Marlowe-Dawson and Dawson

[2012] FamCA 702

FAMILY COURT OF AUSTRALIA

MARLOWE-DAWSON & DAWSON [2012] FamCA 702

FAMILY LAW - COSTS – Litigation funding – Interim spousal maintenance – Interim child support – Interim adult child maintenance

Family Law Act 1975 (Cth)

Bevan & Bevan (1995) FLC 92-600
Breen & Breen (1990) 65 ALJR 195
Harris & Harris (1993) FLC 92-378
Hogan & Hogan (1986) FLC 91-704
M & M (2006) 36 Fam LR 97
Nutting & Nutting (1978) FLC 90-410
Poletti & Poletti (1990) 15 Fam LR 794 (FC)
Saxena & Saxena (2006) FLC 93-268
Strahan & Strahan(Interim Property Orders) (2011) FLC 93-466
Wilson & Wilson (1989) FLC 92-033
Zschokke & Zschokke (1996) FLC 92-693

APPLICANT: Ms Marlowe-Dawson

RESPONDENT: Mr Dawson

FILE NUMBER: SYC 53 of 2011

DATE DELIVERED: 2 August 2012

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Kent J

HEARING DATE: 31 July 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Brasch

SOLICITOR FOR THE APPLICANT: Hopgood Ganim

COUNSEL FOR THE RESPONDENT:

Mr Richardson SC

Ms Black

SOLICITOR FOR THE RESPONDENT: Barkus Doolan Kelly

Orders

Litigation Funding

1. The Husband forthwith provide to the Wife for her signature an application or applications for finance to enable the parties to jointly refinance the existing mortgage debt upon the property situate at S Street, Town P in the United Kingdom, and to obtain loan facilities additional to the current debt of the equivalent of AUD$200,000.00 to be provided to the Husband, with the characterisation of such advance to be determined at trial.

2. Within seven (7) days of the receipt by the Wife of such application or applications, the Wife return to the Husband, duly executed by her, such application or applications together with:

   (a)       A copy of her current passport which she is to obtain;

   (b)       Recent utilities bills and receipts for the property situate at W Street, Suburb U, and the property situate at V Street, Suburb C.

3. Both parties shall do all acts and things reasonably required to secure the refinancing referred to in Order 1 as soon as possible, including the signing of further applications for finance to potential credit providers if necessary.

4. Within fourteen (14) days of the date of these Orders, the Husband shall cause to be paid to the trust account of the solicitors for the Wife the sum of AUD$100,000.00.

5. Within thirty (30) days of the date of these Orders, the Husband shall cause to be paid to the trust account of the solicitors for the Wife the further sum of AUD$96,000.00.

6. The sums referred to in paragraphs 4 and 5, or such proportion of them as are necessary, are to be utilised by the Wife solely in respect of her legal costs and outlays of these proceedings, and are to be taken into account at the final trial of these proceedings, with the categorisation of such amounts to be determined at trial.

7. By 4.00 pm on Friday 14 September 2012:

   (a)       The Husband shall file and serve an affidavit detailing the amount of loan funds obtained pursuant to these Orders and accounting for his use of those funds;

   (b)       The Wife shall file and serve an affidavit accounting for the sums referred to in paragraphs 4 and 5 and her use of those sums or any proportion thereof; and

   (c)       The parties shall exchange costs disclosure statements detailing the amounts of paid and unpaid legal costs and outlays incurred by each party in respect of these proceedings.

Interim Spousal Maintenance

1. Until further Order, the Husband pay or cause to be paid the following as and by way of interim spousal maintenance for the Wife:

   (a)       The monthly mortgage repayments (including any arrears) for any loan secured by mortgage over the property situated at S Street, Town P in the United Kingdom;

   (b)       The monthly mortgage repayments (including any arrears) to the Commonwealth Bank of Australia for any loan secured by mortgage over the property situated at V Street, Suburb C;

   (c)       The monthly mortgage repayments (including any arrears) to the Commonwealth Bank of Australia for any loan secured by mortgage over the property situated at W Street, Suburb U, net of any rental income received by the Wife for the property;

