RYDER & BONHAM - [2017] FamCA 979

FAMILY COURT OF AUSTRALIA

RYDER & BONHAM

[2017] FamCA 979

FAMILY LAW – CHILDREN – variation of interim parenting orders – application for interim costs order – basis for a dollar for dollar order – application for non-periodic child support – voluntary payments by a party as a factor in determining it is not just and equitable to make order under the Child Support (Assessment) Act 1989 s 123

Kartal & Dutsanee [2016] FamCA 1158
Moroni & Moroni [2014] FamCA 664
Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578

Selena & Montez and Ors [2017] FamCA 583

Zschokke & Zschokke (1996) FLC 92-693

Child Support (Assessment) Act 1989 (Cth) ss 117, 123, 124, 125
Family Law Act 1975 (Cth) ss 60CC, 117
Family Law Rules 2004 (Cth) r 15.51

APPLICANT:

Ms Ryder

RESPONDENT:

Mr Bonham

FILE NUMBER:	CAC	1571	of		2017
DATE DELIVERED:	1 December 2017

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Canberra

JUDGMENT OF:

Gill J

HEARING DATE:

8 November 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Miller

SOLICITOR FOR THE APPLICANT:

Mills Oakley Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Campton, SC

SOLICITOR FOR THE RESPONDENT:

Pigdon Norgate Family Lawyers

Orders

That the Husband and the Wife have equal shared parental responsibility for the children B, born … 2006, and C, born … 2009 (hereinafter referred to as “the children”).
That the children shall live with the Wife.
That the children shall spend time with the Husband as follows:
a.During school term on a fortnightly cycle as follows:
i.In week one from the conclusion of school Thursday until the commencement of school on Friday.
ii.In week two, from the conclusion of school Friday until the commencement of school on Monday.
b.That for the purpose of Order 3.a above, in determining when the two (2) week cycles begins in each new school term, if in the previous school term the cycle ended with the children spending the final weekend with the Husband (“week 1”) then in the following term the cycle shall commence with the children spending the first weekend with the Wife, and vice versa.
c.During each School Holiday period following the first, second and third School Terms for up to 7 days as agreed and, failing agreement:
i.In years ending in an odd number, for the first half of the School Holiday period, such period to commence at 9am on the first day following the conclusion of the School Term and to conclude at 12.30pm on the Saturday closest to the midpoint of the middle day of the School Holiday period; and
ii.In years ending in an even number, for the second half of the School Holiday period, such period to commence at 12.30pm on the Saturday closest to the midpoint of the middle day of the School Holiday period and conclude at 5pm on the last day prior to the commencement of the School Term.
d.During the School Holiday period following the fourth School Term (December/January School Holiday period) for up to 2 consecutive weeks as agreed and, failing agreement:
i.In years ending in an odd number, from 9am on the first day following the conclusion of the School Term to 12.30pm 14 days after that day, including Christmas Day; and
ii.In years ending in an even number, from 9am on 1 January to 12.30pm on 15 January; and
iii.As otherwise agreed between the parties from time to time.
The Children communicate with each party at all reasonable times when they are not in that party’s care by telephone, mobile, Skype or any other internet based video link up as agreed and, failing agreement, for a period of up to 20 minutes at 6.30pm at least each third evening.
Each party will use their best endeavours to ensure that the Children communicate with each party pursuant to Order (4).
Each party will provide to the other party their mobile and landline number and will give the Children assess to their mobile phone and landline so that the Children are able to communicate with each party pursuant to Order (4).
If there is any medical emergency involving the Children, including but not limited to serious illness, accident or hospitalisation, the party with the care of the Children must:
a.immediately contact the other party; and
b.as soon as practicable, provide the other party all documentation and information in their possession regarding the incident.
Each party is retrained from doing any act or thing, or causing any other person to do any act or thing, that has as its intention or effect the denigration of the other party or that party’s family within the presence or hearing of the Children or any of them.
That the Wife and Husband are hereby restrained from causing the children to reside more than one hundred (100) kilometres from the D Town area without obtaining the written consent of the other party.
That for the purpose of care of the children save when the parties collect and deliver the children from and to school, the party who is taking possession of the children will collect the children from the other party.

Property

Pending further Order, the Husband pay all mortgage payments of the D Town Property and pay all mortgage payments, taxes, rates and utilities of the E Town Property and indemnify, and keep indemnified, the Wife with respect to same.
Pending further Order, the Husband pay for the Ford Ranger and all repayments for the Ford lease as when they fall due and indemnify, and keep indemnified, the Wife with respect to same.
In relation to the current proceedings before the Family Court of Australia, each party is to instruct their lawyers that:
(a)On monies being deposited into their lawyer’s trust account by or on behalf of the party; and
(b)On accounts from their lawyers being paid by or on behalf of the party; and
(c)On the payment of disbursements by or on behalf of the party the lawyer for the party is to forthwith notify the lawyer for the other party of:
(i)The deposit or payment; and
(ii)The amount of the deposit or payment; and
(iii)The identity of the payee.
In the event that the husband’s payments from the point of first engagement of his lawyers as described in 14 (a), (b) and (c) cumulatively exceed $65,000, then on making any further payment as described in 14 (a), (b) and (c), the husband is, within 48 hours, to make a payment in the same sum into the trust account for the lawyers for the wife.
The wife is restrained from using the funds deposited pursuant to Order 14 for any purpose other than the current Family Court of Australia proceedings.

IT IS FURTHER ORDERED THAT

The matter is adjourned to the Registrar’s list to a date to be fixed.

