Rickert and Rickert (No 2)

[2020] FamCA 841

FAMILY COURT OF AUSTRALIA

RICKERT & RICKERT (NO. 2) [2020] FamCA 841

FAMILY LAW – CHILD SUPPORT – Where the Applicant husband has made an Application for interim orders including for the discharge of previous consent Orders made in respect to child support –Where previous consent Orders were made for the husband to pay 65% of children’s private school fees – Where the husband has not complied with his obligations to pay the school fees since November 2019 – Where the husband is in arrears of $40,000 of school fees payable by him – Where the husband has failed to serve the Child Support Registrar with his Application – Application adjourned to the first day of hearing.

FAMILY LAW – SPOUSAL MAINTENANCE – Where the Application for interim orders also seeks the discharge of previous consent Orders made in respect to spousal maintenance – Where previous consent Orders were made for the husband to pay, by way of interim spousal maintenance, the rates and insurance expenses for the former matrimonial home – Where the final hearing has been listed in three (3) months of this interim Application – Consideration given to whether the circumstances have changed or new facts have been discovered – Application dismissed.

FAMILY LAW – INTERIM PROPERTY DISTRIBUTION – Where the Application for interim orders also seeks orders for a partial property distribution through the sale of the parties former matrimonial home – Where the wife seeks to retain the property at the final hearing of the matter – Where the final hearing has been listed in three (3) months – Consideration given to whether it is in the interest of justice for such an order to be made – Application dismissed.

FAMILY LAW – COSTS – Where the wife seeks that her costs of this Application be paid for by the husband on an indemnity basis – Whether the conduct of the parties to the proceedings justifies an order for costs – Court finds an order should be made for costs to be awarded on a party/party basis – Consideration as to quantum of costs - Whether costs should be paid on a lump sum basis – Whether costs should be paid following the final property Orders being entered – Order made for the husband to pay the wife’s costs incidental to this interim Application on a party/party basis in a fixed lump sum amount following the conclusion of the substantive property proceedings.

Child Support (Assessment) Act 1989 (Cth) ss 116, 117, 129, 145
Family Law Act 1975 (Cth) ss 79, 80, 83, 117,
Family Law Rules 2004 (Cth) rr 1.08, 4.15, 4.23, 5.02, 5.08, 5.09, 9.08, 11.02, 11.03, 15.08
Federal Court of Australia Act 1976 (Cth) ss 37M, 37N
Family Court of Australia and Federal Circuit Court of Australia, Joint Practice Direction No. 1 of 2020 – Core Principles in the Case Management of Family Law Matters, 28 January 2020

Adam P Brown Male Fashions Pty Limited v Philip Morris Incorporated (1981) 148 CLR 170
Aitken & Murphy (No. 2) [2012] FamCA 239
Bass & Bass and Anor [2014] FamCA 1000
Byrnes v Brisconnections Management Company Limited (No. 2) [2009] FCA 1432
Camm v Linke Nominees Pty Ltd (No. 4) [2013] FCA 223 (15 March 2013)
Child Support Registrar & Nixon (2007) Fam LR 571
D & D (Costs) (No 2) (2010) FLC 93-435
Davidson & Davidson (No. 2) (1994) FLC 92-469
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Anor (2005) 33 Fam LR 123
Hall v Hall [2016] HCA 23 (8 June 2016)
In the Marriage of Gyselman (1992) FLC 92-279
Medlon & Medlon (No. 6) (Indemnity Costs) (2015) FLC 93-664
Modra v Victoria (2012) 205 FCR 445
Munday v Bowman (1997) FLC 92-784 at 84,660
Penfold v Penfold (1980) 144 CLR 311
Simic & Norton [2017] FamCA 1007
Seymour & Seymour [2011] FamCAFC 97
Stanford v Stanford (2012) 247 CLR 108
Stoian & Fiening (Costs) [2014] FamCA 944
Sully & Sully (No.2) [2016] FamCA 706
Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189

APPLICANT: Mr Rickert

RESPONDENT: Ms Rickert

FILE NUMBER: SYC 3533 of 2018

DATE DELIVERED: 6 October 2020

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney by web conference

JUDGMENT OF: McClelland DCJ

HEARING DATE: 24 September 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Richards

SOLICITOR FOR THE APPLICANT: Messenger Family Law

COUNSEL FOR THE RESPONDENT: Mr Campton SC

SOLICITOR FOR THE RESPONDENT: Mills Oakley Lawyers

Orders

1. Save to the extent set out in Order (2) hereunder, the Applicant husband’s Application in a Case filed on 5 June 2020 as amended by Amended Application in a Case filed on 7 September 2020 is dismissed. 

2. That part of the husband’s Amended Application in a Case filed 7 September 2020, as set out in paragraph 1, in respect to a discharge of Orders 3 and 4 of the Orders made by consent on 24 September 2018 is adjourned to 18 January 2021, being the first day of the substantive final hearing of this matter.

3. In the event of the husband proceeding with that part of his Amended Application in a Case, as referred to in Order (2) above, he shall, unless leave is otherwise given, proceed on the basis of the evidence that has been tendered in support of the husband’s Amended Application in a Case referred to in Order (1) above.

4. The husband pay costs of and incidental to these proceedings in the sum of $21,217 with such costs to be paid from that property which the husband receives as a result of any adjustment made to the parties’ property as a result of any final orders made pursuant to s 79 of the Family Law Act 1975 (Cth).

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 Rickert & Rickert 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: SYC 3533 of 2018

Mr Rickert

Applicant

And

Ms Rickert

Respondent

REASONS FOR JUDGMENT

Introduction

1. This matter concerns an interim Application by Mr Rickert (“the husband”) for a partial property distribution and other financial orders made in circumstances where this matter has been listed for final hearing over three (3) days commencing 18 January 2021 – that is, in approximately three (3) months’ time. For reasons that I subsequently set out, save to the extent that I have adjourned one aspect of the Application, I have dismissed the husband’s Application. The husband and Ms Rickert (“the wife”) have spent approximately eight (8) per cent of their net non-superannuation property pool in respect to this Application which, for reasons which I explain in the course of this decision, had no reasonable prospects of success.

2. The orders sought by the husband include an Application to vary Orders relating to child support, an Application to vary Orders relating to the husband’s obligation to pay spousal maintenance and an Application for a partial property distribution prior to that issue being determined at final hearing, including, in order to facilitate that distribution, an Application for the parties’ former matrimonial home to be sold.

3. The Application is opposed by the wife, who seeks an order for costs which, for reasons which I explain, I have awarded on a party/party basis.

Background

1. The parties were married in 2002 and separated on 28 January 2018. Accordingly, their marriage lasted for a period of not quite 16 years.

2. The parties have five (5) children, namely:

   a)V born in 2003 and aged 17 years;

   b)W born in 2005 and currently aged 15 years;

   c)X born in 2006 and currently aged 14 years;

   d)Y born in 2008 and currently aged 12 years; and

   e)Z born in 2010 and currently aged 10 years (collectively, “the children”).

3. The parties’ four (4) youngest children live with the wife and spend time with the husband. V lives with his maternal grandparents and spends time with both the wife and the husband. 

4. The four (4) youngest children attend a private school. V attends TAFE.

5. On 5 June 2018, substantive proceedings were commenced by an Initiating Application filed by the wife. In that Application, the wife is seeking orders, at final hearing, for her to retain the former matrimonial home. That Application is opposed by the husband who contends that the wife does not have the capacity to obtain funds to facilitate the necessary adjustments to the parties’ property that would justify an order or agreement whereby she retains the former matrimonial home.

6. Leaving aside superannuation, the major asset in the matrimonial property pool is the parties’ former matrimonial home located in B Street, Suburb C (“the former matrimonial property”). The wife and the four (4) youngest children have been living in that home since 2013.

7. The husband is in full-time employment as an educator and receives an income in excess of $300,000 per annum. The wife is employed as an allied health worker and, on the papers presented to the Court, receives a current income of approximately $59,000 per annum. 

8. On 24 September 2018, the parties entered into consent Orders (“the September 2018 consent Orders”) which included, inter alia, an Order for the husband to pay 65 per cent of the children’s private school fees and the wife to pay 35 per cent of those fees. The relevant Order is as follows:

   2. That by way of interim spousal maintenance, the Husband is to pay the following expenses direct to the third party, for the B Street, Suburb C property as and when they fall due:

   (a) Council and water rates; and

   (b) Home and contents insurance as at the current level of insurance currently in place over the B Street, Suburb C property.