   (d)         The monthly loan repayments (including any arrears) to the Commonwealth Bank of Australia for any loan relating to the Volvo motor vehicle in the possession of the Wife;

   (e)       The rates (including water rates) and insurance for the properties situated at:

   (i)S Street, Town P in the United Kingdom;

   (ii)V Street, Suburb C;

   (iii)W Street, Suburb U;

   (f)       Car insurance and registration for the Volvo motor vehicle in the possession of the Wife;

   (g)       Commencing Monday 6 August 2012, the Husband cause to be paid to the Wife’s nominated bank account the amount of AUD$3,600.00 per calendar month.

Interim Child Maintenance

1. Until further Order, commencing Monday 6 August 2012, the Husband pay or cause to be paid by way of child maintenance for the children, B and M, the amount of AUD$4,580.00 per calendar month net of tax (being AUD$2,290.00 per month for each child) payable in advance to the Wife’s nominated bank account together with payment of the following expenses:

   (a)       Education costs including tuition fees, uniforms, books and stationery; and

   (b)       Private health insurance together with all gap medical and dental expenses.

Interim Adult Child Maintenance

1. Until further Order, commencing Monday 6 August 2012, the Husband pay or cause to be paid to the Wife’s nominated bank account adult child maintenance for N in the amount of AUD$2,150.00 per calendar month net of tax.

2. The Husband shall cause private health insurance to be maintained for N and shall meet all gap medical and dental expenses.

Costs

1. Each party’s costs of and incidental to these interim proceedings be reserved to trial.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Marlowe-Dawson & Dawson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: SYC 53 of 2011

Ms Marlowe-Dawson & Dawson

Applicant

And

Mr Dawson

Respondent

REASONS FOR JUDGMENT

Introduction

1. The trial of the parties’ competing applications for alteration of their property interests is listed to commence before me on 18 September 2012 for four days, thus a little over six weeks’ hence.

2. That has brought into focus the funding of the litigation by both parties.

3. The Wife seeks an Order for payment by the Husband of either $196,000.00, referable to both past and future anticipated legal costs for the trial, or $67,030.73 to meet payment of arrears of legal costs plus what is known as a “dollar for dollar” Order for future legal costs, meaning that any payment by the Husband for his own costs be matched by a payment to the Wife for hers.

4. In addition to litigation funding, the Wife seeks Orders for interim spousal maintenance; interim child maintenance; and interim adult child maintenance with respect to the parties’ eldest child, now in the first year of her tertiary education.

5. By his response filed 27 July 2012, the Husband sought an Order for dismissal of the Wife’s interim applications and an Order that she pay his costs of the application filed on 19 July 2012.

6. However, at the outset of the hearing before me, Mr Richardson of Senior Counsel, who appeared for the Husband with Ms Black of junior Counsel, submitted that the Husband was prepared to, “…undertake to use his best endeavours…” to continue to see the parties’ various loan facilities met; as well as relevant insurances being paid; plus expenses in relation to the Wife’s motor vehicle; plus the payment of school fees and that he would pay $500.00 per week by way of interim spousal maintenance and $350.00 per week for each child.

7. Whilst Mr Richardson SC indicated that he did not have specific instructions (his client resides in China and was not in attendance at the hearing), it was indicated that with respect to litigation funding, it may be appropriate for the approach to be taken that upon the Wife obtaining and providing a current passport and signing an application with the Husband for refinancing and further borrowing on the parties’ real property in Town P in the United Kingdom, the Wife could be paid an initial instalment from funds held in the Husband’s solicitor’s trust account of $100,000.00, with the balance to come upon approval of the proposed loan from Barclays Bank, if approved.

8. It remained the Wife’s position that she sought the certainty of receiving the lump sum for which she contended from the funds held in the Husband’s solicitor’s trust account, essentially on the basis of the contention that the Husband is the party in control of the parties’ assets and that, given his income and resources (further discussed below), the Husband has ways and means to meet his own litigation funding, even if the funds presently held in his solicitor’s trust account are largely deployed to the Wife.

