Swift & Swift
[2020] FamCA 991
•25 November 2020
FAMILY COURT OF AUSTRALIA
Swift & Swift [2020] FamCA 991
File number(s): CAC 658 of 2020 Judgment of: GILL J Date of judgment: 25 November 2020 Catchwords: FAMILY LAW – PROPERTY – interim property distribution – litigation funding – whether it is just and equitable to make adjustment – order made – spousal maintenance – where husband offers an undertaking to continue to support wife – whether the undertaking is a financial resource available to the wife – where undertaking is not regarded as a financial resource of a nature to enable the wife to adequately support herself – orders made – injunctions – restraints on dealing with the property pool – notice period – orders made – binding death nomination – where wife’s claim can be made good by other mechanisms – injunctive relief not granted – documents held by accountant – husband’s duty to disclose Legislation: Family Law Act 1975 (Cth) ss 74, 75, 79, 80, 90SM, 114
Family Law Rules 2004 (Cth)
Cases cited: Bevan and Bevan (1995) FLC 92-600
Gabel v Yardley (2008) 221 FLR 270
Hall v Hall (2016) 332 ALR 1
Harris and Harris (1993) FLC 92-378
In the marriage of Redman and Redman (1987) FLC 91-805
In the Marriage of Sieling (1979) 24 ALR 357
Iphostrou & Iphostrou and Ors [2011] FamCA 20
Oates and Crest (2008) FLC 93-365; 216 FLR 469
Osferatu v Osferatu [2012] FamCA 408
Shelbourne & Shelbourne [2019] FamCAFC 196
Strahan v Strahan (Interim Property Orders) [2009] FamCAFC 166
Wenz v Archer (2008) 40 Fam LR 212
Zadenev v Zadenev [2013] FamCA 838
Zschokke v Zschokke [1996] FamCA 79
Number of paragraphs: 74 Date of hearing: 16 November 2020 Place: Canberra Counsel for the Applicant: Mr Kearney SC Counsel for the Respondent: Mr Roberts Solicitor for the Applicant: Farrar Gesini Dunn Solicitor for the Respondent: Barkus Doolan ORDERS
CAC 658 of 2020 BETWEEN: MS SWIFT
Applicant
AND: MR SWIFT
Respondent
ORDER MADE BY:
GILL J
DATE OF ORDER:
25 NOVEMBER 2020
THE COURT ORDERS, UNTIL FURTHER ORDER:
1.That within 30 days of the date of these Orders the husband pay to the wife’s solicitors Trust Account the sum of $240 000 for her legal fees and disbursements (ACT Law Practice Trust Account BSB: … Account: …99 Reference: …).
2.That by way of interim spousal maintenance the husband pay:
(a)to the Wife $2 000 per month, into an account nominated by the wife, the payment to be paid on the 20th day of each calendar month;
(b)All required repayments, as and when they fall due, for the Westpac loan (account ending …66) secured by Mortgage on the property situate at B Street, Suburb C in the Australian Capital Territory;
(c)All rates, body corporate fees, telephone costs, utilities, repairs, maintenance and insurances for the property situate at B Street, Suburb C, in the Australian Capital Territory, as and when they fall due; and
(d)The balance owing on the Westpac MasterCard (account ending ...81) each month, to a maximum amount of $5 000 each month, as and when it becomes payable, as advised by the wife in writing.
3.That unless otherwise agreed in writing by the wife, the husband be and is hereby restrained from causing or permitting the obligations pursuant to Orders 1 and/or 2 herein to be met by recourse to any right or entitlement of the wife or by the purported conferral upon the wife of any benefit from any entity or trust, including but not limited to, by means of any purported distribution or dividend to the wife from any entity or trust and/or from any entitlement of the wife in and to the F Super Fund.
4.That save in accordance with any written direction of the wife following the date of these Orders, the husband be and hereby is restrained from causing or permitting:
(a)any person (including the husband) and/or entity to have recourse to any right or entitlement of the wife in and/or from any person and/or entity;
(b)the conferral upon the wife of any benefit from any entity or trust. including but not limited to by means of any purported distribution or dividend to the wife or the drawing upon any entitlement of the wife;
including but not limited to in respect of any entitlement of the wife in and to the F Super Fund.
