LANGER & LANGER

[2017] FamCA 1024

FAMILY COURT OF AUSTRALIA

LANGER & LANGER [2017] FamCA 1024

FAMILY LAW – INTERIM – Where the applicant seeks several interim orders, including access to funds held in trust, injunctions, child support departure and an order for disclosure by the second respondent – Where it is ordered that the second respondent provide disclosure of certain documents –  Where the application is otherwise dismissed. 

Child Support Assessment Act 1989(Cth)

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

ABC v Lenah Game Meats (2001) 208 CLR 199
Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57
Browne v Green (1999) FLC 92-873
G & T (2004) FLC 93-176
Gresham & Gresham [2017] FamCA 270
Kowaliw & Kowaliw (1981) FLC 91-092
Medlow & Medlow (2016) FLC 93-692
Mullen and  De Bry (2006) FLC 93-293

Strahan & Strahan (2011) FLC 93-466

APPLICANT: Ms Langer

FIRST RESPONDENT: Mr Langer

SECOND RESPONDENT: Ms D Langer

FILE NUMBER: BRC 11670 of 2016

DATE DELIVERED: 15 December 2017

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Carew J

HEARING DATE: 16 October 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hackett

SOLICITOR FOR THE APPLICANT: Evans & Company Family Lawyers

COUNSEL FOR THE FIRST

RESPONDENT:

Mr Williams

SOLICITOR FOR THE FIRST

RESPONDENT:

Halperin & Con Pty Ltd

COUNSEL FOR THE SECOND

RESPONDENT:

Mr Sorensen

SOLICITOR FOR THE SECOND

RESPONDENT:

Tasiopoulos Lambros & Co

the court orders

BY CONSENT

1. Paragraphs 1 – 5 of the Further Amended Application (interim orders sought) filed 8 September 2017 be dismissed.

IT IS FURTHER ORDERED

1. That the Second Respondent disclose the following documents within twenty-eight (28) days:

   (a)Any current Will or testamentary document made by or prepared by the Second Respondent or any other document which evidences an engagement in estate planning so as to protect the interests of the First Respondent’s siblings;

   (b)Documents (not already produced) evidencing the advances of funds made by the Second Respondent (or entities controlled by her) to the First Respondent (or entities controlled by him) and/or to the First Respondent and the Applicant for which the Second Respondent claims repayment, including but not limited to:

   (i)The documents which evidence the money lent;

   (ii)The documents which evidence the terms on which money was  lent; and

   (iii)The documents which evidence the security for any lending.

   (c)The files maintained on the Second Respondent’s behalf by her accountant, Mr E (to include file notes, correspondence in and out and records of instruction and who provided same), pertaining to the Second Respondent’s financial arrangements with the Husband, for the periods in which it is asserted that loans were being advanced or are now being made/advanced and for which the Second Respondent claims repayment.

2. The Further Amended Application (interim orders sought) filed 8 September 2017 be otherwise dismissed.

3. Any extant application for interim orders be dismissed.

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 Langer & Langer 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 BRISBANE

FILE NUMBER: BRC 11670  of 2016

Ms Langer

Applicant

And

Mr Langer

First Respondent

And

Ms D Langer

Second Respondent

REASONS FOR JUDGMENT

1. When this matter came before me on 16 October 2017, Ms Langer (“the wife”) and Mr Langer (“the husband”) were in dispute about numerous interim financial matters and parenting matters. Issues relating to parenting matters were resolved and an order was made by consent on 16 October 2017. I reserved my decision in relation to the interim financial matters.

competing applications

1. The wife filed a Further Amended Application on 8 September 2017 seeking:

   a)Payment to her of one half of the sale proceeds[1] of F Street, Suburb H (“the former matrimonial home”) or in the alternative a sum of $200,000;

   b)Payment of her legal costs on a ‘dollar for dollar’ basis;

   c)Discharge of a tax debt in her name;

   d)An injunction restraining the husband from distributing benefits to her from certain entities without her written consent;

   e)Child support departure; and

   f)Disclosure against Ms D Langer “Ms D”.

