Russo and Russo and Ors
[2020] FCWA 182
•15 OCTOBER 2020
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: RUSSO and RUSSO & ORS [2020] FCWA 182
CORAM: O'BRIEN J
HEARD: 25 AUGUST 2020 & 27 AUGUST 2020
DELIVERED : 15 OCTOBER 2020
FILE NO/S: PTW 2207 of 2020
BETWEEN: MRS RUSSO
Applicant
AND
MR RUSSO
First Respondent
AND
COMPANY A as Trustee for Trust A
Second Respondent
AND
COMPANY B
Third Respondent
Catchwords:
INTERIM PARENTING – Where it is common ground that the children should continue to live with the wife and spend time with the husband – Where the only issue is whether that time should be subject to the children's wishes – Turns on its own facts – Reasons in short form.
INTERIM PROPERTY – Where the wife seeks the payment of amounts totalling $1.1 million both to fund the litigation and to purchase a property – Where the wife had previously sought the payment of $90,000, but amended her application at a late stage to seek orders against third parties so as to make the funds sought available - Consideration of the question of whether orders can be made in reliance on s 90AE of the Family Law Act 1975 (Cth) on an interim basis – Whether interim orders can properly be described as effecting a division of property between the parties to the marriage – Where in any event the orders proposed, which would require third parties to borrow in order to facilitate the payments sought, are not just and equitable – Orders made as between the primary parties only.
INTERIM SPOUSAL MAINTENANCE – Where the husband does not have the capacity to make the periodic payments sought by the wife – Where the wife's need for maintenance is established – Orders as between the primary parties for the payment of lump sums left to be characterised by the Trial Judge.
INJUNCTIONS – Where the wife seeks orders compelling the third respondent to pay rent at a set market rate to the second respondent to facilitate payments by the second respondent to the primary parties via a trust – Where the wife further resists the husband's proposal that a holiday property be rented out and the rent applied to service the debt secured against it – Where the wife seeks that the holiday property be left vacant so that she and the children may make use of it at any time – Wife's application for orders against the third respondent dismissed – Orders in relation to the holiday property made as proposed by the husband.
Legislation:
Child Support Assessment Act 1989 (Cth)
Family Law Act 1975 (Cth)
Category: Reportable
Representation:
Counsel:
| Applicant | : | Mr Berry SC |
| First Respondent | : | Mr Wilson SC on 25 August 2020, Ms Hynes on 27 August 2020 |
| Second Respondent | : | Mr Dowding SC |
| Third Respondent | : | Mr Dowding SC |
Solicitors:
| Applicant | : | Klimek & Wijay |
| First Respondent | : | DCH Legal Group |
| Second Respondent | : | Kerr Fels |
| Third Respondent | : | Kerr Fels |
Case(s) referred to in decision(s):
AC and Ors & VC and Anor (2013) FLC 93-540
B Pty Ltd & Ors & K and Anor (2008) FLC 93-380
Banks & Banks (2015) FLC 93-637
Brown and Brown (2007) FLC 93-316
Chester v Chester (1995) FLC 92-612
Dundas & Blake (2013) FLC 93-552
Eaby & Speelman (2015) FLC 93-654
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471
Gabel & Yardley (2008) FLC 93-386
Goode and Goode (2006) FLC 93-286
Hall & Hall (2016) FLC 93-709
In the marriage of Redman and Redman (1987) FLC 91-805
Maloney v The Queen (2013) 252 CLR 168
McCloy v New South Wales (2015) 257 CLR 178
Paggett & Cable (2015) FLC 93-670
Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578
SS & AH [2010] FamCAFC 13
Strahan & Strahan (interim property orders) (2011) FLC 93-466
Vallans & Vallans (2019) 60 Fam LR 193
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED
IT IS NOTED that publication of this judgment by this Court under the pseudonym Russo & Russo has been approved by the Family Court of Western Australia pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
1[Mrs Russo] (“the wife”) and [Mr Russo] (“the husband”) (together, “the primary parties”) are unable to agree the parenting arrangements for their children, or the financial arrangements to be made following the breakdown of their marriage.
2The husband and his parents [Mr Russo Snr] and [Mrs Russo Snr] are the directors of [Company A]. Company A is the trustee of [Trust A], and is the second respondent in the proceedings.
3The husband’s parents are the only shareholders of [Company B], which operates a business and is the third respondent in the proceedings. The business is operated on a farm in [Town A] (“the first farm”) of which the husband’s parents are the joint registered proprietors.
4The second respondent owns adjacent farming land (“the second farm”). The third respondent pays rent to the second respondent for the use of the land; as will be seen, there is a dispute arising from changes in rental arrangements since the separation of the primary parties.
5The primary parties are joint trustees of the [Russo] Family Trust (“the family trust”). In that capacity, they own 50 of the 100 units issued in the unit trust. The other 50 units are owned by the husband’s parents as trustees for a family trust under their control.
6The family trust is owed significant amounts by the second respondent. The rent paid by the third respondent has historically represented almost the entire income of the second respondent.
The proceedings and final relief sought
7The proceedings are in their early stages, having been commenced by the filing of the wife’s initiating application on 25 March 2020. In that application, she seeks final orders for alteration of property interests:
(a)requiring the husband to discharge the mortgage secured against a jointly owned property in [Suburb A], and transfer that property to her;
(b)requiring the second respondent to pay to the family trust the amount required to discharge its debt to that trust;
(c)obliging her to transfer to the husband her right to receive any monies from various entities, including the family trust, and requiring the husband to indemnify her in relation to any tax liabilities arising from her involvement in any of the entities, and any claim that might be made against her by them;
(d)requiring the husband to otherwise pay her such sum as is necessary to see her receive 70 per cent of the “net matrimonial assets” inclusive of the legal and equitable interests of the primary parties in the various entities; and
(e)requiring the third respondent to pay rent at a commercial market rate to the second respondent for the use of its farming land pending the husband’s compliance with that order.
8The wife also seeks final orders for ongoing spousal maintenance, and departure from the administrative assessment of child support payable for the children of the marriage, [Child A] born [in] 2008, [Child B] born [in] 2014 and [Child C] born [in] 2016.
9The wife filed particulars of her claim against the second and third respondents on 21 May 2020. She asserted that:
(a)the second respondent owed $5,517,696 to the family trust as at 30 June 2019;
(b)her unpaid present entitlements in the family trust as at that date were $2,778,858;
(c)the husband’s unpaid present entitlements in the family trust as at that date were $2,738,838;
(d)those unpaid present entitlements together represent “the major identifiable legal interest” of the primary parties in property;
(e)the origin of the unpaid present entitlements is the rent paid by the third respondent to the second respondent for use of the second farm, and the subsequent distributions by the second respondent to the family trust;
(f)the amounts distributed by the second respondent to the family trust are not fully paid, such that the second respondent has accumulated the liability to the family trust referred to above; and
(g)the primary parties cannot effectively access their unpaid present entitlements without either the cooperation of the second respondent, or orders being made to require the second respondent to pay monies owed by it to the family trust.
10The husband filed a response on 29 May 2020. He indicated that he did not agree to any of the final orders sought by the wife. He asserted that he was unable to particularise the financial relief sought by him as he was “unable to quantify the net pool of assets and resources available to him and the [wife]” until the second and third respondents had responded to the wife’s claim, and particularised any claim they might make, and until the wife had further particularised the orders which she sought.
11The husband also sought parenting orders in his response. He proposed orders for the children to live with the wife and spend time with him, and various specific issues orders.
12The wife filed a reply on 30 June 2020, setting out the parenting orders she sought. She proposed orders for Child A to spend time with the husband according to his wishes, and for the younger boys to spend time with the husband on alternate weekends. She sought various orders in relation to school holidays and specific issues orders.
13The second and third respondents both filed responses on 17 July 2020. Both sought dismissal of the wife’s application insofar as it sought orders against them.
14It is against that background that a number of interim disputes require determination. The interim financial disputes were heard on 25 August 2020, and the interim parenting disputes were heard on 27 August 2020. With the agreement of the primary parties, orders in relation to the interim parenting disputes were published from chambers later on 27 August 2020, without accompanying reasons, on the basis that reasons would be included in this judgment.
Parenting
The parameters of the interim parenting dispute
15On 8 June 2020, orders were made to list the interim proceedings for mention on 20 July 2020, and requiring the primary parties to personally confer and file by 15 July 2020 a joint Minute setting out any orders that could be made by consent. The primary parties complied with that order, and orders were made by consent until further order on 20 July 2020 for:
(a)all three children to live with the wife;
(b)Child A to spend time with the husband according to his wishes;
(c)the wife to encourage the younger boys to spend time with the husband;
(d)agreed handover arrangements, orders for exchange of information, and mutual non-denigration injunctions; and
(e)the parties to follow any recommendation that might be made by the Single Expert Witness (“SEW”) in the case as to any courses they should attend.
16At that point, the parties had not agreed as to the SEW to be appointed, or as to the terms of reference. By the time of the hearing on 27 August 2020, those matters had been resolved. The parties jointly appointed Dr [P] as SEW, and his report has just been published and distributed to the parties. The report was not available at the hearing, or prior to orders being made.
17The parties also agreed that the younger boys should spend time with the husband pending the publication of the SEW report each alternate weekend from 4.00 pm on Friday until 4.00 pm on Sunday. Their disagreement in that regard arose as the wife proposed that time only take place subject to the children’s wishes; the husband did not agree.
18At the time the joint Minute was filed, the wife sought injunctions restraining the husband from leaving the children in the sole care of his new partner [Ms M], and from consuming alcohol beyond the legal driving limit while the children are in his care, and for 24 hours prior. Those matters were not pressed by her counsel at the hearing.