5.That the husband provide to the solicitors for the wife within 7 days of the date of these Orders copies of the records and disclosure in accordance with Orders 6, 7 and 8 of these Orders:
6.Copies of all records provided to the relevant Accountants for the purposes of preparing the Accounts, Financial Statements and Tax Returns for the period 1 July 2017 to 30 June 2018.
7.Statements for all shareholdings of the wife in publicly listed companies including but not limited to in relation to D Insurance, G Bank and K Company and copies of statements in relation to each of the shareholdings and all linked accounts from 1 January 2018 to date.
8.Copies of all bank statements showing the deposit of the wife's F Super Fund pension payments.
9.That within 60 days of the date of these Orders, the parties jointly instruct Mr L of M Valuers, or such other expert as agreed between the parties in writing ("the ACT Property Expert") to provide valuations of the property located in the Australian Capital Territory.
10.That within 60 days of the date of these Orders, the parties jointly instruct Mr N of P Company, or such other expert as agreed between the parties in writing ("the Country FF Property Expert”) to provide valuations of the property located in Country FF in which the parties have an interest.
11.That within 14 days of the date of these Orders the parties jointly instruct Ms Q of R Accountants or such other expert as agreed between the parties in writing ("the Financial Expert") to be the single expert with respect to all entities in which the parties' have an interest, as at 30 June 2020, including but not limited to:
(a)Swift Pty Ltd (previously S Pty Ltd) ABN …;
(b)F Super Fund ABN …;
(c)Swift Family Trust ABN …;
(d)T Pty Ltd ACN …;
(e)V Group, including:
(i)V Partnership ABN …;
(ii)W Trust;
(iii)X Trust; and
(iv)Y Pty Ltd.
(f)Z Pty Ltd ABN …, including:
(i)AA Pty Ltd;
(ii)BB Pty Ltd; and
(iii)CC Pty Ltd;
(g)DD Pty Ltd ABN ….
12.That the husband pay the costs of all single expert valuations in the first instance, with the wife to pay half of the costs of the single expert on the finalisation of the property proceedings, subject to further order of the Court.
13.That unless otherwise provided for in these Orders, or as agreed in writing between the parties, until further Order, the parties must provide the other with at least 35 days notice prior to doing any act or thing to:
(a)Deplete the asset pool, save for meeting ongoing expenses as outlined in their Financial Statements filed in these proceedings, or as otherwise agreed in writing;
(b)Make any changes to the structure of the entities in which either party had an interest;
(c)Further encumber the Suburb C Property, including but not limited to withdrawing funds from the home loan and/or offset account;
(d)Deal with any real property in which the parties' have an interest;
(e)Pay the provision of benefits and/or distributions to persons other than to the wife, the husband and his current partner and his underage son.
14.That the wife be at liberty to file a further Amended Application upon receipt of disclosure from the husband.
15.Within 28 days following the provision of the single expert valuations the parties are to confer in relation to engaging in mediation.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Swift & Swift has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
GILL J:
INTRODUCTION
These proceedings concern arrangements between the parties pending final resolution pertaining to property distribution, spousal maintenance, injunctive relief in respect of preserving the pool of property and taking preparatory steps to assist in the resolution of the parties’ property dispute. The wife is currently 72 years old, the husband 65 years old. They were together for about 33 years. They hold considerable property interests between them. The proceedings occur in the context that the parties have been separated since 2011 and have consensually managed their financial affairs until their recent divorce in 2020, following which in April 2020 the wife has sought relief in this Court.
Following separation, the parties purchased a property in Suburb C where the wife lives. The husband has continued to operate or manage the various aspects of the property of the relationship, in particular as they relate to the husband’s business interests. The husband has, since separation, continued to access funds in various forms from various corporate and trust entities, and has caused payments to be made, again in various forms from various entities, in support of the wife.