   [1] This was not pressed during the hearing

2. The application is opposed by the husband who seeks its dismissal or, in the alternative, if a sum is released to the wife, the husband seeks a release of funds to him in the same amount.

3. The application for release of any funds to the wife or husband is opposed by Ms D who, in turn, seeks a release of the sale proceeds to her in part repayment of the alleged loans made by her to the husband and/or the wife during the marriage. Ms D also opposes the application for disclosure against her.   

background

1. The wife is 37 years of age and the husband is 53 years of age. The parties cohabited for a number of years prior to separating in 2009, reconciling in or about 2010, marrying on 29 April 2011 and separating in either 2015 (according to the wife) or 2016 (according to the husband).

2. The wife and husband have two children, B aged 6 and C aged 5. The children live primarily with the wife and spend regular time with the husband. The wife and children live in South East Queensland and the husband lives in Melbourne in his mother’s home. In order to spend time with the children, the husband flies to South East Queensland and the children stay with the husband in a rented apartment.   

3. Ms D is the husband’s mother.

4. The wife is not employed but is studying to complete a Certificate IV. Her only source of income is Centrelink and a nominal sum by way of dividend or interest. The wife has about $11,000 in the bank and $99,835 in an unspecified investment.[2] Weekly expenses for the wife and the children are said to be $1,756. Her liabilities are stated to be a mortgage debt of $1,360,000 securing a recent loan made to her by her mother to purchase a home and a personal loan also to her mother for past rent and bond of $27,000. After separation the wife sold jewellery for $10,000.

   [2] The annexure referred to in the Financial Statement is not attached

5. The husband is not currently employed but has historically been involved in his family’s business activities within the ‘Langer Group’. The family business appears to have involved home technology. It was operated by G Pty Ltd a company in which the husband was a director but not a shareholder. G Pty Ltd was then sold and the husband was involved in another business called H Pty Ltd. H Pty Ltd, which operated the business until 2014, is now known as Langer Consultancy Pty Ltd. The husband contends that he has not worked since 2014 and that he is subject to a ten year restraint of trade in the only field in which he is familiar.

6. The husband is currently a director of the following companies:

   a)Langer Consultancy Pty Ltd;

   b)Langer Investments Pty Ltd;

   c)Langer Properties Pty Ltd;

   d)J Pty Ltd;

   e)M Holdings Pty Ltd;

   f)M Super Pty Ltd.

7. The husband currently holds shares in the following companies:

   a)Langer Consultancy Pty Ltd;

   b)J Pty Ltd.

8. The husband contends that the entities are dormant and that the business H Pty Ltd ceased trading in 2014 with accumulated losses of $9,000,000.

9. Subsequent to the date the wife contends separation occurred the husband has resigned from the following directorships:

   a)K Pty Ltd;

   b)N Pty Ltd;

   c)P Nominees Pty Ltd;

   d)T Pty Ltd;

   e)S Pty Ltd:

   f)Langer Nominees Proprietary Limited; and

   g)X Proprietary Limited.

10. The husband contends that he resigned at Ms D’s request.

11. The husband contends that he or entities controlled by him have pressing liabilities of $144,421 and that Langer Consultancy Pty Ltd owes the ANZ Bank $850,000. In addition, the husband contends that he personally owes Ms D  $8,341,158 as a result of loans made over several years including loans made to assist the business formerly conducted by H Pty Ltd as trustee for H Unit Trust. Included in this alleged debt to Ms D is an alleged loan of $1,000,000 advanced for the purchase of the former matrimonial home. The husband contends that his only income is $443 per week received from Langer Consultancy Pty Ltd as trustee for H Unit Trust. The husband’s expenses are said to be $1,310 per week which includes rent of $520. The husband has $3,215,000 in superannuation. 

