Willmot & Willmot

[2021] FamCA 37

FAMILY COURT OF AUSTRALIA

Willmot & Willmot [2021] FamCA 37

File number(s):

PAC 556 of 2020

Judgment of:

FOSTER J

Date of judgment:

12 February 2021

Catchwords:

FAMILY LAW – PROPERTY – Where application for interim spousal maintenance, interim property orders and injunction as to property – Where consideration of applicable principles – Where appropriate to make lump sum orders for further division of funds available in lieu of periodic order – Where proper to make injunctions at to property – Where costs reserved to final trial.

Legislation:

Family Law Act 1975 (Cth) s 114

Cases cited:

Harris & Harris (1993) FLC 92-378

Strahan & Strahan [2009] FamCAFC 166; (2011) FLC 93‑466

Number of paragraphs:

76

Date of last submission/s:

6 November 2020

Date of hearing:

17 August 2020 and 9 December 2020

Place:

Parramatta

Counsel for the Applicant:

Mr Wong

Solicitor for the Applicant:

Rowlandson & Co Solicitors

Solicitor for the Respondent:

Barkus Doolan

ORDERS

PAC 556 of 2020
BETWEEN:	MS WILLMOT Applicant
AND:	MR WILLMOT Respondent

ORDER MADE BY:	FOSTER J
DATE OF ORDER:	12 FEBRUARY 2021

THE COURT ORDERS THAT:

Harris & Harris (1993) FLC 92-378
Strahan & Strahan [2009] FamCAFC 166; (2011) FLC 93-466

APPLICANT: Ms Willmot

RESPONDENT: Mr Willmot

FILE NUMBER: PAC 556 of 2020

DATE DELIVERED: 12 February 2021

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 17 August 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Wong

SOLICITOR FOR THE APPLICANT: Mr Rowlandson of Rowlandson & Co Solicitors

SOLICITOR FOR THE RESPONDENT: Mr Rogers of Barkus Doolan

ORDERS, PENDING FURTHER ORDER:

Interim Distribution

1.That within seven days from this date the husband do all things necessary to pay to the wife the sum of $300,000 from the proceeds of sale of the B Street property with the categorisation of such sum reserved to agreement or final trial.

2.That within seven days from this date the husband be at liberty to pay to himself or as he may direct the sum of $150,000 from the proceeds of sale of the B Street property with the categorisation of such sum reserved to agreement of final trial.

Injunctions

3.That the husband and wife be restrained from selling, disposing of, or encumbering any asset to which he or she may be entitled or in which he or she has an interest without giving to the other written notice of such intention with such notice to be not less than 28 days save and except for the purposes of complying with the orders made herein.

4.That the wife do all things necessary to authorise and direct that all rental income received in relation to the property at X Street, Suburb C as and from this date to be paid to the husband or as he may direct in writing and that as and from this date the husband be authorised to manage the said property and make all reasonable decisions necessary as to its proper management.

5.That the husband pay as they fall due and payable all mortgage payments and property outgoings including insurances in relation to the property at X Street, Suburb C.

6.That the wife do all things necessary to ensure that all rental income derived from the properties at D Street, Suburb C and F Street, G Town be applied to mortgage payments and property outgoings including insurances as they fall due and payable.

Costs

7.That costs of the present application be reserved to final trial.

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 Willmot & Willmot has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

FOSTER J

1. In February 2020 the applicant wife commenced proceedings in this Court seeking financial orders by way of property adjustment.

2. In her Initiating Application the applicant wife, in summary, sought the following orders:

   (a)that the respondent husband pay to her the sum of $5 million;

   (b)that the applicant wife be declared solely entitled to the property situate at H Street, Suburb J and that the respondent husband do all things necessary to discharge the present mortgage encumbrance secured over that property;

   (c)that the applicant wife resign as trustee of the parties’ self-managed super fund, K Pty Ltd and resign as a director of K Pty Ltd company and transfer her shareholding therein to the husband;

   (d)that there be a splitting order in favour of the applicant such that she can transfer to a superannuation fund nominated by her 50 per cent of the parties’ superannuation benefits; and

   (e)that the respondent husband indemnify the applicant wife from all or any liability including any liability to the Deputy Commissioner of Taxation in relation to the said self-managed superannuation fund.

