Stephens & Stephens and Ors

Case •

[2009] FamCA 156

•

10 March 2009

FAMILY COURT OF AUSTRALIA

STEPHENS & STEPHENS AND ORS [2009] FamCA 156

FAMILY LAW - ENFORCEMENT OF ORDERS – Where the wife sought enforcement of the Orders of the trial Judge providing for the payment of a sum of money to the wife in settlement of property following the husband’s unsuccessful appeals to the Full Court and the High Court – Where the husband asserted that he had insufficient personal funds out of which to satisfy the Order – Where the husband asserted that the funds in question were the property of the parties’ children’s trusts and that the Court had neither jurisdiction nor power to make an order with respect to those monies in favour of the wife in satisfaction of a liability which is personal to the husband – It is not for this Court to revisit issues which have been conclusively determined against the husband by the High Court – The s 106B orders made by the trial Judge, which were undisturbed by the High Court, had the effect that the funds were not funds of the Children’s trusts, and to the extent that the funds were trust funds they were the funds of a trust of which the wife was an object, over which the husband had legal control. Further, to the extent that the funds were once the assets of either trust, the funds in question were now in fact removed from those trusts – Not established that the Court cannot or should not order that the stakeholders release to the wife the funds to satisfy her entitlement.

FAMILY LAW - ORDERS – Interest – Whether interest should be payable on the outstanding balance of the judgment sum owing to the wife following the husband’s unsuccessful appeals to the Full Court and to the High Court – Whether the Court should exercise its discretion pursuant to section 117B(2) to make an order for the payment of interest for a different period, and/or at a different rate to those which would otherwise apply by operation of section 117B(1) of the Act – In the circumstances of the case, it is not appropriate to make an order pursuant to section 117B(2) with respect to the period during which interest should accrue on the wife’s entitlement – The Court declined to adopt the interest rate prescribed by the Rules, adopting a rate 2 per cent in excess of the rate from time to time prescribed by the RBA as the cash rate.

FAMILY LAW - COSTS – Security for costs – In the circumstances, to decline to preserve a fund to abide the outcome of the various costs issues would be to create a real and substantial risk that the wife would be unable to recover her current and possible future entitlements to costs – Interlocutory injunctive relief granted.
Waugh and Waugh (2000) FLC 93-052; (2000) 27 Fam LR 63
Deputy Commissioner of Taxation and Kliman (2002) FLC 93-113; (2002) 29 Fam LR 301
APPLICANT: Ms STEPHENS
RESPONDENT: Mr STEPHENS
INTERVENERS: W STEPHENS
X STEPHENS
Y STEPHENS
Z STEPHENS
FILE NUMBER: MLC 788 of 2009
DATE DELIVERED: 10 March 2009
PLACE DELIVERED: Parramatta
PLACE HEARD: Melbourne
JUDGMENT OF: COLEMAN J
HEARING DATE: 17 & 18 February 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Ackman Q.C.
SOLICITOR FOR THE APPLICANT: Kennedy Wisewoulds
COUNSEL FOR THE RESPONDENT: The husband appearing in person
SOLICITOR FOR THE RESPONDENT: Nedovic and Co
COUNSEL FOR THE INTERVENER: Mr Bartfeld S.C.
SOLICITOR FOR THE INTERVENER: Taussig Cherrie & Associates

Orders

  1. That Kennedy Wisewoulds solicitors (the stakeholders) forthwith pay to the wife from moneys held by the stakeholders pursuant to orders of the Court of 1 February 2009 the sum of $996 362.18 being the balance of moneys owed by the husband to the wife pursuant to the orders of the Court of 30 November 2005

  2. That the stakeholders do forthwith further pay from the moneys held by them the sum of $500 647.98 by way of interest payable on moneys owed by the husband to the wife pursuant to orders of the Court of 30 November 2005

  3. That the stakeholders invest the sum of $500 000 of the moneys held by them pursuant to orders of this Court on 1 February 2009 in an interest bearing account as trustees for the parties pending quantification and/or determination of

    (a)       The husband’s liability for costs pursuant to orders made by the High Court of Australia on 3 December 2008

    (b)       The husband’s liability for costs pursuant to orders made of the Full Court of the Family Court of Australia on 13 July 2007

    (c)       Any costs ordered by Strickland J with respect to the proceedings determined by him on 30 November 2005

  4. That the stakeholders pay the balance of the moneys held by them after payment and/or investment of the moneys referred to in orders 1, 2 and 3 hereof to the husband or such entity or entities as the husband shall within 48 hours of these orders specify in writing to the stakeholders

  5. That order 4 of the orders made by Watts J on 1 February 2009 be and is hereby discharged

  6. That written submissions in support of any application for costs of the wife’s application filed 2 February 2009 be filed and served within 21 days

  7. That written submissions in opposition to any such submissions be filed and served within 35 days

  8. That written submissions in reply be filed and served within 42 days

  9. That the wife’s application filed 2 February 2009 and the husband’s response filed 13 February 2009 be otherwise dismissed

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 788 of 2009

Ms STEPHENS

Applicant

And

Mr STEPHENS

Respondent

W STEPHENS, X STEPHENS, Y STEPHENS, Z STEPHENS

Interveners

REASONS FOR JUDGMENT

Introduction

  1. By Application in a Case filed on 2 February 2009 Ms Stephens (“the wife”) sought orders against her former husband Mr Stephens (“the husband”) in the following terms:

    2.That … the amount of $2,034,632.18 [sic] being the amount of the judgment in her favour pursuant to the Order of the Honourable Justice Strickland made on 30 November 2005 as confirmed by the judgment of the High Court of Australia on 3 December 2008 after adjustment to reflect an agreed inadvertent error in His Honour’s calculations be paid forthwith to the wife (“the judgment sum”).

    3.That interest on the judgment sum from 1 March 2006 to the date of receipt by the wife of the judgment sum be paid to the wife in the amount of $665,573.86 to 1 February 2009 together with a further $682.00 a day from 1 February 2009 to the date of receipt by the wife of the judgment sum and interest.

    4.That from the said monies the amount of $500,000 be forthwith paid to the wife in satisfaction of all orders and claims for costs of the proceedings before the Honourable Justice Strickland, the Full Court of this Court and the High Court of Australia and in default:

    4.1    The wife have leave to proceed with an application for costs with respect to the proceedings before the Honourable Justice Strickland.

    4.2    The wife’s costs of the proceedings in the Full Court of this Honourable Court and the High Court of Australia be taxed in accordance with the Orders of those Courts and, when taxed, paid by the husband.

    5.That Kennedy Wisewoulds solicitors as the stakeholders appointed under the Order of the Honourable Justice Watts made on 1 February 2009 be authorised to invest the balance of the monies after payment to the wife of the amount in paragraph 2 hereof in an interest bearing account as trustees for the parties pending final determination of this application. [Application in a Case filed 2 February 2009, page 5, pars 2, 3, 4 and 5].

  2. The wife sought that the husband pay the costs of her application on an indemnity basis.

  3. On 13 February 2009, the husband filed a Response to the wife’s application. In his response, the husband sought orders in the following terms:

    1.That the moneys stolen from the Respondent’s home and now held by Kennedy Wisewoulds be paid to the Children’s Trusts and to the Respondent as set out in paragraph 3 hereof, together with interest, compensation and the costs of the Children’s Trusts and the Respondent.

    2.That from the said moneys $50 000 be paid immediately to the Respondent, to enable him to pay for legal and other expenses.