12. After the 2009 separation the parties had a property settlement and entered into a financial agreement which provided for each of them to retain the property in their own names. The wife’s net property was valued at $669,150 and the husband’s net property was valued at $1,548,483 with interests referred to as ‘financial resources’ in numerous entities with an ‘unknown’ value. The debt owing to Ms D at that time was recorded as $330,000. The ‘Langer Group’ at that time comprised a number of trusts of which the husband or an entity owned by him was named as a beneficiary. The husband was a director of each of the corporate trustees of the Trusts.

13. In 2012 the wife and husband bought the former matrimonial home. It is asserted on behalf of the wife that she contributed to the acquisition of the former matrimonial home from the sale of a property owned solely by her (this is not admitted by the husband) and Ms D contributed $1,000,300 through entities controlled by her. Ms D relies upon an unsigned Deed of Loan in respect of that payment. It does not seem to be in contention that Ms D advanced this sum although the wife disputes any money is owed by her to Ms D.

14. The former matrimonial home sold in March 2017 for $2,800,000 and there remains as at 28 April 2017 $1,368,927 in the trust account of a solicitor who undertook the conveyance. There is no suggestion that, absent an order from the court, there is a risk of the proceeds being released to any party.

15. In 2013 the wife received $685,000 from the sale of a property in her name and the husband contends that the wife has failed to account for the proceeds of sale despite him raising this as an issue since January 2017.   

16. After separation the husband continued to financially support the wife and children to the standard to which they were accustomed until mid-2016 when all financial assistance from him ceased. The husband’s taxable income was only $20,493 for that financial year. The husband’s taxable income for 2017 was $18,842.

17. The husband contends that he was only able to continue financial support for the wife and children because of loans made to him by his mother, Ms D and that she has now refused to continue to advance money to him.

18. Ms D continues to pay for the private school fees, day care, uniforms, books and extracurricular activities for the children – a contribution of about $42,000 per annum.

19. The wife contends that “the Child Support administrative assessment process has produced an outcome which assesses [the husband] as being required to pay … $7.93 per week”. The husband contends that he has never received any notification from any authority to pay the alleged assessed sum.

20. The wife has an outstanding debt to the Australian Taxation Office (“ATO”) of $27,804 arising from the 2014 financial year. It is common ground between the parties that the debt is an error relating to a trust distribution to the wife which the husband contends was never made to her. Despite this common ground the debt  remains owing and is incurring interest. The wife contends that she has taken all reasonable steps to dispute the debt although this is disputed by the husband (no objection to the debt by the wife is in evidence). The wife contends that because of the debt she is unable to access Centrelink entitlements, namely, Family Tax Benefits, which are being off set against the debt (although the absence of receipt of the benefit does not appear to be corroborated by the document annexed to her affidavit filed 18 August 2017 which provides that for the 2017 financial year the wife received $13,379).

matters for determination

release of funds to the wife

1. The wife pressed for the release of $200,000 to meet ongoing living expenses and legal fees. It is argued by Mr Hackett, counsel for the wife, that as one half of the sale proceeds are the legal property of the wife and she has a need for the funds it is difficult to resist the payment to her. Reliance is placed on the Full Court decision in Medlow & Medlow [3] and in particular paragraph 105:

   The wife’s application was for the payment of the balance of the Suburb C property proceeds to her. That payment was described by her as being “by way of interim property settlement”. That phrase is repeated in these grounds of appeal. It is difficult, therefore, to be critical of the primary judge who described her application by using the same phraseology. However, it is apparent from what we have said already that we accept that the wife was simply seeking an order that she receive the interest to which she was legally entitled and was not seeking an interim order intending to alter property rights.

   [3]Medlow & Medlow (2016) FLC 93-692

2. The reference to an ‘interim order intending to alter property rights’ is of course a reference to ss 79 and 80(1)(h) of the Family Law Act, 1975 (Cth) (“the Act”). Section 79 of the Act relevantly provides:

   (1)In property settlement proceedings, the court may make such order as it considers appropriate:

   (a)In the case of proceedings with respect to the property of the parties to the marriage or either of them – altering the interests of the parties to the marriage in the property;

   ...

