Sappho & Sappho

[2021] FamCA 114

FAMILY COURT OF AUSTRALIA

Sappho & Sappho [2021] FamCA 114

File number(s):

ADC 885 of 2020

Judgment of:

BERMAN J

Date of judgment:

12 March 2021

Catchwords:

FAMILY LAW – SPOUSAL MAINTENANCE – Interim – Lump sum – Where the wife seeks further interim spousal maintenance – Where the husband offers an amount to be characterised at the final hearing – Where there is no challenge to the gateway requirement being satisfied – Orders.

FAMILY LAW – PROPERTY – Interim Distribution – Where the wife seeks a lump sum by way of partial property settlement or litigation funding – Where the pool of assets is not yet clear – Where there is no assessment or estimate of future costs – Adjourned for further consideration upon the parties providing cost statements.

FAMILY LAW – PROPERTY – Interim Distribution – Where the wife seeks the husband pay her insurance premiums – Where the monthly premium is modest and any payment should be brought to account as property retained by the wife – Orders.

Legislation:

Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) rr 19.04, 19.18

Cases cited:

Chester & Chester (1995) FLC 92-612

Number of paragraphs:

37

Date of hearing:

18 February 2021

Place:

Adelaide

Counsel for the Applicant:

Mr Anderson

Solicitor for the Applicant:

Clelands Lawyers Adelaide Pty Ltd

Counsel for the Respondent:

Ms Lewis

Solicitor for the Respondent:

All Family Law

ORDERS

ADC 885 of 2020

BETWEEN:

MS SAPPHO

Applicant

AND:

MR SAPPHO

Respondent

ORDER MADE BY:	BERMAN J
DATE OF ORDER:	12 MARCH 2021

THE COURT ORDERS:

1.That the husband shall pay to the wife the lump sum of TWENTY THOUSAND DOLLARS ($20,000) on or before seven (7) days from the date of this order by way of capitalised interim spousal maintenance calculated on the basis of FIVE HUNDRED AND TWENTY ONE DOLLARS ($521) per week as and from 20 January 2021.

2.That on or before seven (7) days from the date of this order the husband shall pay to the wife by way of partial settlement of property the sum of ONE THOUSAND DOLLARS ($1,000) to be utilised by the wife for the payment of the wife’s trauma insurance premiums for her insurance cover with DD Insurance policy number … calculated on the basis of a premium payment of ONE HUNDRED AND SIXTY DOLLARS AND SIXTY NINE CENTS ($160.69) per month over a period of 6 months.

3.That paragraphs 3 and 4 of the Amended Application in a Case filed 28 January 2021 are adjourned for further hearing to 9.00 am on 23 March 2021.

4.That on or before the adjourned date the solicitors for each of the parties must give their party a written notice of:-

(a)The party’s actual costs both paid and owing up to and including the Court event;

(b)The estimated future costs of the party up to and including the anticipated conclusion of the proceedings; and

(c)Any expenses paid or payable to an expert witness or, an estimate of those expenses; and

5.That the statements of costs provided for in paragraph 4 are to be filed and served.

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

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 17.02 Family Law Rules 2004 (Cth).

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

REASONS FOR JUDGMENT

BERMAN J

1. By Amended Application in a Case filed 28 January 2021, Ms Sappho (“the wife”) seeks interim financial orders for spousal maintenance, litigation funding or orders by way of partial settlement of property, the payment by the husband of costs associated with the wife’s motor vehicle 1 and the continued payment of the insurance premiums in relation to the wife’s trauma insurance and her life and total and permanent disablement insurance.

2. By Response to an Application in a Case filed 16 February 2021, Mr Sappho (“the husband”) sought that the wife’s application be dismissed and in addition sought interim parenting orders for X born in 2010 and Y born in 2012 (collectively “the children”) to spend time with him.

3. Following submissions made on 18 February 2021 orders by consent provided for the husband to pay the costs of the valuations set out in paragraphs 4, 5 and 6 of orders made 17 June 2020, that he pay the costs of registration of the wife’s motor vehicle and pending further order, that he do all things necessary so as to maintain the wife’s life and total permanent disablement insurance with DD Insurance under the V Super Fund policy.