Background

1. The Wife is 47 years of age, having been born in July 1965. The Husband is currently 45 years of age, having been born in August 1966. The parties commenced cohabitation in September 1990, and married in March 1991. The parties separated under the one roof whilst residing in Hong Kong on 22 October 2002.

2. There are three children of the marriage, namely N, who recently turned 18 years of age, having been born in April 1994; B, who recently turned 16 years of age, having been born in May 1996; and M, who is twelve years of age, having been born in September 1999.

3. At the time of their separation, the parties were the joint owners of a property at S Street, Town P in the United Kingdom (the “United Kingdom property”) and they continue in joint ownership of that property in which they hold substantial equity. Following separation, the Wife and children came to Australia (in 2004) and they continue to reside here. The Wife purchased in her name a property at Suburb U in Brisbane in about 2002, and in 2007, despite their separation, the parties purchased the property at V Street, Suburb C, in Brisbane and the Wife and children have resided in the Suburb C property since. The real property interests of the parties comprise the United Kingdom property, the Suburb U property, and the Suburb C property, and as well in April 2010, the Husband acquired a one-third interest in a property in the United States of America.

4. In 2004, the Husband commenced cohabitation with his current Wife, Ms A, and following the parties’ divorce in March 2011, the Husband married Ms A in August 2011.

5. In the meantime, in August 2010, the Husband and Ms A’s twin children were born, namely H and J, and the twins are not yet two years of age.

6. From about 1998, the Husband has been an equity partner in the international professional business, Business K, and in 2011, he relocated to China to take up what is described as a secondment in that office, and the Husband, Ms A and their children continue to reside in China in rental accommodation subsidised by Business K. Ms A’s niece, D, is a member of the Husband’s household.

7. On the Wife’s case, from the time of separation until the end of 2011, the Husband was regularly paying lump sum funding to meet payment of the day-to-day living expenses of the Wife and their children, as well as payment of joint mortgage payments and other property expenses for the Suburb C home, as well as the shortfall between rental income and expenses for the Suburb U property. The Wife contends, and it does not seem to be disputed by the Husband, that over the period until January of this year, such payments were in the order of $32,000.00 to $35,000.00 per month.[1]

   [1] See paragraphs 238 to 243 of Wife’s affidavit filed 24 February 2012.

8. However, that position changed from January of this year. The Husband, on the Wife’s case, paid $15,000.00 for each of the months of January and February of this year, $7,000.00 in March, nothing between April and June 2012 and then on 12 July 2012 the Husband paid approximately $7,000.00 to the Wife.

Litigation Funding

1. It is well-settled that s 117(2) and s 80(1)(h) are sources of power for courts exercising jurisdiction under the Family Law Act 1975 (Cth) to require payment of money by one party to provide funds for the other party to pursue claims for property settlement, with the payment to be taken into account when the Court finally determines the property application. Whilst such Orders are commonly called Orders for “interim costs”, they are in reality Orders under which a party who does not have sufficient control of assets obtains an interlocutory Order for a transfer of property or payment of money so that the party will have a fair opportunity of presenting his or her case.[2]

   [2] See Poletti & Poletti (1990) 15 Fam LR 794 (FC); Wilson & Wilson (1989) FLC 92-033; Zschokke & Zschokke (1996) FLC 92-693; Harris & Harris (1993) FLC 92-378; Breen & Breen (1990) 65 ALJR 195 (Brennan J); Hogan & Hogan (1986) FLC 91-704; Strahan & Strahan(Interim Property Orders) (2011) FLC 93-466.

2. The Wife has not been in paid external employment since 1994. Whilst a significant period has now elapsed since the parties’ separation in 2002, their financial affairs have remained entwined and their financial support has essentially depended upon the Husband’s engagement as an equity partner with Business K throughout the period post-separation and continuing.

3. Conscious that this is an interim hearing where evidence, to the extent that it is in issue, is not tested; added to the fact that the final trial of these proceedings is a matter of weeks away and thus the relevant effect of any Orders on the interim applications will shortly be revisited, I do not propose to make detailed findings of fact, nor to provide detailed exposition of competing issues better examined at trial.