   (2)The court shall not make an order under this section unless it is satisfied that, in all of the circumstances, it is just and equitable to make the order.

   …

3. Section 80(1)(h) of the Act empowers the court to make an order pending the disposal of the proceedings.

4. As observed by the Full Court in Medlow the order sought by the wife does not require an alteration of property interests. Despite reliance on this decision counsel for the wife nevertheless addressed (in his written outline) the matters about which a court must be satisfied in the exercise of the discretion in considering an interim property order.[4]

   [4] See Strahan & Strahan (2011) FLC 93-466

5. Mr Williams, counsel for the husband, assumed that the wife was relying upon the exercise of the interim property alteration power and submitted that none of the prerequisites for an exercise of that power were met.

6. Mr Sorensen, counsel for Ms D, does not address the issue of the power exercised.

What is the nature of the power that would enable a release of funds to the wife or alternatively to restrict her access to those funds

1. It is not uncommon for a party’s access to their own property to be curtailed pending disposal of a s 79 application. The rationale being that until a final hearing a court cannot generally determine whether it is appropriate for there to be an alteration of property interests or a settlement of property in substitution for any interest in property. That rationale would seem to be all the more pertinent where a third party claims that a debt will not be able to be repaid if property is prematurely released or property interests altered.

2. It is submitted on behalf of the wife, that Ms D is an unsecured creditor of the husband alone and Ms D’s claim should not be given priority over the wife’s legal entitlement.

3. However, if it is the case that funds were provided to the husband by Ms D to support the family’s lifestyle and the funds were intended to be a loan, the Court would not necessarily treat the ‘loan’ as one for which the husband was solely responsible. By way of analogy, the Full Court said in  in Kowaliw & Kowaliw[5] as follows:

   … financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
   (a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
   

   [5] (1981) FLC 91-092 at 76,644; see also Browne v Green (1999) FLC 92-873 at 86,364

   (b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.

4. The Act provides a statutory basis for issuing an injunction restraining the use of the funds and/or making an order for the preservation of property pending the determination of the substantive proceedings. That power is to be found in s 114 (1) and (3) and Rule 14.01 of the Family Law Rules 2004 (Cth)(“the Rules”). Those provisions relevantly provide:

   Section 114

   (1)In proceedings of the kind referred to in paragraph (e) of the definition of matrimonial cause in subsection 4(1), the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate, including:

   (a)…

   (b)an injunction in relation to the property of a party to the marriage; or

   (c)…

   (2)…

   (3)A court exercising jurisdiction under this Act in proceedings other than proceedings to which subsection (1) applies may grant an injunction, by interlocutory order or otherwise (including an injunction in aid of the enforcement of a decree), in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate.

   Section 4(1) “matrimonial cause” means

   (e)  proceedings between the parties to a marriage for an order or injunction in circumstances arising out of the marital relationship (other than proceedings under a law of a State or Territory prescribed for the purposes of section 114AB)

   Rule 14.01

   Orders about property

   (1) The court may make an order for the … preservation of property if:

   (a)the order relates to the property of a party, or a question may arise about the property in a case; and

   (b)the order is necessary to allow the proper determination of a case.

   (2)– (4) …

   (5)       The court may make an order under subrule (1) binding on, or otherwise affecting, a person who is not a party to a case.

5. Although s 114 of the Act refers to the power of the Court to grant such injunction as the Court may consider ‘proper’ or where it is ‘just and convenient’ to do so, the use of the term ‘injunction’, which is a “legal term of art”[6] attracts the operation of particular principles derived from equity courts,[7] although the term ‘injunction’ “takes its colour from the statutory regime in question”.[8] The term ‘just and convenient’ is not “at large”.[9]

   [6] ABC v Lenah Game Meats (2001) 208 CLR 199 at [8] – [16], [59] – [61] and [86] – [105], Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65] ; Mullen and  De Bry (2006) FLC 93-293

   [7]ABC v Lenah Game Meats (2001) 208 CLR 199 at [88]

   [8] Ibid at [89]

   [9] Ibid at [105]

6. If a prima facie claim exists and damages would not be an adequate remedy the Court may grant an injunction where the balance of convenience favours it.