4. The following matters remain for determination:-

   (1)Periodic spousal maintenance;

   (2)Litigation funding/partial settlement of property; and

   (3)The payment of the wife’s trauma insurance premiums with DD Insurance.

   INTERIM SPOUSAL MAINTENANCE

5. In judgment delivered on 17 June 2020 I had to consider the wife’s earlier application for interim spousal maintenance.  Following a careful consideration of the separate financial circumstances of each of the parties, I found that whilst the husband’s total expenses exceed his income, the property of the parties but in particular a sum of $16,253 which was withdrawn by the husband from the children’s accounts, was a capital sum that was available to assist the wife.

6. I determined the wife’s reasonable needs to be $521 and if paid over a period of 31 weeks could be capitalised in the capital sum identified.

7. The wife sets out her total income and expenditure at paragraphs 30 and 31 of her affidavit filed 4 December 2020.

8. For his part, the husband offers the further sum of $20,000 with the sum to be characterised at the final hearing.  At $521 per week the sum offered by the husband would provide the wife with financial support for 37 weeks.

9. In circumstances where on an interim basis there is no substantive challenge to the gateway requirement being satisfied, I propose to order that the husband do pay to the wife the sum of $20,000 by way of lump sum spousal maintenance calculated at the rate of $521 per week over a period of 37 weeks.

   PARTIAL PROPERTY SETTLEMENT

10. Following the orders made on 17 June 2020 the husband paid the sum of $50,000 to the wife or her solicitors on 13 July 2020.

11. As was anticipated, by 2 December 2020 $43,884.50 of the monies received was paid out to the wife’s solicitors.  The modest sum remaining in her solicitor’s trust account would by now be accounted for.

12. The wife seeks a further $50,000 in order to continue to be represented in the proceedings.  The wife contrasts her circumstances with those of the husband who is able to meet his legal costs as and when they fall due.

13. The husband is opposed to any further lump sum order by way of partial settlement of property or litigation funding.

14. The husband contends that his income has been adversely affected by COVID-19.  His expected taxable income for the financial year to 30 June 2020 is $285,244 down from $421,739 for the previous financial year.

15. At paragraph 33 of his affidavit filed 16 February 2021, the husband sets out the extent of his bank balances together with his liabilities.

16. For reasons that are not easily understood, the husband did not include the assets of the parties nor identify the assets which secure the stated liabilities.

17. The wife did not provide any assistance as to her assessment of the assets and liabilities of the parties.

18. At paragraph 80 of the judgment delivered 17 June 2020, I relied upon a statement of advice as to the assets and liabilities of the parties contained in a document prepared by Z Pty Ltd.  That statement of advice was relevant as at 2018 but is not likely to be of assistance for the purposes of the wife’s current application.

19. Given the status of the litigation, it is likely that the wife’s future legal fees will significantly exceed the amount that she seeks.

20. Notwithstanding that credible assessment, before an order can be made the Court must be satisfied as to the following:-

    (a)That the application is genuine;

    (b)That the circumstance which identify the power are apparent; and

    (c)To weigh the identified need against the benefit of having only one exercise of a s 79 or s 117 power.

21. In the decision of Chester & Chester (1995) FLC 92-612 Moss J considered that the Family Court had the power to make an order of the type as sought regardless of how the order was characterised, but that it was important that the wife (or her present solicitors) attempt to assess the merits of her claim or its monetary ambit.

22. In this case there has been no attempt made to consider the extent of the wife’s anticipated legal fees.

23. Rule 19.18 of the Family Law Rules 2004 (Cth) (“the Rules”) provides for the method of calculation of costs as follows:-

    19.18   Method of calculation of costs

    (1)       The court may order that a party is entitled to costs:

    (a)       of a specified amount;

    (b)as assessed on a particular basis (eg lawyer and client, party/party or indemnity);

    (c)to be calculated in accordance with the method stated in the order; or

    (d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.