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

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

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: CAC 1571 of 2017

Ms Ryder

Applicant

And

Mr Bonham

Respondent

REASONS FOR JUDGMENT

These proceedings are between the applicant wife, Ms Ryder and the respondent husband, Mr Bonham. They commenced their relationship in about March 2002, finally separating in July 2016. They have two children, B, aged eleven, and C, aged eight.
In general terms the application and response brought by the parties seek to deal with issues of litigation funding for the wife, child support to be paid by the husband in an other than periodic manner, the time each of the parties will spend with two children, provision for valuation of a number of items of the parties’ property and a restraint upon the wife from using accountants in the Canberra region to assist her in the preparation of her case.
The wife seeks orders as set out in exhibit W2, as amended, and as follows:
1.
2.…
3.That in the alternative to Order 2:
3.1Within 7 days after any future payment by or on behalf of the Husband of any money in payment of accounts rendered by any lawyers that provide any advice or do any work for the Husband that has any connection with these proceedings, the Husband pay or cause to be paid the same sum of money to the solicitors for the wife.
3.2Within 24 hours after the payment by or on behalf of the Husband of any money referred to in Order 3.1, the Husband cause to be given to the Wife’s solicitors, a memorandum stating the amount or amounts so paid to the solicitors.
3.3All money paid to the solicitors for the Husband including on his behalf pursuant to Order 3.1, shall be held in trust by the solicitors for the Husband and not applied in payment to the Husband’s solicitors until such time as the same amount has been paid by or on behalf of the Husband to the solicitors for the wife.
3.4In the event that the payment to the Wife referred to in Order 3 is not made within seven (7) days thereafter, the Husband is to direct his solicitors to pay 50% of whatever is received (as referred to in Order 3.1 and held by them in trust), to the solicitors for the Wife.
3.5The amounts paid pursuant to these Orders to the solicitors for the Wife are to be applied by them in payment of the costs and disbursements incurred by the Wife in the conduct of these proceedings.
8.Pending further Order, the Husband pay all mortgage payments of the [D Town] Property and the [E Town] Property, along with taxes, rates and utilities of the [E Town] Property.
9.Pending further Order, the Husband pay by way of non-periodic child support, the following expenses for the Children:
9.1100% of all fees for the School to be made directly to the School as and when they fall due;
9.2100% of all other expenses relating to the Children’s attendance at the School, including but not limited to the Children’s school uniforms, extra-curricular activities and overseas trips;
9.3100% of all out of school care costs of the School to be made directly to the School as and when they fall due;
9.4100% of all expenses relating to [B’s] attendance at basketball, including training, accommodation and tournament fees;
9.5100% of all expenses relating to [B’s] attendance at pony club and dressage competitions, including maintenance of the pony, training and competitions;
9.6100% of all expenses relating to [C’s] attendance at basketball and football;
9.7100% of all Health Insurance Premiums to be made directly to the insurance provider as and when they fall due;
9.8100% of Dental Costs to be made directly to the service provider as and when they fall due;
9.9100% of any gap expense not covered by the health insurance rebate.
10.In the event that the Wife pays any of the expense referred to in Order 9 the Husband must reimburse the Wife 100% of the costs within 7 days of receiving a request for payment and evidence of payment.
11.Pending further Order, the Wife retain possession of the [utility motor vehicle] to the exclusion of the Husband.
12.Pending further Order, the Husband pay all repayments for the [utility motor vehicle] lease, as and when the fall due and indemnify, and keep indemnified, the Wife with respect to same.
13.The payments made by the Husband pursuant to Orders 7, 8 and 9 of these Orders are not to be credited toward the Husband’s child support liability pursuant to any Child Support Assessment issued by the Child Support Agency.
14.The Children live with the Wife.
15.The Children spend time with the Husband:
15.1During each School Term:
15.1.1each Wednesday from the conclusion of School to the commencement of School on Thursday, to commence the first Thursday following the making of these Orders and each week thereafter; and
15.1.2each alternate Friday from the conclusion of School to 2pm Sunday, to commence the second Friday following the making of these Orders and each alternate week; and
15.1.3As otherwise agreed between the parties from time to time.
15.2During each School Holiday period following the first, second and third School Terms for up to 7 days as agreed and, failing agreement:
15.2.1in years ending in an odd number, for the first half of the School Holiday period, such period to commence at 9am on the first day following the conclusion of the School Term and to conclude at 12.30pm on the middle day of the School Holiday period; and
15.2.2in years ending in an even number, for the second half of the School Holiday period, such period to commence at 12.30pm on the middle day of the School Holiday period and conclude at 5pm on the last day prior to the commencement of the School Term.
15.3During the School Holiday period following the fourth School Term (December/January School Holiday period) for up to 2 consecutive weeks as agreed and, failing agreement:
15.3.1In years ending in an odd number, from 9am on the first day following the conclusion of the School Term to 12.30pm 14 days following the conclusion of the School Term, including Christmas Day; and
15.3.2In years ending in an even number, from 9am on 1 January to 12.30pm on 15 January; and
15.3.3As otherwise agreed between the parties from time to time.
16.For the purposes of Order 15:
16.1when the conclusion of a care period falls on a School day, the Husband will collect the Children from School;
16.2when the commencement of a care period falls on a School day, the Husband will deliver the Children to School; and
16.3when the commencement of a care period falls on a day which is not a School day, the Husband will collect the Children from the Wife’s residence at the commencement of the time and the Wife will collect the Children from the Husband’s residence at the conclusion of the time.
17.The Children communicate with each party at all reasonable times when they are not in that party’s care by telephone, mobile, Skype or any other internet based video link up as agreed and, failing agreement, for a period of up to 20 minutes at 6.30pm at least each third evening.
18.Each party will use their best endeavours to ensure that the Children communicate with each party pursuant to Order 17.
19.Each party will provide to the other party their mobile and landline number and will give the Children assess to their mobile phone and landline so that the Children are able to communicate with each party pursuant to Order 17.
20.If there is any medical emergency involving the Children, including but not limited to serious illness, accident or hospitalisation, the party with the care of the Children must:
20.1immediately contact the other party; and
20.2as soon as practicable, provide the other party all documentation and information in their possession regarding the incident.
21.Each party is retrained from doing any act or thing, or causing or permitting any other person to do any act or thing, that has as its intention or effect the denigration of the other party or that party’s family within the presence or hearing of the Children or any of them.
Although the wife also filed an application seeking orders for the appointment of valuers on the day before the hearing, these did not form a part of the orders sought by her before me and have not been dealt with.
The husband seeks orders in accordance with his response, as follows:
1.That pending further Order the Husband meet payment of the following:
a.The NAB [E Town] Loan.
b.The NAB Business Overdraft Loan.
c.The NAB [D Town] Loan.
2.That the parties do all acts and things to ensure the Husband’s payments pursuant to Order 1 are credited against the Husband’s child support liability pursuant to any Assessment issued from time to time.
3.The Wife shall pay all other expenses associated with her occupation of the D Town property including but no[t] limited to the outgoings and maintenances expenses.
4.The Wife must ensure that the D Town property is maintained to its current state of repair and shall indemnify the Husband in respect of any damage or loss caused in relation to her occupation of the [D Town] property, save for fair wear and tear.
5.That pending further Order the Wife shall have exclusive use of the … motor vehicle registration number …, subject to the Wife meeting all payments associated with the registration, comprehensive insurance, maintenance and operation of the vehicle.
6.That the Husband and the Wife have equal shared parental responsibility for the children [B] born … 2006 and [C born] … 2009 (hereinafter referred to as “the children”).
7.That the children shall live with the Wife.
8.That the children shall spend time with the Husband as follows:
a.During school term on a fortnightly cycles as follows:
i.     In week one from the conclusion of school Thursday until the commencement of school on Friday.
ii.    In week two, from the conclusion of school Thursday until the commencement of school on Monday.
b.That for the purpose of Orders 8.a above, in determining when the two (2) week cycles begins in each new school term, if in the previous school term the cycle ended with the children spending the final weekend with the Husband (“week 1”) then in the following term the cycle shall commence with the children spending the first weekend with the Wife, and vice versa.
c.For one half of each of the children’s school holiday periods in each year as agreed between the parties and failing agreement for the first half in school holiday periods commencing in even numbered years and the second half in school holiday periods commencing in odd numbered years.
d.For the purpose of Order 8.c:
i.     The children’s school holiday periods shall be deemed to:
1.commence at the conclusion of school on the earliest day that any of the children’s school term concludes, in accordance with the school term calendar; and
2.conclude at the commencement of school on the earliest day that any of the children’s school term commences, in accordance with the school term calendar.
ii.    The mid-point changeover of the children, during school holiday periods, shall occur at 5pm on the day following the final night with the parent with whom the children are spending the first school holiday period.
iii.   That in the event that there are an odd number of nights during a school holiday period, the following shall occur:
1.In even numbered years the children shall spend the additional night with the Husband; and
2.In odd numbered years the children shall spend the additional night with the Wife.
e.From 12pm on 24 December until 12pm on 25 December in each even-numbered year and from 12pm on 25 December until 12pm on 26 December in each odd-numbered year.
f.On Father’s Day from 6pm on the Saturday preceding Father’s Day until 6pm on Father’s Day.
g.If the children are otherwise spending time with the Wife on both of the children’s birthdays, for a period of not less than two (2) hours in the event that the children are attending school and, failing agreement from the conclusion of school until 6.00pm, or if either of the children’s birthdays fall on the weekend, for not less than four (4) hours with the Husband with such time to be by agreement, failing agreement, from 3pm to 7pm.
9.That notwithstanding any other Order, the Husband’s time with the children shall be suspended as follows and the children shall spend time with the Wife as follows:
a.From 12pm on 24 December until 12pm on 25 December in each odd-numbered year and from 12pm on 25 December until 12pm on 26 December in each even-numbered year;
b.On Mother’s Day from 6pm on the Saturday preceding Mother’s Day until 6pm on Mother’s Day;
c.If the children are otherwise spending time with the Husband on both of the children’s birthdays, for a period of not less than two (2) hours in the event that the children are attending school and, failing agreement, from the conclusion of school until 6.00pm, or if either of the children’s birthdays fall on the weekend, for not less than four (4) hours with the Wife with such time to be by agreement, failing agreement, from 3pm to 7pm.
10.Except for time when the commencement or conclusion of the Husband’s time with the children is to coincide with the commencement or conclusion of school, changeover shall be effected at a place agreed between the parties and, failing agreement, at the [F] Carpark located between the parties’ respective homes.
11.That the Wife and Husband are hereby restrained from causing the children to reside more than one hundred (100) kilometres from the [D Town] area without obtaining the written consent of the other party.
12.That the Wife pay the Husband’s costs of and incidental to this Application.
13.That the Wife be restrained from instructing or providing copies of any of the Husband’s financial documents or documents provided in these proceedings to any accountant based in or who primarily practices in the Canberra area.

