Strahan & Strahan (Interim Property Orders)
[2011] FamCAFC 126
•10 June 2011
FAMILY COURT OF AUSTRALIA
| STRAHAN & STRAHAN (LEAVE TO APPEAL INTERIM ORDERS AND APPEAL AGAINST COSTS ORDER) | [2011] FamCAFC 126 |
| FAMILY LAW - APPEAL – Appeal against the trial Judge’s dismissal of the wife’s application for interim property settlement – Whether the trial Judge erred in declining to award the wife, by way of an order for interim property settlement, what the husband assertedly conceded to be the wife’s minimum entitlement to the property of the parties – In circumstances where the wife’s case before the trial Judge was not formulated on this basis, and where the trial Judge was in no position to determine the value of the property of the parties at that stage, error not established. FAMILY LAW - APPEAL – Appeal against the trial Judge’s order for spousal maintenance – In circumstances where the wife claimed an amount of spousal maintenance far in excess of the amount of weekly expenses detailed by her, not established that the trial Judge erred in making an award for the lesser amount. FAMILY LAW - APPEAL – Appeal against the trial Judge’s order for payment to the wife for legal expenses – Where the trial Judge had declined to make an award for the whole of the amount claimed by the wife – Where the basis upon which the sum awarded was calculated is unable to be discerned – Error established – Appeal allowed and discretion re-exercised. |
| Family Law Act 1975 (Cth) |
| Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 Rutherford & Rutherford (1991) FLC 92-255 |
| APPELLANT: | Mrs Strahan |
| RESPONDENT: | Mr Strahan |
| FILE NUMBER: | ADF | 228 | of | 2005 |
| APPEAL NUMBERS: | SA SA | 41 66 | of of | 2010 & 2010 |
| DATE DELIVERED: | 10 June 2011 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Coleman, May and Murphy JJ |
| HEARING DATE: | 2 May 2011 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 31 May 2010 & 13 August 2010 |
| LOWER COURT MNC: | [2010] FamCA 423 & [2010] FamCA 708 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Brown SC assisted by Mr Holland |
| SOLICITOR FOR THE APPELLANT: | Winter & Co |
| COUNSEL FOR THE RESPONDENT: | Mr Bartfield SC |
| SOLICITOR FOR THE RESPONDENT: | Robinson & Mason |
Orders
That the wife’s application for leave to appeal against the orders of 31 May 2010 dismissing her application for interim property settlement and interim spousal maintenance be dismissed.
That the wife be granted leave to appeal against the interim orders for costs of 13 August 2010.
That the wife’s appeal against the interim orders for costs of 13 August 2010 be allowed.
That, in lieu of the sum of $825,000.00 in order 12 of the orders of 13 August 2010, there be inserted the sum of $1,687,250.
That there be no order as to costs of and incidental to these appeals.
IT IS NOTED that publication of this judgment under the pseudonym Strahan & Strahan (leave to appeal interim orders and appeal against costs order) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
Appeal Numbers: SA 41 of 2010 & SA 66 of 2010
File Number: ADF 228 of 2005
| Mrs Strahan |
Appellant
And
| Mr Strahan |
Respondent
REASONS FOR JUDGMENT
Application for leave to appeal – SA 41 of 2010
By Amended Notice of Appeal filed 29 September 2010 Mrs Strahan (“the wife”) sought to appeal against orders made by Dawe J on 31 May 2010 in proceedings between herself and Mr Strahan (“the husband”).
It is common ground that, the trial Judge’s orders being interim and not related to parenting issues, leave to appeal pursuant to s 94AA of the Family Law Act 1975 (Cth) (“the Act”) was required.
Senior Counsel for both parties proceeded on the basis that, if the proposed appeal was shown to have merit, leave to appeal would be granted and the appeal allowed. Such an approach was sensible, and consistent with the principles governing applications for leave to appeal (see Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 and Rutherford & Rutherford (1991) FLC 92-255).
The husband resisted the wife’s application for leave to appeal, and sought to maintain the trial Judge’s orders.
The trial Judge’s orders relevantly provided that the wife’s application for interim property settlement be dismissed, and that the husband pay $325,000 “by way of spousal maintenance pending the disposal of proceedings for spouse maintenance”.
The wife sought that this Court discharge the trial Judge’s orders, and in lieu thereof order that the husband pay $278,000 per month, “or such other sum as was appropriate in the circumstances” by way of interim spousal maintenance. The wife sought by way of interim property settlement the payment to her of $24 million or such lesser sum as the Court determined, being a sum of not less than $9 million.
Background
The orders now sought by the wife substantially reflect the relief sought by her before the trial Judge, although, as her learned Senior Counsel properly conceded, the “fallback” position of a payment of $9 million by way of interim property settlement was not articulated before the trial Judge.
The wife was 48 years of age and the husband 47 years of age at the date of the trial Judge’s judgment.
The parties married in 1994. There was one child of the marriage who is now aged 14. The parties’ child resides with the wife and has special needs.
The parties separated in January 2005, since which time they have been engaged in constant ongoing litigation in this Court with respect to financial and parenting disputes.
On 27 July 2007, Strickland J made an order by consent providing for the payment by the husband to the wife of $1.25 million by way of interim property settlement.
On 31 October 2007, Strickland J ordered by consent that the husband pay the wife $375,000. Whether that sum constituted spousal maintenance, as the wife contended, or interim/partial property settlement, as the husband contended, was reserved to be determined by the judge who will ultimately hear and finally determine the parties’ financial disputes.
