SEWIN & CHEALS - [2020] FamCA 820

FAMILY COURT OF AUSTRALIA

SEWIN & CHEALS

[2020] FamCA 820

FAMILY LAW – PROPERTY – Interim property settlement – Where the wife seeks an interim property distribution – Application pursuant to section 79 of the Family Law Act 1975 (Cth) – Consideration of the two-step approach in respect of interim property applications – Where it is just and equitable to make an interim distribution as sought by the wife.

FAMILY LAW – PRACTICE AND PROCEDURE – Disclosure – Where both parties seek orders for disclosure – Where the wife asserts that the husband has failed to provide adequate disclosure in the proceedings – Orders made as sought by each of the parties as to disclosure.

FAMILY LAW – INJUNCTIONS – Where the wife seeks that the husband be restrained from further encumbering or dealing with two of the parties’ investment properties – Where the husband opposed this on the basis that he is currently further encumbering the investment properties in failing to meet mortgage repayments – Where there are currently interim orders in place requiring the husband to ensure all rental income for the investment properties is transferred into the respective loan accounts – Application dismissed.

Family Law Act 1975 (Cth) ss 75, 79, 80, 114
Family Law Rules 2004 (Cth) r 13.01

In the marriage of Biltoft (1995) FLC 92-614
Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578
Stanford v Stanford [2012] HCA 52
Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466
Tate & Tate (2000) FLC 93-047
Zschokke & Zschokke (1996) FLC 92-693

APPLICANT:

Ms Sewin

RESPONDENT:

Mr Cheals

INTERVENOR:

Ms Nang & Mr G Cheals

FILE NUMBER:

PAC

4193

2018

DATE DELIVERED:

28 September 2020

PLACE DELIVERED:

Parramatta

PLACE HEARD:

Parramatta

JUDGMENT OF:

Hannam J

HEARING DATE:

15 June 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT:

SOLICITOR FOR THE APPLICANT:

El Baba Lawyers Pty Ltd

COUNSEL FOR THE RESPONDENT:

SOLICITOR FOR THE RESPONDENT:

Brighton Lawyers

COUNSEL FOR THE INTERVENOR:

SOLICITOR FOR THE INTERVENOR:

Mr Johnston

Orders

Disclosure

That within fourteen (14) days of the date of these orders, the Husband provide by way of financial disclosure to the Wife if not already provided:
(a)       Copies of all home loan account and mortgage statements for the period from 1 July 2014 to present for any account in the Husband’s name (whether solely or jointly owned with any other person or in trust) and in the name of any entity in which he has an interest, and any property in which he has an equitable interest including but not limited to:
(i)L Street, Suburb H NSW (“the Suburb H Property”);
(ii)A Street, Suburb B NSW (“the Suburb B property”); and
(iii)C Street, Suburb D NSW (“the Suburb D Property”).
(b)       Copies of all income tax returns, notices of assessment and BAS returns for the period from 1 July 2015 to present for the Husband personally and for any entity in which he has an interest (such as a private company, trust or partnership);
(c)       Details and statements with respect to all current superannuation interest/s of the Husband;
(d)       Bank details and account numbers for all accounts that the Husband has held since 1 July 2013 to present whether solely or jointly owned with any other person;
(e)       Copies of all bank statements for the period from 1 July 2013 to present for any account in the Husband’s name (whether solely or jointly owned with any other person or in trust) and in the name of any entity in which the husband has an interest such as a private company, trust or partnership;
(f)        Copies of all credit card statements for the period from 1 July 2015 to present for any account in the Husband’s name (whether solely or jointly owned with any other person or in trust) and in the name of any entity in which the husband has an interest;
(g)       Copies of market appraisals for any properties held in the name of the Husband (whether solely or jointly owned with any other person or in trust or in which the Husband has an equitable interest);
(h)       Copies of registration certificates and sales receipts/tax invoices in respect of all vehicles registered or purchased in the name of the Husband for the period from 1 July 2018 to present;
(i)        Copies the Husband’s three most recent payslips;
(j)        Details of any assets that the Husband has disposed of since separation and where the proceeds of that sale have been distributed.
(k)        Details and particulars of all incurred rent and revenue from any property in which the Husband has a legal or equitable interest, including but not limited to:
(i)the Suburb B property; and
(ii)the Suburb D Property.
(l)        Copies of all invoices and payment receipts for legal fees incurred on behalf of the Husband since January 2018 including but not limited to those due payable to Brighton Lawyers Pty Ltd.
That within FOURTEEN (14) days of the date of these orders, the Wife provides by way of financial disclosure to the Husband the following:
(a)       Copies of documents from Centrelink in relation to benefits granted to the Wife for the period 1 January 2018 to 31 May 2020;
(b)       Certificate of registration for any motor vehicle registered in the wife’s name;
(c)       Bank statements for the period 1 July 2017 to 31 May 2020 for the following accounts:
(i)K Bank, … …16; and
(ii)ANZ, … …68.
(d)       Individual Tax return and Notice of Assessment for the financial years 2017-2018 and 2018-2019;
(e)       Superannuation statement for the financial years 2017-18 and 2018-2019, and documents reflecting the current balance;
(f)        Child support assessment notice or Child Support Agreement which governs the amount payable by the Wife’s ex-husband Mr J for the two children X, DOB … 2008 and Y, DOB … 2012;
(g)       In the event that there are no documents to be produced under (f), all documents and correspondence governing a payment of $628.11 by Mr J on a fortnightly basis; and
(h)       Parenting plan or parenting orders which govern the arrangement of the children between the Wife and her ex-husband Mr J in relation to the two children X, DOB … 2008 and Y, DOB … 2012.

