Strahan & Strahan (Interim Financial Orders)
[2010] FamCA 423
•31 May 2010
FAMILY COURT OF AUSTRALIA
| STRAHAN & STRAHAN (INTERIM FINANCIAL ORDERS) | [2010] FamCA 423 |
| FAMILY LAW – PROPERTY SETTLEMENT – interim orders – where the wife seeks an interim property settlement of $24 million dollars – where there is considerable dispute as to the size of the matrimonial asset pool – consideration of the assets and payments the wife has already received – not satisfied that it is just and equitable to make an order at the interim stage where the evidence has not been tested – wife’s application dismissed FAMILY LAW – CHILD SUPPORT – where the wife has filed an application seeking departure from Administrative Assessment – where there is significant dispute as to wife’s claimed costs for the child – where the husband has voluntarily agreed to provide a significant sum for the care of the child – not appropriate to make order on an interim basis where evidence has not been tested – wife’s application dismissed FAMILY LAW – SPOUSAL MAINTENANCE – interim orders – where the wife has made an application seeking spousal maintenance for the sum of $278,000 per month to be backdated – where the parties maintained a very high standard of living during the marriage – where the sum sought by the wife has not been established by evidence – where the husband has proposed to pay a lump sum spouse maintenance based on wife’s claimed expenditure – consideration of the funds and assets available to the wife since separation FAMILY LAW – PRACTICE AND PROCEDURE – discovery of documents – application by wife seeking discovery of old documents – not satisfied that the documents sought are relevant to issues before the Court – application dismissed Family Law Act 1975 (Cth) ss 72, 74, 75, 77, 78 & 79 Child Support (Assessment) Act 1989 ss 116(1)(b) 117 & 141 Strahan & Strahan [2009] FamCAFC 166 |
| APPLICANT: | Ms Strahan |
| RESPONDENT: | Mr Strahan |
| FILE NUMBER: | ADF | 228 | of | 2005 |
| DATE DELIVERED: | 31 May 2010 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Dawe J |
| HEARING DATE: | 31 March 2010 & 1 April 2010 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Whitington, QC assisted by Ms Pyke, QC and Mr Holland |
| SOLICITOR FOR THE APPLICANT: | Pederick Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Bartfeld, QC assisted by Mr Berman of Counsel |
| SOLICITOR FOR THE RESPONDENT: | Robinson & Mason |
Orders
Applications of the wife for interim property settlement and interim order for departure from Child Support Assessment are dismissed.
Application of the wife for further discovery of documents for period 1 July 1996 to January 2005 is dismissed.
By way of spousal maintenance pending the disposal of proceedings for spouse maintenance within twenty-one [21] days from today the husband do pay to the wife the lump sum of THREE HUNDRED AND TWENTY FIVE THOUSAND DOLLARS [$325,000.00].
IT IS NOTED that publication of this judgment under the pseudonym Strahan & Strahan (Interim Financial Orders) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADF 228 of 2005
| MS STRAHAN |
Applicant
And
| MR STRAHAN |
Respondent
REASONS FOR JUDGMENT
Introduction
The wife seeks orders by way of interim property settlement, departure from administrative assessment for child support, interim spouse maintenance and discovery.
Although there were numerous amended applications and further amended applications (including a further further amended application in a case) on the Court file, the actual orders that the parties were seeking were changed again when Senior Counsel appeared before me at the interim hearing.
The wife sought orders for interim property settlement that the property in Switzerland be transferred into her sole name unencumbered and that she receive further monies to a total of $24 Million.
By way of departure from child support assessment the wife sought orders that the husband pay to the wife (or a company nominated by the wife) child support from the 14 January 2009 until 30 June 2011 at the rate of $1.2 Million per annum (together with CPI increases).
By way of spouse maintenance the wife sought an order that the husband pay $278,000 per month, backdated to the 1 November 2008.
The husband opposed any order being made by way of interim property settlement. He also opposed the order for interim spouse maintenance, but proposed that he pay the sum of $325,000 to the wife on condition that the categorisation of this amount be determined at the final hearing and on condition that the wife not make another claim for spouse maintenance within the next 12 months.
In relation to child support, the husband relied upon the payments he had agreed to make, and had made, to the trust which had been set up to pay the child’s expenses. He relied upon the payment of $691,000 to WS Nominees Pty Ltd in February 2010.
The wife also sought the husband provide discovery and production of documents relating to the husband, his businesses and various taxation authorities in Australia and overseas and statements in relation to commodity trading activities by the husband or entities controlled by him.
A consent order was made in relation to discovery of documents relating to the period 1 January 2005 to date.
The husband opposed the order requiring discovery and production of the documents for the period July 1996 to January 2005 on the basis that the documents were not likely to be relevant and the request was unreasonable and oppressive.
Hearing
The interim hearing proceeded on submissions in relation to the interim orders sought by reference to the particular applications and affidavit material on file. At the hearing which took place on 31 March and 1 April 2010 the wife was represented by Mr R Whitington, QC, Ms M Pyke, QC and Mr Holland. The husband was represented by Mr M Bartfeld, QC with Mr D Berman.
Background and brief chronology
The wife was born in 1962 and is therefore aged 48. The husband was born in late 1962 and is therefore aged 47. They met in the late 1980s and commenced a relationship some years later.
The parties were married in 1994. The only child of the marriage, S, was born in June 1996 and is aged 13, nearly 14. He is autistic. There has been considerable litigation concerning S. He currently resides with the wife and has not recently spent any time with the husband.
The parties separated in about January 2005. Since February 2005 there have been proceedings in the Family Court of Australia. In June 2005 the wife filed an amended application for final orders seeking settlement of property and spousal maintenance.
Numerous interim and procedural orders have been made with a view to the Court attempting to list the proceedings for final determination. The parties have filed numerous documents. At the time of the hearing in late March early April 2010, there were over 400 documents on file.
Final orders in relation to the child were made by consent by Justice Bell on 5 March 2007. Shortly thereafter contravention proceedings were filed alleging that the wife had not complied with the order for the child to spend time with the husband. There are now ongoing proceedings in relation to the child’s parenting arrangements.
On 27 July 2007, His Honour Justice Strickland made a consent order which included an order that by way of interim property settlement the husband pay the wife $1.25 Million. He vacated the trial listing for September 2007.
Following a further amended application in a case filed by the wife seeking $69,350 per month by way of interim spouse maintenance, an order was made on 31 October 2007 by His Honour Justice Strickland, by consent, which provided that the husband pay to the wife the sum of $375,000. The wife considered this payment to be spouse maintenance. The husband considered payment to be an interim/partial property settlement. The resolution of the categorisation was reserved to the trial Judge.
On 25 March 2008, His Honour Justice Strickland made a consent order which included an order that “within 14 days the husband pay to the wife’s solicitors $850,000 by way of interim property settlement”.
On 18 July 2008 the wife filed an application in a case seeking orders that the husband pay her $5 Million to be utilised on account of costs and disbursements of the wife in the Family Court proceedings on the basis that the trial Judge would determine at the conclusion of the final hearing what proportion should be allocated by way of adjustment of property rights or in respect of the wife’s claim for costs.
The husband opposed the orders. On 24 September 2008, His Honour Justice Strickland gave ex-tempore reasons and made an order directing the husband to pay the wife $1 Million within 30 days by way of interim property settlement.
On 21 October 2008 the wife filed a Notice of Appeal in relation to the interim property settlement order made by Justice Strickland on 24 September 2008.
On 3 December 2008 the wife filed the application in a case seeking urgent spousal maintenance of $278,000 per month.At the same time she filed an updated Financial Statement setting out her income, expenses, assets and liabilities.
On 5 December 2008, His Honour Justice Strickland gave ex-tempore reasons which included permitting the wife to amend the application in a case to seek interim spouse maintenance in the same terms as the urgent maintenance. Other directions were made including the preparation of an updated family assessment report and orders made for the filing of affidavits of evidence-in-chief and their witnesses by 19 January 2009, with a view to having the matter listed for final determination.
On 9 December 2008 the wife filed an amended application in a case seeking interim spouse maintenance of $278,000 per month as well as urgent spousal maintenance.
