Pretswell (deceased) and Pretswell

[2019] FamCA 395

FAMILY COURT OF AUSTRALIA

PRETSWELL (DECEASED) & PRETSWELL [2019] FamCA 395

FAMILY LAW – PROPERTY – Interim orders – where the respondent husband died intestate following the commencement of proceedings in the Federal Magistrates Court of Australia (as it was then known) – where Letters of Administration granted and Administrator of the husband’s estate appointed – where husband held real property in his sole name at time of death – where the Administrator makes an interim application seeking orders for sale of real property previously held by husband, for litigation funding purposes – where the Administrator seeks orders for payment pursuant to ss 79 & 80(1)(h) or alternatively s 117 of the Family Law Act 1975 (Cth) – where the wife contends husband held real property on trust for the parties as joint tenants – where the wife contends the real property passed wholly to her on the husband’s death as the surviving owner – where the real property is presently under the control of the Administrator – where the wife seeks the real property be transferred to her – where concurrent proceedings before the Supreme Court of New South Wales – where impact of s 79(8) of the Family Law Act 1975 (Cth) considered – where Court finds no basis for partial property settlement pursuant to ss 79 & 80(1)(h) – where no order made by Court in favour of estate pursuant to s 117.

Family Law Act 1975 (Cth), ss. 4, 75, 79, 80, 117
Succession Act 2006 (NSW), ss. 106, 113

Family Law Rules 2004 (Cth), r. 1.04

Anderson v McPherson [No.2] [2012] WASC 19
Bevan & Bevan [2013] FamCAFC 116
Black Uhlans Inc v New South Wales Crime Commission & Ors [2002] NSWSC 1060
Bourke & Bourke [1998] FamCA 69
Bryson v Bryant (1992) 29 NSWLR 188
Calverley v Green (1984) 155 CLR 242
Capelinski & Patton [2010] FamCA 1243
Cornell & Stokes [2008] FMCAfam 774
Currie v Hamilton (1984) 1 NSWLR 687
Doyle and Doyle (deceased) (1989) FLC 92-027
Eves v Eves [1975] EWCA Civ 3; [1975] 1 WLR 1338
Fielding and Nichol [2014] FCWA 77
Fisher v Fisher (1986) 161 CLR 438; [1986] HCA 61
Flanagan & Sobek (Deceased) [2014] FamCA 696
Grace v Grace [2012] NSWSC 976
Green v Green (1989) 17 NSWLR 343
In the Marriage of Mason (1993) 17 Fam LR 269
Marriage of Love (1993) 17 Fam LR 263
Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34
Neilson v Letch (No.2) [2006] NSWCA 254
Neubert (deceased) & Neubert and Anor (No. 2) [2017] FamCA 829
North v North; Public Trustee of NSW (Intervener) (1987) FLC 91-831
Osferatu & Osferatu [2012] FamCA 408
Parianos v Melluish (Trustee) [2003] FCA 190
Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578
Parrott v Public Trustee of NSW (1993) 17 Fam LR 785
Ryan v Ryan [2012] NSWSC 636
Silvia (Trustee) v Williams [2018] FCAFC 194
Sirola & Sirola and Ors [2018] FamCA 1011
Stanford & Stanford [2012] HCA 52
Strahan & Strahan (interim property orders) (2011) FLC 93-466; (2009) 241 FLR 1
Sully & Sully (No 2) [2016] FamCA 706
Trustees of the Property of Cummins (a bankrupt) v Cummins [2006] HCA 6
Wenz & Archer (2008) 40 Fam LR 212; [2008] FMCAfam 1119
Zschokke & Zschokke (1996) FLC 92-693; [1996] FamCA 79

APPLICANT: Mr B as the Administrator of the estate of the Late Mr Pretswell

RESPONDENT: Ms Pretswell

FILE NUMBER: SYC 2286 of 2011

DATE DELIVERED: 4 July 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Harper J

HEARING DATE: 14 May 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Dart

SOLICITOR FOR THE APPLICANT: Argus Lawyers

COUNSEL FOR THE RESPONDENT: Mr Livingstone

SOLICITOR FOR THE RESPONDENT: Burke & Mangan

Orders

1. The Administrator’s Application in a Case filed 11 April 2019 be dismissed.

2. Pending further order or final determination of these proceedings, the Administrator be restrained from disposing of, encumbering or otherwise dealing with the property known as and situate at F Street, Suburb D in the state of New South Wales being the whole of the land contained in folio identifier … .

3. The question of the wife’s costs of the Application in a Case filed 11 April 2019 by the Administrator be reserved.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Pretswell (Deceased) & Pretswell has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC2286/2011

Mr B as the Administrator of the Estate of the Late Mr Pretswell

Applicant

And

Ms Pretswell

Respondent

REASONS FOR JUDGMENT

Introduction

1. This judgment relates to an Application in a Case filed 11 April 2019 by Mr B (“the Administrator”), as the Administrator of the estate of the late respondent husband, Mr Pretswell (“the husband”), who died intestate in 2016.

2. The substantive proceedings were commenced 14 April 2011 by the wife. They had progressed some distance prior to the death of the husband. It appears the Administrator was granted leave to continue the proceedings pursuant to s 79(8) of the Family Law Act1975 (Cth) (“the Act”) on or about 7 August 2017.

3. The Administrator’s application seeks, in summary, the sale of a property at F Street, Suburb D (“the Suburb D property”). The husband was sole registered proprietor at the time of his death, and the Administrator has treated the property as forming part of the deceased estate of the husband, to be dealt with according to the rules applicable on an intestacy under the Succession Act 2006 (NSW) (“Succession Act”). The Administrator seeks orders that the net proceeds of sale of the Suburb D property be held in a solicitor’s trust account to be accessed by him to fund litigation in this Court and other courts. I set out in full below the orders as sought by the Administrator. The Administrator submits he requires the sale of the Suburb D property as the estate of the husband has no liquid funds to allow him to continue carrying out his duties or prosecute litigation.

4. The applicant wife, Ms Pretswell (“the wife”), resists the application, submitting that she seeks an order on a final basis that the Administrator transfer the Suburb D property to her. She contends that the property was, when he was alive, held by the husband on trust for himself and the wife as joint tenants and therefore, upon the husband’s death, by right of survivorship, sole beneficial ownership of the property passed to her. Thus according to the wife, she already solely owns the Suburb D property beneficially and it does not form part of the estate. She further argues that pursuant to any just and equitable property adjustment order under the Act, she would retain the Suburb D property.

Brief history

1. This matter has a long procedural history, given the proceedings were commenced in 2011. I will refer only to those aspects of it relevant to the Administrator’s application.

2. The parties commenced cohabitation in or around October 1992 and married in 1994. The husband and wife separated 14 February 2011, although there is some dispute with respect to separation which I discuss below.

3. The substantive proceedings were commenced by way of Initiating Application filed by the wife in the Federal Magistrates Court of Australia (as it was then known) on 14 April 2011, seeking orders for spousal maintenance.

4. On 9 November 2011, the wife filed an amended Initiating Application seeking property distribution orders in addition to orders for spousal maintenance. No further amended application has been filed by the wife.

5. On 5 December 2011, the husband filed a Response to the Initiating Application of the wife.

6. The wife contends the parties reconciled on 25 June 2012, and thereafter resumed cohabitation on 6 May 2013. Despite this, the property proceedings continued.

7. The husband suffered a heart attack and subsequently died intestate in 2016.

8. On or about 7 August 2017, the Administrator was substituted for the husband in these proceedings.

9. Following the husband’s death, the husband’s three adult children received the husband’s superannuation benefits of approximately $605,000. The Administrator contends this was as a result of a binding death nomination. There was some dispute before me as to whether the nomination was binding. Little turns on this, in my view. There was no dispute the distribution of superannuation benefits was made to the husband’s adult children in the exercise of the superannuation trustee’s discretion. Although in submissions the wife seemed to impugn this exercise of discretion, she has taken no step to challenge it.

10. On 18 July 2018, the matter was transferred to the Family Court of Australia.

11. On 11 April 2019, the matter first came before me for a Case Management Hearing and, amongst other things, I listed the matter for Final Hearing for an estimated 4 days commencing on 28 October 2019.