The parties were able to agree to the following orders being made:
1.Pending further Order, the Husband pay all mortgage payments of the [D Town] Property and pay all mortgage payments, taxes, rates and utilities of the [E Town Property] and indemnify, and keep indemnified, the Wife with respect to same.
2.Pending further Order, the Husband pay for the [utility motor vehicle] and all repayments for the [utility motor vehicle] lease as when they fall due and indemnify, and keep indemnified, the Wife with respect to same.
3.That the Wife and Husband are hereby restrained from causing the children to reside more than one hundred (100) kilometres from the [D Town] area without obtaining the written consent of the other party.
4.That for the purpose of care of the children save when the parties collect and deliver the children from and to school, the party who is taking possession of the children will collect the children from the other party.
The wife relied upon her affidavit filed 28 August 2017, her financial statement filed on 28 August 2017 and her affidavit in reply filed 6 November 2017. She also relied upon exhibit W1, being credit card statements from the Commonwealth Bank relating to expenditures by the husband.
The husband relied upon his affidavit filed 25 October 2017 and his financial statement filed the same date. He also relied upon exhibits H1 and H2, being correspondence between his solicitors and the wife’s solicitors, exhibit H3, being an electricity bill for the home that the wife is living in and finally exhibit H4, being a statement from a betting agency.

Child-related orders

There is little difference between the parties in respect of the arrangements for the children. Each seeks orders that provide for the children to live with the wife and to spend substantial and significant time with the husband. The wife seeks an arrangement for the husband to spend four nights per fortnight with the children, with the longest period during each fortnight to be two nights. The husband seeks five nights per fortnight, with the longest single period each fortnight being four nights.
Between July 2016 to January 2017 the wife says that the husband spent 15 nights with the children. He says that it was twelve nights, along with an unidentified number of nights in October 2016. They differ as to which nights were spent. It is unnecessary to resolve this dispute to determine what is best for the children.
Each party recounts a history of the other not replying to communication regarding time with the children. They have had disputes over whether the husband would attend the D Town property to collect the children. He has previously refused to, resulting in him not seeing the children.
In February 2017 the parties came to an agreement that the children would spend time with the husband every Thursday night and every second Sunday night, along with a single flexible day on either side of those days as agreed. The wife’s position was that the husband did not make use of any of the flexible days. However, the wife says that the husband has spent 23-26 February 2017, 9-13 March 2017 and 2-5 September 2017 with the children. She further asked, and he agreed to have the children on 16 and 19 May, 2 and 9-11 June 2017. He says he spent all available time save when he has been sick or overseas. Given the qualification in the husband’s position, it was not clear that his version was in conflict with hers and I will operate on the basis the wife’s account is correct.
The wife has asserted in her affidavit in response that the husband has involved the children in the dispute between them, and refused to let her speak to the children. This did not appear to be disputed.
Neither party put in issue the application of the presumption for equal shared parental responsibility. Given the position taken by the parties, there is insufficient reason to rebut the presumption and it will be applied.
This, then, requires consideration to be given as to whether equal time is in the best interests of the children. Neither party seeks such an order which speaks against it being in the children’s best interests. Rather, each seeks that the children live with the wife and have the benefit of substantial and significant time with the husband.

