Michie and Michie and Ors
[2011] FMCAfam 639
•29 June 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MICHIE & MICHIE & ORS | [2011] FMCAfam 639 |
| FAMILY LAW – Property – interim orders – partial property distribution – where parties agree to pay health insurance premiums for the family – where parties seek orders selling and transferring motor vehicles – orders for payment of funds on account of one party’s legal expenses. |
| Family Law Act 1975 (Cth), ss.79, 80, 117 |
| Paradine & Paradine (1981) 7 Fam LR 125; FLC 91-056 In the Marriage of Poletti [1990] FamCA 79 Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166 |
| Applicant: | MR F MICHIE |
| First Respondent: | MS D MICHIE |
| Second & Third Respondents: | MR A MICHIE & MS A MICHIE |
| File Number: | SYC 1002 of 2010 |
| Judgment of: | Scarlett FM |
| Hearing date: | 24 June 2011 |
| Date of Last Submission: | 24 June 2011 |
| Delivered at: | Sydney |
| Delivered on: | 29 June 2011 |
REPRESENTATION
| Solicitors for the Applicant: | Christopher Mackay Lawyer |
| Solicitors for the Respondents: | Marks Griffiths Bova |
ORDERS
That the Applicant husband and the Respondent wife sign all documents and do all things necessary to instruct their solicitors CHRISTOPHER MACKAY for the husband and MARY BOVA for the wife to sign all necessary withdrawal forms and other documents to effect the withdrawal from the National Australia Bank Term Deposit No. [1] in the names of the said solicitors as trustees for the parties of the sum of $1,160.88 or such further sum as may be necessary to pay in advance the premium for twelve (12) months comprehensive family medical insurance with Medibank Private.
That the parties are to do all things necessary and sign all documents to effect the immediate sale of the Toyota Prado motor vehicle registration number [omitted] at a fair market price as agreed by the parties and failing that as decided by a valuer from the NRMA or such other organisation agreed by the parties and pay the sale proceeds to the wife.
The wife is to ensure that the number plates [omitted] on the Toyota Prado motor vehicle referred to in Order (2) above are removed from the said vehicle and returned to the husband prior to the sale of the said vehicle.
The husband is to do all things and sign all documents necessary to transfer to the wife the Toyota HiAce van registration number [omitted].
The parties are to do all things and sign all such documents necessary to instruct their solicitors CHRISTOPHER MACKAY and MARY BOVA to withdraw from the National Australia Bank Term Deposit Account No. [1] the sum of $42,450.00 and pay the said sum to the husband’s solicitor on account of legal costs due and payable in respect of these proceedings.
The application is adjourned for final hearing to Wednesday 19 October 2011 to continue until Friday 21 October 2011.
IT IS NOTED that publication of this judgment under the pseudonym Michie & Michie & Ors is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 1002 of 2010
| MR F MICHIE |
Applicant
And
| MS D MICHIE |
First Respondent
| MR A MICHIE & MS A MICHIE |
Second & Third Respondents
REASONS FOR JUDGMENT
Application
This is an application for interim property orders by the husband. The orders that he seeks relate to a fund of money held on behalf of the wife and himself in a trust account by the parties’ solicitors. The wife, in her Response, seeks orders requiring payment out of those moneys to her or at her direction. She also seeks other orders to bring about the sale of two motor vehicles owned by the parties.
The funds currently in the trust account represent the net proceeds of the sale of a property at [K] previously owned by the parties. The sum of $68, 750.15 was placed in that account. The husband’s solicitor has advised the Court that the amount presently stands at a little over $70,000.00.
In his Application in a Case filed on 3rd June, the husband seeks an order that the parties withdraw the sum of $60,000.00 from that account to be paid to him for the purposes of:
a)repaying a loan from his brother in the sum of $17,550.96; and
b)paying the balance ($42,449.04) to his solicitor on account of legal costs incurred, or likely to be incurred, in connection with these proceedings.
