Muster & Muster
[2022] FedCFamC1F 840
Federal Circuit and Family Court of Australia
(DIVISION 1)
Muster & Muster [2022] FedCFamC1F 840
File number(s): SYC 1908 of 2020 Judgment of: CHRISTIE J Date of judgment: 3 November 2022 Catchwords: FAMILY LAW – INTERIM PROPERTY PROCEEDINGS – Where the wife seeks a partial property settlement to pay outstanding school fees – instructions to single expert – disclosure of medical documents – application for costs where wife self-represented Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 6.06
Family Law Act 1975 (Cth) s 79
Cases cited: Garnett v Bradley [1878] UKLawRpAC 31; (1878) 3 App Cas 944
Stephens & Stephens [2010] FamCAFC 172; (2010) 44 Fam LR 117
Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11
Division: Division 1 First Instance Number of paragraphs: 78 Date of hearing: 27 October 2022 Place: Sydney Solicitor for the Applicant: Litigant in person Counsel for the Respondent: Mr Gould Solicitor for the Respondent: Ms McKay, Bay Legal ORDERS
SYC 1908 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MUSTER
Applicant
AND: MR MUSTER
Respondent
order made by:
CHRISTIE J
DATE OF ORDER:
3 November 2022
THE COURT ORDERS THAT:
1.Within seven days the husband and wife authorise D Company to pay from the monies held in trust on behalf of the parties:
(a)$10,497 to C School;
(b)$3,820 to E School, Suburb F;
(c)$315,000 to the husband by way of partial property settlement;
(d)$315,000 to the wife by way of partial property settlement; and
(e)the balance to Bay Legal to be placed in a controlled monies account in the names of both the husband and the wife.
2.The husband must undertake any testing or investigations required by Mr G to facilitate his completion of the single expert report. Any requests by Mr G for further tests or investigations shall occur within 14 days of Mr G making that request in writing to the husband and the wife.
3.Within seven days of the date the letter of instruction is sent to the single expert Mr G the husband’s lawyers are to lodge with the exhibits section of the Federal Circuit and Family Court of Australia, Sydney Registry a paginated tender bundle containing all medical records provided to the single expert. The wife (and any lawyer she may instruct) have leave to inspect but not copy those documents.
4.Within seven days of the date of release of the single expert report to the parties, the husband’s lawyers are to lodge with the exhibits section of the Federal Circuit and Family Court of Australia, Sydney Registry a paginated tender bundle containing all medical records (including any test results) which have been provided to the single expert subsequent to the letter of instruction. The wife (and any lawyer she may instruct) have leave to inspect but not copy those documents.
5.Within seven days of these orders the husband must provide to the wife all documents in his possession and control as are required to be produced under r 6.06 of the Federal Circuit and Family Court of Australia(Family Law) Rules 2021 (Cth).
6.The application of the wife filed 7 September 2022 is otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Muster & Muster has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J:
This is an interlocutory application brought by Ms Muster (“the wife”).
The application seeks orders about the following issues:
(a)Payment of school fees;
(b)Partial property settlement;
(c)Instruction of the single expert;
(d)Disclosure/discovery; and
(e)Costs.
Mr Muster (“the husband”) opposed the relief sought in the wife’s application.
At the interim hearing the wife appeared on her own behalf and the husband was represented by counsel.
During the course of submissions, counsel for the husband conceded that some of the orders sought by the wife could appropriately be made (or made in a modified form).
Background
The wife who was born in 1978 is an educator.
The husband who was born in 1977 is a trades person although not presently in paid employment. The parties commenced to reside together in early 2003 and were married in late 2005.
The parties separated on a final basis on 25 January 2019.
The parties are the parents of four children: Ms B born 2003, X born 2006, Y born 2007 and Z born 2008.
