Taveray and Wedgewood and Anor

[2017] FamCA 876

FAMILY COURT OF AUSTRALIA

TAVERAY & WEDGEWOOD AND ANOR [2017] FamCA 876

FAMILY LAW – PROPERTY SETTLEMENT – Interim Orders – Family Trust – Where the wife seeks payment of a lump sum by way of interim property settlement to pay legal fees – Whether it is just and equitable to make an interim order pursuant to s79 – Interim application dismissed

Family Law Act 1975 (Cth) ss. 79, 80(1)(h)

Medlow & Medlow (2016) FLC 93-692
Stanford & Stanford (2012) 247 CLR 108
Strahan & Strahan (2011) FLC 93-466

APPLICANT: Ms Taveray

FIRST RESPONDENT: Mr Wedgewood

SECOND RESPONDENT: Wedgewood & Associates as Trustee for Wedgewood Family Trust

FILE NUMBER: BRC 1533 of 2017

DATE DELIVERED: 10 July 2017

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Carew J

HEARING DATE: 26 June 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Shoebridge

SOLICITOR FOR THE APPLICANT: Mark Taveray & Associates

COUNSEL FOR THE FIRST RESPONDENT: Mr Drysdale

SOLICITOR FOR THE FIRST 

RESPONDENT:

Creevey Russell Lawyers

COUNSEL FOR THE SECOND 

RESPONDENT:

Mr Drysdale

SOLICITOR FOR THE SECOND

RESPONDENT:

Creevey Russell Lawyers

Orders

1. The wife’s application for a lump sum payment of $153,915 pursuant to s 79 and s 80(1)(h) is dismissed.

2. Any outstanding interim application is dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Taveray & Wedgewood has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 1533 of 2017

Ms Taveray
Applicant

And

Mr Wedgewood

First Respondent

And

Wedgewood & Associates as Trustee for Wedgewood Family Trust
Second Respondent

REASONS FOR JUDGMENT

1. The parties to this application are wife, husband and a family trust controlled by the husband. Most matters were resolved by consent and an order was made by me on 26 June 2017 providing for the payment of spouse maintenance to the wife; restraints against dealing with property; provision for valuations to be obtained.

2. The only outstanding issue concerns the provision of a lump sum to the wife by way of interim property settlement. The wife intends to use that sum to pay for her legal fees. I reserved my decision on this issue.

background

1. The wife is 54 and the husband is 55. They were married in 2015 having commenced to live together in a de facto relationship in 2005. They separated in August 2016.

2. Both parties have been previously married. The wife has a daughter aged 17 and the husband has two children aged 26 and 24 respectively.

3. Each of the wife and husband owned property prior to the commencement of their relationship and conducted their financial affairs throughout the marriage separately. They did not for instance ever have a joint bank account or own property jointly or guarantee each other’s liabilities. They lived in properties owned by the family trust for which they each contributed rent. The trust is and was controlled by the husband although the wife is one of a number of potential beneficiaries. The wife complains in her material about the extent to which the husband insisted on her paying her own way and that of her child’s. The wife and husband kept a detailed ledger of their respective expenses and contributions throughout their relationship.

4. Until shortly after separation the wife was employed in a financial services business of which the husband is the sole principal. Her employment conditions were set out in a contract of employment. The wife is currently consulting a psychiatrist who opines that the wife is currently unfit for employment.

5. The agreement reached between the husband and wife requires the husband to pay spouse maintenance of $1,500 per week and to pay for the cost of valuations of the former matrimonial home and business in the first instance. The home is estimated to be worth about $2,000,000 subject to a debt of $1,100,000 secured by mortgage. The value of the financial planning business is yet to be assessed. Each party has superannuation interests in the vicinity of $800,000. The wife contends that she has no property in her name although the husband does not concede this to be the case. The husband deposes to receiving income of $232,804 per annum with outgoings of $204,308.

6. Each of the husband and wife is a discretionary beneficiary of the family trust as are the husband’s two adult children.