   Child Support

   3. That under Section 124 of the Child Support (Assessment) Act 1989 Mr Rickert provide non-periodic child support to Ms Rickert for the children V (born in 2003),  W (born in 2005),  X (born in 2006),  Y (born in 2008) and Z (born in 2010) (hereinafter referred to as “the children”) by way of payment of 65% of all school fees for the children from the date of Order until such time as the children conclude Year 12 at the schools the children are currently attending or any other school in which the parties jointly enrol the children.

   That pursuant to S.124 of the Child Support (Assessment) Act 1987 Ms Rickert (born in 1974) provide non-periodic child support for the children by way of a payment of 35% of all school fees for the children from the date of Order until such time as the children conclude Year 12 at the school the children are currently attending or any other school in which the parties jointly enrol the children.

   4. The annual rate of child support is not to be reduced by the child support provided pursuant to Order 3 and 3A.

   (a) That the parties do all acts and things so as to effect a payment to D School for the children’s outstanding school fees currently $16,433 by way of redraw on home loan account number ...48

9. The wife has continued to pay her share of the 35 per cent of the children’s private school fees in the period subsequent to the September 2018 consent Orders being made. For a period, the husband complied with his obligations to pay 65 per cent of the children’s private school fees.

10. On or about 11 November 2019, the husband ceased complying with his obligation to pay 65 per cent of the children’s private school fees. Consequently, the school has commenced proceedings in the Local Court against the husband seeking payment of the sum of $40,000 which is acknowledged by the husband to be the arrears of the children’s school fees payable by the husband.

11. On 5 June 2020, the husband’s Application for interim relief, which is the subject of these proceedings, was commenced by way of him filing an Application in a Case. 

12. On 7 September 2020, the husband filed an Amended Application in a Case. Relevantly, for the purpose of these proceedings, one of the orders proposed by the husband is that the former matrimonial home be sold in order to facilitate a partial property distribution to the husband of $90,000 and an amount of $50,000 to the wife. The difference in the respective amounts is that the husband is seeking a distribution of $50,000 to each of the parties to provide funds for the parties’ legal expenses in respect to the approaching hearing, together with an additional payment of $40,000 to the husband to enable him to pay the arrears of school fees. 

13. On 9 September 2020, her Honour Justice Stevenson made Orders by consent setting the matter down for final hearing over five (5) days commencing on 18 January 2021.

Applications

1. For reasons which I delivered ex tempore at the hearing of this matter on 24 September 2020, I upheld an objection, by the wife, to the husband proceeding with an Application to amend his Amended Application in a Case filed on 7 September 2020. The father sought to amend those proposed orders with additional proposed orders which he provided to senior counsel for the wife and the Court at approximately 10.00am on the morning of the hearing. Accordingly, the Application before the Court is the Amended Application in a Case filed by the husband on 7 September 2020. In that Application, the husband seeks the following orders:

   1. Order that orders 2, 3 and 4 of the Orders made by consent on 24 September 2018 be discharged.

   2. Order that the respondent wife pay the applicant husband’s costs.

   3. Order that 3.2 and 3.3 of the Orders made on 22 February 2019 be discharged

   4. Order that the parties shall have equal shared parental responsibility for and shall make joint decisions in relation to major long term issues affecting their children: V, born in 2003 currently aged 14 ("V"); W, born in 2005, currently aged 13 ("W"); X, born in 2006, currently aged 11 ("X"): Y, born in 2008, currently aged 10 ("Y"): and Z, born in 2010, currently age 8 ("Z"), (collectively referred to as "the children"), save that the Father has sole parental responsibility regarding V's schooling.

   5. Order that the parties give notice by 24 September 2020 to D School that all four younger children will cease attending in E School and F School with effect from the end of Term 4, 2020.

   6. Each party shall forthwith do all things and sign all documents necessary to cause the former matrimonial home known as and situate at B Street, Suburb C, in the State of New South Wales, (folio identifier ...) (hereafter referred to as "the family home"), to be sold by way of public auction within 6 weeks of the date of these orders, unless the home is sold prior by private treaty, at no less than $1,300,000, unless the parties agree otherwise in writing.

   7. Order that to facilitate the conduct of the sale referred to in Order 6:

   7.1 The home will be placed in the hands of as estate agent agreed between the parties:

   7.2 The parties will share equally in any agreed costs incurred in readying the home for sale, including the costs of a stylist, which the parties will arrange and cause the home to be styled within 10 days of the date of these Orders;

   7.3 The parties will execute all such documents as may be necessary to authorize the agent to conduct such auction. Thereafter the parties will sign all documents and shall expeditiously carry out all necessary acts to sell the borne at such auction and to complete the sale if sold at such auction;

   7.4 The reserve price of such auction will be $1,300,000 or such amount which is agreed upon by the parties and, failing agreement, in this regard, the parties will accept the recommendation of the agreed estate agent;

   7.5 If the parties do not accept the recommendation of the agreed estate agent as to the reserve price for the auction and cannot reach agreement between themselves as to the reserve price at least one week prior to the auction, then the parties will arrange for the reserve rice to be determined by a registered valuer appointed by the President for the time being of the Australian Property Division. The parties will share equally in the valuation costs and the valuation fees will be deducted from the proceeds of sale prior to a distribution of the net proceeds between the parties;

   7.6 All costs incurred by the parties in appointing the estate agent, advertising and sales costs, any valuation or auction costs, as well as legal costs incurred in respect of the sale of the home, will be shared equally between the parties and will be deducted from the proceeds of sale prior to any distribution of the net proceeds between the parties;

   7.7 The parties agree to pay to the agent any sum reasonably required for advertising expenses in relation to the auction. If one of the parties advances all of the said expenses they will be reimbursed from the proceeds as a cost of sale before a distribution of the net proceeds between the parties takes place;

   7.8 The parties will attend at the auction and, in the event that the property is not sold at such auction, then the parties will negotiate with the highest bidder. In the event that an offer is made below the agreed reserve price and the parties do not agree that it should be accepted, then the home will be listed for sale by private treaty or, if the parties agree by auction, until sold, such listing for sale by private treaty or subsequent auctions to be conducted by another agent or agents to be agreed upon by the parties (unless the parties agree to continue to use the agreed agent, [sic] but at such subsequent listing for sale by way of private treaty or such subsequent auction the reserve price will remain at $1,300,000 unless the parties otherwise agree in writing;

   7.9 The parties will sign all necessary documents and will expeditiously carry out such necessary acts required to sell the Home at either auction;

   7.10 The solicitor acting in relation to the sale between the parties.

   8. Order that upon completion of the sale of the home pursuant to Orders 6 and 7 of these Orders of sale will be paid in the following manner and priority:

   8.1 In payment of agents and auctions fees and commission, valuation costs and any associated costs due on the sale;

   8.2 In payment of the balance outstanding on the mortgage to National Australia Bank;

   8.3 In payment of the legal costs on the sale of the home;

   8.4 In payment of any taxes and/or duties arising by virtue of the sale of the home;

   8.5 In payment of any agreed costs in readying the home for sale;

   8.6 In payment of the sum of $40,000 to D School in respect of the outstanding school fees owed by the Husband.

   8.7 In payment of the sum of $50,000 to each party by way of interim distribution; and

   8.8. The balance then remaining in an interest bearing controlled monies account in the name of both of the parties pending final determination of the property settlement between the parties or further court order.

2. At the hearing of this matter, counsel for the husband indicated that the husband was not pressing for orders 4 or 5 of the husband’s Amended Application.

3. The wife seeks that orders be made in accordance with her Response to Application in a Case filed 17 September 2020, set out as follows:

   1. That the Applicant Husband’s Amended Application in a Case filed 7 September 2020 be dismissed.

   2. That the Applicant Husband pay the Respondent Wife’s costs of and incidental to this Application.

Evidence

1. The husband relied upon the following:

   a)Amended Application in a Case filed on 7 September 2020 (marked ‘Exhibit 2’);

   b)Case outline document (marked ‘Exhibit 1’);

   c)Affidavit of the husband filed on 7 September 2020 (marked ‘Exhibit 3’);

   d)Tender bundle of annexures to the Affidavit of the husband filed on 7 September 2020 (marked ‘Exhibit 4’);

   e)Husband’s financial statement filed 7 September 2020 (marked ‘Exhibit 5’);

   f)Tender bundle of exhibits (marked ‘Exhibit 6’);

   g)Wife’s financial statement filed 5 June 2018 (marked ‘Exhibit 7’);

   h)Paragraph 52 of the Affidavit of the wife filed 28 February 2020 (marked ‘Exhibit 8’);

   i)Husband’s electronic Court book (marked ‘Exhibit 9’);

   j)Further tender bundle of exhibits (marked ‘Exhibit 10’);

   k)Cost Notice dated 24 September 2020 (marked ‘Exhibit 11’); and

   l)Costs schedule dated 5 June 2020 (marked ‘Exhibit 12’).  