12. Also on 11 April 2019, the Administrator filed his Application in a Case.

13. On 15 April 2019, I made orders in Chambers for the matter to be listed for Interim Hearing on 14 May 2019, limited to the issues arising from the Application in a Case filed by the Administrator on 11 April 2019.

14. On 7 May 2019, the wife filed her Response to an Application in a Case.

15. On 14 May 2019, the matter came before me for interim hearing and judgment was reserved.

16. It should be noted that concurrent proceedings are presently on foot in the Supreme Court of New South Wales between the parties (“the Supreme Court proceedings”). Following the husband’s death, the Administrator contends the wife took control of the Suburb D property, renting it out through Airbnb, and refused to surrender the property to the Administrator, therefore prompting the Administrator to commence the Supreme Court proceedings to obtain control of the property. There was little evidence giving details of the Supreme Court proceedings.

17. The Administrator presently is the registered proprietor of the Suburb D property, presumably by transmission. The property is rented, with net rental proceeds being paid to the trust account of the solicitors for the Administrator in the Supreme Court proceedings, M Firm. The Administrator claims it as the main asset in the estate.

18. Counsel for the Administrator submitted that a series of costs orders have been made against the wife in the Supreme Court proceedings. However specific details were not provided.

19. The wife has lodged a caveat on the title of the Suburb D property. According to the Administrator, the caveatable interest claimed in the caveat was based upon purchase of the Suburb D property with “joint funds”.

Material relied upon

1. The Administrator relied upon:

   a)Case Outline document dated 7 May 2019;

   b)Application in a Case filed 11 April 2019; and

   c)Affidavit of Mr B filed 11 April 2019 (“the Administrator’s Affidavit”).

2. In his Case Outline the Administrator indicated he also relies upon a further amended Initiating Application of the wife's dated 17 December 2015. Court records indicate no further amended Initiating Application was filed by the wife on this date. It appears this document may have only been served upon the Administrator on 17 December 2015 by the wife, in an unfiled and draft form. This further amended Initiating Application was not put before the Court, by the Administrator or the wife.

3. Nonetheless the wife made clear in her evidence and submissions that she will contend on a final basis that she should receive the Suburb D property as her sole asset.

4. The wife relied upon:

   a)Case Outline document dated 8 May 2019;

   b)Her Response to an Application in a Case filed 7 May 2019; and

   c)Her Affidavit filed 7 May 2019 (“the wife’s Affidavit”).

5. The following documents were tendered and placed into evidence:

Exhibit Label	Document	Tendered by
A	Letter from Steven Pirintji, Argus Lawyers to Kylie Mangan, Burke & Mangan dated 9 May 2019	The Administrator
1	The wife’s Tender Bundle	The wife

Competing proposals

1. It is the position of the Administrator that the estate has no liquid funds to allow him to continue carrying out his duties and therefore, he requires the realisation of the main asset, being the sale of Suburb D property, to clear the existing debts of the estate and fund future proceedings. The Administrator submits that if he is unable to obtain funds to meet the existing debts of the estate and future costs, he will need to resign as Administrator of the estate.

2. The orders sought in his application are as follows:

   1. THAT within 21 days of the date of these orders the Applicant to this Application (being the Respondent in the substantive proceedings) do all things necessary and execute all documents required to place on the market for sale at the best available price the property known as F Street, Suburb D NSW being the property in Certificate of Title Folio Identifier ... (“the property”) and shall, without limiting the generality of the foregoing, attend to the following:

   a. List the property for sale with a licensed local real estate agent.

   b. Instruct M Firm Pty Ltd, solicitors, to act on the conveyance of the property.

   c. Execute all contracts and documents necessary to complete the sale of the property.

   d. Deposit the net proceeds of sale into the trust account of M Firm Pty Ltd.

   2. THAT within 21 days of the date of these orders the Respondent to this Application withdraw the caveat lodged by her on the title of the property

   3. THAT the Respondent be restrained from lodging any further caveat on the title of the property.

   4. THAT the Applicant draw from the net proceeds of sale deposited in the trust account of M Firm Pty Ltd such amounts as are required to be paid by the Applicant from time to time to fund the litigation between the parties hereto in this or any other court.

3. The Administrator contends the estate currently owes legal costs of around $109,263 (paragraphs 7 & 8, Administrator’s Affidavit):

   7. The estate currently owes the following amounts by way of costs in relation to both sets of proceedings and in relation to obtaining Letters of Administration:

   a. M Firm Pty Ltd in relation to the obtaining of Letters of Administration - $6,695.55

   b. M Firm Pty Ltd in relation to the Supreme Court proceedings - $40,066.85

   c. Argus Lawyers in relation to these proceedings - $22,670.00

   8. In addition to the above fees I am advised that the unbilled time for each of my lawyers is presently as follows:

   a. M Firm Pty Ltd in relation to the administration of the estate - $17,160.00

   b. M Firm Pty Ltd in relation to the Supreme Court proceedings -$1,468.50

   c. Argus Lawyers in relation to these proceedings - $21,202.00

4. Additionally, based on the Administrator’s current hourly rate as a solicitor, he contends the cost of his time, spent in his role as Administrator, amounts to $76,169.50 (paragraph 9, Administrator’s Affidavit).

5. The Administrator estimates the likely costs of the family law proceedings from the present time to Final Hearing would amount to “some $80,000” (paragraph 10, Administrator’s Affidavit).

6. The wife, by way of her Response to an Application in a Case filed 7 May 2019, sought orders as follows:

   1. Declaration that the late Mr Pretswell held his interest in the property known as and situate at F Street, Suburb D in the state of New South Wales being the whole of the land contained in folio identifier ... (Suburb D property) upon trust for the Respondent and himself as joint tenants;

   2. Declaration that upon the death of the late Mr Pretswell his legal personal representative held the Suburb D property upon trust for the Respondent;

   3. Declaration that the Suburb D property does not form part of the Estate of the late Mr Pretswell.

   4. Order that the Applicant forthwith transfer the Suburb D property to the Respondent.

   5. Restraint by injunction on the Administrator from disposing of or encumbering the Suburb D property other than in accordance with Order 4.

   6. Alternatively, Restraint on the Administrator from disposing of or encumbering the Suburb D property.

   7. Costs.

7. At hearing, counsel for the wife abandoned paragraphs 1, 2 & 3 of her Minute of Order, conceding that such declaratory relief could not be sought on an interim basis. The wife pressed Orders 4, 5 and 6.

Jurisdiction

1. Although the wife contends the parties were not separated as at the date of the husband’s death, referring to the decision of the High Court of Australia in Stanford & Stanford [2012] HCA 52, it is not necessary for the parties to have been separated for proceedings to be considered a “matrimonial cause” within the definition of that term in s 4(1) of the Act. It is sufficient to invoke the Court’s jurisdiction that the proceedings are between either parties to a marriage with respect to the maintenance of one of the parties to the marriage, and/or proceedings, arising out of a marital relationship, between parties to a marriage, with respect to marital property.

Legal Principles

1. The Administrator seeks a payment of an interim nature. As I understood his argument, he submitted such a payment could be ordered pursuant to s 80(1)(h) of the Act, by reference to s 79, as a partial property settlement, or pursuant to s 117, which deals with costs, as an order for litigation funding. It is clear from his proposed orders that the Administrator seeks a payment only for the purposes of litigation funding. In submissions, he expressly disavowed using funds from any order in his favour to meet his claims for commission as Administrator.

2. The death of the husband is a complicating factor. I will return to its impact shortly. It is first convenient to set out the established principles applicable to interim payments in property adjustment proceedings between living parties.

3. Many cases have emphasised the importance in such applications of identifying the relevant source of power for the proposed order, since this determines the necessary preconditions and relevant considerations for making the order: Zschokke & Zschokke (1996) FLC 92-693; [1996] FamCA 79; Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578 and Strahan & Strahan (interim property orders) (2011) FLC 93-466; (2009) 241 FLR 1 at [84].

