Naillon & Naillon (No 2)
[2022] FedCFamC1F 957
Federal Circuit and Family Court of Australia
(DIVISION 1)
Naillon & Naillon (No 2) [2022] FedCFamC1F 957
File number(s): ADC 3408 of 2021 Judgment of: BERMAN J Date of judgment: 6 December 2022 Catchwords: FAMILY LAW – PROPERTY – Single Experts – Where it is likely that the assets of the four-way partnership have been utilised by the three-way partnership – Where the value of the four-way partnership is unclear because of the three-way partnership – Where all parties agree to wind up the four-way partnership – Where it is necessary to appoint a single expert forensic accountant and a single expert valuer in relation to the four-way partnership and the three‑way partnership – Orders.
FAMILY LAW – SPOUSAL MAINTENANCE – Interim – Where the applicant seeks interim spousal maintenance – Where the respondent opposes the application – Where the applicant satisfies the threshold test – Consideration of s 75(2) factors – Consideration of the respondent’s capacity to pay in circumstances where the respondent’s Financial Statement is wholly inadequate – Where it is not unreasonable to bring to account that the respondent has sufficient capacity to meet the spousal maintenance application – Orders.
FAMILY LAW – DISCOVERY – Where the applicant seeks that the first respondent make discovery – Where the documents sought have clear relevance to the proceedings and are not considered a “fishing expedition” – Where the first respondent does not clearly object but rather contends that the applicant can obtain the documents herself in respect of the four-way partnership given her current involvement – Where it is not confirmed whether authority has been provided to the partnership accountant for the applicant to access the documents – Where the respondent would not be put in any difficulty or inconvenience in providing the documents – Orders.
Legislation: Family Law Act 1975 (Cth) s 75(3)
Partnership Act1891 (SA) s 28
Federal Circuit and Family Court of Australia(Family Law) Rules 2021 Chapter 6
Cases cited: Briese and Briese (1986) FLC 91-713
Hall v Hall (2016) 257 CLR 490
Hatton & Attorney-General of the Commonwealth of Australia & Ors (2000) FLC 93-038
Jordan & Jordan (1997) FLC 92-736
Lucas Industries Ltd v Hewitt (1978) 18 ALR 555
Martin & Martin and Anor(No 2) [2014] 51 FamLR 492
Re Ronald Neville McGorm Ex Parte: the Co-operative Building Society of South Australia [1989] FCA 87
Stein & Stein (2000) FLC 93-004
Weir & Weir (1993) FLC 92-338
Woley & Humboldt (No 3) [2009] FamCA 546
Division: Division 1 First Instance Number of paragraphs: 92 Date of hearing: 18 November 2022 Place: Adelaide Counsel for the Applicant: Mr Heinrich Solicitor for the Applicant: Kelly Kelly Legal Counsel for the First Respondent: Ms Ross Solicitor for the First Respondent: Alex Mandry Legal Group Counsel for the Second, Third & Fourth Respondents: Mr Roberts Solicitor for the Second, Third & Fourth Respondents: KP Lawyers ORDERS
ADC 3408 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS NAILLON
Applicant
AND: MR NAILLON
First Respondent
MR B NAILLON
Second Respondent
MS C NAILON
Third Respondent
D PTY LTD
Fourth Respondent
order made by:
BERMAN J
DATE OF ORDER:
6 December 2022
THE COURT ORDERS:
1.That within twenty eight (28) days of the date of this Order, the parties shall jointly instruct a single expert valuer to provide a valuation opinion in relation to:
1.1The market value of the land owned by the second respondent and the fourth respondent;
1.2The market value of all of the assets of the partnership K Partnership (“the four-way partnership”); and
1.3The market value of all of the assets of the partnership R Partnership (“the three-way partnership”) provided that if the parties are not able to agree upon the single expert valuer to be appointed then the parties shall appoint S Company of T Street, Suburb U.
2.That the applicant and the first respondent shall each pay one half of the cost of the valuation of land as provided for in paragraph 1.1.
3.That all parties pay the costs of the valuation of the assets of the four-way partnership and the three-way partnership as provided for in paragraphs 1.2 and 1.3, noting that the cost of the valuation of partnership assets should be paid by the four-way partnership.