On 24 December 2008 the wife filed an application in a case seeking that the trial not be listed until determination of her application for leave to appeal to the Full Court or in the alternative that the husband pay her $3 Million by way of interim property settlement.
On 12 January 2009 the wife filed a further amended application for final orders in which she sought, in addition to the previous orders sought, an order for spousal maintenance in a lump sum amount of $25 Million or in the alternative, $278,000 per month.
The husband opposed the orders sought by the wife.
On 15 January 2009 the wife filed a further amended application in a case seeking a departure from an administrative assessment of child support and leave to amend her application for final orders.
In January 2009 the wife filed an application in a case seeking the disqualification of Justice Strickland.
On 3 March 2009 the Full Court of the Family Court of Australia heard the wife’s appeal against the orders in relation to interim property settlement and reserved judgment.
On 13 March 2009 His Honour Justice Strickland dismissed the wife’s application seeking his disqualification and listed the wife’s application for spousal maintenance and departure from administrative assessment of child support for hearing in April 2009.
In early April 2009 the wife filed a Notice of Appeal in relation to the orders made on 13 March 2009 (when His Honour Justice Strickland dismissed her application in relation to his disqualification).
On 8 April 2009, amongst other orders His Honour Justice Strickland adjourned the application for spousal maintenance and child support. On 9 April 2009 His Honour made a costs order directing the wife to pay to the trust account of the husband’s solicitors $45,000 upon final resolution of the application for property settlement.
On 21 July 2009 the Full Court heard the appeal by the wife in relation to the disqualification of Justice Strickland.
On 14 September 2009 the Full Court granted the appeal in relation to the interim property settlement, set aside the order of 24 September 2008 and ordered instead that the husband pay to the wife $5 Million by way of interim property settlement within 30 days.
Throughout this time further interim and procedural orders were made in relation to both financial matters and children’s issues.
On 5 November 2009, His Honour Justice Strickland delivered judgment in relation to interim orders concerning the child.
On 13 November 2009 the wife filed a Notice of Appeal in relation to some of the orders made in relation to the child on 5 November 2009.
On 18 November 2009 the Full Court allowed the appeal brought by the wife in relation to His Honour Justice Strickland’s disqualification, directing that all matters in the proceedings should thereafter be listed before a Judge other than Justice Strickland and ordering the husband and wife to equally meet the costs of the Independent Children’s Lawyer, otherwise making no orders as to costs of the husband and wife in the appeal.
As Justice Strickland was disqualified the wife’s application for stay in relation to the children’s orders was heard by me on 24 November 2009.
On 15 December 2009 I delivered reasons for judgment granting the stay application on the usual conditions.
On 21 December 2009 the Full Court made orders that the husband pay the wife’s costs of the interim property settlement appeal.
On 23 February 2010 the wife, through her solicitors Pederick Lawyers, filed the following documents;
(a)Document 454 which is described as a further amended application in a case.
The further amended application in a case deleted the orders sought by way of urgent spouse maintenance and sought by way of “interim spousal maintenance the sum of $278,000 per month and such sum to be paid directly into a bank account to be nominated by the wife on the first day of each month until such time as the wife has received all of her entitlement to property settlement by order of this Honourable Court or further order”. (Paragraph 2)
Paragraph 3 sought a new order, namely “that such payments made by the husband be back dated to the separation and be calculated as at 1 February 2005 and be paid to the wife into a bank account to be nominated by the wife, within 21 days.”
Paragraph 6 of Part D was amended so that it no longer sought “such further or other orders as this Honourable Court deems expedient” but now sought orders “as this Honourable Court deems just and equitable.”
(b) An amended application in a case (document 455)
This amended application no longer sought that the trial be delayed until after the wife’s appeal filed on 12 December 2008 had been determined. The other order sought originally was “further or in the alternative that within 14 days the husband pay to the wife by way of interim property settlement the sum of THREE MILLION DOLLARS [$3,000,000.00] and that such sum be utilised on account of the costs and disbursements of the wife in prosecuting her claim in these proceedings.”
The application was amended such that the order then sought was “that within 21 days the husband pay to the wife by way of interim property settlement the sum of TWENTY FOUR MILLION DOLLARS [$24,000,000.00] and that such amount be paid directly into a bank account to be nominated by the wife.”
(c) A further further amended application in a case (document 456)
By further further amended application in a case the wife sought certain orders in relation to the child, instead of the orders previously sought by her and added the following orders sought under the heading “Departure from Administrative Assessment for Child Support”
“9.That the Husband and Wife in their capacity as Directors of [WS Nominees] Pty Ltd do forthwith call a meeting of the company and do all such things as may be necessary to remove Jamison & Associates as trustee of [WS Nominees] Pty Ltd and do appoint the Wife as Trustee thereof and do authorise the Wife to utilise and apply the funds of [WS Nominees] Pty Ltd for the following purposes.
(i)To pay those expenses as detailed in the Budget prepared by [PK] Accountants September 2007 Annexure “A” attached hereto including any updated report as may be necessary.
(ii)To pay such other reasonable expenses associated with [S’s] school, home and community program.
10.
(i)That the accounting and bookkeeping work for [WS Nominees] Pty Ltd be attended to and completed by an accountant to be nominated by the Wife.
(ii)That liberty be granted for an updated Budget to be prepared by [PK] Accountants relating to [S’s] special needs, home, school and community and relied upon as necessary in these proceedings.
11.
(i)That pursuant to section 116(1)(b) of Child Support (Assessment) Act 1989, in the special circumstances of the case there be a departure from the Administrative Assessment of Child Support dated 14 January 2009 for the period 14 January 2009 to 5 June 2014.
(ii)That the Husband do all things as necessary and do cause to be paid to the Wife the sum of One Million Two Hundred Thousand Dollars ($1,200,000.00) per annum together with CPI increase by equal monthly payments of $100,000.00 on behalf of [S] for each year or part thereof. Such payment to commence on
1 February 200930 April 2010 and to be paid in full into the nominated Bank Account of the Wife or upon the making of the Orders referred to in paragraph 1 hereof to [WS Nominess] Pty Ltd, and to conclude on 5 June 2014.12.That the Husband be restrained and an injunction granted restraining him from exercising his powers as a Director to appoint any other Trustee for [WS Nominees] Pty Ltd.
…”
On 15 March 2010 the wife, through her solicitors Pederick Lawyers, filed a further amended application in a case (document 457) which sought the following orders:
“1.That by way of property settlement:
1.1 The Husband, within thirty (30) days, at his own cost do all such acts and things as may be necessary including signing all instruments to have the property described as […] (“the Swiss property”) transferred unencumbered to the Wife for her sole use and benefits absolutely; and
1.2
Further or in the alternative tThatwithin fourteen (14) twenty one (21)thirty (30) days the Husband pay to the Wife a further sum to the effect that the total sum paid to her by way of interim property settlement (including the value of the Swiss property)is by way of interim property settlement the sum of $3,000,000.00Twenty Four Million Dollars ($24,000,000.00)and that such amount be paid directly into a bank account to be nominated by the Wife and that such sum be utilised on account of the costs and disbursements of the Wife in prosecuting her claim in these proceedings.2.That until the said Swiss property is transferred unencumbered to the Wife pursuant to these Orders, the Husband be restrained and an injunction be granted restraining him, his servants or agents from taking any action to dispose of, encumber or otherwise deal with the Swiss property.
3.That if the Husband shall default in carrying out paragraph 1.2 or part thereof of these Orders sought, and such detail shall continue for seven (7) days, interest shall accrue upon such sum as shall remain due and owing at the rate of 10% from the date of default until the date of payment, together with costs of and incidental to any Application to this or any other Honourable for enforcement of this Order.
…”
On 26 March 2010 the husband filed three responses to an application in a case seeking the dismissal of the wife’s applications in a case and costs. In Document 480 (which sought the dismissal of the wife’s spouse maintenance application) he sought the following order:
“2.That in lieu of the wife’s Application, the husband do pay to the wife the sum of $325,000.00 on the following basis:
a.That this payment be made within thirty (30) days of the date of an order being made.
b.That the said lump sum is calculated on the basis of the wife’s claimed expenses of $6,254.00 per week.
c.That the Court determine at trial whether the payment is to be characterised as interim property settlement or spousal maintenance.
d.That in the event that the proceedings, including any Appeal, are finally determined within a period of twelve (12) months from the date of an order being made, that the wife concedes that a pro-rata adjustment in the sum of $6,254.00 per week be allowed in favour of the husband for such period of the twelve (12) months as has not elapsed as at the date of the final determination of the proceedings.
e.That the wife will not make another claim for spousal maintenance within the next twelve (12) months from the date of an order being made.