1. The wife relied upon the following:

   a)Wife’s Electronic Court book (marked ‘Exhibit 14’) which included the following:

   i)Case outline document dated 20 September 2020;

   ii)Amended Initiating Application filed 21 June 2018;

   iii)Response to Application in a Case filed 17 September 2020;

   iv)Affidavit of the wife including tender bundle filed 18 September 2020;

   v)The wife’s financial statement filed 21 September 2020;

   vi)Affidavit of Mr G filed 7 August 2020;

   vii)Emails from the wife’s solicitor to the husband dated 26 March 2020, 27 March 2020 and 21 September 2020; and

   viii)Cost Notice dated 21 September 2020.

   b)Further case outline document (marked ‘Exhibit 13’);

   c)Tender bundle of exhibits (marked ‘Exhibit 15’);

   d)Financial statements of the husband dated 17 August 2018 and 6 May 2020 (marked ‘Exhibit 16’);

2. In addition to the above exhibits, the September 2018 consent Orders were also marked ‘Exhibit 17’.

Issues

1. The issues to be determined in this interim Application are as follows:

   (1)Should an order be made pursuant to s 83 of the Family Law Act 1975 (Cth) (“the Act”) to discharge the order for spousal maintenance as set out in Order 2 of the September 2018 consent Orders?

   (2)Should an order be made pursuant to s 129 of the Child Support (Assessment) Act 1989 (Cth) (“the Child Support Act”) discharging the Orders in respect to child support as set out in Orders 3 and 4 of the September 2018 consent Orders?

   (3)Should an order be made for partial property distribution pursuant to ss79 and 80 of the Act in order to provide funds to the husband for the purpose of him discharging a debt in respect to the children’s school fees and/or to provide him with funding to pursue the litigation that is currently before the Court?

2. For reasons which I explain immediately below, I will consider the second issue before considering the first and third issues.

Issue 1 – Should orders be made to discharge the previous child support orders?

1. At the hearing of this matter, I advised counsel for the husband that I would not consider the husband’s Application to set aside Orders 3 and 4 of the September 2018 consent Orders because the Child Support Registrar had not been served with the husband’s Application. It was acknowledged that the jurisdictional foundation for such an Application is s 129 of the Child Support Act, being the provision under which an order to vary a prior order for lump sum or non-periodic child support may be made.

2. This is in circumstances where s 145(1) of the Child Support Act provides that:

   The Registrar may intervene in, and contest and argue any question arising in, a proceeding under this Act.

3. In recognition of the right of the Child Support Registrar to intervene in proceedings concerning applications in respect to child support, including, specifically, those applications listed in r 4.15 of the Family Law Rules 2004 (Cth) (“the Rules”), r 4.23(1) of the Rules provides that the persons to be served with an application under the relevant part of the Rules dealing with child support applications are:

   (a) each respondent;

   (b) a parent or eligible carer of the child in relation to whom the application is made;

   (c) the Child Support Registrar.

4. It was acknowledged that the Child Support Registrar has not been served with the husband’s Application. Failure to serve the Registrar in accordance with the Rules is fatal to the Court dealing with the Application at this time. Requiring service to be effected is not simply insisting on ritualistic compliance with the Rules for the sake of mere compliance. Non-service on a person or entity that has a statutory right of intervention is a fundamental denial of natural justice that, in the absence of urgency, prevents the Court from dealing with that aspect of the application. In Child Support Registrar v Nixon (2007) 207 FLR 230, the Full Court said at [47]-[48]:

   [47] …given the emphasis placed by the High Court in both Taylor and Allesch v Maunz on the right of a party to be heard when an order is to be made affecting that party, we accept that where a party has not been given notice of the proceedings in which the order was made, and thus not been heard on the making of the order, that that is a matter which should be given very significant weight in the exercise of the discretion to set aside the order. As his Honour did not refer to the fact that the order had been made without notice to the Registrar, it has to be assumed that he gave this fact no weight, and thus his discretion must be regarded as having miscarried on account of his failure to have regard to this important matter.

   [48] We add that we do not accept, as we understood to be submitted by the respondents, that a distinction should be drawn between a party to the proceedings as opposed to a third party…

5. In circumstances where I indicated to counsel for the husband that I would not consider the husband’s Application pursuant to s 129 of the Child Support Act, it has not been necessary for me to consider the merits of the husband’s Application save to note that, on the basis of the material provided to the Court, there is, with respect, substantial merit in the submission of senior counsel for the wife that the husband has not presented evidence to satisfy the preconditions to the exercise of power pursuant to s 129 of the Child Support Act.

6. Those preconditions were summarised by Aldridge J in Bass v Bass [2014] FamCA 1000 at [106]-[109], where his Honour said that, while not limited to the following matters, the following matters are preconditions to the making of an order under s 129 of the Child Support Act:

   [106] Pursuant to s 129(2) the court must not make an order modifying the earlier order unless the court is satisfied that it would be just and equitable as regards the child, the carer entitled to child support and the liable parent and that it is otherwise proper to make the order.

   [107] In doing so the court’s attention is drawn to matters specified under s 123A or a statement made under s 125 at the time the orders were made.  There was neither in the present case.

   [108] In determining whether it is just and equitable to make the order the court must have regard to the matters set out in s 117(4), (6), (7), (7a) and (8).

   [109] In determining whether it is otherwise proper to make the order the court must have regard to the matters in s 117(5).

   (Emphasis added)

7. In this matter, the husband has not presented evidence that could reasonably be contended to satisfy the Court that the orders he seeks under s 129 of the Child Support Act would be “just and equitable” with regard to each of the three (3) categories of persons set out in s 129(2), being all of the following:

   a)The child – in this case, the parties’ children;

   b)The custodian entitled to child support – in this case, the carer of the children, being the wife; as well as

   c)The liable parent concerned – being the husband.

8. The Full Court has held that the Court’s satisfaction in respect to a similar legislative requirement, as set out in s 116 of the Child Support Act, is a jurisdictional precondition to applying the relevant section, in that case, s 116 of the Child Support Act: see Seymour v Seymour [2011] FamCAFC 97 at [84].

9. Further, the Full Court has made it clear that an applicant seeking orders that require the Court to consider the relevant provision of s 117 of the Child Support Act, which, as noted by Aldridge J, is an additional requirement set out in s 129 of the Child Support Act, carries the onus of establishing the existence of “special circumstances” that justify the exercise of the legislative power. In that respect, in the decision of IntheMarriage of Gyselman and Gyselman (1992) FLC 92-279 at 79,064, the Full Court noted:

   Section 117(2) sets out the grounds for departure from administrative assessment. Each of those grounds is prefaced by the words, “in the special circumstances of the case”. Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasize that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases. In Savery’s case (p. 77,897), Kay J, adopting the view in Philippe and Philippe (1978) FLC 90-433 at p. 77,202 in a different context, said that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”. The approach to the interpretation and application of the particular grounds in s 117(2) must be guided by that qualification.

10. There is, with respect, considerable force in the submission by senior counsel for the wife that a significant factor in the husband’s asserted inability to pay outstanding school fees in the sum of $40,000 is his decision to elect to spend his leave overseas rather than in Australia. The husband’s choice, in that respect, resulted in him incurring substantial costs in airfares and accommodation for both himself and his current wife. While I have not been addressed on the issue, it is difficult to see how the required “special circumstances” exist in those circumstances.

11. As a result of being unable to determine the husband’s Application for orders pursuant to s 129 of the Child Support Act, in circumstances where the husband has not served the Child Support Registrar, that aspect of the husband’s Application will be adjourned until the first day of the substantive hearing of this matter on 18 January 2021. The order for adjournment will make it clear that that aspect of the husband’s claim is to be determined on the basis of the evidence that has been tendered in the proceedings on 24 September 2020.

12. In circumstances where the adjournment has been caused by the omission of the husband’s legal advisers to serve the Child Support Registrar, I will make an order requiring the husband to pay the costs of the wife incurred to date in respect to that aspect of the husband’s claim.

Issue 2 – Should orders be made to discharge the previous spousal maintenance orders?

1. As noted earlier, the previous spousal maintenance arrangement is set out in Order 2 of the September 2018 consent Orders. This Application to vary that Order is to be determined by having regard to the considerations set out in s 83 of the Act which, relevantly, provides that:

   (2)  The court shall not make an order increasing or decreasing an amount ordered to be paid by an order unless it is satisfied:

   (a)  that, since the order was made or last varied:

   (i)  the circumstances of a person for whose benefit the order was made have so changed (including the person entering into a stable and continuing de facto relationship);

   (ii)  the circumstances of the person liable to make payments under the order have so changed; or

   (iii)  in the case of an order that operates in favour of, or is binding on, a legal personal representative--the circumstances of the estate are such;

   as to justify its so doing;

   (b)  that, since the order was made, or last varied, the cost of living has changed to such an extent as to justify its so doing;

   (ba)  in a case where the order was made by consent--that the amount ordered to be paid is not proper or adequate;

   (c)  that material facts were withheld from the court that made the order or from a court that varied the order or material evidence previously given before such a court was false.