4.That the four-way partnership be wound up pursuant to the provisions of the Partnership Act 1891 (SA) (“the Partnership Act”).
5.That the respondents be restrained and an injunction be granted restraining the respondents from disposing of, or encumbering, any of the assets of the four-way partnership and three-way partnership except in the ordinary course of business unless expressly agreed to by the applicant in writing.
6.That within twenty (28) days of the date of this Order, the parties shall jointly instruct a single expert forensic accountant to provide an opinion in relation to whether any of the respondents have, separately from their interest in the four-way partnership, made any profits or derived any benefit from any business or transaction as a result of using any assets of the four-way partnership SUBJECT TO THE FOLLOWING:
6.1If the parties are not able to agree on the nomination of a single expert forensic accountant then Mr V or Mr W shall be appointed; and
6.2The parties pay in equal shares the costs of the expert opinion of the appointed single expert forensic accountant.
7.That within sixty (60) days of the date of this Order, the first respondent make discovery of any of the following documents that are in his possession, power, or control and provide copies of same to the applicant’s solicitors:
7.1Annual tax returns for the first respondent for 2018, 2019, 2020 and 2021 financial years;
7.2Annual tax returns for the 2018, 2019, 2020 and 2021 financial years for the four-way and three-way partnerships;
7.3Notices of Assessment from the Australian Taxation Office for the 2018, 2019, 2020 and 2021 financial years for the four-way and three-way partnerships;
7.4If relevant, Business Activity Statements for the first respondent;
7.5Employer annual salary and earnings statements for the first respondent for the 2018, 2019, 2020 and 2021 financial years;
7.6Statements for all accounts with all banks and financial institutions in the name of, or operated by, any of the following entities for the period commencing 1 July 2018 to date, that have not already been disclosed:
7.6.1The four-way partnership;
7.6.2The three-way partnership;
7.6.3K Company; and
7.6.4K Partnership;
7.7Member statements and/or advices relating to any interest in superannuation held by the first respondent since 1 July 2019;
7.8Any employment contract or other document that records and/or sets out the first respondent’s entitlement to remuneration, salary and/or wages at any time on or from 1 July 2019 including any variations to the same at any time since that date; and
7.9Any leases, contracts or documents that relate to land or interest held by the first respondent including any leases, contracts or other documents that record any arrangement relating to that land involving either of the four-way or three-way partnership or any other entity that has conducted operations on that land at any time since 1 January 2019.
8.That pursuant to section 28 of the Partnership Act, within thirty (30) days of the date of this Order, the first respondent shall render to the applicant, true and full information of all things affecting the four-way partnership, for the period between 1 July 2019 and 30 June 2022 inclusive.
9.That pending the final hearing in these proceedings, the first respondent shall pay interim spousal maintenance to the applicant in the sum of $380 per week as and from 9 December 2022, to an account as may be nominated by the applicant.
10.That the applicant’s application for costs in relation to the dismissal of the second, third and fourth respondents interim application for summary dismissal be listed for mention on the next court event.
11.That the Application in a Proceeding filed 9 November 2022 be dismissed within 7 days of the date of this Order.
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 Naillon & Naillon has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Berman J
Introduction
Ms Naillon is the applicant former wife of Mr Naillon the first respondent former husband.
Mr B Naillon and Ms C Naillon (“the second and third respondents”) are the parents of the first respondent and are the Directors of D Pty Ltd, the fourth respondent company.
The orders sought by the applicant are set out in her Amended Initiating Application filed 14 June 2022.
The significant area of contention is the declaration sought by the applicant that all of the land owned by the second and fourth respondent, is held on trust for the applicant and/or the first respondent and that the matrimonial assets including the land, be apportioned as to 60 per cent to the applicant and 40 per cent to the first respondent.