On 25 March 2008, Strickland J made an order by consent which provided for the payment by the husband to the wife of $850,000 “by way of interim property settlement”.
On 24 September 2008, after a contested interlocutory hearing, Strickland J ordered the husband to pay the wife $1 million by way of interim property settlement. The wife appealed against that decision.
On 14 September 2009, the Full Court upheld the wife’s appeal against Strickland J’s order of 24 September 2008, and ordered the husband to pay to the wife $5 million by way of interim property settlement in lieu of the sum of $1 million Strickland J had ordered.
The application which resulted in the orders which have given rise to the current application was filed on 23 February 2010. For reasons which she articulated, the trial Judge dismissed the wife’s application for interim property settlement. Having found the wife’s reasonable weekly needs to approximate $6,254, which the husband had the capacity to pay by way of lump sum, the trial Judge ordered that the husband pay $325,000 by way of spousal maintenance pending completion of the financial proceedings before the Court.
The application to appeal against the dismissal of the wife’s application for interim property settlement
At the commencement of his oral submissions, Senior Counsel for the wife submitted that the trial Judge had failed to adequately examine the pool of assets which the husband conceded to be available, and from which the wife’s minimum entitlement to a settlement of property could be satisfied.
It was submitted by Senior Counsel for the wife that, even on the husband’s case as to the net value of the parties’ assets, (approximately $78 million inclusive of monies already received by the wife), on the husband’s own view of the wife’s entitlement (35 per cent), an entitlement to a further payment to the wife of approximately $9 million was conceded. In essence, the submission of Senior Counsel for the wife was that the trial Judge impermissibly failed to have regard to that evidence and that, having done so, impermissibly failed to award the wife her undisputed entitlement.
In his written outline of argument in support of this proposed challenge, Senior Counsel for the wife asserted that the trial Judge had erred in principle on a number of grounds. Rather than paraphrase them, it is convenient to set out those submissions in their entirety. They provided:
12.1At para. 74 of the Reasons (AB 34) the learned Judged referred to the Judgment of Federal Magistrate Reithmuller in Wenz at para. 52:
“Whether it is just and equitable to make interim orders will require a balancing of the risks of unduly limiting the final orders to 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 the interim orders.”
12.2At paras. 96 and 97 (AB 37) the learned Judge’s refusal to exercise the discretion in favour of making an order for interim property settlement on the basis that “there is a considerable dispute about the likely property settlement orders.”
12.3There was no balancing of other factors as required by Wenz (supra);
12.4The learned Judge should also have considered the following matters to arrive at a decision that was “just and equitable”:
12.4.1The fact that the husband had retained complete control of the parties’ substantial income earning assets since separation;
12.4.2The wife had a genuine and substantial claim on the basis of her financial and non financial contributions to the accumulation of matrimonial assets and Section 75(2) factors, given that the parties’ 13 year old son [the child S] was Autistic and required considerable ongoing care;
12.5The value of the assets in Australia is only about $14m and that the wife had no other security in Australia in the event that any final orders in her favour exceeded that sum;
12.6The wife required monies to pay her legal costs in circumstances where the husband had spent about the same amount of money on legal costs as the wife but had been able to do so without selling any assets.
12.7As we have submitted above, the learned Judge referred to a “difficulty with the significant dispute surrounding the size of the matrimonial asset pool and the available assets to be brought into account”. The likely asset pool was a significant matter to be taken into account by the Judge. While it is true that Her Honour set out to some extent the evidence of the various parties and submissions relating to the size of the asset pool, she did not at any stage attempt to analyse it or indeed come to a conclusion as to its size, not even the “minimum demonstrated assets”. By failing to do so the wife’s likely “minimum reasonable entitlement” could not be considered.
12.8The learned Judge was required (in deciding that an award should be made) to then consider a just and equitable figure despite what the appellant claimed. The learned Judge made no attempt to do so.
12.9The husband had an unfettered discretion as to what he expends on legal costs in the proceedings.
12.10The wife had a limited and much inferior capacity to fund her legal representation.
As Senior Counsel for the wife’s oral submissions to the Court confirm, ultimately, whilst not abandoned, these complaints were overshadowed by the complaint to which we referred at the commencement of these reasons, which found expression in Senior Counsel for the wife’s written outline of argument in the following terms:
13.By dismissing the Application for Interim Property Settlement and without giving due consideration to an award less than that claimed by the wife based upon the wife’s probable minimal reasonable entitlement based upon a minimum demonstrated asset pool, the learned Judge effected a substantial injustice to the wife.
That entitlement was sought to be reinforced by the reality that “the largest component of the matrimonial assets were outside of the jurisdiction and within the complete control of the husband”. We are not convinced, on the evidence before us, that this factor should have assumed significance before the trial Judge in the absence of any evidence, and we have been referred to none, suggesting the likelihood of the husband dealing with the property of the parties in any way that was likely to have defeated the wife’s entitlement, whatever that entitlement may have been.
The case advanced before us on behalf of the wife differed from that advanced before the trial Judge. The transcript would confirm that the Court specifically raised with Senior Counsel appearing before us whether the trial Judge had been urged by Senior Counsel then representing the wife to award her $9 million by way of interim property settlement on the basis that, on the husband’s own case, she was entitled to such sum, and that the husband could not assert an inability to procure payment of it to her. Nothing to which we have been referred in the transcript suggests that the trial Judge was ever asked to consider awarding the wife anything but the $24 million sum claimed by her, and Senior Counsel appearing for the wife before us conceded as much.