Interim Property Adjustment

That on the completion of the sale of the Suburb B and/or Suburb D Property, whichever settlement shall occur first, the proceeds of the sales shall be distributed as follows:
(a)       Payment of the real estate agent’s commission and legal fees and other legal costs associated with the sale;
(b)       Payment of the sum required to discharge the mortgage secured on the property;
(c)       Payment of $80,000.00 to the Wife into the Wife’s solicitors trust account, and that sum shall be advanced towards her costs or expenses, and will be brought into account by the Court and characterised as the Court sees fit at final trial; and
(d)       The balance to be held for the parties in a controlled monies account by the lawyer or conveyancer acting on the sale of each property.

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 Sewin & Cheals 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 PARRAMATTA

FILE NUMBER: PAC 4193 of 2018

Ms Sewin

Applicant

And

Mr Cheals

Respondent

REASONS FOR JUDGMENT

Introduction

The parties (“the husband” and “the wife”) are in dispute as to the future parenting arrangements for their two children and a fair distribution of property following the breakdown of their four year marriage.
At an interim hearing on 15 June 2020, the paternal grandparents who assert an interest in one of the properties in respect of which the wife seeks an adjustment were also joined as the second and third respondents in the proceedings.
The applicant wife seeks interim orders relating to financial disclosure, the payment of a sum of money to her, costs and an order restraining the parties from further encumbering or dealing with two properties that are to be sold.
The respondent husband opposes most of the orders sought by the wife and seeks orders in relation to disclosure to be provided by her to him.