By orders made 2 September 2022, paragraphs 5 to 14 inclusive of the Amended Initiating Application were listed for hearing on 18 November 2022. Counsel for the applicant accurately summarised the proposed orders sought into the following categories:-
(1)Orders 7, 8, 9, 10 and 11 deal with the winding up of the four-way partnership being K Partnership and the valuation of the assets of the four-way partnership and of the three way partnership;
(2)Order 12 seeking that the first respondent make discovery of the documents set out in 12.1 to 12.7 of the interim orders of the Amended Initiating Application;
(3)Order 13 requiring the first respondent to provide information affecting the four-way partnership between 1 July 2019 and 30 June 2021; and
(4)Order 14 being the applicant’s application that the first respondent pay to her the sum of $600 per week by way of spousal maintenance.
There is broad agreement between the parties that the four-way partnership should be wound up.
Whilst it is reasonable that the assets of the four-way partnership be valued, noting that they are now utilised by the three-way partnership in the operation of the enterprise, some complexity may arise in terms of the cost of any valuations that may be required. Even though the lands owned by the second to fourth respondents are utilised by the three-way partnership, the second to fourth respondents do not consider that they should be obliged to fund extensive valuations. The clear position of the applicant and the assertion of the first respondent is that they are impecunious.
In terms of the broad orders sought by all parties to properly wind up the four-way partnership and to transfer its assets to the three-way partnership, the costs and disbursements should be borne from the assets of the four-way partnership even though they are currently being utilised by the new three-way partnership entity.
Motor Vehicle 1
Orders were made by consent on 2 September 2022 that required the first respondent to cause Motor Vehicle 1 to be registered in the name of the applicant provided that she shall pay all registration and insurance costs.
Whilst it was anticipated that the transfer of the Motor Vehicle 1 registration would be effected by 9 September 2022, it appears that there has been some delay in the respondent complying with his obligations as required pursuant to the Orders made on 2 September 2022.
The applicant filed an Application in a Proceeding on 9 November 2022 seeking compliance with the Orders made on 2 September 2022.
Whilst the delay in the respondents’ compliance with the Orders of 2 September 2022 was not explained, the documents necessary to facilitate registration of the Prado motor vehicle to the applicant’s name have now been forwarded to her, albeit in a form difficult to read. Counsel for the first respondent assures the Court that the original copy of the transfer of registration documents electronically transmitted, will now be made available to the applicant.
No orders are required and the Application in a Proceeding filed 9 November 2022 will be dismissed within 7 days of the making of this Order.
The partnership
Counsel for each of the parties filed an Outline of Case document. The outlines filed on behalf of the respondents did not address the partnership issues other than to confirm the winding up of the four-way partnership.
The applicant seeks the appointment of a nominated single expert valuer to value the interests of the parties in the following:-
·The market value of land owned by the second respondent and the fourth respondent;
·The market value of all of the assets of K Partnership (the four-way partnership); and
·The market value of all of the assets of R Partnership (the three-way partnership).
As discussed, there is no opposition by the respondents to a valuation order being made save and except that the second to fourth respondents do not accept that they should be required to either contribute to, or to pay in the first instance, the cost of valuing the land.
Similarly, whilst it is reasonable that the four-way partnership utilise its assets to pay the cost of the valuation of assets held, the same consideration does not apply to the assets of the three‑way partnership, although it is likely that the assets of the four-way partnership have been utilised by the three-way partnership.
The parties understand that unless the valuations of land and partnership assets are able to be agreed, a valuation exercise will be necessary and is a precondition to the matter being able to be listed for final hearing.
I propose to order that the parties attempt to agree as to the appointment of a single expert valuer as to the land and the partnership assets, but at this stage, I do not consider that the second to fourth respondents should be required to contribute to the cost of the land valuation given that they do not accept the applicant and/or the first respondent hold an equitable interest.
It may be that the issue of the valuation cost remains contentious given that the applicant and the first respondent appear to have limited financial resources. It is a matter that they will need to explore before consideration is given as to whether any of the assets held by the applicant and/or the respondent should be sold in order to pay the disbursement cost of valuations.
The applicant seeks that the four-way partnership be wound up pursuant to the provisions of the Partnership Act and that the respondents be restrained by injunction from disposing of, or encumbering, any of the assets of either the four-way partnership or the three-way partnership save and except for in the ordinary course of business and unless expressly agreed to by the applicant in writing.
I do not consider that the injunction sought by the applicant is onerous in circumstances where at least in part, she and the first respondent have a clear interest in the assets of the four-way partnership.
