NEWTON & NEWTON

[2013] FamCA 1026

FAMILY COURT OF AUSTRALIA

NEWTON & NEWTON [2013] FamCA 1026

FAMILY LAW – PROPERTY – Interim – Application seeking partial property settlement in a sum of money by way of distribution from the parties company or in the alternative dollar for dollar orders to cover future anticipated litigation – Where dollar for dollar order more appropriate in the circumstances – Where claim that the husband nor the company can make such payment - Where if amount exceeds wife’s entitlement then unlikely to have assets available to effect any refund - Where valuation of the company yet to be undertaken – Where court satisfied the husband or company have the capacity to progressively meet the payment of that sum on a dollar for dollar basis.

Family Law Act 1975 s75(2), 79, 80(1)(k), 117

Osferatu & Osferatu [2012] FamCA 408

APPLICANT: Ms Newton

RESPONDENT: Mr Newton

FILE NUMBER: TVC 621 of 2012

DATE DELIVERED: 19 December 2013

PLACE DELIVERED: Townsville

PLACE HEARD: Townsville

JUDGMENT OF: Tree J

HEARING DATE: 2 December 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr. Fellows

SOLICITORS FOR THE APPLICANT: O’Shea & Dyer Solicitors

COUNSEL FOR THE RESPONDENT: Mr. Middleton

SOLICITORS FOR THE RESPONDENT: Coupler Geysen Family & Animal Law

IT IS NOTED that publication of this judgment by this Court under the pseudonym Newton & Newton 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

FILE NUMBER:

Ms Newton

Applicant

And

Mr Newton

Respondent

REASONS FOR JUDGMENT

introduction  

1. By her Amended Application in a Case filed 20 November 2013, the wife sought, amongst other orders, a partial property settlement to each of the parties in the sum of $100,000.00 by way of distribution from a company of which both the parties are shareholders and directors. In the alternative, she sought a regime of orders commonly known as “dollar for dollar” orders to cover her anticipated future costs of the litigation, either by way of partial property settlement, or pursuant to the costs power in s117 of the Family Law Act. 

2. The wife’s application was opposed by the respondent husband.

BACKGROUND FACTS

1. The wife was born in 1965, and is therefore presently 48 years of age.  The husband was born in 1967, and is therefore presently 46 years of age.

2. The parties commenced living together in about October 2005, at which time the wife was employed in the mining industry, and the husband was conducting a business known as B Pty Ltd.

3. Both of the parties had children from prior relationships.  At the commencement of cohabitation the wife’s children were all adults, but the husband’s children, C and D, were aged about 8 and 5 years.  Pursuant to Court Order, they lived with the husband, spending time with their mother for about 3 hours every second Saturday.

4. Immediately prior to cohabitation commencing, the husband had been residing with his parents and his two children at his parents’ home.  Upon cohabitation commencing, the wife and the husband resided in a home at E Street, Suburb F, and the husband’s children initially remained at his parents’ place.  However from about the end of 2006 the children joined the parties at E Street and lived with them there.

5. In about the middle of 2006 the wife commenced working in the husband’s B Pty Ltd business.  Initially she was involved in office and administration, as well as working in the workshop.  However her recollection is that as the business grew, she ceased doing jobs in the workshop and primarily concentrated upon working in the office, although she would still pick up parts and undertake minor delivery roles. The wife asserts that this business has grown substantially since 2006.

6. The parties married in 2006, and separated on 30 January 2012.

7. Although initially after separation the wife continued to involve herself in the day to day management and conduct of the B Pty Ltd business, on 23 July 2012 she and the husband entered into consent orders which saw her agree to withdraw from those roles, in exchange for a partial property division to her of $150,000.00, 12 weeks of payments of $1,000.00 each, and continued ongoing receipt of weekly dividends from B Pty Ltd in the sum of $435.00.

THE LAW

1. In the recent decision of Osferatu & Osferatu [2012] FamCA 408, Watts J reviewed the relevant principles pertaining to applications for interim property division in the following terms:

   THE LAW TO BE APPLIED

   Approach to an application for an interim property order

   31.The Full Court in Strahan and Strahan (2011) FLC 93-466 revisited the principles applicable to applications for interim property orders. An interim property decision involves two steps.