Section 60CC factors

It is necessary to consider the s 60CC factors in order to determine what is in each of the children’s best interests. Of the primary considerations, the only one that appears to have application at this stage of the proceedings is as to the benefit to the children of having a meaningful relationship with both of the child’s parents. Each of the parents, by the orders sought, supports the other parent having a meaningful relationship with each of the children. However, they differ as to what form this should take.
On the question of the views of the children the wife gives some evidence as to reluctance on the part of C to spend more than two nights at a time with his father. This does not form cogent evidence of the views of C that can be relied upon.
As to the nature of the relationship between each of the children and their parents, there is limited evidence by which this can be assessed. It appears that both before and after separation the wife has had the primary role of caring for the children.
It is open to find that the husband has failed to take all opportunities to spend time with the children, although the degree to which this is the case is difficult to ascertain. In any event I do not consider that it is a pivotal matter in this case when compared to the importance of providing the children with benefits from spending time with the husband.
Each of the parents has fulfilled obligations in respect of the support of the children, although the assertion is made, which the husband denies, that the husband has not kept up to date with child support payments. Even if he has not, he has made significant other payments outweighing the child support obligations for the upkeep of the children.
As to the likely effects of change, neither parent seeks a significant departure from the current regime. There is little material by which this matter can be assessed.
In terms of the practical difficulty and expense of a child spending time with and communicating with a parent, the key issue seems to be the inability of the parents to communicate with each other. I cannot at this stage determine whether the fault in respect of the lack of communication lies with any particular parent or with them both, although in September 2016 the husband messaged the wife saying he would not attend a sports carnival event if the wife was to be there. This factor does mean that arrangements should be made to minimise the contact that the parents have with each other, in particular in relation to changeovers.
I know little to address the considerations of the lifestyle, sex, maturity and background of the children or the parents.
Some criticism is made of the husband in terms of his attitude to the children at the time of the breakup of the relationship, including only spending limited time with them and allegedly using them in the dispute against the wife. I am unable to determine whether this remains an ongoing deficit on the part of the husband given some time has passed since the end of the relationship.
The wife alleges controlling and abusive behaviour by the husband. A specific instance of financial abuse is cited by her on a previous attempt at separation in 2012. On her account, the husband removed all access to money for the wife and the children, leaving them with the inability to purchase food. While answering a number of the general assertions against him made by the wife, this matter was not addressed. Such behaviour is abusive and potentially hurtful to the children. It calls into question his attitudes to the responsibilities of parenthood. Given the comprehensive evidence about the parties’ financial arrangements since the current separation, there does not appear to have been a repetition of this behaviour and accordingly it is not deserving of weight in assessing the current situation.
To the extent that the other matters are open for consideration they are subsumed in the factors that I have already identified.
It is important in this case to have arrangements that provide for regular time between the husband and the children, being time that does not involve the necessity for the husband and wife to interact at each of the changeovers. This arrangement is best provided for by allowing for changeovers to occur at school. This may mean that longer periods of time are spent with the children than the wife is comfortable with. However, I am not satisfied that such longer periods would in fact be detrimental to the children and the benefit of non-interaction between the husband and the wife far outweighs any discomfort as to the length of time.
However, rather than adopt the husband’s proposal that there be a four night block each fortnight, at this stage, to minimise the degree of change faced by the children it will be restricted to a three night block. Again, in support of minimising the changes to the children, the Thursday overnight in the off week will be retained. Orders will be made for the children to spend each alternate Thursday overnight with the husband and on the other week from Friday after school until Monday at school. The parties have a common view as to the arrangements that should take place over the school term time holidays, that is, that each should spend half the school holidays with the children. They differ as to the arrangements during the Christmas school holidays with the husband seeking half of the school holidays and the wife seeking that the husband have a two week period during those holiday breaks. There is little to differentiate between these two positions. Neither involves a significant extension to the time that the children will spend in a block with the husband. Again in the interests of minimising the degree of disruption to the children the appropriate order will be in accordance with those sought by the wife.
The parties have now agreed on the changeover regime, where if the changeover is not at school the parent receiving the children will collect them. They have also agreed that the children’s home will not be moved more than 100km from D Town without consent.
Given the hostility between the parties, it is appropriate that the non-denigration orders sought by the wife, which are mutual in effect, are made.
It is also appropriate that the children are able to communicate with the parent they are not with by electronic means on a reasonable basis.

litigation funding

The wife seeks pursuant to s 117, that a dollar for dollar order be made in order to provide her with the funds necessary to conduct litigation. She asserts that this is a necessary step to ensure a level playing field between the parties, on the basis that she is unable to fund litigation herself. In making this application, the position presented by the wife was that on the evidence before the Court at present, the net assets held by the parties (disregarding superannuation given the ages of the parties) are significantly outweighed by the liabilities asserted by the parties. The liabilities appear to outweigh the assets by approximately $500,000. This was not a concession by the wife that this will be the ultimate position, but that it reflected the currently available evidence.
The wife points to a significant disparity in the earning capacity of each of the parties. She has tertiary qualifications and works as a public servant. She also undertakes other work involving the training of animals. Her income is approximately $95,000 per year. In contrast, as taken from his financial statement, the husband’s annual income is approximately $330,000 per year.
In addition to this disparity of income, one of the significant items of property within the relationship is the business run by the husband through various entities. The husband has valued the business as being of net negative value to the value of approximately $360,000. He asserts that he is able to give this valuation on the basis of the expertise he has, recognised by him having been called in various proceedings as an expert witness. She does not have the advantage of this inherent expertise to assist her in preparing for the case. The wife points to the fact that the material to conduct an analysis of the worth of the business is within the husband’s hands.
The wife says that she is unable to pay for legal representation. She has recently borrowed money from a credit union in the sum of $70,000 that she says is being used for the payment of legal fees. At annexure U of her affidavit in reply she sets out her costs position in the proceedings, which will be set out more fully later in the judgement.
The wife emphasises the breadth of the discretion at s 117 of the Family Law Act 1975 to support the making of such an order.
The husband’s position was also that the liabilities of the parties outweighed their assets. His explanation for how this was able to occur was that, in a context where following their earlier separation in 2015 the parties had progressively borrowed more and sold items of property, that the current position was funded in part by the parties spending money that has been set aside for an upcoming tax liability. That is, the tax money is being spent before it has been paid to the Australia Taxation Office. His assertion is that the parties have been living beyond capacity for a period of time.
While the husband purported to annex an expert report regarding the value of the business, prepared by himself, he has not been appointed as a single expert and no permission was sought pursuant to r 15.51 to adduce evidence from him in that capacity. His valuation of the business will be disregarded, although, given the manner in which the case was run by the wife, that is, on the basis that the parties’ debts outweighed their assets, little turns on this rejection of his valuation at this stage of the proceedings.
He opposes the making of the dollar for dollar order for a number of reasons. Firstly, he says that there is a jurisdictional issue with the capacity to make the order. That is, in the absence of a well-defined amount as being required for legal fees, he says that it is impossible to conclude that an order under the costs power could be made on a just basis.
The second aspect that he raises is that there is no capacity to fund the making of such an order. He sets out the income that he receives as against the various expenses that he has to say that he simply does not have the capacity to pay for such an order.
The third objection relates to the inequity that may arise as a result of the making of such an order. He says that the making of such an order would require him to fund the wife’s litigation with no cap on the wife obtaining other sources to supplement her litigation funding. That is, there is a potential lack of balance, illustrated in part by the wife’s recent obtaining of $70,000 towards her legal expenses.
His fourth objection is that the making of the order has the potential to undermine his own arrangements in securing legal representation. That is, it may impact his capacity to fund his own litigation if he is also to pay for the wife’s litigation.