By reference to the evidence before the trial Judge, Senior Counsel for the wife submitted that the trial Judge was able to, and should have made, “strong and comfortable”, albeit “conservative”, findings as to the pool of assets. Counsel contended that those findings could and should have been made in reliance upon the husband’s own concessions as to the wife’s entitlement to that pool of assets. Those concessions, it is said, should have led the trial judge to make an order for interim property settlement in her favour.
In addition to the asserted concession, Senior Counsel relied upon the wife’s evidence before the trial judge as follows:
4.With respect to this Application, I refer to:
4.1.Further Amended Application in a Case filed on this day;
4.2.Form 13 Financial Statement filed this day;
4.3.The matter referred to in paragraphs 2 and 3 hereof in so far as they are relevant.
5.I say that it is appropriate that given that the Husband has had complete control of the assets and income from them since separation and has been able to deal with those assets as he sees fit, that it is appropriate that I receive a further sum by way of interim property settlement. 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 costs to Trial might average $125,000.00 per month excluding Queens Counsel and Counsel fees. I would like the opportunity of being able to utilise, invest and control assets myself, and to secure my own independent financial situation.
6.I say that on the presently available evidence, the following assets (at least) comprise the matrimonial asset pool;
…
There followed a list of 25 items of realty and personalty asserted to have a total worth of $105,402,343.41. The list did not include any monies received by the wife pursuant to the orders to which we have earlier referred. The evidence of the wife continued:
7.In addition, [Ms E] valued [X Ltd] which, at that time, was in the process of starting up a [business] in London and other parts of the world at “Nil”. That business is now well established, and when [Ms E] receives further information for the purpose of up to date valuations, it is my contention that the Husband’s interest in [X Ltd] will be substantial. [Ms E] also valued the Husband’s interest in [B Ltd] as “Nil”. At that time a valuer was denied access to a building the company owns. If a valuation is provided to [Ms E] it is likely a high value of the Husband interest will result.
8.It is uncertain when this matter will be able to be listed for Trial, as there are still a number of interim issues to be determined, I will be requesting that [Ms E] be provided with a substantial amount of new information which has become available since her last report.
9.There is a property [in] Switzerland, which is owned by [D Ltd], a company this [sic] the Husband controls. The Husband, [the child S] and I resided at this property. It is our matrimonial home in Switzerland which [the child S] is deeply attached to, and I seek as part of my interim property settlement that the Husband do all things necessary to have the property transferred to me unencumbered. The value of that property as recorded in [Ms E]’s report is CHF3,340,000 (AUD3,408,000.00). In the event that such an Order is made on this Application, I ask that a further sum be awarded to me in cash to make up a total of $24,000,000.
10.The Husband has sufficient resources to enable him to satisfy such an Order. He also has the capacity to meet his legal costs when they fall due.
APPROPRIATENESS
11.I have used the majority of all previous interim property settlement funds received from the Husband and without further money, I will in a few months be without any means of financial support to cover my living expenses including expenses related to [the child S] and future financial security.
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.
13.On or about 12 January 2010 I caused the establishment of a company called [IL Nominees]. This is my company. I wished to control a company to provide the necessary services for [the child S]. The company has employed my brother [Mr J] as a carer. He previously filled that role as an employee of [WS Nominees], but his services were terminated by the Husband. I have also now reengaged [Mr J]’s services for a short period of time. [The child S] requires two therapists at school in a controlled environment and a further two carers for the home and community programs. These community programs operate in broad, open space environments. I am not in the position to provide [the child S] with the full services available before separation at this point in time. [Mr J] is paid for his services from [IL Nominees] at a rate of $1,980.00 per fortnight. I have transferred a total of $168,000.00 to this company from the $1,000,000.00. I am not able to maintain a reasonable resource level of the home and community learning programs without carer assistance and funding.
14.My expenditure (including expenditure from the sum of $168,000.00 I paid to [IL Nominees]) from the said $1,000,000.00 is as follows:
$AUS
Sundry cash withdrawals for living costs
36,947.85
Repay family loans from sister (see below)
50,000.00
Repay family loans from brother (see below)
5,000
Bank fees/ charges/ international
1,834.31
Food and Beverage (including gifts)
19,134.77
Restaurants
19,330.75
Travel to Europe December 2009 with [the child S] and carers
121,024.66
Flowers and balloons ([the child S]’s party)
4,624.27
Educational & toys & stationary ([the child S])
9023.65
Health care and beauty
12,592.92
Clothing and dry cleaning
82,146.75
Newsagent
559.65
Household supplies & maintenance
19,523.66
Motor Vehicle petrol and maintenance
7242.74
Medical (for myself and [the child S])
12,723.41
[G Pty Ltd]
3,589.85
Professional fees
30,464.35
Other
2,308.27
Cleaning & gardener
8,127.69
Deposit of $97,000 for motor vehicle (remainder to be covered by trade in value) – [IL Nominees]
97,000.00
Payment for services, as outstanding to [Mr J] – [IL Nominees]
13,870.00
Therapist – [Ms B] – [IL Nominees]
19,921.00
Repay outstanding credit card balance Oct ‘09
19,779.34
Sub Total
596,769.89
I also pay [Ms C] and [Mr MC] to assist me in my complex Family Court proceedings, as follows:
Payment for services, as outstanding for the last two financial years – [Ms C]
120,000.00
Payment for services, as outstanding for the last two financial years – [Mr MC]
120,000.00
TOTAL EXPENDITURE
836,769.89
15.The expenditure may be reconciled with the balance of monies shown in my Form 13 Financial Statement filed herein as follows:
Amount received
1,000,000.00
[WS Nominees] reimbursements (from solicitors’ trust a/c – see above)
1,792.62
Interest received
4,168.06
Opening balance of cash investment account
22.04
Total payments as above
(836,769.83)
169,212.83
Represented by:
Cash on hand [Euro balance held after travel]
11,250.00
Balance of cash investment account 10.2.10
120,763.80
Cash at Bank – [IL Nominees]
37,199.03
169,212.83
16.The $4,000,000.00 paid into a trust account of my solicitor, has been expended as follows:
Legal costs and disbursements including counsel fees for this action
$2,139,287.78
Legal costs and disbursements including counsel fees relating to my action against the former solicitors in the Supreme Court
$4,743.16
Auscript
$5,290.12
Other Experts
$154,025.05
Various payments to Robinson & Mason
$36,947.38
Other Payments
$1,014,985.62
TOTAL PAYMENTS
$3,355,279.11
17.The closing balance as at 11 March 2010 in the Bank SA Account including interest is $697,898.60.