3. The husband, for his part, filed a Response seeking financial orders by way of property adjustment, in summary, as follows:

   (a)that the applicant wife transfer to the respondent husband her interest in the property at Suburb J and that concurrently with that transfer the husband pay to the wife a sum equivalent to 45 per cent of the overall net pool of assets including superannuation;

   (b)that the property at L Street, Suburb M and that the net proceeds of sale after making provision for estimated capital gains tax be paid to the parties equally;

   (c)that upon sale of the property at N Street, Suburb M the net proceeds of sale after making provision for estimated capital gains tax be paid to the wife;

   (d)that upon sale of the property at Z Street, Suburb M the net proceeds of sale after making provision for estimated capital gains tax be paid to the wife; and

   (e)that there be a superannuation split in relation to the parties’ self-managed superannuation fund such that the wife be entitled to 50 per cent of the said fund and that the applicant wife resign as trustee of the parties’ self-managed super fund, K Pty Ltd and resign as a director of K Pty Ltd company and transfer her shareholding therein to the husband.

4. The proceedings have been before a registrar on a number of occasions particularly in relation to issues as to appropriate disclosure and discovery by each of the parties and single expert valuations.

5. On 12 August 2020 the wife filed an Application in a Case.  That application sought a number of orders, in summary, as follows:

   (a)that the husband pay to the wife by way of spouse maintenance the sum of $3,000 per week pending further order;

   (b)that pending further order the husband pay as they full due and payable mortgage payments including arrears and property outgoings in relation to properties at H Street, Suburb J, D Street, Suburb C, X Street, Suburb C and F Street, G Town;

   (c)that the husband pay to the wife within seven days the sum of $70,000 to be applied by the wife towards her legal fees and that thereafter the husband pay to the wife’s solicitors an amount equal to any and every amount he pays or that is paid on his behalf to his solicitors in relation to costs of these proceedings;

   (d)that the husband be restrained from selling, transferring, encumbering or otherwise dealing with any item of property in his name, custody, control or possession including but not limited to:

   (i)boat 1;

   (ii)motor vehicle 1;

   (iii)motor vehicle 2;

   (iv)motor vehicle 3;

   (v)any watches or jewellery purchased by the husband since June 2018; and

   (vi)proceeds of sale of the property at B Street, Suburb P;

   (e)that there be a departure from the administrative assessment of child support payable by the husband to the wife for the parties’ children in that the husband pay:

   (i)within seven days arrears, if any, and ongoing school fees and expenses for the children at Q School;

   (ii)within seven days arrears, if any, and ongoing extracurricular expenses, school excursions, school uniforms, sports uniforms, shoes and equipment and school textbooks if not incorporated in school invoices with such payments to be made directly to the school or other provider within seven days of receipt of a tax invoice;

   (iii)one hundred per cent of the children’s private health insurance payments as and when they fall due;

   (iv)one hundred per cent of the children’s gap medical, dental, hospital, orthodontic and other similar expenses within seven days of receipt of a tax invoice; and

   (v)that in the event that the wife pays the whole or any part of any of the expenses above, the husband reimburse her within seven days of being provided with a tax invoice and receipt.

   (f)that in the event that the husband fails to comply with the previous orders, then he do all things necessary to sell the boat 1 and that the net proceeds of sale be paid into a bank account nominated by the wife; and

   (g)costs.

6. The husband filed a Response to the wife’s Application in a Case.  That Response simply seeking an order that the Application in a Case be adjourned to a date not before 30 September 2020.

7. The interim issues were listed for hearing before the Court on 17 August 2020. The wife did not press her child support orders. 