…”
On 4 March 2010 a consent order was made as follows:
“UPON NOTING the order made by their Honours Boland, Thackray & O’Ryan JJ on 21 December 2009
AND FURTHER UPON NOTING the order made by His Honour Justice Bell on 9 July 2009
BY CONSENT IT IS ORDERED:
That in full and final settlement, satisfaction and redemption of any claim that either party may have against the other, for costs to be assessed on a party and party basis in the action SA 87 of 2008, pursuant to orders made 21 December 2009 and in action ADF 228 of 2005 pursuant to orders made by Justice Bell on 9 July 2009:
1.That the husband do pay to the wife’s solicitors, Pederick Lawyers Pty Ltd, within ten (10) days the sum of EIGHTY FOUR THOUSAND, FOUR HUNDRED AND SEVENTY FOUR DOLLARS AND THIRTY CENTS ($84,474.30).
2.That the payment referred to herein shall be in full satisfaction and discharge of the costs orders in action SA 87 of 2008 made on 21 December 2009 and the costs order made by Justice Bell in action ADF 228 of 2005 on 9 July 2009.”
The above paragraphs are merely a summary of documents filed and orders made that are relevant to the current proceedings and by no means detail the numerous other applications, interim procedural orders and documents filed.
When the matter came on for the determination of the interim applications in late March early April 2010, the wife continued to seek an interim property settlement order which was still phrased as “$24,000,000.00 which sum includes a property in […] Switzerland which the wife seeks to be transferred to her unencumbered as part of the order”. (See the wife’s outline of argument upon application for interim property settlement orders sought filed in the Court on 23 March 2010). When asked to explain why the Court would make such an order, there was some discussion about whether there was an agreed value for the Swiss property. Some time later on that morning counsel advised that he had been given instructions that the value of the Swiss property was agreed at A$3,417,912.00 and that therefore the residual amount the wife sought for interim property settlement was $20,582.088.00. (Page 19 of the transcript).
On that morning counsel for the wife also indicated that, notwithstanding the further amended application in a case filed by the wife through her solicitors on 23 February 2010 which sought that the interim spousal maintenance be backdated to the date of separation “and be calculated as at 1 February 2005” …” and notwithstanding “the applicant’s (sic) wife’s outline of argument upon application for interim spouse maintenance orders sought” filed on 23 March 2010 which sought the interim spouse maintenance be backdated from the date of separation (ie 8 February 2005) the wife was now only seeking to backdate the interim spouse maintenance payments to 1 November 2008.
Notwithstanding the further further amended application in a case filed by the wife through her solicitors, Pederick Lawyers, on 23 February 2010 (document 456) the wife’s Queen’s Counsel filed an outline of argument on 23 March 2010 (document 465) the following appears as part of the submissions in the unnumbered paragraphs on the unnumbered page 2:
“The wife now seeks that child support payable to her be paid to the account of [IL Nominees] Pty Ltd.
The wife does not seek that child support payments be paid to [WS Nominees] Pty Ltd.
In the event that the Court orders that payments are to be made to [WS Nominees] Pty Ltd the wife seeks to be appointed as Trustee in accordance with paragraph 6 of her application of 15 January 2009.”
In the outline of argument filed on behalf of the respondent husband dated 26 March 2010, counsel for the husband indicated the husband still opposed any further order being made by way of partial or interim settlement of property. In relation to the departure for child support assessment in relation to S, page 3, third unnumbered paragraph says:
“The husband proposes that pending the final trial of this matter he will pay the sum of $10,788 per week (a total of $560,976 per annum) to Russell Jamieson to meet the costs of [S’s] care and education, including the salaries of the qualified ABA Therapists together with those of Dr [A].”
This is apparently a reference to the amount of $691,000 paid by the husband in February 2010 to WS Nominees Pty Ltd on account of the Trust which makes payments for the child’s care.
The husband continued to oppose any further order being made for interim spouse maintenance.
Interim property settlement
(a) Issues
The wife seeks an interim property settlement of $24 Million. Included in this sum is the home in Switzerland which she seeks to be transferred to her name unencumbered.
The husband opposes any further order being made by way of interim property settlement.
The wife claims the assets of the parties exceed $100 Million. The husband claims that the pool of assets at the moment is approximately $61 Million. This does not take into account the amounts the wife has already received.
The husband maintains that the orders sought by the wife would provide her with more than she would be entitled to on the final hearing.
(b) The law
Both counsel relied upon the Full Court decision of Strahan & Strahan [2009] FamCAFC 166 and the principles discussed therein.
The application was an application for interim orders pursuant to section 79 of the Family Law Act 1975 (Cth) (“the Act”).
At paragraphs 101 to 141 Boland and O’Ryan JJ discuss the law applicable in applications under section 79 for interim property settlement orders.
The Full Court judgment refers to the two-step process. At paragraph 118, Boland and O’Ryan JJ say:
“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.”
Paragraph 132 states:
“In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.”
Paragraph 139 states:
“We also emphasise that in order to establish an appropriate case for an interim property settlement order more is required than the mere fact that upon a final hearing the applicant would receive the property being sought (or an amount in excess of the funds being sought) from the other party.”
When considering the re-exercise of discretion to make an interim property settlement order, Justices Boland and O’Ryan said at paragraph 161:
“There are appropriate circumstances to make an interim property order and thus we propose to proceed to the substantive stage. For reasons we have given there is no issue that the Husband is able to pay his legal costs and expenses and is in a position of considerable financial strength. Further there is no issue that the remaining property will be sufficient to meet the claims of the parties when an order is made exhausting the jurisdiction. In the circumstances, we propose to make the order sought by the Wife. The Husband will therefore be required to pay the Wife the sum of $5 million.”
In a separate judgment Thackray J said when discussing the applicable principles at paragraphs 215 to 221:
“215.The Full Court in Zschokke discussed the matters a court would be required to consider in making an order under s 80(1)(h). In doing so it said (at 83,216):
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 s 79(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…
216. The Full Court went on to say (at 83,220) that:
it must … be an integral part of any order under s 80(1)(h) for an advance of funds from the party in possession of the bulk of the party’s [sic] assets to the other party, that such advance can then be taken into account in the property settlement, that is, it must be capable of satisfying part of the other party’s entitlement.
217.The Full Court in Zschokke also mentioned (at 83,217) three matters that would be relevant in considering an application for an interim property settlement order that was intended to fund legal costs. These were the matters that Strickland J referred to in his reasons, namely:
·a position of relative financial strength on the part of the respondent;
· the respondent’s capacity to meet his own litigation costs; and
· an inability on the part of the applicant to pay her costs.
218.None of these three matters can be referenced directly to the statutory provisions. However, the legislation itself provides no guidance to the Court in determining when it is appropriate to exercise the power to make an interim property settlement order. It was to be expected that over time jurisprudence would develop to assist judicial officers when called upon to exercise their discretion. These attempts to ensure some predictability in the exercise of discretionary powers come in the form of statements of principles or guidelines. However, as the High Court has made clear, these are not binding principles of law. Mason and Deane JJ said in Norbis v Norbis (1986) FLC 91-712 at 75,166, “the nature of the issues which arise under sec. 79 is such that there is either little or no scope for giving guidance in the form of binding rules of law”.
219.The Full Court recognised as much in Harris when it said (at 79,928) that “section 80 is intended to be a wide, enabling provision and there is no justification for imposing limitations upon its normal or ordinary meaning and operation when applied to s. 79”. The Full Court’s reference in Harris to the need to establish “compelling circumstances” must therefore be read in light of that undoubtedly accurate statement of the law. It should also be observed that the Full Court in Harris used other, less rigorous, formulations in describing when an interim order might be made. For example, the Court referred to interim orders being made in “appropriate circumstances” (at 79,928) and in “a proper case” (at 79,929). Similarly, Nygh J in Burridge and Burridge (1980) FLC 90-902 at 75,679 referred to an order being made under s 80(2)(h) if the “justice of the case so requires”.