18.I currently owe approximately $85,000 for legal costs and disbursements which include fees for experts.
19.With my former solicitors instructions being terminated I was left without advice and the need for engagement of new solicitors. Until I received the $5,000,000 my ability to investigate the size of the asset pool were [sic] severely constrained. It was necessary for my present solicitors to peruse 182 boxes of files from my former solicitors as well as data held electronically surrendered by my former solicitors.
The foregoing evidence of the wife was not challenged before the trial Judge. Nor was the evidence of the husband upon which Senior Counsel for the wife relied which provided:
12.As to paragraph 9 of the wife’s Affidavit, I say as follows:
a.I do not agree to the wife having that property as part property settlement.
b.The total value of the combined assets is $61,040,451.00 plus $6,723,145.00 retained by the wife at separation and $10,475,000.00 by way of interim property settlement, totalling $78,238,596.00.
c.It is my case that the wife is entitled to 35% of the asset pool namely, an amount of approximately 27,384,000.00.
d.The wife retained the asset referred to (i) and (iv) below and I propose she will receive the asset referred to in (v):
(i) Funds retained by the wife at separation
$6,723,695.00
(ii) Interim property settlements paid by me to the wife
$10,475,000.00
(iii) Assets held by the wife as set out in her Financial Statement filed 15 March 2010 at separation
$5,458,907.00
(iv) Adjustment for the wife’s two motor vehicles
$151,000.00
(v) Assets to be retained by the wife as to be set out in my Amended Response for Final Orders, which is to be filed on or before 31 March 2010
$4,575,398.00
Total
$27,384,000.00
It was submitted that the trial Judge made a “fundamental error” in concluding that she was not able to quantify the pool of the parties’ property, at least for the purpose of the application before her, and, in reliance upon such quantification, declining to award the wife what the husband effectively conceded to be her minimum entitlement.
In his oral submissions, Senior Counsel for the husband submitted that the essential basis of resistance to what has, in this Court, been the primary thrust of the wife’s complaints was that, having never been agitated before the trial Judge, and the case conducted entirely on the basis that the wife’s claim was for $24 million, the wife’s proposed challenges to the trial Judge’s rejection of her application for interim property settlement must fail. Leave to appeal should thus be refused.
It was further submitted by Senior Counsel for the husband that the trial Judge could not be criticised for concluding as she did. That is all the more so, it is submitted, in respect of a “hearing on the papers” which involved a substantial factual dispute, which could not be resolved without calling and cross-examining witnesses and evaluating all of the evidence in relation to the net value of the parties’ assets.
No submission to which we have been referred suggests that the claim before the trial Judge was formulated, even on a “fallback” basis, in reliance upon the wife’s entitlement as conceded by the husband (in terms of the net value of the parties’ property and the wife’s percentage entitlement to that net value). The transcript to which we have been referred demonstrates that the trial Judge inquired as to what the wife was seeking. The figure of approximately $9 million was never suggested in response, nor was the husband’s asserted concession as to the wife’s entitlement relied upon.
The proceedings before the trial Judge were adversarial. The parties were both represented by Senior Counsel. Absent any indication to the contrary, her Honour was entitled to consider the wife’s claim, and was not required to explore possible claims which the wife had not made. The trial Judge correctly recognised, in the course of the transcript passages to which we have referred, that she was not bound by the wife’s claim. But, as a matter of natural justice, in the absence of Senior Counsel then representing the wife having sought a different sum, or a different basis for such sum, her Honour was somewhat constrained from making an order for such sum.
For reasons which she detailed, the trial Judge rejected, with respect correctly, any requirement that the wife demonstrate “compelling circumstances” in order to obtain the relief she sought. Her Honour, again, with respect correctly, referred to the “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”, as discussed by Federal Magistrate Reithmuller in Wenz v Archer(2008) 40 Fam LR 212 and referred to by the Full Court (per Boland and O’Ryan JJ) in Strahan & Strahan(2009) 42 Fam LR 203.
The trial Judge further recorded, again correctly, that there was “considerable dispute between the parties as to the correct size of the ‘matrimonial pool’” (original emphasis) and recorded the contention of the wife that the property of the parties exceeded $105 million. Her Honour also recorded that the husband maintained that the asset pool of the parties approximated $61 million net, to which there should be added the $6 million which the wife retained at separation and the $10.5 million which the wife had received pursuant to interim orders of the Court, the net assets of the parties thus approximating $78 million. Although there is no suggestion that her Honour thereby inaccurately recorded the figures which had been advanced before her, Senior Counsel for the wife submitted before us that there should be notionally added back $13 million with respect to legal fees paid by the husband, thereby producing net property of $90 million.
