PRESTON & PRESTON

[2013] FamCA 28

FAMILY COURT OF AUSTRALIA

PRESTON & PRESTON [2013] FamCA 28

FAMILY LAW – PROPERTY SETTLEMENT - Partial property settlement - disputed entitlement and quantum of any order - Order made.

Family Law Act 1975 (Cth)

Bing and Bing [2007] FamCA 418, (2007) FLC 93-318
Strahan and Strahan (interim property orders) [2009] FamCAFC 166

APPLICANT: Ms Preston

RESPONDENT: Mr Preston

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: MLC 8813 of 2012

DATE DELIVERED: 1 February 2013

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 25 January 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms De Vere

SOLICITOR FOR THE APPLICANT: Champion Legal

COUNSEL FOR THE RESPONDENT: Ms Bridger

SOLICITOR FOR THE RESPONDENT: Cahine & Associates

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: No appearance

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Stidwell Solicitors

Orders

1. That pursuant to s 79 of the Family Law Act 1975 (Cth), the husband pay to the wife the sum of $120,000 by way of partial settlement of property.

2. That all interim applications are otherwise dismissed.

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

FILE NUMBER: MLC 8813 of 2012

Ms Preston

Applicant

And

Mr Preston

Respondent

Independent Children’s Lawyer

REASONS FOR JUDGMENT

1. The proceedings before me on 25 January 2013 between Mr Preston (“the husband”) and Ms Preston (“the wife”) were commenced in Melbourne on the basis of a review of the Senior Registrar’s decision in which he transferred the proceedings to Sydney.

2. An Independent Children’s Lawyer had been previously appointed by the Court and a solicitor filed notice on the record as the Independent Children’s Lawyer.  That lawyer made contact with the Court seeking to be heard in respect of parenting issues but by telephone from France.  I rejected that application.  A proper application should have been made under the Rules.

3. Notwithstanding there were live parenting applications as well as financial issues between the parties, the Court was only required to determine one financial issue relating to a claim by the wife that the husband pay her $120,000.  These reasons concern that issue.  It must be noted however that the parenting orders, whilst reached through an uneasy compromise, were still orders of the Court and which, in my view, satisfy the legislative requirements of Part VII of the Family Law Act 1975 (Cth) (“the Act”).

4. In the midst of argument over the change of venue and the parenting issues, I agreed to give a priority hearing to the matter on the basis that I could see difficulty in the relationship between the husband and the child J (“the child”) if the wife remained in Melbourne.  I could also see difficulty for the child if the order was made that the wife return him to live in Sydney.  The pragmatic solution was to have the matter heard as a matter of urgency.  The parties agreed that the financial issues were not complicated and that ultimately, many of the matters might be resolved by an assessment on the evidence presented.

5. I have made orders on 25 January 2013 relating to the timetable for trial.  I have made a provision for the Independent Children’s Lawyer to be heard if she considers that she needs to maintain a presence in the proceedings.  The husband is to consider whether or not he intends to proceed with an application for the wife to relocate with the child.  If that is not to occur, and that will be evident from the amended documents to be filed very shortly, the issue will be what time the husband is to spend with the child into the future.

6. By her application for interim orders filed on 27 September 2012, the wife sought a payment of the $120,000 from the husband to be put towards her legal expenses for the conduct of the trial.

7. When I queried with the wife’s counsel the basis upon which the application was being sought and more importantly, what power I was being asked to exercise, she confirmed that in reality, I was being asked to deal with the matter as a partial settlement of property using the s 79 power.

8. Counsel for the husband indicated that the husband opposed the making of the order.  A number of arguments ensued as to the evidence upon which the wife was relying and also that if there was to be any payment, it should not be $120,000 but in any event, maintained by the solicitors for the wife and explained as to their disposal.  In my view, that is not appropriate.

9. The Full Court of this Court in Strahan and Strahan (interim property orders) [2009] FamCAFC 166 discussed the various heads of power that could be used. The Court there set out how litigation funding orders were to be contemplated. This is not a litigation funding order. It is an interim division of property.