220.Accordingly, I accept the submissions of Senior Counsel for the wife that:
·s 80 confers a “free standing and unfettered discretion to entertain an application for an interim property settlement”;
·it is “contrary to proper judicial practice to confine the jurisdiction … by artificial formulae”; and
·the only limits on the application of s 80 “are the usual limits on the exercise of a judicial discretion”.
221.It is pertinent to note that the High Court has considered an attempt to confine the exercise of a judicial discretion by a similar test to that applied by the trial Judge in the present matter. In AMS v AIF (1999) 199 CLR 160 the High Court found it was impermissible to impose upon a parent the obligation to demonstrate “compelling reasons” to justify a proposed relocation of a child when such an obligation is “not warranted… by the statutory instructions” (at [191] per Kirby J; see also at [47] per Gleeson CJ, McHugh & Gummow JJ).”
All Judges rejected the requirement that there was a test of “compelling circumstances”.
The Full Court quoted with apparent approval the decision of Federal Magistrate Reithmuller in the matter of Wenz v Archer (2008) 40 Fam LR 212. In paragraph 52 of his reasons, the Federal Magistrate said:
“… Whether it is just and equitable to make interim orders will require a balancing of the risks of unduly limiting the final orders that can be made (or even potentially defeating parties’ claims or legitimate expectations) against the circumstances said to show that it is just and equitable to make interim orders.”
He also said in paragraph 54:
“The first consideration identified in Harris’s case appears to me to reinforce the importance of recognizing that any interim orders have the potential to limit the type and extent of the orders that can be made under s.79 which must ultimately be “just and equitable”: s.79(2). Because the orders under s.79 are the exercise of such a broad and complex discretion, generally the interests of the parties are better served by there being one final hearing under s.79. If the s.79 proceedings are not completed in one decision various options may not be left open and therefore the court may not be able to ensure that a “just and equitable” outcome overall is achieved. However, there will be cases where it would not be “appropriate” to deny interim relief, as this would not permit a “just and equitable” result in the interim.”
(c) Discussion
In the background set out by Justice Thackray in his judgment relating to the earlier interim property settlement order, His Honour said at paragraphs 165 to 172:
“165.In summary, the Husband and Wife have been involved in protracted parenting and property settlement proceedings. The Husband claims the assets are worth around $60 million whereas the Wife considers they are valued in “the hundreds of millions of dollars”. The Wife seeks an equal division, whereas the Husband proposes a 70:30 division in his favour.
166.The Wife commenced proceedings in 2005. She has spent in excess of $10.5 million in legal fees. The majority of this has been directed to establishing that the Husband has not provided full disclosure.
167.One of the principal issues is the value of the Husband’s interest in an international gambling enterprise. This is a highly profitable undertaking, with the Husband declaring a weekly income approaching $300,000.
168.In 2007 the Wife applied for $5 million by way of interim property settlement. She obtained an order for $3 million. This was intended to cover anticipated legal costs. At that stage, the trial of the parenting issues was due to commence in March 2007 and the trial of the financial issues was scheduled for September 2007.
169.The trials did not occur as anticipated and in July 2007 the Husband agreed to pay a further $1.25 million by way of interim property settlement. In October 2007 another consent order was made for $375,000, with the characterisation to be determined by the trial Judge.
170.In March 2008 an order was made requiring the Husband to pay the Wife $850,000 by way of interim property settlement. This brought the total of interim payments to $5.475 million. This was in addition to the $6 million the Wife had in the bank at the time of separation.
171.Having expended almost all of her funds, the Wife made an application in July 2008 seeking a further interim payment of $5 million. At that time the trial of the parenting issues stood adjourned and the trial of the financial issues had not commenced.
172.Strickland J heard the Wife’s application on 24 September 2008 and delivered ex tempore reasons for his decision to award her $1 million.”
The Full Court then set aside the order made by Justice Strickland which provided for a further payment of $1 Million and made a fresh order for the payment of $5 Million by way of interim property settlement.
Thus at the time the wife filed her amended application for interim property settlement, the wife had received from the husband since 2005 a total of $10.475 Million in addition to the $6 Million she retained at the time of separation in 2005. (Total $16.475 Million).
There is considerable dispute between the parties as to the correct size of the “matrimonial pool”. The wife argued that the matrimonial pool exceeded $105 Million. The husband maintained that the pool of assets is approximately $61 Million to which needs to be added the $6 Million the wife retained at separation and the $10.5 Million she has had by way of interim orders making a net matrimonial pool of approximately $77 Million. Counsel for the husband indicated that the husband would be arguing that the wife would be entitled to 35 per cent or $27 Million. Other calculations suggest the pool is probably $71.85 Million and 35 per cent would allocate $25 Million to the wife.
The husband’s counsel then refers to the assets and payments the wife has already received, amounts owing to her in the Strahan Trust and amounts in the bank, together with the home in Adelaide which the wife seeks to retain. Counsel maintained that would mean that the wife would already have received, or has in her possession a sum equal to her final entitlement.
Counsel for the wife maintained that if the wife were to receive a further payment of $24 Million this would equate to a total of just over $34 Million she would have received by way of interim property settlement. He maintained that the matrimonial pool to be considered should be $105.4 Million and that therefore the monies received by her would equate to approximately 32 per cent. The husband conceded that the wife would be entitled to at least 35 per cent but not of assets totalling more than $77 Million.
The wife relied on her affidavit filed on 15 March 2010. In that affidavit she said that there was $697,890.60 in her solicitors’ trust account and $169,212.83 in her bank account. (Paragraphs 6.1.7 and 6.1.8 of document 458).
The wife said in that affidavit that she had used “the majority of all previous interim property settlement funds”. (Paragraph 11). She said at paragraph 12:
“12.My solicitors received the further sum of $4,000,000.00 pursuant to the Order of the Full Court on 14 October 2009. At that time I owed outstanding legal fees and disbursements of $1,054,530.88. My solicitors paid me a sum of $1,000,000 on the 21 October 2009.”
Paragraph 14 then sets out the wife’s allegations in relation to the dealings with the sum of $1 Million paid to her in October 2009 which came to a total of $596,769.89. This includes items such as “Sundry cash withdrawals for living costs, food and beverage (including gifts), restaurants, travel to Europe December 2009 with [S] and carers ($121,024.66), flowers and balloons ([S’s] Party) ($4,624.27). The figures included also relate to household supplies and maintenance, motor vehicle petrol and maintenance and medical costs, as well as professional fees. One of the figures is $97,000 for a motor vehicle.
In paragraph 16 the wife sets out what she says has become of the $4 Million paid into the Trust account of her solicitors and paragraph 17 confirms that “as at 11 March 2010” there was $697,898.60 in the bank account.
This sum is also disclosed in the item “other personal property” item 43 of the Financial Statement of the wife filed on 15 March 2010. The Financial Statement of the wife discloses only interest on investment income before tax of an estimate of $65 per week. If the sum of approximately $680,000 (representing a portion of the funds retained by the wife’s solicitors in Trust account) were invested at, say, five per cent this would produce an income of approximately $650 per week. The absence of any interest on this amount is not explained.
The decision of the wife to commit to spending $97,000 and a further $48,800 (total $145,800) on a new vehicle when she already had in her possession a luxury vehicle worth an estimated half a million dollars and a BMW worth an estimated $47,000, indicates the wife has maintained a significant lifestyle.
One of the submissions of counsel for the wife related to the interim property settlement providing security for the enforcement of any final orders. The submission related to the assets in Australia of about $14 Million. The other assets are overseas.
The wife was unable however to indicate that there had been any failure by the husband to meet any interim orders, nor any specific risk factors which would require the significant step of selling assets overseas to make interim payment to the wife.
The submissions on behalf of the wife also related to the wife acquiring funds sufficient to meet her further costs of litigation. Her affidavit filed on 15 March 2010 said:
“I currently owe approximately $85,000 for legal costs and disbursement which include fees for experts.”
Earlier in her affidavit filed on 15 March 2010 the wife deposed
“…Amongst other things, I require further substantial sums of money to enable me to prosecute this matter to Trial. I am advised and verily believe that my legal cost to Trial might average $125,000.00 per month, excluding Queens Counsel and Counsel fees.” (Paragraph 5)
The wife provides no explanation for the very large amount estimated to be required for legal costs.