4. On any view of the evidence, the Husband earns an exceedingly high income. Some confusion as to his income was produced by his financial statements, filed on 11 March 2012 and 2 April 2012 respectively, given that the income and taxation figures contained in those statements appear to be Australian dollar amounts, whilst it is clear from the annexures to those documents that the relevant figures are in English pounds (“GBP”).

5. The notes and annexures to the Husband’s respective Financial Statements referred to add to, at least from my point of view, some confusion about the Husband’s Business K remuneration. For example, by reference to Annexure A to the later Financial Statement filed 2 April 2012, one might conclude that the payments referred to therein (given the heading) are payments received for the year to 30 April 2011, but it would seem from cross-referencing to Annexure A attached to the Financial Statement filed 11 March 2012, some of the payments post-date 30 April 2011.

6. Broadly speaking, it appears that the Husband receives annual gross income via Business K (updating the allowances by reference to Annexure I to the Husband’s affidavit filed 27 July 2012) in the order of, in Australian dollar equivalent (“AUD”) $2,700,000.00. Taking into account taxation, the net (after tax) weekly income of the Husband in Australian dollar equivalents is in the order of AUD$25,125.00 net plus approximately AUD$4,000.00 net in allowances. Thus, the Husband’s net weekly income seems to be in the order of the equivalent of AUD$29,000.00. Obviously that translates to net (after tax) annual income of the equivalent of AUD$1,500,000.00. I am not entirely certain that these figures include an annual GBP30,000.00 the Husband is paid by way of a “hardship” payment with respect to his secondment in the China office of Business K, but I assume that is so.

7. In any event, Annexure I to the Husband’s affidavit filed 27 July 2012 includes an estimate of bonuses the Husband is to receive (net of tax) on 17 September 2012 and 17 December 2012 respectively in the amount in each instance of GBP190,126.00 less modest sums for drawings (anticipated) and for “driver expense salary sacrifice” (estimated).

8. Paragraphs 33 to 36 and Annexure H to the affidavit of the Husband filed 27 July 2012 confirm that on 13 July 2012, the Husband obtained an interest free loan from Business K in the sum of GBP175,000.00. Curiously, the loan agreement in Clause 1 suggests the loan is to be drawn down on 1 August 2012, yet the Husband deposes in his affidavit sworn 26 July 2012 to Business K having by then directly deposited into the trust account of his solicitors AUD$210,000.00. I assume, notwithstanding the express terms of the loan agreement, that an earlier drawdown was able to be made by the Husband with respect to the loan.

9. As Annexure H and paragraph 39 of the Husband’s affidavit confirms, the interest-free loan provided by Business K to the Husband is to be repaid over the period to December 2013 from bonuses the Husband is to receive. Paragraph 39 of his affidavit records that from bonus payments of the equivalent of AUD$275,089.00 on each of 17 September 2012 and 17 December 2012, AUD$26,442.00 will be made by way of loan repayment of the Business K loan.

10. Plainly, as a partner with Business K deriving the levels of income referred to, taken with the prospect of significant capital sums net of tax anticipated to be paid in September and December of this year as referred to, the Husband has significant financial capacity. As noted, the partnership with Business K has been prepared to advance a substantial loan to the Husband on interest-free terms.

11. The Husband has retained a well-known specialist family law firm based in Sydney and has retained Senior Counsel and Junior Counsel for the trial. They appeared on this application. His solicitor and own client costs for this application are $25,000.00.

12. In contrast to the Husband’s position, the Wife’s financial means in terms of income are modest. She does not work and has not been in the paid workforce for many years. I am satisfied on the Wife’s evidence that the only realistic source of funds to maintain the Wife’s representation by her current solicitors (likewise a well-known Brisbane firm with family law expertise) and her proposal to have Senior Counsel represent her at the forthcoming trial, inevitably means that the funds must be sourced from assets and/or the Husband’s income.

13. Clearly enough, fairness and equity dictates that both parties have similar opportunities and access to funding to prepare and prosecute the substantive proceedings at the forthcoming trial.