The wife filed a Response to the Application in a Case on the morning of the hearing. In that Response, she seeks orders that:
a)the parties are to withdraw the sum of $1,160.88 to pay twelve months comprehensive family medical insurance with Medibank Private;
b)the parties sell the Holden Monaro motor car in the possession of the husband and divide the proceeds equally;
c)the parties sell the Toyota Prado motor car and divide the proceeds equally; and
d)in the alternative, after the payment to Medibank Private, the balance of the proceeds in the trust account should be paid to her.
The wife also seeks an order that the husband should pay her costs, although no submissions were made as to why that should be so.
Areas of Agreement
At the hearing, the husband’s solicitor advised that his client agreed that the sum of $1,160.88 or whatever further amount was necessary should be paid to Medibank Private to cover the family fund membership for the next twelve months. I propose to make that order.
The husband also agrees with the order sought by the wife that the parties’ Toyota Prado motor vehicle, which is currently in the wife’s possession, should be sold and that, instead of the proceeds being divided equally, as the wife seeks, the wife should retain the entire proceeds of sale as a partial distribution of property.
The vehicle bears the number plates [omitted] and the husband seeks an order that the plates be returned to him. The number plates are personal number plates with the husband’s [details omitted]. The wife has agreed that the number plates should be returned to the husband.
During the course of the hearing, the husband agreed that the wife should have the Toyota HiAce van currently in her possession. The wife uses that vehicle in her business as a [omitted].
Matters in Issue
The husband does not agree with Order 2 sought by the wife that says:
that the husband do all such things and sign all documents to effect the immediate sale at a reasonable market price as agreed between the husband and the wife of the Holden Monaro motor vehicle registration number [omitted] and failing which at a price as decided by a valuer of [omitted] and upon such sale distribute the nett proceeds equally between the husband and the wife. The cost of such valuation shall be equally paid by the husband and the wife.
The husband does not agree with the order sought by the wife in the alternative, which is Order 4 in her Response:
That in the alternative, after payment pursuant to Order 1, the balance of monies remaining in the National Australia Bank Term Deposit Account number [1] be paid to the wife and the Court shall at the final hearing determine the nature of the distribution to the wife.
The wife’s solicitor said that her client wished to vary the proposed order 4, so as to provide that after payment of the amount in Order 1 for the medical fund premiums, the balance of the proceeds in the term deposit should be divided equally between the husband and the wife.
The wife also seeks costs.
The wife does not agree with the husband’s Order 1 in his Application, which states:
The husband and wife forthwith sign all documents and do all things necessary to instruct their solicitors, namely Christopher Mackay for the husband and Mary Bova for the wife to sign all necessary withdrawal forms and other documents and other documents to effect the withdrawal of the sum of $60,000.00 from National Australia Bank Term Deposit No. [1] in the name of the said solicitors as trustees for the parties and pay the said sum of $60,-000.00 to the husband (or in the alternative, to the husband’s solicitor Christopher Mackay) on account of legal fees (barrister and solicitor) and to enable repayment by the husband to his brother Mr J Michie of the amount of $17,550.96.
Submissions
Mr Mackay, for the husband, submitted that the husband needed money to fund his legal expenses. He currently owes his solicitor $20,911.00 and expects to incur further solicitors’ costs of $11,000.00, counsel’s fees of $14,520.00 and court fees of $1,332.00 for the final hearing of this matter, which will now run for three days in October.
In addition, as the wife had appropriated for herself the Toyota Prado and Toyota HiAce motor vehicles, he needed to have a car, so he arranged for work to be done on his 1969 Holden Monaro so that he could use it. The work done on the engine cost $17,550.96, which his brother Mr J Michie paid on his behalf. He now wishes to repay his brother.
Mr Mackay referred to the decision of the Full Court of the Family Court in the matter of In the Marriage of Poletti[1] and also Paradine & Paradine.[2]
[1] [1990] FamCA 79
[2] (1981) 7 Fam LR 125; FLC 91-056
The wife has paid her legal costs, according to her affidavit. Those costs are remarkably similar to the husband’s costs.