The Court has previously attempted to list the matter for final hearing. The wife has indicated that she has already spent a large amount on litigation in this Court. Her current solicitors still have in excess of $690,000 in their Trust Account.
This is an interim hearing where the Court is asked to come to a conclusion without testing the evidence of the parties before it in the various affidavits.
This application differs from the application considered by His Honour Justice Strickland and the Full Court in that the husband does not now concede that the amount sought will not exceed the amount the wife will ultimately receive.
(d) Findings
The difficulty with the consideration of a further interim property settlement order is the significant dispute surrounding the size of the matrimonial asset pool and the available assets to be brought into account. The identification of assets, determination of their value and appropriate adjustments are the substantial matters to be determined at the final hearing.
On the basis that there is considerable dispute about the likely final property settlement order because of the dispute about the assets to be considered, the Court cannot at this stage determine that it is in the interests of justice to make a further interim property order. The circumstances which currently exist do not make it appropriate for the Court to exercise the power available to it.
The Court will however consider the second step. It is appropriate to exercise the discretion conservatively. It is inappropriate to consider that the wife must establish compelling circumstances for an interim order.
Section 79(2) requires the Court “shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.” Subsection (4) sets out the matters which the Court is required to take into account.
As the authorities indicated, it is difficult to make a determination in relation to these factors at an interim hearing. In particular the parties do not agree upon the property which is to be brought into account.
The significant factors in section 75(2) are that the wife currently has the care of the only child of the marriage who has significant needs. The income, property and financial resources of each of the parties is a factor of significance. The husband has a very large income. The assets retained by the husband after the payments made to the wife are also significant.
These factors together with the significant standard of living maintained by the parties are factors which support the wife’s claim.
However the overriding consideration is the requirement that the Court needs to be satisfied that in all the current circumstances it is just and equitable to make the interim order.
Considering the difficulties in ascertaining the amount to which the wife may be entitled on conclusion of the final proceedings, the Court cannot be satisfied that in all the present circumstances it is just and equitable to make the order sought.
The wife’s application for interim property settlement order should therefore be dismissed.
Child Support
(a) Issues
Although the further further amended application in a case filed by the wife on the 23 February 2010 sought orders which would apply from 14 January 2009 to 5 June 2014, at the interim hearing before me on 31 March 2010 counsel for the wife indicated that the wife was seeking the departure order for the period 14 January 2009 to 30 June 2011 on the basis that the latter date was a date which it was submitted on behalf of the wife, would be “the anticipated conclusion of the proceedings”.
The wife was seeking Child Support at the rate of $1.2 Million per annum based upon a budget prepared for her by her accountants.
The husband agreed to pay $710,000.00 to WS Nominees Pty Ltd to be used by the trustee for payment of S’s expenses. Russell Jamison is the trustee of the Trust. The wife complains about his role in determining the items to be paid as support or expenses for the child. The wife maintained that the expenses approved by Mr Jamison as trustee for payment from the funds were currently limited to school fees and the attendance of two therapists at S’s school.
Counsel for the wife acknowledged that payments made by the husband since 14 January 2009 for the support of the child would need to be taken into account.
The husband relied upon the payment he had already made to WS Nominees Pty Ltd of $691,000 in February 2010. He maintained also that additional monies paid related to expenses such as utilities, telephone, internet, rates, taxes and other motor vehicle and household expenses which would include a portion of the items the wife was claiming as expenses which related to the child.
(b) The Law
The Child Support (Assessment) Act 1989 Section 116(1)(b) provides:
(1) A liable parent or a carer entitled to child support may, in respect of an administrative assessment of child support for a child, apply to a court having jurisdiction under this Act for an order under this Division in relation to the child in the special circumstances of the case if:
…
(b) both of the following apply:
(i)the liable parent or carer entitled to child support is a party to an application pending in a court having jurisdiction under this Act;
(ii)the court is satisfied that it would be in the interest of the liable parent and the carer entitled to child support for the court to consider whether an order should be made under this Division in relation to the child in the special circumstances of the case;
Section 117 sets out the matters about which the Court must be satisfied before making an order.
Section 118 permits the Court to make an order varying the annual rate of child support payable by a parent.
The specific provisions of section 117 give the Court power to make a departure order in the special circumstances of a case, only if the Court is satisfied that one or more of the grounds for departure exist and that it would be just and equitable as regards the child, the carer entitled to child support and the liable parent and otherwise proper to make the particular order.
The relevant grounds for consideration under subsection (2) in this matter are:
(b)that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:
…
(ia)because of special needs of the child; or
(ib)because of high child care costs in relation to the child; or
(ii)because the child is being cared for, educated or trained in the manner that was expected by his or her parents;
(c)that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:
(i)because of the income, earning capacity, property and financial resources of the child; or
(ia)because of the income, property and financial resources of either parent; or
(ib)because of the earning capacity of either parent; or
Subsection (4) sets out matters to which the Court must have regard when determining whether it would be just and equitable to make a particular order. These include the proper needs of the child and the income earning capacity, property and financial resources of each parents and (g) any hardship that would be caused to the child or the carer entitled to child support by the making of, or the refusal to make, the order and to the liable parent by the making of, or refusal to make, the order.
Other significant portions of the legislation include subsection (6)(a) and (b):
(6)In having regard to the proper needs of the child, the court must have regard to:
(a)the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained; and
(b)any special needs of the child.
Section 141 of the Child Support (Assessment) Act 1989 sets out the general powers of a Court and includes at subsection (1)
(1)In exercising its powers under this Act, a court may do all or any of the following:
…
(b)order payment of a weekly, monthly, yearly or other periodic amount;
…
(g)make a permanent order, an order pending the disposal of proceedings, an order for a fixed period, an order until a child attains a specified age or an order until further order;
…
(n)make any other order (whether or not of the same kind as those referred to in paragraphs (a) to (m) (inclusive)) that the court considers appropriate;
(p)make an order at any time.
(c) Discussion
The issue was raised by counsel for the husband at the hearing before me in March/April 2010 that the wife did not then have an application for final orders before the Court which sought any departure from child support assessment. Directions had been made for the parties to file updated applications for final orders. Notwithstanding the large sums of money spent by the wife on legal fees, the final orders she sought did not at that time include an application for departure from child support. The Court has power to waive compliance with such rules. This technicality is not one which should deter the Court from considering the merits of the application in a case before the Court
The affidavit of the wife filed on 15 January 2009 includes annexure ES1 being correspondence to the wife from the Child Support Agency, including an assessment issued on 14 January 2009 for the period 14 January 2009 to 4 June 2009, calculating an annual amount of child support of $16,700 payable by the husband to the wife for the support of the child.
The wife relies upon a budget prepared by PK Accountants at her request. This budget dated 16 December 2008 is prepared for the year ended 31 March 2008 includes salaries and wages for four people (three at $110,000 per annum and one at $58,000 per annum) other consultants and speech pathologists, clinical psychologists, therapists and tutors. It also includes airfares of $105,000 per annum and reports of $60,000 per annum. The expenses include further items such as school fees of $12,000 per annum, management fee to “E [Strahan]” $60,000 and capital sums such as “community vehicle $65,000” and laptop computer $2,500. The total in this budget upon which the wife relies is $1,159,008.00 per annum.
In the Financial Statement filed by the wife on 15 March 2010, under Part F item 18, “Expenses paid by others for your benefit”, the wife attests that “household outgoings related to [S’s] program and carers are paid by [WS Nominees] Pty Ltd/Husband and refers to Note 4”. A page attached to the document “Note 4” reads as follows:
“The deponent estimates that the following amounts are reimbursed to her by [WS Nominees]:
(a)Food E$50 to E$100
(b)Household Supplies E$50
(c)Petrol E$50 to E$100
(d)Sporting equipment for [S] E$50
Under 13 “Maintenance/Child Support” the wife has referred to “Note 2”. Note 2 in the attached page says:
“The husband pays no Child Support per se but [S’s] school fees, school therapists and some educational expenses are met by [WS Nominees] Pty Ltd.”