14. Mr Richardson SC for the Husband agitated the proposition that because the outstanding fees owing by the Wife to her solicitors of approximately $67,000.00 had now been outstanding for in excess of 90 days (Exhibit 1), some inference might be drawn to the effect that the solicitors would not, or perhaps legally could not, cease to act for the Wife on the basis of non-payment of those fees prior to trial. However, given the evidence of the Wife as deposed to in her affidavit, and the evidence of her solicitor, Ms Wigan, I am satisfied that it is reasonable to conclude that if funding is not identified and obtained in advance of the trial, it is more likely than not that the Wife will not have her proposed legal representation. This includes payment of her outstanding legal fees.

15. Fairness dictates a level playing field, as it were, with respect to litigation funding in the circumstances, and there is nothing extraordinary in the Wife’s claim for anticipated costs by reference also to the Husband’s anticipated legal costs as would lead to any conclusion that what the Wife proposes to expend on the litigation is unreasonable.

16. As already noted, in the end, Mr Richardson SC submitted that a fair and equitable outcome would be the parties sharing the risk, as it were, of a proposed finance application to extend the debt on the United Kingdom property, and in the meantime, the funds of approximately $200,000.00 held in the trust account of the solicitors for the Husband being shared between the parties upon the Wife providing her signed application and necessary supporting documentation to advance a loan application.

1. On balance, whilst I consider it reasonable that the Husband have the avenue of securing further loan funds via the United Kingdom property, I do not propose to make Orders that would link the provision of litigation funding to the Wife with the success of a loan application so directly. That is, I propose to make Orders that will permit the Husband to make applications with the participation of the Wife, but I propose to nevertheless order the provision by the Husband of the necessary funding.

2. The Orders I make might mean that the loan funds are available at least by the time the second tranche is due to be paid, but the Husband’s obligation to pay will not be conditional upon such loan funds being obtained.

3. The Husband, as an expert in project financing, is in the best position to assess as to the means by which he might best provide for litigation funding, having regard also to his income between now and trial and having regard to the capital payments he is due to receive, as already referred to. Whilst this is necessarily speculative, I note that the Husband does not exclude, on his affidavit evidence, the prospect of obtaining some further advance from Business K or some combination of an advance from that source together with an external credit provider.

4. I am satisfied, on balance, that the Wife establishes that she does not have the independent capacity to borrow sufficient funds to meet her litigation funding and that she cannot fund the litigation by other means.

5. I note in passing that Exhibit 2 before me is paragraph 27 of the Wife’s affidavit filed 24 February 2012. Mr Richardson SC made reference to that for the proposition that whilst the Wife seeks to retain the United Kingdom property as part of the Orders made in the substantive proceedings, there would seem to be some inherent unlikelihood in contemplation even by the Wife as to her capacity to so do. Whilst that may be so, and it is a matter, no doubt, to be agitated at trial, it seems to be accepted by the Husband on his current affidavit that even if the United Kingdom property were now listed for sale, it would be optimistic to think a sale of that property would yield funds in sufficient time to meet the current exigencies with respect to litigation funding for a trial about six weeks away.

6. Moreover, it will remain open to both parties to agitate at the trial issues surrounding the non-tenanting of the United Kingdom property for a significant period and any relevant financial consequence of that property not having been sold, despite the Wife’s ambition to retain it.

Interim Spousal Maintenance

1. Apart from Orders that the Husband meet monthly mortgage repayments and other outgoings on the subject real properties (net of any rental income received by the Wife for the Suburb U property), as well as loan repayments on the Wife’s motor vehicle, house and contents insurance, car insurance, registration and maintenance and repairs for the Wife’s motor vehicle, the Wife seeks a cash sum of AUD$6,136.00 net of tax per month by way of interim spousal maintenance.

2. Whilst the Wife’s application seeks also, “…any maintenance or repairs required to be effected to the properties…” referring to each of the United Kingdom, Suburb C and Suburb U properties, in the time frame in contemplation, and having regard to the open-ended nature of that Order as framed, I do not propose to make any Order to that effect.

