Pawson & Saetang
[2021] FedCFamC1F 249
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Pawson & Saetang [2021] FedCFamC1F 249
File number(s): SYC 4040 of 2021 Judgment of: CHRISTIE J Date of judgment: 2 December 2021 Catchwords: FAMILY LAW – INTERIM PROPERTY – COSTS – DISCHARGE SPOUSE MAINTENANCE – level playing field
FAMILY LAW – INTERIM PARENTING – RELIGIOUS AND CULTURAL HOLIDAYS – best interests of the child
Legislation: Family Law Act 1975 (Cth) ss 62B, 65DA(2), 90SF(3), 90SI, 90SM, 90SS(1)(h),117,117(2), 117(2A)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021, r 7.06
Cases cited: Strahan and Strahan (2011) FLC 93, Osferatu & Osferatu [2012] FamCA, Tallant & Tallant (2017) FLC 93-789 Division: Division 1 First Instance Number of paragraphs: 63 Date of hearing: 30 November 2021 Place: Sydney Counsel for the Applicant: Mr G Johnston Solicitor for the Applicant: Sexton Family Law Counsel for the Respondent: Ms A Murphy Solicitor for the Respondent: Atkinson Vinden Solicitor for the Independent Children's Lawyer: Medcalf Grant Lawyers ORDERS
SYC 4040 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR PAWSON
Applicant
AND: MS SAETANG
Respondent
AND: INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
CHRISTIE J
DATE OF ORDER:
2 DECEMBER 2021
THE COURT ORDERS:
1.That within 14 days of the date hereof the husband’s lawyers prepare a draft letter of instruction for the appointment of a single expert forensic accountant (“the single expert”) to value the husband’s interest in the entities known as:
(a)B Pty Ltd Super Fund
(b)Pawson Family Trust
(c)D Unit Trust
(d)E1 Pty Ltd
(e)E2 Unit Trust
(f)F Unit Trust
(g)H Unit Trust
(h)J Unit Trust
(i)L Unit Trust
(j)M Unit Trust
(k)N Unit Trust
(l)O Pty Ltd
(m)P Family Trust
(n)Q Partnership
(o)T Company
(p)U Pty Ltd
2.That simultaneously with Order 1 the husband’s lawyers provide to the wife’s lawyers the names of three proposed experts together with the CV of each, their estimated fees and their availability to prepare a valuation report.
3.That within a further 14 days, that the wife’s solicitors provide any amendments to the proposed joint letter to the single expert and the wife shall nominate one such expert who shall thereupon become the single expert.
4.That the single expert’s costs be borne equally by the parties save that in accordance with Rule 7.06, the husband be responsible for the fees and expenses of the single expert in the first instance with the wife to reimburse him within 28 days of the making of a final order in the proceedings
5.That by 15 January 2022 the parties shall exchange market appraisals of the following properties:
(a) V Street, Suburb W, NSW;
(b) BB Street, Suburb CC, NSW;
(c) DD Street, Suburb EE, NSW;
(d) FF Street, Suburb GG, NSW;
(e) HH Street, Suburb JJ;
(f) KK Street, Suburb W, NSW; and
(g) MM Street, Suburb LL, NSW
6.In the event that the parties do not agree on the value of any of the properties in accordance with the orders herein, then the parties are to obtain a single expert valuation of those properties, and for that purpose:
(a) Within seven days of receipt of notification that the value is not agreed in relation to a property;
(b) The de facto husband shall provide to the de facto wife the names of three proposed valuers, together with their CV, estimated costs of valuation and estimated time to complete the inspection and report/s and a draft joint letter of instruction;
(c) Within seven days of receipt of the de facto husband’s nomination/s, the de facto wife shall nominate one of the proposed valuer/s (“the single expert property valuer”) to undertake the valuation/s and provide any response in relation to the draft joint letter of instruction;
(d) The parties shall engage the single expert property valuer/s by way of joint letter within 7 days of having been selected;
(e) Each party shall do all such acts and things necessary to facilitate the preparation of the valuation/s, including providing the single expert property valuer/s with reasonable access to the property being valued;
(f) The parties shall equally share the costs of the single expert property valuer/s, save that in accordance with Rule 7.06, the husband be responsible for the fees and expenses of the single expert property valuer in the first instance with the wife to reimburse him within 28 days of the making of a final order in the proceedings.