Ms Bova, for the wife, told the Court that the husband’s application should be split in two:
a)the payment for the repairs to the Holden Monaro; and
b)the payment of the husband’s legal costs.
It was submitted that the amount for the repair of the Holden Monaro was excessive. The husband has been living with his parents in the adjoining property and has the use of his father’s car, as his father no longer drives. Further, the wife had proposed that the Toyota Prado should be sold as long ago as January 2010.
Further, the assets of the marriage are miniscule, being the money in the term deposit and the parties’ nebulous interest in the home that was built on the land owned by the father’s parents.
The wife has to rehouse herself. She has the shared care of the parties’ three children. The shared care arrangement works because the parties live so close together. The wife works from home as a [omitted]. She needed to have [omitted] built for her use in the business as the husband’s parents have withdrawn their consent for her to use their [omitted].
Ms Bova submitted that the decision in Poletti should be distinguished on the facts. These parties do not have substantial or diverse assets. There is a risk that the only valuable asset is the term deposit.
The Relevant Law
Section 79 of the Family Law Act 1975 gives the Court power to make alteration of property interests. Section 80 gives the Court a number of powers, including the power to make an order pending the disposal of proceedings or an order until further order (s.80(1)(h)).
In Poletti[3] the Full Court of the Family Court held that an order to one party to pay to the other party’s solicitors an amount of money to be utilised on account of that party’s costs in prosecuting the claim for property settlement was properly made under the provisions of paragraph 80(1)(h) and could be supported under subsection 117(2). The Court has power in appropriate cases to make an order for interim costs.
[3] Supra
In Strahan & Strahan[4] the Full Court of the Family Court held that an order for the provision of funds for litigation expenses may be made as a maintenance order under ss 72 and 74 of the Act or a property settlement order under s. 79 or s. 80(1)(h) or a costs order under s. 117. It is important for a court to identify the relevant source of power when contemplating an order for interim provision for litigation expenses since it is the source of power that determines the necessary preconditions, relevant considerations, factors or matters for making the order. An order sought under s.79 of the Act may be made by the Court as it considers appropriate provided it is satisfied that it is just and equitable to make the order.
[4] [2009] FamCAFC 166
Conclusions
The wife, in her financial statement filed on 21st June 2011, estimates the value of the Toyota Prado at $15,000.00. The husband, in his financial statement filed on 3rd June 2011, estimates the values of the Toyota Prado and the Toyota HiAce together at $23,500.00. He estimates the value of the Holden Monaro at $40,000.00.
The two Toyotas are in the wife’s possession and the husband agrees that she may have both vehicles. He wishes to retain the Monaro. He has spent the sum of $17,550.96 on making the Holden Monaro roadworthy and his brother has paid for that work to be done. The husband wishes to repay his brother for that expenditure, but in the light of a final hearing in mid-October, it is difficult to see why this amount needs to be paid now. The payment to the husband’s brother should await the final hearing.
The legal costs are another matter. The husband does not appear to have the wherewithal to pay his legal costs for the forthcoming hearing, which would leave him unrepresented. His solicitor has told the Court that he cannot brief counsel if he does not have the funds in hand to pay counsel’s fees, and he is unwilling to go on acting for the husband whilst his costs remain unpaid.
There needs to be a level playing field for the final hearing, with both parties legally represented. The husband seeks a payment out of the term deposit of $60,000.00 to repay his brother and to make a payment on account of legal costs. Deducting $17,550.96 from the sum of $60,000.00 sought would leave the husband with $41,449.04 to go towards his past and anticipated legal costs. The total of the costs amount to $47,763.00, but the husband has not asked for that amount. Clearly, he can expect to be able to continue his case if he were to receive the smaller amount of $42,449.04 (rounded up to $42,450.00), which would substantially defray his expenses. I am satisfied that it is just and equitable for that amount to be paid to the husband’s solicitor on account of the husband’s legal costs, as a partial property distribution.
The parties’ funds are diminishing and they would be advised to resolve this matter as expediently as possible in order to avoid incurring further costs.
I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of Scarlett FM
Date: 29 June 2011
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