    3.That, pending the payment referred to in paragraph 1 hereof, the balance of the said moneys held by Kennedy Wisewoulds be invested by them at call, in separate accounts, on behalf of the following:

    [W Stephens] Trust:   $839,000

    [X Stephens] Trust:    $879,000

    [Y Stephens] Trust:    $815,000

    [Z Stephens] Trust:    $821,000

    [The Husband]  $779,000 (less an amount under paragraph 2, supra)

    [Stephens] Superannuation:          $309,000

    and that copies of all statements and other documents relating to the said moneys be sent to the Respondent immediately upon receipt by Kennedy Wisewoulds of such statements and other documents.

    4.That the paintings owned by the Respondent by […] and […] be delivered to him, and the […] drawing and […] painting be retained by the Applicant.

    5.That interest be payable only from 3rd December 2008 or some other date after 28th February 2006, and further or alternatively that interest at a reduced rate be payable.

    6.That the Applicant pay the Respondent’s costs of and incidental to this application on an indemnity basis. [Response to Application filed on 2 February 2009, filed 13 February 2009, pages 1 & 2, paras 1-5].

  4. The husband also sought that the wife pay his costs of the proceedings on an indemnity basis.

  5. The stakeholders currently hold the sum of $4 442 000 to abide the outcome of the wife’s application. The circumstances in which they came to do so will later be discussed.

  6. At the commencement of the hearing of the competing applications on 17 February 2009, the husband filed in Court a document entitled “Disposition of Monies” (Exhibit H1) which stated:

    In response to the letters of demand of Kennedy Wisewoulds of 4 December 2008 and 23 January 2009, I hereby transfer and assign absolutely to [Ms Stephens] with immediate effect all my rights and interest in $1,038,000 being part of the monies stolen from me and now held by Kennedy Wisewoulds, in satisfaction of part of the amount of $2,304,362.18 claimed against me by the said [Ms Stephens], so that the part of the said amount that remains is $996,362.18. [Exhibit H1].

  7. When the competing applications of the parties came before the Court on 17 February 2009, Mr Bartfeld S.C. appeared for the four daughters of the parties, W Stephens, X Stephens, Y Stephens and Z Stephens (“the daughters”). By consent, a Notice of Address for Service was filed in Court on behalf of the daughters by Mr Bartfeld’s instructing solicitors.

  8. Mr Bartfeld S. C. informed the Court that the daughters sought no orders in the proceedings, either affirmatively, or by way of opposition to the wife’s application. The daughters’ opposition to relief being granted in the terms sought by the husband could thus be inferred.

  9. Mr Bartfeld S.C. confirmed that his clients did not object to the Court making an order that any monies not ordered to be paid to the wife pursuant to her application or held on her behalf pending the determination of the outstanding costs issues be paid to and received by the husband on whatever basis he sought.

  10. By consent, Mr Bartfeld S.C. withdrew from the hearing of the proceedings upon completion of the husband’s cross-examination of two of the daughters who had sworn affidavits in support of the wife’s application.

  11. During the course of the proceedings on 17 February 2009, with the consent of all parties, an order was made to give effect to the husband’s consent to the wife receiving $1 038 000 from funds held by Messrs Kennedy Wisewoulds solicitors (“the stakeholders”) on behalf of the parties. That order being made, the wife’s claim for $2 034 362.18 was reduced to $996 362.18.

  12. The wife’s claim for interest to 17 February 2009 was quantified by her learned Senior Counsel in the sum of $676 498.11. Ongoing interest was claimed in the sum of $682.77 per day, albeit that calculation was made prior to the order releasing to the wife the sum of $1 038 000.

  13. The wife’s pleaded claim was that $500 000 be paid to her in satisfaction of the costs orders and potential costs orders particularised in that claim [Application in a Case, filed 2 February 2009, page 5, par 4]. Sensibly in the Court’s view, her learned Senior Counsel conceded that such relief was premature, and that her claim should be seen as seeking an injunctive order preserving a fund of that magnitude to abide the taxation of costs previously awarded and/or yet to be determined. Given the issues for determination and their various outcomes, Senior Counsel for the wife sensibly agreed that the costs of the present proceedings should abide their outcome, and be the subject of further submissions in the light of the Court’s orders and reasons for such orders.

  14. Whilst the orders sought by the husband were not in doubt having regard to the Response filed by him on 13 February 2009, his concession that $1 038 000 could be released to the wife by the stakeholders, and the Court so ordering, gave rise to some uncertainty as to what orders the husband ultimately sought. That uncertainty does not give rise to difficulty, given the fundamental basis of the husband’s opposition to the balance of the wife’s claims.

  15. Senior Counsel for the wife, sensibly in the Court’s view, conceded that the husband should immediately be paid $50 000, for whatever purpose he desired, from the funds held by the stakeholders as sought by him in his Response [Response to Application filed 2 February 2009, filed 13 February 2009, page 1, par 2]. The concession was made on the basis that such payment not be out of monies to which the wife was held to be entitled. The Court made an order to give effect to the consensus thus reached.

  16. The husband’s position, it seems clear, is essentially that by the release to her of $1 038 000 from funds held by the stakeholders, the wife will have received all of the husband’s property, save for some furniture and a nine year old motor vehicle. The husband thus contends that, whilst she would gain nothing from doing so, the wife’s remedy in relation to the balance of monies claimed by her in her application of 2 February 2009 ($996 362.18 plus interest and costs) was by proceeding against him in bankruptcy.

  17. Save to the extent of the $1 038 000 which the wife has received in the circumstances described earlier, the husband contends that the totality of the funds held by the stakeholders are the property of trusts controlled by him, the discretionary beneficiaries of whom he contends are the daughters, and described by the husband in his Response as “the Children’s Trusts”.

  18. Presumably having reduced the amounts pro rata after the $1 038 000 paid to the wife had been taken into account, and the $50 000 paid to him had been taken into account, the husband asserted that the monies held by the stakeholders be paid to the children’s trusts in the sums, or necessarily reduced sums asserted in paragraph 3 of his Response.

  19. The husband opposed any order for interest on two bases. The first, and overarching basis of the husband’s opposition was that, after the wife received $1 038 000, he had no property from which any interest awarded could be recovered. In the alternative, the husband raised a number of objections to the Court exercising its discretion to award any interest, or interest for the period, or at the rates prescribed by the Rules of Court and claimed by the wife.

  20. The husband opposed the retention of any monies on account of past or future costs orders on two bases. The first and overarching basis of the husband’s opposition was that, after the wife had received the sum of $1 038 000, he had no property from which any liability for costs he may incur, or have incurred, could be satisfied. The husband also raised discretionary challenges to the retention of any monies on account of past or future costs orders.

  21. Although perhaps not fairly able to be seen as a concession, in the course of his submissions, the husband suggested that the taxed costs of his unsuccessful appeal to the High Court could not exceed $80 000. In similar vein, the husband also suggested that the costs awarded against him by the Full Court could not reasonably exceed the sum of $80 000.

The history of the property settlement proceedings

  1. Proceedings between the wife, the husband, the daughters in their own right, and a number of trusts, including the children’s trusts, were determined by Strickland J on 30 November 2005 after a hearing earlier that year.

  2. For reasons which he then gave, Strickland J ordered, relevantly for present purposes, that a number of instruments and dispositions made in 1998 and 2002 be set aside pursuant to section 106B of the Family Law Act (Cth) (“the Act”) and that on or before 28 January 2006 the husband pay to Ms Stephens the sum of $2 182 302. It is common ground that such figure was mathematically erroneous, the correct figure being $2 034 362.18. At the risk of oversimplifying matters, the effect of the s 106B orders was to restore the wife as an object of the Stephens Trust, and to return to that trust property removed from it and settled upon trusts for each of the parties’ four children. The husband has at all material times controlled all of the relevant trusts.

  3. The husband appealed against Strickland J’s orders. The husband’s appeal was dismissed by the Full Court of this Court on 13 July 2007.