The wife complains that, until recently, she was unaware that the husband was conferring upon her wages (without the wife engaging in any paid employment), that he was drawing upon and making payments to her from her superannuation account, and that he was levying a rent upon the wife for her occupation of the Suburb C property, being a rent paid from the various payments that he was effecting.
The husband offers an undertaking that he will continue to make payments to the wife, albeit not precisely in the amounts or nature sought by the wife. The wife seeks to restrain the husband from making payments in the manner that he has, such as through the payment of a wage, or drawing upon her superannuation.
The wife seeks the payment of various amounts as spousal maintenance.
The wife also seeks $240 000 (increased from the $170 000 previously sought) be paid to her as a partial property distribution, or alternatively as a costs order, on account of legal fees. The wife provided a costs notice from her lawyers dated 13 November 2020 (see Tender Bundle p132), identifying fees to the conclusion of a contested trial estimated at approximately $390 000, including $180 000 incurred to date, of which approximately $170 000 remains unpaid.
The parties were in dispute in relation to the meeting of disclosure obligations by the husband. Little clarity emerged during the proceedings.
The husband appropriately conceded in relation to the wife’s application the following:
(a)That if the interim property orders were made as sought by the wife, and the husband was ultimately successful in his case, that the effect of the orders would be able to be practically reversed;
(b)That the amounts sought by the wife as necessary for her support were accepted as generally justified;
(c)That the husband has the capacity to make the payments as sought by the wife by way of maintenance;
(d)That the husband’s binding death benefit nomination has the effect contended for by the wife, of removing the husband’s superannuation from the property pool should the husband die, an occasion that the husband submitted was unlikely during the relevant period;
(e)That the entities sought to be valued by the wife could all be valued, and that the valuations could also be as at 30 June 2020;
(f)That the restraints sought by the wife in relation to dealings with the parties interests, making dispositions, including outside the jurisdiction, changing office holders without notice could be made, although he asserted that the appropriate notice period should be fourteen days rather than the sixty days sought by the wife.
The parties also agreed as to payment for the valuations insofar as that the husband could fund the valuations at first instance, with the wife to be responsible for half of the costs of such at the conclusion of the proceedings subject to contrary order.
MATERIAL RELIED UPON
The Wife relied upon the following:
(a)Case Summary Document filed 16 November 2020;
(b)Affidavit of the Wife filed 9 November 2020;
(c)Affidavit of Wife filed 8 September 2020;
(d)Amended Application for Final orders filed 3 September 2020;
(e)Tender Bundle;
(f)Supplementary Tender Bundle.
The Husband relied upon the following:
(a)Case Summary Document filed 16 November 2020;
(b)Affidavit of the Husband filed 3 November 2020;
(c)Amended Response to Final Orders filed 3 November 2020;
(d)Tender Bundle.
The interim property distribution claim
It is well-established that the power under s 79 or s 90SM of the Family Law Act 1975 (Cth) (‘the Act’) to make an order to alter interests in property can be made on an interim basis.[1]
[1]Gabel v Yardley (2008) 221 FLR 270; Strahan & Strahan [2009] FamCAFC 166 (“Strahan”).
In Gabel & Yardley,[2] Bryant CJ and Coleman J observed in relation to the interim exercise of the power contained in s 79 to adjust the property of the parties that:
The legislative framework, and the authorities to which we have been referred, suggest that the court’s power to make orders with respect to settlement of property is not necessarily exercisable at only one time, and can properly be exercised by a succession of orders until the power to make orders with respect to property is exhausted. Logic suggests that the power to make orders for settlement of property will be exhausted or “spent” when there remains no property of the parties to the marriage or either of them with respect to which orders by way of alteration of interests of property could be or have been made.
[2] (2008) 221 FLR 270, [57].
The approach to the making of an interim property distribution was set out in the Full Court case of Strahan.
In Strahan, it was held that it is necessary to identify the relevant source of power to found the application before the Court, in order to identify the conditions that are placed upon the powers exercised.[3] This step is of critical importance where the relief sought by a party may be pursued under a number of heads of power, such as a litigation funding order that may be effected under the property, maintenance or costs powers.