It does not appear that the orders sought by the applicant are the subject of strong opposition. The order of injunction being subject to the utilisation of the partnership assets in the ordinary course of business or by express consent of the applicant, seems reasonable and unlikely to unduly fetter the ongoing operation of the enterprise by the three-way partnership.
The applicant seeks the appointment of a single expert forensic accountant to provide an expert opinion in relation to the following:-
·Whether any of the first, second or third respondents have, separately from the interest in the four-way partnership, made any profits or derived any benefit from any business or transaction as a result of using any assets of the four-way partnership; and
·To prepare the accounts in respect of the four-way partnership to enable the dissolution of it.
The orders sought by the applicant are reasonable in that the dissolution of the four-way partnership will reveal the net value of the partnership and the monetary value of the interests of the applicant and each of the respondents including their entitlement to share in the dissolution.
I consider that rather than be proscriptive in terms of the identity of the single expert, the parties should attempt to reach agreement.
Discovery
The applicant seeks that the first respondent make discovery of documents as set out in her Case Outline filed 16 November 2022 at paragraphs 6.1 to 6.9 inclusive, noting that the documents sought in paragraph 6.4 have been provided other than for the first respondent.
Chapter 6 of the Federal Circuit and Family Court of Australia(Family Law) Rules 2021 (Cth) (“the Family Law Rules”) imposes an obligation of full and frank disclosure on the parties to court proceedings and provides specific mechanisms by which that obligation must be fulfilled.
As noted in Briese and Briese (1986) FLC 91-713 at 75,180, Smithers J said as follows:-
… . The need for each party to understand the financial position of the other party is at the very heart of cases concerning property and maintenance. …”
Despite the breadth of the duty to disclose, there are concerns about the over-broad disclosure of documents in court proceedings. The restriction on the obligation of discovery has been the subject of discussion as it relates to subpoenas to produce documents. In Lucas Industries Ltd v Hewitt (1978) 18 ALR 555, at 570 Smithers J said:-
The purpose of the process of subpoena is to facilitate the proper administration of justice between parties. For that purpose it is the policy of the law that strangers who have documents may be put to certain trouble in searching for and gathering together relevant documents and bringing them to court. It is according to the same principle that persons who have knowledge of facts are put to the inconvenience of being brought to court and required to give evidence.
In Hatton & Attorney-General of the Commonwealth of Australia & Ors (2000) FLC 93-038, the relevance of documents in the context of a subpoena, was considered by the Full Court and the following summary of examples were given where a court may determine that it is proper to set aside a subpoena:-
(1)If the subpoena is for an improper purpose namely, to obtain discovery against a third party;
(2)Where it might be oppressive to comply with a subpoena;
(3)Where a party embarks upon a “fishing expedition”.; and
(4)That the subpoena should be set aside because it lacks relevance to the proceedings.
In Martin & Martin and Anor(No 2) [2014] 51 FamLR 492, Cronin J found that the focus of the Court should be whether it was “on the cards” that the documents would materially assist. At [28], his Honour considered his own comments in Woley & Humboldt (No 3) [2009] FamCA 546 where he said:-
39.In Hudson Timber and Hardware Ltd v Chaudhary Group Pty Ltd [2002] FCA 832, the Full Court of the Federal Court examined the issue of apparent relevance and said that the relevant principles governing the obtaining of documents on subpoena which have “apparent relevance” were that inter alia:
(1)The relevance of documents was not limited to documents directly admissible in themselves in proof of an issue raised in pleadings; and
(2)If a class of document which has material forensic relevance could be shown to exist, then a subpoena would not normally be set aside.
(Emphasis in original)
The obligation to make discovery is not in the abstract but rather requires the parties to consider the relevance that the documents may have to an issue in dispute. The objective should be to assist the Court in the disposal of an issue or the dispute in general.
At an early stage in the proceedings, it is not necessarily easy to define the issues and therefore the extent to which a document or a category of documents may have a sensible relevance. As the proceedings progress the issues are cast more clearly and accordingly, the parties are better able to ascertain what documents are truly relevant and germane to the task that the Court is required to undertake. The Court now has the advantage of the affidavits of the parties.
