Robinson and Shelter (No. 2)

[2009] FamCA 477

FAMILY COURT OF AUSTRALIA

ROBINSON & SHELTER (NO. 2) [2009] FamCA 477

FAMILY LAW – PRACTICE AND PROCEDURE – Security for costs – Interim financial orders and case management issues – Lack of proper evidence as to assets and liabilities for a s 79 hearing

Family Law Act 1975 (Cth)

APPLICANT: MS ROBINSON

RESPONDENT: MR SHELTER

FILE NUMBER: MLF 2725 of 2006

DATE DELIVERED: 29 MAY 2009

PLACE DELIVERED: MELBOURNE

PLACE HEARD: MELBOURNE

JUDGMENT OF: YOUNG J

HEARING DATE: 29 MAY 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR ROBINSON

SOLICITOR FOR THE APPLICANT: MACGREGORS

COUNSEL FOR THE RESPONDENT: NO APPEARANCE

SOLICITOR FOR THE RESPONDENT:

ORDERS

IT IS ORDERED:

1. THAT from the balance of monies available from the sale of the three (3) real properties in Queensland (as are identified in paragraph 1 of the Order dated 4 March 2009) a sum of $30,000 be forthwith paid to Macgregor, Barristers and Solicitors, for and on behalf of the wife and payment of her past and ongoing legal expenses and disbursements.

2. THAT the categorisation of this payment of $30,000 be reserved to the trial Judge and both the husband and wife be at liberty to file an affidavit upon this issue.

3. THAT further to paragraph 1 of the Order dated 4 March 2009 the balance of monies to be invested by the wife’s solicitors pending further order of the Court are to be in a secure and proper interest bearing account to be held for and on behalf of the husband and wife.

4. THAT the solicitors for the wife forthwith serve a sealed copy of this Order upon the husband and upon the solicitors formerly acting for him and an affidavit of service be forthwith filed with the Court.

5. THAT the extempore reasons for judgment be transcribed, be placed upon the Court file and be made available to the parties.

6. THAT the wife’s application in a case filed 26 May 2009 be otherwise dismissed.

7. THAT all extant applications be otherwise adjourned for case management and further interim hearing, if required, before Young J on 7 August 2009 at 10.00 a.m.

IT IS NOTED that publication of this judgment under the pseudonym Robinson & Shelter is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 2725 of 2006

MS ROBINSON

Applicant

And

MR SHELTER

Respondent

REASONS FOR JUDGMENT

1. The matter of Shelter and Robinson is again before me in an interim defended hearing list and for case management.  Mr Robinson of counsel appears for the wife, who is in court.  There is no appearance by or on behalf of the husband. 

2. It is understood but not known as a matter of certainty that the husband is overseas, in Russia and thus not within the jurisdiction of this court.  There has been no contact or correspondence between the husband and the court since the date of the last orders which I made in this matter on 4 March of this year.  Mr Robinson has informed the court that his client has had no contact or knowledge of the whereabouts of the husband.

3. The background to this matter is encapsulated within the various prior orders which I have pronounced and extempore judgments which I have delivered. 

4. The matter first came before me by way of an assignment to my judicial docket prior to 15 July 2008.  Thereafter the husband had initially been represented by the firm Kennedy Wisewoulds, and of more recent times has represented himself, including via a telephone conference that was arranged during court hours and with him and his friend then in Russia.  I will continue to direct that orders be served by the wife upon the husband at his recorded address for service, which is engrossed on the coversheet to orders of 4 March 2009.

5. I will not traverse the facts in terms of assets and liabilities both within Australia and within Russia as are detailed in earlier affidavits.  It is the updated knowledge of the current assets and liabilities, and perhaps their whereabouts, that are matters of importance in this case.  The wife's material is substantially incomplete, from any point of view, of a final section 79 property hearing, and that is not contemplated today. 

6. The matter was originally listed this day on the basis that the court would be updated with financial information and assessment could be made about a defended hearing, be it with the active knowledge and participation of the husband or otherwise. 

7. Prior to hearing today the solicitors for the wife have filed an application in a case on 26 May 2009.  What is there sought is an application for security for costs (a Barro order) in the sum of $50,000.  In support of that application there is filed an affidavit of the solicitor, Ms Macgregor and an affidavit of the wife.  I have read both affidavits.  There is a conflict in the information as to fees and disbursements owing and I will accept the evidence of the solicitor and therefore understand that the current indebtedness of the wife to her solicitors is $13,600 approximately.

8. I accept that the wife has, at least on her instructions to her counsel, no other current moneys available.  There was originally a sum of $70,000 that she accessed from an account at or about separation date of those moneys.  A sum of $10,000 or thereabouts was said to have been paid by her to her solicitors, and presumably the balance expended on living and outgoings.  Those matters will have to be proved at trial.  That onus is upon the wife. 

9. From the wife's most recent affidavit I accept that she is now permitted to engage in employment because of a change in visa conditions and I have read and accept paragraph 3 of her affidavit. 