19There was also a dispute between the parties as to whether, and if so how, the wife should be permitted to contact the children during their time with the husband.
Relevant legal principles
20The parties were married. The proceedings fall to be determined pursuant to the Family Law Act 1975 (Cth) (“the Act”). The court must be guided by the objects of Part VII of the Act and the principles underlying them.
21Section 61DA requires the court, when making a parenting order, to apply a presumption that it is in the best interests of the children for their parents to have equal shared parental responsibility. The presumption does not apply if there are reasonable grounds to believe that a parent of the children, or another relevant adult, has engaged in abuse of the child or family violence.
22Section 61DA(3) provides that the presumption applies when the court is making an interim order, unless the court considers it would not be appropriate in the circumstances. The section provides a discretion “not to be exercised in a broad exclusionary manner, but only in circumstances where the limited evidence may make the application of the presumption, or its rebuttal, difficult”.[1]
[1] Goode and Goode (2006) FLC 93-286 at 80,885.
23If the presumption applies, it may still be rebutted by evidence that satisfies the court that it would not be in the best interests of the children for the parents to have equal shared parental responsibility. The clear legislative intent is that the statutory presumption is of central importance. Explicit and cogent reasons are required to displace the presumption.[2] There must be convincing proof as to the children’s best interests for s 61DA(4) to be activated to rebut it.[3]
[2] Dundas & Blake (2013) FLC 93-552; Paggett & Cable (2015) FLC 93-670 at [39].
[3] Vallans & Vallans (2019) 60 Fam LR 193.
24In the present case, neither party sought interim orders in relation to parental responsibility. It is unnecessary, therefore, to consider further the matters mandated by s 65DAA.
25In determining what is in a child’s best interests, the court must consider the matters set out in s 60CC. While those matters are divided in the legislation into primary and additional considerations, the primary considerations do not necessarily outweigh any combination of the additional considerations. The issues that are joined between the parties will dictate which s 60CC factors are relevant.
26The requirement to consider each matter set out in s 60CC does not mean that each factor must be expressly discussed in a judgment, where the factor in question has no sufficient relevance to displace the determinative significance of factors specifically discussed.[4]
[4] Banks & Banks (2015) FLC 93-637 at [52].
27The circumspection with which findings on an interim hearing must be couched is well-established, and remains “no matter how firmly a judge’s intuition may suggest that the finding will be borne out after a full testing of the evidence”.[5] That said, in interim proceedings the court is frequently required to “weigh the probabilities of [the] competing claims and the likely impact on [the] children in the event that a controversial assertion [was] acted upon or rejected”.[6] Evidence may not simply be “disregarded” merely because facts are in dispute, leaving the interim determination to be made “solely by reference to the agreed facts”.[7]
[5] SS & AH [2010] FamCAFC 13 at [88].
[6] Ibid at [100].
[7] Eaby & Speelman (2015) FLC 93-654 at [18].
28Section 69ZL permits the Court to give reasons in short form for decisions in relation to interim parenting orders.
Reasons
29As already noted, interim parenting orders were published from chambers on 27 August 2020. In short, I rejected the wife’s proposition that the time to be spent by the younger boys with the husband pending the publication of the report of the SEW should be subject to their wishes. I also made specific orders giving the wife liberty to telephone the children briefly on one occasion each Saturday afternoon or evening that they are in the husband’s care, and requiring the husband to facilitate both that call and any call the children might wish to initiate, with supportive orders regulating the nature of the wife’s communication with the children during those calls.
30These are the brief reasons for the making of those orders.
31There are a number of matters about which the parties give conflicting evidence; only some of those matters represent genuine factual disputes. The balance are predominantly reflective of different perceptions, or in some cases evidence being given in a selective manner. By way of one example, the wife said in her Case Information Affidavit that, inferentially by his choice, between Christmas 2019 and 25 January 2020 the only time the husband spent with the children was seven hours on 7 January 2020. In response, the husband said that the wife had unilaterally taken the children to Suburb A on holidays for the whole of the relevant periods either side of that date.
32Given the narrow parameters of the matters which required determination on an interim basis, nothing further need be said about those factual disputes.
33I record that, as neither party sought interim orders relating to parental responsibility, I did not consider it appropriate to apply the presumption in s 61DA(1) in making the interim orders.
34It is common ground that the wife was the primary carer for the children prior to separation, and that the husband worked full-time and was actively involved in sporting activities outside his working hours. The dispute between the parties as to the extent of his working hours is irrelevant for present purposes.
35The wife alleges that in the latter stages of the marriage in particular the husband drank to excess, was verbally abusive towards her, and on one occasion was physically aggressive. The husband admits that his drinking increased late in the marriage, says that both parties were loud and aggressive in their verbal arguments, and denies any physical aggression.
36It is common ground that following separation the children initially spent time with the husband on an informal arrangement. At first, they spent Friday nights with him; that then progressed to them spending alternate weekends with him from Friday afternoon to Sunday afternoon.
37It is also common ground that from early February 2020 Child A’s relationship with the husband deteriorated. That appears to coincide with the husband commencing cohabitation with his new partner, Ms M. The husband accepts that, at present at least, Child A should only spend time with him in accordance with his wishes.
38On the husband’s case, since about April 2020 [Child B] has become upset after receiving telephone calls from the wife. He says that on 18 April 2020, after a call from his mother, Child B said that he wanted to “go home”. On his evidence, Child B later changed his mind but, having made arrangements with the wife to return him, the husband persuaded him to go. He says further that on 2 May 2020, again after a call from the wife, Child B said that he wanted to “go home” but recovered soon after and returned to the wife as usual the following day.
39On the husband’s evidence, on 15 May 2020 at handover Child B said to the wife that he did not want to go to the husband. On his evidence, the wife told Child B that she was “sure [that he would] have fun things to do at dad’s”, but that Child B still did not want to go. The husband did not force the issue. He says that he sent the wife a text message the following day to see if she would bring Child B to him and that she replied: “I asked him but he doesn’t want to come”.
40The wife agrees that Child B has shown reluctance to go to the father’s home. Describing the weekend commencing 13 June 2020, she said:
“[Child B] did not want to go to [the husband’s home]. I did not compel him to… [Child B] has since said to me “Dad won’t let me come home”, and “we aren’t allowed to talk to you at Dad’s house”. I suspect this is one of the main reasons why [Child B] does not want to stay at his dad’s house”.
41The wife says that she seeks orders for the children to “continue to spend [two] nights” per fortnight with the husband, but that she does not want to compel them to do so if they do not want to.
42In submissions, Senior Counsel for the wife referred to the children’s clear connection with her, and noted the apparent significant changes experienced since the husband commenced cohabitation with Ms M. He referred further to the wife’s evidence as to Child B becoming more clingy and emotional in recent months, and seeking to insist on Child A accompanying him to the husband’s home. He emphasised his client’s concern about the impact on Child B of being compelled to spend time with the husband, and her uncertainty as to what is causing his present distress.
43Counsel for the husband submitted that evidence as to the children’s wishes is presently scant. She referred to evidence indicating a significant level of discussion between the wife and the children of a nature that could only make them anxious, submitting that when the wife has had a chance to assuage the children’s anxieties she has not done so. She referred to the husband’s evidence as to the children enjoying their time with him, particularly if it was not interrupted.
44Counsel for the husband also made what was, with respect, the obvious point – that Child B has only just turned six years old and Child C was, at the time of the hearing, only three. She submitted that given their ages and level of maturity little weight should be given to their views, and orders should not be made effectively making them responsible for the maintenance of their own relationship with the husband.
45In short, I accepted that submission. It will rarely, if ever, be appropriate to make orders for children of six or three to spend time with a parent operative only subject to their wishes. It is the wife’s case that a relationship with the husband is in the children’s best interests; on the evidence presently available there was nothing to persuade me that the wife should not be required to exercise the parenting skills necessary to manage any displayed resistance or distress by Child B in particular.
46By the same token, given the ages of the children and the dynamic between the parents, I did not consider it appropriate to simply leave it to the children to initiate calls to the wife while in the husband’s care.
47I record that I considered the relevance to the narrow dispute between the parties of each of the primary and additional considerations set out in the legislation. Self-evidently, only the matters referred to above were relevant to the determination of that dispute.
48As already noted, the preparation of a report by the SEW was in train at the time of the hearing. I gave the parties liberty to seek a relisting only after publication of that report.
Financial
The parameters of the interim financial dispute
49At the commencement of the hearing on 25 August 2020, a number of preliminary matters were argued and addressed. For the sake of clarity, those matters will be summarised later in these reasons.
50The wife sought interim orders in the terms of an amended Minute filed on 27 July 2020.
51She sought interim spousal maintenance in the sum of $2,378 per week, less the amount required to be paid by the husband as the minimum repayment on the loan secured against the Suburb A property, his payment of rates and taxes for that property, and the amount paid by him by way of assessed child support. In addition to the required payments on the Suburb A loan, rates and taxes, she sought that he make all required payments to maintain the registration of her [luxury] motor vehicle.
52She sought interim orders requiring the following steps to be taken:
(a)payment by the second respondent to the family trust of the amount of $500,000 (“the first lump sum”) in partial repayment of the relevant beneficiary account;
(b)payment by the family trust to her of the amount so received, to be treated as a partial repayment of her unpaid present entitlement;
(c)payment by the second respondent to the family trust of a further amount of $600,000 (“the second lump sum”) in partial repayment of the relevant beneficiary account; and
(d)payment by the family trust to her of the amount so received, to be treated as a partial repayment of her unpaid present entitlement.