   The first step

   32.First, it must be established that s 80(1)(h) Family Law Act 1975 (Cth) (“FLA”) was enlivened to allow an interim property settlement under s 79 FLA. The test for this was not confined to ‘compelling circumstances’. The Court in Strahan revisited the earlier well known statement made in Harris and Harris (1993) FLC 92-378 where the Full Court had said:

   The exercise of the power should be confined to cases where the circumstances presented at that time are compelling. As a generality, the interests of the parties and the Court are better served by there being one final hearing of s 79 proceedings. However, circumstances may arise before there can be a final hearing which dictate that some part of the property of the parties should be the subject of orders. A common example is where both parties agree to the disposal of some assets pending the trial. However, we do not consider that it is confined to cases where the parties consent. Urgent situations may arise where it is necessary to exercise this power if injustice is to be avoided. Examples include cases where it is necessary to do so to avoid an asset being eroded or lost in the intervening period, and cases (beyond the maintenance power) where an order in favour of one party is necessary to preserve or obtain a home for or is otherwise necessary for the welfare of the children.

   33.      In Strahan, the Full Court said:

   [132] In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

   …

   [139] We also emphasise that in order to establish an appropriate case for an interim property settlement order more is required than the mere fact that upon a final hearing the applicant would receive the property being sought (or an amount in excess of the funds being sought) from the other party.

   34.As explained by the Full Court, s 80(1)(h) FLA is a wide enabling provision for interim property decisions, and there is no reason to limit it, by requiring a finding of ‘compelling circumstances’. All that is required before the power to make an interim property order is exercised, is an assessment of whether it would be “appropriate” to make an interim order, with the “overarching consideration” being the interests of justice. There may need to be evidence of the likely cost of litigation, but only if that is the reason or part of the reason that is propounded as to why it is appropriate that the order be made.

   Considerations about making an interim property order in “the interests of justice”

   35.The notion of a “level playing field” is one which almost axiomatically is in the interests of justice and an important matter to consider when deciding whether it would be appropriate to make an interim property order.

   36.In In the Marriage of J U and T Poletti (1990) 15 FamLR 794, Ellis, Strauss and Butler JJ quoted Ngyh J with approval at [796]:

   …It is rather, as it certainly was in Wilson and Wilson [(1989) 13 Fam LR 205], a situation where one party to the marriage controls almost exclusively what might be described as the patrimony of the parties and has control of the bulk of the assets and funds of the parties, where an order may be made to ensure that the other party, who does not have the fortune of controlling those funds, at least has an equal or near equal opportunity to present his or her case...

   37.One method sometimes adopted is to provide a disadvantaged spouse with a “dollar for dollar” order. That is, an order that the advantaged spouse has to pay the disadvantaged spouse one dollar for each dollar the advantaged spouse pays his or her own lawyer.

   38.The implementation of such an order is not as clean cut as the interim property order sought in this case and there is more ambiguity about which power is being exercised and what evidence is needed. There has been previous discussion in cases as to whether or not an application of this nature relies upon s 79 and s 80(1)(h) or s 74 or s 117 FLA.

   39.      In Farnell and Farnell (1996) FLC 92-681, Kay J said:

   In the Marriage of Gould, (Appeal EA 37 of 1994, judgment of 29 June 1994), the Full Court coram Fogarty, Kay and Graham JJ[1], overturned an order of the trial Judge wherein her Honour had ordered that pending trial, for every dollar that the husband had spent on his lawyers, he should provide the wife with a similar amount for costs. The trial Judge had ought to make that order to create what she saw as ''a level playing field''. The Full Court disallowed the orders on the basis that the wife had adequate finances to provide for her own costs by reason of a substantial recent inheritance. In the course of my reasons for judgment I said this: 

   [1] The published report incorrectly states the constitution of this Full Court which was actually Fogarty, Kay and Renaud JJ.