Background

The parties are in dispute as to a number of matters which are not capable of resolution at an interim stage. The matters contended for by each of them will be set out for the purpose of understanding the nature of the dispute and the assets that each argue are to be considered for property adjustment purposes.
The husband who is 31 and wife aged 36 are both of Chinese heritage. Prior to her relationship with the husband the wife appears to have been married and this relationship produced two sons who are currently aged 12 and seven.
Virtually nothing is known about the circumstances of the parties’ relationship other than that they married in 2014. One reason for the paucity of evidence and lack of clarity is that the parties refer to the contents of affidavits which were not relied upon in this application or respond to affidavits filed by the other party which were not relied upon, in a manner which is difficult to follow.
In November 2013 the husband purchased a property (“the former family home”) in his sole name. The husband paid an amount of the purchase price in cash though this sum and the loan he obtained for the balance, secured by a mortgage, appear to be matters in dispute. The husband contends that his parents advanced significant funds in relation to this purchase and other properties over a number of years. He variously contends that the former family home was to be held on trust by him for his parents until they migrated to Australia or that this sum should be treated as a contribution made by him.
The husband’s parents who are now joined as respondents in the proceedings assert that the former family home was to be held on trust for them. It is their case that this property has always been intended to be their retirement home. The wife contends that any contribution made by the paternal grandparents to the purchase of this property was a gift to both parties.
At some stage during the relationship (on a date which is unclear and appears to be in dispute) the parties moved into the former family home where they continued to live throughout their marriage.
During the relationship and until just after separation the husband worked as an accountant, and received an income which he deposes as being “barely enough to service the interest component of the mortgage as well as outgoings of [the former family home]”. The wife received financial support from Centrelink (though the nature of the payment and the basis for this entitlement is unclear) and child support from her ex-husband during the relationship which the parties used for their daily expenses.
In August or October 2014 the parties purchased another property (“the investment property”) in joint names for around $570,000 - $585,000. It would appear that all of the funds required for this purchase were borrowed and secured by mortgages including over the former family home. The wife also asserts that she received a gift of $100,000 from the paternal grandparents which was used for the purchase of this property. The property has for the most part been leased. Although the rent was paid towards the loan repayments there was apparently a shortfall required to repay the loan and expenses associated with the property during the period of this loan.
In 2014 the wife gave birth to the parties’ first child.
In around December 2015 the parties purchased a second investment property off a plan (“the second investment property”) in joint names for $830,000-$843,000. According to the husband the deposit for the purchase came from bank loans secured by a mortgage over the former family home.
In 2016 the parties’ second child was born.
In April 2017 a friend of the husband’s (“the husband’s friend”) purchased an investment property (“the friend’s investment property”). The husband contributed some funds to this purchase, the amount of which is in dispute. The wife asserts that the husband has an equitable interest in this property though it does not appear that the husband’s friend has been made aware of this claim.
The wife asserts that she and the husband purchased a 50 percent share in a business (“the business”) in July 2017 for $170,000 and contributed $90,000 to store stock. This business is not registered in the name of either the husband or wife which the wife contends is related to the husband previously having been pursued by the authorities in relation to insolvent trading. The husband asserts no interest in the business, contending it is owned by his mother and another business partner and that he works part time in the business as an employee only.
The wife contends that she worked in the business between five and six days per week for which she received a wage of $800 a fortnight until the parties’ separation when she ceased that employment.
The purchase of the second investment property settled around July 2018. The husband deposes to borrowing money from the husband’s friend to complete the purchase. The wife contends that the husband contributed $160,000 to the purchase from revenue of the business and that the remainder was funded by a bank loan.
The parties separated in about July or August 2018 but continued to live in the former family home together with their children and the wife’s other children. Subsequently the wife left the former family home with her four children. The husband has not paid any Child Support or provided other financial support to the wife for the children since separation.
The wife commenced parenting and property settlement proceedings in September 2018 in the Federal Circuit Court.
In September 2019 the paternal grandparents engaged a lawyer who sent the father a letter demanding repayment of the funds provided for the purchase of the former family home which were described as a loan. Later that month the paternal grandparents also lodged a caveat over the former family home to protect their asserted interest in the property.
Several orders in relation to parenting have been made in the Federal Circuit Court with the current interim parenting arrangement being in accordance with orders of 23 October 2019. These orders provide that the children live with the wife and spend time with the husband each alternate weekend and a weekday in the alternate week.
In October 2019 orders were also made for the sale of the two investment properties and for the balance of the proceeds on sale to be deposited into a solicitor’s trust account. On this date the proceedings were transferred to the Family Court.
At the interim hearing on 15 June 2020 orders were made joining the paternal grandparents who assert an interest in the former family home as second and third respondents in the proceedings. Further orders made with the consent of all parties facilitate the sale of the two investment properties and with the consent of the husband and wife restrain the husband from further encumbering the former family home without the written consent of the parties. An order was also made with the consent of the parties requiring the husband to ensure all rental income from the investment properties is transferred and continues to be transferred to the respective loan accounts for those properties.
As to the remaining orders pressed by the wife, judgment was reserved.

The Interim Application

The wife seeks orders that she receive a sum of $80,000 to be characterised by the Court as the Court sees fit at final hearing.
The husband opposes the wife’s application for this payment apparently on the basis of the uncertainty about the final net asset pool, contending that the parties’ significant liabilities will exceed their assets.
It is also the wife’s contention that the husband has failed to provide adequate disclosure in the proceedings and she seeks orders for disclosure. The husband opposes her proposed order for disclosure and seeks alternate orders in relation to this matter.
The wife also seeks an order restraining the parties from further encumbering or dealing with the investment properties without the written consent of the parties or court order which is opposed by the husband.
Finally, the wife seeks an order that the husband pay her costs incidental to this application and to these proceedings.