  4. Pursuant to a grant of special leave, the husband then appealed to the High Court. Whilst there were a number of parties to the proceedings in the High Court, and a variety of competing positions were agitated, it is sufficient for present purposes to record that no party, entity or interest participating in the current proceedings was not a party to the proceedings in the High Court and thus bound by its decision. The proceedings, heard on 2 September 2008 by French CJ, Gummow, Hayne, Heydon and Kiefel JJ were determined by the High Court on 3 December 2008. The High Court dismissed the various challenges to the decision of the Full Court thus leaving the decision of Strickland J undisturbed.

  5. Whilst the orders are not without some intricacy, in broad terms the wife was awarded costs of the proceedings in the High Court and those costs orders were made against the husband or interests controlled by him.

  6. On Sunday 1 February 2009 Watts J, consequent upon an ex parte oral application by telephone to him by the wife’s solicitors (“the stakeholders”), made a series of interlocutory injunctive orders. Whilst certain of those orders will require consideration in these Reasons for Judgment, reference is now made only to the orders which are directly relevant to the competing applications which have been earlier identified. Other orders requiring consideration will later be referred to.

  7. Watts J ordered that the stakeholders be “appointed to hold as stakeholders pending further direction of the Court the amount of $4, 442, 000.00 in cash (“the funds”) the subject of the dispute between the parties to these proceedings.” A number of procedural orders were also made.

  8. Watts J also ordered:

    7.That until further order the husband by himself, his servants and agents be and are hereby restrained from selling, alienating, realising, encumbering or in any way dealing with:

    7.1    Assets held in any trust in which the children [W Stephens], [X Stephens], [Y Stephens] or [Z Stephens] (“the children”) are actual or potential beneficiaries;

    7.2    Assets including but not limited to monies standing in any bank account in his name as nominee for any of the children or accounts relating to the children in respect of which he is an authorised signatory. [Orders, 1 February 2009, par 7].

  1. Perhaps not surprisingly in the circumstances, the record of the proceedings before Watts J is less than comprehensive. No reasons for Watts J’s decision appear to have been published. That is not said critically. No disadvantage could flow to either party from the absence of reasons for the orders of 1 February 2009.

  2. On 2 February 2009, after a hearing in open court, which seems to have been ex parte, Cronin J ordered:

    1.That to give better effect to paragraph 1 of the Order of the Honourable Justice Watts made on 1 February 2009 appointing Kennedy Wisewoulds Solicitors as stakeholders of the funds referred to in paragraph 1 of that Order the said solicitors be and are hereby authorised to deposit the said funds into the Kennedy Wisewoulds Trust Account at National Australia Bank pending further order of the Court.

    2.That all questions of costs of and incidental to this application be reserved.

    3.That this Order be brought to the attention of the Respondent husband [Mr Stephens] as soon as is practicable by the Court. [Orders, 2 February 2009, pars 1-3].

  3. Whilst Cronin J’s published reasons are available, with no disrespect to his Honour, they do not advance matters for present purposes.

  4. The matter came before this Court on Monday 9 February 2009 by way of telephone link between Parramatta and Melbourne. Video link facilities which had been arranged for that purpose had proved less than equal to the task.

  5. The proceedings were specially fixed for hearing before the Court on 17 February 2009 in Melbourne. The proceedings were heard on 17 and 18 February 2009.

  6. The effect of the proceedings, to which reference has briefly been made, is that Strickland J’s orders have survived the process of challenge through to and including the High Court. It is common ground that, save for the $1 038 000 received by the wife in the circumstances recorded earlier, the wife has received no part of the monies to which she is entitled.

  7. It is common ground that Strickland J has not determined the fate of the applications for costs arising out of the trial of the proceedings.

  8. As will be seen, pivotal to the determination of the wife’s claim for the balance of the monies payable to her by the husband pursuant to Strickland J’s orders, interest thereon, and the retention of monies relating to costs issues is whether, as Senior Counsel for the wife contends, the Court can order the stakeholders to pay those monies to the wife, or hold them on her behalf, irrespective of whether they represent the property of the husband and/or any of the Stephens or the children’s trusts.

  9. The husband’s contention is that, save for the sum of $1 038 000 paid to the wife, and at least inferentially, the $50 000 paid to him by the stakeholders, the balance continuing to be held by them of $3 354 000 is the property of the children’s trusts and the Court has neither jurisdiction nor power to make any order with respect to those monies in favour of the wife in satisfaction of a liability which is personal to the husband.

The evidence in the present application

  1. On behalf of the wife five affidavits were read. The deponents of all of those affidavits were cross-examined by the husband.

  2. The husband filed no evidence in the proceedings.

  3. The only evidence before the Court in the present application is thus evidence adduced on behalf of the wife. That in itself does not mean that the allegations of fact contained therein are automatically entitled to be accepted.

  4. Nothing emerging from the cross-examination of any witness relied upon in the wife’s case provides a rational basis for not accepting the allegations of fact made by each of those witnesses. Nor is any allegation of fact appearing in the affidavit evidence of any of those deponents inherently unable to be accepted.

  5. Ultimately, as a reading of the transcript would confirm, the husband’s cross-examination of the wife and the four witnesses relied upon by her did not reveal any serious challenge to the essential allegations of fact made by the wife or any of her witnesses.

  6. The status of the evidence can be summarised as being that the only evidence before the Court in the present application is the evidence adduced on behalf of the wife, that there is no reason not to accept the allegations of fact made by the wife and her witnesses and that, quite apart from his election not to adduce any evidence, the husband did not in cross-examination of the wife or any witness suggest an alternate version of the crucial events to those advanced by the wife and her witnesses.

  7. The evidence of the wife and her witnesses is relevant for two different purposes. Given the issues which the Court has identified, it is instructive to consider the evidence by reference to the topics which are potentially of relevance.

The evidence in relation to the funds which are held by the stakeholders

  1. The wife’s affidavit contains no direct or admissible evidence impacting upon the question of whose funds the stakeholders are holding. The husband did not object to any part of the wife’s affidavit. In her affidavit, the wife asserted:

    14.The husband’s home was valued for the trial four years ago, in the sum of $730,000.00. I believe the current value is in the range of $800,000 - $1 million. He also had a substantial share portfolio in his own name, valued at August 2005, for the trial, at $937,831.00. The Children’s Trusts, including shares and cash holdings, were valued at trial at $4,760,152.00. Since then some of the monies have been used to purchase properties for each of the children, but the bulk of the trust assets, say $4 million, remained held in shares. The husband did not provide the girls with particulars of the proceeds of realisation of his personal assets but the total assets realised by him and converted to cash would be in the range of $5 million or more. [Affidavit of the Wife sworn 1 February 2009, page 5, par 14].

  2. Notwithstanding that the foundation for some of those allegations, or the expertise to express the opinions they advance is not apparent, as Senior Counsel for the wife asserted, the evidence raised the possibility that between $1 737 831 and $1 937 831 of the funds held by the stakeholders could have been the property of the husband. Save to the extent indicated, and subject to the qualifications which have been recorded, the wife gave no evidence as to who owned the funds.

  3. W Stephens, the eldest daughter of the parties, deposed in her affidavit to conversations with the husband on 30 January 2009 at a restaurant at South Yarra. She deposed to the husband informing her that “I have sold the house”, and having sold “all of the trust shares”, and having “it all in cash”, and to the husband having produced a bag which contained a quantity of cash, asserted by the husband to have been $150 000. [Affidavit of W Stephens sworn 1 February 2009, page 2, par 4].

