Wu and Heaton-Wu
[2011] FMCAfam 144
•19 April 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WU & HEATON-WU | [2011] FMCAfam 144 |
| FAMILY LAW – Final property settlement – application by intervener – spousal maintenance – just and equitable. |
| Family Law Act 1975 (Cth), ss.72, 75(2), 79, 80, 81, 83, 90AE Federal Magistrates Act 1999 (Cth), s.18 |
| Strahan & Strahan (interim property orders) [2009] FamCAFC 166 Yates & Yates [2009] FamCA 1023 Puddy v Grossvard and Another (2010) 43 Fam LR 288 I Ltd v Chester [2010] FamCAFC 251 Ferdinand & Ferdinand & Anor [2010] FMCAfam 465 Worsnop v Worsnop (No.2) [2007] FamCA 1315 Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) 30 Fam LR 355 C v C (2005) 33 Fam LR 414 AJO v GRO (2005) FLC 93-218 Kowaliw and Kowaliw (1981) FLC 91-092 Re NHC and RCH (2004) FLC 93-204 Finlayson and Finlayson [2002] FamCA 898 Aleksovski & Aleksovski (1996) FLC 92-705 Norbis & Norbis (1986) 161 CLR 513 Wilson and Wilson (1989) 13 Fam LR 205 Tomasetti & Tomasetti (2000) FLC 93-023 Warby and Warby (2002) FLC 93-091 Trustee for the Bankrupt Estate of N Lasic & Lasic [2010] FamCA 682 Firth v Centrelink [2002] NSW SC 451 Clauson & Clauson [1995] 18 Fam LR 693 In the Marriage of Anast and Anastopoulos [1981] 7 Fam LR 728 Vakil & Vakil (1997) FLC 92-743 Vailes & Vailes [2010] FMCAfam 391 |
| Applicant: | MR WU |
| Respondent: | MS HEATON-WU |
| Intervener | MICHAEL CONLEY LAWYERS |
| File Number: | SYC 1805 of 2009 |
| Judgment of: | Pascoe CFM |
| Hearing date: | 14 February 2011 |
| Date of Last Submission: | 14 February 2011 |
| Delivered at: | Sydney |
| Delivered on: | 19 April 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Watkins |
| Solicitors for the Applicant: | N/A – Direct Brief |
| Counsel for the Respondent: | Self-represented |
| Solicitors for the Respondent: | Self-represented |
| Counsel for the Intervener: | Mr Millar |
| Solicitors for the Respondent: | Self-represented |
ORDERS
That by way of final property settlement, Mr Wu (the husband) and
Ms Heaton-Wu (the wife) do all acts and things and sign all documents necessary to allow the funds in ANZ Bank Account Number [omitted] in the name of Robert Van Aalst and Michael Conley representing the proceeds of sale of the matrimonial property, together with any interest, be paid as follows:(a)$134,265.75 to the husband; and
(b)$124,198.75 to the Intervener, Michael Conley Lawyers.
With any additional interest to be divided 50% to the husband and 50% to the Intervener.
That the husband Mr Wu pay to Legal Aid NSW the sum of $2,259.20 such sum being a further contribution towards the provision of an Independent Children’s Lawyer in family law proceedings and that such payment be made within three months of the date of these orders.
The injunction restraining the husband from accessing or in any way dealing with 50% (20,000) of his [P] Options be discharged.
The husband retain to the exclusion of the wife:
(a)The [P] Options;
(b)The BMW Motor Vehicle;
(c)Bank accounts, furniture, jewellery and musical instruments in his possession;
(d)[G] Finance Pty Ltd investment and associated liability;
(e)[I] Pty Ltd liability;
(f)His credit card liabilities.
The wife retain to the exclusion of the husband:
(a)Jewellery and furniture in her possession;
(b)The Michael Conley Trust Account;
(c)Liabilities arising from personal loans to Ms H, Aunt G and the [C];
(d)Liability arising from debt to husband.
The husband retain the artwork in storage and at the wife’s residence (item 10 on balance sheet), including but not limited to the Mr C drawing.
The wife retain the items of furniture currently in storage (item 11 on balance sheet), conditional on her giving any children’s possessions or children’s items amongst the stored items to the husband.
That the husband pay to the wife by way of spousal maintenance $200 per week until 3 July 2011, upon which date the husband’s obligation to pay spousal maintenance will be discharged permanently. The final payment of $200 will be for the week commencing Monday 27 June 2011.