7. Since separation the husband has paid to the wife $60,000 with the characterisation of that sum to be determined at trial.

8. The wife seeks an order for the payment of a lump sum of $153,915 for outstanding and anticipated legal costs by way of an interim property order pursuant to s 79 and s 80(1)(h) of the Family Law Act 1975 (Cth). She contends that without such a payment she will not be able to meet her ongoing legal fees. It does not seem to be in contention that the husband will have an ongoing ability to meet his legal costs from borrowings.

9. An order for payment of $153,915 is opposed by the husband on the basis that it is not just and equitable to make any order pursuant to s 79 and there is no prospect of any sum being recovered from the wife if he is successful in his application to have the wife’s application for property settlement dismissed.

10. The husband contends that the money he has agreed to advance to the wife will have to be borrowed through existing lines of credit but it will enable the matter to proceed to trial without the wife having to contribute in the first instance to the cost of valuations.  

legal principles

1. The applicable legal principles in making an order for interim property settlement have recently been discussed by the Full Court in Strahan & Strahan[1] and Medlow & Medlow.[2]

   [1] (2011) FLC 93-466

   [2] (2016) FLC 93-692

2. The discretion to make an interim property order must be exercised within the parameters of s 79 although not on as thorough a basis as would be required if the Court were determining the matter on a final basis. The fact that it is an interim order requires a degree of caution. In considering what, if any, order to make, s 79(2) requires a consideration of whether it is just and equitable to make any order. If so satisfied, consideration is then given to any relevant matters in s 79(4) including relevant matters in s 75(2).

3. An applicant for an interim property order need not establish compelling circumstances but it is insufficient to establish merely that a property order of the type sought will be made at trial. A significant factor is whether or not any interim order is capable of reversal.

4. In Stanford & Stanford [3] the High Court held:

   40 … whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.

   [3](2012) 247 CLR 108

discussion

1. The only basis upon which it was argued on behalf of the wife that the sum sought should be paid was pursuant to the power contained in s 79 and s 80(1)(h).

2. In this case the husband contends that it is not just and equitable to make any property order because he and the wife acted upon their early agreement not to intermingle their finances. It is his case that at all times they maintained entirely separate finances and were free to make financial decisions independently. He relies upon the detailed breakdown of their day to day living expenses to which they made proportional contributions and the employment contract entered into by the wife when working in the financial services business providing for a salary of approximately $100,000 plus superannuation.

3. The wife contends that she made the major contribution as homemaker and complains about the extent to which the husband insisted that she meet her own living expenses but by so doing confirms that their finances were kept separate.

4. It is not in contention that the parties do not have ability to oust the jurisdiction of the Court to make a property order, if it is just and equitable to make one, other than by entering into a financial agreement that is binding upon them pursuant to s 90G of the Family Law Act1975 (Cth). Rather, it is the husband’s case that it is not just and equitable to make a property settlement order having regard to the particular circumstances of this case. As the High Court made clear in Stanford there is no legal presumption that after an eleven year period of cohabitation a party has an entitlement to a property settlement order.

5. The husband does not concede that the wife has no property and contends that in addition to her salary she received profit from the sale of property owned by her during the marriage.

6. It was frankly conceded by counsel for the wife that if the husband is ultimately successful in his application to dismiss the wife’s claim for a property settlement order any sum paid to the wife by way of an interim property order would not be able to be recovered.

7. I note that the wife’s solicitor does not state an unwillingness to continue to act for the wife in the event she is unsuccessful in her application.

conclusion

1. I cannot be satisfied on an interim basis that it is appropriate to make an order pursuant to s 79. Although, at a final hearing the wife may persuade the Court that it is just and equitable to make an order, the husband’s case in the substantive proceedings is not without merit and accordingly were he to ultimately succeed it would not be possible to recover the sum sought by the wife.

2. Accordingly, I propose to dismiss the wife’s application for an interim property order.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 10 July 2017.

Associate: 

Date: 10 July 2017