[3]Strahan & Strahan [2009] FamCAFC 166, [84].
As Watts J stated in Zadenev v Zadenev [2013] FamCA 838, there are two steps involved in making a determination regarding an interim property distribution. The first step, set out in Strahan, is to identify whether it is appropriate to exercise the power, where the power confers a wide discretion, where the overarching consideration is the interests of justice, [4] but where the usual order is a once and for all order made at the conclusion of a final hearing. There is no requirement for compelling circumstances.
[4]Strahan & Strahan [2009] FamCAFC 166, [88].
For a more in depth discussion of the first step, regard may be had to what was said by Reithmuller FM in Wenz v Archer (2008) 40 Fam LR 212 as approved by Boland and O’Ryan JJ in Strahan.
Here, the wife’s case in relation to the first step is that it is a proper exercise of the discretion in order to adequately equip her to undertake litigation of the property case.
The Full Court in Strahan recognised the impetus for making a litigation funding order as coming from the desirability of both parties having access to legal representation, even where it is one party who has the control over the property of the marriage to the exclusion of the other. That is, it is driven by the interests of justice.[5]
[5]Strahan & Strahan [2009] FamCAFC 166.
In Shelbourne & Shelbourne [2019] FamCAFC 196, Ainslie-Wallace, Ryan and Tree JJ stated that ‘[n]otwithstanding the head of power engaged, often the disparity of resources available to the parties to fund the litigation will be identified as demonstrating a desirability to establish a “level playing field”.’[6]
[6]Iphostrou & Iphostrou and Ors [2011] FamCA 20.
Whatever the head of power, the Full Court held in In the Marriage of Zschokke that there are at least three relevant matters to consider before making such an order. Firstly, a position of relative financial strength by the respondent, secondly, a capacity of the part of the respondent to meet his or her own litigation expenses; and thirdly, an inability by the applicant to meet her or his litigation expense from his or her own income assets or financial resources. While typically important, these factors do not substitute for the consideration that the requirements of justice remain a basic underlying condition to the exercise of the power.
The complexities in the arrangement of the property of the relationship, the corporate entities, trusts, and business interests shared with third parties points to a high degree in the complexity of the property proceedings, as already indicated by the conflict over disclosure, and the need for the wife to be able to fund them. While it is true that the Wife has some capacity to fund the litigation, by virtue of holding a sum in an account, having some money held by her lawyers, and having some capacity to access superannuation, the cash sums fall well short of what is required. For the reasons identified in the spousal maintenance aspect of the judgment, at this stage the wife ought not be required to strip her superannuation to fund the litigation in order to avoid leaving the property adjustment to a single exercise at the final hearing.
The second step, also supported by Strahan is to have regard to the usual matters in a s 79 order (ss 79(2) and 79(4)).
As to these usual matters, the High Court in Stanford has set out the approach to be taken to the powers granted by s 79, identifying that it is necessary to identify the legal and equitable interests of the parties, and to determine whether it is just and equitable to make any adjustment at all.
Although Stanford was determined in the context of a final determination pursuant to s 79, it necessarily informs the application of the power to interim proceedings where those proceedings rely upon s 79.
In interim proceedings, it may not be possible, given the limitations of such proceedings, to identify definitively, or even approximately, the interests of the parties or the values to be attributed to such interests.
The approach in Strahan to this issue, which, although it predated Stanford has been followed post Stanford, is that:
A detailed inquiry is not required, but there must be some assessment of s 79 factors. Given it is an imprecise exercise, the interim property order has to be “conservative” so that the final outcome of property settlement will not be compromised by the interim property order.
Further, Strahan picked up what was earlier said in Zschokke v Zschokke [1996] FamCA 79 regarding the relationship between an interim s 79 order and a final order, being:
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 assets [sic] 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.
What is then required is that the legal and equitable interests on an interim application, are sufficiently identified to both answer the question of whether it is just and equitable to make any adjustment, and just and equitable to make the particular adjustment. At times, this will be answered by the concession made by a party that the other party will ultimately be entitled to such an adjustment. At other times, although parts of the pool are unidentified, the pool is sufficiently identified such that it is plainly apparent that such an adjustment will not prejudice the ultimate exercise, whether that be by virtue of reversibility, or otherwise.