Her Honour then recorded that “counsel for the husband indicated that the husband would be arguing, at a final hearing, that the wife would be entitled to 35 per cent or $27 Million”. Her Honour added:
79.… Other calculations suggest the pool is probably $71.85 Million and 35 per cent would allocate $25 Million to the wife.
By reference to the “add back” just referred to, it was submitted before us that the wife was, on the husband’s own case, entitled to 35 per cent of $90 million: a sum of $31.5 million. On that basis, it was submitted, the wife – on the undisputed evidence before the trial Judge – was entitled to receive a further $15.025 million or, at the very least, if the $13 million paid by the husband by way of legal fees were not added back, a sum of $10.475 million. Thus, it is said, a “strong and comfortable” but “conservative” finding could have, and should have, been made as to a “minimum entitlement” to the wife of $9 million.
Having not been asked to consider, if only by way of “fallback”, making an order for the payment to the wife of approximately $9 million, it is unsurprising, and in our view a matter not justifying criticism of her, that her Honour considered only the wife’s claim for a “further payment of $24 Million”. The complaint that the trial Judge “gave no reason for not awarding a lesser sum” can be simply answered. No lesser sum was sought. As we have earlier recorded, it cannot in our view be concluded that, if it had, the trial Judge’s conclusion would not have differed. We struggle to criticise a trial Judge for not having adopted an outcome which was not urged upon her.
It is not in doubt that the trial Judge was in no position to determine whether the property of the parties was worth as little as $77 million net, or as much as $105 million net, or any sum in between. We agree with the succinct submissions contained in the written argument on behalf of the husband:
The learned trial Judge cannot be criticised for holding that the size of the asset pool was relevant to the question of whether it was in the interests of justice to make an interim property order. Her Honour was acting in accordance with Full Court authorities which were binding upon her as a Judge at first instance. Her Honour discussed those issues at (AB 32 par 72 and following).
Her Honour recorded, again accurately, that:
97.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.
Notwithstanding that conclusion, the trial Judge did consider further whether it was appropriate to exercise a discretion to make an order for interim property settlement in favour of the wife, and ultimately concluded:
104.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.
Nothing to which we have been referred persuades us that, having regard to the way in which the wife’s case was presented before her, the trial Judge’s discretion miscarried in concluding as she thus did. Speculation about what the trial Judge may have concluded had she been asked to grant relief in the terms urged upon this Court is unnecessary and unproductive.
The trial Judge’s references to how the wife had dealt with the very substantial sums which had come into her possession subsequent to separation were also matters to which her Honour could, and properly did, have regard in exercising her discretion.
We thus conclude that this proposed challenge lacks merit.
The proposed challenge to the order for spousal maintenance
It was submitted that the trial Judge erred in principle in making the order for spousal maintenance which she did. Senior Counsel for the wife asserted that:
18.1At para 150 of her Reasons (AB 48) the learned Judge cited from Bevan and in particular the requirement with regard to the husband’s liability to maintain the wife “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 circumstances that the parties are no longer husband and wife and the assets which were formerly available to them both in common have now been divided between them.
18.2Unlike many cases it is submitted that the pre-separation lifestyle of the parties including the amount of money and resources available to the wife assumed greater than usual significance. Particulars are set out in the wife’s affidavit sworn on 2 December 2008, (AB 79-85). That affidavit also refers to some evidence of the income of the husband. In our submission the learned Judge failed to take that evidence into account.
18.3The learned Judge failed to take account of the fact that the husband’s net weekly income after payment of his claimed expenses was $37,915 per week.
The proposed challenge was encapsulated in the following submission:
19.In our submission the award was patently unjust on its face and manifestly inadequate. It was unjust to make an award of $6,254 per week to the wife effectively her claimed present expense at that time given the clear evidence of her standard of living pre-separation. Even after payment of that sum, the husband had an excess of income over expenditure (an income obtained solely as a result of his control of the income earning assets of the matrimonial pool) of some $31,661 per week or $1,646,372 per year.
Senior Counsel for the husband submitted in reply:
15.In relation to spousal maintenance it is hard to comprehend the wife’s complaint when she was awarded that sum which the learned trial Judge found to be necessary for her own maintenance (AB 51 paras 170 and 172). The court was unable to find any basis for a maintenance order in the sum of $278,000 per month (AB 50 para 166). The figure claimed by the wife was found by her Honour to be more than 5 times of the average weekly expenses claimed by the wife. (AB 50 par 162).
Senior Counsel for the husband amplified that submission in the following terms:
Ground 1
The learned trial Judge carefully analysed the wife’s current weekly expenditure and reached a conclusion on the wife’s own evidence. Her Honour was dealing with an interim application on the papers, with all of the attendant limitations that such a hearing presents.
It is submitted that there is no principle of law which calls for the making of a maintenance order which is more than 5 times the asserted need of the wife (AB 50 para 262). Her Honour correctly identified the legal principles and proceeded to apply them.
The judgement shows that her Honour conscientiously analysed the parties cases and determined the matter on the evidence. Her Honour was not bound to accept the wife’s untested assertions and allegations of what she (the wife) was accustomed to receiving during the marriage and such evidence was not relevant when the wife’s need for maintenance was substantially less than her claim.
Her Honour also took into account the fact that the husband was providing $10,778 per week for [the child S] (this was before her Honour dismissed the child support application in respect of which the appeal is abandoned).