   “I wish to make comment on ... the general philosophical views expressed by her Honour about endeavouring to achieve a level playing field by providing the wife with a dollar for dollar basis for costs. Whilst I agree with his Honour's [Fogarty J's] observations that this may not be an appropriate approach to these cases, I would also like to make reference to an article from the Chicago Daily Law Bulletin of 20 April 1992 which indicated that wives in these circumstances often have to spend much more than dollar for dollar to achieve a level playing field, particularly, and I quote - this is in reference to a survey of the American Bar Association Family Law Section: 

   ‘Most of the lawyers agree that women will face higher legal bills in a divorce. Accordingly to 91% of those surveyed women splitting from their husbands will have to pay more for discovery. Husbands traditionally have had full control over the family finances and economic information. This means the wife's attorney must often engage in discovery to gain equal knowledge about assets and income. The lawyer has an obligation to undertake discovery to find out if there are assets in just the husband's name, or if the wife has no knowledge of them.’

   40.Putting the sexist language to one side, nearly twenty years later the position of a former spouse, now in highly conflicted litigation, who has not played a significant role in controlling the finances of the parties, has not much changed.

   The second step

   41.As was discussed in Harris and confirmed in Strahan, the second step in making an interim property order is to have regard to the usual matters in a s 79 order (ss 79(2) and 79(4) FLA). A detailed inquiry is not required, but there must be some assessment of s 79 factors. Given it is an imprecise exercise, the interim property order has to be “conservative” so that the final outcome of property settlement will not be compromised by the interim property order. Either the remaining property needs to be sufficient to meet the legitimate expectations of both parties at the final hearing, or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.

   42.Being a preliminary property order, the wife may choose to spend the money however she wishes.

   43.        In Harris, the Full Court said:

   As a generality, the interests of the parties and the Court are better served by there being one final hearing of sec 79 proceedings.

   44.In Strahan, the Full Court said in exercising the wide and unfettered discretion conferred by s 79 and s 80(1)(h) FLA:

   Regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

   45.A corollary of these statements made by the Full Court in both Harris and in Strahan is the proposition that as a generality, the interests of the parties and the court are better served by there being as few interim property applications under s 79 as possible.”

2. I gratefully adopt his Honour’s analysis of the authorities, and propose to apply it to this application.

THE FIRST STEP

1. The question for my determination is whether or not it is appropriate to exercise the power to make an interim property order.

2. The following matters support the making of such an order here:-

   ·The husband has retained control over the vast bulk of the parties’ assets;

   ·The assets likely exceed $2.6 million in net value;

   ·The wife only has $7,000 left from her previous interim property settlement, which sum is likely to be shortly depleted by meeting the costs of valuing B Pty Ltd in the sum of about $5,000.00;

   ·The wife only appears to have income derived from weekly dividends in the amount of $435.00;

   ·The wife presently has an unbilled liability for legal costs in the order of $40,000 - $50,000, and has no means with which to pay it should it be billed;

   ·The proceedings have a degree of complexity to them;

   ·There is a reasonable basis to assume that, if the wife is not put in further funds with which to meet he likely legal costs, there will not be a level litigious playing field.

3. The following factors do not support the making of an order here, or at least at this stage of the proceedings:-

   ·The usual s 79 order is a once and for all order made after a final hearing;

   ·There has already been a partial property settlement in July 2012;

   ·There is some uncertainty as to the likely value of the property of the parties, particularly the value of B Pty Ltd;

   ·There is some uncertainty as to what, if any, growth occurred in B Pty Ltd between 2006 and now, and what, if any, contribution the wife made to that growth.

4. Upon balance, I think the weighing of those factors supports the making of an interim order here, principally to ensure that the parties are competing on a level litigious playing field.

THE SECOND STEP

The property of the parties available for division under s 79

1. At para.27 of his affidavit filed 23 July 2012, the husband identified that the assets and liabilities of the parties comprised as follows:

   27. I consider the asset pool (where known as set out in the table below)

   Asset  Ownership  Estimated Value
   B Pty Ltd Pty Ltd (including cash at bank,  Joint  NK
   Equipment and property at I Town)