Those matters are sufficiently addressed by the concession as to reversibility, that is, that an interim payment to the wife will not prejudice the ultimate adjustment pursuant to s 79. That is, the wife is anticipated by both parties to have an ultimate entitlement that will more than cover the partial distribution that she seeks. When combined with the impetus for such an order flowing from the complex litigation the wife faces, an order should be made for the sum sought by the wife, even though that falls short of the estimated amount required.
Having determined this on the primary argument raised, being that such payment should be made as part of the s 79 adjustment, there is no requirement to move onto the arguments to justify such a payment pursuant to the costs power.
The spousal maintenance claim
The power to order spousal maintenance pursuant to s 74 is conditioned upon the order being “proper”, on the applicant spouse being unable to adequately self-support, and on the respondent spouse being reasonably able to provide that support. The Court is to consider the matters set out at s 75(2).[7] The temporary and interim nature of the proceedings points, as was said in In the marriage of Redman and Redman (1987) FLC 91-805, to the evidence not needing to “be so extensive and the findings not so precise.”
[7] Hall v Hall (2016) 332 ALR 1.
Further, as was observed by Watts J in Osferatu v Osferatu [2012] FamCA 408:
Any proposed interim property order must be taken into account when interim spousal maintenance is considered (see Bevan and Bevan (1995) FLC 92-600 and Oates and Crest (2008) FLC 93-365; 216 FLR 469).
Here, subject to particular qualifications, it is accepted that the claim made by the wife represents her support requirements. The two exceptions identified are as to the wife’s claim for an open ended amount on the credit card each month, of the wife’s open ended claim in respect of scans and the like being provided for the wife.
On these exceptions, the wife accepts, as a general proposition, the appropriateness of a cap on the credit card, accepting that the expenditure typically falls under the $5 000 threshold proposed by the husband. She argues that there may be occasions when more is required than this. Those assertions do not demonstrate a proper support requirement. Similarly, without more, the claim as to scans as directed by the wife’s general practitioner represent such an uncertain claim, and to the extent that they are necessary, a lack of clarity that they would not be met by the credit card allowance as to not demonstrate a further requirement for support. In any event, there is no demonstration of the ongoing capacity of the husband to require that services be provided without charge to the wife.
It was also accepted that the husband has the capacity to support the wife to such an extent.
In any event, even without such an concession, although the husband discloses a wage of approximately $160 000, with additional rental income, he has also received trust distributions, drawings and payments in the form of loans from various corporate and trust entities, in excess of $1.4m in 2018, in excess of $1.5m in 2019, and in excess of $1.3m in 2020.
In May and June of 2020, the husband drew against the Suburb C property approximately $185 000, explaining $130 000 was to meet a tax liability. In 2018, the husband caused payments to be made (via trust distributions) to various persons in Country FF of approximately $345 000, and in 2019 approximately $430 000.
It should be understood that the husband has extensive access to funds beyond his wage, enjoying an elasticity in his resources far beyond the wife’s resources.
Although the husband submitted that the payments to the wife needed to be in line with what he described as the “historical” approach of recourse being had to wages and the like, the elasticity demonstrated in the funds accessed by the husband were not suggestive of such a hard limit on his capacity.
The substantive contest was whether an order should be made, in the context of the restraints pursued against the husband, where the husband offers an undertaking to continue to support the wife in much the same manner as he has.
This issue goes to the question of the financial resources available to the wife, as required to be taken into account at s 75(2)(b). Although the wife asserted that the husband’s offered undertaking could not be regarded as a financial resource, such a conclusion is not axiomatic.
In Hall v Hall, the plurality of the High Court observed in relation to the concept of a financial resource the following:
[52] The wording of s 72(1), it has been noted, seems to imply that each party should attempt to support himself or herself where that is reasonable having regard to the matters referred to in s 75(2).