The applicant has access to her own personal financial records including, taxation returns and financial statements for the four-way and three-way partnerships.
The various categories of documents sought by the applicant would have clear relevance to the proceedings.
I do not consider that the application for discovery falls into the category of a “fishing expedition”.
The position of the first respondent is uncertain. It is not suggested that the documents are other than relevant to an issue in the proceedings but the respondent contends that the applicant has had access to a significant tranche of the documents via discovery made by the second to fourth respondents.
The applicant has been particular in crafting the orders she seeks to be directed to the first respondent. The clear strategy is to avoid the second to fourth respondents incurring unnecessary costs in circumstances where the obligation to make full and frank disclosure rests upon the applicant and the first respondent.
The applicant does not seek that there be unnecessary duplication of documents but rather, that he disclose the documents that he says have not been produced but are otherwise available to the applicant.
It is a reasonable point made by the first respondent that documents in respect of the four-way partnership are able to be requested by the applicant given her current involvement.
It is not yet confirmed by the respondents that comprehensive authority has been provided to the partnership accountant to release information as may be sought by the applicant.
In the decision of Re Ronald Neville McGorm Ex Parte: the Co-operative Building Society of South Australia [1989] FCA 87, von Doussa J considered the obligation on a party to give discovery of documents not in their possession:-
5.The obligation resting on a party obliged to give discovery requires that he make proper enquiries and efforts to identify and disclose all relevant documents that are not in his possession. The obligation extends to making enquiries from the person in whose possession the documents now are … It was said in the nineteenth century case of Taylor v. Rundell … by Lyndhurst LC. “If it is in your power to give discovery, you must give it; if not, you must show that you have done your best to procure the means of giving it”…
6.The scope of the enquiries which should be made will depend on the circumstances of the case having regard to the need for discovery in order to dispose fairly of the matters in question, or to save costs in the proceedings. The enquiries must be reasonable, but do not demand of the party giving discovery that he goes to lengths which are oppressive…
(Citations omitted)
I do not consider that the first respondent will be put to any difficulty or inconvenience in providing documents that either are in his possession or would be made available to him upon his request.
I propose to make orders substantially as sought by the applicant.
Section 28 of the partnership act 1891 (sa)
The applicant seeks orders in her Case Outline filed 16 November 2022, that the first respondent provide “… true and full information of all things affecting the [four-way partnership] for the period between 1 July 2019 and 30 June 2022 inclusive”.
It is likely to be a matter of formality in the sense that the dissolution of the four-way partnership will provide all necessary information. Given that the parties agree that the four‑way partnership needs to be dissolved, the orders sought by the applicant appears reasonable.
Spousal maintenance
The applicant seeks that the first respondent pay interim spousal maintenance in the sum of $600 per week, commencing from the date of filing of the Initiating Application on 15 July 2021.
The application is opposed.
Interim spousal maintenance
In the decision of Hall v Hall (2016) 257 CLR 490 (“Hall v Hall”) the High Court set out the appropriate approach in considering an application for interim spousal maintenance as follows:-
3.… . The gateway to the operation of Pt VIII in relation to spousal maintenance is in s 72(1). That sub-section 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 … having regard to any relevant matter referred to in [s] 75(2)”.
4.The liability of a party to a marriage to maintain the other party that is imposed by s 72(1) is crystallised by the making of an order under s 74(1). That subsection provides that, “[i]n proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part”.
5.A court exercising the power conferred by s 74(1) is obliged by s 75(1) to take into account the matters referred to in s 75(2) and only those matters. Those matters are presented as a comprehensive checklist. They include what s 75(2)(b) refers to as “the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment”. They also include, by virtue of s 75(2)(o), “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
(Citations omitted)
…
8.Unlike a court exercising the power to make an urgent order conferred by s 77, a court exercising the power to make an interim order under s 74(1) must be satisfied of the threshold requirement in s 72(1) and must have regard to any matter referred to in s 75(2) that is relevant. No doubt, on an application for an interim order “[t]he evidence need not be so extensive and the findings not so precise” as on an application for a final order. But there is nothing to displace the applicability to an exercise of the power conferred by s 74(1) of the ordinary standard of proof in a civil proceeding now set out in s 140 of the Evidence Act 1995 (Cth). A court determining an application for an interim order under s 74(1) cannot make such an order without finding, on the balance of probabilities on the evidence before it, that the threshold requirement in s 72(1) is met having regard to the relevant matter referred to in s 75(2).