   E Street, Suburb F  Mr Newton               480,000

   G Street, H Town   Mr Newton               380,000

   1/3 share of E Street, Suburb F  Mr Newton (and parents)     73,326

   NAB …        (offset account)  Mr Newton               56,449

   NAB …  Mr Newton                   1,026

   BOQ…  Mr Newton  400

   Motor Vehicle 1  Mr Newton                   5,000

   Motor Vehicle 2  Mr Newton                   6,000

   Household contents  Mr Newton               20,000

   Motor Vehicle 3  Ms Newton              40,000

   Household contents  Ms Newton              20,000

   ING Whole of Life Insurance  Ms Newton              NK

   NAB  Joint  7

   Liabilities

   B Pty Ltd Pty Ltd  Joint  NK

   NAB Mortgage   Mr Newton               52,544

   Superannuation

   Sunsuper  Mr Newton               22,517

   Newton Family Super Fund  Mr Newton               30,936

   BT Super  Mr Newton                  1,500

   Sunsuper   Ms Newton              14,074

   Newton Family Super Fund  Ms Newton              NK

2. It does not appear as though, at least as at that date, the wife disputed that those identified assets were indeed the assets available for division, however I am unable on the material before me to determine the extent to which, if at all, the values attributed to that property were then in dispute.

3. Whilst it does not seem as though the identity of the assets of the parties would now need revision, the attributed values of some of them do need to be revisited.

4. Firstly, the parties have now obtained valuations of the three real properties, together with a property at I Town owned by B Pty Ltd Pty Ltd.  The value of E Street is $190,000.00, 2 E Street is worth $375,000.00, and G Street, H Town (apparently 2 units) is worth $390,000.00. The I Town property has been valued at $195,000.00.

5. Secondly, the assets of B Pty Ltd Pty Ltd (excluding the I Town property, and as distinct from the overall undertaking of the company) have been valued as being worth $1,499,930.00 on an orderly liquidation basis, albeit having a fair market value of $2,011,230.00.  Whilst precisely what the ultimate value of B Pty Ltd is assessed at remains to be seen, it can be conservatively inferred that at least it would have the orderly liquidation value of its underlying physical assets, together with the value of the I Town property.

6. Further, I am conscious that pursuant to orders of Kent J made by consent on 23 July 2012, the husband has been required to pay the wife $150,000.00 by way of interim property settlement.  The material does not disclose whether that was funded from cash held by B Pty Ltd or the husband at that time, or whether it has been in part or in whole met by borrowings.

7. Moreover, it appears as though that $150,000.00 has been all but entirely spent by the wife.  In her affidavit filed 20 November 2013, she identified that from that sum $50,800.90 was paid to her solicitors, leaving a balance of $99,199.10.  She further says that she now has only a balance of approximately $7,000.00 in her account.  Precisely what happened to the remaining $92,000.00 is not revealed, however it does not look as though it has been spent on legal costs, as she estimates in that affidavit that she is presently liable for somewhere between $40,000.00 and $50,000.00 to her solicitors including counsel’s fees. The closest that the evidence comes to explaining its apparent dissipation is the wife’s assertion that she had to rely upon the partial property settlement funds to “pay rent and pay my general living expenses.”

8. It can therefore be seen that I am not in a position to precisely ascertain the current value of the property of the parties available for division, nor the present quantum of their liabilities.  That said however, it would seem permissibly conservative to:-

   ·Accept the value of B Pty Ltd is likely to be at least the orderly liquidation value of its underlying assets, including the I Town property;

   ·Assume that the $99,000.00 retained by the wife after payment of her legal fees is no longer reflected in cash or other assets of any value;

   ·Reduce the specifically identified bank account balances to “NK” and therefore effectively regard them as having a nil balance;

   ·Include the company bank account balances (totalling $185,000.00) as sworn to in the husband’s affidavit of 27 November 2013 in the value of B Pty Ltd;

   ·Include the further tax liability of B Pty Ltd, identified by the husband as likely to be in the sum of $126,000, as a separate liabilty

1. Adopting that approach therefore the likely present assets and liabilities of the parties, together with their conservative values, are as follows:

Asset  Ownership  Estimated Value

B Pty Ltd (including cash at bank,           Joint  1,879,930     

equipment and property at I Town)

E Street, Suburb F  Mr Newton   375,000

G Street, H Town            Mr Newton  390,000

1/3 share of E Street, Suburb F                   Mr Newton (and parents)                 63,333