8. On that day certain orders and directions were made as follows:

   1.The Respondent husband file and serve any Amended Response to the wife’s Application in a Case together with any further affidavit material upon which he intends to rely by no later than Monday, 7 September 2020.

   2.The Respondent husband file and serve a short outline of case and submissions in support of the orders sought by him by no later than Monday, 7 September 2020.

   3.The Applicant wife file and serve any further supplementary submissions by no later than Monday, 14 September 2020.

   WITHOUT PREJUDICE AND WITHOUT ADMISSIONS IN RELATION TO THE OUTSTANDING INTERIM ISSUES, IT IS FURTHER ORDERED THAT

   4.Within seven (7) days from this date the husband pay or cause to be paid to the wife or as she may, otherwise, direct in writing the sum of $50,000 with the characterisation of that sum to be reserved to agreement or final trial.

   5.Within one (1) month from this date the husband pay or cause to be paid to the wife or as she may, otherwise, direct in writing the further sum of $200,000 with the characterisation of that such to be reserved to agreement or final trial.

   6.The husband be restrained from selling, disposing of, or encumbering any asset to which he may be entitled or in which he has an interest without giving to the wife written notice of such intention with such notice to be not less than 28 days save and except for the purposes of complying with the previous orders made herein.

   7.Upon receipt of written submissions, judgment is reserved to chambers.

   8.Leave is granted to either of the parties to re-list the matter on short notice by application to the Court in Chambers in appropriate circumstances.

   9.The parties are granted leave to issue such subpoena as they consider relevant to the issues before the Court with such subpoena to be returnable by no later than 27 November 2020.

   10.Leave is granted to the parties’ legal representatives to have photocopy access to all documents produced on subpoena in these financial proceedings with those photocopy documents to be retained in the possession of a parties’ legal representative at all times, not be otherwise disseminated or distributed in any manner other than for the purposes of the proceedings and at the conclusion of proceedings be destroyed by the legal practitioner or returned to the Registry.

9. Subsequently, the husband filed on 9 September 2020 an Amended Response to the wife’s Application in a Case.  In that Amended Response he sought orders, in summary, as follows:

   (a)that the Application in a Case be dismissed;

   (b)that the wife, pending further order, pay as they fall due and payable loan repayments secured by mortgage over the properties at H Street, Suburb J, D Street, Suburb C, X Street, Suburb C and F Street, G Town and outgoings in respect of the said properties;

   (c)that the wife do all things necessary to cause the properties at D Street, Suburb C, X Street, Suburb C and F Street, G Town to be tenanted and remain tenanted with all rent to be applied to mortgage payments and outgoings;

   (d)that the husband pay or cause to be paid from the proceeds of sale of the property at B Street, Suburb P the following sums:

   (i)$150,000 to the wife with such sum to be categorised by the trial judge;

   (ii)$150,000 to the husband with such sum to be categorised by the trial judge; and

   (iii)$150,000 to R Pty Ltd.

   (e)that pending further order, the husband pay or cause to be paid as and when they full due and payable from funds available from the sale of the property at Suburb P school fees for the children for their attendance at Q School together with any associated expenses including and limited to school excursions, sports uniforms, school uniforms, schools and equipment, school textbooks, IT devices as recommended by the schools;

   (f)that Order 6 made 17 August 2020 be discharged; and

   (g)costs.

   The Interim Hearing

10. In support of the orders sought by her, the wife ultimately relied upon:

    (a)her affidavit sworn 7 August 2020;

    (b)her later affidavit sworn 27 November 2020;

    (c)her Financial Statement sworn 7 August 2020;

    (d)her Undertaking as to Damages signed 11 September 2020;

    (e)her Short Case Outline dated 14 August 2020;

    (f)her Minute of Proposed Orders: Exh “B”;

    (g)her submissions dated 22 September 2020; and

    (h)her supplementary submissions filed 6 November 2020.