The Law and Discussion

Payment to the wife of $80,000

It was observed in Paris King Investments Pty Ltd v Rayhill[1] that there are a number of juridical bases for orders of the type sought.
[1] [2006] NSWSC 578.
In Strahan & Strahan (Interim Property Orders)[2] the Full Court said at 85,633:
86. Once the relevant source of jurisdiction for making an order is resolved then it could be assumed that what Brereton J in Paris King Investments described as “the necessary preconditions and relevant considerations” or as the Full Court in Zschokke described as the “matters” to be taken into account should be easy to identify. If the source of jurisdiction is s 117(2) of the Act then the court may make such order as it considers just provided there are justifying circumstances. If the order is sought under s 79 of the Act then the court may make such an order as it considers appropriate provided it is satisfied that it is just and equitable to make the order. If the order is sought under s 74 of the Act then the court may make such order as is proper.
87. If the source of jurisdiction is s 79 of the Act, in Zschokke at 83,216 the Full Court said:
If the order is to be made under s.80(1)(h), it would seem that regard should be had to the requirement in s.79 that the orders be just and equitable and this would require the Court to undertake at least some brief consideration of the matters in s79(4) including those referred to in s.75(2). If on a brief consideration of those matters, it seems likely to the Court that the party who is the applicant for the interim order for an advance of funds from the other party will be likely to receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made (cf Wilson and Poletti).
88. In Paris King Investments Brereton J at [33], referring to an interim property order under s 79 and s 80(1)(h) of the Act and also Zschokke, said that “while the requirements of s 79(2) and (4) must be observed in the same manner as for any interim property order, if it appeared that the applicant would likely receive by way of property settlement a sum sufficient to cover the advance, then an interim order may be made” (citations omitted).
[2] (2011) FLC 93-466.
The wife generally relies upon section 79 and 80(1)(h) of the Act as the juridical basis for the interim property order she seeks. At one stage it was contended on her behalf that the power to make the order could also be pursuant to section 117 and some further submissions were made on this basis.
According to Strahan (supra) where the power is to be exercised pursuant to s 80(1)(h) a two-stage approach is to be taken to the hearing of an application. The Full Court said at [118]:
… This is recognised by the fact that although the power under s 79 should ordinarily be exercised on a once only basis, “circumstances may arise before there can be a final hearing” where the power is exercised. Thus the first step is to resolve whether to exercise the power before a final hearing and if it is resolved to do so then the second step involves the exercise of that power.

So far as the first step is concerned, it is settled in Strahan (supra) that the Applicant is not required to establish that there are compelling circumstances at the time for making an order for interim property settlement. The test in light of the High Court decision in Stanford v Stanford[3] is whether it is just and equitable to exercise the power in relation to an interim application.
[3] [2012] HCA 52.
It is important to note that as observed in Strahan (supra), any interim order “must be capable of variation or reversal without resort to s 79A of the Act or appeal”.
The Full Court in Zschokke & Zschokke (1996) FLC 92-693 identified three criteria that are relevant to the determination of whether an interim adjustment should be made:
76.…As to the five criteria which her Honour considered could be drawn from existing authority, there is no doubt that whether the matter was determined as an interim property settlement order under s.80(1)(h), or as an interim costs (or security for costs) order under s.117(2), or indeed even a maintenance order, the last three matters identified by her Honour (being a position of relative financial strength on the part of the respondent; a capacity on the part of the respondent to meet his own litigation costs; and an inability on the part of the applicant to meet her costs) would all be relevant.
(emphasis added)
The wife contends in accordance with the matters set out in Zschokke (supra) that her significantly disadvantaged financial position to that of the husband supports the making of an interim order.
There seems to be no dispute between the parties that the husband is in a superior financial position to the wife and that she is currently reliant solely on a Centrelink benefit for income. She has the care of four young children including two of the parties’ children for whom she receives no Child Support or any other financial support from the husband, has outstanding legal fees and an ongoing need for funds for the purposes of the litigation.
Although the husband claims to be significantly indebted to his parents he has been employed as a professional for some years and appears to have had access to substantial financial resources to fund or provide security for loans to purchase real estate. It appears that he has financial capacity to fund his own legal costs in the litigation.
On the basis of the foregoing matters, in my view, it is appropriate for the power to be exercised in order that a just and equitable result may be achieved before the final hearing of the matter.
Having determined that the jurisdiction under s 79 should be exercised, I am required to undertake a consideration of the matters in s 79(4), including the s 75(2) matters. However, in Strahan (supra) it was observed at [137] that:
… consideration of such matters may be brief and if it is established that “it seems likely to the Court that … the applicant … will be likely receive (sic) by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made”. …