10. The Full Court observed that there is only one exercise of power under s 79 of the Act and it was preferable that there only be one final hearing. The Court went on to say that a two step process should be followed. The first step required consideration as to whether the jurisdiction should be entertained and if so, then the applicant needed to satisfy the necessary requirements for the exercise of power under s 79 to make an order.

11. The Full Court rejected the necessity to establish compelling circumstances but noted that one example where it may be appropriate to exercise the power was where it was necessary to make an order because a party required funds to assist in defraying the costs of litigation which, absent those funds, an injustice may be caused.  It is clear in this case that the evidence is scant on that subject but equally importantly, the wife wishes to pay her lawyers and she considers it preferable that they not have to wait until the conclusion of the trial particularly having regard to the circumstances to which I turn below.

12. As the Full Court said in Strahan (supra), once a determination is made to exercise the power, there must be evidence that satisfies the necessary requirements of s 79. The Court emphasised that in respect of the first of the steps however, more was required to be shown other than the mere fact that at the final hearing, the applicant would receive the property being sought or more than that from the other party. Where there is a clear imbalance between the parties in terms of assets, a consideration is always that one party has the assets and the other does not and an injustice can be seen if the party not having those assets is simply told to wait. Thus, in examining whether there is a circumstance that justifies entertaining the power, it is permissible for a court to examine whether or not all of the requisites of s 79 can be satisfied on the evidence and the only reason a payment is not otherwise being made is that a party is being told to wait. That is particularly important as the Full Court pointed out in Strahan that the financial circumstances of both parties are relevant at the substantive stage but may also be relevant to the procedural stage.  This is one such case.

13. In her affidavit in support of the application, the wife set out in numerous paragraphs, the details of her contribution and her financial position present and as she saw it, into the future.  In his affidavit in reply, whilst the husband joined issue with the wife as to the facts, the dispute as to the overall picture of what the wife contributed and how her contribution affected the marriage, was not really in dispute at all.  Indeed, counsel for the wife asserted and it was not denied by counsel for the husband, the assets of the parties varied from (the wife’s perspective) $3.7 million and (the husband’s perspective) $4.3 million.

14. Importantly, in his response seeking final orders filed 24 October 2012, the husband sought the final order that he pay to the wife $600,000 in return for which she was to transfer any interest she had in a house and relinquish any interest in other assets.  On any view therefore, I am entitled to presume that the husband acknowledges that of the pool of assets that I have just mentioned, the wife is at least entitled to $600,000. 

15. There was also some argument in submissions about where $120,000 would come from.  In my view having regard to what the Full Court said in Bing and Bing [2007] FamCA 418, (2007) FLC 93-318 that is not an issue that should affect the entitlement of the wife to what is effectively her money.

16. I am satisfied that there is sufficient evidence for me to say that to simply leave the position of the assets in the hands of the husband, as against those in the hands of the wife would not be a just and equitable outcome even on an interim basis. There is sufficient evidence for me to find that the wife has made a significant contribution in the descriptive terms of s 79(4) of the Act. To a very large degree, the husband acknowledges there has been a significant contribution. I am satisfied that there is sufficient evidence before me of the factors in s 75(2) of the Act to enable me to at least be satisfied that the wife has an entitlement to some of the assets in the hands of the husband such as would enable me to make an order within the meaning of s 79(2) of the Act to achieve a just and equitable outcome.

17. In my view, there is sufficient evidence therefore to make an order that the husband pay the wife $120,000.

18. I do not intend to set a time limit for the payment of that sum and without any such time limit being so ordered, the payment is required forthwith.  It was clear in argument however that the husband would have some difficulty raising those sums immediately.  To the extent that there is a dispute about when the money is to be paid, I shall have the matter relisted and the parties can at their expense, have the Court determine that payment phase.

I certify that the preceding Eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 1 February 2013.

Associate: 

Date:  1 February 2013