Under Part N the wife sets out her average weekly expenses with columns “Total”; “For You”; “For Children” and “Other Adults”. The total expenses claimed by the wife as an average weekly amount is $6,254 per week, including $600 per week for food and $2,308 per week for “Family Court support”. The average weekly expenses for children (S) totals $4,952 which includes $1,981 per week for “wages for carer”. Included in the expenses for “Other Adults” are items such as food $400 and holidays $1,100 per week making up the total of payments to average weekly expenses for “Other Adults” an estimate of $2,060 per week.
Another annexure to the wife’s Financial Statement is a document apparently prepared by V & Co dated 9 March 2010 which includes items 20, 21 and 22 being wages for AC, MC and GC, siblings of the wife which total $223,045 per annum.
It is maintained on behalf of the husband that many of the items claimed by the wife as expenses are unnecessary, excessive or without foundation.
The husband proposed that pending trial he pay the sum equivalent of $10,788 per week to Russell Jamison, a trustee to meet the costs of S’s care and education, including the salaries of the qualified therapists and those of Dr A. The husband opposed paying the money to the wife or a company controlled by her on the basis that he did not wish to fund expenses for the wife’s family or other unnecessary expenses.
The husband provided $691,000 to Russell Jamison for WS Nominees Pty Ltd in February 2010. This was proposed to cover S’s expenses for 2010 and “provide a contingency fund for part of 2011” (See paragraph 2(b) of the husband’s affidavit filed on 26 March 2010 – document 481).
The affidavit of the husband says in paragraph 23:
“The wife received a total of $56,000 from [WS Nominees] in 2009, of which $40,000 was authorised for her expenses in relation to [S], which was ample for her to attend the conference is (sic) she wished to do so.”
His affidavit raised issues about the manner in which the wife used other funds paid to her in June 2009 and alleges that it establishes a basis for payments being made direct by the third party Russell Jamison upon presentation of appropriate invoices. (See paragraphs 24 and 25 of the husband’s affidavit filed on 26 March 2010).
The husband asserts in his affidavit that the payment by him to WS Nominees includes an amount of $40,000 per annum “which she can spend at her discretion on [S] provided she provides accounts”.
The husband maintains that S is supported by him financially on a voluntary basis and that therefore the application by the wife should be dismissed.
(d) Findings
The dispute between the parties relates to both the extent of the wife’s claimed costs for the child’s expenses and the need for an order considering the husband’s voluntary payments to the trust fund set up for the child’s expenses. These issues are not capable of being determined on an interim basis due to the considerable discrepancy in the factual material presented by each of the parties.
The evidence clearly supports the finding that there are grounds for departure based upon S’s special needs. A standard Child Support Assessment would result in an unjust and inequitable determination of the level of financial support to be provided because of the income earning capacity, property and financial resources of the husband.
However, the Court is required to determine whether it would be just and equitable to make an order on an interim basis.
The Court takes into account in considering whether it is just and equitable to make an interim order that the husband is presently providing in excess of $600,000 per annum for the child’s care.
The husband has committed himself to support S and has in fact paid $691,000 in February 2010 to cover S’s expenses. It is therefore not just and equitable to make an interim order for departure from Child Support Assessment for the period sought by the wife.
It is not possible to determine on the documentary evidence in dispute before the Court whether on an interim basis it is appropriate or just and equitable to allow the wife to control the trustee of the fund into which the husband pays the monies for the child’s support. On that basis it is therefore not appropriate to make the order the wife seeks allowing her to control the trustee or the company into which the trust funds are placed. That matter should also await determination of the final hearing when the evidence in dispute has been tested and appropriate findings are made.
The consideration of an appropriate departure from Child Support Assessment (if any) should be determined after the disputed evidence is appropriately tested at final hearing.
The application by the wife for an interim order in relation to departure from child support assessment pending trial should therefore be dismissed.
Spouse Maintenance
(a) Issues
In the further amended application in a case filed on 23 February 2010 (document 454) the wife sought interim spousal maintenance at $278,000 per month, payable on the first of each month “until such time as the wife has received all of her entitlement to property settlement by order of this Honourable Court or further order”. She sought that such payments be backdated to the date of separation “and be calculated as at 1 February 2005 and be paid to the wife into a bank account to be nominated by the wife within 21 days”. At the hearing however counsel indicated that the wife was now only seeking that the maintenance be backdated to 1 November 2008.
The husband proposed that he pay the sum of $325,000 on the same basis as the consent order made on 31 October 2007, namely that the categorisation of the payment would be resolved by the trial Judge at final hearing, determining whether the payment was an interim property settlement or spousal maintenance.
(b) The Law
Section 72 of the Family Law Act 1975 (Cth) states:
(1)A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
Section 74(1) states:
(1)In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.
Section 75 states:
(1)In exercising jurisdiction under section 74, the court shall take into account only the matters referred to in subsection (2).
(2) The matters to be taken into account are:
(a)the age and state of health of each of the parties;
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain;
(e)the responsibilities of either party to support any other person;
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
(l)the need to protect a party who wishes to continue that party's role as a parent;
(m)if either party is cohabiting with another person the financial circumstances relating to the cohabitation;
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) of (ii); and
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties, to the marriage.
Section 77 states:
Where, in proceedings with respect to the maintenance of a party to a marriage, it appears to the court that the party is in immediate need of financial assistance, but it is not practicable in the circumstances to determine immediately what order, if any, should be made, the court may order the payment, pending the disposal of the proceedings, of such periodic sum or other sums as the court considers reasonable
The heading before the section refers to “urgent spousal maintenance”. Although the wife does not now describe her application as urgent (which was once her application), the order she seeks is payment pending a final hearing of the proceedings and can only be described as an order made “pending the disposal of the proceedings”. The power is to be exercised when “it appears to the court that the party is in immediate need of financial assistance”.
His Honour Justice Nygh said in Wilson & Wilson (1989) FLC 92-033 at 77,454:
“…on an application for interim maintenance the court conducts 'not as final or exhaustive a hearing as would be the case if one were hearing the matter finally'”
The Court was referred to Atwill & Atwill (1981) FLC 91-107 in the context of what is adequate. On page 76,792 the Full Court in Atwill said:
““Adequately” imports relativity. Subsistence may be adequate for some applicants, but not for others. It must be viewed in the light of para. (g) of sec. 75(2) “a standard of living that in all the circumstances is reasonable”.”
In Bevan & Bevan (1995) FLC 92-600 the Full Court (Nicholson CJ, Lindenmayer and McGovern JJ) considered the provisions of section 72 at page 81,981and said:
“The standard of living to which a party was accustomed is clearly a matter to which the Court must refer in determining whether a figure is adequate or not." (at 77,209).
This reasoning and conclusion was supported by Bulley J in Brady and Brady (1978) FLC 90 -513 at 77,701. Prior to these decisions, Lindenmayer J in Nutting and Nutting (1978) FLC 90 -410 had explained that while standard of living during marriage was relevant, the correct approach was to determine what was "reasonable in the circumstances":
"By sec. 72 of the Act, the husband is liable to maintain the wife only to the extent that she is incapable of supporting herself adequately, and again "adequately" imports a standard of living which is reasonable in the circumstances, including the circumstance that the parties are no longer husband and wife and that the assets and resources which were formerly available to them both in common have now been divided between them." (at 77,094).
The judgments of Strauss and Nygh JJ In the Marriage of Wilson (1989/90)13 Fam.L.R. 205 also support the reasonableness test. The matter was decided in relation to an application for interim spousal maintenance but the issue of how a discretionary award should be decided is relevant here. There, the Full Court was concerned with a wealthy family with a lavish lifestyle and rejected the proposition that where a respondent's means allow, the respondent should as a matter of principle support the pre-separation standard of living. Kay J, in dissent, in that case favoured greater reliance on the prior standard of living and drew inter alia upon the words of Fogarty J in Gamble and Gamble (1978) FLC 90 -452 at 77,301.