At the time of the parties’ separation the children lived with the mother and spent time with the father. The parties competing applications for final orders originally included applications for the making of final parenting orders. The parents resolved their dispute as regards parenting matters by the making of final consent orders on 17 September 2021. Those orders provided for the children to reside with their mother and spend time with their father on a modest basis. The material filed by the mother suggests that the oldest child of the parties (an adult) does not spend time with the father. The exact amount of time which the children spend with their father and whether or not it is in accordance with those final consent orders may be a matter of controversy as between the parties. It is not necessary to resolve that controversy to find that the children are almost in the sole care of their mother.
The father is liable to the mother for child support. That child support liability has remained in the sum of $300 per week notwithstanding the fact that the father is not in paid employment. This amount is currently being met from capital.
On 18 October 2021 orders were made for the sale of a property owned by the parties at H Street, Suburb J (“the Suburb J property”) and the parties were to act in accordance with those orders as regards the proceeds of sale. Order 3 of the 18 October 2021 orders provide that, upon completion of the sale of the Suburb J property, the parties shall do all acts and things and sign all documents necessary to disperse the proceeds of sale as follows:
a. First, to pay all necessary and reasonable costs, commissions and expenses of the sale;
b. Second, to pay any amounts required to discharge the home loans with Commonwealth Bank of Australia referrable to the mortgage registered over the [Suburb J] property and discharge the mortgage;
c. Third, payment of any amounts required to discharge the loan referable to the caveat … of [K Pty Ltd] registered over the title of the [Suburb J] property to be removed and in doing so the parties shall do all acts and things and sign all documents necessary to require [K Pty Ltd] to remove said caveat;
d. Fourth, the sum of $40,000 to [Mr L];
e. Fifth, the sum of $20,000 to [Ms M];
f. Sixth, $21,000 to the wife for renovation expenses incurred, and as evidenced by receipts or tax invoices provided to the husband’s solicitor;
g. Seventh, the sum of $300,000 to the wife by way of a partial property settlement;
h. Eight, the sum of $200,000 to the husband by way of partial property settlement; and
i. The balance held in [D Company] trust account (“the balance of the net sale proceeds”) pending further Orders or written agreement from both parties.
4. The parties do all acts and things and sign all documents necessary to instruct [D Company] to invest the balance of the net sale proceeds in a controlled monies investment trust account in the names of both the husband and the wife.
5. That within 14 days of receipt of the monies pursuant to Order 3(h) herein, husband pays:
a. $7,250 to [E School, Suburb F] being half of the children’s school fees outstanding at the date of these Orders; and
b. $4,000 to [C School] being half of the children’s school fees for the 2021 school year.
It is important to understand the application for final orders of each of the parties in order to appreciate whether the partial property settlement orders sought by the wife on this application potentially jeopardise the relief sought by one or other of the parties at final hearing.
The wife seeks a final property settlement such that would see her receive 70 per cent of the parties assets while the husband seeks a property settlement which would see him receive 60 per cent of the parties assets.
The wife’s interim application for partial property settlement seeks that she receive an amount which she says is equivalent to 50 per cent of the existing property of the parties.
The law
This is an application for orders for interim or partial property adjustment pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
As a general rule justice and equity are served by there being one exercise of the s 79 power under the Act.
In an appropriate case it is recognised that one or both of the parties may seek an order under s 79 of the Act at an interlocutory stage of the proceedings.
A party seeking an interim or partial property settlement does not need to demonstrate special circumstances to seek such an order. However, it is essential to demonstrate that:
(a)Such an order would be just and equitable;
(b)Such an order would not prejudice the relief of another party; and
(c)There are assets available to satisfy the order.
In approaching the question of payment of school fees it is important to understand how such an order is to be characterised. The wife’s case was that such an order was to be made as a partial property settlement order. The husband opposed the making of the order on the basis that it was a child support order.
Consideration
The parties have the sum of $2,730,649 sitting in the account of the conveyancer who acted on the sale of their Suburb J property (“the sale proceeds”). It is not earning interest.
Proposed orders 1-3 in the wife’s application deal with school fees. Paragraphs one and two seek the payment of a specific sum from the sale proceeds to C School and E School, (“E School”). Paragraph three seeks a payment to the wife referable to monies she has previously paid by way of school fees.
In mid-2015 the husband signed an “Enrolment contract” with C School in respect of the attendance of the parties’ son X.