The property of the parties

The wife contends that various assets should be treated as property of the parties for the purposes of her application for an adjustment of interests. The husband contends for a number of liabilities to be included in the Balance Sheet and this inclusion would result in a negative asset pool. He also disputes the inclusion or treatment of other assets that the wife seeks to be included in the “pool” of assets available for distribution. Although these areas of dispute cannot be resolved at this interim stage it is the wife’s case that a proper interim distribution may be made having regard only to the assets that indisputably fall within the asset pool. She submits that the value of the parties’ property excluding the former family home is just short of $1.35 million while the husband contends that the parties’ liabilities exceed their assets.
Each party also contends that the other has not provided financial disclosure as required and for this reason the asset pool cannot be precisely identified.
Doing the best I can on the available evidence and the respective cases as I understand them, the husband and wife seem to agree that the investment property has an estimated value of $615,000 and that $470,000-$481,000 is outstanding on the loan for this property. Thus the equity in this property at its lowest is around $134,000. They also seem to agree that the second investment property has an estimated value of $805,000 with a mortgage of $732,000-$742,000, so that the equity in this property at its lowest is around $63,000.
The parties’ respective contentions about the way in which the former family home is to be treated cannot be resolved until final hearing. It can be noted for the purposes of this application that this property has an estimated value of $1,500,000 - $1,700,000 and that the amount outstanding on the loan secured by a mortgage over this property is around $1,000,000.
In addition the wife asserts that the husband holds an equitable interest in the friend’s investment property, though the friend is not a party to these proceedings. At this stage it can simply be observed that the husband concedes he lent his friend $86,000 to acquire this property.
The wife asserts that the business in which she contends the parties have a shared 50 percent interest has a value of $1,000,000, while the husband claims that the parties have no interest in this business at all. The paternal grandparents also assert that they have a half interest in this business which they contend they purchased from the owner.
Another asset is the husband’s car with an estimated value between $55,000 and $80,000.
Otherwise the asset pool comprises household contents, jewellery owned by each of the parties, luxury items of clothing and shoes asserted by the husband to be owned by the wife and cash at bank but the value of all of these items is in dispute.
The wife contends that the husband has around $18,055 in superannuation and she around $10,987. The husband did not provide any details regarding the superannuation interests of either party in his Balance Sheet relied upon at the interim hearing.
Finally, the parties both include as liabilities in the Balance Sheet significant sums for outstanding legal fees and in the case of the husband a loan from his parents for legal fees. The manner in which these asserted liabilities will be treated also cannot be determined at this interim stage.
In these circumstances the only assets which could be taken into account for the purpose of the application for interim property payment are those that indisputably fall within the asset pool, being the net value of the two investment properties and the husband’s car, which amount to approximately $252,000.
Neither the husband nor wife particularised in their respective written submissions what they seek as a just and equitable final settlement. When pressed in the course of oral argument it was contended on the wife’s behalf that at final hearing she would be asserting an overall entitlement to 70 percent of the parties’ property (constituting 60 percent referable to contributions and a further 10 percent adjustment for 75(2) factors).
The proposition that the wife has a 60 percent contribution based entitlement seems difficult to maintain given the undisputed facts that the wife brought no property to the relationship, that it was short lived and as even on her case the paternal grandparents made very generous gifts to the parties which provided for the purchase of the most significant asset being the former family home.
In the course of oral submissions the father’s lawyer was asked about his contentions in the event that there is found to be property of the parties available for distribution. In this event it is his case that the wife’s contributions should be assessed as 40 percent and a further 10 percent adjustment may be made in her favour for section 75(2) factors.
There is no dispute between the parties about the property owned by the husband at the commencement of the relationship and the significant financial advances however characterised made by the paternal grandparents. There is also no dispute that the husband was employed as an accountant throughout the relationship and applied his earnings for the benefit of the family. It appears common ground that the wife made significant non-financial contributions to the marriage, especially as homemaker and parent. There is also no dispute that the husband has provided no financial support for the children since separation and that the wife has been required to accommodate herself and the children and financially support them while the husband also has been able to utilise the former family home as if it were his alone.
It would also appear that both parties and the husband in particular may have access to undisclosed financial resources considering the unexplained funds that appear to have been available to lend to friends and purchase luxury items.
The wife will bear the majority of expenses and caring responsibility in relation to the children at least during the period the interim parenting orders are operative and if orders are made as she seeks on a final basis. While the husband also seeks orders that the children live with him on a final basis, if orders are made as sought by the wife at final hearing it is likely that this will have some bearing on the adjustment made based on section 75(2) factors.
It is contended on the wife’s behalf that it is likely that there is at least $218,000 (or perhaps $252,000 as previously noted) in joint property currently available for distribution. In percentage terms the sum of $80,000 sought by the wife amounts to 37 percent of $218,000. This is significantly less than the 70 percent she contends for as a final percentage based entitlement and her 50 percent entitlement conceded by the husband.
As previously noted the husband’s opposition to the wife receiving an interim payment is based on his contention that there will be no assets to distribute at final hearing as the parties’ liabilities exceed available assets. This position is founded first on the contention that the “loans” from the paternal grandparents are a responsibility of both parties. Curiously the husband is quite insistent that these funds were advanced as a loan and that he did not hold the former family home on trust for the paternal grandparents as they contend. The second plank to the contention that the parties’ liabilities exceed their assets is that the parties have no interest in the business and that the husband has no interest in the friend’s investment property as the wife asserts.
The authorities[4] make it clear that a Court may determine not to take into account or discount the value of a debt if it is unlikely to be enforced. Further the parties adduce such limited evidence in this interim application that it is not possible to make any other assessment of their various contentions concerning the asset pool. In these circumstances there is a significant degree of uncertainty as to the asset pool available for distribution at final hearing.
[4] See In the marriage of Biltoft (1995) FLC 92-614.
It is worth noting that the paternal grandparents did not take a position in relation to the interim application sought by the wife after being joined to the proceedings. Although they seem to contend that the former family home is held on trust by the husband for them and seek to participate in the final hearing, they did not engage in the interim dispute at all.
I do not consider that a rejection of the wife’s application for interim relief on the basis of the husband’s case (that there will be no funds available at final hearing) will bring about a just and equitable outcome given her obvious need to access funds.
There remains a real doubt as to whether any or all of the liabilities contended for by the husband will be brought to account as joint liabilities and questions arise as to the possible inclusion of other assets.
On the basis of the husband’s own case about the wife’s likely percentage entitlement at final hearing (albeit on the basis of a reduced or negative asset pool) and in all the foregoing circumstances I am satisfied that it is just and equitable that the wife receive $80,000 and consider it proper that this distribution come from the sale proceeds of the investment properties as she seeks. In the circumstances described and based on the assets that indisputably fall within the asset pool available for distribution I am of the view that such a sum will be capable of being clawed back if necessary in the overall resolution of the financial dispute between the parties.