  4. W Stephens further deposed:

    5.He told us that the sale of the home had settled and he had the money, but he had arranged to stay on there for a further period. He said that he was arranging a meeting of lawyers on Friday 6 February and that our mother would be offered cash which he estimated to be around about $400,000.00. He went on to say that if this was not accepted she would “not get anything” as he would “disappear”, and gave me the impression that he intended to leave Melbourne soon. [Affidavit of W Stephens sworn 1 February 2009, page 2, par 4].

  5. W Stephens also deposed:

    6.He told us that he had cashed up around $900,000.00 from each of the four children’s trusts. I believe (but am not certain) that he also said that he had the proceeds of the sale of the house and his personal assets in cash but he did not say how much that amounted to. [Affidavit of W Stephens sworn 1 February 2009, page 3, par 6].

  6. W Stephens further alleged that he was “only trying to look after us and stop her [the wife] trying to get her hands on money that really belonged to us”. [Affidavit of W Stephens sworn 1 February 2009, page 3, par 7].

  7. She further deposed to telling the husband “that if he was in Australia, he would surely be tracked down; and if what he was doing was illegal, I was very concerned he would go to jail, so what was the point of his actions. He replied that if he thought he was about to be caught, as an absolute last resort, he would burn the money; and in the worst case, if he was sent to jail, he would go to jail rather than see our mother get anything.” [Affidavit of W Stephens sworn 1 February 2009, page 3, par 8].

  8. In cross-examination, the husband did not challenge W Stephens in relation to any of the matters to which reference has been made.

  9. As was submitted by Senior Counsel for the wife, W Stephens’ evidence was supportive of an inference that a substantial, if unspecified, part of the monies held by the stakeholders was or could have been the property of the husband and that his stated intention in relation to the funds was inconsistent with his assertion that he could not utilise them as he saw fit.

  10. Y Stephens, the third daughter of the parties, deposed in her affidavit to conversations with the husband in the presence of her eldest sister W at a restaurant in South Yarra on 30 January 2009. Y Stephens’ affidavit was in substantially the same terms as W Stephens’ affidavit to which reference has been made.

  11. In cross-examination the husband did not challenge any of the material allegations of fact appearing in Y Stephens’ affidavit.

  12. The affidavit of the wife’s solicitor, Ms Grobtuch, did not contain any allegations of fact in relation to who owned the money which came to be held by the stakeholders.

  13. The same is true of the affidavit of Mr Kennedy, another solicitor acting for the wife.

  14. It was always open to the husband to file evidence in the proceedings explaining how the sum of $4 442 000 came to be in his possession in cash. The husband, better than anyone, could have explained the sources of those funds. It is not irrelevant in this context that the husband has for thirty years been a legal professional and, as it emerges from other material upon which he relied, is the author of an eminent legal text ….

  15. Whilst Strickland J’s finding of fact in relation to the husband’s property, albeit made more than three years ago, and the evidence relied upon by the wife in the present proceedings renders it improbable that all of the $4 442 000 which came to be held by the stakeholders was the husband’s personal property, the evidence does not enable the Court to find that the funds were not substantially his. The husband could have explained how he came to have in his possession $4 442 000 in cash, and have substantiated his explanations by reference to source documents. He chose not to.

  16. The Court accepts, as submitted by Senior Counsel for the wife, that whatever the legal basis for the husband’s opposition to the relief sought by the wife in the present proceedings, the Court cannot make the finding of fact upon which the husband’s opposition is predicated.

  17. The husband was in possession of the money. The husband evidenced an intention to deal with the money which was not consistent with the recognition of it being other than his to deal with as he pleased. In the circumstances, the husband bore the onus of establishing that the funds were not his. The failure to adduce evidence that the funds were not his money, to the extent that it ultimately matters, would permit the Court to conclude that funds of the magnitude sought by the wife in this application were, on the balance of probabilities, the husband’s property. To the extent that they were not, and were trust assets, the wife was an object of that trust as a result of Strickland J’s orders.

The removal of the funds from the husband’s premises

  1. In his written material and during his submissions to the Court, the husband repeatedly described the removal of the funds which the stakeholders currently hold as having been “stolen” from his premises.

  2. During the course of the husband’s cross-examination of his daughters, that proposition appeared about to be put. Senior Counsel for the daughters did not object to their being directed to answer questions of that kind, provided that they were afforded the benefit of a certificate pursuant to section 128 of the Evidence Act1995 (Cth) in relation to such evidence.

  3. The Court made clear to the husband that, subject to the issue of such certificates, his daughters would be directed to answer questions in relation to the “stealing” of the funds from his premises. The husband thereupon withdrew such questions.

  4. There is little doubt that the wife, W Stephens and Y Stephens engaged in subterfuge on the morning of 31 January 2009 in order to recover from the husband’s premises the cash monies which are held by the stakeholders.

  5. The circumstances surrounding the removal of the funds from the husband’s premises have potential significance in relation to those aspects of the current proceedings which involve the exercise of discretion. The husband did not appear to expressly say so, but it would be reasonable to infer from the conduct of his case, and tenor of his submissions, that the husband was asserting that the circumstances surrounding the removal of the cash funds from his premises on 31 January 2009 disentitled the wife to the benefit of any relief which involved the exercise of discretion in her favour.

  6. The Court perceives that could not relate to the question of her entitlement to receive $996 362.18 but could potentially relate to her entitlement to interest on the sum awarded to her by Strickland J. Although more difficult to see how, the circumstances surrounding the removal of funds might be thought to have some possible relevance to the determination of the wife’s application to preserve a fund of $500 000 to abide the outcome of the various costs issues identified earlier.

  7. Little needs to be said about the removal of the funds on 31 January 2009. The statements made by the husband to W Stephens and Y Stephens on 30 January 2009 provided ample justification for such deception or subterfuge as was involved in the removal of the cash funds from the husband’s residence on 31 January 2009.

  8. To the extent that the wife relies upon the exercise of discretion in her favour in order to succeed with any claim currently before the Court, nothing done by her or on her behalf in relation to the removal of the funds from the husband’s premises would disincline the Court to exercise such discretion in her favour if she is otherwise entitled to succeed with such claim.

the wife’s application to be paid the sum of $996 362.18 being the balance of her entitlement to be paid $2 034 362.18 pursuant to Strickland J’s orders.

  1. Senior Counsel for the wife asserted that the basis of her claim was simple and irrefutable. As recorded earlier, it was submitted by Senior Counsel for the wife that the evidence did not establish that any part of the funds currently held by the stakeholders, or at least sufficient of those funds to satisfy the wife’s claim, was other than the husband’s property. To the extent that the funds were not, that did not matter in view of Strickland J’s orders.

  2. Senior Counsel for the wife submitted that the basis upon which the husband asserted that the Court could not grant the relief sought by her had been agitated unsuccessfully by the husband before Strickland J, the Full Court of this Court, and the High Court.

  3. It was thus submitted that, however the husband reflected his so doing in relation to the assets and records of the children’s trusts, he could be required by Strickland J’s orders, and the refusal of the High Court to disturb them, to satisfy his personal liability out of funds which, although not proved to be, were what the husband continues to assert were funds of the children’s trusts.

  4. It was submitted, with ample evidentiary foundation, that the husband’s actions in relation to the funds which came to be held by the stakeholders was consistent with them being his funds, or being able to be utilised as if they were, and with them not being impressed with the trust obligations asserted by the husband.

  5. It is a matter of record in the current proceedings that, at a time when they have been represented by Senior Counsel, the beneficiaries of the children’s trusts have not opposed the wife being paid out of funds which may belong to those trusts. They have not opposed the release to the husband personally of the balance of the funds held by the stakeholders, without seeking that they be designated as funds of the children’s trusts or in any way the subject of any orders preventing or curtailing the husband’s ability to deal with those funds in such manner as he chooses. Given the decision of the High Court, the stance taken by the children was sensible.