The contracts reads:
We acknowledge that in enrolling our child at [C School] we have committed to paying School Fees for the period of the student’s education at the school and that we have carefully considered the financial commitment involved.
We acknowledge and agree we are both jointly and severally liable to pay all School Fees.
We agree to pay the School Fees, including school tuition and other ancillary charges such as technology, camps, excursions, etc., In accordance with the timetable set out in the Fee Schedule.
It is clear from the evidence that when school fees are unpaid the school engages a third party to collect its debts.
The evidence establishes that there is an outstanding liability to C School in the sum of $10,497.
In mid-2017 the parents signed an application to enrol their daughter Y at E School, Suburb F.
In early 2018 both parents completed and signed the application for enrolment of Z at E School, Suburb F.
In both cases the signing of the acceptance of enrolment was an acceptance of the terms of enrolment.
There is an outstanding balance owed to E School in respect of Z’s fees of $3,820.
The wife submitted that it was not in the children’s interests to be removed from the schools they have attended for some time. She may be correct but in argument I indicated to her that since these were not parenting proceedings I could not take into account the best interests of the children. The exercise is governed by Part VIII of the Act.
The Act permits the Court to make orders about the debts of the parties, including orders for payment of those debts to the third party.
C School and E School are creditors of the parties. The wife seeks that the parties’ funds be applied to the debt.
The husband has not brought an application that the children’s schools be changed.
The husband submitted that the Court could not make the orders sought by the wife as they were properly characterised as orders relating to child support and the prerequisites to the Court hearing and determining a child support application had not been satisfied. I accept that the payment of school fees pursuant to court order may be characterised as a child support order but I do not accept for the reasons set out below that it can only be characterised as a child support order.
I consider that there is jurisdiction to make an order that the parties’ debts (in this case school fees) are paid from the sale proceeds and I intend to so order. I agree that if I were being asked to make an order for ongoing payments or payments in the future the situation may be less clear. However, the wife’s application seeks an order that the parties’ contractual obligations to pay school fees be satisfied by payment from the sale proceeds. The husband has consented to that course in the past and I find that I can order him to do so in the above circumstances.
Proposed Order 3 is of a different character. The wife is seeking reimbursement from the husband of a relatively modest sum. That matter can be dealt with in any final resolution.
Partial property settlement lump - sum to each party
I now turn to the wife’s application for release of substantial funds to herself and the husband by way of partial property adjustment.
By way of submission the wife said the money she seeks would assist to rehouse her and assist to meet expenses. The submission is not supported by any evidence that suggests that the wife intends in the near future to purchase a specific property.
I accept that the wife has expenses which exceed her income. Some of those expenses relate to the children including an adult child. I note the adult child has an income albeit she is a student.
The wife’s application would see her receive (on her calculation) about 50 per cent of the overall assets taking into account her superannuation and partial property settlements monies received to date. She says the figure she seeks to bring her to approximately 50 per cent requires a payment from the sale proceeds in the sum of $1,347,500.
From the material, the parties’ assets, liabilities and superannuation would appear to be:
Property Ownership Value ASSETS Proceeds of sale J $2,730,649 ANZ account ending …34 H $555 ANZ account ending …69 H $145 N Pty Ltd shares H $875 O Pty Ltd shares H $1,600 Motor Vehicle 1 H $3,000 Tools/household contents H $3,500 Motor Vehicle 2 W $30 Household contents W $2,000 Partial property settlement H $400,000 Partial property settlement W $300,000 Total: 3,472,324 SUPERANNUATION Superannuation Fund 1 H $12,205 Superannuation Fund 2 H $8,271 Superannuation Fund 3 W $150,000 Total: $170,476 Total Assets: $3,612,830
There are three difficulties with the wife’s application that she receive $1,347,500:
(a)If the Court were to make orders as sought by the wife she will have received some of the funds which are necessary to satisfy the orders the husband seeks for payment of monies to him and the wife’s affidavit is silent as to how the funds to be paid to her may be preserved;
(b)The wife has not given any evidence about the manner in which the $300,000 to which she has already had access has been applied and this makes me cautious about release of such a significant sum; and
(c)The wife has not adequately addressed why justice and equity require the making of an order at this interlocutory stage of proceedings before evidence can be tested, bearing in mind the caution about it generally being in the parties’ interests that there be just one exercise of the s 79 power.