11. In support of the orders sought by him, the husband ultimately relied upon:

    (a)his affidavit sworn 17 August 2020;

    (b)his later affidavit sworn 14 October 2020 filed 15 October 2020;

    (c)his later affidavit sworn 4 December 2020;

    (d)his Financial Statement sworn 1 June 2020;

    (e)his Minute of Proposed Orders: Exh “C”;

    (f)his Summary of Argument filed 10 September 2020; and

    (g)his Supplementary Summary of Argument filed 15 October 2020.

    Context

12. The wife is presently aged 47 and the husband aged 50.

13. The parties commenced cohabitation in late 1994 and married in 1996.  The parties separated on a final basis in early June 2018.

14. There are four children of the parties’ marriage now aged 21, 19, 17 and 13.

15. At the commencement of the relationship the husband was aged 23 and the wife 21.  Neither party had any assets of significance.

    The wife’s contention

16. Early in the parties’ relationship R Pty Ltd was incorporated and through the entity the husband was engaged in building and construction.  The company trades as “R Commercial”. The wife was employed and assisted the husband with significant clerical duties in relation to the company.

    Property dealings

17. Prior to marriage the parties resided in rented premises for a period. After marriage the parties resided in the wife’s parents’ property at Suburb S rent free until 2001. During this period the parties purchased a property at Suburb T for $140,000 with joint savings and a mortgage advance for the balance of purchase price.  The Suburb T property was tenanted until sold.

18. The Suburb T property was sold in 2001 with the net proceeds of sale being approximately $200,000. The proceeds of sale were applied to purchase a property at Suburb C with the balance of purchase money comprising a mortgage advance. The Suburb C property was sold in about early 2005 for about $500,000.

19. Whilst owning the Suburb C property the parties purchased a property at Suburb V for $130,000 with the purchase price funded from savings and a collateral mortgage secured over their Suburb C property.  This Suburb V property was sold in about 2014 for $220,000.

20. In 2005 the parties purchased a property at Suburb W for $560,000.  The purchase price comprised the proceeds of sale of the Suburb C property and a mortgage advance of about $500,000.  The parties occupied this property as the matrimonial home until its later sale in 2012.  In 2012 Suburb W was sold for $1.1 million with the net proceeds of sale being about $390,000.

21. In 2010 the parties purchased in the name of the wife the property being vacant land at H Street, Suburb J (“the Suburb J property”) for $890,000.  The parties subsequently constructed a home on the property at a cost of over $1 million.  The parties commenced to occupy this property as the matrimonial home in about 2012 after the sale of the Suburb W property.

22. Subsequent to the parties’ separation in June 2018, the wife and children have remained in occupation of the Suburb J property.

23. In 2013 the parties entered into a development arrangement in relation to vacant land purchased at Suburb C for the sum of $550,000.  Subsequent to the development, the wife retained in her name a property known as D Street, Suburb C.  The property was acquired for $550,000 and was subject at that time to a mortgage of $365,000.  The property has been tenanted since purchase.  Otherwise, the parties realised funds from the balance of the development.

24. In 2016 parties entered into another development agreement in relation to a property at X Street, Suburb C.  Subsequently, the wife retained in her name the property at X Street, Suburb C.  The property was acquired for the sum of $560,000 with a mortgage of approximately $500,000.  Otherwise, the parties realised funds from the balance of the development.

25. In 2016 the parties purchased the property at Y Street, G Town for the sum of $620,000 with a mortgage advance of about $500,000.  The property has been tenanted from time to time.

26. Vacant land was acquired at B Street, Suburb P using, it appears, the corporate entity R Company as Trustee of R Trust (“R Trust”).  The husband, through R Investment Pty Ltd as trustee of the R Investment Trust, holds 90 of the 100 Units in the R Trust.  The husband’s contribution to the purchase, says the wife, was about $1.2 million funded from monies realised through the Suburb C developments.  This property was developed and sold in late July 2020 with the husband, says the wife, not responding to requests for disclosure as to the circumstances of that sale. The husband says that the property has now been sold for $4.6 million plus GST with the husband asserting he has been paid $1 million representing return of his capital investment and a further sum of $300,000 paid to his company account as at 16 September 2020. Otherwise, the husband asserts that a further sum of $648,550 in the Trust Bank account is payable to him, all other parties having been paid.