3. Section 72(1) of the Act provides that:

   A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so if, and only if, that other party is unable to support herself or himself adequately…

4. Section 72(1) sets out the three circumstances which may cause the need for maintenance to arise and, relevantly here, provides in sub-paragraphs (a) and (b):

   (a) by reason of having the care and control of a child of the marriage who has not yet attained the age of 18 years;

   (b) by reason of age or physical or mental incapacity for appropriate gainful employment; …

   having regard to any relevant matter referred to in subsection 75(2).

5. In Bevan & Bevan (1995) FLC 92-600, the Full Court of this Court set out the process for assessing a spousal maintenance claim as:

   Taken together then, we would state the law as being that an award of spousal maintenance requires:

   1. A threshold finding under s 72 [now s 72(1)];

   2. Consideration of s 74 and s 75(2);

   3. No fettering principle that pre-separation standard of living must automatically be awarded where the respondent’s means permit;

   4. Discretion exercised in accordance with the provisions of s 74, with ‘reasonableness in the circumstances’ as the guiding principle.

6. The first question is whether the Wife is unable to support herself adequately.

7. In Nutting & Nutting (1978) FLC 90-410, Lindenmayer J interpreted “adequately” within the meaning of s 72 of the Act as importing:

   A standard of living which is reasonable in the circumstances, including the circumstance that the parties are no longer husband and wife and that the assets and resources which were formerly available to them both in common have now been divided between them.

8. In Saxena & Saxena (2006) FLC 93-268, Coleman J set out the four steps that the Court should follow as:

   1. To what extent was the Wife unable to support herself?

   2. What were the Wife’s reasonable needs?

   3. What capacity did the Husband have to meet an order, if one were made?

   4. If steps 1 to 3 favoured the Wife, what order would be reasonable having regard to s 75(2) of the Act?

9. The Full Court of this Court, in M & M (2006) 36 Fam LR 97, addressed the threshold proposition in the following terms:

   [31] …The question whether an applicant can support his or herself “adequately” is not to be determined by reference to any fixed or absolute standard but by having regard to the matters referred to in s 75(2): Mitchell (above at Fam LR 59; FLR 306; FLC 81,995).

   [32] The question is not to be determined upon a “subsistence level” but upon consideration of whether the applicant can support himself or herself “adequately” importing a standard of living reasonable in the circumstances: Mitchell (above); Evans and Evans (1978) FLC 90-435; Brady and Brady (1978) FLC 90-513 at 77,701; Gamble and Gamble (1978) FLC 90-452; Wilson and Wilson (1989) 13 Fam LR 205; FLC 92-033; and Bevan and Bevan (1993) 19 Fam LR 35; (1995) FLC 92-600.

   [33] It is not necessary for an applicant for maintenance to use up all of his or her assets and capital in order to satisfy the requirement that he or she is unable to support him or herself “adequately”: Mitchell, above.

10. On this hearing, there was no cross-examination of either party, and obviously the evidence of each remains untested. I also note that paragraph 3.5 of the written submissions on behalf of the Husband makes specific reference to the approach to be taken on the determination of an interim maintenance application. That assumes particular significance in circumstances where the trial of the substantive proceedings is imminent and even allowing for the prospect that final judgment will be reserved for a time, it would not be anticipated at this stage that interim spousal maintenance Orders, as currently made, would have operative effect for a significant period of time.

11. Despite the assertion in paragraph 53(a) of his affidavit filed 27 July 2012 to the effect that he does not accept that the Wife has any entitlement to spousal maintenance, I do not discern from the Husband’s affidavit any direct or specific traverse of the Wife’s claims for her own needs as detailed in her Financial Statement filed 24 February 2012, totalling an estimated $1,396.00 per week. Whilst I noted at the outset of the hearing that paragraph 3.10 of the written submissions on behalf of the Husband indicated that there would be specific claims attacked, the typographical correction to the document then made left the bare assertion that the claims were not reasonable.

12. Having regard to Part N of the Wife’s Financial Statement filed 24 February 2012, it seems to me that on an interim basis, and on a relatively short interim basis, I ought not make allowance for the Wife making provision for holidays, nor gifts. Whilst, “…donations to charities…” of $163.00 per week might be made at the election of the Wife, in circumstances of a contested application for interim spousal maintenance, I consider that claim ought be excluded in assessing the Wife’s reasonable needs.