4. In Paris King Investments Pty Ltd v Rayhill (supra) Brereton J at [29]-[33] gave a detailed consideration of the authorities and principles which it is worth setting out at some length:

   [29] The juridical bases for an order for preliminary provision for litigation costs in matrimonial proceedings are diverse. Such an order may be made as a costs order under Family Law Act, s 117, or as an interim or partial property order under s 79 and s 80(1)(h), or perhaps as a maintenance order under s 74 [see In the Marriage of Poletti [1990] FamCA 79; (1990) 15 Fam LR 794; Breen v Breen (1990) 65 ALJR 195; Parker v Parker (1992) 16 Fam LR 458, DFC 95-123 (a decision of Bryson J in this court, upheld in the Court of Appeal); and In the Marriage of Zschokke [1996] FamCA 79; (1996) 20 Fam LR 766].

   [30] The Full Court of the Family Court of Australia reviewed the authorities and principles relating to the making of interim provision for litigation costs in Zschokke. That case establishes that it is important, when contemplating an order for interim provision for litigation expenses, to identify the relevant source of power - because it is the source of power that determines the necessary preconditions and relevant considerations for making the order. Thus, where an interim order for litigation expenses is to be made as an interim costs order under s 117(2), and probably also if it is to be made as a maintenance order under s 74, there are at least three requirements: first, a position of relative financial strength by the respondent; secondly, a capacity on the part of the respondent to meet his or her own litigation expenses; and thirdly, an inability by the applicant to meet her or his litigation expenses from her or his own income assets or financial resources. In addition, it has been said that such an order should be made only if the applicant has at least an arguable case for substantive relief which deserves to be heard [In the Marriage of Chester (1995) 19 Fam LR 281, 287], and that there should be evidence of what the applicant's likely costs of the litigation [In the Marriage of Wilson (1989) 13 Fam LR 205, 208-9; Chester, 288]. But it is not an essential precondition to the making of a such an order that an applicant first prove that his or her legal representatives will not continue to act unless their costs are paid or secured on an ongoing basis [In the Marriage of Columb (Family Court of Australia, Fogarty J, 27 November 1987, unreported); but cf In the Marriage of Coomes [1995] FamCA 103; (1995) FLC 92-558, in which Cohen J declined to make an order where the Wife's lawyers had expressly said that she would not be required to pay their costs until she had received funds from the final property order].

   [31] Although there is some authority for the view that financial provision for litigation expenses should be calculated in accordance with the authorised scale of costs [Chester, 288], the better view – consistent with the approach that in my view applies in Mareva cases, that a party’s recourse to its assets for the purpose of funding its defence should not be limited to the bare minimum [Harrison Partners Construction Pty Ltd v Jevena Pty Ltd [2006] NSWSC 317, [11], and see [50] below] - is that a Court may make provision for litigation expenses at a rate that appears reasonable in all the circumstances [A Dickey, “Interim Financial Provision for Litigation Expenses: In the Marriage of Zschokke” (1997) 11 AJFL 231, 233]. While there is some dispute whether, at least where s 117 is the source of power, an order can be made which provides for past costs, as distinct from future costs - in Liati v Warren (1995) DFC 95-161, Master McLaughlin (as his Honour then was) declined to order provision to cover costs already incurred - the distinction is often semantic in practice, where there is a running account between solicitor and client for the ongoing costs of legal proceedings, though it may be relevant in calculating the amount of an order. As the practice of making orders for interim costs derives from the earlier practice of requiring husbands to provide security for their wives’ costs, and as it is established that security for costs may be ordered in respect of costs already incurred as well as of future costs [Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd [1985] 1 NSWLR 114], in my opinion an order can be made in respect of costs already incurred, though whether the order is to be in respect of costs already incurred or costs to be incurred, and whether the applicant’s lawyers will continue to act in the absence of provision for costs to be incurred, may be relevant to the discretion to make an order, and its quantum.

   [32] In Breen v Breen, the High Court emphasised that any such order should be framed to protect the parties from any risk of injustice arising from the manner in which the funds are expended. This is often done by requiring that the funds be administered solely by the applicant's solicitors and applied only to meet the expenses referred to in the order, with detailed records being maintained to permit review by the Court at the time of the exercise of its discretion in the substantive property proceedings or on the final determination of the issue of costs [Dickey, 11 AJFL 231, 233; Poletti, 795; Parker, 462].

   [33] But many of the foregoing considerations are less important, though not necessarily irrelevant, where what is relied on as a source of power is not s 117 or s 74, but an interim property order under s 79 and s 80(1)(h). In that respect, the Full Family Court said in Zschokke (780-781) that while the requirements of s 79(2) and (4) must be observed in the same manner as for any interim property order, if it appeared that the applicant would likely receive by way of property settlement a sum sufficient to cover the advance, then an interim order may be made [Zschokke, 780-781; see also In the Marriage of Harris [1993] FamCA 49; (1993) 16 Fam LR 579, 586].

1. As will appear from the discussion below, identification of the relevant source of power takes on particular importance in this matter because it is the Administrator of a deceased estate who makes the interim application, not a living spouse. I will discuss the issues surrounding an interim property order first, then separately discuss an interim costs order pursuant to s 117.

Partial Property Settlement

1. Strahan (supra), is the principal authority for interim property orders. Thackray J at [213] confirmed that s 80 is an enabling provision for the variety of orders that may be made under s 79. These include interim property orders.

2. In Strahan (supra), the Full Court held that there are two steps to considering an Application for interim property settlement, the first step being a “procedural step” and the second being the “substantive step”: Strahan (supra) at [115].

3. With respect to the first step, the Full Court in Strahan (supra) approved the approach adopted by Federal Magistrate Reithmuller (as he then was) in Wenz & Archer (2008) 40 Fam LR 212; [2008] FMCAfam 1119 where he identified the need for there to be appropriate circumstances for an interim order to be made, rather than compelling circumstances. Boland & O’Ryan JJ commented:

   [132] In relation to the first stage, in our view, when considering whether to exercise the power under ss 79 and 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.

4. Recently in Sirola & Sirola and Ors [2018] FamCA 1011, McClelland J (as he then was) pointed out at [34] that, although compelling circumstances are not necessary, as the High Court of Australia emphasised in Stanford (supra) at [40], applications for property adjustment should not be commenced with the assumption “that one or other party has the right to have the property of the parties divided between them”.

5. Consequently, an application for interim property orders carries the onus of satisfying the court that it is in the interests of justice for such an order to be made, rather than for a “once and for all” order to be made at Final Hearing (Strahan (supra)). This entails considering both the interests of the parties (Sully & Sully (No 2) [2016] FamCA 706 at [33] to [36]) and the public interest, which itself also includes the fact that the usual order pursuant to s 79 is once and for all, that contemporary rules of court emphasise the just, efficient and economical resolution of proceedings at a reasonable cost, and the general undesirability of a multiplicity of interim applications: Sirola (supra) at [36]-[40]; Family Law Rules 2004 (Cth) Rule 1.04.

6. The second step identified in Strahan (supra) involves the exercise of the Court’s power pursuant to s 79 of the Act. Insofar as it is possible in interim proceedings, this step requires the Court to:

   a)identify “the parties’ property and of their interests in it” (Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34 at [69]); and

   b)consider and apply the provisions of s 79 of the Act (Strahan (supra) at [135]).

7. Any interim property order should not exhaust the discretion in s 79 of the Act. In Strahan (supra) at [136] the Full Court said:

   [136] As to the third matter identified at 79,930 by the Full Court in Harris, in discussion before us it was described as the “adjustment issue” or “claw-back issue”. It was submitted by senior counsel for the Wife that it is relevant to consider whether an order would give the applicant “more than they would be indubitably entitled to on a final hearing” or alternatively “would it give them so much that it could not be adjusted on a final hearing?”. As we have observed the Full Court in Zschokke at 83,220-221 stressed the importance of consideration of the “adjustment issue” if the power in s 80(1)(h) of the Act is being exercised. We accept the submission and observe that this matter is relevant because the discretion conferred by the power in s 79 is to make such order as the Court considers appropriate provided it is just and equitable to make the order in circumstances where the power will not be exhausted by the interim order. As Bryant CJ and Coleman J observed in Gabel v Yardley at [69] and [72] the interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal. As Finn J said at [126] the interim order must be “capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power”.