7. The High Court in Australian Broadcasting Corporation v O’Neill[10] described it thus:

   [10] (2006) 227 CLR 57 at [65]

   The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued:

   "The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted."

   By using the phrase "prima facie case", their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal:

   "How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks."

   [footnotes omitted]

The claim made by Ms D

1. It is common ground that Ms D advanced approximately $1,000,000 to the parties to assist in the purchase of the former matrimonial home. Ms D contends that she intended the advance to be a loan to the husband and the wife although the loan agreement that was prepared was never signed. Ms D contends that shortly after the purchase of the former matrimonial home, the wife telephoned her and thanked her for “lending the money”. In addition Ms D contends that she (either personally or through trust controlled by her) lent significant further sums to the husband or his company, H Pty Ltd up to 31 July 2015.

2. In addition, it is acknowledged on behalf of the wife that, if accurate, Division 7A loan agreements annexed to Ms D’s affidavit support the making of loans to the husband (or entities controlled by him) by Ms D (or entities controlled by her) in the period 2007 to 2012 totalling some $5,590,317.

3. The husband personally guaranteed the repayment of the loans made to his company and agrees that he owes Ms D the sums claimed by her.

4. The wife appears to deny that any sums advanced are loans requiring repayment.

5. Various inconsistences in the husband’s evidence are highlighted on behalf of the wife in relation to a number of matters. Firstly, the loan agreements are inconsistent with what the husband represented as his debt to Ms D in the August 2010 financial agreement entered into between the parties where he said the debt was only $330,000. Secondly, given the minimum interest repayments required under the loan agreements it is not apparent how the husband made those payments after 30 June 2012. His taxable income is inconsistent with an ability to do so. Thirdly, the wife complains of the failure of the husband and Ms D to disclose documents that explain the alleged advances made after 2012.

6. The wife also deposes to her understanding of the generous provision by Ms D to her three children in circumstances where only the husband was involved in the operation of the various businesses conducted in the family group. It was her understanding that the generous provision made to the husband was in recognition of his considerable contribution to those businesses. The wife suggests that the idea that these benefits were in fact loans is a recent invention and unlikely to be pursued by Ms D. The wife contends that the husband told her that there would not be a requirement to repay any funds advanced.

7. Notwithstanding the matters raised by the wife, I am satisfied that Ms D has established a prima facie case that significant sums were advanced to the husband and that the husband and wife both benefited from those sums such that any repayment of sums allegedly lent are arguably sums that may be recoverable from the assets of each of the husband and the wife.

Prejudice to each party

1. If the sum sought by the wife is released to her it will not be recoverable as she intends to use it to pay her legal fees and day to day expenses. That represents a significant prejudice to Ms D in the event that her claims are ultimately successful.

2. On the other hand the wife contends that she requires access to $200,000 of the funds to meet her ongoing expenses including legal fees.

3. Although the wife contends that she requires the funds I note that in her financial statement the wife discloses savings of about $11,000 and an investment valued at $99,835. The wife does not claim to owe any money to her solicitors for legal fees and there is no suggestion that the debts to her mother require immediate repayment.

4. The husband contends that the wife has failed to account for the proceeds of sale of a property in 2013 in the sum of $685,000 despite his first raising it as an issue in January 2017. There is certainly nothing in the wife’s material that addresses that issue.

5. The balance of convenience would favour the granting of the injunction restraining the wife from accessing any of the funds currently held in trust. However, in the absence of any evidence that the wife can access the funds without agreement I do not propose to grant the injunction.

Payment of legal costs on a ‘dollar for dollar’ basis

1. In this jurisdiction parties are generally expected to meet their own legal costs. That said s 117(2) of the Act empowers the Court to make an order as to costs where there are circumstances that justify it.