Ground 2
The learned trial Judge was not obliged to take the parties previous lifestyle into account. Her Honour was obliged to take into account the matters set out in s 75 (2) (g) and she did so at (AB 50 para 168).
It is hard to comprehend the wife’s complaint in this ground, as her Honour ordered “such other sum as was appropriate in the circumstances” that is $6,254 per week, which corresponds to the estimate of the wife in her financial statement filed 15 March 2010 (AB 349). Part N of that statement (AB 360-361) reveals the wife’s claim of $6,254 which is analysed by her Honour at AB 49 paras 156 to 160).
It is submitted that no appealable error can be shown in relation to this ground or the spousal maintenance appeal generally.
As is not in doubt, the trial Judge concluded that the husband had a substantial capacity to meet an order for interim spousal maintenance. The husband “conceded a capacity to pay spouse maintenance”. His disclosed average weekly income exceeded his total expenditure on a weekly basis by approximately $38,000. Nowhere did the trial Judge find that, if the wife established an entitlement to interim spousal maintenance of $278,000 per month, the husband would be unable to meet an obligation of that magnitude.
The focus of the proposed challenge is in reality on the trial Judge’s finding that the wife’s reasonable weekly needs approximated $6,254, rather than the $69,500 upon which her claim for $278,000 per month was based.
As is clear from the written and oral submissions of Senior Counsel for the wife in support of this proposed challenge, there is no suggestion that any finding of fact made by the trial Judge for the purpose of determining the wife’s interim spousal maintenance claim was erroneous, or other than reasonably open to her. Rather, the complaint was that the trial Judge failed to have regard to what the wife had been accustomed to spending and would, had she the capacity to do so, have been, and be spending.
The financial statement upon which the wife relied before the trial Judge itemised the weekly expenses claimed by the wife for herself, the parties’ child and “other adults”. These expenses, as at the date of swearing the document, totalled $12,866, of which $6,499 was referrable to the wife, $5,537 to the parties’ child and $830 for “other adults”.
Elsewhere in her financial statement, under the heading “Personal expenditure” (Part G) the wife included no expenses not otherwise referred to in the $13,266 which she suggested emerged from the annexure to her financial statement to which reference has just been made. The wife claimed that she was meeting expenses for the benefit of her sister “and others” of $2,060 per week. The wife disclosed a weekly income of her sister of $1,153. We are not able to completely reconcile the figures, but that ultimately is not of concern for present purposes.
Even taking the higher figure, referred to in the wife’s financial statement of $13,266 per week, the figure claimed for her own personal expenditure, falls far short of the sum which the wife’s interim spousal maintenance claim was predicated on.
Nothing to which we have been referred in the wife’s affidavit in support of her application could have advanced the claim before the trial Judge. Beyond saying that her “standard of living [and that of the parties’ child] now is significantly lower than before separation”, the wife did not identify, or quantify any expenses which she would meet if she had the means to do so. Nor did she particularise, or attempt to quantify, any asserted unreasonable reduction of her standard of living.
The trial Judge’s finding that she was “unable to find the basis upon which an order for spousal maintenance in the sum of $278,000 per month or any similar amount could be made on an interim basis” was well open to her in those circumstances. Even within the context of the expenses claimed by the wife, as the trial Judge recorded, there were substantial expenses, including expenses for which the wife was not responsible, which the trial Judge was entitled to, and did reject.
The figure upon which the trial Judge based the order for interim spousal maintenance was the figure which the wife herself asserted in her financial statement. We have not been referred to any other figure which the wife claimed represented her reasonable weekly expenses. The trial Judge awarded the wife what her own evidence suggested were her reasonable weekly needs.
No other relevant finding recorded by the trial Judge has been shown to have been erroneous or other than reasonably open to her. Nothing to which we have been referred established that this proposed complaint has merit.
Conclusion
Neither the wife’s proposed challenge to the trial Judge’s order with respect to interim settlement of property or interim spousal maintenance being shown to have merit, leave to appeal should and will be refused.
The proposed appeal against costs order - SA 66 of 2010
It is then necessary to consider the application made by the Notice of Appeal filed by the wife on 10 September 2010. It is common ground that the wife required leave pursuant to s 94AA of the Act to appeal against the orders of the trial Judge referred to in the wife’s Notice of Appeal.
It is common ground that the Court would approach the wife’s Notice of Appeal on the basis that, if it was shown to have merit, the Court would grant leave to appeal and allow the wife’s appeal.
The husband resisted the wife’s application for leave to appeal and sought to maintain the trial Judge’s order.
On 13 August 2010, Dawe J ordered that the husband pay the wife $750,000 on account of the wife’s anticipated legal expenses. The wife had sought that the husband pay to her $3.8 million on account of her future anticipated legal expenses. The husband had opposed any order in the wife’s favour.
The crux of the proposed challenge to the trial Judge’s order was that she “erred in principle in failing to give any or adequate reasons for the basis of her assessment of the entitlement of the wife to the sum of $750,000 for costs and preparation of trial”.
It was submitted that:
8.The learned Judge found that the wife required monies to take the matter to trial. The nature of the evidence presented inherently had to be to some extent unreliable. It involved projections. There is no limit upon the husband’s ability to pay his legal fees which to date, it seems, are about the same as the wife. In that event, to limit the wife’s ability to run the matter for trial, amounts to injustice to the wife.
Each party has to date expended in excess of $10,000,000 on legal fees and disbursements. Senior Counsel for the wife referred to matters which were said to be relevant to an application “for provisional funds to enable payment of legal costs”. As the trial Judge concluded that there should be such a payment, and there has been no appeal by the husband against that determination, it is unnecessary and unproductive to refer to those matters.