(Citations omitted)
As noted in Hall v Hall (supra), an applicant seeking orders for spousal maintenance carries the evidentiary burden.
The respondent does not consider that the gateway requirement is satisfied.
The applicant is an allied health worker and is employed on a part-time basis.
She has the full time care of the two children of the relationship, pursuant to final Orders made on 9 February 2021.
The children are aged 11 years and nearly 9 years respectively.
The evidence supports a finding that the applicant considers she has maintained an appropriate balance in terms of undertaking employment at a level that is consistent with her supervision and parenting of the children.
The applicant’s position is reasonable in the circumstances.
I have regard to the applicant’s Financial Statement filed 4 October 2022. Part B provides a financial summary which includes a total average weekly income of $1,147, of which $691 comprises her salary and the balance of $456 comprises her Centrelink benefit, pension or allowance.
Section 75(3) of the Family Law Act 1975 (Cth) (“the Act”) requires that for the purposes of determining the income of a party, I am to disregard the government benefits that the applicant receives. Accordingly, the amount of income that is brought to account in determining the reasonable financial needs of the applicant is $691. I note that Part G provides expenses of $417 that relate to the following:-
·Income tax in the sum of $47;
·Superannuation Fund 1 contribution in the sum of $50; and
·Rent paid to applicant’s parents in the sum of $320.
Whilst there is some contention as to the rental component in circumstances where the applicant resides in her parents’ premises, it is not unreasonable that proper consideration be given to a rental component. The sum of $320 does not appear an unreasonable assessment for the provision of accommodation to the applicant and the children.
The Part N expenses total $742 which comprises of $376 representing the applicant’s discretionary expenditure and $366 for the children.
In the ordinary course, I would be required to distinguish between the expenses of a spouse seeking an order for maintenance and the expenses of the children. See Stein & Stein (2000) FLC 93-004.
The current circumstances of the applicant is different in that there has been an Assessment of Child Support which has effectively been ignored by the first respondent. His last payment of $50 was made on 13 September 2022 and as at 4 October 2022, the arrears of Child Support are in the sum of $30,896.29.
Moreover, by reference to the first respondent’s Application to Change Assessment (Special Circumstances), being annexure “MN13” to the applicant’s affidavit filed 4 October 2022, the following narrative appears in answer to a request to explain why the first respondent considers the assessment should be changed:-
I am un-employed and not earning a wage. (Bank statements prove this).False and tapered document [sic] were used to calculate last assessments. I simply don’t have any funds in any bank accounts as they are at $0.00, therfore [sic] I can not pay the amount currently assessed on. Forged and stolen information was provided which is all incorrect. My tax returns also state otherwise. My employment and financial status has dramatically change [sic] for the worst. Provided in this paperwork will be a letter stating what the partnership I’m in provides for me financially broken down in lists.
It is reasonable to find that the first respondent is pessimistic as to his ability to provide Child Support at any level that is commiserate with the reasonable needs of the children.
In those circumstances, subject to a minor adjustment for food, share of utilities and gifts, I propose to reduce the cost for the children from $366 to $280.
Therefore, I bring to account that the applicant’s total personal expenditure is $1,071 as against a salary of $691 leaving a shortfall of $380.
I consider this sum to be a reasonable assessment of the applicant’s financial circumstances and it should be reflected in an order of spousal maintenance in her favour for that amount.
It is then necessary to consider the financial circumstances of the first respondent to ascertain whether he has the ability to satisfy a spousal maintenance order if made.
The first respondent relies upon his Amended Financial Statement filed 25 October 2022. At Part D, the first respondent provides that his total average weekly income is estimated to be in the sum of $600 per week from his current occupation as a labourer, even though he agrees that he holds a one-third interest in the partnership trading as the K Partnership.
The first respondent has a partner whose income is in the sum of $300 per week.