2. A ‘dollar for dollar’ order, which would require the husband to pay to the wife’s lawyers a sum equal to any sum paid to his lawyer from time to time, is a form of order that is sometimes made in this jurisdiction.[11]

   [11]G & T (2004) FLC 93-176

3. However, I am not satisfied that there are circumstances justifying such an order in this case because despite the wife being legally represented there is no evidence of any outstanding liability for legal fees nor any evidence that the wife is at risk of being unrepresented absent an order as sought by her.

4. In any event the wife has an investment available to her and has failed to account for the not inconsiderable proceeds of sale of a property sold by her in 2013.

Discharge of tax debt

1. The wife has a tax debt to the ATO in the sum of $27,804 arising from the 2014 financial year. The wife disputes ever receiving the sum and the husband disputes ever distributing the sum to the wife. Despite there being agreement that the alleged debt is an error the parties seem unable to co-operate in a way that may assist the wife in having the error corrected. Such a position seems somewhat ludicrous.

2. There is no evidence that a Notice of Objection has been lodged by the wife although she contends that her accountant “appealed to the ATO to ask that the debt be waived given the circumstances” and was unsuccessful.

3. I am not satisfied on the evidence before me that the wife has been unable to access Family Tax Benefits due to the debt, given the content of the letter from Centrelink to the wife dated 2 August 2017. In the 2017 financial year the wife received $13,379.19. The deduction of $2,582.47 from her Family Tax Benefit entitlement of $15,961.66 is stated to be for “overpayment other than family assistance”.

4. I see little point in causing funds to be released when it is common ground the debt is an error. Each party should take all steps necessary to correct the error.  

Injunction restraining the husband from making further distributions to the wife

1. The basis for this application relates to the disputed tax debt referred to above.

2. I propose to dismiss the application for an injunction for the following reasons:

   a)The alleged distribution was made in 2014;

   b)The husband disputes making the distribution;

   c)There is no evidence of a distribution having been made since then;

   d)The risk of distribution seems remote.

Child support departure

1. The wife seeks an order for a departure from an administrative assessment in circumstances where she is a party to pending proceedings already before this Court.[12] A departure from a child support assessment may be made where special circumstances exist and where, pursuant to s 117 of the Child Support Assessment Act 1989 (Cth), one or more of the grounds specified therein are met and where it would be just and equitable and otherwise proper to depart from the administrative assessment.

   [12] See s 116 of the Child Support Assessment Act 1989 (Cth)

2. While counsel for the wife submits in his written outline that the husband “has been assessed to pay $7.93 per week”, I am not persuaded on the evidence before me that this is correct. The wife deposes in her affidavit:

   110. I have tried to proceed to ask [Mr Langer] to volunteer to pay child support and I have also tried to seek an administrative assessment of child support.

   111. [Mr Langer] has not volunteered to assist me (sic) support the boys, and the Child Support administrative assessment process has produced an outcome which assesses [Mr Langer] as being required to pay me $7.93 per week.

   (emphasis added)

3. Further, and despite Rule 4.18 of the Rules requiring a copy of the assessment to be filed, there is no child support assessment in evidence. Nor is there any evidence that the application for child support departure has been served upon the Child Support Registrar as required by Rule 4.23.

4. Section 66E of the Act prohibits the court from making a child maintenance order if an application could properly be made by the applicant under the Child Support (Assessment) Act 1989 (Cth) for the respondent to be assessed for child support.

5. The authority relied upon by counsel for the wife in support of this application is Gresham & Gresham.[13] That case concerned a claim by a husband for a child support departure against his former wife where the administrative assessment was coincidentally $7.93 per week.

   [13] [2017] FamCA 270

6. While no issue was taken by the husband’s counsel as to absence of a jurisdictional fact upon which the wife’s application is dependent, either the court has jurisdiction or is does not[14] and in the absence of evidence that an assessment of child support has been made by the Child Support Agency I propose to dismiss the application.