  6. During the course of extensive and cogently argued oral submissions, the husband sought to persuade this Court that, save to the extent that he had already done so by consenting to $1 038 000 being released to the wife, the Court could not make any further order with respect to the monies held by the stakeholders as they were the funds of the children’s trusts.

  7. Without any discourtesy to him, the Court does not propose traversing the husband’s submissions in detail. With all due respect to him, the husband’s submissions in the present applications are in substance the same as those which have been advanced unsuccessfully on his behalf by a series of Queens Counsel before Strickland J, the Full Court and the High Court.

  8. It is clear beyond doubt that the husband regards the decisions of each of those Courts as having been erroneous in law. Whether they are or not is an issue which this Court can not entertain. Given the husband’s concern however that the judges of the Family Court have from time to time not taken any notice of his submissions, brief reference will be made to the documentation advanced by the husband in support of his contentions.

  9. As noted earlier, the husband’s broad contention permeates each of the three issues relating to the funds held by the stakeholders requiring determination in these proceedings. Obviously, if the husband were to succeed with his primary submission, the stakeholders could not validly be directed to release further funds to the wife, either by way of satisfaction of Strickland J’s order that she receive $2 034 362.18, or by way of interest thereon, or by way of security for past costs orders and possible future costs orders.

  10. During the course of his submissions, the husband relied upon a Deed of Settlement titled “The Stephens Trust”. There is little doubt that this Deed of Settlement has been the subject of extensive consideration in the proceedings before Strickland J, the Full Court and the High Court. Nothing emerging from the document advances the husband’s position for present purposes.

  11. The husband relied upon a page of written submissions made on his behalf in the appeals referred to earlier, and in particular upon the part of the submissions which asserted:

    8.Thus, in In the Marriage of Martin (1986) 83 FLR 373, 374 Simpson J of the Full Court of the Family Court held that property in respect whereof the interests of the parties may be altered by the court is property of the parties in existence at the time of the determination of the proceedings; in In the Marriage of Warne (1982) FLC 91-247 at page 77,370, Strauss J with whom Hase J agreed, held that the right approach under s.79(1) is to look at what the property is at the time of the hearing; and in In the Marriage of Candlish and Pratt (1980) 6 Fam LR 75, 82 to 83, the Full Court of the Family Court in a unanimous judgment held that the court must consider the issues arising under s.79 at the time of the hearing; ie, the time when the matter is before it and not retrospectively. Further, Mrs [Stephens] was able to have her divorce application adjourned pending determination of the property proceedings, as Asche SJ indicated in Emmett v Emmett [1982] FLC 91-212 at page 77,136. [page 4, par 8].

  1. Nothing emerging from that passage advances the husband’s position in the current proceedings. As with the Stephens Trust Deed of Settlement, those matters were conclusively dealt with by the Judges of the High Court in their judgments of 3 December 2008.

  2. The husband also relied upon a letter written by him to the Chief Justice of the High Court on 5 January 2009. In fairness to the husband, who has squarely indicated his intention to appeal through to the High Court any decision made in the present proceedings which is not consistent with the outcome sought by him, it is sufficient to describe his letter to the Chief Justice as conveying his disagreement with the correctness of the judgments of the majority delivered on 3 December 2008, and an indication of the bases of such disagreement. With respect to the husband, nothing contained in his letter to the Chief Justice of the High Court advances his contentions in the present proceedings.

  3. Although expressed more briefly and candidly than they were in the submissions to the High Court on 2 September 2008, the complaints agitated by the husband in his letter to the Chief Justice are to the same effect as the challenges Senior Counsel for the husband have more appropriately agitated on his behalf with respect to Strickland J’s decision in the Full Court of this Court, and before the five judges of the High Court who heard his appeal.

  4. The husband also relied upon a 20 page submission headed “Agreement That Trust Capital Pass to the Children or Under Their Control”, and a further 14 page submission headed “Adverse Comments re [the Husband] by Justice Strickland, and Miscellaneous Errors of Justice Strickland”, relied upon by Senior Counsel then appearing for him in the High Court on 2 September 2008. Again with great respect to the husband, as the very nature of those document and reasons for their existence suggest, the matters relied upon in that submission failed to persuade the majority of Judges in the High Court who determined Strickland J’s orders. This Court cannot revisit those issues.

  5. On 23 February 2009 the husband provided the Court with a copy of a nine paragraph document which he read onto the Court record on 18 February 2009. With respect to the husband, nothing emerging from that document can assist the husband in the current proceedings. The matters referred to in the nine paragraphs were unsuccessfully agitated before the High Court.

  6. The husband may well feel intellectually slighted by this Court failing to engage with almost three hours of oral submissions, and the documents incorporated in those submissions in other than a few sentences. It would however be unproductive for this Court to do more than indicate why it has not engaged with the substance of those submissions.

  7. As Senior Counsel for the wife correctly asserted, it is no business of this Court to revisit issues which have been conclusively determined against the husband by the highest court in the land.

  8. It is correct, as the husband contends, that Strickland J’s order was made against him personally. It is also correct to assert, as the husband also does, that nowhere in his orders did Strickland J expressly provide that the husband could, or should, satisfy his obligation to the wife out of the assets of the children’s trusts. That however overlooks the effect of the s 106B orders made by his Honour. These orders were not disturbed by the High Court. That reality is fatal to the husband’s insistence that the funds held by the stakeholders belonged to the children’s trusts. They did not. To the extent that the funds were trust funds they were the funds of a trust of which the wife was an object, over which the husband had legal control.

  9. Senior Counsel for the wife directed the Court to a number of passages in Strickland J’s judgment which are instructive for present purposes. For reasons which he gave, Strickland J concluded that a number of instruments and dispositions should be set aside. [Reasons for Judgment of Strickland J, 30 November 2005, par 189]. So doing produced “assets, liabilities and financial resources of the parties” which totalled $9 818 144.37 (it is common ground that figure, as a matter of arithmetic, should have totalled $9 527 356). [Reasons for Judgment of Strickland J, 30 November 2005, par 189].

  10. As is apparent from his Honour’s Reasons for Judgment, the husband’s personal assets were concluded to total $1 790 108.15. Of those sums, $10 000 was referrable to a motor vehicle, $5 000 to miscellaneous personal property, and $57 727.15 to legal costs paid. His Honour thus concluded that the husband’s personal assets were worth somewhere between $1.7m and $1.8m.

  11. His Honour’s order that the husband pay the wife $2 034 362.18 could not possibly on his own findings have been satisfied out of the husband’s personal assets. There can be no suggestion that Strickland J was unaware of that reality.

  12. As other paragraphs of his Honour’s Judgment to which the court has been referred by Senior Counsel for the wife make clear, Strickland J anticipated that the husband could and would satisfy all or such part of the wife’s entitlement as he saw fit out of the funds which the husband regards as belonging to the children’s trusts.

  13. That proposition is irrefutable in the light of his Honour’s conclusion that:

    244.There was also no evidence of what the husband will do with the balance of the assets of the Trust if he decides to meet the order that I propose to make out of those assets.  Whatever he does though the effect of my finding that those assets can be treated as his property is that with his share of those assets it is appropriate for the court to take into account the income that those assets produce as income of the husband.  I have no evidence of what the income is but it would be relatively substantial. … [Reasons for Judgment of Strickland J, 30 November 2005, par 244].

  14. His Honour’s later statement that:

    268.Thus, the husband will have to pay to the wife the sum of $2,182,302.00 (in round dollars).  Where that will come from though is entirely up to the husband.  On the figures he has assets to the value of $1,790,108.15 less $57,727.15 being the amount he has paid for legal costs, but I have found that the assets of the [Stephens] Trust can be treated as his property once the relevant instruments and dispositions are set aside, and thus that is a source of funds for the husband. [Reasons for Judgment of Strickland J, 30 November 2005, par 268].

    puts the matter beyond doubt.