Disclosure

The wife further seeks orders that the husband provide within 14 days by way financial disclosure the following:
·Copies of all home loan account and mortgage statements for the period from 1 July 2014 to present for any account in the husband’s name (whether solely or jointly owned with any other person or in trust) and in the name of any entity in which he has an interest, and any property in which he has an equitable interest including but not limited to the former family home, the [investment] property, the [second investment] property and the property [in which the wife assets the husband has an equitable interest]
·Copies of all income tax returns, notices of assessment and BAS returns for the period from 1 July 2015 to present for the husband personally and for any entity in which he has an interest (such as a private company, trust or partnership)
·Details and statements with respect to all current superannuation interest of the husband
·Bank details and account numbers for all accounts that the husband has held since July 2013 to present whether solely or jointly owned with any other person
·Copies of all bank statements for the period from 1 July 2013 to present for any account in the husband’s name (whether solely or jointly owned with any other person in trust) and in the name of any entity in which that party has an interest such as a private company, trust or partnership
·Copies of all credit card statements for the period from 1 July 2015 to present for any account in the husband’s name (whether solely or jointly owned with any other person or in trust) and in the name of any entity in which that party has an interest
·Copies of market appraisals for any properties held in the name of the husband (whether solely or jointly owned with any other person or in trust or in which the husband has an equitable interest)
·Copies of any registration certificates and sales receipts/tax invoices in respect of all vehicles registered or purchased in the name of the husband for the period from 1 July 2018 to present
·Copies of the husband’s three most recent payslips
·Details of any assets the husband may have disposed of since separation and where the proceeds of that sale have been distributed
·Details and particulars of all incurred rent and revenue from any property in which the husband has a legal or equitable interest, including but not limited to the [investment] property, the [second investment property] and the [property in which the wife asserts the husband has an equitable interest][5]
·Copies of all invoices and payment receipts for legal fees incurred on behalf of the husband since January 2018 including but not limited to those due payable to his current lawyers
(all as written)
[5] The husband agrees to an order in these terms but not in relation to the last mentioned property in bold.
The husband seeks that orders be made in similar terms to those italicised in respect of his disclosure obligations so orders in these terms are not opposed by him.
The husband seeks orders that within 14 days the wife provide by way of financial disclosure to him:
·Copies of documents from Centrelink in relation to subsidies granted to the wife and any applications by the wife therein for the period 1 January 2018 to 31 May 2020
·Certificate registration of motor vehicle
·Bank statements for the period 1 July 2017 to 31 May 2020 on the following accounts:
oK Bank, … …16
oANZ, … …68
oAny other accounts not previously disclosed to the husband
·Individual tax return and Notice of Assessment for the financial years 2017-2018 and 2018-2019, and documents reflecting the current balance
·Superannuation statement for the financial years 2017-2018 and 2018-2019, and documents reflecting the current balance
·Child support assessment notice or Child Support Agreement which governs the amount payable by the wife’s ex-husband for the two children of their relationship. In the event that there are no documents to be produced, all documents and correspondence governing a payment of $628.11 by the wife’s ex-husband on a fortnightly basis
·Parenting plan or parenting orders which governs the arrangements of the children between the wife and her ex-husband in relation to the children of their relationship
(all as written)
The husband opposes the orders sought by the wife as to disclosure, primarily on the basis that some of the material she seeks to be disclosed pre-dates the parties’ marriage. He contends that the wife has not explained why she requires such disclosure, and seems to argue that the documents sought to be disclosed are not relevant. It is also submitted on behalf of the husband that the wife should be required to provide disclosure of a similar breadth to that which is sought by her.