If either party shall refuse or neglect to sign any document or do any such thing as may be reasonably required to give effect to this Order within 14 days of the service of a demand upon him or her to execute such document or to do such thing, pursuant to s.106A of the Family Law Act 1975 (Cth) the Registrar of the Federal Magistrates Court of Australia is empowered to sign such document and to direct such things to be done in the name of the party in default.
NOTATION
A.The husband and wife have each already paid a contribution of $1,650.00 to Legal Aid NSW and the amount at order 2 above is a further contribution.
IT IS NOTED that publication of this judgment under the pseudonym Wu & Heaton-Wu is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 1805 of 2009
| MR WU |
Applicant
And
| MS HEATON-WU |
Respondent
| MICHAEL CONLEY LAWYERS |
Intervener
REASONS FOR JUDGMENT
Introduction
These proceedings relate to applications for property settlement and spousal maintenance under the Family Law Act 1975 (“the Act”). The parties, Mr Wu (“the husband”) and Ms Heaton-Wu (“the wife”) commenced cohabitation in or about December 1998, married [in] 2000 and separated on 4 March 2009. The relationship produced two children: [X] (born [in] 2003) and [Y] (born [in] 2001) (“the Children”). The wife also has a child from a previous relationship, [Z] (born [in] 1996) (“[Z]”).
The husband is currently self-employed as a [omitted]. The wife is receiving a Newstart allowance and completing a [omitted] course at TAFE.
The property and the parenting aspects of this matter have been the subject of a significant amount of litigation, as both parties’ legal bills attest. With regard to the property aspect of the matter, there have been two sets of interim orders of this Court, both of which have had the effect of diminishing the sum that is available for distribution at the present hearing.
The property aspect of this matter was originally listed for final hearing on 22, 23 and 24 November 2010, concurrent with the final hearing in the parenting aspect of the matter. However these three days were consumed by the parenting aspect of the matter, so 14 February 2011 was made available to hear submissions with regard to the property settlement.
Orders Sought
On 22 November 2010, the husband indicated that he sought two orders pertaining to property distribution. The first order provided that the monies representing the proceeds of sale of the former matrimonial home should be paid to him in full. The second order sought that each of the parties be declared the owner of all other property possessed by them or registered in their name, including but not limited to bank accounts and superannuation funds.
At hearing on 14 February 2011, the husband stated that in addition to these orders, he also sought discharge of an injunctive order relating to share options and cessation of an order requiring him to pay the wife $200 per week spousal maintenance.
The wife did not provide any written material prior to the hearing on 14 February 2011 indicating what orders she sought. At hearing, the wife stated that she sought 60 per cent of the total asset pool, to be comprised of all monies representing the sale of the former matrimonial home, as well as any additional sum required to take the total percentage up to 60 per cent. The wife stated that any of the husband’s belongings, as well as his superannuation, share options and investments, should remain in his possession and be counted towards his 40 per cent split. The wife also sought a continuation of the existing spousal maintenance arrangement of $200 per week.
The Intervener, Michael Conley Lawyers, former legal representative for the wife in this matter, sought orders as set out in its Application in a Case dated 14 February 2011. The orders so sought were, in paraphrased form:
a)that the wife and husband do all acts and things and sign all documents necessary to allow the Intervener to withdraw $198,079.65 from the ANZ account containing the balance of the monies representing the sale of the former matrimonial home; and
b)in default of this occurring, the Registrar of the Court be appointed pursuant to section 106A of the Act to execute any documents and carry out any act as necessary to give operation to the requested order; and
c)the wife pay the costs of and incidental to the Intervener’s Application.
During oral submissions, Mr Millar for the Intervener stated that the order was drafted so as to be sought against both parties, because the account containing the balance of monies from the proceeds of the sale of the matrimonial home presently stands in the name of both parties. Mr Millar clarified, however, that should the Intervener be successful in its application, the Intervener would be seeking payment from the wife’s share of the fund, as determined by s.79 factors.
The Independent Children’s Lawyer (ICL) in the parenting aspect of this matter presented to the court a minute of proposed orders on
24 November 2010. This document sought that the husband and wife each be required to pay $1,129.60 to Legal Aid NSW as a further contribution towards the provision of the ICL, on top of the $1,650.00 each party has already paid to Legal Aid NSW for provision of the same.
At hearing, the husband was represented by Mr Watkins of Counsel. The wife was self-represented. The Intervener, Michael Conley Lawyers, was represented by Mr Millar of Counsel.