   (Emphasis added)

2. In Adam P Brown Male Fashions Pty Limited v Philip Morris Incorporated (1981) 148 CLR 170 at 178, the High Court stated that, in considering whether interim orders should be varied, a Court should consider whether, inter alia, any “new facts come into existence or are discovered which render its enforcement unjust”. That is a sensible and practical approach to considering an application for variation of an order for interim spousal maintenance.

3. In Adam P Brown Male Fashions Pty Limited (Supra), the High Court applied Cutler v Wandsworth Stadium Limited (1945) 1 All ER 103 in confirming that the onus rests on the person seeking to vary the consent or interim order to establish that those changed circumstances and that must be “established by evidence”.

4. In this matter, the husband contends that there has been a change in both the wife’s circumstances and also his circumstances such that a discharge of the previous spousal maintenance orders is appropriate. He has, however, not discharged the onus which he carries to establish that has occurred.

5. The evidence regarding the husband’s circumstances in respect to this issue is set out in his Affidavit filed 7 September 2020. 

6. In respect to what he contends to be a relevant change in the wife’s circumstances, the husband submits that, since the Orders were made in September 2018, the wife has disclosed that she has a significant financial resource which is reflected in the fact that she has been able to raise the amount of $200,000 to pay her legal fees. The husband, through his counsel, contended that the wife has not provided adequate disclosure in respect to what he contends to be that financial resource which the wife has been able to access.

7. Despite submissions by counsel for the husband that the wife had not provided proper disclosure of the amount she has spent in respect to legal fees, at paragraph 52 of his Affidavit, the husband states that his understanding was that, as at 7 September 2020, being the date that he filed his Affidavit, the wife’s parents had lent her approximately $140,000 for the payment of legal fees. The wife has since updated that amount by way of a costs disclosure notice provided to the husband and the Court.

8. The fact that the wife has been able to access funds to meet her legal fees is not, however, indicative of the source of those funds being a financial resource for the wife. In Hall v Hall (20160 332 ALR 1at [54], the High Court described, with reference to Kelly & Kelly (No 2) (1981) FLC 91-108, the task of considering whether an applicant for spousal maintenance has access to a financial resource in the following terms:

   The reference to “financial resources” in the context of s 75(2)(b) has long been correctly interpreted by the Family Court to refer to “a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency”. The requirement that the financial resource be that “of” a party no doubt implies that the source of financial support be one on which the party is capable of drawing. It must involve something more than an expectation of benevolence on the part of another. But it goes too far to suggest that the party must control the source of financial support. Thus, it has long correctly been recognised that a nominated beneficiary of a discretionary trust, who has no control over the trustee but who has a reasonable expectation that the trustee's discretion will be exercised in his or her favour, has a financial resource to the extent of that expectation.

   (Citations omitted)

9. The evidence presented in the matter before me is not sufficient to satisfy me that the fact that the wife has been able to obtain funds to assist her in this litigation, which includes issues in respect to parenting proceedings, means that she has available to her “a source of financial support” which she can “reasonably expect will be available to [her] to supply a financial need or deficiency”.

10. In submissions, counsel for the husband contended that the wife’s income increased in June 2018 and that she was able to obtain a second job in 2019, which the husband contends has not been properly disclosed or particularised in response to questions from the solicitors for the husband. That imputation is, however, with respect, not sustained when one has regard to the fact that the wife’s Financial Statement filed 21 September 2020 clearly states that she receives income from two (2) sources, being the H Employer and the J Employer. Documentation tendered in these proceedings also shows that the employment has been disclosed in correspondence between the parties’ solicitors.

11. The wife’s Notice of Assessment in respect to her taxation liability for the financial year ended 30 June 2019 disclosed a taxable income of just $33,536: see exhibit 13 to the husband’s Affidavit in ‘Exhibit 4’. It is to be acknowledged that this amount represents a relatively minor increase from the amount of the total salary stated in the wife’s Financial Statement filed 5 June 2018, in which the wife states that she received a pre-tax salary from her employment with J Employer of $443 per week or $23,036 per annum. That relatively minor increase in salary occurred in circumstances where the wife took on additional financial responsibilities as a single mother. This included the responsibility of meeting 35 per cent of the children’s private school fees.

12. That amount of $443 per week as set out in the wife’s Financial Statement of 5 June 2018 is also less than the income of $1,133 particularised by the wife in Part D of her Financial Statement filed 21 September 2020. The wife was, however, in May 2018, receiving a combined child support payment of $924 per week. In September 2020, her child support payment was $593 per week and did not include an amount in respect to the parties’ eldest son, V. The wife’s Financial Statement filed 5 June 2018 does not record that she was incurring expenses in respect to the children’s private school fees whereas her 21 September 2020 Financial Statement notes that she is incurring education expenses in the sum of $309 per week.

13. Further, at paragraph 19 of her Affidavit filed on 18 September 2020, the wife attests to incurring additional costs in respect to the children’s “specialist doctor’s fees, psychologist fees, prescribed medications and orthodontic work. These costs have been significant approximately $20,000 in total since separation.”

14. At paragraph 23 of her Affidavit, the wife attests that:

    As to paragraph 23 [of the husband’s Affidavit], the Applicant has not always been in compliance with spousal maintenance orders and thus risked significant stress to the children and me. I was issued with a disconnection notice for our water on 24 February 2020 so to avoid this I was forced to pay 2 unpaid bills myself. The Applicant was also issued with a debtors notice on 6 January 2020 (to which I was sent a copy) from Region K Council.

15. The wife summarises her financial circumstances at paragraph 39 of her Affidavit filed on 18 September 2020, with reference to paragraph 47 of the husband’s Affidavit filed 7 September 2020, as follows:

    As to paragraph 47, my weekly gross salary is now approximately $1133 (still about one sixth of the Applicant’s) yet I have endeavoured to meet my obligations towards the children's' school fees as per the consent orders of September 2018. The HEM the Applicant quotes in in fact is similar for my household (1 adult and 4 children require $1,169 per week) versus the Applicant's (previous) household of (2 adults and 1 child) at $1,242 per week, yet I earn less than a quarter of what the Applicant earns. I am not in a position to pay for the Applicant's share of the school fees on my current income.

16. Despite contending that the wife’s financial circumstances are such that she is no longer in need of spousal maintenance in accordance with the September 2018 consent Orders, at paragraph 54 of his Affidavit, the husband attests that, in his opinion, the parties’ financial circumstances are such that neither he nor the wife can afford to keep the children at their current private schools.

17. Additionally, at paragraph 56 of his Affidavit, the husband attests that:

    [The wife] cannot afford the school fees herself as she earns $33,536 per annum according to her 2019 Notice of Assessment.

1. At paragraph 57 of his Affidavit, the husband further attests that:

   I phoned NAB on Monday 24 August 2020, who hold our mortgage account. They said that mortgage repayments will need to commence being paid in October 2020. On her income she will be unable to service the mortgage and any part of the school fees.

2. Having regard to the evidence to which I have referred, I am satisfied that, as attested by the wife in her Financial Statement filed 21 September 2020, the wife’s total personal expenditure of $2,070 exceeds her total average weekly income of $1,954.

3. In circumstances where the husband has not made mortgage payments in respect to the former matrimonial home since 16 May 2018, I am further satisfied that, as of October 2020, the wife will likely take on that additional financial responsibility pending determination of the litigation in this matter. 

4. In respect to what he contends are his own changed circumstances, the husband attests, at paragraph 17 of his Affidavit, as follows:

   Since the orders were made nearly two years ago on 24 September 2018 the following events have occurred that have materially changed my circumstances, which events I detail more full below:

   (i)I am being sued for $40,000 in respect of arrears in school fees, which I cannot pay such that I face bankruptcy and the forced sale of the family home;

   (ii)My income has decreased by $30,000 per annum;

   (iii)I have paid a further amount in respect of legal fees of about $66,800 and need further provision for legal fees as Ms Rickert has indicated out hearing will be 4 days, with the cost of a joint single expert Dr L;

   (iv)The school fees have increased;

   (v)V has been living with me and I have remarried.

   (vi)[The husband’s current wife] is unable to work much and needs surgery. [The husband’s current wife] in any event usually earns less than $18,000 per annum;

   (vii)I am unable to borrow further funds from my family.