[53] The matters referred to in s 75(2)(b) are matters which bear on the practical ability of one party to support the other, and of the other party to support himself or herself. Hence the concluding reference is to the matter of "the physical and mental capacity of each of them for appropriate gainful employment". Hence also the opening reference to the matter of "the income, property and financial resources of each of the parties" cannot be confined to the present legal entitlements of the parties.
[54] The reference to "financial resources" in the context of s 75(2)(b) has long been correctly interpreted by the Family Court to refer to "a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency". The requirement that the financial resource be that "of" a party no doubt implies that the source of financial support be one on which the party is capable of drawing. It must involve something more than an expectation of benevolence on the part of another. But it goes too far to suggest that the party must control the source of financial support. Thus, it has long correctly been recognised that a nominated beneficiary of a discretionary trust, who has no control over the trustee but who has a reasonable expectation that the trustee's discretion will be exercised in his or her favour, has a financial resource to the extent of that expectation.
[55] Whether a potential source of financial support amounts to a financial resource of a party turns in most cases on a factual inquiry as to whether or not support from that source could reasonably be expected to be forthcoming were the party to call on it.
[56] Here, on the Full Court's finding of fact, the annual payment from the Group was a financial resource of the wife so as to be a matter within s 75(2)(b). The payment was available to her if she asked for it. The availability of the payment was the subject of specific provision in the father's will. The making of the payment was at least a moral obligation of the wife's brothers, who were in any case well-disposed towards her.
[57] Section 75(2)(o) plainly extends to any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account as showing that a party to the marriage is or is not able to pay spousal maintenance or is or is not able to support himself or herself. The paragraph has accordingly long been correctly interpreted by the Family Court as permitting consideration by a court of "all of the financial matters which are relevant to [a] particular case". Nothing in the language or structure of s 75 prevents a fact or circumstance which falls within s 75(2)(o) being also a fact or circumstance which gives rise to a matter under another paragraph of s 75(2), including s 75(2)(b).
[58] Because it bore centrally on the ability of the wife to support herself adequately, the availability to the wife of the annual payment from the Group was also a fact or circumstance in respect of which it was open to the Family Court to form the opinion that the justice of the case required that it be taken into account. The analysis of the Full Court shows that it formed that opinion. There was thus, in addition to a matter within s 75(2)(b), a matter within s 75(2)(o). (footnotes omitted)
When accompanied by the offered undertaking, the monies would become, as described by the High Court, something that could “reasonably be expected to be forthcoming were the (wife) to call upon it.” This renders the offered undertaking as a matter to be taken into account.
However, in considering this financial resource, a number of complexities arise.
Firstly, a part of the proposed support of the wife is to come from her superannuation. The husband’s drawing on the wife’s superannuation to make payments to the wife is not support from the husband, but is the wife’s involuntary support of herself. It is difficult to construe this as a form of spousal maintenance. At the same time, whether or not the wife wishes to draw upon the superannuation, it remains a financial resource for her. The issue is whether that financial resource undermines or nullifies the wife’s claim.
In Bevan, the Full Court dealt with the significance of a spouse holding an asset that may be depleted to assessing a spousal maintenance claim:
It was put to us, on behalf of the husband, that such a calculation does not make any allowance for the depletion by the wife of her capital by the application of part of it to her own support. However, we do not think that the law requires that a wife should deplete an already comparatively meagre capital sum, to enable a much higher earning husband to avoid his obligation to maintain a former spouse who is in financial circumstances such as those in which she finds herself.
While the availability of the superannuation is a matter to take into account in relation to the wife’s ability to support herself, the matters described in Bevan mean that the depletion of that resource is not an appropriate means of self-support pending the final hearing of the matter.
Secondly, a portion of the proposed support of the wife is to come from a wage allocated to her, in a context where it is not suggested that the wife undertakes a form of employment for which the wage is related. This appears to form a key aspect of the offered undertaking. However, the string attached to such payment is not one that can be held by the husband. He has no right to employ the wife in such a manner without her consent, and the wife is under no obligation to consent to being used in such a manner.
Under those circumstances, the undertaking should not be regarded as a financial resource of a nature to enable the wife to adequately support herself.