The wife did not make any submissions concerning the orders sought by the husband.
The obligations of parties in financial proceedings to make full and frank disclosure of “all information relevant to the case”[6] is well established.
[6] Rule 13.01 of the Family Law Rules 2004 (Cth).
In Tate & Tate (2000) FLC 93-047 the Full Court said:
50.It is useful to recall that discovery is a continuing process (see Brambles Holdings Ltd v Trade Practices Commission (1983) 47 ALR 69). Indeed, had there even been a compliance with the rules of court or practice directions on one occasion it would not obviate the need for a party to a property proceedings in this court to make a full and frank disclosure of all relevant financial circumstances which may involve a duty of continuing discovery. Indeed it is difficult to see how it could not.
51.The law in Australia on this point is the same as in England. In Oriolo v Oriolo (1985) FLC 91-653 (a decision of Emery, Fogarty and Murray JJ), the Full Court held at 80,256:
“We consider that there is a clear obligation on a party to proceedings in this court to make a full and frank disclosure of all relevant financial circumstances. As was said by Lord Brandon for the House of Lords is Livessey v Jenkins (1985) 1 All ER 106 at page 114:
“I stated earlier that, unless a court is provided with correct, complete and up to date information on the matters to which, under Section 25(1), it is required to have regard, it cannot lawfully or properly exercise its discretion in the manner ordained by that sub-section. It follows necessarily from this that each party concerned in claims for financial provision and property adjustment (or other forms of ancillary relief not material in the present case) owes a duty to the court to make full and frank disclosure of all material facts to the other party and the court. This principle of full and frank disclosure in proceedings of this kind has long been recognised and enforced as a matter of practice. The legal basis of that principle, and the justification for it are to be found in the statutory provisions to which I have referred.”
52.In that decision the Full Court also approved the statement of Smithers J in Briese and Briese (then unreported 27 June 1985) (1986) FLC 91-713 at 75,180):
“I believe that a person in the position of the husband in this case has a positive obligation to set out at an early stage his financial position in a clear and comprehensive manner.”… “The need for each party to understand the financial position of the other party is at the very heart of cases concerning property and maintenance. Unless each party adopts a positive approach in this regard delays will ensue with the consequent escalation of legal, accounting and other expenses, always assuming that a party has the strength to continue the struggle for information and understanding.
In this case it is possible, but I believe largely with the benefit of hindsight, to suggest one or two other strategies which the wife could have employed in her search for the facts before the trial. On the whole however, I do not believe that her case was conducted other than appropriately and reasonably. It was in the power of the husband to curtail the costs by making adequate disclosure.
Although the case relates to quite different circumstances, I believe that the conclusion in the House of Lords in the case of Livesey v Jenkins (1985) 1 All E.R. 106 is apposite, namely that in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. In that case it was made clear that full and frank disclosure was required as a matter of principle in the light of the fact that it was the duty of the court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of a discretion. This is quite different from common law litigation between strangers, in which such a general duty does not exist, and obligations would only exist in so far as statute or court rules required.
In my view it is fundamental to the whole operation of the Family Law Act in financial cases that there is an obligation of the nature to which I have referred. Livesey v Jenkins make it clear that mere compliance with rules of court or practice directions does not alter the basic principle of the need for full and frank disclosure by the parties…
53.The position in this Court is indeed quite unlike that of the Common Law Courts. Full and frank disclosure is required as a matter of “principle in the light of the fact that that it is the duty of the Court, taking into account a number of designated criteria to make a decision which basically involves the exercise of a discretion”.