child support application

The wife makes an application pursuant to s 123(1)(a) of the Child Support (Assessment) Act 1989 (the CSA Act). She seeks that there be an order that the husband “provide child support otherwise than in the form of periodic amounts paid to the carer entitled to the child support”. In order to make such an order, the requirements of s 124 of that Act must be met, which require that I be satisfied that it is just and equitable as regards to the children, the wife and the husband to make the order and that it is otherwise proper to make the order.
In the event that such an order is made the default position, as set out at s 125(1) is that the relevant administrative assessment of child support is to be reduced as a consequence of making an order that the payments be made in an other than periodic manner. That default position is only displaced where, similarly to a departure order, the Court is satisfied that in the special circumstances of the case it will be just and equitable as regards to the children, the wife and the husband and otherwise proper to make the order not to reduce the annual child support amount. That is, the default position is that the payments other than periodic payments be in substitution for the administrative assessment amount.
In this case the wife seeks that they not be substituted. That is, she seeks that the current administrative amount remains in place while the various non-periodic amounts are also paid. Specifically, the expenses sought by the wife to be paid by the husband are one hundred per cent of the school fees (approx. $34,470 per annum), ancillary expenses relating to the children’s attendance at school and undertaking overseas excursions, obtaining school uniforms and the like, the payment of out of school care costs (approx. $15,800 per annum), payment of B’s attendance at basketball (approx. $60 per week), the payment of B’s attendance at pony club (approx. $3,000 per annum), the payment of C’s attendance at basketball and football (approx. $820 per annum), the payment of all health insurance premiums, the payment of dental costs and the payment of any gap expenses not covered by the health insurance rebate. She seeks that these expenses, (other than the payments in respect of the car) be characterised as non-periodic child support payments, and that they not reduce the child support payments the husband is otherwise liable to pay. The husband continues to accept responsibility for the school fees, mortgage payments for D Town, payments for the car used by the wife and child care expenses, including those expenses incurred during the time the children are under the wife’s care. The wife seeks that these continue to be paid by the husband, along with other incidental expenses for the children.
In order to determine whether it is just and equitable to make a non-periodic order I am required to take into account the factors set out at s 117(4), (6), (7), 7(a) and (8). In order to determine whether it is otherwise proper to make the order I am required to take into account the matters contained at s 117(5).
Further, pursuant to s 124(2) I am required to take into account the following matters:
(a)     the administrative assessment in force in relation to the child, the carer entitled to child support and the liable parent.
(aa) any determination in force under Part 6A (departure determinations) in relation to the child, the carer entitled to child support and the liable parent;
(b)    any order in force under Division 4 (departure orders) in relation to the child, the carer entitled to child support and the liable parent;
(c)    whether the carer entitled to child support is in receipt of an income tested pension, allowance or benefit or, if the carer entitled to child support is not in receipt of such a pension, allowance or benefit, whether the circumstances of the carer are such that, taking into account the effect of the order proposed to be made by the court, the carer would be unable to support himself or herself without an income tested pension, allowance or benefit.
The husband is currently the subject of a Child Support assessment. A decision regarding change of assessment was made on 13 August 2017 (husband Annexure KK) following an application by the wife and cross application by the husband. In the application, the wife asserted, and the husband accepted that his adjusted taxable income amount for 2015-2016 of approximately $35,000 was not the right basis for the assessment, and that his income ought to be taken as the maximum amount of $200,000 per year. The wife’s income was also reassessed upwards as being $100,000 per year. The husband sought recognition of other expenses paid by him, for example, school fees, mortgage payments, car payments for the car operated by the wife and child care expenses. These did not result in a change to the assessment.

The wife in this case is not in receipt of an income tested pension, allowance or benefit. There is no evidence to suggest that she would require such on the making of a child support order.
She says that this order should be made pursuant to s 124 of the CSA Act based upon financial circumstances constituted by the needs of each of the children and the reasonable commitments of each of the parties to support themselves. She says that an examination of the financial statements of the parties reveals a capacity on the part of the husband to support the children in the manner sought by her.