53Initially, a distinction was drawn in the wife’s application between the first lump sum and the second lump sum. The first lump sum was sought either pursuant to ss 79 and 80(1)(h) of the Act, or alternatively (in whole or in part) pursuant to s 117(2). The second lump sum was sought solely pursuant to ss 79 and 80(1)(h).
54At the hearing, Senior Counsel acknowledged that the alternative ground proposed for the payment of the first lump sum could not appropriately be pursued, and that both lump sums were sought by reference to ss 79 and 80(1)(h) and Part VIII AA of the Act.
55The wife sought further orders as to the rent to be paid by the third respondent to the second respondent in relation to the use of the second farm. She proposed orders whereby:
(a)in the absence of agreement as to the appropriate market rate of rent for the second farm, the parties take the necessary steps to appoint a SEW as to that issue;
(b)in those circumstances, the third respondent pay rent to the second respondent at the rate assessed by the SEW as the appropriate market rate for the second farm;
(c)pending any such assessment, the third respondent pay rent to the second respondent at not less than the rate that was being paid prior to the separation of the primary parties;
(d)in either case, the second respondent continue to, for accounting and taxation purposes, “distribute 50 per cent of the net rental income to the family trust”;
(e)the family trust continue to, for accounting and taxation purposes, evenly distribute those distributions between the primary parties; and
(f)the second respondent utilise the rental income actually received from the third respondent by paying quarterly PAYG instalments for the primary parties, and otherwise paying the balance into the [Bank A] loan secured against the second farm.
56The wife sought an order pursuant to s 116(1)(b) of the Child Support Assessment Act 1989 (Cth) (“the Assessment Act”) granting her “leave” to pursue at trial a child support departure order.
57She further sought an order giving her liberty to sell the luxury motor car in her possession and deposit the net proceeds into the redraw account on the home loan secured by mortgage against the Suburb A property.
58The husband filed an amended Minute of proposed interim financial orders on 4 August 2020. In that Minute, he sought:
(a)the discharge of consent orders made without admission on 16 April 2020 requiring him to pay interim periodic spousal maintenance in the terms sought by the wife as set out above, and discharge of the associated order giving him liberty to access the redraw account for that purpose;
(b)orders appointing him as sole trustee to lease the [Suburb A] property and apply the rental income from it to costs associated with that property, including the loan secured against it;
(c)orders appointing him as sole trustee to sell the [Suburb A] property, with the net proceeds of sale to be divided equally between the primary parties, with the wife’s share of the proceeds to be characterised by the trial judge if not agreed, and the husband’s share to be characterised as an advance on his ultimate property entitlements;
(d)in the event that the [Suburb A] property is not to be sold on an interim basis, orders for the parties to redraw the amount available on the redraw account, and pay the whole of those funds to the wife on the basis that the payment be characterised by the trial judge if not agreed;
(e)orders for the wife to deliver up the [luxury motor vehicle] to him for him to manage its sale, with the net sale proceeds to be paid to the wife and again to be characterised by the trial judge if not agreed;
(f)orders for the third respondent to pay the second respondent market rent for the second farm in an amount as agreed, or determined by the court following the publication of the relevant SEW report;
(g)an order for the parties to have liberty to apply in respect of a historical reconciliation of the amounts paid by the third respondent to the second respondent, and the amounts each maintains should have been paid;
(h)an order that “subject to the determination of its board” the second respondent distribute 50 per cent of the net rental income from the second farm to the family trust, and utilise the rental income actually received from the third respondent in payment of the quarterly PAYG instalments for the primary parties, to pay its own expenses, and otherwise pay the balance into the [Bank A] loan secured against the second farm; and
(i)an order requiring the family trust, for accounting and taxation purposes, to continue to distribute the distributions received from the second respondent evenly between the primary parties.
59The second and third respondents each filed Minutes of orders sought on 11 August 2020. Each sought the dismissal of all orders sought by the primary parties which affected them.
60Between the filing of the various documents and the hearing, one minor agreement was reached; the wife indicated that she had no objection to the husband arranging the sale of the luxury motor vehicle provided that he arranged for someone to collect it from her.
Relevant legal principles
Interim lump sum payments for litigation funding or otherwise
61As will be outlined in more detail below, the wife seeks lump sum payments in part to fund the litigation, and in part for other purposes.
62An order for the provision of a lump sum for litigation expenses may be grounded in one or more of the powers to award spousal maintenance, make orders for the interim alteration of property interests, or make orders as to costs.[8]
[8] Strahan & Strahan (interim property orders) (2011) FLC 93-466 (“Strahan”).
63 It is essential that the relevant head of power be clearly identified, as it is “the source of power that determines the necessary preconditions and relevant considerations for making the order”.[9]
[9] Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578 at [30] ("Paris King Investments").
64Where, as in this case, the application is grounded in the power to make interim orders for the alteration of property interests, there are two stages to the hearing. The first requires the court to resolve whether to exercise the relevant power before a final hearing, bearing in mind that although the power under s 79 should ordinarily be exercised once only, circumstances (which need not be compelling) may arise where the power is exercised before there can be a final hearing. The second requires the Court, having determined to exercise the relevant power, to undertake consideration of the matters in s 79(4). That consideration may, however, be brief particularly in circumstances where it is likely that the eventual entitlement of the applicant will be sufficient to cover the advance.[10]
[10] Strahan at [137].
65Self-evidently, the applicant should have “at least an arguable case for substantive relief which deserves to be heard”.[11] That said, the mere fact that upon a final hearing the applicant would receive the property being sought, or a greater amount, is of itself not sufficient to establish an appropriate case for an interim order.[12]
[11] Paris King Investments at [30]-[31]; Chester v Chester (1995) FLC 92-612 at 82,107.
[12] Strahan at [139].
66To the extent the order is sought to fund the litigation, a position of relative financial strength on the part of the respondent, and the involvement in the case of complex financial issues requiring expert reports, will add weight to the case for an interim order. A comparison of the capacity of each of the parties to meet their own litigation expenses, and a consideration of their financial circumstances generally, will also be relevant. Evidence as to the applicant’s incurred and likely future costs of the litigation will generally be required, as may be a consideration of the bona fides of the interim application.[13]
Spousal maintenance
[13] Ibid at [138] and [141].
67Section 72(1) of the Act provides that “a party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately… having regard to any relevant matter referred to in subsection 75(2)”.
68Any such liability is then “crystallised by the making of an order under s 74(1)”[14] which provides that the court may make such order as it considers proper.
[14] Hall & Hall (2016) FLC 93-709, 81,450 at [4] (“Hall”).
69In exercising the power conferred by s 74(1), the court is required to take into account only those matters referred to in s 75(2).
70The consideration of the capacity of a party to self-support “adequately” does not refer to support merely at a subsistence level. Adequacy is not to be determined according to any fixed or absolute standard, and where possible both spouses should continue to live after separation at the level which they previously enjoyed if that is reasonable, and the resources available to them are sufficient to maintain that standard.
71It is not necessary for an applicant to “use up all capital” in order to satisfy the requirement of an inability to self-support adequately. That said, an applicant is not entitled to live at a luxurious level simply because a respondent is very wealthy.[15]
[15] Brown and Brown (2007) FLC 93-316 at [50].
72On an application for interim maintenance orders, “the evidence need not be so extensive and the findings not so precise”[16] as on an application for a final order, but the court cannot make such an order without finding on the balance of probabilities that the threshold requirement in s 72(1) is met, having regard to any relevant matter referred to in s 75(2).[17]
[16] In the marriage ofRedman and Redman (1987) FLC 91-805 at 76,081.
[17] Hall, 81,450 at [8].
73The reference to “financial resources of a party” in s 75(2)(b) “must involve something more than the 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”. It refers 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”.[18]
Third parties
[18] Ibid, 81,455 at [54].
74Section 90AE of the Act is in the following terms:
90AE Court may make an order under section 79 binding a third party
(1) In proceedings under section 79, the court may make any of the following orders:
(a) an order directed to a creditor of the parties to the marriage to substitute one party for both parties in relation to the debt owed to the creditor;
(b) an order directed to a creditor of one party to a marriage to substitute the other party, or both parties, to the marriage for that party in relation to the debt owed to the creditor;
(c) an order directed to a creditor of the parties to the marriage that the parties be liable for a different proportion of the debt owed to the creditor than the proportion the parties are liable to before the order is made;
(d) an order directed to a director of a company or to a company to register a transfer of shares from one party to the marriage to the other party.
(2) In proceedings under section 79, the court may make any other order that:
(a) directs a third party to do a thing in relation to the property of a party to the marriage; or
(b) alters the rights, liabilities or property interests of a third party in relation to the marriage.
(3) The court may only make an order under subsection (1) or (2) if:
(a) the making of the order is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; and
(b) if the order concerns a debt of a party to the marriage—it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full; and
(c) the third party has been accorded procedural fairness in relation to the making of the order; and
(d) the court is satisfied that, in all the circumstances, it is just and equitable to make the order; and
(e) the court is satisfied that the order takes into account the matters mentioned in subsection (4).
(4) The matters are as follows:
(a) the taxation effect (if any) of the order on the parties to the marriage;
(b) the taxation effect (if any) of the order on the third party;
(c) the social security effect (if any) of the order on the parties to the marriage;
(d) the third party’s administrative costs in relation to the order;
(e) if the order concerns a debt of a party to the marriage—the capacity of a party to the marriage to repay the debt after the order is made;
Note: See paragraph (3)(b) for requirements for making the order in these circumstances.
Example: The capacity of a party to the marriage to repay the debt would be affected by that party’s ability to repay the debt without undue hardship.