While the husband conditioned his payment to the wife on the historical structure he has utilised, this is not the limit of his capacity to reasonably support the wife. Even if his concession as to capacity were not taken at face value, the monies that he has been able to access through the various entities in addition to his wage illustrate his capacity in a manner somewhat analogous to that observed by Watts J in Osferatu.
It is necessary to consider the impact of the partial property settlement on the wife’s maintenance claim. Given the partial property adjustment is for the purpose of funding the proceedings, it is not a matter that detracts from the considerations identified above that point to the payment of the maintenance to the wife.
Subject to the limit on the credit card proposed by the husband, and excluding the proposed scans, orders should be made generally as sought by the wife.
Injunctions
The husband has unilaterally conferred a wage on the wife, drawn on her superannuation, and assigned funds, notionally for her benefit, to the payment of rent he has determined to charge for the jointly owned property that the wife lives in. Absent her consent to such, he should not be at liberty to deal with the resources of the wife, or their joint resources, in such a manner. He is not entitled to take any of those steps without her consent in any event, and his doing so points to the need for a restraint to be imposed in aid of the protection of the wife’s claim on the property.
As to the further restraints on dealing with the pool sought by the wife, the parties are agreed that a notice requirement should be imposed. Such a notice requirement is a sensible way to restrict the intrusion upon the husband’s legitimate interest in dealing with the entities he is involved with, while protecting the wife from unilateral dissipation of the pool, in circumstances where the husband has been able to deal with the property largely unhindered, and in doing so has divested considerable sums.
The parties are not agreed as to the notice period. The fourteen days sought by the husband is, in the context of any delay in being able to bring the matter before the Court, inadequate to give the protection intended by a notice period. The husband has identified no particular practical difficulty arising from the wife’s proposed 60 days. However, a notice period of 60 days is a longer period than necessary to bring the matter before the Court if such is necessary. On that basis, the notice period, on the principle that a restraint should not be greater than necessary, should be for a five week period, that is 35 days.
Binding Death Nomination
On 1 May 2020, the husband executed a binding death benefit nomination in relation to his superannuation, directing on his death that his superannuation entitlements would go to his de facto partner, Ms GG, and their son. The wife contends that this would, should the husband die, remove a large component (potentially, it is submitted for the wife 20 per cent) from the pool, and prevent any adjustment of the parties’ superannuation interests in her favour.
The husband concedes that the binding death benefit nomination removes, on his death, his superannuation from the pool. Under those circumstances, no further adjustment of superannuation in favour of the wife could be made. The husband justifies the nomination on a need to provide properly for his de facto partner and son should he die.
The wife proposes two mechanisms to deal with the nomination. She firstly proposes that she be the subject of the nomination, or secondly that the husband’s legal personal representative should be the subject of the nomination to keep the superannuation in the pool and the subject of a claim from the estate and from the wife should the husband die.
Although the wife seeks an equalisation of the parties’ various superannuation interests, which would involve an assignment of approximately $330 000 of the husband’s superannuation to the wife to achieve, the husband correctly points out that the balance of the pool is of such magnitude to mean that even if the removal of the husband’s superannuation from the pool occurred, the balance of the pool could make good on the wife’s claim. While the wife complained that she would lose advantages associated with an alteration of superannuation, undoubtedly the loss of such advantages could also be otherwise catered for by the balance of the pool.
The husband correctly extracts from In the Marriage of Sieling (1979) 24 ALR 357 the underlying principle in relation to relief by injunction:
The power to grant injunctions is, of course, a discretionary power, not to be exercised lightly. The court must balance the hardship to each party of granting or refusing an order, and frame its order in such a way as to impose no further restriction that is necessary to achieve the protection of the applicant's interest. It will not lightly interfere with the rights of an owner of property on the basis of a vague or uncertain claim. There must be circumstances arising out of the marital relationship which make it necessary to restrain, temporarily, a spouse from using his or her property rights to the detriment of the other party. Within these limits, it is our view that there is power to grant an injunction in respect of property under s 114(1) where this is necessary to prevent the frustration of a later claim under s 79. As such, an injunction would be of a temporary and personal nature, and it would not involve the exercise of any power referable only to s 79.