Capacity and reasonable commitments of the husband

The wife submitted that, working from the husband’s financial statement, the husband has capacity that would enable him to make the orders sought by the wife for non-periodic child support. She took from the financial statement that his weekly income is $6,357. This incorporates an amount of $283 for superannuation and so may not represent funds available (at face value) to be drawn upon. Going through the expenses claimed by the husband, the wife asserted that a number should be disregarded as not being reasonably necessary for the support of the husband (a reference to s117(4)(e) of the CSA Act). Those matters that she sought to exclude are as follows:
1.$1,675 tax. She asserted that this should not be taken into account on the basis that the husband has not been paying it (noting his explanation that he has been drawing upon the tax fund and noting the accumulated tax debt). However, in this instance the drawing against the tax money does not give it the characterisation of an expense that is not reasonably necessary. It remains reasonably necessary as it is the unavoidable obligation of the husband to pay it.
2.The mortgage payments of $254 per week for G Town, a residence that he has a part share in but which is occupied by his parents. The husband has long had a one third share in this property and the associated mortgage. The evidence does not disclose whether the sum paid is over and above the amount for which the husband is liable under the terms of the mortgage. The husband did not mount an argument as to why it is necessary to pay these amounts as an aspect of his need to support himself when it is his parents who occupy the property.
3.$44 for motor vehicle insurance for the car that the wife drives, on the basis that the wife will take responsibility for this in accordance with the matters consented to by the parties.
4.$10 for registration for a motor vehicle 2 and $180 for its leased costs. The use of this vehicle is not addressed in the evidence. This appears superfluous to the husband’s use of the utility vehicle which the wife accepts is a commitment necessary for the husband to support himself.
5.Lease expenses of $581 for a German motor vehicle. This is asserted not to be a necessary expense, in particular given that the husband also has a utility motor vehicle. There is no basis to infer that payment for this vehicle is reasonably necessary for the husband’s self-support, although the debt remains an obligation for which the husband is liable.
6.Credit card payments of $277 on the basis that the expenses accumulated on the credit cards are accounted for elsewhere on the financial statement, namely in Part N. The amounts recorded by the husband appear to relate to the minimum payment to be made on each of the cards. Accordingly they represent both an interest and principal component, meaning there is a degree of double counting. However, I am unable to discern the proportions.
The wife also asserted that the figures provided by the husband in relation to Part N of his financial statement were excessive. He has not supported the validity of those claims that he has made that are the subject of challenge by the wife. The onus is upon him to support the matters he asserts.
The husband claims $1,855 worth of expenses for himself per week. Of those, the wife asserts that the amount of $500 per week for food should be reduced to $125, the amount claimed by her. She says that the $150 per week for telephone expenses should be reduced to $50, an amount double that which she claims. The $300 per week entertainment should be reduced to $150 and the $115 per week on holidays should be reduced to $35, each then being in accord with what she claims. She says that neither the gardening expense nor the unspecified expense should be allowed. Neither is supported by the husband producing material to demonstrate the necessity of the expense. This would equate to $935 in deletions bringing the husband’s weekly expenses for himself to $920. On the basis that the husband has failed to adequately support his assertions, the expenses should be taken as reduced in accordance with the wife’s submissions.
Similarly, in relation to the children’s expenses the wife asserted that the husband’s claim of $150 for food was excessive and should be $50. The $120 for entertainment should be reduced to $60. The $800 education should be deleted on the basis that that would form part of the order that was being sought by the wife, that is, to pay the children’s school fees. The $60 for gifts should be deleted as optional. In total this would remove a further $1,020 per week from Part N, reducing the necessary expenses to $535 per week for the children. Aside from the reference to educational expenses, and for the reasons set out in relation to the husband’s expenses for himself, his expenses asserted in relation to the children should also be taken as reduced.
Accordingly, the husband’s capacity could be reckoned in the following manner. That is, that he receives an income of $6,357 per week from which can be deducted legitimate expenses of $2,799 (including his child support assessment liability), a further $920 for his self-support expenses in relation to Part N and a further $535 in relation to support of the children while in his care in Part N. This would leave him with an excess capacity in the order of $2,100 per week, as against his declared income.
It was emphasised by the wife that the husband must have capacity given the contents of exhibit W1 which contained credit card statements for the husband showing payments made by him to a betting agency. In the July statement these totalled approximately $5,000 and in the September statement approximately $9,500. To counter this the husband relied upon exhibit H4, the significant portion of which was a statement for the period 11 June 2017 to 25 October 2017 showing net losses of approximately $8,000. This indicates that the net position was not as poor as depicted by the credit card statements. It does show losses of about $2,000 per month. The significance of the credit card statements is that they show the capacity to deposit significant sums of cash into the account. In a financial statement that indicates that the husband’s expenses seriously outweigh his income, there appears to be no item that corresponds to his betting, or the expenses incurred or the losses accrued because of the betting. This is indicative, as the wife submits, of undisclosed capacity on the part of the husband.
Further, as establishing an undisclosed capacity, the wife points to the fact that the husband communicated with her as late as May 2017 expressing his hopes to take the children overseas.
The wife asserted that at present she meets the majority of the expenses for the children. She says that the child support amount payable by the husband of $302 per week is less than one third of living expenses as set out by her as relevant to the children in Part N of her financial statement. It is not at present clear which of those expenses as expressed by the wife are actually being incurred. Her counsel’s explanation for the Part N of her financial statement was that it expressed the amount that she would spend were she able. She asserts that she is unable to spend this amount and therefore does not. At the same time the husband also asserts expenses for the children while in his care, and meets other expenses outside of the child support to the benefit of the children.
The husband relied upon a number of matters as establishing a lack of capacity on his part.
In assessing his capacity he urged that the Court should examine the expenses faced by him on a yearly basis. That is, in paying the mortgage on the former matrimonial home that is currently occupied by the wife but arguably secures a business debt of the husband’s, he has an obligation to pay $65,000 per year. He pays $28,000 per year rental on his own home. He asserted that he has a car for which he pays $15,000 per year (although on his financial statement this is closer to $26,000 per year). He pays child support in the sum of $15,000 per year. He pays for school fees and out of school care in the sum of $55,000 per year. At present the husband accepts responsibility for the school fees and the out of school care expenses. He is in arrears in respect of the school fees to the sum of $16,664 (Item 53 husband’s financial statement).
This totals $178,000 per year before other expenses are taken into account, such as the payment of tax, reckoned at approximately $87,000, outstanding liabilities to the tax office and to other lenders and superannuation at approximately $15,000 per year. Before self-support, and without taking into account the husband’s liabilities for child care expenses, credit card debts, vehicle insurance, health and life insurance premiums, mortgage repayments for G Town and outstanding legal fees, this leaves approximately $50,000.
If this assessment is correct then, even deducting all matters contended for by the wife from the husband’s Part N would see a negative figure once his weekly necessary expenses for the support of himself and the children are taken into account.
In relation to the debts, annexure II of the husband’s affidavit sets out that the parties are currently at risk of the loan facilities not being extended on the basis of the Family Court litigation. If they are not extended the various sums become due immediately and, while outstanding, are subject to a default rate of interest at approximately 15 per cent per annum.
The husband’s assertions about his expenses outweighing his income are seriously undermined by the manner of his spending. His continued betting, depositing $5,000 in July 2017 and $9,500 in September 2017 into a betting account, points to access to funds over and above what is represented. His capacity to lose approximately $2,000 per month betting also speaks to a capacity beyond what is represented in his financial statement.
More critically, his relatively recent act in January 2017 of entering into a lease for a German motor vehicle with a purchase price (including taxes) of $112,000 with weekly payments of $581, while at the same time already being committed to payments in respect of a utility vehicle at $520 per week is indicative of the husband’s capacity being superior to what he represents, particularly where the purchase is without explanation of how it was able to be done.
His representation to the Child Support Agency at Annexure LL was that the payments for school fees, after school care and mortgage payments for the D Town property are made from trust distributions. The trust distributions, he asserts (p300 of the annexures) will be credited to the wife as fully franked and will equate to 100 per cent of the D Town mortgage payments, 100 per cent of the utility motor vehicle lease payments and 50 per cent of the child care costs. At [132] he confirms that he has told the wife that the payments will be made as trust distributions for tax purposes.
It is unclear what the relationship is between these distributions from the trust and the payments asserted as coming from the husband’s income in his financial statement. The only trust available for the payment appears to be the H Trust (husband [114]) of which the husband and wife are specified beneficiaries (husband p229 Annexures). If it is a payment from the trust it cannot be described as being paid from the income of the husband. If the payments are from the trust rather than the income then the net position is not as reflected in the financial statement. The source of income for that trust is the husband’s business and so, ultimately, whether the money is by trust distribution or otherwise from what he is paid by the business, the money comes from the business.
At exhibit CC the husband annexes profit and loss statements for H Pty Ltd Pty Ltd for June 2016 and June 2017. The annual profit before owner remuneration (presumably to the trust as the owner of the business) is asserted to be between $294,000 and $415,000. The profit and loss statement also discloses a number of expenses paid by the business. No evidence has been presented as to the interaction between the sums paid for in that profit and loss statement and the matters outlined as expenses for the husband in his financial statement. For example, in his financial statement the husband asserts an amount paid as superannuation as an expense for himself. The profit and loss statements also include amounts for superannuation. The husband has not made clear whether they relate to the same superannuation or are distinct. Similarly, the entry for telephones and mobile phones in the profit and loss and its inter-relationship with the claim for telephone expenses contained at Part N of the husband’s financial statement are not made clear.
The profit and loss statement includes payment of interest. Presumably this relates to the loans identified by the husband as related to the business, indicating that these liabilities are dealt with before the question of owner remuneration arises.
For each of the 2016 and 2017 years a management fee is identified in the profit and loss statement, of $232,518 and $262,626 respectively. There is no identification of who this is paid to, given the husband’s assertions at [119]-[120] that it is a sole proprietor business, with five professional staff, one administrator and a part-time manager, and that the business is solely reliant upon the husband to “generate, execute and complete work” and that without him almost all of the customers would leave the business.
The questions arising from the unexplained aspects of the profit and loss statement are unable to be resolved at this stage. However, the failure of the husband, in whose hands this material lies, to explain precisely how he receives money from the business, means that, again, his assertions of lack of capacity must be approached with significant caution, when seen in the light of his expenditure.
In any event, even without taking these unexplained matters into account, the profit before owner remuneration asserted for the June 2017 year is $415,000, an amount significantly higher than the income the husband claims that he receives, but apparently available for distribution through the trust.

The wife’s capacity and reasonable commitments

Like the husband, the wife asserts expenditure that outweighs her income, in her case, by about $1,800 per week, although she concedes that she does not pay all the expenses as set out in her Part N as she is unable to at present. It is unclear then, what the shortfall is or how the shortfall is funded. In her financial statement she sets out a number of liabilities, including to the J Credit Union at approximately $40,000 and credit cards at approximately $25,000.
On 1 November 2017 the wife secured a further loan with the J Credit Union for $70,000, for the purpose of paying for her legal representation. She says that she has used $65,000 toward legal fees, as shown at Annexure U of her affidavit in reply, in her updated statement of legal expenses. At present the trust account balance is at almost $20,000, with approximately $10,000 outstanding to be paid in disbursements. The estimate for the balance of proceedings is a further $177,000.
The shortfall for the wife between her expenses and income is not explained. Despite that shortfall she has been able to secure a loan to pay legal expenses. There is nothing to suggest that she has further capacity to secure loans for legal expenses. She can now be regarded as reasonably heavily indebted.