A consideration of the Part G expenditure reveals a total sum of $89 of which $50 is maintenance payments/ Child Support that the first respondent considers is appropriate.
The Part N expenses records that the first respondent’s average weekly expenses are zero.
It is apparent, even from the most cursory consideration of the first respondent’s Financial Statement filed 25 October 2022, that the document is wholly inadequate and provides no assistance either as to verify his income or to reflect his expenditure.
On closer consideration, the first respondent receives benefits from his employment of $80 per week to cover fuel, vehicle registration and electricity. He has no other personal expenditure other than for the registration of three motor vehicles (one of which now is registered in the name of the applicant) and the maintenance payments, the payment of which might be considered unreliable at best.
The first respondent refers to Recreational Vehicle 1 valued at $15,000. It is now admitted that the vehicle no longer exists and that it was sold by him some time ago. It is only that the applicant saw the sale of the vehicle on a social media site, that the first respondent revealed for the first time that he had disposed of the vehicle.
Counsel acknowledged that Part M of the Financial Statement requires information about the disposal of the property.
It appears that the first respondent also sold Recreational Vehicle 2 for $10,000. No discovery has been made by the first respondent which supports the circumstances in which both Recreational Vehicle 2 and now Recreational Vehicle 1 were disposed of.
It is difficult to understand how the obligation to make full and frank disclosure could be so easily ignored particularly, given that at all material times the first respondent is represented.
The decision of Weir & Weir (1993) FLC 92-338, is clear authority for the importance that should be placed on a party making proper discovery and the consequences should that obligation be ignored. The Court is entitled to take a robust approach to assessing the financial circumstances of a party who may be recalcitrant in discharging his obligation to provide disclosure.
In the absence of the provision of documents evidencing his personal financial circumstances, it is difficult to accept that the first respondent is not capable of generating income and/or seeking employment that would provide remuneration greater than $600 per week together with $80 of work related benefits.
Whilst I am limited as to the extent of judicial knowledge I can bring to bear income that might represent a fair wage, the first respondent’s current circumstances would render him below the average weekly earnings of $1,344 or $69,888 per year according to the latest figures from the Australian Bureau of Statistics (August 2022). The annual income for a labourer in his industry is nearly $50,000 per year. On any consideration, the first respondent has the capacity to earn significantly more than he currently does.
There is no explanation as to why the first respondent chooses to remain employed and be impecunious when his prospects for more remunerative employment have not been explored.
Whilst the first respondent’s conduct may well invite some scepticism, in the absence of any proper explanation, it is not unreasonable to bring to account the information provided in the first respondent’s Amended Financial Statement and find that there is sufficient capacity to meet the spousal maintenance needs of the applicant as determined. See Jordan & Jordan (1997) FLC 92-736 as to the application of the Elias Principle.
Outstanding cost application
I note that the applicant seeks that the second to fourth respondents pay costs in the sum of $6,502, in relation to their failed interim application for summary dismissal of the relief sought as particularised in the applicant’s Statement of Claim. I do not propose to determine that issue at this time and the applicant’s costs application will be considered at a later date.
Costs of the parties
Each of the parties have filed a Cost Statement. The applicant’s costs as at 16 November 2022, are in the sum of $35,324.20 inclusive of GST to her current solicitors and the amount of $42,021.22 paid to her former solicitors.
The anticipated future costs, should the matter go to trial, is between $60,000 and $120,000 plus GST and disbursements.
The first respondent’s costs as at 17 November 2022, are in the sum of $18,999.51 to his current solicitors and $94,618 paid to his former solicitors. The estimate, should the matter proceed to trial, is between $55,000 and $95,000.
The costs paid to date by the second to fourth respondents as at 17 November 2022, are in the sum of $13,220 with approximately $90,000 paid to their former solicitors. The likely costs of trial will be considerable.
It is immediately apparent that the costs being incurred by the parties may significantly outweigh the benefit of the litigation.
From a costs perspective alone, the parties would do well to consider their position and genuinely explore an appropriate resolution so as to avoid a pyrrhic victory.
I make Orders as appear at the commencement of these reasons.
I certify that the preceding ninety-two (92) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman. Associate:
Dated: 6 December 2022
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