(f) the economic, legal or other capacity of the third party to comply with the order;
Example: The legal capacity of the third party to comply with the order could be affected by the terms of a trust deed. However, after taking the third party’s legal capacity into account, the court may make the order despite the terms of the trust deed. If the court does so, the order will have effect despite those terms (see section 90AC).
(g) if, as a result of the third party being accorded procedural fairness in relation to the making of the order, the third party raises any other matters—those matters;
Note: See paragraph (3)(c) for the requirement to accord procedural fairness to the third party.
(h) any other matter that the court considers relevant.
75The application of the broad terms of s 90AE(2) is expressly limited by the conditions in s 90AE(3), and by reference s 90AE(4).
76The limitations expressed in s 90AE(3)(b) and (c) are self-explanatory, and readily satisfied by factual enquiry.
77The limitation expressed in s 90AE(3)(a) requires careful attention in each case. It requires the court to be satisfied that the making of the order is either reasonably necessary to effect a division of property between the parties to the marriage, or reasonably appropriate and adapted to meet that purpose.
78Firstly, the singular nature of the identified purpose, to effect a division of property between the primary parties, must be borne in mind.
79Secondly, the court must consider whether the making of the order is reasonably necessary, or reasonably appropriate and adapted to meet that purpose. Both phrases should be read together with the balance of s 90AE(3)(a) as providing the “requisite sufficient connection between the making of the order… and the core of the marriage and matrimonial causes power”, with that construction “meet[ing] the test which marks the limits of the power and discretion of the Court”.[19]
[19] AC and Ors & VC and Anor (2013) FLC 93-540 at 87,134.
80“Reasonably necessary” does not mean “essential”, without any qualifier; rather, the making of the order will meet that criterion if there is no clear and reasonably practicable means of achieving the same purpose.
81If not satisfied that the making of the order is reasonably necessary, the court must consider whether it is reasonably appropriate and adapted to effect a division of property between the primary parties.
82While in a different context the use of the expression “reasonably appropriate and adapted” has been “criticised as cumbersome and lacking in clarity”,[20] in my view it involves “proportionality testing” of the nature described by the plurality in McCloy v New South Wales.[21] That in turn involves satisfaction that the making of the order is suitable to meet the singular purpose, and a consideration of other reasonably practicable means of achieving that purpose without impingement on the rights of the third party in question. Where such other reasonably practicable means are available, the court should not readily be satisfied that orders affecting the rights of third parties should be made.
[20] Maloney v The Queen (2013) 252 CLR 168 per Crennan J at [246].
[21] McCloy v New South Wales (2015) 257 CLR 178.
83Even if satisfied that the making of the order is reasonably necessary, or reasonably appropriate and adapted, to meet the singular purpose the court may only make the order if satisfied that in all the circumstances it is just and equitable to do so. The consideration of justice and equity self-evidently extends to the interests of the relevant third party.
84That requirement is reinforced by the requirement in s 90AE(3)(e) that the order only be made if the court is satisfied that “the order takes into account” the matters set out in s 90AE(4). The requirement that the order takes those matters into account is, in my view, distinguishable from the requirement elsewhere in the Act that, in considering whether to make a particular order, the court take into account specified matters.[22] The latter requires the Court to have regard to particular matters in exercising what is a broad discretion, and permits considered dismissal of the matters specified even if they are arguably relevant to that exercise. The former, in my view, requires an identifiable reflection in the order and its effect of the consideration of the matters specified.
[22] e.g. The Act s 79 (4).
85The matters set out in s 90AE(4) are directed to protection of the rights and interests of the third party affected by the order. Subsections (g) and (h) demonstrate the breadth of matters which may legitimately be considered.
Preliminary matters
86After the parties had conferred as ordered, detailed procedural orders were made on 20 July 2020 as to the further materials permitted to be filed by each of them.
87Notwithstanding those orders, on 19 August 2020 (four working days prior to the listed hearing) the wife filed an Application in a Case seeking leave to rely on an affidavit sworn by her solicitor on 11 August 2020 setting out details of her paid legal fees to date, and the solicitor’s estimate as to her future legal costs, and an affidavit of her father as to monies loaned to her. The affidavits were asserted by the wife’s lawyers in correspondence to “vouch [the wife’s] previously canvassed position in relation to a loan from her parents and her expected legal fees”.
88The wife’s affidavit sworn in support of the Application in a Case proffered no explanation for the affidavits in question not having been filed earlier, nor for the failure to raise a perceived need to file them at the time the procedural orders were made on 20 July 2020. The affidavit did no more than annexe the affidavits in question, and a letter from the wife’s solicitors to the solicitors for the other parties seeking agreement to them being filed. Otherwise, the affidavit simply stated that conferral had taken place and no agreement was reached.
89In the absence of even a token attempt to explain the matters just referred to, and in circumstances where I perceived no appreciable prejudice to the wife, I dismissed the application.
90The orders of 20 July 2020 permitted the wife to file and serve an amended Minute of the interim orders which she sought by 27 July 2020. Her amended Minute was filed in accordance with that order; as outlined in more detail below, the Minute reflected a substantial change in the relief sought by the wife in the financial case. She abandoned the relief previously sought against the husband by way of provision of funds for litigation, and sought the orders outlined earlier in these reasons; those orders primarily seek relief against the second and third respondents.
91In submissions filed on behalf of the husband on 20 August 2020, reference was made to that change in the wife’s approach. It was submitted that conferral between all parties had taken place on 10 July 2020 by reference to the relief then being sought, and that the procedural orders made on 20 July 2020 had similarly been made in the context of the applications then on foot, and after two separate conferrals and hearings. It was submitted that at no stage prior to the filing of her amended Minute did the wife foreshadow the significant and fundamental changes to the interim relief sought.
92The submissions filed on behalf of the husband also raised matters which might reasonably have been expected to be raised directly by the second and third respondents, if considered by them to be relevant. It was suggested that the fundamental change in the wife’s position, and in particular the late change whereby relief was sought directly against the second and third respondents, had compromised the ability of those parties to have proper opportunity to consider their position and be accorded procedural fairness. Correctly, in oral submissions Senior Counsel for the husband pointed out that the wife had changed the dynamics of the case substantially.
93While the observations made on behalf of the husband were accurate, nothing turns on them. That is so, as the second and third respondents filed affidavit material responding to the claims made by the wife against them prior to the hearing, and did not suggest that they were in any sense prejudiced by the hearing proceeding as scheduled on 25 August 2020. Consistently with that, Senior Counsel for the second and third respondents made oral submissions squarely addressing the relief sought by the wife, and expressly did not seek an adjournment.
94Finally, the wife filed an updated financial statement on 20 August 2020. The filing of that document was not contemplated by the orders made on 20 July 2020, and objection to it was taken by Senior Counsel for the husband. Bearing in mind the provisions of rule 13.06, and the duty of parties to promptly correct any erroneous evidence given, I permitted reliance on the document.
The evidence
The financial circumstances of the primary parties
95The wife’s evidence confirms that she is not presently employed. She is reliant on spousal maintenance and child support as her only sources of income. She is renting the home in which she and the children live, at a weekly rate of $450. Her claimed expenses exceed her income.
96Attached to the wife’s most recent financial statement is a schedule of what she asserts to be the property and superannuation available for division between the parties, and the extent of their liabilities. She estimates that the jointly owned Suburb A property has a value of approximately $450,000; as at 17 August 2020, the loan secured against that property was drawn down to $131,054, with just under $57,000 remaining available for redraw.
97The wife gives evidence as to the unpaid present entitlements of each of the primary parties in the family trust, as outlined earlier in these reasons. Apart from 2 motor vehicles, a trailer and a go-kart, the parties have no other assets of significance. They each have entitlements in their self-managed superannuation fund; on the wife’s evidence her member entitlement as at 30 June 2019 was $221,351 and the husband’s entitlement of the same date was $298,714.
98Apart from the Suburb A loan, each party has tax liabilities. On the wife’s evidence, their PAYG instalments have historically been paid from rent received by the unit trust. She says that she otherwise owes her parents $139,000, and has outstanding legal fees of just under $37,000.
99The wife’s financial statement also discloses as a claimed financial resource an interest of unknown value in the first farm. The wife says that she and the husband “had committed to a life on [that] property, and have invested substantial money to the improvement of that property, including building a home” on it.
100The husband’s financial statement filed on 29 May 2020 discloses his weekly income from employment by Company B as $1,827. He discloses various expenses paid by Company B on his behalf, totalling $762 per week. He discloses further that Ms M has her own income of $900 per week net, and covers her own expenses. His claimed expenses significantly exceed his income.
101The husband agrees with the wife’s estimate of the value of the Suburb A property at $450,000. He agrees also with her evidence as to the superannuation entitlements of the parties as at 30 June 2019, while saying that by 25 May 2020 his entitlement was approximately $305,656. He confirms the amount recorded as being owed to the family trust by the unit trust, and the beneficiary accounts of the primary parties.
Financial circumstances of the second and third respondents, the acquisition of the second farm, and the historical payment of rent
102Given the nature of the relief sought by the wife, and the express provision of s 90AE(4)(f), the financial circumstances of the second and third respondents are potentially relevant. The history of the payment of rent for the second farm is central to the dispute between the parties as to the payment of rent moving forward, and relevant to the other relief sought against the second and third respondents.
103The husband’s father filed affidavits on behalf of the second and third respondents on 17 July 2020 and 18 August 2020. He said that Company B employs over 50 people and operates from farming property in Town A, including the second farm which is leased from the unit trust. Initially, he and his wife operated Company B as a sole trading business, and then as a partnership. The company was incorporated in or about 1997.