The proceedings
On 26 March 2009 the husband filed an Initiating Application seeking final parenting orders and interim property orders.
Parenting
As the husband’s submissions relied in part on allegations of the wife’s reckless behaviour stemming from alcohol abuse, on which basis the husband submitted legal costs incurred from November 2009 should be considered an add-back, it is necessary to give a summary of proceedings in the parenting aspect of the matter. Fuller discussion of issues in the parenting aspect of the matter can be found in judgments of this Court dated 27 October 2009, 4 January 2010 and 23 December 2010.
The parenting aspect of the matter was heard by me on an interim basis on 27, 28 and 31 July 2009. Subsequent orders of this Court dated
27 October 2009 provided that the children spend approximately equal time with both parents, with the parents to have equal shared parental responsibility.
At hearing on 27, 28 and 31 July 2009, evidence was adduced to the Court to the effect that the wife had Alcohol Abuse Disorder. In my judgment of 27 October 2009, I wrote at paragraph 116:
“I find that that the mother’s drinking does pose a risk to the children. Although the evidence mainly relates to the mother’s excessive consumption of alcohol, I find on Dr W’s [Family Report Writer] evidence that there is a higher risk of her relapsing if she commences drinking any alcohol. However, when she is alcohol free there appears to be no risk.”
To this effect, orders of this Court contained in the judgment delivered by me on 27 October 2009 stated:
“That the parties have liberty to restore the matter to the list on 28 hours notice in the event a significant issue concerning the children’s welfare arises, including if the mother resumes consuming alcohol or fails to comply with orders (9) and (10) without reasonable explanation.”
Orders (9) and (10) related to alcohol testing.
On 21 and 22 December 2009, this matter came before the Court on the basis of an incident on 28 November 2009 where it appeared the wife had consumed two stubbies of beer along with a sleeping pill while the children were in her care. On this hearing date, the suggestion was put to the Court that the children appeared to believe they were being given sleeping pills by the wife to facilitate her consumption of alcohol.
I note that at both the present hearing and the hearing on 21 and 22 December 2009, the wife categorically denied giving sleeping pills to any of the children.
Orders of the Court dated 24 December 2009 required that the children live with the husband and spend time with the wife, with any overnight time with the wife to be supervised. Further orders were made by the Court on 12 March 2010, varying the orders of 24 December 2009 such that all time the children spent with the wife was to be supervised, not just the overnight time.
On 3 March 2010, the wife filed a contravention application in which she stated that:
“The [husband] without reasonable excuse refused to allow the [wife] to spend time with the children [X] and [Y] on 20 February 2010, 21 February 2010, 27 February 2010 and 28 February 2010 as provided for in the Orders dated 24 December 2009.”
At the hearing for the Contravention Application on 13 April, the wife made no appearance. On the next court date, 20 May 2010, the Court made orders as to the shared care arrangements that would prevail until final hearing.
Final parenting orders of this Court dated 23 December 2010 provided that the children live with the husband and spend some time with the wife, such time to be supervised if it is overnight. The orders provided for an increase in the amount of time the children would spend with the wife, dependent on the wife attending a regime of drug and alcohol testing and producing a succession of clean results.
Property
The property aspect of the matter came before Howard FM on
20 August 2009. On that date, his Honour ordered that the former matrimonial home situated at Property B be sold. This duly occurred on 7 November 2009 at auction for the sum of $2,282,000.00, and the date of settlement was 21 December 2009. Howard FM also ordered that on completion of sale of the property, the proceeds of sale be paid to discharge various mortgages, debts, bills, credit cards and lease facilities held jointly by the parties, and that the husband and the wife should receive an amount of $50,000 and $75,000 respectively by way of partial property settlement. This served to reduce the liabilities in the balance sheet at the present hearing significantly.
In his orders of 20 August 2009, Howard FM required the parties to transfer a Volvo Station Wagon to the sole name of the wife and transfer a BMW motor vehicle to the sole name of the husband. The husband was also ordered to commence paying $200 per week spousal maintenance to the wife upon completion of sale of Property B.
In orders of 12 March 2010, I ordered that a further interim property settlement of $40,000 be made to the husband and $100,000 to the wife. In doing so, I utilised the power to make an interim property order pursuant to s.79 and s.80 of the Act, and gave consideration to the relevant authorities Strahan & Strahan (interim property orders) [2009] FamCAFC 166 and Yates & Yates [2009] FamCA 1023.
The interim property distributions thus total $175,000 to the wife and $90,000 to the husband.