NAB … (offset account)           Mr Newton  NK

NAB …Mr Newton  NK

BOQ …  Mr Newton  NK

Motor Vehicle 1           Mr Newton  5,000

Motor Vehicle 2  Mr Newton  6,000

Household contents  Mr Newton  20,000

Motor Vehicle 3  Ms Newton  40,000

Household contents  Ms Newton  20,000

ING Whole of Life Insurance  Ms Newton   NK

NABJoint  NK

Total Assets  2,799,263

Liabilities

B Pty Ltd – tax debt due March 2014        Joint   126,000

NAB Mortgage 796504545  Mr Newton  52,544

Total Liabilities         178,544

NET ASSETS              2,620,719

Superannuation

SunsuperMr Newton   22,517

Newton Family Super Fund  Mr Newton  30,936

BT SuperMr Newton   1,500

Sunsuper Ms Newton   14,074

Newton Family Super Fund  Ms Newton   NK

Total Super  69,027           

1. It can therefore be seen that, on the conservative approach I have adopted, that the net value of the property of the parties available for division (leaving aside superannuation) is just over $2.6 million.

The parties property at the commencement of the relationship

1. At the commencement of the relationship it seems uncontroversial that the wife brought in little by way of property, only comprising a motor vehicle and a nominal amount of superannuation.

2. On the other hand the husband brought in significant assets at the commencement of the relationship, including the home at 2 E Street, another property at G Street, H Town, and a one third share in property at E Street Suburb F (the other two thirds being owned by his parents). In addition, the husband brought into the relationship the B Pty Ltd business, which is conducted by B Pty Ltd.

3. The material does not enable me to determine the value of these assets as at the date of cohabitation.  Moreover, the material does not enable me to determine the extent of liabilities, if any, attaching to them at that time either.  However it is plain that the husband brought assets of substantial value into the relationship, and the wife did not.

Contributions during the course of the relationship

1. It seems likely that the husband will contend that he made direct financial contribution to the acquisition, conservation or improvement of the property of the parties during the course of the relationship, from salary or dividends which he received from B Pty Ltd.  It is also likely that he will argue that he made indirect financial contribution by virtue of, firstly, his labour and enterprise in his involvement in B Pty Ltd, and secondly, the renovation, repair and maintenance of the real properties which he brought into the relationship.

2. Finally, the husband will argue that he made homemaker parent contributions, as detailed in paragraphs 43 – 47 of his affidavit filed 23 July 2012.

3. Turning then to the wife’s direct financial contributions, it is likely that she will rely upon her wage and dividends which she received from B Pty Ltd, and assert that those funds have been used in the conservation or improvement of the property of the parties, or perhaps, have been used to reduce the parties’ liabilities.

4. As to her indirect financial contributions, it appears this is likely to be advanced on several fronts, and particularly:

   (a)her renovation of 2 E Street, which she claims involved her “both physically doing the work myself and arranging trade persons, material etc;”

   (b)her renovation of the 2 units at G Street, H Town, in relation to which she says that she undertook the renovation and improvement of them, one at a time, involving her not only performing physical work herself, but also for arranging for tradesmen, building supplies etc;

   (c)her involvement with the renting of both of the G Street units, including cleaning them after tenants had vacated;

   (d)her involvement in B Pty Ltd, including invoicing of clients, arranging for the financing and purchasing of equipment identified as appropriate for purchase by the husband, and general delivery and errand duties from time to time.

5. Finally she will assert an entitlement based upon homemaker parent contribution, no doubt particularly relying upon her role in the raising of the husband’s two children.

S 75(2) factors

1. At this stage of the proceedings inevitably the parties have not directed much attention to s75(2) factors in their material.  That said, there are some tentative observations which can nonetheless be made.

2. Turning firstly to the age and state of health of the parties, I have already noted that the parties are respectively 48 and 46 years of age.  In his affidavit filed 23 July 2012 the husband said that he was in good health, save that he has a sore arm, shoulder and elbow.  Although in that affidavit he also said that the wife was in good health and still had the capacity to work for a number of years, as she was relatively young, in her affidavit filed 20 November 2013 the wife identified that in October 2012 she was diagnosed with a pre-cancerous growth which required surgical removal in November of that year, after which it took her at least 6 months to recover.  Nonetheless it appears as though, as at the date of these reasons, both parties are in reasonable health.