I am of the view that most of the orders as to disclosure sought by both parties are relevant to the case in circumstances where there is a real lack of clarity in relation to the financial dealings of the parties. It seems that the parties had a financial relationship prior to their marriage and on the husband’s evidence his parents (and others on the parents’ behalf) have been transferring funds to him from about 2012. There is a dispute about the funds used in the acquisition of the former family home which was purchased just before the parties’ marriage. In these circumstances it could not be said that the financial dealings of the parties leading up to their marriage are not relevant to this case.
More generally, proper disclosure is particularly relevant in this case where the wife asserts that she was kept in the dark about financial dealings of the husband on the parties’ behalf during the relationship. Further there appear to be apparent inconsistencies in the husband’s evidence as he asserts both that his income from his employment at times was insufficient to support all of his expenses and that he was able to accumulate further real property and provide financial assistance to others at around the same time.
In all of the circumstances it is proper to make the orders for disclosure as sought by the parties with the following exceptions. Some of the documents sought by the wife to be disclosed by the husband relate to the friend’s investment property. However, the wife has not particularised any final property orders to date and although she claims the husband has an interest in this property she has not put this person on notice about that claim or sought to join him to the proceedings.
I have also made some minor grammatical changes to the form of the orders sought by the husband to assist with clarity. An order that the wife disclose “any other accounts not previously disclosed to the husband” was not made as I consider it so broad to be meaningless.

Injunction

The wife seeks an order pursuant to s 114 of the Act. that the parties be restrained from further encumbering or dealing with the investment properties without the written consent of the parties or court order.
Section 114 of the Act provides:
(1)In proceedings of the kind referred to in paragraph (e) of the definition of matrimonial cause in subsection 4(1), the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate, including:
…
(e) an injunction in relation to the property of a party to the marriage
The wife contends that such an order is proper in circumstances where the husband has not kept her informed of how he is managing the jointly owned investment properties despite her requests for disclosure. The wife contends that as the husband has exclusive access to the mortgage account for the two investment properties he has been able to deal with the properties at his discretion without her knowledge.
The husband opposes orders being made as sought by the wife in relation to the two investment properties. He contends that he would be unable to comply with any order in the terms sought as he is currently unable to meet mortgage repayments as required. He argues that on an ongoing basis he further encumbers the mortgage on each occasion that he does not meet the required repayment.
I am of the view that the current interim orders made with the parties’ consent at the last court event are proper to protect the wife’s interests in these circumstances. Those orders require the husband to ensure all rental income for the investment properties is transferred into the respective loan accounts. These are sufficiently protective and preservative particularly in circumstances where orders have also already been made for these properties to be sold.

Costs

As I indicated at the interim hearing, it is more appropriate for the issue of costs to be determined after the delivery of this interim judgment. Neither party took any issue with this approach.
Accordingly, the orders I make are those set out at the forefront of these reasons for Judgment.

I certify that the preceding eighty five (85) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hannam delivered on 28 September 2020.

Associate:

Date: 28 September 2020