104The properties comprising the first farm were acquired in various transactions between 1987 and 2003. The second farm was purchased in 2009 as referred to earlier in these reasons. The purchase price totalled $15,520,000; on his evidence, the entire sum for the purchase was advanced to Company A by way of loan from Bank A, with mortgages secured over both the first and second farms, a charge against water rights owned by he and his wife, an unlimited guarantee from Company B supported by a first registered charge, and personal guarantees from the primary parties.
105The husband’s father said that from the purchase of the second farm Company B “began paying interest only on the mortgage secured, and which was treated as a rent from Company B to the Unit Trust”. He said further that infrastructure and capital improvement costs paid by Company B since the purchase of the second farm exceed $15 million.
106He said that he “sought to fast-track the repayment” of that mortgage by way of paying increased rent to the unit trust, with those payments to be made only from Company B revenue.
107Exhibited to the affidavit of the husband’s father filed on 17 July 2020 is an email from the wife (who was then employed by Company B, and who in her affidavit sworn on 20 March 2020 described herself as having since 2006 “effectively been the ‘internal accountant’ for Company B”) to the then external accountant for the business. That email, dated 19 August 2011, advised that the wife had spoken to both the husband and his father recently, and that they both agreed with “the proposal of filtering the profits into Company A in order to pay the loan off”, with the only concern raised by the husband’s father being the ability to “get the extra money over” from cash flow. The wife observed that, having reviewed the Company B performance from the past year, she considered that Company B “could certainly handle the payment of $200K (inc GST) per month” in terms of cash flow, noting also that the resulting lease income for Company A would be $2,181,818 representing a return on investment of 14.5 per cent. She went on to observe: “that return on investment is still high but at least it is not the 20 [per cent] that we originally spoke about”. She proposed that Company B could “revisit the setup each financial year and make adjustments depending on how [Company B] are going”.
108Also exhibited to that affidavit was a subsequent email exchange between the wife and the accountant for the business. In response to the provision by the wife of Company B financial statements to the end of December 2017, the accountant suggested that she “consider reducing the [Company A] lease payments until prices pick up”. In response, the wife said that she was “keeping a close eye on the lease payments but in all honesty [she] would rather keep the payments as they have been, make a loss in Company B and take the money from the $3.5 [million] that we have in the bank account for Company B”, and that she did not intend that Company B would make “big losses” to keep the lease payments as they were, and would be “looking at it regularly to make sure”.
109In her affidavit filed on 18 August 2020, the wife said only that the latter comment was made “at a specific time during a financial year and should be read in that context”, saying that significant profits were always made by Company B and the cash deposit account of Company B continued to grow. She did not dispute the nature of the rental arrangements described.
110In his affidavit filed on 17 July 2020, the husband’s father said that between 2011 and 2019 the annual payments by Company B towards the mortgage on the second farm and characterised as rent increased from $1.089 million to $3.8 million. He said that he discussed the finances with the wife “from time to time”, emphasising that she was not to “touch the cash reserve” and that priority was to be given to Company B paying its bills. He said that he had been unaware of the accountant’s suggestion that the rental payments be reduced, and that in fact the wife caused the rent paid by Company B to increase from $3.4 million in 2017 to $3.8 million in 2019. In her responsive affidavit, the wife did not deny that evidence, while saying that she and the husband’s father had regular discussions about finances.
111It is the position of the husband’s father that he did not understand the accounting arrangements which followed the purchase of the second farm, nor that by adopting those arrangements obligations in the form of unpaid entitlements were being created. In response, the wife says that her father-in-law was “aware of the financial arrangements”, noting that he signed the relevant financial statements and tax returns each year and that those documents clearly recorded the amounts owing to the family trust. Those are matters which will no doubt be explored at trial, as may be any potential tax consequences of the arrangements undertaken by the parties to date.
112On the evidence of the husband’s father, the rent (excluding GST) paid by Company B in the 2020 financial year was $1.55 million. He proposes that the rent going forward should be $386,225 per annum, asserting that figure is struck by reference to advice as to an appropriate market rent. Having received that advice, rent is presently being paid at the rate of $38,500 per month. Prior to the receipt of that advice, the rental payments had been reduced at his direction to $10,000 per month from November 2019 to April 2020.
113In his more recent affidavit filed on 18 August 2020, the husband’s father says that if the orders sought by the wife requiring the second respondent to pay $1.1 million to the family trust are made, “the only mechanism available to achieve same is to increase the indebtedness of the [second respondent] to [Bank A]”, in turn increasing the exposure of Company B and other guarantors. He says that the second respondent does not hold significant cash reserves, and does not have the capacity to pay $1.1 million from liquid funds.
114The annual accounts for the second respondent for the year ended 30 June 2019 are exhibited to that affidavit. They reveal the lease income of $3.493 million in 2018, and $3.8 million in 2019, a debt to Bank A of $4.29 million, the liability to the family trust already referred to, and a liability of $5.614 million to the family trust controlled by the husband’s parents. They show very modest cash reserves.
115No evidence was adduced as to the financial circumstances of the third respondent. It was not contended on behalf of the third respondent that it did not have the capacity to meet the orders as to rental payments sought against it by the wife; rather, it was contended that the orders sought to the extent that they proposed payment (either retrospectively or prospectively) of rent above a commercial market rate inappropriately sought to increase the property available for division between the primary parties, at the third respondent’s expense.
116The evidence just outlined supports the following findings:
(a)it cannot be contended that the historical rent paid by the third respondent to the second respondent was in any sense set at a commercial market rate;
(b)the wife was at all material times well aware of that;
(c)the second respondent does not have the capacity to make the payments immediately sought by the wife without borrowing; and
(d)it may reasonably be inferred both from the evidence and from oral submissions made on behalf of the second and third respondents that there is the capacity to undertake relevant borrowing, and service the debt. The fact that there is that capacity does not, of course, mean that the borrowing should be compelled.
Other evidence of the wife relevant to the consideration of the spousal maintenance application
117On the wife’s evidence, she was employed as [an office administrator] at [a local business] prior to starting employment with Company B in approximately 2006. She worked full-time for Company B, including working from home when the children were young. She undertook what she describes as “accounting and export work”, and on her evidence was “effectively the ‘internal accountant’” for the business.
118The wife ceased her employment with Company B on separation in late October 2019. She received a lump sum in satisfaction of her leave entitlements in the sum of $34,225 on 6 November 2019.
119The wife has not sought employment since. She says that she has the primary responsibility for the care of the children, wishes to continue in that role, and is unable to work while Child C is not yet of school age. She points out that she has not worked outside the “family business” in approximately 14 years, and would, because of her commitments to the children, need to find employment in or near to [Town B].
120I am satisfied that the threshold requirement for an order for interim spousal maintenance is met, in that the wife is presently unable to support herself adequately. I reject any contention by the husband to the contrary, while acknowledging that his submission that the wife is failing to properly exercise her earning capacity was not vigorously pressed.
121As will be seen, it is unnecessary to consider further the question of the wife’s reasonable needs, and the expenses claimed by her. It is accordingly unnecessary to recount the evidence of the parties, or their submissions, in that regard.
Other evidence of the wife relevant to the application for interim lump-sum payments
122The wife has already incurred significant legal costs. As at 19 August 2020, her costs incurred with her solicitors totalled $124,159, of which $89,443 had been paid. She had paid $9,680 towards Senior Counsel’s fees, and owed Senior Counsel $2,200.
123Her solicitors estimate that she will incur further costs of between $40,000 and $95,000 arising from the interim hearing, anticipated work required around valuations and disclosure, and preparation for and attendance at a mediation style conference.
124I note without further comment, at this stage at least, my concern at the level of fees already incurred in the proceedings, which have already for example seen the filing of eight separate affidavits and financial statements sworn by the wife and involved the attendance of six solicitors and three Senior Counsel at the interim hearing on 25 August 2020.
125That observation having been made, the evidence to date clearly establishes a degree of complexity in the financial case.
126The wife has already borrowed $139,149 from her parents since separation. On her evidence, those monies have been applied to the payment of legal fees as already noted, plus $5,000 towards her expenses and $44,536 for the purchase of her new car in circumstances where she was uncomfortable continuing to drive the luxury motor vehicle particularly as its tyres were in poor condition.
127I accept that the wife has no identifiable means to repay those borrowings, or her ongoing legal fees, other than from any lump sum payment to be received by her by way of interim property settlement or otherwise.
128As it is common ground between the primary parties that the court should exercise power pursuant to s 79 prior to a final hearing, it is unnecessary to consider further the evidence of the wife which goes to that point. It is sufficient to say that the evidence supports the common position of the primary parties.
129Similarly, while the husband’s Form 1A Response unhelpfully contains no indication whatsoever as to what he would assert to be an appropriate division between the parties of whatever their existing interests in property might prove to be, it is unnecessary to refer further to the matters set out in s 79(4) given the evidence set out in his affidavit filed on 29 May 2020 as to the contributions of the parties. While it may transpire that there will be a dispute between the parties as to the appropriate assessment of their respective contributions, and in particular the effect on that assessment of contributions the husband would assert were made by his parents, I am comfortably satisfied that the wife will likely have an eventual entitlement sufficient to cover the advance which I propose to order.
130For reasons which will become apparent, it is unnecessary to consider whether she will have an eventual entitlement sufficient to cover the advance which she seeks.
Evidence relevant to the orders sought by the husband other than in relation to the second and third respondents
131The husband seeks the discharge of the interim order for spousal maintenance made without admission on his part on 16 April 2020. In short, he maintains that he does not have the capacity to pay periodic spousal maintenance in that amount or at all.