8. In Osferatu & Osferatu [2012] FamCA 408, Watts J at [41] made clear a detailed inquiry is not required:

   [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 section 79 order (ss 79(2) and 79(4) FLA). A detailed inquiry is not required, but there must be some assessment of section 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.

9. As I understood the submissions of the parties, the Administrator’s application could be determined by a straightforward application of these principles. However, the death of the husband adds a layer of complexity. This is because his death raises the necessity to consider the impact of s 79(8) of the Act at an interlocutory stage of the proceedings, and as Austin J commented in Flanagan & Sobek (Deceased) [2014] FamCA 696 at [8], when s 79(8) is engaged, “procedural and substantive impediments arise”.

Section 79(8)

1. Pursuant to s 79(8)(a), the property proceedings, having been commenced prior to the husband’s death, may continue. The proceedings do not abate. Section 79(8) has been upheld as constitutionally valid: Fisher v Fisher (1986) 161 CLR 438; [1986] HCA 61. It is helpful to set out the terms of s 79(8) of the Act in full:

   (8) Where, before property settlement proceedings are completed, a party to the marriage dies:

   (a) the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings;

   (b) if the court is of the opinion:

   (i) that it would have made an order with respect to property if the deceased party had not died; and

   (ii) that it is still appropriate to make an order with respect to property;

   the court may make such order as it considers appropriate with respect to:

   (iii) any of the property of the parties to the marriage or either of them; or

   (iv) any of the vested bankruptcy property in relation to a bankrupt party to the marriage; and

   (c) an order made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.

2. It appears from the terms of s 79(8), the Administrator, in conducting these proceedings in substitution for the deceased husband, stands in the same position as the deceased would have stood, but for his death. This broad observation is subject to qualifications, which I discuss later in these reasons. It is important to point out here that s 79(8)(b) only permits the Court to make orders altering the property interests of the parties to the marriage in such circumstances if two preconditions are satisfied: the Court is of the opinion (a) it “would have made an order” prior to the death of the husband (s 79(8)(b)(i)) and (b) it is “still appropriate” to make such an order (s 79(8)(b)(ii)).

3. The correct approach to determining the satisfaction of the preconditions has been the subject of comment in several decisions in the context of final hearings.

4. In Grace v Grace [2012] NSWSC 976, Brereton J stated the applicable principles at [242]-[243] as follows:

   [242] Under Family Law Act, s 79(8), there are two necessary conditions for a court to make a property order after the death of a party: first, that the court be of opinion that it would have made an order with respect to property if the deceased party (relevantly Colin) had not died (s 79(8)(b)(i)); and secondly, that it be of opinion that it is still appropriate to make such an order (s 79(8)(b)(ii)). As to the first of those conditions, the court is required to consider and decide whether, if the deceased spouse had not died, the court would have made an order in the proceedings, and in considering that question the court has regard to the substantive circumstances relevant to the exercise of the jurisdiction invoked by the initiating application which existed immediately before the death of the deceased spouse. In short, the court must be satisfied that at the time of the death one or other party had a good cause of action for an order under s 79 in respect of which the court's jurisdiction had been regularly invoked [Bourke v Bourke [1998] FamCA 69, [4.8]-[4.10]]. The court is not required to work out the precise order it would have made had the deceased not died [Allan & Allan (1987) FLC 91-824; Randle & Randle (1987) FLC 91-828; North & North (1987) FLC 91-831].

   [243] As to the second condition, relevant factors include the consequences of the death of the deceased spouse on the financial position of the surviving spouse. For example, the surviving spouse may benefit from the deceased's estate in such a way that any further property adjustment is unnecessary. Another common consideration is that the deceased spouse has no continuing maintenance needs: this will often have a marked impact on the balance of the s 75(2) factors. Otherwise, the court takes into account the considerations relevant on an application under s 79, including in particular the contribution based factors specified in s 79(4)(a), (b) and (c), and the means and needs factors referred to in s 75(2) and incorporated by s 79(4)(e). The court does not take into account the claims or financial circumstances of the beneficiaries of the deceased spouse's estate [Menzies & Evans (1988) FLC 91-969, 77,010; Re Berry & Berry [1989] FamCA 76;(1990) FLC 92-118, 77,779; Mason v Hannaford; Mason-King (1993) FLC 92-398, 80,055, 80,056, 80,057]. This means that the claim of or against the surviving spouse is to be considered essentially as between husband and wife before the claims of other beneficiaries are taken into account.

5. In Neubert (deceased) & Neubert and Anor (No. 2) [2017] FamCA 829, Benjamin J at [91] cited with approval the following statement of principle by Wilson FM (as he then was), in Cornell & Stokes [2008] FMCAfam 774, after a review of the relevant authorities, including the Full Court decision in Bourke & Bourke [1998] FamCA 69:-

   [23] From the above authorities, I conclude that the appropriate way in which to deal with a case where one of the parties has died since the commencement of proceedings is as follows:

   (a) The party representing the deceased party to the marriage must demonstrate that, at the time of the death of the party so represented, the court would have made an order in favour of that party. In so doing, the party is not limited to the state of evidence at the date of death;

   (b) In reaching an opinion about that first prerequisite imposed by s 79(8)(b)(i) of the Act, the Court is not required to determine precisely what orders would have been made in that deceased party’s favour, just that an order would have been made in that party’s favour;

   (c) To reach that opinion, the Court must embark upon the exercise in s 79(4) of the Act;

   (d) Having determined that it would have made an order in the deceased party’s favour had he or she survived, the Court must then consider whether it is still appropriate to make an order;

   (e) In that regard, the Court’s discretion should not be exercised lightly, and should only be exercised in limited circumstances, so as to satisfy moral obligations that remain unsatisfied;

   (f) The deceased party to the marriage has a prima facie moral entitlement to his or her contributions based entitlements to matrimonial property;

   (g) The size of the pool and the needs of the surviving spouse, including s 75(2) factors must be taken into account in formulating any orders.

   [24] In this process, the onus of establishing the appropriateness of making a property order post mortem rests on the representative of the deceased party: Tasmanian Trustees Ltd (Administrators of Estate of Gleeson, B J) & Gleeson, D W (1990) FLC 92-156, applied by Carmody J in Rutter [2004] FamCA 424; and by Boland J in Ford & Marchant [2001] Fam CA 1585.

6. In Neubert (supra) at [92], Benjamin J also accepted that exercising discretion to permit the continuation of proceedings pursuant to s 79(8) is to be undertaken in “limited circumstances” and “not lightly”, having regard to the obiter of Gibbs CJ in Fisher (supra) at 448. See also Flanagan & Sobek (supra).

7. In my view, the terms of s 79(8)(b) of the Act are not limited to the question of whether the Court would have made, and would still make, an order in the deceased’s favour. The question is whether the Court would have made, and would still make, “an order with respect to property if the deceased party had not died”, that is, the enquiry is not limited to orders in the deceased’s favour. Here an order with respect to property includes an order in favour of the applicant wife.

8. Orders pursuant to s 79 of the Act altering the property interests of the parties may only be made if the court is first satisfied that it is just and equitable to make such orders: s 79(2) of the Act, Stanford (supra) at [35]; Bevan & Bevan [2013] FamCAFC 116 at [70]. The issue of the justice and equity of any property adjustment orders thus also permeates the two separate inquiries required by s 79(8)(b)(i) and 79(8)(b)(ii): In the Marriage of Mason (1993) 17 Fam LR 269 at 286; Flanagan & Sobek (supra) at [13].

9. The consideration of the preconditions generally takes place as part of a final hearing. The authorities indicate that in the process of forming the necessary opinion about satisfaction of the precondition in s 79(8)(b)(i), the Court must, inter alia, embark upon a number of different factual and legal enquiries, which overlap with the usual enquiries required in property adjustment proceedings pursuant to s 79. This must also involve the formation of a view about the justice and equity of any proposed outcome, although the authorities do not make clear the extent to which the court must form such a view when considering the preconditions in s 79(8)(b)(i). Forming such a view is more difficult if, as the authorities hold, the Court is not required to determine precisely what orders would have been made in that deceased party’s favour, just that an order for property adjustment would have been made. Plainly, from what has already been said above, it is even more difficult where the court is considering the position at an Interim Hearing.