7.That within 28 days the parties do all acts and things and sign all necessary documents, to list the property at BB Street, Suburb CC (“the Suburb CC property”) to be sold by private treaty or auction in accordance with the advice of the listing agent and for this purpose:
7.1The parties shall instruct such real estate agent (“the Agent’) as agreed by the parties, or failing agreement for a period exceeding seven days, as nominated by the then president of the Australian Property Institute, NSW Division (API);
7.2The parties shall instruct such conveyancer or solicitor as agreed by the parties, or failing agreement for a period exceeding seven days, as nominated by the then president of the Law Society of NSW (“the Conveyancer”);
7.3The parties shall list the Suburb CC property for sale or reserve price by private treaty at such price as agreed between them, or failing agreement for a period exceeding seven days, then as recommended by the Agent;
7.4The sale price of the Suburb CC property shall be any amount in excess of the reserve price but in the event of the reserve price not being reached the sale price of the Suburb CC property, it shall be such amount as is agreed between the parties or failing agreement any offer received after the auction to buy the property at a price that is at least 95 per cent of the reserve price shall be accepted by the parties;
7.5The parties shall cooperate in every way with the Agent in relation to the marketing of the Suburb CC Property for sale including making the key readily available, allowing inspection of the property at all times reasonably requested by the Agent and ensuring that the property is clean, neat and in good condition at the time of inspection by any prospective buyer; and
7.6If the Suburb CC property does not sell by private treaty (by an unconditional exchange of contracts) within two months of the date on which it was listed for sale, then the parties shall do all acts and sign all things necessary to re-list the Suburb CC property for sale at a revised price as agreed between them, or failing agreement for a period exceeding seven days, as recommended by the Agent.
8.If the Suburb CC property is not sold (by an unconditional exchange of contracts) within a further month of the reviewed list price pursuant to Order 7.4, the parties shall do all things and sign all documents to sell the Suburb CC property by public auction and for this purpose:
8.1The parties shall do all things and sign all documents necessary to instruct such auctioneer as agreed between them or failing agreement for a period exceeding seven days, as recommended by the Agent (“the Auctioneer”);
8.2The parties shall nominate such reserve price as agreed between them, or failing agreement for a period exceeding seven days, as nominated by the Agent and/or Auctioneer;
8.3The parties shall give all such instructions as are necessary for the Conveyancer to prepare the Contract for Sale and provide it to the Agent and/or Auctioneer prior to the auction no later than the date sought by the Agent and/or Auctioneer;
8.4The parties shall cooperate in every way with the Agent and/or Auctioneer in relation to the sale by auction, including allowing the inspection of the Suburb CC Property at all times reasonably requested by the Agent and/or Auctioneer ensuring that the property is clean, neat and in good order at the time of any inspection and on the day of the auction; and
8.5In the event the reserve price is not reached at auction, and the property is not sold within 14 days thereafter by further negotiation, the parties do all acts and sign all things necessary to submit the Suburb CC Property for sale by such further auction or auctions as may be necessary to effect the sale, and revise the reserved prices as agreed or recommended by the Agent.
8.6That upon completion of the sale of the Suburb CC Property, the parties shall do all acts and things and sign all necessary documents to direct the proceeds of the sale in the following manner and priority:
8.6.1In payment of the Agent, Auctioneer and Conveyancer’s costs of sale;
8.6.2In discharge of NN Bank loan ending #...00 secured against the Suburb W property;
8.6.3The balance then remaining to the wife.
9.That the directions hearing before Registrar Aitken listed on 17 December 2021 be vacated and the matter be listed for a case management hearing before Justice Christie on 28 January 2022 at 9.30am.
10.The husband’s application for discharge of Order 35 of the orders of 6 July 2021 is dismissed.
THE COURT ORDERS BY CONSENT THAT:
A.The Court notes the following definitions for the purpose of these Orders:
a.“Father” means Mr Pawson born … 1966
b.“Mother” means Ms Saetang born … 1980
c.“X” means X born … 2014
d.“Y” means Y born … 2014
e.“Z” means Z born … 2016
f.“the children” means X, Y and Z
1.That orders 2, 3, 4, 5 and 24 of the orders dated 6 July 2021 be discharged.
2.Pending further order that the children live with the mother.
3.Pending further order, that the children spend time with the father, precise times to be agreed and failing agreement then as follows:
3.1From the date of orders to the conclusion of Term 4, 2021 as follows:
3.1.1Each Wednesday from the conclusion of school until the commencement of school on Thursday;
3.1.2Each weekend as follows:
3.1.2.1On Sunday, 5 December from 9:30am to 4:30pm;
3.1.2.2On Saturday, 11 December from 9:30am to 4:30pm; and
3.1.2.3On Sunday, 19 December from 9:30am to 4:30pm.