5. At paragraph 30 of his Affidavit, the husband contends that “when the orders were made by consent on 24 September 2018 regarding the paying 65% of the school fees, I believed that liability would then be about $35,000 annually and that if [the wife] and I made further representations to [the school] that it was reasonably likely that those school fees would be reduced further.  It is on this basis that I assumed that I would be able to afford the school fees.”

6. At paragraph 44 of his Affidavit, the husband attests that the 65 per cent share of the children’s school fees for which he is responsible “is currently about $30,000 annually for the four younger children, excluding V”. The husband contends that he cannot afford this fee level on his current salary. This is actually less than he anticipated at the time the consent Orders were made.

7. At paragraphs 45 to 47 of his Affidavit, the husband attests as follows:

   45. My gross salary was $330,000 - $340,000 in the 2017/18 and 2018/19 financial years. This consisted of just over $200,000 as a base salary, plus anywhere from 45-55% salary loading, making about $310,000 gross. The remaining $20,000-30,000 (to make $330,000 to $340,000) in the total comes from over-time or over-load casual work that I elected to undertake in those years. However, in the financial year 2019/20, I was on sabbatical leave (special studies leave) in semester 2, 2019 and then on long service leave in semester 1, 2020. This meant that I did not undertake any casual work in that 12 month period. As such my 2019/20 gross salary was $306,718 and nett $195,598. Exhibited to me at the time of swearing this affidavit is my 2020 Notice of Assessment, marked “6”. As such, with a reduction in my annual salary of about $30,000 in the last year, I simply cannot currently afford to pay the school fees at all, as set out below.

   46. I had to take long service leave as I was concerned that my stress levels, occasioned by these proceedings may negatively impact my work performance should I not take the break due to me. Given the Covid-19 impact, there is no over-time available to me when I return to work at the Employer M in August 2020.

   47. My weekly gross salary is about $6,000 per week, which is $306,718 annually. I receive $167,500 after tax and salary sacrifice arrangements for my car. I owe $40,000 to D School in school fees, which is due immediately. I owe about $40,000 to Messenger Family Law. I owe $6,600 to CBA from a personal loan (due this year) and $1,200 on credit cards. My rent is $30,000 annually ($560 a week) and I pay $31,000 annually in child support. The sum of these obligations and liabilities is $150,800. I needed to borrow further funds from family members to pay my barrister's costs in May 2020 for the third interim hearing. This would leave me only $17,700 annually for living expenses like eating, paying for electricity, gas, water, phone, internet, etc, as well as care for V. The HEM minimum value for living expenses for a couple in Sydney with one child is $2,450 per fortnight, which is $63,700 per year. Including this and adding my liabilities all together makes $213,700 annually. This is well above the $167,000 I receive a year in after tax income. Exhibited to me at the time of swearing this affidavit is a copy of my payslip dated 27 August 2020, marked “7”.

8. The husband’s payslip for the period 14 August until 27 August 2020 (see annexure 7 to the husband’s Affidavit in ‘Exhibit 4’), being for a period of two (2) weeks, states that the husband’s gross income was $12,255.68 which is equivalent to $318,647 per annum. This compares to the income disclosed in the husband’s Financial Statement, filed 17 August 2018, of $5,878 per week being equivalent to an income of $305,656 per annum. It is noted that the husband’s Financial Statement was filed approximately five (5) weeks prior to the consent Orders being made on 24 September 2018. Accordingly, the husband’s assertion, as set out in his Affidavit, that his income has declined since the consent Orders were made on 24 September 2018, is not supported by the evidence in these proceedings. To the contrary, it appears that the husband’s income has actually increased by approximately $13,000 per annum. 

9. In his Financial Statement filed 17 August 2018, the husband further attests to incurring total personal expenditure of approximately $5,763. That compares to total personal expenditure disclosed in the husband’s Financial Statement filed 7 September 2020 of $6,498, being a difference of $735 per week. In his Financial Statement filed 7 September 2020, at Part E, the husband states that he does not know his current wife’s income. However, in his Affidavit filed on the same day, the husband states in paragraph 17(vi) that his current wife usually earns “less than $18,000 per annum”. That assertion, with respect to the husband, suggests that he has some knowledge of the income that his current wife receives. That income has not been disclosed.

10. The husband’s expenses as set out in his Financial Statement filed 7 September 2020 also include the amount in respect to repaying his lawyers in the sum of $590 per week. At Part H of the Financial Statement filed 7 September 2020, the husband also states that he pays personal expenses of his current wife in the sum of $697. The expenses which make up that sum are set out in Part N of the husband’s Financial Statement filed 7 September 2020.

11. In circumstances where the husband has not disclosed the income of his current wife, I propose to disregard the expenses that the husband attests that he incurs in respect to his current wife. This is because I am unable to determine the extent to which those expenses are or reasonably could be offset by any income which is earned by the husband’s wife.

12. When that amount is deducted from the husband’s Financial Statement filed 7 September 2020, the difference between his expenses as set out in his Financial Statement filed 17 August 2018 and his Financial Statement filed 7 September 2020 is just $38 per week. This is more than compensated for by the additional salary which he now receives in the sum of $13,000 per annum, which is equivalent to $250 per week. In other words, on those figures, even allowing for the amount that the husband is paying his lawyers, on a weekly basis, the husband’s income over expenditure suggests that the husband has an additional surplus over and above that which he had in August 2018 of $212 per week.

13. On that basis, the husband has not satisfied the Court that his financial circumstances have deteriorated at all, let alone to such an extent that they could be regarded as being of such magnitude that they justify an order pursuant to s 83 of the Act, setting aside the previous Order that had been made for the husband to pay spousal maintenance in the form of council rates and insurance on the former matrimonial home.

14. In summary and conclusion on this issue, having regard to the evidence to which I have referred under this subheading of Issue 1 in respect of spousal maintenance, the husband has not discharged the onus which he bears of satisfying the Court that the circumstances of either the wife or himself have so changed that it justifies making an order pursuant to s 83 of the Act to set aside the Order for spousal maintenance made, by consent, on 24 September 2018. The husband’s Application to set aside that Order must therefore be dismissed.

Issue 3 – Should there be an order for partial property distribution to be effected by way of sale of the family home?

1. The legislative foundation for an order for partial property distribution is ss 79 and 80(1)(h) of the Act. In combination, these sections confer power on the Court to make orders for interim property settlement. Section 80 is not, in itself, a source of jurisdiction for an order for the partial distribution of property to be made in the course of interim proceedings. Rather, the section is an “enabling provision” that provides various ways in which the general power in s 79 may be exercised in individual cases. In that respect, in Davidson and Davidson (No 2) (1994) FLC 92-469 at 80,874, the Full Court stated:

   Section 80(1) is limited by its introductory words, namely that “The court, in exercising its powers under this Part, may do any or all of the following ...”. That is, s. 80(1) is activated by the exercise by the court of some other of the powers in Part VIII.

2. It is clear that the power to make orders pursuant to ss 79 and 80 of the Act can be exercised prior to final hearing, including through “a succession of orders until the power ... is exhausted” or until a final order dealing with all the known property of the parties is made: see Gabel & Yardley (2008) FLC 93-386, cited in Strahan & Strahan (Interim Property Orders) (2011) FLC 93‑466 (“Strahan”) at 85,640.

3. However, as noted by Thackray J in Strahan (supra) at 85,656:

   …it is important to note that s 80(1) is couched in the permissive. Hence, although the Court must give consideration to the matters set out in s 79(4) when hearing an application for an interim payment, it has no obligation to make an interim order. The Court “may” do so if it considers that it should in the exercise of its discretion.

4. In Strahan (supra), the Full Court held that there are two steps to considering an application for an order for partial property distribution prior to final hearing. The first step is to resolve whether to exercise the power before a final hearing. This is a “procedural step” which requires an analysis of whether the circumstances of the case trigger the Court’s power to invoke s 80(1)(h) of the Act to make an order for interim property settlement before a final hearing. At this stage, the “overarching consideration” is the interests of justice: see Strahan (supra) at 85,645.

5. In approaching the determination of the first issue, the Full Court in Strahan (supra), at 85,645, said:

   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.

6. It is clear that it is not necessary for an applicant seeking orders for the partial distribution of property, prior to final hearing, to show “compelling circumstances”. Nonetheless, in Stanford v Stanford (2012) 247 CLR 108 at [40], the High Court held that consideration as to whether there should be an order for the adjustment of the parties’ legal and equitable interests in matrimonial property 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”: see also Medlow & Medlow (2016) FLC 93-692 at 81,089. This applies to an application for a partial distribution of property in interim proceedings as much as it does to an application for the adjustment of property at the final hearing of the matter.