Discussion - the child support application

Dealing with the wife’s application regarding child support, the key components of her case firstly related to the capacity of the husband, taking into account his income earning ability and taking into account his commitments necessary to support himself. Secondly, they related to what is required to appropriately support the children, particularly in the context that the children attend private schools.
The two critical aspects of the application for the wife are that an order be made for non-periodic payments, dealing with particular expenses for the children, and that such an order not reduce the current assessment for periodic child support. To do this she must demonstrate that it is just and equitable and otherwise proper to make a non-periodic order. While it may be accepted, in accordance with the wife’s case, that the husband has excess capacity to support the children in the manner sought, and that the proper needs of the children are higher because of the educational expectations of the parents, those matters do not, in this case, equate to it being just or equitable to make the orders sought.
Firstly, disregarding the school and child care related payments, the balance of the payments sought are not demonstrated to constitute proper needs justifying the order. The necessity of the payments for the benefit of the children have not been established by the wife.
Secondly, considering the school and child care fees, these matters have already been the subject of a child support assessment process. The husband relies upon that process and asks that the Court not intervene in it. That process acknowledged that the husband is paying the school and out of school care expenses. It did not reduce the Assessment level for the husband. While the husband asserts that he cannot afford to make the school payment when he is making other payments that he characterises as for the support of the wife, he has not suggested that he will cease paying the amount. Given his representations to the Child Support Agency regarding trust distributions, and given the analysis above of the circumstances of the business, the husband has the capacity to continue making the payments. He claims them as part of his current expenses as set out in his financial statement.
On the wife’s case, he is the one who seeks the private schooling for the children rather than her. Her position is that, should the husband cease to pay for the private school attendance then the children should be enrolled in a public school. This would appear to be inevitable in the event that the husband ceased to pay the school fees. On his case, he asserts that the retention of the children in their current schools is in their interests. At present it appears to be the case that the husband will continue to meet these expenses, even where orders have not been made that require him to do so.
This position of the husband undermines the case to establish that it is just or equitable to require an order to be made. The situation may be quite different if that was not his position, but at present there is no question of justice or equity that calls for the order to be made. In the event that he ceases to pay the private school fees, it will be open for a further application to be made directed to whether the children continue to attend their private schools, or whether a variation in child support is called for.
The orders for non-periodic payment of child support will not be made.

Discussion - the s 117 application

Dealing with the application for litigation funding, the application by the wife seeks orders to be made pursuant to s 117 of the Act. The orders that she seeks provide for a dollar for dollar arrangement and are as follows:
3.1Within 7 days after any future payment by or on behalf of the Husband of any money in payment of accounts rendered by any lawyers that give any advice or do any work for the Husband that has any connection with these proceedings, the Husband pay or cause to be paid the same sum of money to the solicitors for the wife.
3.2Within 24 hours after the payment by or on behalf of the Husband of any money referred to in Order 3.1, the Husband cause to be given to the Wife’s solicitors, a memorandum stating the amount or amounts so paid to the solicitors.
3.3All money paid to the solicitors for the Husband including on his behalf pursuant to Order 3.1, shall be held in trust by the solicitors for the Husband and not applied in payment to the Husband’s solicitors until such time as the same amount has been paid by or on behalf of the Husband to the solicitors for the wife.
3.4In the event that the payment to the Wife referred to in Order 3 is not made within seven (7) days thereafter, the Husband is to direct his solicitors to pay 50% of whatever is received (as referred to in Order 3.1 and held by them in trust) to the solicitors for the Wife.
3.5The amounts paid pursuant to these Orders to the solicitors for the Wife are to be applied by them in payment of the costs and disbursements incurred by the Wife in the conduct of these proceedings.
The wife’s application is grounded in the financial disparity between the parties, and the injustice that will flow from the wife being unable to conduct her litigation without a costs order. The factor driving the application is the need to secure a level playing field for the litigation.
The circumstances pointed to by the wife were firstly, that the husband has income earning capacity well in excess of that of the wife, and in excess of what is required to support himself. Secondly the level of debt of the parties is such that there is not a source to draw from to enable the wife to fund the litigation. Thirdly, the husband is in a position of advantage with respect to the litigation in that he has expertise in relation to the value of the business, and holds the information that is necessary for the litigation in respect of the business.
Given the asset position each party took for the purpose for the interim proceedings, the wife says that the only source for the payment of either party’s legal expenses is the husband’s income.
Despite assertions by the husband that his expenses outweigh his income, the earlier analysis shows that this should not be accepted. He has a capacity greater than that which he has disclosed, although the extent of the capacity cannot be precisely identified.
The husband has paid $8,000 to his lawyers and owes them a further $13,000, with an amount of $9,000 as yet unbilled. This amount is more than at the time of the costs notice at Annexure UU of the husband’s affidavit, explicable by further work being completed. From that document it is expected that in total, including the work to date, the legal fees will be approximately $122,000. He has so far paid these amounts from his income and says that he will need to continue to do so.
There was no suggestion made that at present the husband is unable to fund his legal representation from his income, despite his assertions that his expenses significantly outweigh his income.
The wife has to date provided her lawyers with $65,000 toward legal expenses sourced from a loan. She is currently in credit by $20,000, with approximately $10,000 outstanding to be paid in disbursements. The estimate for the balance of proceedings is a further $177,000.
In order to make the order sought by the wife it is necessary to apply s 117 to the facts of this case. The terms of ss 117(1), (2) and (2A) are as follows:
(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