"In this case as in many others, attention is generally focussed on the question of 'need' under s 72. It seems sometimes to be thought that there is some absolute level beyond which an applicant's need would not go. That is that once it is shown that his or her income from other sources has reached some designated level, that there is no longer any 'need' for maintenance under s 72. Whilst that may be broadly true of what might be described as the general run of cases, the measure of need is a variable factor which must take into account a variety of circumstances not the least of which is the appropriate standard of living of the parties. Where the capacity of the husband is such that he is able to provide maintenance for the wife at a level that enables both of them to continue to enjoy a standard of living equivalent to that which they enjoyed for some time prior to the separation or which enables the wife to enjoy a standard of living which may be higher than the average in the community it may be proper to make an order which broadly achieves that result...." (Wilson (supra) at 217-8 ”
Reference was also made to the case of S & S [2000] FamCA 102 where issues about the standard of living, which is reasonable in all the circumstances were discussed.
(c) Discussion
As earlier discussed in relation to the interim property settlement application since 23 January 2007 the wife has received $10.475 Million and had available to her at the time of separation in early 2005 approximately $6 Million. She has been residing rent free in the Adelaide property and has had access to the funds paid by the husband to the WS Nominees Trust to assist in the care of S.
The husband conceded a capacity to pay spouse maintenance. His Financial Statement filed on 24 March 2010 disclosed an estimated average weekly income of $82,763 and his total expenditure on a weekly basis estimated to be $44,848.
The husband also conceded that the parties had in the past maintained a high standard of living. However he did not accept the wife’s alleged expenses were all reasonable. He alleged that they were excessive even taking into account a high standard of living.
By way of interim hearing on the papers it is not possible to make specific findings about each of the expenses claimed by the wife. This process was not in any event assisted by the different conflicting material presented by the wife in her Financial Statement being Part N and documents annexed to the Financial Statement (apparently in error).
Part N of the Financial Statement filed by the wife on 15 March 2010 did not claim any amount for food for S. This was apparently an error, either by the wife or by her solicitors. The food item is referred to as an estimate of $1,000 per week, being $600 per week for food for the wife and $400 per week for “other adults”. The reference to “other adults” is apparently a reference to the wife’s sister, AC, who is referred to in Part H, item 34, as the person for whom the wife pays personal expenses of an estimated $2,060 per week. This $400 per week for food is included as one of the items which total $2,060 paid for the benefit of AC.
Similarly, the wife alleges that she spends $400 per week on household supplies, being $200 for herself and $200 per week for AC.
Another item claimed by the wife in Part N is for holidays. The total estimate is $2,300 per week, being $600 for the wife, $600 for S and $1,100 per week for other adults. This is $119,600 per year for holidays.
Included in the claim of the wife’s expenses is an item “Wages for Family Court support” an estimate of $2,308 per week which is $120,016 per annum. This is separate from the claim of “Wages for Carer” (presumably for S) of $1,981 per week.
The total under the column “for you” in Part N of the wife’s Financial Statement is $6,254. This includes the $2,308 wages for Family Court support, $600 for holidays, $800 for clothing and shoes and $600 for food (all per week).
The wife’s Financial Statement filed on 15 March 2010 shows total average weekly expenses estimated at $13,266 per week.
The wife is claiming spousal maintenance at the rate of $278,000 per month which is $69,500 per week. This is more than five times the total amount indicated as average weekly expenses claimed by the wife. (On an annual basis $3,336,000).
The wife now seeks that the amount be backdated to the 1 November 2008 which would require a payment by the husband as at end of May 2010 (backdated 19 months at $278,000 per month) of $5.282 Million.
In this interim application the Court has taken into account the allegations made by each of the parties, including the earlier affidavit material upon which the wife seeks to rely being the affidavit and Financial Statement filed on 3 December 2008, as well as the current material filed in March 2010.
The wife emphasises the standard of living which she asserts was enjoyed prior to the parties’ separation in early 2005 and her need to make proper provision for S, taking into account his appropriate standard of living and his special needs.
(d) Findings
The Court is however unable to find the basis upon which an order for spouse maintenance in the sum of $278,000 per month or any similar amount could be made on an interim basis.
The husband is reasonably able to assist in maintaining the wife. The wife argues that she is unable to support herself due to her care of S, in particular because of his special needs. These factors are established sufficiently on an interim basis. However the question of the wife’s capacity to support herself in the long term will need to be considered at the final hearing, bearing in mind the appropriate property settlement order that may be made and the assistance available to the wife in caring for the child.
Having regard to the matters in section 75(2), the Court must give considerable weight in this particular matter to subsection (g) which refers to a standard of living that in all the circumstances is reasonable.
The other significant factors are the income, property and financial resources of each of the parties and the wife’s care and control of S.
Taking into account the arrangements which the husband has made for the payment of monies to the Trust Fund in relation to the support of S, the amount which the wife has estimated as expenses for herself (namely $6,254 per week) is a significant amount. This would not be considered a normal standard of living but would be classified as a high standard of living.
Section 77 refers to the requirement when orders are made pending disposal of proceedings that it appears to the Court that the party is “in immediate need” of financial assistance.
On an interim application, and without testing the evidence before it, spouse maintenance in the sum of $6,254 per week is an amount which the Court considers reasonable and proper for the provision of spousal maintenance pending the determination of the matters in dispute.
The wife has established a basis for interim spousal maintenance although the appropriate amount is not clearly established.
It is appropriate to categorise the payment by the husband to the wife as interim spouse maintenance, whilst noting the capacity of the Court to take into account the payment of those monies and the use of those monies when making final orders for property settlement or spousal maintenance.
There is a dispute between the parties as to the drawings by the wife from WS Nominees Pty Ltd and how that should be calculated. The husband claims that he has been paying $950 per week for the wife and $10,788 per week for S. He also asserts that payments have been made totalling in addition a further $56,259.26 from WS Nominees Pty Ltd “for miscellaneous personal expenses not connected to [S]”. These are for payments from 1 January to 31 December 2009.
The Court can therefore not be satisfied that it is proper to backdate the claim for the weekly amount to the 1 November 2008 as sought by the wife. This is a matter which can be further considered when all of the evidence has been tested.
The interim order proposed by the husband represents approximately one year of spouse maintenance at $6,254 per week. The wife would have the benefit of investing the lump sum and therefore the possibility of earning interest upon the sum (albeit reducing).
Taking all of the matters into account it is proper by way of interim order to direct that the husband pay the wife the sum of $325,000 within 21 days from today, such sum to be considered lump sum spouse maintenance for one year from the date of payment.
It is anticipated that within this time the Court will have heard and determined the final proceedings between the parties.
Discovery
By amended response to an application in a case filed on 21 October 2009, the wife sought inter alia orders in relation to certain documents. Paragraph 3 stated:
“3.That the husband do disclose and produce to the wife’s solicitors within seven (7) days:-
3.1all documents relating to any negotiations between the husband, [CX Company] and any other betting syndicates of which the husband is or has been a member and any other person or entity on their behalf with:-
3.1.1the Australian Taxation Office during the period 1 July 1996 to date;
3.1.2the Inland Revenue Department, Hong Kong for the period 1 July 1996 to date;
3.2all documents relating to any monies paid by the husband and/or [CX Company] and/or any betting syndicate of which the husband is or was a member or any other person or entity on their behalf to:
3.2.1the Australian Taxation Office;
3.2.2the Inland Revenue Department Hong Kong;
3.2.3the National Tax Agency in Japan’
3.2.4the Internal Revenue Service (IRS) in USA;
3.2.5the National Tax Agency in Canada;
3.2.6any other overseas tax authority;
for the period 1 July 1996 to date with respect to the husband’s gambling activities and commodity trading.
3.3all documents relating to any monies paid by the husband and/or [CX Company] and/or any betting syndicate of which the husband is or was a member or any other person or entity on their behalf to:
3.3.1the Australian Taxation Office;
3.3.2the Inland Revenue Department, Hong Kong;
for or on behalf of [Z Company] and [F] Limited;
3.4all statements provided by brokers [Y] Trading Co with respect to [Z Company] and [F] Limited and relating to the husband’s commodity trading activities for the period 1 July 1996 to date;”
This was in substantially similar terms as paragraph 3 of the response to an application in a case filed on 13 October 2009 save and except that the words “disclose and” were added after the words “That the husband do” in paragraph 3.
At the same time as filing the original response to an application in a case the wife filed an affidavit to which was annexed a large amount of correspondence between the solicitors.