7. In other words, an applicant for orders for the partial distribution of property, at a time prior to final hearing, carries the onus of satisfying the Court as to why it is in the interests of justice for such an order to be made, rather than for there to be a “once and for all” order made at final hearing.

8. The second step identified in Strahan (supra) at 85,645-85,646 involves the exercise of the power pursuant to s 79 of the Act. In turn, insofar as it is possible in interim proceedings, this step requires the Court:

   ·to identify “the parties’ property and… their interests in it”: see Medlow & Medlow (2016) FLC 93-692 at [69]; and

   ·to consider and apply the provisions of s 79 of the Act.

9. Section 79 should be applied in the context of the interim proceedings and, in particular, in considering whether it is just an equitable to make the order, it is necessary to have regard to the impact of the order upon the respective parties at the point in time that the interim order is made: see Sully & Sully (No.2) [2016] FamCA 706.

10. In this case, the husband is seeking orders for a partial property distribution to be effected by way of sale of the parties’ former matrimonial home at a point in time that is just over three (3) months away from the dates allocated for final hearing of this matter. This is in circumstances where the wife and the parties’ children have been living in the home since 2013 and the wife is seeking orders that she retain the home in any property adjustment that may be made by the Court or agreed to by the parties.

11. I am not satisfied that it would be in the interests of justice for an order for partial property distribution to be made in the circumstances of this case. In that respect, in Aitken & Murphy (No 2) [2012] FamCA 239 at [158], Young J said that, in considering whether to make an order for a partial distribution of property prior to final hearing, “care must be taken not to potentially defeat any parties claim or legitimate expectations in a final hearing”, including the fact that a party should not be “required to liquidate an asset reasonably sought to be retained in the final hearing”.

12. The need to take such care must surely be even greater, in the circumstances of this case, where the final hearing is just over three (3) months away. In that context, I respectfully agree with senior counsel for the wife that practical considerations suggest that, in any event, there would be a significant chance that any sale of the former matrimonial home would not be completed prior to the hearing.

13. For this reason alone, the husband’s Application for orders for an interim distribution of property must be dismissed. This is because the husband has not discharged the onus which he bears of satisfying the Court that it is in the interests of justice to make the orders that he is seeking for there to be a sale of the former matrimonial home to effect such a partial property distribution.

14. For completeness, I can indicate that I would have, in any event, dismissed the husband’s Application for orders for an interim distribution of property on the basis that he has not presented evidence that enables the Court to undertake the second leg of the task described in Strahan (supra), that is, to enable the Court to consider those matters set out in s 79 of the Act, including the parties’ initial contributions to the former matrimonial property and their respective financial and non-financial contributions during the course of and subsequent to the parties’ relationship. That is because these matters have not been addressed in the husband’s Affidavit.

15. In so finding, I note that the husband sought to rely on the parties’ respective Financial Questionnaires which are included in the husband’s tender bundle of documents. This is not a permissible way of admitting evidence in these proceedings. In that respect, the following rules are relevant.

16. Rule 5.02(1) of the Rules relevantly provides:

    Evidence in applications to which Chapter 5 applies

    (1)  A party who applies for an interim, procedural, ancillary or other incidental order in an Initiating Application (Family Law), or who files an Application in a Case, must at the same time file an affidavit stating the facts relied on in support of the orders sought.

17. Rule 5.09 of the Rules provides:

    Affidavits

    The following affidavits may be relied on as evidence in chief at the hearing of an interim or procedural application:

    (a)  subject to rule 9.07, one affidavit by each party;

    (b)  one affidavit by each witness, provided the evidence is relevant and cannot be given by a party.

18. Rule 15.08(1) of the Rules sets out the requirements for an affidavit as follows:

    (1)  An affidavit must:

    (a)  be divided into consecutively numbered paragraphs, with each paragraph being, as far as possible, confined to a distinct part of the subject matter;

    (b)  state, at the beginning of the first page:

    (i)  the file number of the case for which the affidavit is sworn;

    (ii)  the full name of the party on whose behalf the affidavit is filed; and

    (iii)  the full name of the deponent;

    (c)  have a statement at the end specifying:

    (i)  the name of the witness before whom the affidavit is sworn and signed; and

    (ii)  the date when, and the place where, the affidavit is sworn and signed; and

    (d)  bear the name of the person who prepared the affidavit.

19. The Financial Questionnaires that the husband seeks to rely upon are not affidavits. They have not been sworn and do not comply with r 15.08(c) or (d) of the Rules. The husband’s case outline document prepared for the purposes of these proceedings (see ‘Exhibit 1’) identified those Affidavits that the husband sought to rely upon in these proceedings. The husband did not identify the Financial Questionnaires as being documents upon which he sought to rely on in these proceedings.

20. In so far as the husband seeks to rely on the Financial Questionnaires to, in effect, supplement the evidence set out in his Affidavit, r 15.08(2) and (3) relevantly provide:

    (2)  A document that is to be used in conjunction with an affidavit and tendered in evidence in a proceeding:

    (a)  must be identified in the affidavit; and

(b) must not be attached or annexed to the affidavit, or filed as an exhibit to the affidavit.

(3)  If a document that is to be used in conjunction with an affidavit and tendered in evidence in a proceeding is in the possession of the party on whose behalf the affidavit is filed, a hard copy of the document must be served on each person to be served at the same time as the affidavit is served on that person.

1. The Financial Questionnaires were not identified in the husband’s Affidavit nor were they served at the time that the husband’s Affidavit was served. They have merely been provided in a bundle of documents that was provided to the wife and the Court shortly prior to the commencement of the hearing and not prior to two (2) days before the hearing in accordance with r 9.08(3) of the Rules.

1. Further, no application was made pursuant to r 11.03 of the Rules to grant relief from the effect of r 11.02, which provides that a step in a proceeding that has not been undertaken within a time prescribed by an order or the Rules is of no effect.

2. Accordingly, for all of those reasons, I have not had regard to the contents of the Financial Questionnaires previously completed by the parties as evidence in these proceedings. To avoid doubt, I repeat that, even if I had considered the Financial Questionnaires as providing evidence in these proceedings, I would nonetheless have dismissed the husband’s Application for orders for partial property distribution because I am not satisfied that such order would be in the interests of justice.

Costs

1. The combined costs of the parties in respect to these interim proceedings are slightly less than $60,000. To put that amount in context, it represents approximately a little under eight (8) per cent of the parties’ net property pool, absent superannuation. This has occurred in circumstances where the dates set for the final hearing are a little over three (3) months away.

2. The wife has sought an order for costs in respect to these proceedings. The husband contends that each party should pay their own costs.

3. The issue of costs is to be determined in accordance with s 117 of the Act.

4. Section 117 relevantly provides:

   (1)  Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.

   (2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

   (2A)  In considering what order (if any) should be made under subsection (2), the court shall have regard to:

   (a)  the financial circumstances of each of the parties to the proceedings;

   (b)  whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

   (c)  the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

   (d)  whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

   (e)  whether any party to the proceedings has been wholly unsuccessful in the proceedings;

   (f)  whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

   (g)  such other matters as the court considers relevant.

5. Those provisions make clear that, while the general rule in family law proceedings is that each party bears his or her own costs, the Court may order a party to pay the costs of another where there are circumstances justifying the making of such an order.

6. The considerations set out in s 117(2A) of the Act must be taken into account in deciding whether or not to order a party to pay the costs of another. No one factor under s 117(2A) prevails over any other factor. It is a matter of weight that is accorded to each of the relevant factors in the trial judge’s discretion: Medlon & Medlon (No. 6) (Indemnity Costs) (2015) FLC 93-664 per Strickland J.

7. As such, a litigant seeking a costs order must establish that the justice of the case requires an order for costs, by reference to the non-exhaustive list of statutory considerations set out in s 117(2A) of the Act, before such an order is made. Although the applicant for costs must establish circumstances which would justify such an order, it is not the case that a costs order can only be made in what has been described as “a clear case”: Penfold v Penfold (1980) 144 CLR 311 at [13].

8. Accordingly, there is “nothing to prevent any factor being the sole foundation for an order for costs” being made: Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123 at [41].

Consideration of the issue of costs

The financial circumstances of the parties

1. The primary basis upon which the husband has proceeded with these proceedings is his inability to pay the arrears of school fees for his children in the sum of $40,000. That amount is payable pursuant to Orders that the husband has previously agreed to. He is now at risk of default judgment being entered against him in respect to that amount.

2. Both parties have filed Financial Statements indicating that their weekly expenditure exceeds their income.

3. The husband has not contributed to mortgage payments on the former matrimonial home since May 2018. He contends that, as from October 2020, the bank will require those mortgage payments to recommence.