The proposed challenges involve essentially two elements. The first is that, whilst the trial Judge made adverse findings or criticisms of a number of the anticipated costs upon which the wife relied, no adverse finding or criticism was made with respect to the great bulk of those expenses. In those circumstances, the trial Judge was submitted to have erred in rejecting the wife’s evidence as to the likely quantum of her future legal expenses as “unreliable”. Sensibly, and properly, the particular matters which the trial Judge concluded to have been inappropriately claimed were not the subject of complaint by Senior Counsel for the wife.
It was accordingly submitted that the items which the trial Judge expressly, and permissibly, rejected did not result in the $3.8 million sum advanced by the wife being reduced to $750,000 and that, as Senior Counsel for the wife somewhat colourfully submitted, the Court would not find a “single line” in the trial Judge’s reasons explaining how the figure of $750,000 was arrived at. It was thus submitted that, in the absence of any adequate reasons for determining $750,000 to be the appropriate sum, and the identified deductions from $3.8 million not leading to that figure, appellate intervention would be enlivened.
Senior Counsel for the husband resisted the application by relying upon the “very wide discretion” which the trial Judge was exercising. Whilst, in his written submissions, Senior Counsel for the husband relied upon the funds which the wife had available to her in the post separation period, which were submitted to have been “in excess of $16 million”, he fairly conceded in oral submissions before us that, as the husband had not sought to appeal against the trial Judge’s order, his submissions were necessarily limited to defending the quantum of the order made by her Honour, rather than whether or not she should have made an order at all.
The Court enquired of Senior Counsel for the husband how the sum of $750,000 was arrived at by the trial Judge. Effectively acknowledging that her Honour did not expressly state how the figure of $750,000 was arrived at, Senior Counsel for the husband sought to rely upon a “concession” asserted to have been made by Counsel representing the wife, in which it was said:
…Your Honour has to make a decision as to whether or not the claim is reasonable, but there is authority which is referred to in Strahan which indicates that it’s not necessary for a bill of costs in taxable form to be presented to the court.
It is not clear to us in what way the “concession” asserted to have thus been made could assist the husband in resisting the proposed challenge to the trial Judge’s order.
It was further submitted by Senior Counsel for the husband that, whatever may have been the rights or wrongs of the findings made by the trial Judge, and/or conclusions reached by her in reliance upon them, they had been “overtaken by subsequent events” in that the wife has since changed lawyers.
It was suggested to Senior Counsel for the husband by the Court that, the issue being the reasonable quantum of the wife’s likely future legal expenses, rather than by whom they were provided, the Court could not assume that a change of lawyers would materially alter the wife’s reasonable costs of legal representation to the completion of the trial of the substantive proceedings.
With respect to him, Senior Counsel for the husband was unable to suggest anything which persuades this Court that a change of lawyers by the wife materially alters the matters with which we must engage in order to determine this application.
The trial Judge referred to a schedule of the wife’s anticipated legal costs which had been prepared by the solicitor then representing her, and attached to an affidavit which was read before her. The schedule to the solicitor’s affidavit provided a breakup of the $3,766,250.00 “estimated costs to a trial hearing” of 23 days. We have not been referred to anything to suggest that the estimation of 23 days for the trial was contentious, although, clearly the expenses which the wife’s solicitors anticipated with respect to it were.
The trial Judge recorded that the schedule to the affidavit of the wife’s then solicitor was not “reliable evidence”. Her Honour particularised a number of aspects of the schedule of estimated costs which she found to be unreasonable. Sensibly, Senior Counsel for the wife did not dispute before us that the trial Judge was not reasonably able to reject the sums claimed which she did in the paragraphs to which we have referred.
It is ultimately less than clear to us, and neither Senior Counsel appearing before us shed any constructive light on the topic, of the effect on the $3,766,250.00 estimated costs of the deletions or discounts which the trial Judge particularised. Significantly, Senior Counsel for the husband did not suggest to us that, as a matter of arithmetic, those deductions produced the figure of $750,000 which the trial Judge determined to be an appropriate sum to award the wife.
Nor was it submitted by Senior Counsel for the husband that some combination of the discounts particularised by the trial Judge, and provision for the wife’s “reckless” or “unexplained” expenditure of the $5 million which she had received the previous year pursuant to the orders of the Full Court, provided an explanation for the quantification of estimated costs in the sum of $750,000.
Having indicated the areas in which she regarded the projected expenses as inappropriate or unreliable, the trial Judge reiterated that the “information supplied by the wife’s solicitors concerning the expected fees of $3.766 Million was unreliable”. The trial Judge recorded that “[t]he solicitor’s preparation work would only occupy three months, not five”, a finding which has not been seriously challenged before us.
Her Honour then referred to other assets at the husband’s disposal and found:
185.The affidavit material before the Court however clearly indicates that the husband has control over a substantial portion of the assets to be taken into account and has the capacity to obtain sufficient funds to meet any order of the Court.
As is not in doubt, the trial Judge’s order was not influenced by any asserted incapacity of the husband to meet any order she might make with respect to the wife’s estimated costs.
Her Honour then recorded:
188.It is not appropriate to require the wife or the Court to accurately calculate the amount required for future representation. However, taking into account all the material before the Court, and, in particular the considerable sums which the wife says she has already spent on legal costs in this matter, it is just and equitable that the wife receive the sum of $825,000 being $750,000 for her solicitors and counsel fees and $75,000 for the Independent Children’s Lawyer.