27. In about 2015 R Investment No 1 Pty Ltd purchased commercial premises at Z Street, Suburb M for about $350,000 partly financed by way of mortgage advance from the ANZ Bank.  The wife asserts that the husband is a shareholder of the company.

28. Otherwise, the wife asserts that the husband has purchased two home units off the plan in L Street, Suburb M paying a small deposit and now seeking to finance the balance of the purchase price.  She further asserts that the husband is a unit holder in AA Trust that has completed a three townhouse development at BB Street, Suburb C. The wife is uncertain as to the present circumstances of that development and asserts that the husband has a one third interest in the enterprise.  The wife also asserts that the husband through an entity FF Holdings has an interest in commercial vacant land at Suburb CC.

1. The husband owns a boat purchased in 2014/2015 for the sum of about $1.1 million.  The wife asserts that the funds borrowed to finance the boat were repaid during the parties’ relationship.  The boat is usually moored at a marina in respect to which there are significant mooring fees. The husband has relocated the boat to Queensland with an arrangement to reduce costs. He opposes any sale of the boat and seeks to retain it.

2. The wife, otherwise, asserts that the husband has spent significant funds on refurbishing the boat referred to above and now has available to him through his company motor vehicle 2 having a value of $200,000.  Prior to the purchase of the motor vehicle 2 the husband sold the motor vehicle 5 and motor vehicle 3 in May 2020 for a total of about $218,000. He asserts that funds were used to discharge finance attached to those vehicles. Yet he then financed the purchase price of motor vehicle 2.

3. Yet on 30 June 2020, by way of chattel mortgage, the husband borrowed $236,000 against the security of the boat. Repayments are $4,362 per month. Yet this further borrowing was obtained at a time he asserts was when he had sold two luxury cars to reduce outgoings. These funds were, he asserts, deposited to the account of his company that had paid significant funds in the mooring, maintenance and repair of the boat totalling about $85,000 in the year ended 30 June 2020. The husband somewhat ingeniously asserts that the boat is used for business purposes including entertaining and parties.

4. Save for the husband’s desire to retain the boat there is no other need for its retention if funds are needed to be realised.

5. It was later disclosed that the husband had purchased a one half share in a boat 2 in June 2020. He asserts it was to replace the previous tender for boat 1. The purchase price was in all $241,990. The husband’s share was funded in part from his inheritance from his one eighth interest in his late father’s estate in the sum of $65,000 from which he paid about $45,000 and a further chattel mortgage in the sum of $152,403 with the husband responsible for one half thereof. Loan payments are $3,252 per month with, it appears, the husband to pay half thereof.

   Parenting

6. The wife ceased her employment shortly before the birth of the parties’ first child in 2001.  She thereafter continued significant engagement in clerical duties and administrative tasks for the company in addition to primary parenting responsibilities in relation to the parties’ children.  For a period, the wife worked from home but returned to work in the company offices for a time in 2012.

7. The wife asserts that throughout cohabitation she was the primary carer for the parties’ children with the husband attending to building and development.  She asserts that the husband had only modest involvement in the day-to-day care of the children and that since separation spent little time with the two youngest children until March 2020 when he commenced to spend alternate weekend time and some time during school holidays with the children. 

   Financial circumstances

8. The wife obtained an administrative assessment of child support and on 17 July 2020 the husband was assessed to pay child support in the sum of $2,507 per month in respect of the two youngest children of the parties’ relationship.

9. The wife has not worked in any capacity since she ceased work for the company in about 2014.  Her only formal qualification is an associate diploma obtained some 21 years ago.