4. I am satisfied that neither party is in a better position than the other in satisfying an order for costs in respect to this Application. Indeed, requiring either party to pay costs to the other, at this point in time, would present a hardship to that party. On that basis, having decided to make an order for costs for reasons which include the matters to which I refer below, I will make orders in accordance with those sought by senior counsel for the wife – specifically, that the payment of costs is to be satisfied from the property received by the husband as a result of the adjustment made by the Court in orders pursuant to s 79 of the Act or as a result of the settlement agreed to by the parties.

Whether a party is legally aided

1. Neither party is legally aided in these proceedings. Accordingly, this consideration is not relevant.

The conduct of the parties to the proceedings

1. In respect to the issue of costs, senior counsel for the wife contends that:

   a)These proceedings were wholly unnecessary in circumstances where the dates of the final hearing have been set for a time that is a little over three (3) months away. In that respect, senior counsel for the wife contends that these proceedings are “tantamount to an abuse of process”;

   b)These proceedings are a direct affront to the main purpose of the Rules; and

   c)The proceedings are “unreasonable” in all the circumstances and it does not achieve cost effectiveness and frustrates and even may “prevent the proper administration of justice”. In that context, reference was made to the Rules generally and, specifically rr 19.04 and 19.10 of the Rules.

2. Comparatively, counsel for the husband contends that:

   a)These proceedings were commenced at a time prior to the final hearing dates being allocated;

   b)The proceedings occur in circumstances where the husband contends that the wife has declined requests to resolve issues in dispute between the parties, including facilitating the husband accessing $40,000 from a mortgage redraw facility to avoid him being the subject of judgment in respect to that amount; and

   c)That the wife has failed to disclose additional income that she has received and, additionally, she has access to what the husband contends is a financial resource enabling her to pay her legal fees in the sum of $200,000.

3. In considering the conduct of the parties in this matter, I note that Principles 2 and 7 of the Joint Practice Direction, JPD1 of 2020 relevantly provide:

   2. The overarching purpose to be achieved is to ensure the just, safe, efficient and timely resolution of matters at a cost to the parties that is reasonable and proportionate in all the circumstances of the case, having regard to the significant impact of family law disputes on children and families.

   …

   7. Parties and their lawyers are expected to take a sensible and pragmatic approach to litigation, and to incur costs only as are fair, reasonable and proportionate to the issues that are genuinely in dispute. Parties and their lawyers are expected to engage in cost budgeting, and regularly inform their clients and the Court of the actual costs they have incurred and are likely to incur (see Part 19.2 of the Family Law Rules 2004).

4. Further, Principle 8(b) provides that:

   b. applications should only be brought before the court if they are reasonably justified on the material available;

5. Rule 1.04 of the Rules sets out the main purpose of the rules as follows:

   The main purpose of these Rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.

6. Rule 1.08 of the Rules provides that parties and their lawyers “have a responsibility to promote and achieve the main purpose” including:

   (a)  ensuring that any orders sought are reasonable in the circumstances of the case and that the court has the power to make those orders;

   (b)  complying with the duty of disclosure (see rule 13.01);

   (c)  ensuring readiness for court events;

   (d)  providing realistic estimates of the length of hearings or trials;

   (e)  complying with time limits;

   (f)  giving notice, as soon as practicable, of an intention to apply for an adjournment or cancellation of a court event;

   (g)  assisting the just, timely and cost-effective disposal of cases;

   (h)  identifying the issues genuinely in dispute in a case;

   (i)  being satisfied that there is a reasonable basis for alleging, denying or not admitting a fact;

   (j)  limiting evidence, including cross-examination, to that which is relevant and necessary;

   (k)  being aware of, and abiding by, the requirements of any practice direction or guideline published by the court; and

   (l) complying with these Rules and any orders.

7. In this matter, by failing to serve the Child Support Registrar in respect to the husband’s Application, pursuant to s 129 of the Child Support Act, the husband, through his lawyers, has failed to comply with his obligations under r 1.08 (l) of the Rules. Costs have been thrown away by the consequent adjournment resulting from that failure.

8. For reasons which I have set out, there was no reasonable basis for applying for orders to discharge the previous spousal maintenance Orders agreed to by the husband. This is because there has not been a change in circumstances of either the wife or the husband that so justifies that consent Order being set aside. 

9. Further, proceeding with the husband’s Application for an order for the former matrimonial property to be sold to facilitate a partial property distribution to the parties, at this point in time – that is, in circumstances where the hearing dates are a little over three (3) months away – was contrary to the husband’s obligations and his legal advisers’ obligations pursuant to Principle 7 of JPD1 of 2020 to take a “sensible and pragmatic approach” to this litigation. Further, it has resulted in the parties incurring costs in respect to these interim proceedings alone, which are approximately eight (8) per cent of the parties’ net non-superannuation property. In no way could those costs be regarded as being reasonable and proportionate. 

10. The husband’s conduct in that respect, together with the conduct of his legal advisers, is therefore, in my opinion, also contrary to their obligations pursuant to the main purpose of the Rules as set out in r 1.04.

11. The principles set out in JPD1 of 2020 to which I have referred, as well as rr 1.04 and 1.08 of the Rules, are similar in their effect to ss 37M and 37N of the Federal Court of Australia Act1976 (Cth). In Modra v Victoria (2012) 205 FCR 445 (“Modra”) at 455, Gray J stated that “the impact of those sections on the obligations of legal practitioners practising in this Court is significant”.

12. In Camm v Linke Nominees Pty Ltd (No 4) [2013] FCA 223 (“Camm”) at [52], Tracey J referred, with approval, to the comments of Gray J in Modra (supra) and stated further that “the same may be said about their impact on the obligations of litigants”.

13. It is to be observed that the notation to r 1.08 of the Rules relevantly provides that:

    The court may take into account a failure to comply with this rule when considering costs (see subrule 19.10(1) and subclause 6.10(1) of Schedule 6).

14. In this matter, no application has been made pursuant to r 6.10 (1) of ch 6 of the Rules, which relevantly provides:

    (1)  A person may apply for an order under subclause (2) against a lawyer for costs thrown away during a case, for a reason including:

    (a) the lawyer's failure to comply with these Rules or an order;

    (b)  the lawyer's failure to comply with a pre-action procedure;

    (c)  the lawyer's improper or unreasonable conduct; and

    (d)  undue delay or default by the lawyer.

15. Nonetheless, I have had regard to the notation to r 1.08 of the Rules, to which I have referred, and the failure of the husband and his legal advisers to comply with their obligations, to which I have also referred, justifies, in my view, an order for costs being made in favour of the wife.

Failure to comply with previous orders of the court

1. A significant reason for the husband proceeding with this matter was the fact that the husband owes $40,000 in respect to the children’s outstanding school fees. Those monies are payable, by the husband, in accordance with his obligation pursuant to the September 2018 consent Orders. He has failed to comply with that obligation.

The husband has been wholly unsuccessful

1. Aside from the issue in respect to the husband’s Application pursuant to s 129 of the Child Support Act, which has been adjourned until the final hearing, the husband has been wholly unsuccessful in respect to these proceedings. While I have not determined the Application under s 129 of the Child Support Act, I have noted the merit in the submissions by senior counsel for the wife that the evidence presented by the husband in respect to his Application pursuant to s 129 of the Child Support Act is insufficient to establish the jurisdictional preconditions to the exercise of power under that section.

Offers in writing

1. In justifying the commencement and continuation of the husband’s Application for interim orders which are the subject of these proceedings, counsel for the husband referred to the fact that the husband has made several attempts to reach agreement with the wife whereby the wife would facilitate the husband drawing upon the mortgage over the parties’ former matrimonial home or a line of credit similarly secured over the former matrimonial home in order to obtain the sum of $40,000. That sum, he contends, would then be applied to satisfy his outstanding debt in respect to the children’s private school fees.

2. Comparatively, senior counsel for the wife contends that it was and is entirely unreasonable for the husband to expect the wife to agree to that proposition in the following circumstances:

   a)The husband had previously agreed to Orders whereby he would meet 65 per cent of the cost of the children’s private school fees and he has not done so; 

   b)The wife has met and continues to meet her obligations under those same consent Orders to pay 35 per cent of the children’s private school fees;

   c)The husband earns in excess of $300,000 per annum and the wife earns less than one (1) quarter of that sum; and

   d)The husband’s inability to meet the arrears of child support fees is due, in substantial part, to the fact that he elected to spend a substantial portion of his leave overseas rather than in Australia. 

3. I agree that, in those circumstances, the wife has not unreasonably rejected a settlement proposal offered by the husband. 