  15. The reasoning process which led his Honour to those conclusions was far more sophisticated than this Judgment records, or needs to record. It is clear beyond doubt that the husband’s challenges to Strickland J’s orders did not result in them being disturbed by either the Full Court of this Court or the High Court. Reference to some passages in the judgment of the majority in the High Court leave no room for imagining that the High Court did not realise or understand the practical effect of Strickland J’s orders.

  16. Relevantly for present purposes, the Chief Justice of the High Court said:

    73.In light of the trial judge's findings about the purposes of the 1998 instrument and the 18 January 2002 dispositions, the preceding conclusion is sufficient to support the trial judge's orders and the dismissal of these appeals. They are also supported by a consideration of [the Wife’s] equitable right to due consideration as an object of the trust prior to the 1998 instrument and, for the reasons enunciated by Gummow and Hayne JJ, by consideration of that right in conjunction with [the Husband’s] power as trustee to apply the assets or income of the trust to any of the beneficiaries in his discretion. [Reasons for Judgment of the High Court of Australia, 3 December 2008, par 73].

  17. His Honour also said:

    81.The assets of the trust, coupled with [the Husband’s] power to appoint them to his wife and her right to due consideration, were, until the 1998 instrument, the property of the parties to the marriage for the purposes of s 79. The fact that [the Husband] removed himself as a beneficiary by the 1983 deed does not affect that conclusion. Because the 1998 instrument effectively disposed of [the Wife’s] equitable right to be considered in the application of the trust fund, and having regard to the trial judge's conclusions about the purpose of the instrument, the order setting it aside was an appropriate exercise of the Family Court's power under s 106B. [The Wife’s] equitable right could then be considered as part of the property of the parties to the marriage. The setting aside of the 18 January 2002 dispositions was also appropriate. The ancillary order that [the Husband] pay his wife the sum of $2,182,302 was appropriate for the reasons stated by Gummow and Hayne JJ in their joint judgment. [Reasons for Judgment of the High Court of Australia, 3 December 2008, par 81].

  18. Relevantly for present purposes, Gummow and Hayne JJ said:

    130.In the circumstances of the present case, it was open to the primary judge to formulate his orders, as he did, on the basis that the "asset pool" comprised $9,818,144.37 and included the assets of the trust as supplemented by the operation of the s 106B orders. To proceed on that basis properly reflected what was "the property of the parties to the marriage or either of them" as if the changes to property rights otherwise brought about by the divorce of those parties had not yet occurred. To proceed on the basis propounded by the husband would confine attention to what was his property. [Reasons for Judgment of the High Court of Australia, 3 December 2008, par 130].

  19. Their Honours further said:

    137.… The jurisdiction being exercised by the Family Court was, as earlier indicated, jurisdiction over "proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them"85 (emphasis added). What matters in this case is that once the 1998 instrument and the 2002 instrument were set aside by the s 106B orders, the property of the parties to the marriage or either of them was to be identified as including the right of the wife to due administration of the trust, accompanied by the fiduciary duty of the husband, as trustee, to consider whether and in what way the power should be exercised. And because, during the marriage, the husband could have appointed the whole of the trust fund to the wife, the potential enjoyment of the whole of that fund was "property of the parties to the marriage or either of them". Furthermore, because the relevant power permitted appointment of the whole of the trust fund to the wife absolutely, the value of that property was the value of the assets of the trust. In deciding what orders should be made under ss 79 and 80 of the Act, the value of that property was properly taken into account. [Reasons for Judgment of the High Court of Australia, 3 December 2008, par 137].

  20. Although not directly relevant for present purposes, it could be said that the course to which Gummow and Hayne JJ referred at paragraph 138 of their judgment is, in the current circumstances, substantially what could occur if, as the Court proposes, the wife is paid the balance of her entitlement pursuant to Strickland J’s orders from the funds held by the stakeholders. In the course of his submissions, the husband made clear that he does not intend to proceed in that manner.

  21. In her judgment, Kiefel J said:

    191.The "net asset pool", to which the primary judge had regard in assessing the parties' contributions, included the trust assets. His Honour found that the parties' contributions were 52% by the husband and 48% by the wife. The net result was that the husband was entitled to $5,105,435 and the wife $4,712,709. After taking account of the assets of which the wife had the benefit, the husband was ordered to pay the wife $2,182,302. Although his Honour said "[w]here that will come from though is entirely up to the husband", he clearly had in mind the trust assets, which he considered could be treated as the property of the husband. His Honour had found that the trust was at all times subject to the control of the husband. (footnotes omitted) [Reasons for Judgment of the High Court of Australia, 3 December 2008, par 191].

  22. Quite apart from the obvious reality that, for reasons which have been briefly suggested earlier, Strickland J did, and had to, anticipate that the husband could, and would, satisfy some or all of the wife’s entitlement out of assets which, but for the s 106B order he made, may have been the assets of the children’s trusts, his Reasons for Judgment confirm that such was the case.

  23. Without suggesting that such analysis is exhaustive of the issue, the passages of the judgments of the High Court to which reference has briefly been made confirm that their Honours were never in any doubt as to either the basis upon which Strickland J determined the wife’s entitlement, or the realities of how that entitlement might have been satisfied.

  24. Though conscious of those bases, and the nature of the husband’s challenges to them, the High Court declined to disturb Strickland J’s orders.

  25. Nothing which the husband has raised in the current proceedings persuades the Court that it cannot or should not order that the stakeholders release to the wife the sum of $966 362.18 to fully satisfy her entitlement pursuant to Strickland J’s orders.

the wife’s claim for interest

  1. The wife’s claim for interest in the sum of $676 498.11 to 17 February 2009 was calculated on the basis of a document provided to the Court, and the husband, by her Senior Counsel.

  2. As noted earlier, the husband objected to any interest being awarded to the wife on the basis that, having paid to her $1 038 000, the husband had no other property or assets from which the wife could successfully recover any monies awarded by way of interest, or otherwise.

  3. The Court having rejected that assertion, it is necessary to consider the other bases upon which the husband objects to the imposition of interest on the monies payable to the wife. The husband asserted that interest should accrue from 2 September 2008, the date upon which his unsuccessful appeal to the High Court was heard. The logic underpinning that date is less than entirely clear. The husband contended that he had done no more than pursue his legal rights to challenge Strickland J’s judgment.

  4. There is no evidence before this Court that the husband delayed the appeal process through to the High Court. It is also a matter of record that the issues raised on the husband’s behalf gave rise to a division of opinion in the Full Court of this Court and in the High Court. The husband thus contends that he should not be penalised by way of an award of interest.

  5. On behalf of the wife it was submitted that to deny her interest from the date she was entitled to receive $2 034 362.18 pursuant to Strickland J’s orders was unjust in circumstances where, albeit the husband was only pursing his legal rights, the wife had been vindicated at every turn.

  6. It was further submitted that declining to award the wife interest for the whole of the period to which she would be entitled pursuant to section 117B of the Act would unjustly confer a substantial financial benefit upon the husband and correspondingly, and equally unjustly, visit a financial penalty upon the wife. Whatever interest rate was applied, it is clear that absolving the husband from the obligation to pay interest on $2 034 362.18 for almost three years would confer a substantial benefit upon him and represent, even allowing for the assets which she otherwise had, a substantial penalty upon the wife.

  7. It is perhaps helpful to record the terms of section 117B of the Act:

    Interest on moneys ordered to be paid

    (1)Subject to any order made by the court under subsection (2), where, in proceedings under this Act, a court makes an order for the payment of money (other than an order for the payment by way of maintenance of a periodic sum), interest is payable, at the rate prescribed by the applicable Rules of Court, from:

    (a)    the date on which the order is made; or

    (b)    the date on which the order takes effect;

    whichever is later, on so much of the money as is from time to time unpaid.