    (2)       ….

    (3)       In making an order under subrule (1), the court may consider:

    (a)       the importance, complexity or difficulty of the issues;

    (b)       the reasonableness of each party’s behaviour in the case;

    (c)       the rates ordinarily payable to lawyers in comparable cases;

    (d)whether a lawyer’s conduct has been improper or unreasonable;

    (e)the time properly spent on the case, or in complying with pre-action procedures; and

    (f)       expenses properly paid or payable.

24. The wife’s application is characterised as an order by way of partial settlement of property. No attempt has been made to set out the matters that would be relevant to an order under s 117 of the Act.

25. In circumstances where the parties are not able to agree the arrangements which would enable each of them to be appropriately represented to the conclusion of the proceedings, it is the obligation of the wife to satisfy the requirement for an order to be made either by way of partial settlement of property or by way of litigation funding pursuant to s 117 of the Act.

26. The husband does not deny that it is appropriate for the wife to be appropriately represented.  I do not know the financial arrangements that the husband has put in place to enable his legal fees to be paid on an ongoing basis.

27. Sub-rule 19.04(2) of the Rules provides:-

    Immediately before each court event, the lawyer for a party must give the party a written notice of:

    (a)the party’s actual costs, both paid and owing, up to and including the court event;

    (b)the estimated future costs of the party up to and including each future court event; and

    (c)any expenses paid or payable to an expert witness or, if those expenses are not known, an estimate of the expenses.

28. Notwithstanding that there is no challenge to the principle that in litigation there should be a level playing field, similar to a consideration that applies in applications for partial settlement of property, it is the preferred position to place a limit on the number of costs and partial settlement of property applications.

29. In circumstances where I am not able to have any clear understanding as to the extent of the pool of assets available to the parties and where there is no assessment or estimate of the parties future costs likely to be incurred, I am not prepared to make the order as sought by the wife.  I do not propose to dismiss the application but rather that it be adjourned for further consideration consequent upon each of the parties providing a costs statement of their costs to date, the source of funds used to pay those costs, and an estimate of the future costs likely to be incurred up to the conclusion of the proceedings.

    WIFE’S TRAUMA INSURANCE

30. The wife seeks that the husband pay the wife’s trauma insurance premiums with DD Insurance.  The policy allows a payment to be made to the wife in the event of a traumatic health event in the sum of $855,169.  The premiums are in the sum of $160.69 per month.

31. The wife acknowledges that the trauma policy does not have a surrender value.  It is a one off payment that is made to the wife upon the happening of a traumatic health event.

32. There is no evidence that suggests the wife’s health is in any way compromised or that on medical advice there is a risk which would invite a consideration of relevant insurance cover, nor is there any suggestion that if the current trauma policy lapses then the wife will in some way not be able to renew the policy at a later date.

33. I am uncertain whether the weekly payment for life insurance premiums as disclosed by the husband in his financial statement includes a trauma component.  If it does then it would be reasonable for the Court to understand the basis upon which the husband would consider a trauma policy to be of advantage to him, but not to the wife.

34. In the absence of any basis upon which the policy should be maintained it is difficult at this stage to make a determination as to the utility of the retention of the policy.

35. It is not a question of the preservation of an asset.  The policy would appear to have no inherent value other than a right of entitlement to a lump sum upon the happening of a certain specified health event.

36. At this stage I am not prepared to make a determination other than to note that the monthly premium is relatively modest and it would not seem unreasonable for the wife to be provided with a further $1,000 which would enable the premiums to be paid for six months and give the wife an opportunity to consider her affairs and whether the retention of a trauma insurance policy is a matter that has importance and therefore should be maintained. This sum should be brought to account as property retained by the wife.

37. Noting that the balance of the Amended Application in a Case, the husband’s Response to an Application in a Case and the Application for Contravention filed 28 January 2021 are adjourned for hearing to 23 March 2021, I make orders as appear at the commencement of these reasons.

I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman.

Associate:

Dated:       12 March 2021