Given the above observations, the potential frustration of the wife’s interests in the defeat of her claim for superannuation equalisation, where such a claim can be made good by other mechanisms, means that the injunctive relief should not be granted and the husband should not be forced to change his nomination.
Disclosure
The wife sought particular orders for disclosure set out at Annexure A of her Amended Initiating Application of 3 September 2020, save for items [5] and [7] which were no longer pressed. The parties each provided schedules relating to the disclosure of these items.
The first category related to the Swift Pty Ltd Superannuation Fund, seeking records provided to the accountants to prepare the accounts, financial statements and returns for 1 July 2018 to 30 June 2019.
The wife is a director of Swift Pty Ltd, the trustee for the self-managed superannuation fund. The husband’s response is that the wife, as a director, can obtain the documents. At p 28 of the documents associated with the husband’s affidavit is correspondence from the wife’s solicitors to the husband’s solicitors noting that HH Accountants (apparently the accountants) had been non-responsive to the wife’s request.
The wife has since issued a subpoena to HH Accountants in respect of the entities. Her request is of the material provided to the accountants. Absent an inadequacy or shortfall in the material produced on subpoena, the subpoena adequately deals with the obtaining of the documents and a further order in relation to those documents is not called for.
The second category related to items in the husband’s personal name, seeking records of the disposal of assets since separation; purchase of assets of over the value of $20 000, either in the husband’s name, with a third party, or via an entity in which he has an interest since separation; a list of and records in relation to art and other collections in the husband’s name or possession; bank statements for accounts and loans in which the husband has or had an interest from 1 July 2019 to date.
The husband’s response is that he has responded this request, most recently on 16 September 2020. The wife disputed this. Absent being able to form a satisfaction as to the non-production, orders should not be made in relation to production.
The third category related to items in the wife’s personal name, as provided to HH Accountants to prepare financial statements and tax returns for the period 1 July 2017 to June 2018; statements of shareholdings in the wife’s name in publicly listed companies for 1 January 2018 to date; all bank statements showing the deposit of the wife’s F Super Fund payments.
The husband’s response is that the wife can obtain these from HH Accountants as they relate to her.
Implications that flow from the evidence including the exchanges between the parties are that it is the husband rather than the wife who has engaged HH Accountants, and it is the husband who has provided the documents to HH Accountants, despite the documents relating to the wife. It is not made apparent how or why this came about, or on what basis HH Accountants now holds such documents. Lack of clarity about the basis on which HH Accountants have the documents results in a lack of clarity about the wife’s ability to access the documents, absent the issue of a subpoena to HH Accountants in pursuit of such. The provision of the documents to HH Accountants comes in a broader context of the husband having unilaterally caused both a wage to be paid to the wife, and drawn upon her superannuation account, purportedly to her benefit. Under those circumstances, the husband will be required to produce the documents to the wife.
Valuation
Prior to the commencement of the interim hearing, there were a number of issues in dispute with respect to valuation, including the entities to be valued, the date of valuation and the costs of the preparation of the valuations. At the interim hearing, the parties were able to narrow the scope of the issues in dispute between them in relation to the valuation so that the only remaining issue concerned how the valuers are to be paid. In general, the wife’s position is that the husband has the means to meet the entirety of such costs in the first instance and thereafter, the wife will pay half the costs of the valuers following completion of the final hearing, subject to further order of the Court. The husband’s position is that the parties should share the costs of the valuers at first instance, an approach that conforms with the starting position identified under the Family Law Rules 2004 (Cth).
The approach proposed by the wife is to be preferred in this instance. Although the wife, through these orders has obtained a fund for the litigation, it is substantially less than her estimated costs to completion. Although she is the director of a number of the entities, it is apparently the husband who drives the entities and has used the various entities to obtain payments, demonstrative of his capacity to fund the valuations at first instance.
Accordingly orders will be made as sought by the wife.
I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Gill. Associate:
Dated: 25 November 2020
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