    (2)A court that makes an order for the payment of money as mentioned in subsection (1) may order that interest is not payable on the money payable under the first‑mentioned order or may order:

    (a)    that interest is payable at a rate specified in the order, being a rate other than the rate prescribed by the applicable Rules of Court; or

    (b)    that interest is payable from a date specified in the order, being a date other than the date from which the interest would be payable under subsection (1).

  8. The provisions of section 117B(2), as Senior Counsel for the wife fairly conceded, repose in the Court a discretion to make an order for the payment of interest for a different period, and at a different rate to those which would otherwise apply by operation of section 117B(1) of the Act.

  9. Whilst it is clear that nothing emerging from section 117B(2) suggests on what basis orders might be made pursuant to that subsection, it is reasonably apparent that the general legislative intention is revealed by section 117B(1) and that section 117B(2) provides exceptions to the usual practice. On what grounds a court might decide to depart from the usual rule is not assisted by the wording of section 117B(2).

  10. Whilst it is undoubtedly clear that the discretion created by section 117B(2) is broad, it must, as Senior Counsel for the wife reminded the Court, be exercised judicially.

  11. The Court is not disposed in the circumstances of this case to make an order pursuant to section 117B(2) with respect to the period during which interest should accrue on the wife’s entitlement to receive $2 034 362.18 pursuant to Strickland J’s orders.

  12. Whilst the issue is finely balanced in some respects, what is ultimately decisive in the Court’s thinking is the reality that any shortening of the period during which interest accrues on the wife’s unpaid entitlement represents a substantial financial gain for the husband and a substantial financial detriment for the wife in circumstances where, notwithstanding that the husband was only pursuing the avenues of redress legally available to him, he was wholly unsuccessful. Interest should accrue on the wife’s entitlement from the date provided in Strickland J’s judgment.

  13. The more complex issue is the rate of interest which should from time to time apply. It is ultimately less than entirely clear what rate the husband asserted to be the appropriate rate applicable to any interest awarded to the wife.

  14. The husband filed in Court on 18 February 2009 a hand written affidavit, paragraph 1 of which set out a series of interest rates which the husband asserted Westpac Bank had charged his daughter Y Stephens on a finance facility. It is convenient to set out those asserted interest rates:

    From end of 2006:                  7.17%

    From 10 August 2007:           7.42%

    From 12 November 2007:      7.67%

    From 14 January 2008:          7.82%

    From 8 February 2008:          8.07%

    From 11 March 2008:            8.37%

    From 2 April 2008:                 8.47%

    From 2 May 2008:                  8.57%

    From 17 July 2008:                8.71%

    From 4 September 2008:        8.46%

    From 13 October 2008:         7.66%

    From 27 October 2008:         7.48%

    From 10 November 2008:      6.81%

    From 8 December 2008:         6.01%

    From 9 February 2008 [sic]:    5.01%

    [Affidavit of the Husband, filed 19 February 2009].

  15. There is no doubt as to the interest rates prescribed by the Rules of the Court for the relevant periods. Nor is there any doubt as to the RBA cash rate for those periods. The husband’s 18 February 2009 affidavit provides some evidence of bank lending rates for those periods.

  16. The difficulty the Court has with applying the interest rates from time to time applicable pursuant to the Rules is the disparity between such rates and the RBA cash rate. Although less dramatic, there is a significant difference between the rate applicable under the Rules and the rates emerging from the husband’s 18 February 2009 affidavit.

  1. Senior Counsel for the wife squarely addressed the issue, asserting that the intention under the Rules was to impose a “penalty” on parties who do not comply with their obligations to pay monies pursuant to Court orders. It would be reasonable having regard to the prescription of a differential of 5 percent above the RBA cash rate to conclude that indeed was the intention of those who formulated the Rules.

  2. There are at least three obvious ways of categorising interest rates on unpaid verdict monies: penal, coercive, and compensatory. The issue is not without uncertainty. There are contained within the Family Law Act1975 provisions which are clearly penal (such as section 112AP), and provisions which are clearly coercive (such as section 112AD). Albeit more in the context of parenting proceedings under Part VII of the Act than in financial proceedings, the Court is empowered to make “compensatory” orders. Whilst the Rules might appear to endeavour to be penal, or at least coercive, nothing in section 117B of the Act provides a legislative foundation for concluding that the imposition of interest on unpaid monies must be penal or coercive, or that the legislature so intended.

  3. With respect to him, nothing to which Senior Counsel for the wife has referred the Court establishes that, in the exercise of the discretion created by section 117B(2), the Court cannot regard as its primary focus the issue of “compensation” to the party who has been denied the use of monies to which (in this case) she has been repeatedly held to be entitled. That is particularly appropriate where, as here, the husband has merely pursued unsuccessful but by no means baseless claims.

  4. There is no evidence before this Court that the wife has been denied the opportunity to earn interest on her unpaid entitlement at or near the rates prescribed pursuant to the Rules. Nor is there any evidence before this Court that the wife has lost any particular financial opportunity by reason of the non-payment to her of her entitlement.

  5. In those circumstances, to do more than seek to compensate the wife for not having had the benefit of her entitlement would, whether or not it was intended, be to punish the husband in circumstances where, albeit ultimately, and by majority, he was unsuccessful, has only pursued his legal rights throughout the courts of the land.

  6. With respect to her, the Court is not persuaded by any evidence before it or submissions advanced on her behalf that the wife should reap the benefits of penal interest rates, or that the husband should be penalised by their imposition. The question then becomes what rate to apply. Senior Counsel for the wife submitted, perhaps correctly, that it was not open to the Court to simply fix on a rate of its own choosing. The rate applied must have basis in fact and logic.

  7. To award interest at the RBA cash rates would probably be unfair to the wife. The rates emerging from the husband’s affidavit have the attraction that they reflect what the wife would have been likely to have had to pay by way of interest had she borrowed to acquire or do something because she had not received her entitlement from the husband. However, there is no evidence that she did borrow any money.

  8. There is no evidence before the Court in relation to what, if she had received her entitlement, the wife would have done with it. That is not surprising and not cause for criticism. It does however place the Court in a somewhat invidious position so far as determining what an appropriate compensatory interest rate.

  9. It was submitted by Senior Counsel for the wife that the Court’s capacity to impose an interest rate other than that prescribed by the Rules was limited, inferentially to the rates emerging in evidence before it.

  10. As noted earlier, none of the rates revealed by the evidence is in the Court’s view appropriate, being either too high (such as the rate applicable pursuant to the Rules), and thus punitive, or too low (such as the RBA cash rate), and thus inadequately compensating the wife, or simply inappropriate (such as what the wife would have paid had she borrowed from a bank).

  11. In valuation disputes, the Court frequently declines to adopt the capitalisation rates emerging from competing expert opinion evidence and, for reasons which it provides, fixes a capitalisation rate not relied upon by any expert. The Court perceives there to be no absolute bar to fixing an interest rate in this case. So doing is based upon the evidence before it. No impermissible reliance upon expertise is involved in doing so. Rejecting the various rates, for reasons which the Court has advanced, provides support for adopting the rate the Court proposes.

  12. If a rate 2 per cent in excess of the rate from time to time prescribed by the RBA as the cash rate were applied, that would in the Court’s view, though less than perfect, provide the fairest basis for compensating the wife. Unsurprisingly, applying a 2 per cent margin to the RBA rate produces figures somewhat less than the interest rates payable on borrowings. That is consistent with the ordinary experience of most people who have ever invested or borrowed money. This approach tends to approximate the cash rates offered by the “big four” banks to investors.