4. From the wife’s perspective, senior counsel for the wife referred to a letter dated 18 September 2020, in which the solicitors for the wife proposed that the husband’s Application in a Case should be stood over until the hearing commencing on 18 January 2021. That proposal was, in my view, sensible and consistent with the obligations of the wife and her legal advisers to comply with those relevant principles set out in JPD1 of 2020 and their obligations pursuant to rr 1.04 and 1.08 of the Rules to which I have referred.

Such other matters as the court considers relevant

1. Senior counsel for the wife noted concerns expressed, in the community, about what can be the high cost of family law litigation. In that respect, it is noted that, in Simic & Norton [2017] FamCA 1007, Benjamin J stated, at [25]:

   The family law courts have rightly been the subject of complaints about the level of costs in family law proceedings.  All Judges have seen instances where the financial circumstances of the parties have been emasculated or wholly lost by the impact of legal costs.

2. Senior counsel for the wife contended that not all legal practitioners should be subject to the same criticism in respect to engaging in conduct that unjustifiably results in parties incurring unnecessary legal fee. I respectfully agree with that submission. However, equally forcefully senior counsel for the wife contended that where that criticism is justified it should be identified and the conduct called out. He contended that this case is an example of a party and the party’s legal advisers acting unreasonably with the consequence that the parties have incurred unnecessary legal fees which are wholly disproportionate to the issues in dispute. This is particularly so in circumstances where the final hearing is approximately three (3) months away. I, respectfully, agree with and express a similar concern to that which has been expressed by senior counsel for the wife.

3. In that context, applying the similar principles set out in ss 37M and 37N of the Act to which I have referred, in Camm (supra) at [54], Tracey J held that:

   One element of the overarching purpose is “the efficient use of the judicial and administrative resources available for the purposes of the Court”. Another is “the efficient disposal of the Court’s overall caseload”. Conduct on the part of a litigant or a practitioner which impacts adversely on the pursuit of these purposes may be taken into account when costs are awarded.

4. Accordingly, an additional consideration to which I have had regard in making an order for costs against the husband and in favour of the wife is the impact that these proceedings have had on the “efficient use of the judicial and administrative resources available for the purposes of the court” and, as a related concern, the impact upon the ability of the Court to achieve “the efficient disposal of the court’s overall caseload”. In summary and by way of emphasis, the more often this Court is required to deal with interim applications that are without merit, the less time the Court has available to conduct hearings to finally dispose of cases in the interests of the litigants involved in those cases and in the interests of other litigants before the Court who are waiting for what can be an unacceptably long period of time before their cases are listed for hearing.

Quantum of costs

Indemnity costs

1. Senior counsel for the wife contended that, as a result of the conduct of the husband and his legal advisers, in respect to these proceedings, costs should be awarded on an indemnity basis.

2. The Full Court, in D & D (Costs) (No 2) (2010) FLC 93-435 at [26]-[28] (“D & D (Costs) (No 2)”), conducted a useful review of authorities dealing with the issue of indemnity costs in the following terms:

   26. In Limousin & Limousin (Costs) [2007] 38 FamLR 478, the Court reviewed the authorities in relation to indemnity costs. Reference was there made to the judgment of the Full Court in Kohan and Kohan (1993) FLC 92-340. It was recorded at 79,614 (citations omitted) in which it was said that:

   “The intent of s 117(1) and 117(2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the court may make such order as the court considers just. As we have pointed out, the court may depart from the scale of costs prescribed under the rules. However, the purpose of fixing a scale of costs must be understood to signify that they contain the normal rates of charges. By O 38 r 2, the provisions of O 38 apply to costs ordered to be paid or taxed, and costs payable or to be taxed between solicitor and client. O 38 r 7 makes provision for the allowance of additional amounts for complexity, difficulty or novelty and special skill, knowledge or responsibility. Consequently, the Court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind. See Degmam v Wright (No 2) [1983] 2 NSWLR 354]; Wentworth v Rogers (No 5) (1986) 6 NSWLR 534; Hobartville Stud v Union Insurance Co (1991) 25 NSWLR 358 at 368–70.

   Indemnity costs orders are still an exception in this and other jurisdictions.

   27. The Court in Limousin (supra) also referred to the judgment of Shephard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 upon which learned Counsel for the Wife relies in support of the present application. Shephard J said in Colgate-Palmolive (supra) (at 256):

   2. The ordinary rule is that, where the court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis...

   3. This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of court) or a decision of an intermediate Court of Appeal or of the High Court would be required to alter it...

   4. In consequence of the settled practice which exists, the court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the court in departing from the usual course...”

   28. Reference was made to the later decision of the Full Court of Yunghanns v Yunghanns (2000) FLC 93-029 in which is [sic] was said (at 87,471, par 31):

   It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed, and that it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought.

1. In Munday v Bowman (1997) FLC 92-784 at 84,660, Holden CJ drew from the decision of Sheppard J, in Colgate-PalmoliveCo v Cussons Pty Ltd (1993) 118 ALR 248, in providing some examples of circumstances that might warrant the exercise of discretion to award indemnity costs as including:

   (a) Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts (see Fountain Selected Meats (Sales) Pty. Ltd. v. International Produce Merchants Pty. Ltd. [1988] 81 ALR 397.

   (b) Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud (see Fountain Selected Meats (Sales) Pty. Ltd. (supra).

   (c) Evidence of particular misconduct causing loss of time to the court and to other parties (see Tetijo Holdings Pty. Ltd. v Keeprite Australia Pty. Ltd (unreported, Federal Court, 3 May 1991)).

   (d) The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (see Ragatta Developments Pty. Ltd. v Westpac Banking Corporation (unreported Federal Court, 5 March 1993)).

   (e) An imprudent refusal of an offer to compromise.

2. The wife contends that it is appropriate for the Court to make an order for the husband to pay her costs because the manner in which the husband and his legal advisers have conducted this litigation constitutes an abuse of process. In considering that submission, I note that, in Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 at [7], Harper J held that an award of indemnity costs may be justified in circumstances where a party has engaged in the following conduct:

   (a) conduct which causes loss of time to the Court and to the other parties;

   (b) the commencement or continuation of proceedings for an ulterior motive, and

   (c) the commencement or continuation of proceedings and wilful disregard of known facts or clearly established law.

3. It was, in my view, certainly imprudent for the husband and his legal advisers to continue these proceedings once final hearing dates had been allocated for January 2021. However, there is no evidence that the husband commenced or continued the primary proceedings for an ulterior motive. Further, while, in my view, the husband’s legal advisers have not paid sufficient attention to the relevant legislative criteria underpinning the relief sought and marshalling evidence with a view to satisfying the Court that those criteria had been satisfied, it cannot be said that the husband has commenced or continued this litigation with “wilful disregard of known facts or clearly established law”.

4. Accordingly, I am not satisfied that the husband’s conduct was such that it could be characterised as conduct of an “exceptional kind” as that concept is described in D & D (Costs) (No 2) (supra).

5. In those circumstances, I am not satisfied that it would be “just” in terms of s 117(2) of the Act to make an order for the husband to pay the wife’s costs on an indemnity basis.

Costs on a lump sum basis

1. Rule 19.18 of the Rules provides for the methods of calculating costs. These include, in r 19.18(1)(a) of the Rules, the Court fixing upon a specific amount for costs or, in r 19.18(1)(b) of the Rules, an order for the costs to be assessed on a particular basis, including for a lump sum amount.

2. In Stoian & Fiening (Costs) [2014] FamCA 944 at [91], Kent J endorsed the principles for applying a rule equivalent to r 19.18 of the Rules as adumbrated by Einstein J in Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 at [9]. Those principles are:

   i. the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation…;

   ii. the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable…;

   iii. the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available…;

   iv. a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place…;

   v. the gross sum “can only be fixed broadly having regard to the information before the Court”…;

   …

   [References omitted]

3. Consistent with those principles, it has been determined that, where a court orders a party to pay costs, it may be appropriate for the court to fix a lump sum. By doing so, the court can avoid further delay and inconvenience being occasioned by the requirement to tax a bill: Byrnes v Brisconnections Management Company Limited (No 2) [2009] FCA 1432 at [51].

4. At pages 24-28 of the wife’s tender bundle (marked ‘Exhibit 15’ in the proceedings), the wife has detailed the costs she has incurred in respect to the husband’s Application in a Case and Amended Application in a Case totalling $32,147.77. It is apparent, however, that those costs represent the totality of costs incurred by the wife in respect to the husband’s Application. In circumstances where I have not made an order for indemnity costs, I will therefore make an order for the husband to pay two-thirds (2/3) of the costs incurred by the wife in the sum of $21,217, which I consider to be a fair and reasonable amount for costs that would be assessed on a party/party basis.

I certify that the preceding one hundred and thirty nine (139) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice McClelland delivered on 6 October 2020.

Associate: 

Date:  6 October 2020