3.2From the commencement of Term 1, 2022 and thereafter during term time:
3.2.1In week 1, from the conclusion of school on Wednesday to the commencement of school on Thursday; and
3.2.2In week 2, from the conclusion of school on Friday until the commencement of school on Monday.
3.3During the Term 4, 2021 Christmas school holiday period on a week about basis with Weeks 1, 3 and 5 of the Christmas school holidays to be spent with the father and Weeks 2, 4 and 6 with the mother subject to other provisions in these orders.
3.4During the Term 1, Term 2 and Term 3 school holiday periods as follows:
3.4.1During odd numbered years, the children will spend the first half of the holidays with the mother and the second half with the father; and
3.4.2During even numbered years, the children will spend the first half of the holidays with the father and the second half with the mother.
4.For the purpose of the time referred to in orders 3.1, 3.2, 3.3 and 3.4 where changeover does not occur at school, changeover will occur at PP Cafe in Suburb EE at 9:30am unless otherwise specified or agreed and both parents shall ensure that during changeovers:
4.1Each parent will behave in a civil and courteous manner to the other parent;
4.2Communication between the parties will be in accordance with order 11 below;
4.3Neither parent will discuss issues of any controversy between them; and
4.4Each parent will conduct themselves in a child focused manner.
5.For the purpose of the time in orders 3.1 and 3.2, that the mother shall ensure that the children’s school uniforms and shoes are placed in their school bags prior to the commencement of school on Wednesday and the father shall ensure that the children’s school uniforms and shoes are placed in their school bags prior to the commencement of school on Thursday.
6.For the purpose of the time in orders 3.1.2 and 3.2.2, that the mother shall ensure that the children’s swimming costumes and all other equipment required for their swimming lessons including goggles, footwear, towels and membership cards are placed in the children’s bags prior to the commencement of time and that the father shall ensure that all of the items provided by the mother for swimming are placed in the children’s bags at the conclusion of time.
7.That the time provided for in these orders will be suspended to allow the children to spend time with the parties on the following Special Days (“Special Days”) as follows:
7.1with the mother on Mother’s Day, from 9am until before school the following day;
7.2with the father on Father’s Day, from 9am until before school the following day;
7.3with the parent with whom the children are not already spending time in accordance with these orders, on each of the children’s birthdays:
7.3.1where the birthday falls on a weekend, from 9am to 1pm;
7.3.2where the birthday falls on a weekday, from after school to 6:30pm;
7.4with the mother on her birthday from 9am to 9am the following morning;
7.5with the father on his birthday from 9am to 9am the following morning;
7.6with the father on no more than two occasions each year from 5pm to 8pm Saturday for the purpose of attending the Parish Family Mass held by QQ School Suburb WW, with the father to provide by written notice the nominated date for attendance, no less than 7 days prior to the date of the Parish Family Mass held by QQ School Suburb WW, and the nominated dates not to include times when the children are otherwise spending time with the mother during Easter or Christmas in accordance with these orders; and
8.For the purpose of these orders in relation to school holidays and Special Days:
8.1The Term 4 Christmas school holiday period will commence on Monday, 20 December at 9:30am and conclude at the commencement of school on Monday, 31 January 2022.
8.2Other than as provided at order 8.1 above, school holidays will commence at the end of the school day after the children last attended school (and if there is a difference between the children, on the day the last of the children concludes school term) and will conclude at the beginning of the school day on the children’s first day of resuming attendance at school (and if there is a difference between the children, on the day the first of the children resumes attendance at school).
8.3Where any Special Days occur during the time that the children are otherwise spending time with either party, the number of nights in that holiday period is not altered.