10. No party made any submissions about the impact of s 79(8)(b) on the Administrator’s interim application. There is no authority known to me which deals with the extent to which these preconditions should be addressed as part of an interim application for partial property settlement by the legal personal representative of a deceased estate. No authority was cited by the parties.

11. It seems to me that the preconditions must be addressed on an application by a legal personal representative for an interim property payment. Although the authorities such as Strahan (supra), and those which follow, set out the principles applicable to an interim property application, they did so in cases where both spouses remained living. The Full Court in Strahan (supra) held the “overarching consideration” is the interests of justice and all that is required “is that in the circumstances it is appropriate to exercise the power” to make an order. These statements of principle, although remaining relevant to any exercise of discretion, do not provide a basis to disregard the statutory preconditions in s 79(8)(b) on an application for interim relief. Nor is there anything in the terms of s 79(8)(b) which suggests, let alone mandates, that the preconditions need not be satisfied, or can be ignored, where a legal personal representative makes an interim application for a partial property order. The s 79(8) preconditions are more than simply part of the circumstances to be considered in deciding whether it is appropriate to make an interim order. They are preconditions to the exercise of any statutory power in favour of the Administrator.

12. I observe here that if the preconditions are satisfied the Court may make “such order as it considers appropriate with respect to… any of the property of the parties to the marriage or either of them”: s 79(8)(b)(iii). It is unclear whether this power to make orders with respect to the property of the parties should be understood as separate to the powers elsewhere in s 79 to make orders. No argument was directed to this question. The Administrator did not contend, for example, that s 79(8)(b)(iii) in combination with the enabling provisions of s 80(1)(h) would provide a separate basis for the interlocutory order which he sought. Since no argument was directed to this I express no view. I will assume, consistently with the approach of the parties, that the same considerations would apply to the exercise of the power to make orders, interim or final, in s 79(8)(b)(iii) as to those which apply to the exercise of the power in s 79(1).

13. The interpretation of s 80 as an enabling provision which prescribes a variety of orders the court may make when exercising its power under s 79, applies equally if the preconditions in s 79(8) are satisfied. Section 80(1)(h) permits an order pending disposal of the proceedings. Therefore, an interim order for partial property distribution may be permissible even after the death of a party to the marriage.

14. In interlocutory applications between living parties to a marriage the Court relies upon Affidavit and documentary evidence, and submissions only, and the scope for resolving contentious questions is limited. For the purposes of an interim determination of a partial property order application between living spouses, decisions such as Osferatu (supra), make clear that a detailed inquiry for the s 79(4) exercise is not necessary but some assessment of contributions must be undertaken. The Court can form a view in a “broad brush” manner, without a detailed inquiry.

15. There appears to exist some controversy in the authorities on the question of the date at which the assessment for the purposes of s 79 should be undertaken where s 79(8) is engaged. Some decisions say the broad assessment to be undertaken is referable to the time of the spouse’s death: North v North; Public Trustee of NSW (Intervener) (1987) FLC 91-831 per Gee J. There is another view that it is at least arguable that it is referable to the time of hearing [e.g Doyle and Doyle (deceased) (1989) FLC 92-027 at p 77,397 per Lindenmayer J. The statement of principle in Neubert (supra) supports the view that the parties are not limited to evidence available at the time of death. In the circumstances of these proceedings and for the purposes of an interim application, there is little practical difference, in my view. The evidence did not carefully differentiate the position as at the death of the husband and as at the date the interim application was heard. I will undertake the broad assessment as at the date of hearing the interim application.

1. In my view, by parity of reasoning, the same “broad brush” approach should apply to the formation of an interim opinion whether the Court “would have made an order” prior to the death of the husband for the purposes of s 79(8)(b)(i) and would “still” make such an order for the purposes of s 79(8)(b)(ii). The Court should form an interim opinion on both questions as to whether it would have made an order if the deceased had not died, taking the same broad approach as the Court takes to the question of whether to make an interim partial property order where both parties to the marriage are living.

2. The authorities make it clear that it is necessary to begin the enquiry for the purposes of s 79(2) and 79(4) on an interim property application, and s 79(8) which will be informed by the s 79(4) assessment, by identifying the existing legal and equitable property interests of the parties (see Flanagan & Sobek (supra) at [12] referring to Stanford (supra) at [37], [41]).

The existing interests of the parties

1. The Administrator put before the Court very little evidence as to the existing interests of the parties. He does however depose in his Affidavit that the estate has no liquid funds to allow him to continue carrying out his duties and therefore he requires the sale of the Suburb D property. As already noted, he gave evidence that at present the estate “mainly comprises” the Suburb D property.  This assumes it was owned solely or partly by the husband at his death.

2. The wife at paragraph 10 of her Affidavit sets out the assets and liabilities of the parties in a table. I will treat this evidence as persuasive for the purposes of the broad brush approach to the financial position of the parties for the purposes of this judgment. The evidence of the wife is replicated below:

Ownership			Description			Value
ASSETS
1.	H			F Street, Suburb D		$         1,485,000
2.	W			R Street, Suburb Q		$            850,000
3.	H			M Firm Trust Account		$                3,125
4.	H			Bank N Smart Saver		$                   195
5.	W			CBA # …88		$                   171
6.	W			CBA # …34		$                   146
7.	W			CBA # …08		$                   189
8.	H			L shares 535		$                3,900
9.	W			L shares 416		$                3,032
10.	W			Vehicle 1		$                6,000
11.	W			Household contents		$                5,000
Total				$         2,356,758
ADDBACKS
12.		H		V Superannuation		$            605,269
13.		H		Funds in Argus Lawyers Trust Account		$            101,570
14.		H		Loan to Mr G		$              60,000
15.		H		Legal fees paid by the Administrator using Estate funds		$              72,672
Total				$            839,511
LIABILITIES
16.		H		ANZ Home loan # …74 Suburb D		$            231,373
17.		H		ANZ Home Loan # …33Suburb D		$              99,373
18.		H		Vehicle 1 loan – H Financial Service		$                7,633
Total				$            338,379
SUPERANNUATION
Member				Name of Fund	Type of Interest	Wife / de facto partner’s value
19.		W		S Fund	Accumulation	$           297,395
Total				$           297,395

1. Based on the above, the parties total asset pool would be $3,155,285. There are a number of issues to be settled in relation to the Balance Sheet, particularly “addbacks”, including the question of whether the payment of approximately $605,000, being the husband’s superannuation, to the husband’s children should be treated as an “addback”. As pointed out earlier, there was a dispute as to whether this payment was made by the superannuation trustee pursuant to a binding nomination or in a pure exercise of discretion. There are a number of other questions, such as why a loan should be treated as an addback as opposed to an asset of the lender. However, there was no evidence lead by either party which would permit even a preliminary view to be formed on the question of addbacks.

2. Putting aside the asserted addbacks, and apart from the wife’s superannuation, the Suburb D and Suburb Q properties clearly make up the bulk of the asset pool. There is no dispute that the wife owns the Suburb Q property. There is a dispute about the ownership of the Suburb D property.

The Suburb D property

1. To repeat, the wife contends the property was held by the husband prior to his death on trust for himself and the wife as joint tenants. If this is found to be so, the entire beneficial interest in the Suburb D property would on the death of the husband have passed to the wife as the surviving owner. If that be correct, the likely conclusion on a final basis would be that the wife already owns almost all the property of any value on the Balance Sheet.

2. Both parties appear to agree the Suburb D property has a value of $1,485,000 (paragraph 2, the Administrator’s Affidavit; paragraph 10, wife’s Affidavit), and is subject to a mortgage.

3. At present, the Suburb D property is under the control of the Administrator and is rented, with net rental proceeds being paid to the trust account of the solicitor’s for the Administrator in the Supreme Court proceedings, M Firm.

4. The wife at paragraphs [27]–[32] of her Affidavit sets out the details surrounding the acquisition of the Suburb D property. 