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

After referring to Zschokke[1] and to Paris King Investments,[2] Senior Counsel for the husband referred, in the context of applications for dollar for dollar orders, to the decision of Loughnan J in Kartal & Dutsanee[3] and McLelland J in Selena & Montez and Ors.[4]
[1]Zschokke & Zschokke (1996) FLC 92-693.
[2]Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578.
[3]Kartal & Dutsanee [2016] FamCA 1158.
[4]Selena & Montez and Ors [2017] FamCA 583.
In each case the power to make dollar for dollar orders pursuant to s 117 was challenged, despite such orders having been made in a number of instances, including by Watts J in Moroni.[5] The challenges came variously from the idea that an order for costs incurred in the future, particularly one that had the character of an order for indemnity costs, could not be made on a consideration of the s 117(2A) criteria and further could never be characterised as just, particularly without the ability to consider all of the matters in s 117(2A) and without the capacity to establish the quantum of the order in advance.
[5] Moroni & Moroni [2014] FamCA 664.
In Kartal, Loughnan J noted the breadth of the discretion contained in s 117. He accepted that not all of the considerations contained at s 117 “sit comfortably with an order about future costs.” The argument was put that in the absence of being able to consider the conduct of the parties to the litigation, or being able to know what the relevant financial circumstances are, the question of whether an order could be considered just could not be answered. The argument, Loughnan J said, “overlooks the interests of justice in the parties being fairly represented in the proceedings. It is notoriously unfair for a litigant in person to litigate against somebody who is legally represented….[a]t stake, of course is the quality of the outcome of the proceedings….[i]t may be that a dollar for dollar order arises in that way. Such an order may ameliorate the risk that one party to litigation is required to operate without proper funding while the other party, arguably using resources of the marriage, is able to properly provide for their representation.”
It was suggested that in contrast, McClelland J, after recognising disparate authority regarding the concept of making an order “as to costs” and, in accepting the meritorious objective of levelling the playing field, said:[6]
However, the pursuit of that meritorious objective does not, in my view, justify adopting a construction of s 117 that results in it being applied at a point prior to the time when it is possible for the Court to fulfil its obligation to consider the matters referred to in s 117(2A). Most significantly, it is clearly not possible to determine whether the party seeking costs has been successful in the litigation, nor is it possible to consider the conduct of the party in circumstances where that conduct is yet to occur. Nevertheless, despite the significant doubt that I have expressed, I recognise that it is generally accepted that s 117 empowers the Court to make a litigation funding order. Accepting that to be the case, it is necessary to follow the clear legislative direction set out in s 117. This includes applying the presumption set out in s 117(1) that each party is to bear their own costs unless, having regard to those matters set out in s 117(2A), the Court is satisfied that it would be just to make such an order.
[6] Selena & Montez and Ors [2017] FamCA 583 [84].
Both judgments recognise that the application of s 117 to litigation funding is difficult because of the terms of s 117. Justice Loughnan accepted that there was a power within the broad costs jurisdiction to make a dollar for dollar order. Justice McClelland did not deny this, but noted the inherent difficulty in the application of s 117 to future incurred costs. Both accepted that s 117 is able to be used as a source of power for litigation funding. Justice Loughnan recognised that the driving factor, in meeting the threshold requirement that the order be just, relates to ensuring that the proceedings themselves are just. Justice McClelland noted that use of s 117 for litigation funding requires that there be adherence to the terms of the provision, including an assessment of the mandatory considerations.
Before allowing a departure from the general rule expressed in s 117(1) that each party bear their own costs, it is necessary to establish that there are, pursuant to s 117(2), circumstances that justify the departure. It is at that point that the discretion to make an order is enlivened. Until that point there is no power to make an order departing from the general rule.
Once enlivened, the discretion to make an order is governed by the requirement that the order, if made, be just, and that the determination as to whether any order should then be made, and the terms of that order, are governed by the considerations contained at s 117(2A).
The circumstance pointed to here is the need for an order in relation to costs in order to secure fair litigation for the wife. What were described by Brereton J as “requirements” in Paris King Investments, are relevant firstly to the determination of the threshold issue of whether there are circumstances justifying a departure from the default position, being:
…first, a position of relative financial strength by the respondent; secondly, a capacity on the part of the respondent to meet his or her own litigation expenses; and thirdly, an inability by the applicant to meet her or his litigation expenses from her or his own income assets or financial resources.
These three circumstances together provide the justification for the departure. In this case, all three elements are present.
In order to determine whether an order for dollar for dollar funding should be made, it is necessary to consider the matters set out at s 117(2A), insofar as those considerations are relevant to the present case and established by evidence.
While each party asserts non-disclosure on the part of the other as an aspect of the conduct of the proceedings, I am not able to determine those matters at present. There is no relevant conduct in the proceedings, nor a failure by either party necessitating proceedings, nor a consideration of whether a party has been wholly unsuccessful, nor a relevant offer to form part of the current considerations in the matter. This means that no findings can be made in relation to considerations (c)-(f).
Neither party is in receipt of Legal Aid.
The wife’s application relies upon the three Paris King Investments circumstances as above. They fall into s 117(2A)(a). Further matters requiring consideration (in accordance with s 117(2A)(g)) are whether there is an arguable case for substantive relief, and the degree to which an order pursuant to s 117 may be able to taken into account in the making of orders pursuant to s 79. Each of these latter two matters is uncertain, in the sense that the argument presented for the wife was on the basis that there are no assets currently available for distribution. That is, for the purposes of the interim hearing the husband’s position that the liabilities outweigh the assets was taken at the starting point. While this does not equate to there being no prospects at the ultimate hearing, it does not enable a positive finding to be made regarding either of these matters at this stage. The risk flowing from this state of affairs is as to an ultimately unfair outcome for the husband.
However, the avoidance of an unfair hearing provides reason for a litigation funding order that outweighs this risk. Provided that an order may be fashioned that is otherwise just, in this case it should be made.
The key matter that creates uncertainty as to whether an order will be just relates to the uncertainty as to the extent of the ability to use the husband’s income superiority to also fund the wife’s litigation. While I am satisfied that the husband’s capacity significantly outweighs what is required to support himself, this cannot be quantified with any precision or certainty.
That is, for an order to meet the requirement that it be just in the current circumstances, it must be an order that accommodates this uncertainty.
While it was suggested that a dollar for dollar order cannot be made pursuant to s 117, such a blanket position is not correct. Whether a dollar for dollar order can be made in a particular case will depend upon the circumstances of that case. A dollar for dollar order can, in cases where there is uncertainty as to the precise extent of capacity, provide for an order that is just because by its terms it attaches to the actual capacity, uncertain though it may be.
This mechanism allows the husband and wife to both be funded to the extent that the husband’s capacity enables this to occur, providing the level playing field important to the litigation.
There will however, need to be further safeguards to prevent inequality. Firstly, the means by which the fees are to be funded is through the husband’s income. He has used it so far to pay legal fees and has a significant amount outstanding at this stage of the proceedings. The wife has already paid all her legal fees, partly through borrowing. The borrowings are no doubt reliant on her income in a similar manner to how the husband is to provide for his. The levelling of the playing field should not place the husband in a position of disadvantage as compared with the wife. Given that the obligation to be placed upon him is significantly reliant upon the wife being unable to fund her own litigation, the extent to which she has been able to so far should be recognised.
Accordingly, the dollar for dollar order should not become operative until the husband’s expenditure on legal fees has reached the level that the wife has spent (or placed in trust).
Further, the order sought by the wife impermissibly seeks to bind third parties, being the lawyers involved in the proceedings. The obligations under the orders will be placed upon the parties rather than the lawyers.
Lastly, given that the orders are directed to the fact of expenditure on legal fees, each party will be required to keep the other advised of the expenditure that has taken place. The additional nature of this safeguard is that, should it become apparent that the wife becomes able to further fund her litigation, the husband will be in a position to bring a further application for the amendment of these orders.

Injunction as to obtaining advice

The husband sought a further restraint upon the wife in the following terms.
1.That the Wife be restrained from instructing or providing copies of any of the Husband’s financial documents or documents provided in these proceedings to any accountant based in or who primarily practices in the Canberra area.
This was explained to be on the basis that the husband runs a business based in Canberra and the possible provision of material to a competitor, for the purpose of the wife obtaining advice in the matter would risk the undermining of his business. The husband has not supported this application with evidence, other than evidence generally as to the character of his business, and it will be refused.

I certify that the preceding one-hundred and fifteen (115) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 1 December 2017.

Associate:

Date: 1 December 2017