9.That both parents will:
9.1advise of the phone number(s) of the children and of any changes to that phone number or changes to the residential address of the children;
9.2advise the other parent of an emergency and urgent message contact number to contact and of any changes to that number;
9.3when either parent wishes to take the children interstate on holidays give to the other not less than 14 days’ notice of the intended holiday specifying the intended destination, travel dates and contact numbers;
9.4notify the other parent as soon as possible of any serious illness or injury suffered by either of the children whilst in their respective care;
9.5notify the parent of the full name and birthdate of any person who lives in the home with the children;
9.6keep the other parent informed in relation to all medical, dental or other health related treatments being undertaken by the children or either of them, and the identity of the treating professionals;
9.7keep the other informed as to all sporting, religious and educational events (which come to the notice of that parent) in which the children are from time-to-time involved or which relate to activities of the children although they themselves may not be involved, for example parent/teacher interviews, and at which parents may attend and each parent be so at liberty to attend, including a notification being provided to the other parent in the event the children are not going to attend the particular events or activities;
9.8do all things reasonably practicable to ensure that the children (or either of them) attend any extracurricular event relating to an activity in which they are enrolled;
9.9do all acts and things to encourage and facilitate the children contacting and being contactable by telephone by the other parent when they are with them and will ensure that the children are able to speak to that parent in a private environment;
9.10notify the other parent as early as practicable of there is likely to be delay in collecting the children or if time pursuant to these orders may not be able to proceed on a specific occasion.
10.That each parent shall facilitate the children speaking with the other parent by way of telephone or Facetime at least once each week at 6pm on Wednesdays when the children are in their care during school holiday periods as provided for in orders 3.3 and 3.4 herein.
11.That the parties will ensure the following:
11.1That all communication between the parties is to be via email and will only relate to the children; and
11.2That text messages will only be used to inform the other party of an emergency or if one of the children or a parent is unable to attend changeover due to illness.
International Travel
12.The Children are permitted to travel overseas with the mother or the father subject to the provisions of these Orders and provided that:
12.1The parent proposing to travel overseas with the Children, provides the other parent with:
12.1.1Written notice of the proposed travel, no less than 30 days prior to the departure, including details of:
12.1.1.1The purpose of the travel;
12.1.1.2The approximate dates of travel;
12.1.1.3Destination(s);
12.1.1.4The means of travel;
12.1.1.5Accommodation arrangements;
12.1.1.6Details of persons with whom the children will be travelling; and
12.1.2A copy of the following, at least 14 days prior to departure:
12.1.2.1Travel itinerary;
12.1.2.2Contact numbers for the children whilst travelling;
12.1.2.3The return airfares for the children;
12.1.2.4Copies of travel insurance; and
12.1.2.5Copy of registration with DFAT.
12.2The parent proposing to travel with the children is to obtain the written consent of the other parent.
12.3In the event that the travel itinerary changes whilst the Children are travelling, then the parent with whom the Children are travelling will provide the changes in itinerary in writing within 12 hours of the change in itinerary.
12.4The Father hold the Children’s passports and will provide the passports to enable the Children to travel with the mother for the purpose of any proposed travel in accordance with order 12, not less than 14 days before the proposed date of travel.
12.5Within 14 days of the return from any overseas travel with the Children the Mother will return the passports to the Father immediately upon returning to Australia with the Children.
12.6The mother and father shall equally pay the cost of obtaining and renewing the Children’s passports.
12.7The parent with whom the Children are traveling pursuant to Order 12, is to accompany the Children during the travel.
12.8Neither the father nor the mother is permitted to travel outside of the jurisdiction of Australia with the Children to a country that the Australian Government has issued an official travel warning.
12.9Neither the father nor the mother is permitted to travel to a non-Hague Convention country unless agreed otherwise in writing in advance.
THE COURT ORDERS THAT:
13. The time provided for in these orders will be suspended to allow the children to spend time with the parties on the following special days (“Special Days”) as follows:
(a) With the father from 12.00 pm on Easter Saturday 2022 until 12.00 pm on Easter Monday 2022; and
(b) With the mother for Lunar New Year from Friday after school until Monday before school.
14. Leave is granted to the parties’ legal representatives to inspect material returned on subpoena by Atkinson Vinden Pty Ltd.
THE COURT NOTES THAT:
a.Pursuant to s.65DA(2) and s.62B, the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders and details of who can assist the parties adjust to and comply with an order are set out in the Fact Sheet attached hereto and these particulars are included in these orders.
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 Pawson & Saetang has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J:
These are interim proceedings for financial and parenting orders.
Mr Pawson, the de facto husband (“the husband”), seeks orders as set out in his Further Amended Initiating Application filed 15 November 2021 (parenting) and his Amended Reply filed 15 November 2021 (property). Those were supplemented by a Minute of Order relating to valuation issues.
Ms Saetang, the de facto wife (“the wife”), seeks orders as set out in her Second Amended Response to Initiating Application filed 16 November 2021.
The parenting proceedings relate to the three children of the parties X (“X”) born in 2014, Y (“Y”) born in 2014 and Z (“Z”) born in 2016.
The children are independently represented in the proceedings.
BACKGROUND
The parties commenced a relationship in 2013 and separated on 14 May 2020.