5. The wife agrees that the husband was registered as the sole proprietor of the Suburb D property. But she argues that she and the husband always intended her to take a beneficial interest in the property from the start. The wife contends the Suburb D property was purchased on her birthday, in 2010. She gave evidence that the husband stated it was a “birthday present” for her and promised to transfer the title “to be held jointly by us.” She gave evidence that both the deposit and balance of the purchase price came from the parties’ savings in a joint account held with T Bank. According to her evidence, the money in the joint account came from the revenue generated by the husband in his business, in which the wife also worked as business manager, receptionist, as well as conducting debt recovery and marketing (paragraph 22, wife’s Affidavit). She says she managed the business alone during a period when the husband went overseas for 7 months (paragraph 23, wife’s Affidavit). She says the revenue generated from the business, after payment of expenses, was paid to various accounts in the husband’s name and “accounts in our joint names” (paragraph 24, wife’s Affidavit).

6. The wife says she began looking for a property in the Suburb D area in 2007 (paragraph 25, wife’s Affidavit). In 2008, the parties set up a new business in larger premises at Suburb K Shopping Centre. The wife says she undertook most of the work to set up this business.

7. Exhibit “F” of the wife’s Tender Bundle, which was marked Exhibit “1”, is the husband’s Affidavit sworn and filed 3 June 2011, prior to his death. In particular, the wife relies on paragraph [54.34] which reads:

   [34] The Suburb D property was identified by the applicant wife and we agreed that it should be purchased in order to be our future matrimonial home. Before exchanging contracts, we agreed that it would be put into my name because initially it would be an investment property, and the expenses could be negatively geared against my income, and also because the applicant wife already had two properties solely in her name. Two days before settlement, the applicant wife expressed strong disagreement with the Suburb D property being in my name alone. This surprised me, as she had until then expressed complete agreement concerning the property being in my name. She wanted the property purchased in joint names. I agreed with her that I would put the property in our joint names as soon as we moved in and the Town W property had been sold. She did not agree to this and continue [sic] to express strong objections to the purchase of the Suburb D property in my name alone.

8. The Administrator adduced no evidence seeking to challenge the evidence of the wife or the husband about the circumstances surrounding the purchase of the Suburb D property.

9. The prima facie position is that the beneficial ownership of real property is commensurate with the legal title: Currie v Hamilton (1984) 1 NSWLR 687 at 690; Black Uhlans Inc v New South Wales Crime Commission & Ors [2002] NSWSC 1060 at [128]. However, “where the legal title does not reflect the proportionate contributions of the parties, then (at least absent a presumption of advancement) it will be presumed that the beneficial ownership of the property is held in the proportions in which they contributed the purchase money”: Ryan v Ryan [2012] NSWSC 636 at [43] per Ward J; Anderson v McPherson [No.2] [2012] WASC 19 per Edelman J (as he then was) at [106]-[116]. The property is then held on trust for the parties as tenants in common in those proportions: Trustees of the Property of Cummins (a bankrupt) v Cummins [2006] HCA 6 at [55].

10. A resulting trust founded on actual intention is an example of what has been called an “intent enforcing” type of resulting trust: Black Uhlans Inc v New South Wales Crime Commission (supra) at [133], as opposed to a resulting trust imposed by law, which may be contrary to the parties’ intention (Anderson v McPherson (supra) at [96]-[98]). That is because such a resulting trust is based on the presumed actual intentions of the parties but is capable of being displaced where the parties had an actual common intention to share an equal interest in the property and/or where the party making the disproportionate contribution intended that the parties would have an equal interest in the property notwithstanding: Neilson v Letch (No.2) [2006] NSWCA 254 at [26].

11. It may be that the wife can argue that a presumption of advancement works here in her favour, although no argument was made before me relying on the presumption.

12. The wife also relies upon constructive trust. In Silvia (Trustee) v Williams [2018] FCAFC 194 at [14] the Full Court of the Federal Court of Australia pointed out that although categories are not closed, a constructive trust may be imposed when a spouse or partner makes a financial contribution towards the cost of acquiring, improving or maintaining a property held in the other’s name. In such cases, it is accepted that the party asserting the existence of the trust must prove, first, that the spouses held a common intention that they would own the property together; and, secondly, that the party asserting the trust acted upon that common intention by making contributions or other action to their detriment. The Full Court followed Green v Green (1989) 17 NSWLR 343 at 354-355. The Full Court also pointed out at [15] that “In cases involving actual contributions by one spouse this will often make it relatively straightforward to establish detriment which may consist of the fact of the contribution itself.”

13. The relevant time for a finding of intention is the time of acquisition of the property or "so immediately after it as to constitute a part of the transaction"; subsequent declarations of intention are only admissible against interest: Calverley v Green (1984) 155 CLR 242 at 262 and 269; Bryson v Bryant (1992) 29 NSWLR 188 at 215.

14. In Silvia (Trustee)v Williams (supra) the Full Court of the Federal Court of Australia at [15] also made clear that when joint ownership can be inferred to have been intended, this may suggest equal beneficial interests, citing Eves v Eves [1975] EWCA Civ 3; [1975] 1 WLR 1338 at 1345. The wife referred to the decision of Parianos v Melluish (Trustee) [2003] FCA 190 in which Jacobson J held, following Green v Green (supra), that although the parties in that case did not turn their minds to the particular form of title, the conclusion which best gave effect to their intentions was a beneficial entitlement as joint tenants. Accordingly, the wife argued, although the parties may not have turned their minds to the particular form of title, on the available evidence she has a good claim that joint tenancy of the beneficial interest in the Suburb D property best gives effect to the parties’ intentions in this case.

15. The Administrator argued that on an interlocutory basis the Court could not make a finding about the ownership of the Suburb D property. I agree. Having said that, the Court can form a view about the relative strength of the wife’s claims in respect of the Suburb D property for the purposes of this interlocutory application.

16. The only evidence before me is consistent with a common intention that the parties to the marriage would own the Suburb D property jointly. The legal title solely in the name of the husband would therefore not reflect the common intention of the parties. The evidence is also consistent with joint tenancy as the form of title which best gives effect to the parties’ intentions, in particular the use of joint funds suggesting equal contributions to the purchase, its intended use as the matrimonial home, and the evidence of the husband that there was an agreement to put the property in joint names. According to the authorities discussed above, the wife may well have had a good claim to beneficial ownership of the property as a joint tenant with the husband, on the basis of either a resulting or constructive trust. Therefore, although I make no finding at this point, there exists a real possibility that at Final Hearing, when findings are made about the assets and liabilities of the parties as at trial, the Court may find that the Suburb D property is an asset of the wife.

Section 79(4)

1. I turn then to a broad assessment of contributions and s 75(2) factors. The evidence already discussed concerning the acquisition of the Suburb D property demonstrates both parties made contributions to its purchase, that the husband made contributions through his business and the wife made contributions through her support of the husband’s business. The wife also in her Affidavit gave evidence that she made an initial contribution of the Suburb Q property and she made contributions as a homemaker and performed household duties.

2. There was little evidence of the husband’s contributions put before the Court on the Administrator’s application.

3. The wife also gave evidence which shows she likely has a claim to an adjustment for s 75(2) factors. She is 61 years of age. She relies on Centrelink benefits for income, she suffers systemic hay fever which leaves her bedridden for a period every year, chronic bronchial asthma, severe cervical spondylosis and osteoarthritis (paragraphs [53] – [59], wife’s Affidavit).

Conclusions as to Interim Property Order

1. One potential consequence of a finding that the Suburb D property is an asset of the wife, could be that the Administrator is ordered, pursuant to s 79, to transfer the legal title to the property to the wife. The wife seeks this order. This would also require the mortgage to be dealt with in a manner consistent with the wife’s title and the rights of the mortgagee. Another possibility is that, if the wife is found to own both the Suburb D and Suburb Q properties, a just and equitable outcome may require an order pursuant to s 79 for some payment to the estate of the husband, after assessment of contributions and s 75(2) factors. The Administrator addressed no argument to this possibility.