189.Payment of a further sum of $750,000 to the wife’s solicitors would provide significant sums for the preparation of the matter for trial by solicitor and counsel and for the final hearing before the Court, together with any necessary further interim hearings.
With respect to her Honour, and accepting that, in the circumstances of this case, her Honour was not obliged to provide detailed reasons for concluding that $750,000 “would provide significant sums for the preparation of the matter for trial by solicitor and counsel and for the final hearing before the Court, together with any necessary further interim hearings”, the Court is unable to discern the basis upon which such sum was concluded to be appropriate.
As Senior Counsel for the wife submitted, the specific criticisms of the schedule of estimated costs prepared by the wife’s solicitor made by the trial Judge were limited in the respects her Honour clearly articulated.
In circumstances where there was no finding that the husband’s capacity to meet the order for interim costs sought by the wife was problematic, and where the trial Judge clearly accepted, as was open to her, that the wife was entitled to an order of the kind she sought, with respect to her, the trial Judge was obliged to provide clearer reasons for her conclusion than she did.
In those circumstances, the wife has established an entitlement to a grant of leave to appeal and for her appeal to be allowed. To decline to do so would in our view be to visit a substantial injustice upon the wife, and/or to countenance an error of principle.
The more difficult issue is what this Court should do, having determined that the wife’s appeal against the quantum of the order for interim costs should be allowed.
It was submitted by Senior Counsel for the wife that, albeit subject to the “discounts” determined by the trial Judge to be appropriate, the Court should re-exercise her Honour’s discretion by reference to the $3.8 million approximately particularised by her now former solicitor, and make an order in his client’s favour for substantially more than $750,000.
Senior Counsel for the husband submitted that the Court should remit the matter for re-hearing by a single judge. It was submitted by Senior Counsel for the husband that, if the Court allowed the wife’s challenge to the trial Judge’s order on the basis that inadequate reasons for that order were provided, the Court could not be in a position to provide adequate reasons for re-exercising the trial Judge’s discretion. There is some force in that submission.
This Court does, however, have the benefit of a detailed estimate of the wife’s costs to a trial hearing and some specific findings by the trial Judge with respect to those proposed costs. Whilst accepting that re-exercising the trial Judge’s discretion will necessarily be to some extent arbitrary, that would necessarily be so even if the matter were remitted for determination by a single judge.
Moreover, as is clear from the submissions of Senior Counsel for both parties before us, if remitted, quite apart from further delaying the parties’ passage to a final hearing of matters in dispute between them, the issue would be likely to gain a life of its own, with further evidence, testing of evidence, further applications and the distinct prospect of a further application for leave to appeal to this Court.
On balance, whatever imperfections are inherent in this Court re-exercising the trial Judge’s discretion, they are in our view greatly outweighed by the likely consequences of remitting the matter for redetermination by a single judge. We are mindful of the fact that the husband undoubtedly has the capacity to arrange his affairs so as to comply with any order which this Court might make, and that the ultimate impact of any monies received by the wife pursuant to an order of this Court will be able to be determined by the judge who finally determines the proceedings.
In those circumstances, we propose to re-exercise the trial Judge’s discretion.
Neither party sought to adduce further evidence before us in the event that this Court did re-exercise the trial Judge’s discretion.
The following figures are instructive for present purposes. A 23-day trial would be likely to cost the wife $500,250 ($21,750 per day x 23 days). Three months of preparation of documents, proofing of witnesses, solicitors and paralegals/clerks would cost $450,000.
If one allowed, as Senior Counsel for the wife conceded it should be, one Queens Counsel proofing witnesses, $50,000 would be allowed. So too would “[a]dvice on evidence, settling and matters incidental to preparation of trial affidavit of the wife as to both children’s matters and property and spousal maintenance and child support” inclusive of Senior and Junior Counsel of $300,000 (original emphasis).
Other items which were not the subject of criticism by the trial Judge were:
…
Airfares and expenses for overseas and out of State witnesses and advising experts.
$50,000
8
Matters relating to disclosure and inspection of Husband’s documents by counsel and expert
$100,000
9
Consideration of [Ms E]’s valuation report and of possible questions for [Ms E] and attending with other experts with respect that– say, 5 days
$60,000
10
Airfares, accommodation and fees, if conferences with [Ms E] required 2 days.
$12,000
11
…
Disbursements
Translation of documents
$10,000
13
Transcripts
$20,000 (approximately 15 Hearings)
14
…
Prestige photocopying of Husband’s Discovered documents (voluminous documents re discovery) – based on previous billing of approx $13,000.00 for Husband’s 5th List of Disclosure.
$15,000
16
Photocopying by Prestige of additional briefs and documents required by Wife’s legal team for Trial
$45,000
17
Total
$312,000
We would accordingly substitute the sum of $1,612,250 for the figure awarded by the trial Judge ($750,000). We do not understand any of the figures to which we have referred, and included, as having been challenged before us.
The effect of substituting the said sum of $1,612,250 for the sum of $750,000 is to produce a total of $1,687,250 when the $75,000 payable to the ICL pursuant to order 13 of her Honour’s orders is added.
Costs
As is apparent, each party has been partly successful and partly unsuccessful before us.
We are not of the opinion that either party should be awarded any costs with respect to the proceedings before us. That is essentially because each party has been wholly successful as to one application before us and wholly unsuccessful as to the other.
Nor are we persuaded that we should exercise our discretion to order costs certificates in the circumstances of this case.
I certify that the preceding one hundred (100) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Coleman, May and Murphy JJ) delivered on 10 June 2011.
Associate:
Date: 10.06.11
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