ISSUES
PARENTING ISSUES
By the time of the interim hearing the only interim parenting issue remaining between the parties related to special cultural/religious holidays. Otherwise, the parties and Independent Children’s Lawyer (“ICL”) submitted consent orders.
FINANCIAL ISSUES
Each party seeks interim financial orders from the court.
The husband seeks to discharge the consent order made 6 July 2021 that requires him to pay the wife $650 per week.
The wife seeks an order that the husband pay her $250,000 for “litigation funding”. Her application refers to such an order being made pursuant to section 117(2) of the Family Law Act 1975 (“the Act”). It also inconsistently suggests that the payment may be characterised by the trial judge. Her written submissions raised an alternate basis for the making of the order, namely interim property settlement.
The husband opposes the litigation funding order. He contends that the sum may represent more than the wife’s property entitlements.
The wife seeks orders for valuation of real estate and business interests. The husband accepts that the real estate may require valuation but asks that the parties undertake a preliminary step of exchanging market appraisals with a view to agreement and failing agreement, proceed to formal valuation.
The husband initially resisted orders for the valuation of business interests (trusts, shares in private companies) but at the interim hearing provided a Minute of Order with which the wife in substance agreed.
The parties’ assets and liabilities are identifiable but various matters of valuation remain outstanding. Set out below is a schedule of the parties’ assets, liabilities, financial resources and superannuation drawn from their evidence.
Asset
Owner
Value
DD Street, Suburb EE
Wife
E$650,000
V Street, Suburb W
Joint
(R)E$4,500,000
(A)E$3,500,000
BB Street, Suburb CC
Joint
(R)E$500,000
(A)E$450,000
FF Street, Suburb GG
Husband
(R)E$1,400,000
(A)E$350,000
CBA bank account #...39
Wife
$1632
CBA bank account #...23
Wife
E$10,518
Westpac account #...75
Wife
NIL
Motor Vehicle 1
Wife
$25,000
Motor Vehicle 2
Wife
$3,000
Household contents
Husband
$5,000
Household contents
Wife
$5,000
Jewellery and Dr Suess Prints
Wife
$50,000
Wine Collection
Husband
E$50,000
Artwork
Husband
E$65,000
Sporting Memorabilia
Husband
E$5,000
NN Bank account #...27
Joint
$882
NN Bank account #...57
Joint
$1912
NN Bank account #...20
Husband
$4,083
NN Bank account #...99
Husband
$9,049
F Pty Ltd ATF F Unit Trust
Husband
NK- 6.7% of units held by the husband. See below table of assets
D Pty Ltd ATF D Unit Trust
Husband
NK
Financial Resources
Husband
C Family Trust
Husband
NK* see below table of assets
P Pty Ltd Family Trust
Husband
NK* see below table of assets
Bare executor to the estate of the late Ms Pawson. Not a beneficiary.
Husband
NIL
Interest in 5sqf piece of land in the United Kingdom.
Husband
NIL
Beneficiary of Pawson Family Trust
Wife
NK
R Pty Ltd
Husband
Non-trading, dormant entity
Superannuation
Super Fund 1
Wife
$38,980
B Pty Ltd Superannuation Fund
Husband
E$1,015,856
Liability
Owner
Value
Home Mortgage
Joint
E$1,400,000
BB Street Mortgage
Joint
E340,000
FF Street Mortgage
Husband
E$709,000
RR Pty Ltd Loan
Husband
$1,000,000
S Trust Loan
Husband
E$50,000
Westpac MasterCard
Wife
$1045
NN Bank Visa
Husband
$7,533
Legal fees
Wife
$105,167
Personal guarantee to NN Bank
Husband
$3,321,000
Personal guarantee for U Pty Ltd
Husband
$200,000
Personal guarantee for mortgage on Suburb CC property
Husband
$170,195
F Pty Ltd ATF F Unit Trust – List of Assets
KK Street, Suburb W
MM Street, Suburb LL
HH Street, Suburb JJ
20% of units in H Unit Trust
33% of units in J Unit Trust
12.5% of units in N Unit Trust
25% of units in K Unit Trust
12.5% of units in L Unit Trust
25% of shares in O Pty Ltd
25% of units in SS Unit Trust
Sole unit holder of M Unit Trust
Cash of approximately $50,000
Other shares in unlisted companies and trusts
D Pty Ltd ATF D Unit Trust – List of Assets
Minimal assets
C Family Trust – List of Assets
Sole shareholder of D Pty Ltd
Sole shareholder of M Pty Ltd
Sole shareholder of G Pty Ltd
Sole unitholder of M Unit Trust
1/3 shareholding in E1 Pty Ltd
1/3 shareholding in E2 Pty Ltd
1/3 of units in E3 Unit Trust
Cash of approximately $5,000
Motor Vehicle 3
Publicly listed shares
P Pty Ltd ATF Family Trust – List of Assets
1/3 shareholding in U Pty Ltd
1/3 interest in Q Partnership
It emerged in submissions that the wife raises as an issue in the proceedings the following queries:
(a)Does the husband hold ¾ of the equity in FF Street, Suburb GG on trust for the children?