13. Taking a “broad brush” approach and applying modest discounting, I would, in this context, accept that the Wife’s weekly needs are in the order of $850.00.

14. The written submissions on behalf of the Husband contend that the Wife has the capacity to meet her own needs from employment. Whether or not that is so in the longer term, no doubt an issue to be agitated at trial, the fact is that from separation in late 2002 until early this year, the Husband, on the Wife’s case and on his own case to a lesser extent, acquiesced in the provision of substantial support to the Wife and children. That was in the context of the Wife not working nor seeking work.

15. In circumstances where the time to trial is a matter of weeks; the Wife has been out of the workforce since 1994; and where the Wife will have a need to focus upon the preparation of her trial, it would be unrealistic, even if the evidence allowed for such a conclusion, to assume that the Wife can now obtain employment that can meet in whole or part her needs of $850.00 per week.

16. I am thus satisfied that the Wife is unable to support herself (in circumstances where the Suburb U rental income is applied to the mortgage) and that her reasonable needs are $850.00 per week.

17. Turning to the Husband’s capacity, I have already made several references to the Husband’s exceedingly high income earning capacity and anticipated receipts of distributions of profit as well as the evidence concerning the level of support he has provided over the nine years or so from separation in October 2002 until the end of 2011.

18. Indeed, it is to be noted that even in January of this year, the Husband was proposing substantial monthly payments to the Wife, albeit not contemplated as being limited to her own personal support.

19. Whilst it was submitted that the Husband’s financial position reached a point earlier this year which did not allow him to meet the proposal he had advanced the objective evidence does not readily establish what changes or developments in circumstances produced that.

20. Whilst obvious caution needs to be taken in approaching untested evidence, I do not consider that such a cautious approach includes acceptance at face value of assertions in affidavit material that appear to be inherently unlikely or improbable. To my mind, at first blush, many of the expenses claimed by the Husband appear extraordinary or at least requiring further and better explanation than is provided by the Husband. As but one example, the Husband claims that for food for himself, his present wife, Ms A, their two infant children and Ms A’s niece, D, the weekly expense is $2,300.00. On its face that is an extraordinary claim. Similar questions might be raised, as they are raised in the submissions on behalf of the Wife, as to the claimed expenses in general. I cannot accept, without better elucidation from the Husband, expenses which are, on their face, extraordinary, as reasonable.

21. In the end, accepting that the Husband has a historically demonstrated capacity to provide substantial support, I rely primarily upon that feature in reaching the conclusion that he has the capacity to meet the Wife’s reasonable needs.

22. I have already referred to the paragraphs of the Wife’s affidavit filed 19 July 2012, where she makes specific depositions as to the level of monthly payments ($32,000.00 to $35,000.00) the Husband made throughout the period from separation until the end of last year or January this year.

23. It is difficult, if not impossible, to identify on the Husband’s evidence, as read before me, some clear explanation for the Husband having had the capacity historically to meet such substantial support but such a change in his circumstances has more recently significantly curtailed that capacity.

24. On balance, I conclude that the Husband has the capacity in the interim period under contemplation to meet an Order for interim spousal maintenance of $850.00 per week, rounded off to $3,600.00 per calendar month.

25. In circumstances where the other payments and outgoings contended for by the Wife are included as claimed expenses of the Husband in his Financial Statements and nevertheless, in circumstances where preservation of the asset pool is in both parties’ interests, I propose to make the other Orders referred to as sought by the Wife in relation to the payments of mortgages and outgoings until further Order.

Interim Child Maintenance

1. As is reflected in the Husband’s affidavit and in the written submissions on his behalf, the Husband concedes that he has an obligation to meet child maintenance for the two children of the marriage under the age of eighteen years, but disputes the quantum sought by the Wife.