At the hearing before me on 1 April 2010 counsel agreed that a consent order could be made in relation to the disclosure and production of documents referred to in paragraph 3 provided it was limited to the period after the 1 January 2005.
(a) Issues
The parties were unable to agree on any order that related to the disclosure and production of the documents for the period from 1 July 1996 to 1 January 2005.
(b) The Law
Section 38 of the Family Law Act provides:
Section 38 - Practice and procedure
(1) Subject to this Act, the practice and procedure of the Court shall be in accordance with the regulations and the standard Rules of Court.
(2) In so far as the provisions applicable in accordance with subsection (1) are insufficient, the Rules of the High Court, as in force for the time being, apply, mutatis mutandis , so far as they are capable of application and subject to any directions of the Court or a Judge, to the practice and procedure of the Court.
(2A) This section does not apply in relation to proceedings that are transferred to the Court from the Federal Court of Australia.
(3) In this section, practice and procedure includes all matters with respect to which regulations or standard Rules of Court may be made under this Act.
The Family Law Rules 2004 provide at Rule 1.04; Rule 13.01; Rule 13.07; Rule 13.20 and Rule 13.22:
R1.04 - Main purpose of Rules
The main purpose of these Rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.
Note Section 43 of the Act sets out the principles that the court must apply when exercising its jurisdiction under the Act.
R13.01 - General duty of disclosure
(1) Each party to a case has a duty to the court and to each other party to give full and frank disclosure of all information relevant to the case, in a timely manner.
Note Failure to comply with the duty may result in the court excluding evidence that is not disclosed or imposing a consequence, including punishment for contempt of court. This Chapter sets out a number of ways that a party is either required, or can be called upon, to discharge the party’s duty of disclosure, including:
(a)disclosure of financial circumstances (see Division 13.1.2);
(b)disclosure and production of documents (see Division 13.2.1); and
(c)disclosure by answering specific questions in certain circumstances (see Part 13.3).
(2) The duty of disclosure starts with the pre-action procedure for a case and continues until the case is finalised.
Note The duty of disclosure applies to a case guardian for a child and a person with a disability (see subrule 6.13 (2)).
13.07 - Duty of disclosure -- documents
The duty of disclosure applies to each document that:
(a)is or has been in the possession, or under the control, of the party disclosing the document; and
(b)is relevant to an issue in the case.
Note 1 For documents that parties must produce to the court:
(a)on the first court date for a Maintenance Application, see rule 4.15 ;
(b)on the first court date for a child support application or appeal, see rule 4.26 (2);
(c)at a conference in a property case, see Part 12.2; and
(d)at a trial, see Chapters 15 and 16.
Note 2 Rule 13.15 provides that a party must file a written notice about the party’s duty of disclosure.
Note 3 Rule 15.76 provides that a party may give another party a notice to produce a specified document at a hearing or trial.
Note 4 A document disclosed to a party must be used for the purposes of the case only and must not be used for any other purpose without the consent of the other party or an order.
13.20 - Disclosure by service of a list of documents
(1) After a case has been allocated to a first day before the Judge, a party (the "requesting party") may, by written notice, ask another party (the "disclosing party ) to give the requesting party a list of documents to which the duty of disclosure applies.
(2) The disclosing party must, within 21 days after receiving the notice, serve on the requesting party a list of documents identifying:
(a)he documents to which the duty of disclosure applies;
(b)he documents no longer in the disclosing party’s possession or control to which the duty would otherwise apply (with a brief statement about the circumstances in which the documents left the party’s possession or control); and
(c)he documents for which privilege from production is claimed.
Note Rule 13.07 sets out the documents to which the duty of disclosure applies.
(3) The requesting party may, by written notice, ask the disclosing party to:
(a)produce a document for inspection; or
(b)provide a copy of a document.
(4) The disclosing party must, within 14 days after receiving a notice under paragraph (3) (b), give the requesting party, at the requesting party’s expense, the copies requested, other than copies of documents:
(a)in relation to which privilege from production is claimed; or
(b)that are no longer in the disclosing party’s possession or control.
(5) If a document that must be disclosed is located by, or comes into the possession or control of, a disclosing party after disclosure under subrule (2), the party must disclose the document within 7 days after it is located or comes into the party’s possession or control.
Note Rule 13.07 sets out the documents to which the duty of disclosure applies.
13.22 - Application for order for disclosure
(1) A party may seek an order that:
(a)another party comply with a request for a list of documents in accordance with rule 13.20;
(b)another party disclose a specified document, or class of documents, by providing to the other party a copy of the document, or each document in the class, for inspection by the other party;
(c)another party produce a document for inspection;
(d)a party file an affidavit stating:
(i)that a specified document, or class of documents, does not exist or has never existed; or
(ii)the circumstances in which a specified document or class of documents ceased to exist or passed out of the possession or control of that party; or
(e)the party be partly or fully relieved of the duty of disclosure.
(2) A party making an application under subrule (1) must satisfy the court that the order is necessary for disposing of the case or an issue or reducing costs.
Note 1 Before making an application under this Chapter, a party must make a reasonable and genuine attempt to settle the issue to which the application relates (see rule 5.03).
Note 2 An application under this Chapter is made by filing an Application in a Case and an affidavit (see rules 5.01 and 5.02). The court may allow an oral application at the conciliation conference or another court event.
(3) In making an order under subrule (1), the court may consider:
(a)whether the disclosure sought is relevant to an issue in dispute;
(b)the relative importance of the issue to which the document or class of documents relates;
(c)the likely time, cost and inconvenience involved in disclosing a document or class of documents taking into account the amount of the property, or complexity of the corporate, trust or partnership interests (if any), involved in the case; and
(d)the likely effect on the outcome of the case of disclosing, or not disclosing, the document or class of documents.
(4) If the disclosure of a document is necessary for the purpose of resolving a case at the conciliation conference, a party (the "requesting party ) may, at the first court event, seek an order that another party:
(a)provide a copy of the document to the requesting party; or
(b)produce the document to the requesting party for inspection and copying.
(5) The court may only make an order under subrule (4) in exceptional circumstances.
(6) If a party objects to the production of a document for inspection or copying, the court may inspect the document to decide the objection.
(Emphasis added)
Menzies J in Mulley v Manifold (1959) 103 CLR 341 at p.345, discussed the test of relevance in the discovery process as it then applied saying:
“…Only a document which relates in some way to a matter in issue is discoverable, but it is sufficient if it would, or would lead to a train of enquiry which would, either advance a party’s own case or damage that of his adversary.”
The Family Law Rules 2004 now emphasise that discovery applies only to a document directly relevant to an issue in dispute.
The question of relevance has been referred to in many cases including cases where the production of a document has been sought by subpoena. Those cases indicate that it is necessary to establish some apparent relevance to the issues in the property settlement proceedings. Clearly, the Rules specifically require that it be established the documents will be relevant to an issue that the Court needs to determine.
(c) Discussion
The affidavit filed by the wife on 13 October 2009 paragraph 34 refers to the correspondence between the solicitors and says that she has requested, through her solicitors:
“… production of relevant communications between the husband, [CX Company], his gambling syndicates, the Australian Taxation Office and the Inland Revenue Department and other tax authorities and full particulars of all negotiations and findings with respect to such relevant taxation authorities.”
There are then annexed 11 annexures being the correspondence between the solicitors. Originally in the correspondence the period in which the wife sought the documents was for the period January 2005 to date (15 April 2009). It subsequently became the 1 July 1996 to date.
(d) Findings
Nothing in the correspondence from the wife’s solicitors when read in the context of the correspondence from the husband’s solicitors establishes any basis upon which the Court could find that the documents sought are relevant to any particular issue to be determined by the Family Court in the proceedings concerning property settlement, spouse maintenance or child support.
There is therefore no basis upon which the Court is able to find that the disclosure of the documents is relevant to an issue to be determined in the Family Court proceedings. It would be inappropriate and indeed oppressive to require the husband to obtain from other persons, authorities or governments, all such documents going back to a period commencing in 1996.
The wife has therefore failed to establish the basis upon which the order for discovery should be made. The application so far as it relates to the period from July 1996 to January 2005 is therefore dismissed.
I certify that the preceding one hundred and ninety-four (194) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe
Associate:
Date: 31 May 2010
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