(b)Do the children legitimately hold the units in the F Unit Trust or is the husband the real owner of those units?
(c)Is the loan the husband sets out in his affidavit to RR Pty Ltd a legitimate debt owed to that company or to the estate of his mother or otherwise?
(d)Is the husband’s representation that he is not a beneficiary of the estate of his mother accurate?
None of the above issues fall to be determined at this interim hearing. It should also be said that nothing in the wife’s evidence or in the submissions made pointed to any basis upon which the Court could conclude that the wife’s concerns are justified. Through her lawyers, the wife says these issues are part of the complexity of the financial picture which she wishes to investigate. It may be that the valuation process will assist the parties to resolve those issues.
LEGAL PRINCIPLES
Discharge of spouse maintenance order
In submissions, counsel who appeared on behalf of the husband argued that Order 35 of the 6 July 2021 orders made by Senior Registrar McGrath, may not be a spouse maintenance order. When asked under what power the Court had made the order, counsel indicated it may be a spouse maintenance order, but may also fall to be classified (by the trial judge) at a later time, as either a spouse maintenance order or a property order.
The order reads in full:
35. That the Father pay to the Mother the sum of $650 per week for rental accommodation for the Mother and the children to be paid upon the Mother notifying the Father of the rental arrangement she has agreed to.
On the face of the order it is an order that the father pay the mother a periodic sum which she is to apply to her living expenses, namely rent.
An order to pay a periodic sum on an interim basis, which monies are to be applied to living expenses is properly characterised as a spouse maintenance order and accordingly those provisions which apply to discharge and or variation of orders for spouse maintenance are applicable here.
When the court has made an order for spouse maintenance, whether by consent or otherwise, then any application for modification of that order (including any application for discharge) falls to be considered by application of the principles contained in s 90SI of the Act.
No decrease in the order is permitted unless one or more of the circumstances set out in s 90SI(3) is satisfied.
Interim order: litigation funding
The making of orders for provision of funds to apply to legal fees may be undertaken pursuant to the courts power to make a costs order under s 117(2A) of the Act or alternatively in reliance upon the power conferred by s 90SM and s90SS(1)(h) of the Act.
The considerations which apply differ depending upon the head of power relied upon. For that reason it can be problematic to leave the task of classification of the payment to a later time – since the judicial officer making the orders must be satisfied as to the matters set out in the statute prior to making an order, including an order by consent.
The importance of each party being given the opportunity to obtain legal advice and assistance has been recognised by the expression “level playing field”.
If an order is made for provision of a lump sum in reliance upon ss 90SS(1)(h) and 90SM of the Act, the determination adopts a two step approach as set out by the Full Court of the Family Court of Australia in Strahan and Strahan (2011) FLC 93- 466:
“[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.”
The second stage requires consideration of the usual s 90SM matters with a view to ensuring that the order which is made at an interlocutory stage, will not compromise the requirement to do justice and equity as between the parties at the final hearing.
Parenting
The parents, to their credit and with the assistance of their lawyers and the ICL, reached agreement about most of the interim parenting issues.
The only outstanding issue on an interim basis concerned the time the children were to spend with each parent at Easter and Lunar New Year. Notwithstanding the limited scope of the issue, it still falls to be determined as all interim parenting issues do, having regard to the best interests principle and with a consideration of the relevant uncontested facts.
CONSIDERATION
Lump sum legal fees
The wife sought an order for payment of $250,000 characterised as legal costs.
In order to make an order pursuant to s 117(2A) of the Act, I would need to be satisfied that there are justifying circumstances to depart from the usual rule namely that each party pay his or her own costs. Section 117(2A) sets out specific matters for consideration; it is important when making an order for payment of monies under this section to be able to address any relevant matters. No submissions were made about matters under s117(2A) except as regards the parties’ respective financial positions. There can be little issue that the husband is in a stronger financial position. In some cases that may be sufficient to amount to justifying circumstances. However, in this instance I am not satisfied that this is sufficient. This is particularly the case because the mother’s evidence suggests that failure to make a costs order will not result in her being unrepresented. The solicitors for the mother have agreed to be paid at the conclusion of the matter.