   [14]Ridley v Whipp (1916) 22 CLR 381at 381

Disclosure

1. The wife seeks an order requiring Ms D to give disclosure of a number of specified documents or classes of documents. The precise order sought is as follows:

   17. That the 2^nd Respondent give disclosure of the following documents within twenty-eight (28) days:

   a.   Any current and previous Will or testamentary document made by or prepared by the 2^nd Respondent or any other document which evidences an engagement in estate planning so as to protect the interests of the Respondent’s siblings;

   b.   Documents evidencing the advances of funds made by the 2^nd Respondent between each of her children, including the Husband, including but not limited to:

   i.The documents which evidence the money lent to each;

   ii.The documents which evidence the terms on which money was lent; and

   iii.The documents which evidence the security for any lending.

   c.   The files maintained on the 2^nd Respondent’s behalf by her accountant, Mr E (to include file notes, correspondence in and out and records of instruction and who provided same), pertaining to the 2^nd Respondent’s financial arrangements with the Husband, for the periods in which it is asserted that loans were being advanced or are now being made/advanced, but also for the period between 1 July, 2012 and the current date;

   d.   The file maintained by the solicitor who prepared the Deed of Assignment (of debt) documents referred to in Paragraph 12 of the Affidavit of the 2^nd Respondent filed 30 March, 2017, insofar as it relates to the giving of instructions and the giving of advice in relation to the preparation of the document and the arrangements generally which gave rise to the reassignment of the debt, together with any financial planning, succession planning or accounting advice provided in relation to the assignment of the debt;

   e.   The file maintained by the solicitor and/or accountant who prepared or gave advice in relation to the Division 7A Loan Agreements and Deed of Guarantee and Indemnity arrangements referred to in Paragraph 2 of the Affidavit of the 2^nd Respondent filed 30 March, 2017, insofar as those files relate to the giving of instructions and giving of advice in relation to the preparation of the documents and the arrangements generally which gave rise to the documents, together with any financial planning, succession planning or accounting advice provided in relation to the arrangements referred to in the documents; and

   f.   In the event that file maintained by [Q Firm] (to which annexures “RL-4” to “RL – 8” of the Affidavit of the 2^nd Respondent filed 30 March, 2017, relate) is in the name of the 2^nd Respondent, disclosure of that file is to occur.

2. Each party to a case has a duty to give full and frank disclosure of all information relevant to the case in a timely manner.[15] In financial cases each party (save a party who is not a party to the marriage unless their financial circumstances are relevant to the issues in dispute) is required to make full and frank disclosure of their financial circumstances.[16] The duty of disclosure applies to each document that is in the possession or under the control of the party disclosing the document and relevant to an issue in the case subject to a proper objection.[17]

   [15] See Rule 13.01 Family Law Rules 2004

   [16] See Division 13.1.2 Family Law Rules 2004

   [17] See Division 13.2.1 Family Law Rules 2004

3. In addition, a party may require another party to provide a copy, or produce for inspection, a document referred to in a document filed by a party or in correspondence prepared and sent by or to another party.[18]

   [18] See Rule 13.08 Family Law Rules 2004

4. There is an issue in this case about the nature and extent of monies advanced to the husband and/or the wife by Ms D for which she now claims repayment. If her claim succeeds there may well be no property left to divide between the husband and wife.

5. The wife’s position seems to be that any sums lent were to the husband alone and she should not be required to repay them and/or alternatively any sums advanced are unlikely to be repaid and presumably the wife’s argument is that they should be ignored for the purposes of the property settlement as between the husband and the wife.

6. Ms D contends that she (or entities controlled by her) lent to the husband (or entities controlled by him) and/or to the husband and wife significant sums of money from 2007 which she requires to be repaid.