3. Turning to the income, property and financial resources of the parties, and their capacity for gainful employment, I note that pursuant to the orders of Kent J the wife continues to receive a dividend from B Pty Ltd of $435.00 per week. That appears to be her only income.  She has physical and mental capacity for appropriate gainful employment, however at para.7 of her affidavit filed 20 November 2013 she identified that since July 2012, she has been in employment for relatively short periods of time, and generally out of work.  On the other hand the husband presently has an income of $1,000.00 per week (reduced from $1,500.00 per week since July 2013).  Plainly the husband retains physical and mental capacity for appropriate gainful employment, which he is deploying within B Pty Ltd.

4. I do not have any up-to-date figures as to the expenditure which the parties need to support themselves or, in the case of the husband, his two children.  As at 12 June 2012 he said that his total personal expenditure was $1,211.24. 

5. As at the date of her affidavit filed 12 June 2012, the wife was residing with her former husband who suffering from cancer of the oesophagus and dementia.  She then said his prognosis was poor and he was not expected to live beyond the end of the year.  I do not know whether he has now passed away.  In any event I do not know of any financial circumstances relating to that cohabitation.

6. Beyond these observations, either I do not regard the s75(2) factors not addressed above to be engaged, at least on the state of the evidence before me, or alternatively even if they are likely engaged, are not able to be addressed in any meaningful way given the paucity of evidence.

Should a further interim distribution be made?

1. The husband points to the following matters as weighing against there being a further interim distribution:

   (a)      that the wife has already received:

   ·$14,000,00 in cash withdrawn from the safe at the home at separation;

   ·$2,280.00 withdrawn from B Pty Ltd’s bank account;

   ·Up until 23 July 2012, payment of $1,305 per week;

   ·A lump sum interim property settlement of $150,000.00 on 6 August 2012;

   ·Pursuant to the orders of Kent J, a further $12,000.00 in $1,000.00 instalments for 12 weeks;

   ·Dividends of $435.00 per week;

   (a)       the husband’s assertion that he does not have the capacity to pay a further $100,000.00;

   (b)the husband’s assertion that B Pty Ltd Pty Ltd does not have the capacity to pay a further $100,000.00, and in that regard identifies that although the company working account had (as at 27 November 2013) $38,000.00 in it, this account is used to pay the company payroll.  Further, although the company savings account had (as at 27 November) $147,000.00 in it, that is earmarked to the extent of about $126,000.00 tax due to be paid in March 2014;

   (c)if he is required to pay any money to the wife, then he would need to sell some of the B Pty Ltd assets. 

2. He repeats those reasons as his basis for the opposition to a dollar for dollar order.

3. Essentially the position of the husband is that I could not be satisfied, on a conservative approach, that at the trial of this matter, the wife would likely receive any further adjustment in her favour.  It was in this context, during the course of argument, that the husband indicated that at trial it is likely to be his position that, given the circumstances in which the wife came to be a shareholder of B Pty Ltd Pty Ltd, she does not own the beneficial interest in those shares.

4. Inevitably, as is recognised by the authorities, assessing parties’ potential entitlements at this stage in the proceedings is an inexact process based upon incomplete information.  No doubt it is that which underscores the need to be conservative.  In this case that is particularly pertinent consideration, given that it is simply impossible to attribute, on the basis of the material before me, a value to the wife’s indirect financial contribution to the development of B Pty Ltd.

5. If the wife were to receive a further $100,000.00 as she seeks, then I calculate that would have received a total of $266,280.00 in property, comprising:

   (a)      the $14,000.00 in cash;

   (b)      the $2,280.00 withdrawal;

   (c)      the $150,000.00 partial property settlement;

   (d)      the $100,000.00 further partial property settlement.

6. I do not in this calculation factor in the amounts which she has received by way of income, as I do not regard it as reasonably arguable that they were by way of property division.

7. I have conservatively determined that the net value of the parties’ assets is $2,620,719.00.  Therefore if the wife were to receive the further $100,000.00, the division of property in her favour to date would be 10.2 per cent.  I think that that is below the range of conservative likely entitlement of the wife.  Even if the car and furniture said to be owned by her were also taken into account, the property division would still be below her likely entitlement.