That is not the end of the inquiry. In the alternative the wife seeks that she receive monies she intends to apply to her legal fees by way of interim or partial property settlement.
She points to the property owned jointly by the parties at BB St, Suburb CC (“the Suburb CC property”) as being an appropriate source of such funds.
The parties purchased the Suburb CC property on 24 July 2020 for $430,000. In order to settle the purchase they borrowed the sum of $344,000. At present the parties estimate the Suburb CC property is valued between $450,000 and $500,000. It has a current mortgage liability of $340,390. That mortgage is secured against V St Suburb W (“the Suburb W property”).
Both parties seek sale of the Suburb CC property. The wife seeks, after deduction of costs of sale, payment to her of $250,000 with the balance to be applied to the Suburb W mortgage. While not plain from his Minute of Order, the husband’s evidence suggests he seeks discharge of the Suburb W mortgage, payment of a loan of $50,000 to his brother and he is silent as to the surplus or shortfall.
Before determining the appropriateness or otherwise of an interim payment to the wife it is necessary to understand the parties’ respective positions in the litigation more broadly. The husband for his part says that the he and the wife had an agreement after separation such that she would receive the proceeds of sale of a property at TT Street Suburb VV (“the Suburb VV property”). The Suburb VV property sold in April 2020 and the net proceeds of $853,000 were paid to the wife. She applied $580,000 out of the $853,000 to purchase a property at DD St Suburb EE (“the Suburb EE property”). The husband says those funds (or such of those funds as the wife retains) represent a just and equitable property settlement.
The wife says that the assets, liabilities, financial resources and superannuation of the parties are as yet unknown (at least as to quantum) and accordingly ascertaining whether the current ownership represents a just and equitable outcome is difficult if not impossible. There is some merit in that submission. The husband does not come to the court and say that the net pool has a specific or an estimated value. The husband also submits the value of the pool, is in the main, unknown.
It is necessary to consider whether the relevant s 90SM and s 90SF(3) factors would result in the wife receiving an adjustment of property interests. The evidence establishes significant non-financial contributions by the wife as against significant financial contributions, including significant initial contributions, by the husband during a period of no less than six years. The s 90SF(3) factors seem to warrant an adjustment to the existing property of the parties. If I am wrong, the property available to the wife will permit a payment to the husband at the final hearing: Osferatu & Osferatu [2012] FamCA 408.
The evidence establishes that the husband has significant financial resources available to him such that he should be responsible in the first instance for payment of the valuation fees and disbursements necessary to provide the parties and the court with expert evidence and, appropriately, he has agreed to this course. This should be subject to the usual rule that the de facto wife be responsible for payment of her half with such payment delayed until the conclusion of the litigation.
However, it is not a whole answer to submit, as the husband has in this case, that the wife may not receive $250,000 by way of final property adjustment and hence ought not be provided with the funds at an interim stage. That is particularly the case here where, even if accurate the wife could be required to realise her real property that is, the Suburb EE property, to make payment to the husband if indeed any interim payment exceeded her entitlements at trial.
Accordingly, the wife should receive the net proceeds of sale from the Suburb CC property after deduction of costs of sale and repayment of the mortgage. It is not possible to say what that amount will be. But if the property were to sell for $450,000 then the net proceeds may be in the order of $100,000.
Each party filed a costs memorandum which became an exhibit. The wife’s legal fees to date exceed $280,000. In comparison the husband’s are about $95,000. Accepting that the party without firsthand knowledge of the financial circumstance of the parties may sometimes incur greater costs, the amount spent on legal fees by the wife to date is a matter of concern. It is important that parties understand that the financial aspects of the litigation require them to act in a way which is proportional and commercial.
The exact quantum of the assets owned by the parties is, at this stage of the litigation unknown, – however it is plain that it is divided between assets in the parties’ names, trust assets, assets said to be in trust for the children and superannuation interests.
A proper resolution of the interim dispute would be for the parties to attend to arrangements for sale of the Suburb CC property. The net proceeds, after costs of sale, should be applied to discharge the mortgage obtained to acquire the Suburb CC property but secured over the Suburb W property. If there are surplus funds they should be paid to the wife by way of partial property adjustment to be applied to legal fees. Since the husband represented to the wife, that he would be wholly responsible for repayment of the $50,000 he borrowed from his brother, that sum should not be deducted from the proceeds of sale of the Suburb CC property.