10. The wife has sought assistance from her general practitioner and treating psychologist to deal with issues relating to the parties’ separation and thereafter.

11. As at the interim hearing, the wife had available funds at bank of about $6,300 and credit card debt of about $7,500.

12. The wife has remained in occupation of the former matrimonial home at Suburb J.  The property is subject to a mortgage of $1.66 million in favour of Westpac.  As at separation in June 2018 there were funds of approximately $140,000 standing to the credit of a mortgage offset account with Westpac.  In the period from June 2018 to June 2019 the wife asserts that she has mostly expended that sum in paying for living expenses, holidays, mortgage payments and property outgoings in relation to rental properties in her name.

13. In the period from separation to January 2020 deposits have been made by the husband to the offset account totalling $216,000 in addition to which the husband has facilitated the payment of running expenses in relation to the Suburb J property.  Otherwise, the husband has maintained the wife’s use of a motor vehicle 4 in respect to which she meets petrol and maintenance costs.  The husband provides for the wife’s mobile phone.  Until March 2020 the husband paid $800 per week to the wife’s account but as at that date reduced those payments to $400 per week in addition to which the wife receives a salary from the company of $740 per week.

14. Subsequent to commencement of proceedings by the wife in March 2020, the husband, she says, ceased making mortgage payments in relation to properties at D Street, Suburb C, X Street, Suburb C and F Street, G Town.  The wife arranged a mortgage moratorium in relation to these properties and a mortgage moratorium in relation to the Suburb J property until early November 2020.  As at August 2020 overall mortgage arrears had accrued to the sum of approximately $30,000. The husband complains that the wife has failed to apply rental income from the investment properties in her name to the payment of property mortgages and outgoings.

15. It is readily apparent that rental income should be applied to these property outgoings. Should the wife not do so, the mortgagees will take appropriate action.

16. The wife primarily asserts that the husband has used the finances and resources of his company for his living and other expenses since separation, many of such expenses being run through the company credit card account to which deposits totalling $1.437 million were paid in the period from February 2018 to March 2020. The husband asserts that primarily the credit card is used for company business purposes including the purchase of materials for commercial projects undertaken and payment of subcontractors.

17. The husband’s income assessed for the 2018/2019 was $4.872 million, which he asserts was a consequence of Division 7A loan accounts being assessed as income by the ATO. Such loan accounts accrued as a result of funds drawn by him to meet the family expenses and other expenditure over some years. The husband now contends that his business has suffered a downturn as a consequence of the present community pandemic. He has sought to sublet his commercial business premises and to move the business to premises at a luxury accommodation in part owned by the self-managed superannuation fund. The husband asserts that the business is struggling to stay afloat yet it has financed the purchase of motor vehicle 2 for his use and appears to meet significant personal expenses for him including boat 1. Otherwise, the husband asserts significant ill-health that impacts on his ability to attend to his business.

18. It is readily apparent from the discussion above, that legal costs in these proceedings absent resolution will be significant.  As at the interim hearing the wife had outstanding legal fees of about $40,000.

19. It is also readily apparent that any capital sum provided to the wife to use pending hearing will be, if necessary, able to be clawed back at final trial from her own assets.

    The husband

20. Since separation the husband has paid mortgage payments on the parties’ home and investment properties and school fees and other expenses for the children.

21. The husband asserts that the trading circumstances of his business have been adversely impacted by the community COVID pandemic resulting in a significant decrease in turnover commencing in April 2020. He has sought to relocate the business premises to premises owned in part by him and the parties’ self-managed superfund save rental outgoings.

22. He asserts ill-health including depression and anxiety.

23. He complains that the wife has failed to rent the parties’ holiday property at G Town and failed to apply rents to the payment of mortgages secured over other properties in her control.