2. If, on the other hand the wife’s claims were to fail entirely, and the Court finds the husband was the sole beneficial owner of the Suburb D property, or she succeeds only to the extent that the Court finds she and the husband held equal interests as tenants in common, then the wife may have a good claim on the husband’s interest in the property, now held by the estate, pursuant to s 79, based on her contributions and s 75(2) factors.

3. Furthermore, it is well established that the wife’s entitlement to property by reference to the s 75(2) factors may be enlarged because the weight of such factors is all the one way: Parrott v Public Trustee of NSW (1993) 17 Fam LR 785 at 790-791; Marriage of Mason (supra) at 286-287; Bourke & Bourke (supra) at [4.30]-[4.31]; Grace v Grace (supra) at [290].

4. I express no concluded view about these possibilities, but they are relevant to the formation of an interim opinion as to whether the s 79(8)(b) preconditions are satisfied, and any claw back or orders which cannot be reversed if the Suburb D property is sold and to the “conservative” approach which I should take.

5. Consequently, I am persuaded the evidence is sufficient to support an interim opinion that the Court would have made an order in respect of the parties’ property if the husband had not died. On the evidence, it is very hard to conceive an outcome where no property adjustment order would have been made. The very fact of separation and the termination of the relationship affects assumptions about property during the existence of a marriage or de facto relationship and often leads to the ready satisfaction of the just and equitable requirement: Stanford (supra) at [41]- [42]. Both parties were seeking property orders as at the point in time when the husband died and, I infer, would have conducted their cases on the basis it was just and equitable to make some form of adjustment: see Fielding and Nichol [2014] FCWA 77 at [43].

6. I am also of the interim opinion that it would still be appropriate “to make an order with respect to property”. It has been held that the reference in s 79(8)(b)(ii) to the need for it to be “still appropriate” to make an order with respect to property means “still appropriate to make the order despite the party’s death” rather than “still appropriate now to make the order”. The Act is addressed to the conceptual rather than the temporal effect of the party’s death: Flanagan & Sobek (supra) at [39] following Grace v Grace (supra) at [289]; Bourke & Bourke (supra) at [4.8]-[4.10]. Indeed the wife submits she seeks such an order in her favour, even if she is held to be sole beneficial owner of the Suburb D property. My discussion of her contributions and future needs above, and the range of possible outcomes support the conclusion it would still be appropriate to make an order.

7. Therefore I find interim satisfaction of the preconditions is established and the power to make an interim order is enlivened.

8. However, in light of the authorities, and the discussion above, and taking a conservative approach, I can see no basis for a partial property settlement order in the terms sought by the Administrator, for the following reasons.

9. It is important to emphasise a number of matters.

10. First, as pointed out in Grace v Grace (supra) above, and the authorities to which it refers, the Administrator would bear the onus of satisfying the Court that it was appropriate to make a property adjustment order at a final hearing. However, the Administrator made no attempt to argue in support of his interlocutory application that it would be appropriate to make an order in the favour of the husband’s estate at final hearing, based on contributions.

11. Secondly, the Administrator does not seek a simple payment to him of a lump sum. He seeks the sale of the Suburb D property and the deposit of the net proceeds of sale into an account held by M Firm Pty Ltd with the ability to draw down “such amounts as are required to be paid by the Applicant from time to time to fund the litigation between the parties hereto in this or any other court.” He thus asks for the sale of a principal asset from the matrimonial pool to create a fund upon which he can draw to pay litigation costs in this or any other court. Theoretically under such an order he could expend the entire net proceeds of sale on legal fees in other Courts. It was undisputed that there are presently on-foot proceedings in the Supreme Court of New South Wales.

12. I doubt such an order could be made in such wide terms by this Court, permitting the utilisation of funds in another court. No argument was directed to this issue. But in any event, in the exercise of discretion I decline to make such an order. It would produce an irreversible outcome, in circumstances where the wife has a plausible claim to ownership of the Suburb D property, which she wants to keep, and puts forward credible evidence of claims to the assets in the matrimonial pool based on contributions and s 75(2) factors. I do not ignore the possibility that the husband’s estate may receive an award based on his contributions but as already noted, there was very little evidence placed before me of the husband’s contributions, apart from his admitted contributions to the purchase of the Suburb D property.

1. Thirdly, some importance attaches to the fact that the Administrator is acting for the husband’s estate. As noted above, although it is usually said the Administrator stands in the same position as the deceased would have stood, but for his death, this is only partly true. There are at least two fundamental differences between the position of the deceased and the Administrator, namely, the Administrator can take no benefit from s 75(2) factors and he acts for the benefit of an estate in respect of which the wife, who would have been directly opposed to the husband if he had lived, has a statutory entitlement, so that in a sense he acts, as representative of the husband’s intestate estate, in part for the benefit of the wife, unlike the husband would have.

2. This last point requires some further explanation. Since the husband died intestate, the Administrator correctly argued that as a result, pursuant to s 113 of the Succession Act, the wife would receive the bulk of the husband’s estate, specifically, the husband’s personal effects, a statutory legacy and one-half of the remainder (if any) of the estate. Section 106 of the Succession Act provides that the “statutory legacy" is relevantly calculated as a sum of $350,000 together with increases in the consumer price index since the December 2015 quarter: Succession Act, s 106(2). There was no evidence of the precise amount of this calculation as at the date of the Interim Hearing. It was common ground that any balance of the estate, after the wife received her Succession Act entitlements, would go to the adult children. I note that if the value of the estate is insufficient to allow for the payment of a statutory legacy in full, the statutory legacy abates to the necessary extent: Succession Act, s 106(4).

3. Clearly it is not possible to know what falls into the husband’s estate until the present proceedings under s 79 are concluded and any just and equitable property adjustment orders are made, and in particular the question of the beneficial ownership of the Suburb D property is settled: see Capelinski & Patton [2010] FamCA 1243 at [29]. It is possible that if the wife’s arguments in these proceedings succeed, there may be little left in the estate.

4. However, I am satisfied that if the husband had lived, it is more likely than not the Court would not have found it to be just and equitable for him to have retained sole legal title to the Suburb D property, particularly as the evidence satisfies me that the property was likely purchased with joint funds.

5. Fourthly, an application for alteration of property interests under Part VIII of the Act, if it involves property within the deceased estate, takes priority over the claims of the beneficiaries upon the deceased estate, irrespective of whether such claims exist or are made pursuant to the terms of a probated Will or the provisions of State succession or family provision legislation: Fisher v Fisher (supra) at 458; Marriage of Love (1993) 17 Fam LR 263 at 266; Marriage of Mason (supra) at 274-275, 287; North v North; Public Trustee of NSW (Intervener) (supra) at 76,251, 76,254). It is undisputed that the husband’s adult children have already received his superannuation, being, as already noted, approximately $605,000. There was no evidence lead by the Administrator which sought to explain why the beneficiaries were unable to fund litigation by the Administrator in this Court, which, in part at least, would be for their benefit.

6. On balance it seems likely the only practical purpose of the Administrator’s application for the sale of the Suburb D property is to obtain funds for costs, including lawyers, and to achieve a possible dividend for the husband’s adult children. No other practical purpose is apparent in contesting the wife’s claims. It is hard to avoid the conclusion that the Administrator is seeking to obtain a priority over the claims of the wife for costs of the estate in these proceedings, before they have been determined. This may well have the effect of disturbing the priority of the wife’s claim under Part VIII of the Act over claims of the other beneficiaries to the husband’s deceased estate. Such an outcome seems to be contrary to well settled authority. There is no reason why the priority of the wife’s Part VIII claim over the interests of beneficiaries should be any different at an interim stage than at a final hearing.

7. Fifthly, these considerations also undermine the Administrator’s argument that the wife is somehow “double dipping.” This submission is rejected. The wife has rights under both the Family Law Act and the Succession Act. She is not obliged to elect between them in some way. The rights under the Succession Act arise as a matter of law, no exercise of discretion is involved. It seems likely that the wife’s entitlements under the Succession Act should, at Final Hearing, be taken into account as a species of property or financial resource pursuant to s 75(2) and this would affect the nature of any just and equitable order in these proceedings. Although no final view can be formed about such a possibility at this stage, it would likely address any perceived problem of “double dipping”.