10. The parties, individually or jointly, owned valuable assets within Australia and they are summarised in paragraph 1 of the orders of 4 March 2009.  The two apartments in the Gold Coast have been sold.  All proceeds were paid to the ANZ Bank in discharge of combined mortgage liabilities and other outgoings and the current debt owing to that bank is approximately $1.2 million. 

11. The one property remaining in the ownership of the husband and which is an asset for the purposes of this court is the property at S in Queensland.  Its valuation may be up to a sum of $3 million or thereabouts.  It is to be sold by the bank.  The bank will discharge the mortgage balance, costs, interest and commission, and ultimately there will be a sum of money available to be invested pending court order.  The court makes no direction as to the sale of that property, which will be undertaken by the ANZ Bank. 

12. Pursuant to paragraph 1 of the orders of 4 March 2009 and as a result of a letter received from the ANZ Banking Group Ltd, which is noted as exhibit “A” to that order, the balance of moneys received from the sale of all Queensland properties in excess of that amount required to discharge the secured mortgages, and, I should carefully add, the proper and additional expenses, interest, charges and commissions of the ANZ Bank, were then to be paid into a trust account of the wife's solicitors, Macgregor Barristers and Solicitors, pending further order of the court.  Those moneys should of course be held in an interest‑bearing account by that firm for and on behalf of the husband and wife and pending further order of the court.

13. It is within that financial and factual background that I have assessed the need for a security for costs order to be made in favour of the wife this day.  The sources of power to make such orders arise under the Family Law Act and that now seems a matter of acceptance it having been the subject of endorsement by the Full Court in numerous cases, such as Zschokke (1996) FLC 92-693. The factual basis of such orders, and the appropriate exercise of discretion, has been explained in earlier cases and, of relevance in this matter are the fact that:

    (a)the husband has control of the majority of assets, certainly ownership of real estate within Australia subject to bank liabilities;

    (b)the wife has no readily available financial means to adequately prepare and present her case to the court;

    (c)there is a complexity to the parties financial affairs which require the identification and valuation of assets both within and outside of Australia;

    (d)the wife has a strong prima facie case for a settlement of property;

    (e)the wife had been financial dependent upon the husband for support and there is a level of real wealth in the case, subject to a proper understanding of liabilities and overseas financial commitments.

    The wife cannot meet her legal fees without an order for security for costs.  It is proper and reasonable for her to have legal representation in this case and there is an available pool of assets that will likely be available after the sale of the remaining property in Queensland and discharge of liabilities to the ANZ Bank.  There is no financial disadvantage to the husband in that the funds will come from a secured interest bearing account to be held pending the outcome of this case. 

14. On balance and having regard to the evidence before me, the financial circumstances of the parties and the conduct and disposition of these proceedings, it is appropriate for an order to be made for a sum of $30,000 to be paid from the net proceeds after sale of the remaining Queensland property to the wife's solicitors to expend on behalf of the wife.  First, that will be in payment of the sum of $13,600 approximately, plus interest, as the current arrears of bills rendered, and otherwise to facilitate the further hearing of this matter.

15. I do not accept the information before the court in paragraph 8 of the wife's affidavit as to quantum.  I have had that somewhat lengthy discussion with counsel in the course of these proceedings and it would seem that there is no request for any sum in excess of $30,000.  I might add that I did initially consider $25,000, but, to avoid any return hearing of any subsequent Barro application, I will make an order for $30,000.  I make it as a condition of the order that the characterisation of those moneys will be determined by the trial judge, presumably myself, at the defended hearing. 

16. Therefore and by way of explanation, there has been no argument developed today as to whether such moneys will be received in whole or in part by way of a partial property settlement, a spousal maintenance component or otherwise exclusively as security for costs.  Those matters should be the subject of evidence to be filed and consideration to be given to those issues and ultimately a determination made at final trial.

17. I am satisfied that, if there is a balance of up to $1.8 million of funds in Australia, then $30,000 is an appropriate and somewhat restricted sum within the availability of cash moneys in Australia.  The wider issue in this case ultimately remains as to the assets and liabilities outside of Australia and what are actual and factual and can and will be proved.  I make no further comment, save to emphasise to the wife's legal practitioners that there does need to be proper and complete evidence before the court. 

18. This order must be served upon the husband by the wife's solicitors, as will notice be given to him by them in writing of the adjourned hearing date of 7 August 2009 at 10.00 a.m. for case management and/or further interim orders.  That will not be a final defended hearing date.

19. Mr Robinson sought a further order today in extension of paragraph 6 of the orders of 16 February 2009.  On that occasion I was somewhat reluctantly persuaded to request but not order a Chief Government Registrator to forward to the wife information of and related to five Russian properties.  Evidently that request was unsuccessful, and I was today asked to extend that request to the chairman of a body or organisation which has some judicial structure or operation in Russia. 

20. I had no affidavit or other material before me in that regard and I declined to make any such other request.  It is up for the wife to instigate or pursue litigation in Russia, to establish facts and information of a financial nature which would be of assistance to her cause. 

21. For those very brief reasons and on an interim basis and in an to endeavour to progress this matter, I will therefore pronounce orders giving effect to these extempore reasons.