24. He asserts that he has relocated boat 1 to EE Marina, Queensland to reduce mooring and maintenance costs. Yet historically the business has paid out substantial sums for the maintenance and upkeep of the boat. The boat, he asserts, is used for “promotion” and entertaining. He asserts the boat has a value of about $800,000.

25. He has moved his residence to a cheaper rental property at suburb DD.

26. The B Street property sold in July 2020 for $4.6 million plus GST. On sale the husband received a repayment of his initial capital investment of $1 million.

27. It appears readily apparent that the lifestyle expenses of boats and expensive European cars are not sustainable in circumstances where the husband is clearly concerned as to the viability of his business.

28. There are funds from the sale on the B Street property held by the husband of about $301,000 and further undistributed funds payable to him of about $648,000.  These are available for distribution with the husband seeking orders as to the distribution of $450,000 therefrom as referred to above.

29. Should he require capital funds to support his ongoing business then he can have recourse to selling his boat that clearly appears redolent to the core business of his company. He will of course be required to notify the wife of such intention and she may make such application as she may wish at her peril as to costs.

    Interim Property 

30. The principles as to applications for interim property provision are well settled, (Strahan & Strahan [2009] FamCAFC 166; (2011) FLC 93-466) and require a two-step process.

31. In Strahan, the Full Court said:

    132.In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

32. Firstly, there must be circumstances enlivening the power to make an interim order. The test is not limited to “compelling circumstances” but whether it would be “appropriate” to make an interim order, with the “overarching consideration” being the interests of justice.

33. Secondly, the Court is to have regard to relevant matters in s 79 of the Act. It needs to be kept in mind that the final outcome of property settlement should not be compromised by an interim property order. Either the remaining property needs to be adequate to meet the legitimate expectations of both parties at the final hearing or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.

34. A detailed inquiry is not required, but there must be some assessment of s 79 factors as referred to above.

35. In Strahan the Full Court went on to say:

    137.Once a court proceeds to exercise the power in s 79 of the Act, being in the substantive phase, a court is required to undertake consideration of the matters in s 79(4) including by reference to s 79(4)(e) the matters in s 75(2) so far as they are relevant. However consideration of such matters may be brief and if it is established that “it seems likely to the Court that ... the applicant ... will be likely receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made”: Zschokke; Polletti and Polletti per Nygh J and Wenz v Archer. As senior counsel for the Wife submitted, “provided scope can be found within the assets of the parties for an order of the size sought ... then that should be the end of the matter”. In other words, in such circumstances the applicant would only be receiving what he or she was entitled to receive when the power was exhausted.

    138.The legislation does not prescribe what the Full Court in Zschokke at 83,218 described as “preconditions” and nor would we seek to exhaustively prescribe matters that may be relevant to take into account in the exercise of the discretion under s 80(1)(h) of the Act. As to the three “criteria” identified by the Full Court in Zschokke, we accept that an inability on the part of an applicant for an interim property order to defray the costs of litigation to meet his or her litigation costs would be a relevant matter to take into account at the procedural or first stage. Senior counsel for the Wife submitted that it may be relevant at the substantive or second phase in reviewing the “necessarily limited and impressionistic budget for costs” to ensure that the application is bona fide. We are of the view that it may be that any issue about the bona fides of an application is relevant at the procedural phase in the context of considering if in the interests of justice it is appropriate to make an order before the final hearing.

    139.We also emphasise that in order to establish an appropriate case for an interim property settlement order more is required than the mere fact that upon a final hearing the applicant would receive the property being sought (or an amount in excess of the funds being sought) from the other party.

    140.As to the other matters being a position of relative financial strength on the part of the respondent to an application and the capacity of the respondent to meet his or her own litigation costs, there is no doubt that the financial circumstances of both parties are relevant at the substantive stage and may also be relevant at the procedural stage. Senior counsel for the Wife submitted that all of the matters discussed by the Full Court in Zschokke are self-evident and we accept that this is so in relation to at least two of the matters being the need for funds and the financial circumstances of both parties.