132The husband’s evidence as to his income and expenses is as set out earlier in these reasons. I find that he does not have the capacity to pay periodic spousal maintenance from his income. I will return to the question of whether he has the capacity to pay periodic or lump sum spousal maintenance from other resources.
133The husband seeks orders appointing him as trustee to sell the Suburb A property, and for the division of the proceeds of sale as set out earlier in these reasons. He seeks orders appointing him as sole trustee to lease that property pending sale, and for the application of rental proceeds towards the loan secured against the property.
134The evidence in that regard may be briefly stated.
135The property is a holiday home. The husband does not seek to retain it as part of the overall settlement between the parties and accordingly seeks its sale.
136The wife seeks to retain the Suburb A property as part of her overall entitlement. She resists the proposition that it should be rented out, saying in her affidavit filed on 11 August 2020 that she and the children have continued to use the property since separation in the same way as they did prior to separation. She says that she and the children typically holiday at the property “every school holidays” and that on occasion they would also spend weekends there during term if the children’s sporting commitments permitted. She says that she does not wish to see the property tenanted, even on an interim basis, so that she and the children can continue to use it in that manner.
137The determination of the dispute between the parties as to the disposition of the Suburb A property is inextricably linked with the determination of the central element of the wife’s application for payment of lump sum amounts. I will return to the issue of the Suburb A property later in these reasons.
The submissions of the parties, discussion and conclusions
The wife’s application for lump-sum payments
138Senior Counsel for the wife submitted firstly, and un-controversially, that the assets of the family trust should be treated as property of the parties. The deed establishing the family trust is in evidence. The primary parties are the trustees of the family trust and are the joint appointors. They are eligible beneficiaries, and as trustees have the relevant discretion to distribute the income of the trust, and to appoint the capital or any part of it for any one or more of the eligible beneficiaries.
139The only significant assets of the family trust are the 50 units held in the unit trust, and its beneficiary account in the unit trust of some $5.5 million as at 30 June 2019.[23] The only significant liabilities of the family trust are the beneficiary accounts of the primary parties, each in the sum of approximately $2.7 million as at 30 June 2019.
[23] Financial statements annexed to the affidavit of Mr Russo Snr filed 18 August 2020.
140Senior Counsel for the wife next submitted that, in the absence of any allegation that any of the parties were inappropriately induced to execute documents reflecting the arrangements between the second and third respondents, any application for rectification, or any allegation of execution by mistake, the parties are bound by those documents. While the authority cited in support of that submission[24] related to the execution of contracts in the form of loan agreements, and it might be suggested that a relevant distinction might be drawn in that regard, nothing turns on that for present purposes. I accept that in the context of an interim hearing on the papers, the liability of the unit trust to the family trust, and the liability of the family trust to the primary parties, should be accepted for the purpose of required interim determinations as being accurately reflected in the documents executed by the parties prior to them falling into dispute.
[24] Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471.
141The case for the wife proceeded on the basis that there is no relevant distinction between an application for interim property orders and an application for final property orders when considering whether relief dependent upon the application of s 90AE is available. Certainly, an order of either nature is made “in proceedings under s 79”, but that only takes the matter so far.
142The potentially more difficult question is whether an order made on an interim basis can properly be said to be reasonably necessary, or reasonably appropriate and adapted, to “effect a division of property between the parties to the marriage”.
143The power under s 79, whether exercised on an interim or final basis, is to make orders “altering the interests of the parties to the marriage” in property; the expression “division of property” is not used.
144An interim order made pursuant to s 79 must be capable of variation or reversal without resort to s 79A or an appeal,[25] and “capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power”.[26]
[25] Strahan at [136]; Gabel & Yardley (2008) FLC 93-386 at [69] and [72].
[26] Gabel & Yardley (2008) FLC 93-386 per Finn J at [126].
145Can it, therefore, properly be said that such an interim order “effect[s] a division of property between the parties to the marriage”? In my view, it cannot. Rather, such an order effects an interim alteration of the property interests of the parties in particular items of property, in a manner capable of variation or reversal. The words used in s 90AE, in my view, refer instead to the division of property which occurs consequent to the making of a final order for alteration of property interests. Further, in my view the expression “effect a division of property between the parties” itself connotes finality. In expressing that view I acknowledge that it may be open to argue that there is a relevant distinction between “a division of property between the parties” and “the division of property between the parties”.
146If I am correct in my expressed view, then the wife’s application insofar as it seeks interim orders which are dependent upon the operation of s 90AE must fail.
147The matter does not turn on that issue, however, as even assuming there is power to make the orders sought, for the reasons that follow I would not make them.
148Senior Counsel for the wife submitted, correctly in my view, that s 90AE(3)(b) is not relevant for present purposes, and that the third parties had been accorded procedural fairness as required by s 90AE(3)(c). He submitted further that s 90AE(4)(a) to (c) inclusive are not relevant for present purposes, as the payments sought could not trigger any relevant taxation effect on any party, being no more than payment of existing recorded liabilities, and there is no suggested social security effect. Again, I accept those submissions. There was no suggestion that either the second or third respondent would have any relevant administrative costs, and s 90AE(4)(e) is self-evidently not relevant.
149Properly, Senior Counsel for the wife acknowledged that s 90AE(4)(f) is, to use his word, a “key” consideration. The economic capacity of the second respondent to comply with the order proposed is squarely in issue.
150The husband’s father gave evidence that the second respondent does not hold significant cash reserves, and does not have the capacity to pay the $1.1 million sought from liquid funds. He said that the “only mechanism” by which that payment could be made would be by increasing the indebtedness of the second respondent to Bank A. The financial statements for the second respondent annexed to that affidavit supported that contention, which was unchallenged in any event.
151The husband’s evidence was that as at September 2019 the second respondent’s loan facility with Bank A had an available redraw of $2.09 million, and that at the time of swearing his affidavit on 29 May 2020 the redraw available was $1.617 million.
152Accordingly, it was submitted on behalf of the wife that the second respondent has the capacity to raise the necessary funds to make the payment sought.
153Properly, Senior Counsel for the wife acknowledged that I might have some misgivings about the size of the proposed borrowing, and the extent to which it might preclude further borrowings by the second respondent in the ordinary course of business. While the acknowledgement was appropriate, with no disrespect it was significantly understated.
154Section 90AE(4)(f) does not merely require consideration of the ability of the third-party to raise the money sought; it requires a broader consideration of the “economic or other capacity” of the third party to comply with the order in question.
155I have significant concerns as to the economic capacity of the second respondent to comply with the order sought, and service significantly increased borrowings, in circumstances where it is common ground that the income of the second respondent is almost exclusively comprised of lease payments from the third respondent, and that those lease payments have historically been inflated for the purpose of reducing the second respondent’s indebtedness as quickly as possible.
156Further, even if I am wrong in relation to the point earlier raised as to whether interim orders can be made in reliance on s 90AE, I must be satisfied that as between the primary parties the proposed interim order should, in the exercise of discretion, be made. Only if that question is answered in the affirmative do issues related to the reliance on s 90AE arise.
157It is at this point that the variable nature of the relief sought by the wife draws attention.
158In her initiating application, the wife sought no interim relief directed to payment of any lump sum by either of the third parties. Rather, she sought orders requiring the husband to pay her the sum of $90,000 by accessing the redraw facility on the Suburb A loan, or “from such other source as this Honourable Court deems fit”. While the application was expressed in the alternative, relying either on s 79 or s 117(2), in her supporting affidavit the wife expressly stated that she sought “an interim property order in the sum of $90,000”. She said further that she anticipated that the money would be “split evenly” between her legal fees and other “unforeseen lump sum living expenses pending a mediation style conference”. She went on to explain that while she did not know what funds the husband might have in personal bank accounts, the redraw facility on the Suburb A loan had available funds of $91,354. She noted also that the husband “could also cause the family trust to request from the [second respondent] a payment of $90,000 to be credited against” the relevant liability as between those two entities.
159In his response filed on 29 May 2020, the husband met that application by proposing an interim order whereby the funds available by way of redraw from the Suburb A loan would be paid to the wife, and characterised as an advance upon her ultimate property entitlements. On his evidence at that time, that would result in a payment to the wife of approximately $80,000.
160It was not until the filing of her amended Minute on 27 July 2020 that the wife abandoned that aspect of her claim, and turned her attention instead to the relief now sought. It bears repeating that having initially sought an interim lump sum payment of $90,000, only half of which was anticipated as necessary to meet legal fees, she now seeks $1.1 million.
161In her affidavit filed on 11 August 2020, the wife said that as her legal fees had accumulated, “the magnitude of the costs involved have dawned on [her] and [her parents]”. Having stated that she owes her parents $139,149, she went on to say that the amount of $150,000 proposed by the husband in his affidavit would not be sufficient for her to repay her parents and pay her ongoing legal fees. That is self‑evidently true, given the rate at which legal fees are mounting in this matter.
162In the next paragraph of the same affidavit, the wife said that she “also [sought] more funds than $150,000” because she would like to purchase the property she is presently renting. She went on to explain that her lease on that property expires in October, that the owner had previously considered selling the property, and that he is willing to sell it to her for $535,000. I accept her evidence that she is unable to independently borrow that sum.
163The wife’s evidence is that her solicitors anticipate that she will incur further legal costs in the range of $176,800-$271,800 if the matter proceeds to trial. Accordingly, if the matter proceeds to trial, and she repays her parents in full, and she purchases the home which she is presently renting, she will incur total expenses of approximately $946,000 before consideration of any additional costs involved in the purchase of the home or contingencies.