2. Notably, none of the written submissions of the Husband directed to this issue are directed specifically to his capacity to pay. Rather, there is the submission as to the provision of funds to the Wife, “…in excess of $1,200,000.00…” said to have been provided by the Husband since separation. There is the assertion in the written submissions that the Wife can support the children from such funds.

3. Consistent with his acknowledgement of his obligation was Mr Richardson SC’s submission at the outset that the Husband was prepared to pay $350.00 per week per child.

4. In her financial statement filed 24 February 2012, the Wife particularises expenses for the children, including N (who has now turned 18 years) at an estimated $2,080.00 per week. Those claimed expenses include education expenses, including fees and levies and uniforms of $471.00 per week. The written submissions on behalf of the Husband contain that the Husband continues to meet private school fees for the two youngest children and in the year to date, has met expenses totalling in excess of $12,000.00.

5. If the item for education expenses is removed (on the assumption that the Husband proposes that he continues to meet this expense separately for the two younger boys) and expenses specific to N are removed, the expenses claimed in respect of the children (all three of them) reduces to $1,597.00. Taking the broad brush approach of reducing those expenses by one-third (as being referable to N), the weekly sum is about $1,065.00 for both boys. That converts to a calendar monthly sum of about $4,580.00.

6. I am satisfied that the Wife does not have the capacity, from her own resources, to contribute to the children’s needs and, frankly, I do not understand the contention that somehow the provision of historical funds is a source of such continuing and future support. There is no evidence upon which I can comfortably conclude that the Wife retains, other than the relatively modest amounts in bank account balances, any of the substantial funds historically paid by the Husband.

7. I therefore propose to Order on an interim basis that by way of interim child maintenance, the Husband pay the amount of $4,580.00 per month to the Wife, together with an Order that he meet their education expenses.

Adult Child Maintenance

1. Again, the Husband acknowledges an obligation to meet adult child maintenance for N, but disputes the quantum sought by the Wife.

2. Part of the claims advanced by the Husband in his Financial Statements for expenses include claims in respect of his wife, Ms A’s, niece, D. As per the Amended Financial Statement filed on 2 April 2012, the Husband claimed expenditure of $250.00 per week for school expenses for D plus $50.00 per week for her driving lessons. The note to that Financial Statement observes that, “other adults” in the applicable column refers to both the Husband’s current wife Ms A and Ms A’s niece, D.

3. It is not clear to me that the Husband has any legal obligation to provide financial support for D, as she seems to be identified as the niece of his current wife. In terms of total weekly expenses of $3,796.00 for “other adults” in the Financial Statement, it would seem that the Husband is paying significant expenses for D.

4. Whilst it is not entirely clear to me how old D is, the fact that she was apparently, as at April 2012, having driving lessons, is some indication. Thus it would seem strange that there is apparently no expectation by the Husband that D should contribute to her support (there is a $400.00 per week claim for child minding) and that the Husband should support her freely and fully, yet he suggests that N should contribute to her own support and he challenges the need to make any significant provision for her.

5. Balancing the competing considerations, and on the approach that the Husband’s legal obligation for the support of N is paramount to any moral obligation to support D, I am satisfied that an Order ought be made for adult child maintenance on an interim basis of AUD$500.00 per week or AUD$2,150.00 per calendar month.

Other Orders Sought

1. Whilst the Application in a Case filed by the Wife sought Orders with respect to the repair of the United Kingdom property and its tenanting, no written submissions or oral submissions at the hearing were addressed to this aspect of the application, either by or on behalf of the Wife or the Husband.

2. In any event, given the imminence of the trial, it seems to me that the issues raised in respect of that property, which are in contention, can most conveniently be dealt with at the trial.

3. I simply observe that it is passing strange that the most valuable property of the parties with significant equity has remained a non-income earning proposition for now more than twelve months. Put another way, it would seem that the United Kingdom property has had the potential scope for significant income production that has not been utilised, but no doubt the issues surrounding that aspect will be further crystallised in the course of the trial.

4. In the circumstances, I do not propose to make any interim Orders with respect to this.

5. I therefore make Orders as set out at the commencement of these reasons.

I certify that the preceding eighty (80) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 2 August 2012.

Associate: 

Date:  2 August 2012