I accept that the wife has established that she has a need for funds and in the absence of any evidence that the husband has the capacity to pay spouse maintenance it is appropriate that she be given access to capital by way of an interim property order.
The wife proposed that the husband receive $315,000. He is not currently in receipt of income. The husband’s income when employed was $61,000. The wife has full time employment earning about $130,000 but I accept she has greater expenses. I will provide that they each receive an equivalent sum.
The parties will receive funds by way of partial property settlement. They are, of course, entitled to apply those funds in whatever manner they chose. However, until there is a final property settlement then the manner in which they apply those funds may be relevant to the justice and equity of the overall property adjustment orders in due course.
Investing proceeds from former matrimonial home
Both parties agree that the funds which are currently held in the account of D Company on behalf of the parties should be transferred into a controlled monies account in the names of the parties held by Bay Legal. The only dispute is about the quantum of funds to be held. The wife raised concerns about the conduct of the husband’s lawyers to date. I accept that they may have faced challenges in providing timely responses and the wife has felt aggrieved but in the context of an interim hearing I am far from satisfied that the matters about which the wife complains demonstrate any wrongdoing on the part of the husband’s lawyers and may in due course be attributable to difficulty in obtaining instructions. These are interim proceedings where the evidence is untested and I cannot make findings unless they are available on the uncontested or objective evidence. I do not accept that there is any evidence to support the contention that Bay Legal would act other than in accordance with the duties they owe to the Court and their professional conduct rules.
After the payments pursuant to these orders, the balance of monies will be placed in a controlled monies account with Bay Legal.
Mr G
In late 2021 the parties entered into consent orders to appoint an unnamed person as single expert “to provide a medico-legal report regarding the husband’s medical conditions and life expectancy” (Order 6, exhibit 3).
On 2 May 2022 orders were made by Judge Monahan appointing Mr G as single expert.
A draft letter of instruction to Mr G was prepared but the process has stalled. The wife wants very specific orders about testing which she contends are necessary if Mr G is to undertake his report.
The wife also wanted specific orders about provision of the information to the single expert and provision of copies of all documents to her.
The wife is currently acting for herself in the proceedings and indicates she will be doing so for the foreseeable future.
The wife accepts that Mr G is appropriately qualified to provide the report.
During the course of the hearing I asked the wife whether or not the problem might be solved by the husband being required to undertake whatever tests were requested by the single expert. The wife seeks such an order at paragraph 15 of her application. The husband’s counsel appropriately conceded that it was an order which could, and perhaps should, be made.
Counsel for the husband pointed the Court to the draft letter of instruction which includes recent test results for the husband. Mr G could be empowered by an order to make any further necessary requests in writing and the husband would be obliged to comply with any such request.
The husband raised a concern in his material that the nature of the testing and the provision of the medical information is invasive and/or intrusive. That is true. Accordingly, the Court needs to be very careful to only order those tests, and the provision of that information, which is necessary to prepare the single expert report and prepare the financial matter for hearing (or resolution).
I indicated to the parties in submissions that the wife was entitled to have access to the material provided to the single expert (notwithstanding the personal nature of it) but that this could be achieved by making that material available at the Court. The wife would be entitled to inspect and take notes but not photocopy or retain the records.
To that end I suggested that the husband be required to provide all documents which accompany Mr G’s letter of instruction to Mr G as a paginated bundle. An identical paginated bundle is to be lodged at the exhibits section of the Federal Circuit and Family Court of Australia, Sydney Registry (“the Registry”), within seven days of provision to the single expert.
If Mr G receives further documents (including test results) during the process of completing his report, those documents should be provided to the lawyers for the husband so that a supplementary paginated bundle can be lodged with the exhibits section of the Registry.