164As between the primary parties, and as acknowledged by the bringing of the application against the third parties, there is no immediately available source of those funds. Even were there such a source of funds, whether by the mechanism proposed by the wife or otherwise, I would not be satisfied that it is appropriate as between the primary parties to make the orders sought.
165That is so for the following reasons:
(a)there is no evidence of any pressing need for repayment of the wife’s parents;
(b)it is not, in my view, appropriate to make an order which provides a lump sum for the whole of the wife’s anticipated legal costs through to the conclusion of a four-day trial in circumstances where the parties have not yet obtained valuations necessary to inform their negotiations, nor attended a mediation style conference;
(c)the wife’s very recently expressed desire to purchase the property which she presently rents is not a persuasive basis for the exercise of the relevant discretion;
(d)the exercise of that discretion is also informed by the nature and quantum of the relief initially sought by the wife, and the somewhat spectacular nature of the recent amendment to that relief; and
(e)the latter point is reinforced by the additional proffer by the husband of the whole of the proceeds of sale of the luxury motor vehicle, which he anticipates to be in the vicinity of $60,000, when that is considered against the amount initially sought.
166Even if I was satisfied that there is power to make the orders sought on an interim basis, I am not persuaded that it is appropriate even as between the primary parties only to make an interim order in the amount sought. The question of whether the orders sought against the third parties are reasonably necessary, or reasonably appropriate and adapted, to effect such an order accordingly does not arise.
167Even if it did, and even if the question was answered in the affirmative, it would remain for the wife to persuade me that the orders she proposes are just and equitable not only as between the primary parties, but as between the primary parties and the second respondent.
168In short, I am not so persuaded. In circumstances where, regardless of any dispute as to the circumstances in which the various unpaid entitlements have accrued it is common ground that the accrual has occurred over some years without demand being made, it cannot in my view be just and equitable (or for that matter just or convenient) to order the second respondent to immediately borrow the sum of $1.1 million to make payment towards those entitlements, whether or not to do so would effectively exhaust its borrowing capacity.
169The application of the wife insofar as it sought the orders set out at paragraphs 8 and 9 of her amended Minute filed on 27 July 2020 will be dismissed.
The lump-sum payments proposed by the husband, and the questions of sale or rental of the Suburb A property
170In his Minute filed on 4 August 2020, the husband proposed various lump sum payments to the wife predicated at least in part on the determination of that part of his application which sought the prompt sale of the Suburb A property. It is appropriate therefore to deal firstly with that question.
171In short, I am not prepared to order the sale of the Suburb A property at this stage of the proceedings in circumstances where the wife has consistently sought to retain it as part of her overall entitlements upon the division of property between the parties. It cannot be said that the relief sought by her in that regard is inherently unattainable, and there is no pressing need for the property to be sold in any event.
172In anticipation of the possibility of that conclusion being reached, the husband proposed:
(a)that the parties redraw the amount available to be redrawn on the [Suburb A] loan, and pay those funds to the wife, with the payment to be characterised by the trial judge if not agreed; and
(b)that the proceeds of sale of the [luxury motor vehicle] similarly be paid to the wife, again on the basis that the payment be characterised by the trial judge if not agreed.
173Against that background, the husband also sought orders permitting him to rent out the Suburb A property and apply the rental income to the costs associated with that property, and otherwise to the Suburb A loan.
174Notwithstanding having initially sought orders for the payment to her of the amount available to be redrawn on the Suburb A loan, and having proposed in her affidavit filed on 24 March 2020 the characterisation of that payment as an “interim property order”, the wife abandoned that aspect of her application as earlier noted. Further, she sought that the proceeds of sale of the luxury motor vehicle be paid towards the Suburb A loan rather than to her.
175For the reasons earlier noted, I am satisfied that it is appropriate for a lump sum to be made available to the wife. While I would ordinarily be inclined to categorise the payment at the time of making the relevant order, so as to limit the scope for subsequent dispute, it is not essential that I do so. In circumstances where the husband does not press for an immediate categorisation of the payment, and where I am satisfied that the payment would be justified under either the property power or the maintenance power, I propose to accede to the husband’s proposal that the categorisation be left to the trial judge, particularly as for the reasons that follow I conclude that the wife’s application for interim periodic spousal maintenance must fail.
176I propose to make the orders sought by the husband at paragraphs 7, 8 and 9 of his amended Minute filed on 4 August 2020.
177I propose also to make the order sought by the husband at paragraphs 4 and 5 of that Minute, permitting him to rent out the Suburb A property and apply the rental income both to its maintenance and to payment of the loan secured against it. The only argument raised by the wife against that proposal was her desire to keep the property vacant so that she and the children could use it during school holidays and occasionally on weekends; I am not persuaded that is appropriate or viable in the current circumstances. The loan against the property should be serviced, and the property itself provides a potential source of income for that.
178While no evidence or submissions were directed to the point, and I cannot accordingly make orders in relation to it, it may reasonably be expected that properties of the nature of the Suburb A property may be offered for rental, while reserving to the owners the ability to have exclusive use of the property at specified times. While it is in my view unreasonable for the wife to seek to insist that the property simply be left vacant so as to always be available whenever she and the children might wish to use it, equally it would be unreasonable for the husband to decline sensible proposals by the wife to facilitate some use of the holiday home by them.
179Hopefully, that is a matter which can be addressed by the parties without further litigation or undue expenditure in legal fees.
Periodic spousal maintenance
180As noted earlier in these reasons, I am satisfied as to the threshold question of the wife’s inability to adequately support herself. I have found also that the husband does not have the capacity to pay spousal maintenance from his income.
181The next question, accordingly, is whether the husband has the capacity to pay spousal maintenance from other resources.
182In short, I conclude that the only resources from which the husband has the capacity to pay spousal maintenance are those identified by him – i.e. the redraw facility on the Suburb A property, and the proceeds of sale of the luxury motor vehicle. Both those resources will be fully consumed by the orders just referred to; the husband’s inability to pay periodic spousal maintenance from his income is a factor supporting my inclination to leave open the characterisation of those lump sum payments.
183I note that in his affidavit filed on 4 August 2020 the husband said that he had approached his parents and asked if he could borrow $150,000 from them, for payment to the wife, and that his parents had agreed subject to the loan being on commercial terms and secured. Again, the husband indicated his willingness for that lump sum payment to be characterised by the trial judge if not agreed thereby leaving open the possibility that it could be characterised as a lump sum maintenance.
184Orders in that regard were not, however, sought by either party. The husband’s expressed willingness to borrow the amount in question and pay it to the wife was also on the basis of both his application for the sale of the Suburb A property and the payment to the wife of the monies available in the redraw facility being unsuccessful. While I do not propose to order the sale of the Suburb A property I do propose to make the order sought by the husband in relation to the redraw.
185In those circumstances, and noting also that the primary parties would need to cooperate in securing the proposed borrowing, I do not propose to make orders of the nature foreshadowed by the husband in his affidavit but not formally sought.
186That said, the husband’s willingness to take steps of that nature so as to ensure that additional lump sum funds are provided to the wife is squarely “on the table”. I can do no more than encourage the primary parties to discuss the matter further rather than incurring still more legal costs in any further interim dispute.
187I propose to make an order in terms of paragraph 1 of the husband’s Minute filed on 4 August 2020, discharging the order for interim periodic spousal maintenance contained in the orders made on 16 April 2020.
Relief sought against the third respondent rent
188The wife sought orders requiring the third respondent to:
(a)pay rent for the second farm to the second respondent of at least the same rate as was being paid prior to the separation of the primary parties, pending an agreement between all parties as to the market rent for the second farm, or the fixing of market rent by a SEW;
(b)thereafter, pay rent for the second farm to the second respondent at the market rate established by agreement or by the expert;
(c)pay a one-off sum to the second respondent upon the establishment of the market rate, to reflect any difference between rent actually paid from November 2019 until the date of establishment of the market rate, and the market rates so established.
189In oral submissions, Senior Counsel for the wife appropriately conceded that if the rent historically paid by the third respondent was at a higher than commercial rate, the third respondent could not be bound to continue payment at that level. The evidence, including that of the wife, clearly establishes that the amount of rent paid was not at any time set by reference to a commercial market rate, and that the wife and directors of the third respondent well knew that.
190Senior Counsel pointed out that, on the evidence of the husband’s father, Company A has taken legal advice about the appropriate market rent and the terms of any lease, and given instructions for the preparation of a lease on commercial terms for presentation to the third respondent. In his more recent evidence, the husband’s father exhibited to his affidavit a copy of the proposed lease, in which the second respondent seeks annual rent from the third respondent at the rate of $386,225 in contrast to the much higher amount previously paid. He gave evidence that it was likely that the third respondent would agree to the proposed new rental figure, which was struck after advice had been obtained from [Real Estate Agent B] as to the appropriate market rate. The wife disputes the independence of that advice.
191At the hearing on 25 August 2020, Senior Counsel for the wife submitted that the orders proposed by the wife could be founded in either s 90AE or s 90AF. That submission was inconsistent with the particulars of claim filed by the wife on 21 May 2020, in which reliance was placed only on “s 90AF(2)(a) and/or s 90AF(2)(b)”. The differences in the protections afforded to third parties by s 90AE(3) and s 90AF(3), and in particular the differences between s 90AE(3)(d) and s 90AF(3)(e) do not require further consideration for present purposes.
192That is so, as the relief sought should not in my view be granted irrespective of the power upon which it is proposed to be grounded.