The parties have each sought orders in the nature of procedural orders designed to ready the matter for alternate dispute resolution and if unsuccessful, hearing.
It seems sensible for the parties to endeavour to agree on the values of items of real property as a precursor to formal valuation. I make orders accordingly.
Both parties sought orders for the parties to attend mediation. Mediation is appropriate but would be unlikely to produce agreement until after the parties have a more settled balance sheet. The matter will be adjourned for case management and the parties directed to participate in alternate dispute resolution when valuation tasks have been undertaken.
Spouse maintenance
In characterising Order 35 of the orders of 6 July 2021 as a spouse maintenance order, I have regard to the “history and context” set out in the parties’ evidence: Tallant & Tallant (2017) FLC 93 – 789.
It is plain that as at the time of the making of the consent orders both parties were representing to the court (by seeking the order) that the criteria for the making of a spouse maintenance order were satisfied. Accordingly, it is necessary to understand what factors are said to invite the court to revisit the order.
The husband’s case is that the wife could (indeed should) be utilising her qualifications and experience to obtain work. Further he says that the wife ensured the children attended school even during that period of time when schools in Sydney were operating predominantly online – inferentially he contends that the wife could not rely on a necessity to provide care to the children as a basis upon which it is reasonable that she remain out of the workforce.
The husband has, through his lawyers, sought from the wife details of any job applications made by her during 2021. It would appear from the evidence that the wife has not provided any job applications to the husband’s lawyers in answer to their inquiries.
Counsel for the wife submitted that the wife has been primarily responsible for the care of the parties’ three children both prior to and since separation. The children are seven year old twins and their five year old sister. The Act speaks of circumstances in which a party is not able to support themselves adequately because they have care and control of a child of the marriage who has not attained the age of eighteen years. Those were the wife’s prevailing circumstances when the order for payment of $650 per week was made in July 2021. Those remain her circumstances at the time of this interim hearing. The husband says he has expenses which exceed his income but does not claim this as a new circumstance. In addition, he will no longer be liable to meet supervision costs. The husband’s application for discharge of Order 35 of the 6 July 2021 Orders will be dismissed.
Parenting
The parents’ affidavit material relevant to the dispute was limited in nature.
The wife says:
(a)She has celebrated Easter with her former partner and the children since they were born;
(b)She says Easter is a significant family day for her; and
(c)She takes the children to Melbourne every school holiday to spend time with her extended family.
The husband says:
(a)He is Catholic and the children were baptised and raised Catholic;
(b)Easter has significant meaning to him and the children; and
(c)He and the children have attended mass almost every Christmas and Easter.
The independent children’s lawyer submitted:
(a)The children have affection for both parents;
(b)The children’s culture and religion are important for them;
(c)One option may be to alternate special events each year; and
(d)Lunar New Year may not be an issue because the husband does not seek it – but there may be some value in alternating anyway.
The children attend primary school. The parents have agreed to share school holiday time. Sometimes Easter will fall during school holidays and at other times it will not. These orders are likely to operate for the Easter period in 2022 only.
The husband proposes that he always have from noon Easter Saturday until noon Easter Monday. The wife proposes that the same period alternate between the parents such that the husband has that period in even years (including 2022) and the wife in odd years.
The orders are drafted such that the children’s regular time with one parent or the other would be suspended (if necessary) to allow for the Easter time.
As a general principle the court makes orders for children to spend time with parents on occasions important to the children and occasions important to the parents. Easter has particular religious significance for the husband and children but has come to have importance for the wife as something important to her children.
Given that the orders afford the wife ample opportunities to travel at periods other than Easter, I find that the most appropriate interim order is the one that (consistent with both parties’ applications) provides that the children will be with their father at Easter next year (2022).
Hopefully the parties will otherwise be able to resolve their dispute about Easter on a final basis taking into account where it falls in the children’s school holidays, or otherwise, in the years that follow.
The wife offered the husband time with the children for Lunar New Year. She sought to alternate the weekend associated with Lunar New Year with the husband. The husband on the other hand, did not seek time with the children over Lunar New Year. There was no evidence in either parties’ affidavit specifically about Lunar New Year. In circumstances where the husband was content for the wife and children to celebrate Lunar New Year together each year, I intend to make that order.
I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie. Associate:
Dated: 2 December 2021
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