The effect will be that all parties will have access to the material which has informed the single expert conclusion. Those orders will deal with the wife’s application to be provided with documents relating to the husband’s testing.
The wife sought in paragraphs eight, nine, 12, 13, 14 and 16 that the husband undertake specific medical tests. I asked the wife to indicate the evidence which would support the necessity for the specific tests and frequency. That evidence was not before the Court. If the tests are necessary in order for the single expert to prepare the report then I have confidence that the single expert will request that the husband undertake the tests. I will make the general order that requires the husband to undertake any test requested by the single expert.
The order sought by the wife at paragraph 10 seeks the husband’s compliance with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“Cth”) (“the Rules”). It is unnecessary to make such an order since the parties are obliged to comply with any rule, compliance with which has not been waived.
Costs
The wife sought that the husband pay costs of an enforcement application before a Judicial Registrar. The wife was not legally represented at that hearing. The wife does not specify the costs to which she refers.
The wife’s application sought costs at the scale in Schedule 3 to the Rules.
The expression “costs” is a reference to the payment by one party to the litigation to another party to the litigation of “money by way of partial indemnity for professional legal fees and expenses actually incurred by another party in the course of the litigation.” Garnett v Bradley (1878) 3 App Cas 944; Oshlack v Richmond River Council (1998) 193 CLR 72 at [67]; Stephens & Stephens at (2010) 44 Fam LR 117 at [67].
If there are no professional legal fees and expenses then there can be no order as to costs.
The making of an order for costs cannot be used to punish: Oshlack v Richmond River Council (1998) 193 CLR 72 at [67]; Stephens & Stephens (2010) 44 Fam LR 117 at [67].
The wife also sought the husband be responsible for the costs of a hair follicle test because she contended there had been delay in his having undertaken that test. His counsel submitted that there was no delay and the wife had misinterpreted the orders which required the husband seek referrals within 14 days as being a requirement that the testing take place within 14 days. I accept the order did not oblige the husband to have completed the test within 14 days. I find that to the extent that the husband did not complete the test as promptly as the wife wished it does not provide a basis for the original order that the costs of testing be shared to be upset.
To the extent that the wife applied for the costs of this application I find that she does not have any legal costs and the application is therefore ill conceived.
Discovery – Disclosure
Both parties are obliged to make full and frank disclosure of all documents and information relevant to determination of a fact in issue in the proceedings.
The two issues which occupied the Court on this interim hearing were the circumstances of the husband’s employment (or lack of employment) and the circumstances of the husband’s health and how they may touch on his future financial needs.
The oral applications
The wife sought leave to issue subpoena. She had not prepared a draft and had not given notice to the husband. She sought to subpoena the husband’s employer.
The husband says he is currently on leave without pay from his employer. The wife does not accept that the information she has been provided is accurate. The husband has disclosed an email and a payslip both of which support the position that he is on leave without pay. The husband also discovered an invoice for a training course he is to undertake.
Counsel who appeared for the husband said (on instructions) his client was speaking with the Union and does not accept there is either a disciplinary or a voluntary aspect to the leave without pay. Negotiations are said to be ongoing.
I will direct that the husband provide all documents which are relevant to his income. If the husband is or has been terminated then this will include any letter of termination. The duty of disclosure is ongoing. The husband must provide documents to the wife in a timely manner if they are relevant to his income or earning capacity. The documents which will be required are those covered by the terms of r 6.06 of the Rules.
The wife is not precluded from seeking leave to issue a specific subpoena or subpoenae in due course if she establishes that the husband has failed to provide relevant documents which are in his possession or control.
Costs Notice
The wife sought an order that the husband provide Costs Notices for various historical court events. It is appropriate that each party comply with the requirement to file a Costs Notice. However, in this case I am satisfied that the requirement is met by the direction I proposed – which was for the husband to file a compliant Costs Notice within 24 hours of the hearing on 27 October 2022. The husband filed a Costs Notice on 28 October 2022.
I certify that the preceding seventy-eight (78) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie. Associate:
Dated: 3 November 2022
0
2
0