8. However that is not the end of the matter.   Firstly, the husband says that neither he nor B Pty Ltd can make such a payment, notwithstanding the fact that the company had, as at 27 November 2013, $185,000.00 in the bank.  Whilst one might normally be sceptical of such a claim, particularly given the absence of any specificity beyond general broad assertions, it is nonetheless a matter which I need to take into account.  Secondly, if I am wrong and the further payment of $100,000.00 would exceed the wife’s entitlement, it is unlikely that she would have assets available to effect any refund of all, or even part, of that sum, because she presently estimates that she has between $40,000.00 and $50,000.00 worth of unbilled liability to her solicitors, and inevitably between now and trial, those costs will only increase, and will likely wholly consume the $100,000.00.  Thirdly, I am mindful that whilst the underlying assets of B Pty Ltd have been valued, the valuation of that company is yet to be undertaken.  The ultimate ascertainment of its value is a matter that will substantially impact upon the value of the property available for distribution between the parties, and if, for some reason which I cannot presently identify, its value were to be said to be less than the orderly liquidation value of its underlying assets, then the whole basis of my notional calculation above may be substantially undone.

9. Against that background, I turn to consider whether it is, in the circumstances, more appropriate to make an order in the alternative form sought by the wife, namely a dollar for dollar order.

10. The first matter I need to address is the point which was made by counsel for the husband, namely that the power pursuant to which that order is sought it is not clear, particularly whether it is sought by way of interim property division, or whether it is sought pursuant to the Court’s costs powers.  I think that such an order could be supported – assuming that the relevant requirements are met – under either head, particularly given s 80(1)(k) of the Act.  There is nothing contradictory in ordering a progressive interim division of property based by reference to costs expended by the husband, provided that a maximum is established under the order, and there is an opportunity afforded to the party against whom such an order is made to bring the matter back before the Court in the event that any of the assumptions which have underpinned the interim division prove to be unfounded or flawed.

11. As I have already indicated, the husband opposes a dollar for dollar order on the same basis he opposes the lump sum order.  However in this context, the lack of any specificity in his assertions that either he or the company are unable to fund such an order assume greater significance than in the lump sum order.  Particularly:

    ·He accepts that the company savings account presently has $21,000.00 in excess of the tax liability which will be payable in March 2014;

    ·He does not identify, beyond pointing to wages, any likely amount that will need to be paid from the $38,000.00 in the working account, and does not identify what that wages payroll is likely to be;

    ·He does not identify any borrowing capacity which he or the company have, although one assumes that the company would have good standing with its banker given its considerable asset position and apparent capacity to service debt, and in relation to himself, the fact that he owns substantial interests in real property which are only encumbered to the extent of about $50,000.00, would likewise suggest a capacity for him to personally borrow funds.

12. Absent any such specificity supporting the assertion of an inability to pay, I do not think it should be given much weight in the context of recurrent expenditure of relatively modest sums, as distinct from the payment of a relatively large lump sum.  I am therefore satisfied that:

    (a)the further payment to the wife of the sum of $100,000.00 is beneath a conservative range of her likely entitlements of division under s 79;

    (b)either the husband and/or B Pty Ltd have the capacity to progressively meet the payment of that sum;

    (c)it is appropriate that the size of the periodic payments of the $100,000.00 be determined by the legal costs paid by the husband from time to time, save that there should be a ceiling of $100,000.00;

    (d)any concerns I may have about the assumptions which underpin this order can be sufficiently accommodated by reserving to the husband liberty to apply in respect of the maximum sum payable under the order in the event that any evidence subsequently obtained provides a sufficient basis for revisiting those assumptions.

CONCLUSION

1. It only remains to be said that, although Mr. Fellows, who appeared as counsel for the wife, in part sought to support the dollar for dollar costs order upon the costs power, it is unnecessary to consider that, given my conclusions in relation to the interim property orders which I propose to make.

2. I direct that the wife bring in orders consistent with these reasons, and incorporating the other matters in her Application which were resolved consensually during the course of argument before me.          

I certify that the preceding fifty three (53) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Tree delivered on 19 December 2013.

Associate:

Date:  19 December 2013