  13. Reflected graphically, so doing produces the following outcome:

Period Amount outstanding Cash rate target Cash rate target     + 2% No of days Interest accrued    in period Total interest
1 Mar 2006 to 2 May 2006: 2,034,362.18 5.50 7.50 63 26,335.24 26,335.24
3 May 2006 to 1 Aug 2006: 2,034,362.18 5.75 7.75 91 39,307.78 65,643.02
2 Aug 2006 to 7 Nov 2006: 2,034,362.18 6.00 8.00 98 43,696.98 109,340.00
8 Nov 2006 to 7 Aug 2007: 2,034,362.18 6.25 8.25 273 125,531.29 234,871.29
8 Aug 2007 to 6 Nov 2007: 2,034,362.18 6.50 8.50 91 43,111.76 277,983.05
7 Nov 2007 to 5 Feb 2008: 2,034,362.18 6.75 8.75 91 44,379.75 322,362.80
6 Feb 2008 to 4 Mar 2008: 2,034,362.18 7.00 9.00 28 14,045.46 336,408.26
5 Mar 2008 to 2 Sep 2008: 2,034,362.18 7.25 9.25 182 93,831.47 430,239.73
3 Sep 2008 to 7 Oct 2008: 2,034,362.18 7.00 9.00 35 17,556.82 447,796.55
8 Oct 2008 to 4 Nov 2008: 2,034,362.18 6.00 8.00 28 12,484.85 460,281.40
5 Nov 2008 to 2 Dec 2008: 2,034,362.18 5.25 7.25 28 11,314.40 471,595.80
3 Dec 2008 to 3 Feb 2009: 2,034,362.18 4.25 6.25 63 21,946.03 493,541.83
4 Feb 2009 to 17 Feb 2009: 2,034,362.18 3.25 5.25 14 4,096.59 497,638.42
18 Feb 2009 to 10 Mar 2009: 996,362.18 3.25 5.25 21 3,009.56 500,647.98

The application for retention of $500 000 in relation to legal costs

  1. On the basis that, having paid the wife $1 038 000, and having retained no assets or property from which he could pay any legal costs, whether previously awarded against him or to be awarded against him in the future, the husband opposed the retention of any monies from the funds held by the stakeholders to abide the taxation of the costs orders obtained by the wife in the Full Court and the High Court and to abide the outcome of her application to Strickland J for the costs of the trial.

  2. The Court having rejected the husband’s contentions in that regard, it is necessary to consider the bases of the wife’s claim and the husband’s opposition to it.

  3. As noted earlier in these Reasons, the husband volunteered the figures of $80 000 as the likely upper end of the costs which might be taxed with respect to each of the High Court and the Full Court appeals. In fairness to him, the Court does not conclude that the husband conceded those amounts. The fact remains however that the first and only reference to those sums came from the husband. In the circumstances, to retain $160 000 with respect to those costs would not seem unreasonable.

  4. As to the balance, the only evidence, albeit not challenged, in relation to the topic is that of the wife in her affidavit of 2 February 2002 in which she said:

    5.I was also awarded costs in relation to each of the appeals, and have liberty to apply for costs in relation to the proceedings before Justice Strickland. Although those costs have not been formally assessed or taxed, my solicitors have advised the husband’s solicitors it is estimated that they total $655,000.00. I am advised and believe I am not likely to receive payment of the full amount of my costs, and it is estimated I should receive approximately $500,000.00. [Affidavit of the Wife, sworn 1 February 2009, page 3, par 5].

  5. There was no objection to that evidence, nor was the wife cross-examined in relation to it. There is no other evidence as to the likely quantum of any costs the wife might be awarded. Of course, this Court does not presume to suggest what the outcome of the costs application before Strickland J should be or will be. Those are matters for his Honour’s determination.

  6. On balance, the combination of the evidence of the wife and the matters referred to by the husband suggests that a sum of $500 000 may well be taken up by the wife’s taxed costs of the High Court and Full Court proceedings and, if she is successful, her application for the costs of the trial before Strickland J. That said, it is not a matter of then proceeding to make the orders sought on the wife’s behalf as the authorities in this Court make clear. (See Waugh and Waugh (2000) FLC 93-052; 27 Fam LR 63; Deputy Commissioner of Taxation and Kliman (2002) FLC 93-113; (2002) 29 Fam LR 301).

  7. In this context, the unchallenged evidence of W Stephens and Y Stephens assumes significance. The Court has earlier referred to that evidence and noted the reasons for its acceptance. In those circumstances, the Court is able to and does conclude that to decline to preserve the fund of $500 000 to abide the outcome of the various costs issues would be to create a real and substantial risk that the wife would be unable to recover her current and possible future entitlements to costs.

  8. The husband’s statements on 30 January 2009 and his steadfast refusal to accept the umpire’s decision, as the transcript of the proceedings in the present proceedings confirms beyond doubt, enable the Court to conclude on the balance of probabilities that the wife is entitled to the interlocutory injunctive relief which she seeks with respect to this sum and the Court will so order.

The other injunctive orders of 1 February 2009

  1. On 1 February 2009, Watts J made ex parte orders in the following terms:

    4.That until further order the husband be and is hereby restrained from:

    4.1Approaching, harassing, molesting or assaulting:

    4.1.1The wife;

    4.1.2The children [W Stephens], [Y Stephens] and [Z Stephens];

    4.1.3The legal practitioners for the wife or any member or employee of the firm of the wife’s legal representatives.

    4.2Coming within 100 metres of:

    4.2.1The offices of Kennedy Wisewoulds at 459 Collins Street, Melbourne;

    4.2.2Any place where the wife or any of her legal representatives may reside;

    4.2.3Save with respect to the Court premises on the hearing of this matter, any place where the wife or her legal practitioners may from time to time be. [Orders, 1 February 2009, page 2].

  2. Senior Counsel for W Stephens, X Stephens, Y Stephens and Z Stephens, invited the Court to discharge Order 4 so far as it related to them.

  3. Senior Counsel for the wife invited the Court to discharge other portions of the order, particularly so far as they related to legal practitioners.

  4. The husband sought that the balance of Order 4 be discharged.

  5. Senior Counsel for the wife sought that the balance of the order remained.

  6. Without suggesting that the order was not appropriate when made by Watts J on 1 February 2009, no evidence before this Court would support the continuation of Order 4.

  7. Senior Counsel for the wife submitted that, the orders having been obtained and operating pending further order of the Court, the husband should apply for their discharge and support such application with evidence which, if accepted, would lead to the discharge of the order.

  8. That might technically be a correct approach, but it would produce a perverse outcome in this case. In reality, the husband would on that approach be required to prove a negative in the absence of the probability or even possibility of a positive having been established. The absence of any evidence which would support the continuation of Order 4 is influential in that regard. So is the reality that the order imposes a significant restraint on the husband’s freedom of movement within the community.

  9. The Court is also influenced by the reality that discharging the order would not permit the husband, at least so far as the wife is concerned, to do most if not all of the things which the order was presumably aimed at preventing. If she has grounds for doing so, the wife can protect her entitlement to quiet enjoyment of her life and home via a number of legal remedies. The order will accordingly be discharged.

I certify that the preceding one hundred and fifty two (152) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Coleman

Associate: 

Date: 10 March 2009 (as amended pursuant to Slip Rule, Rule 17.02)

Key Legal Topics

Areas of Law

  • Family Law

  • Civil Procedure

Legal Concepts

  • Jurisdiction

  • Costs

  • Injunction

  • Appeal

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Most Recent Citation
Wohen and Wohen [2009] FamCA 848
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Wohen and Wohen [2009] FamCA 848
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