7. In her affidavit Ms D deposes inter alia:

   2… Over many years, I have through my trusts and personally loaned a lot of money to [Mr Langer] to assist him, especially when his [H Pty Ltd] business needed money. I am informed by my accountant, [Mr E], that as at today the total loans owing to me by [Mr Langer] are in excess of $8,300,000 in total. [Mr E] informs me and I believe that this amount includes loans made by me personally to [Mr Langer] and loans made by trusts controlled by me (my trusts), including the [Langer Snr] Family Trust and the [Langer Snr] Investment trust, to [Mr Langer] and his company [H Pty Ltd] up to 31 July 2015. The loans made by my trusts, which were subject to loan agreements, were assigned to me by my trusts on that date. …

   3. I have always expected all of the loans made by me and my trusts to be repaid. …

   4. Because [Mr Langer] needed a lot of money for his [H Pty Ltd] business I have lent [Mr Langer] significantly more money than I have lent to my other children, [Ms L] and [Mr Z], but I have organised my estate planning so that whatever sum I am unable to recover of these loans is taken into account when I die so that my other children are not disadvantaged.

   …

   6. I am informed by [Mr Langer] and believe that he instructed [Mr O] to prepare a Deed of Loan and Mortgage for the proposed loan from my trusts. I am informed by my solicitor Mr Lambros that [Mr O] prepared a file note reflecting his instructions from [Mr Langer]. [Ms D] …

   8. I believe that for convenience [Mr E] recorded all of the money lent by me to purchase the Property to a loan account with the [Langer Snr] Family Trust. However, where money came from the [Langer Snr] Investment Trust, this is noted in the loan account entries as having been transferred “from [X Pty Ltd]” or from “[Langer] investment Trust”. …

   12. By Deed of Debt Assignment dated 31 July 2015 [N Pty Ltd] assigned to me the amount of $2,165,627.26 being a debt owed by [Mr Langer] to the [Langer Snr] Family Trust (the assigned debt). …

8. Ms D resists the order sought by the wife and in relation to each particular document or class of documents it is submitted on her behalf:

   e)Wills or testamentary documents evidencing estate planning to protect the interests of the husband’s siblings – it is “not appropriate” to make such an order nor are the documents relevant;

   f)Documents evidencing advances to the husband and his siblings – the documents are not relevant and the request is oppressive given the possible time span;

   g)Files maintained by Ms D’s accountant pertaining to Ms D’s financial arrangements with the husband for periods during which it is asserted that the loans were being advanced – unnecessary, oppressive and fishing;

   h)Solicitor’s file re preparation of Deed of Assignment referred to in paragraph 12 of Ms D’s affidavit – the documents are subject to legal professional privilege;

   i)File maintained by solicitor and/or accountant relating to the Division 7A loan agreements and guarantees – the documents are subject to legal professional privilege;

   j)File of Q Firm relating to the documents annexed to in Ms D’s affidavit (if it is in her possession) – the documents are not in the possession of Ms D.

9. Having regard to the content of paragraph 4 of Ms D’s affidavit in which she refers to her “estate planning so that whatever sum I am unable to recover of these loans is taken into account when I die so that my other children are not disadvantaged” the wife is entitled in my view (pursuant to Rule 13.08) to request a copy of Ms D’s current will and other testamentary documents prepared.

10. I am not satisfied that the documents evidencing advances of funds made to the husband’s siblings are relevant to an issue in the proceedings however documents evidencing advances of funds to the husband (for which repayment is claimed) are relevant. They are documents which Ms D is under an obligation to disclose. The fact that the documents may relate to a period prior to the parties’ relationship does not make the request oppressive if those documents relate to funds which Ms D now claims are repayable.

11. The same comments are applicable for the request relating to Ms D’s accountant’s files pertaining to the financial arrangements with the husband.

12. I do not propose, at this stage, to order the production of documents for which legal professional privilege is claimed.

summary

1. I propose to dismiss the applications for interim orders other than for an order requiring Ms D to disclose certain documents.

I certify that the preceding seventy-eight (78) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 15 December 2017.

Associate: 

Date:  15 December 2017.