193As earlier noted, the third respondent is an entity in which the primary parties have no legal interest, although the husband and his parents are the directors. It pays rent to the second respondent as trustee of the unit trust. The husband and his parents are the directors of the second respondent; the husband owns 50 per cent of the shares and his parents own 25 per cent each. The primary parties have an interest in the unit trust through the ownership by the family trust of 50 per cent of the units. There is, as earlier noted, presently no formal rental agreement.
194The first question which may reasonably be asked is this: why does the wife seek orders directed to the third respondent, compelling it to pay market rent, while seeking no orders directed to the second respondent compelling it to insist on payment of market rent?
195The wife’s particulars of claim offer no clear answer to that question; indeed, quite to the contrary.
196The particulars recite a number of the matters already set out in these reasons, which do not require repetition. They observe that the unpaid present entitlements of each of the primary parties in the family trust are “the major identifiable legal interest of [the primary parties] in property”.
197Tellingly for present purposes, the particulars state:
“Third parties are necessarily engaged to ensure the UPE’s can be paid out, and that pending finalisation of this matter, the UPE’s continue to increase in proportion to the market rent paid for use of the Second Farm” (emphasis added).
198Whether the order sought by the wife is grounded in s 90AE or s 90AF, it may only be made if it is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; on the wife’s own case, the order is sought for the purpose of increasing the property of the parties to the marriage. The distinction is critical, and in my view fatal to this aspect of the wife’s application.[27]
[27] B Pty Ltd & Ors & K and Anor (2008) FLC 93-380.
199Even were that not the case, the wife’s particulars emphasise her assertions that the second respondent, in accepting a lower rate of rent than that historically paid, has “prima facie ceased acting on a commercial basis with respect to the rent paid to it by the third respondent”. They go on to assert that the orders sought will “ensure that the second respondent acts in a commercial manner consistently with its duties as trustee of the unit trust”, referring specifically to its obligations to exercise all due diligence and vigilance in protecting the rights of the unit holders. Again, that begs the question as to why orders are sought to compel the third respondent to pay rent at a market rate, rather than orders being sought to compel the second respondent to seek it. The assertion that the second respondent has “ceased acting on a commercial basis” by accepting rent at a rate lower than previously, when it is common ground that the previous rate was set for purposes unrelated to commerciality, does not require further discussion.
200The orders sought by the wife at paragraph 10(e), 11-14 and 15 (insofar as it relates to the third respondent) of the wife’s Minute filed on 27 July 2020 are not reasonably necessary, nor reasonably appropriate and adapted, to effect a division of property between the primary parties. It is neither just nor convenient for the orders sought to be made. That aspect of the wife’s application will be dismissed.
Relief sought against the second respondent – distribution and use of rental income
201The wife seeks an order that the second respondent “continue to (for accounting and taxation purposes) distribute 50% of the net rental income [received from the third respondent] to the family trust”. She seeks a further order that the second respondent “utilise the rental income actually received” firstly by paying the quarterly PAYG instalments for the primary parties, and only then to pay the balance into the Bank A loan secured against the second farm.
202She points out that, in accordance with its unit holding, the family trust has historically had distributed to it 50 per cent of the income received by the second respondent, but that income has been retained by the second respondent and directed to the reduction of the loan secured by mortgage over the second farm. The family trust has historically recorded distributions of that income to the primary parties equally, the primary parties have been assessed to pay tax, and the second respondent has paid it. None of those asserted facts are in dispute.
203The observations earlier made as to the distinction between orders directed to effecting a division of property between the primary parties, and orders directed to increasing the property available for division need not be repeated. The application insofar as it seeks to compel the second respondent to make distributions of rental income so as to continue to increase its indebtedness to the family trust is fundamentally flawed.
204Otherwise, no proper basis is established by the wife for orders to be made directing the second respondent as to the utilisation of rental income actually received.
205The husband and his parents are the directors and shareholders of the second respondent. The Constitution of the second respondent is in evidence, as is the deed establishing the unit trust. As the second and third respondents point out, the second respondent has clear obligations as to the distribution of the income of the unit trust under the provisions of the trust deed.[28]
[28] Trust A Deed, clause 17.
206Further, and although it was not a matter raised in submissions, the trust deed:
(a)defines “Net Income” as meaning, at the discretion of the trustee, either the net income of the fund for an accounting period calculated in accordance with the Income Tax Assessment Act or the income of the fund for the relevant accounting period calculated in accordance with generally accepted accounting principles and trust law, adjusted in either case by an accumulation amount retained by the trustee;[29]
(b)defines the “Accumulation Amount” as an amount retained by the trustee pursuant to its power to retain and accumulate any part of what would otherwise be income for that accounting period;[30]
(c)provides that no unit holder has any interest in the amount accumulated, although if the trustee decides to later distribute it or any part of it, it must be treated as a distribution of net income in the subsequent accounting period;[31] and
(d)otherwise provides that each unit holder has “an immediate beneficial interest vested absolutely in the Net Income to the extent of the unit holder’s entitlement and is presently entitled to that share of the Net Income”.[32]
[29] Ibid clause 1.1 (21).
[30] Ibid (3).
[31] Ibid clause 17.8.
[32] Ibid clause 17.6.
207The orders sought by the wife may, accordingly, directly affect the rights of the unit holders. The unit holders are the family trust and the husband’s parents as trustee for the [Russo Snr] Family Trust. The husband’s parents are not parties to the proceedings either in their personal capacities or as trustees of their family trust.
208Even were that not the case, I would not be persuaded that the making of the orders sought by the wife are reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the primary parties. Even if that were not required, I would not be persuaded that it is just or convenient to grant the orders sought. They represent an imposition on the legal rights (and, for that matter, duties) of third parties sought to be justified by nothing more than the fact that the steps presently sought to be imposed have in the past been undertaken voluntarily.
209My view in that regard is not altered by the fact that the husband joins with the wife in seeking a number of the orders sought as against the second and third respondents.
210Insofar as the wife otherwise seeks an order that the family trust continue to “evenly distribute the distributions received from the second respondent between the [primary parties]” that order is unnecessary. The parties are the joint trustees of the family trust, and on the papers both agree that course.
211The wife’s application insofar as it seeks the orders set out at paragraphs 10 and 15 of the Minute filed on 27 July 2020 will be dismissed. The husband’s response insofar as it seeks the orders set out in paragraphs 10 to 14 inclusive of his Minute filed on 4 August 2020 will be dismissed.
Procedural matters
212The wife seeks an order pursuant to s 116(1)(b) of the Assessment Act giving her “leave to pursue at trial a child support departure order”. While leave is not required given that the primary parties are parties to a pending application, presumably what is sought is a finding at this stage that it would be in the interest of the parents to consider whether a departure order should be made in the special circumstances of the case.
213The matter was not addressed in submissions before me, and the relevant amendment to the wife’s Minute was made after the ordered conferral between the parties as to procedural orders required to ready the matter for trial. I do not, accordingly, know what position the husband adopts in relation to the matter.
214I do not, therefore, propose to determine it at this stage. I hasten to add, hopefully for the assistance of the parties, that it does appear that it would be to the benefit of both primary parties for all aspects of their financial relationship to be resolved at trial together if no agreement is reached in the meantime. If, accordingly, the parties agree that the question of any child support departure order should be dealt with at trial no doubt that will be the subject of a consent order in the short term; if they do not so agree, then the matter can be determined once it is properly addressed.
215All parties sensibly agree that they should attend at a mediation style conference. They disagree only as to whether the proceedings should be adjourned generally for that purpose, or should be relisted before me for further monitoring.
216In my view, the latter is preferable. Matters are assigned to the Complex Track both because of their complexity, and because of the associated view that they would benefit from active judicial management.
217I propose to hear from the parties as to what would be a reasonable timeframe within which they might attend at a mediation style conference, armed with sufficient information to meaningfully negotiate. I will allocate a monitoring hearing date based on that estimate.
Proposed orders
218Subject to any submissions as to form, I propose to make the following orders:
1.The orders contained in paragraphs 1(a) to (c) inclusive and 2 of the Minute annexed to the orders made on 16 April 2020 be and are hereby discharged.
2.The husband be appointed as sole trustee to lease the [Suburb A] property and appoint [Real Estate Agent A] to advertise and lease the [Suburb A] property for the best price possible.
3.The husband apply the rent income of the [Suburb A] property in the following order of priority:
(a)in payment of the costs of keeping the [Suburb A] property leased, including letting agent’s fees and repairs and maintenance;
(b)in payment of council rates and taxes, land tax, insurance and other outgoings on the [Suburb A] property; and
(c)in payment of the balance towards the loan from [Bank A] secured against the [Suburb A] property.
4.The husband and wife forthwith do all things necessary to redraw the amount available at the date of these orders in the loan from [Bank A] secured against the [Suburb A] property, and to pay the whole of the funds so drawn to the wife.
5.The wife make available for collection by the husband or his agent the [luxury] motor vehicle in her possession, together with all keys, logbooks, registration papers and the like.
6.The husband sell the [luxury] motor vehicle for the best price reasonably obtainable, and pay the proceeds of sale (after deduction of any fees or commissions charged in relation to the sale) to the wife.
7.The payments to the wife pursuant to paragraphs four (4) and six (6) of these orders be characterised by the trial judge.
8.The application of the wife insofar as it seeks a finding that the court is satisfied that it would be in the best interest of the primary parties for the court to consider whether a child support departure order should be made will stand adjourned generally.
9.All outstanding applications and responses insofar as they sought interim and interlocutory relief be and are hereby dismissed, save as to the question of costs.
10.The proceedings otherwise stand adjourned to a monitoring hearing before the presiding judge, on a date to be allocated after hearing submissions from the parties as to the timeframe within which they anticipate attending mediation.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.
KM
Associate15 OCTOBER 2020
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