    141.As to the various matters discussed by Brereton J in Paris King Investments which we have discussed above, we do not propose to deal with all of what his Honour said, however we make the following observations about some of the matters. Obviously the applicant should have “at least an arguable case for substantive relief which deserves to be heard”. Further, in determining at the procedural stage whether to exercise the jurisdiction there may need to be evidence of the applicant’s “likely costs of the litigation” given that the need for funds to defray litigation costs and expenses is the circumstance propounded as to why it is appropriate that an order be made. We also accept that “it is not an essential precondition” that the applicant’s legal representatives will not continue to act unless the costs are paid or secured on an ongoing basis.

36. It is important to have regard to an overall caution. In Harris & Harris (1993) FLC 92-378, the Full Court said:

    As a generality, the interests of the parties and the Court are better served by there being one final hearing of s 79 proceedings.

37. In Strahan, the Full Court said at [132]:

    … regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

38. It is the husband’s contention that there are funds available to facilitate lump sum payments totalling $450,000 as sought by him. Clearly such sums if distributed can be as it were clawed back from the asset pool at trial if necessary.

39. Whilst the wife seeks an order for periodic support, in all the circumstances, the evidence is not conducive to findings as to her reasonable expenses and the husband’s capacity to pay. In the event that any sum paid to the wife, including sums to date as expended by the wife on her reasonable living expenses, and there is cogent evidence as to same at final trial, then such sums will likely not be treated as partial property payments in the hands of the wife.

40. In all the circumstances, it is appropriate that the husband pay to the wife the further capital sum of $300,000 within seven days of these orders. It will clearly be a matter for the wife as to how she expends those funds over the period to final trial.

    The X Street, Suburb C property 

41. The wife seeks a sale of the property. The husband seeks to retain it as part of final property settlement.

42. Section 114 of the Family Law Act 1975 (Cth) (“the Act”) provides that the Court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate. In this matter, of course, the proceedings relate to the property of the parties and to the orders proposed by both parties.

43. Section 114 relevantly provides:

    (1)In proceedings of the kind referred to in paragraph (e) of the definition of matrimonial cause in subsection 4(1), the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate, including:

    (a)an injunction for the personal protection of a party to the marriage;

    (b)an injunction restraining a party to the marriage from entering or remaining in the matrimonial home or the premises in which the other party to the marriage resides, or restraining a party to the marriage from entering or remaining in a specified area, being an area in which the matrimonial home is, or the premises in which the other party to the marriage resides are, situated;

    (c)an injunction restraining a party to the marriage from entering the place of work of the other party to the marriage;

    (d)an injunction for the protection of the marital relationship;

    (e)an injunction in relation to the property of a party to the marriage; or

    (f)an injunction relating to the use or occupancy of the matrimonial home.

44. The grant of an injunction is discretionary and the basis upon which an order or injunction may be made is well settled. The wife, in this case, has readily satisfied the Court that there is a serious issue to be tried that being the question of overall property entitlement as between herself and her husband.

45. The wife has failed to pay mortgage payments from rental income received and sought a mortgage moratorium resulting in accumulation of arrears. The husband asserts that he will, if in receipt of the rent, attend to mortgage payments and payment of property outgoings pending further order.

46. Such an outcome is proper in all the circumstances especially where the wife asserts that she will now apply rent received to property outgoings in regard to the properties at D Street, Suburb C and F Street, G Town. It is thus incumbent on her to maximise rental income from the said properties. Should she not do so then the mortgagee may step in and seek a sale.

47. Otherwise, it is proper that the husband continue to be restrained from selling, disposing of, or encumbering any asset to which he may be entitled or in which he has an interest without giving to the wife written notice of such intention with such notice to be not less than 28 days save and except for the purposes of complying with the orders made herein. Such will give to the wife the ability to apply for further orders at her peril as to costs.

48. Orders will be made accordingly.

I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Foster.

Associate:       

Dated:       12 February 2021