8. Analysed in this way it can be seen that whatever the outcome in these proceedings, the wife is likely to receive the bulk of the available asset pool. If any order is made under the Act, which had the effect of bringing money back to the estate in these proceedings, for example, either a declaration that the Suburb D property was owned by the parties as tenants in common, or the wife is ordered to make some payment to the estate by way of property adjustment order based on the husband’s contributions, the wife will anyway then be entitled, pursuant to the Succession Act, to the statutory legacy of $350,000 indexed from 2015, and half the balance of the estate. 

9. Sixthly, in my view, there is no reasonably likely outcome which would support the application of the Administrator. The Administrator says the Suburb D property is the only significant asset in the estate. Its agreed value is $1,485,000. As already stated above, I do not consider it a likely outcome that the full value of the property would be ordered in favour of the estate in these proceedings. In light of the discussion of the evidence above, a result which gave the entire Suburb D property or its value to the estate seems to have a low probability. If, for argument’s sake, the estate received half the value of the Suburb D property, being $742,500, which also seems unlikely, the wife would receive from this amount under the Succession Act the indexed statutory legacy and half the balance. While there are no calculations available, I am not persuaded even such an outcome would support the order sought by the Administrator.

10. I am not satisfied that if the Suburb D property was sold and the net proceeds were dealt with by the Administrator in funding litigation, the remaining property could meet the legitimate expectations of the wife, or even, depending on the level and nature of the Administrator’s potential expenditure, the husband’s estate.

11. Seventhly, I observe here that if the Suburb D property is sold it is likely that Capital Gains Tax will be payable. The Administrator makes no proposal about how this liability should be dealt with on an interim basis.

12. Eighthly, it is also clear that if the property is sold, the position cannot be reversed. Any payments which dissipate the net proceeds of sale will likely be irrecoverable by the wife if she succeeds in her claims to an extent which includes the value of the amounts dissipated. Such an order would have the effect of peremptorily dismissing the wife’s claims to the Suburb D property. Even if on a final basis the wife was ordered to make a payment to the husband’s estate to reflect his contributions during the marriage or post-separation, which is possible but by no means certain, the sale of Suburb D would not be inevitable. The wife may have the capacity to satisfy such an order from other resources or by an appropriate form of order, especially since any payment by the wife to the estate pursuant to Part VIII of the Act would likely return to her anyway, in order to meet the statutory legacy in whole or in part, and her entitlement to half the balance of the estate. It seems to be self-evident that any Part VIII payment ordered in favour of the husband’s estate which is of equal or lesser value than the statutory legacy, would prima facie be returned in full to the wife pursuant to the Succession Act, subject perhaps to any claims by the Administrator for commission.

13. Ninthly, these considerations may weigh in favour of an interim conclusion that there is a material prospect this Court may hold on a final basis that it would not be just and equitable to make any property adjustment order in favour of the estate, depending on the ultimate findings and conclusions at Final Hearing.

14. Finally, the usual conservative approach to interim property orders mentioned in the authorities is reinforced where s 79(8) is engaged because, as the authorities make clear, continuation of proceedings under s 79(8) is undertaken in “limited circumstances” and “not lightly”.

15. All these considerations weigh against any order in favour of the Administrator. Although the estate may be short of funds as the Administrator says, it is not appropriate in the interests of justice, nor in the public interest, to make the interim property order sought by the Administrator.

16. The Administrator sought no specific sum in the alternative, which he attempted to justify by reference to evidence or argument. For the same reasons given above at paragraphs [99]-[117], I am not persuaded some other form of partial property settlement order should be made in favour of the Administrator for the same reasons. 

Section 117

1. The power to award costs in s 117 of the Act raises similar and different considerations to those under s 79(1).

2. For one thing, there is no requirement to demonstrate satisfaction of s 79(8) preconditions, since the Court would not be exercising any power pursuant to s 79.

3. I have considered the matters in s 117(2A). Not all of them have direct relevance. I set out earlier the jurisdictional basis for a litigation funding order pursuant to s 117, as discussed by Brereton J in Paris King Investments Pty Ltd v Rayhill (supra), which ordinarily include a position of relative financial strength enjoyed by a party, here, the wife; a capacity on the part of the wife to meet her own litigation expenses; and an inability by the Administrator to meet litigation expenses from income, assets or financial resources, as well as at least an arguable case for substantive relief which deserves to be heard. 

4. I accept the wife has the capacity to meet her own litigation expenses.

5. Many of the reasons for rejecting a partial property order also apply and I refer to the discussion in paragraphs [99]-[117] above. These also weigh against making a litigation funding order pursuant to s 117. I emphasise that sale of the Suburb D property would have the effect of dismissing the wife’s claims to the property before Final Hearing. Some other points bear emphasis.

6. As already discussed earlier in these reasons, although the Administrator is broadly in the same position as the husband if he had not died, as Counsel for the Administrator conceded, there are differences. The Administrator is not a living spouse.

7. Nonetheless, like the husband, the Administrator would in the ordinary course have to pay his own costs: s 117(1). He is conducting the litigation for the husband’s estate not the husband himself.

8. However, a comparison of relative financial strengths becomes somewhat artificial where the Administrator is acting in a representative capacity for the estate against which the wife has clear and plausible claims. As already pointed out, the Administrator represents the interests of the wife and the other beneficiaries in the estate, whilst seeking funds to argue against the wife’s claims. The position of the Administrator acting for the estate makes a simple comparison between the parties’ financial positions inapt. 

9. In any event, although I accept the wife appears to be in a position of greater financial strength than the estate, the relative difference is hard to be precise about and clearly depends to some extent on the final outcome of the proceedings. If the wife succeeds in retaining the Suburb D property absolutely, then, since it is the only significant asset in the estate, she will be in a stronger financial position than the Administrator. But until final determination this outcome cannot be treated as certain.

10. The Administrator gave evidence that he could not meet litigation expenses from his own income, assets or financial resources. However, the Administrator is not in the same position as a litigant spouse. He conceded as much in argument. As already pointed out, there is no evidence about the capacity or lack thereof of the beneficiaries supporting the litigation by funding the Administrator.  

11. Moreover, to paraphrase Austin J in Flanagan & Sobek (supra) at [29], parties are ordinarily required to bear their own costs of proceedings under the Act (s 117(1)) and only when the Court is persuaded otherwise, in the exercise of discretion (s 117(2)), should one party bear another’s legal costs. Where that discretion has not yet been exercised, permitting the estate to meet its outstanding and future legal costs from the sale of the Suburb D property, thereby limiting the assets available for distribution under Part VIII of the Act, would effectively amount to an expectation that the wife defray the estate’s legal costs before discretion has been exercised by the Court to determine the probity of that outcome.

12. The Court would not make an order in the terms sought by the Administrator under s 117 for the reasons given already. It would permit the Administrator to expend the entire net proceeds of sale of the Suburb D property and defeat in advance the claims of the wife.

13. I decline to make any order in favour of the Administrator pursuant to s 117.

Transfer to the Supreme Court

1. The Administrator also sought in the alternative an order that the proceedings be transferred to the Supreme Court of New South Wales. He gives no cogent reasons for such transfer. No particular submissions were directed to this possibility. I see no reason for such an order. As already discussed above, until these proceedings are determined, the assets of the estate cannot be finally known. This needs to happen before the Administrator can know what assets are held in the estate, especially since the wife claims full beneficial ownership of the Suburb D property, and thus before the Supreme Court proceedings can be finalised. In such circumstances the interests of justice are not served by a transfer to another court. I decline to make such an order.

2. Accordingly, I propose to dismiss the Administrator’s Application.

Injunction

1. The wife sought an injunction restraining the Administrator dealing with the Suburb D property pending determination of the proceedings.  I am satisfied for the foregoing reasons that such an order should be made.

Costs of the Administrator’s Application

1. The wife sought a costs order in her favour on this application.

2. I reserve the question of costs of this application, to be determined as part of the orders made after Final Hearing.

I certify that the preceding one-hundred and thirty-six (136) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Harper delivered on 4 July 2019.

Associate:

Date: 4 July 2019