The Evidence
The applicant husband relied upon:
a)Summary of argument filed in Court on 14 February 2011;
b)Updated financial statement sworn 14 February 2011;
c)Updating affidavit sworn 14 February 2011.
d)Joint balance sheet outlining agreed assets and liabilities tendered in court on 14 February 2011, with areas of contention on a separate page.
The respondent wife was self-represented and filed limited material in support of her proposed orders. The material the wife did file was:
a)A Centrelink statement dated 16 November 2010 outlining the wife’s rate of Newstart Allowance;
b)Email from Elders Real Estate Agents of Double Bay to the wife, dated 27 November 2010, informing her of overdue rent payments totalling $4114.00
c)Joint balance sheet outlining agreed assets and liabilities, with areas of contention on a separate page.
The wife also sought to rely upon an email which was tendered by the husband on 23 November 2010 as part of bundle of documents labelled Exhibit A16. The email in question is dated 2 September 2010 and was sent from the wife to the husband. In it, the wife outlines a proposal for settling the property aspect of the matter.
Issues
The issues identified between the parties and argued at hearing are as follows:
a)How the remaining assets, most notably the ANZ Bank account held on trust for the husband and wife, should be divided;
b)The wife’s responsibility for legal costs incurred by both parties after November 2009, and whether these costs ought to be considered an add back, to be taken in the division of the notional pool by the wife;
c)Whether any adjustments should be made with respect to additional factors and considerations under s.75(2);
d)Whether the Intervener has an equitable claim to be granted priority of payment by this Court;
e)Whether a continuation of spousal maintenance payments to the wife is appropriate and, if so, for how long such payments should continue.
The Intervener’s Application:
On 22 November 2010 the Intervener filed an Application in a Case and an Affidavit. In the Application, the Intervener sought orders joining it to the matter, and a further order directing the wife to pay the Intervener the amount of $198,079.65 pursuant to any order made as between the Husband and the Wife under s.79 of the Act.
The property aspect of the matter was not considered during the November 2010 hearing dates, and the position of the Court – as well as the position of both the husband and the wife – as to whether the Intervener should be granted leave to be joined was reserved.
At the present hearing on 14 February 2011, the Intervener again sought leave to be joined to proceedings. In supporting submissions, the Intervener stated that it had previously been the solicitor for the wife, and that costs incurred as a result of this work for the wife had been the subject of a claim in the District Court in which judgment had been entered, making the Intervener a judgment creditor for the amount sought.
Counsel for the Intervener noted that the husband was seeking “an order which would, if made, result in the whole of the fund that is held in the controlled monies account being paid to the husband.” Counsel for the Intervener then drew the Court’s attention to s.79(10)(a) of the Act, which states:
(10) The following are entitled to become a party to proceedings in which an application is made for an order under this section by a party to a marriage (the subject marriage):
(a) a creditor of a party to the proceedings if the creditor may not be able to recover his or her debt if the order were made;
Counsel further submitted that in addition to the s.79(10)(a) factor the Intervener was:
“as far as [he was] aware, the only creditor who has a judgment debt and, secondly, a solicitor in any event has of course the fruits of the action type lien for recovery of costs to secure over whatever the fruits might be to, in this case, the wife, and so that would give us support anyway, but the way the section is now worded with regard to creditors, it seems we have an entitlement.”
In response, Counsel for the husband stated that the husband opposed the Application for the Intervener to be joined, and that it was only necessary for the Court to “make a note” of the wife’s outstanding legal fees. As to whether the orders sought by the husband had potential to impede the Intervener’s ability to recover its debt, Counsel for the husband said:
“He [the Intervener] may not be able to recover the debt regardless of – in whatever court – sorry, whatever order the court makes, he may not be able to recover the debt.”
Counsel for the husband further stated that applying for leave to join proceedings under s.79(10)(a) was a “course available to any creditor [of the parties]”. This is true, however no other creditor did take this step.
In response to the Intervener’s application, the wife stated that her proposed orders, if granted by the Court, would enable her to pay all of her creditors, including the Intervener:
“I’m seeking a percentage of a balance sheet that I have and I’m not sure whether I have handed that up to you, which would see me get the money in trust which could then pay all my creditors.”
In Puddy v Grossvard and Another (2010) 43 Fam LR 288, the Full Court considered the types of interest the Court should have regard to when applying s.79(10)(a) and the related provision s.75(2)(ha) and found that both appear to refer to a debt that is not controversial. At paragraph 61, the Full Court went on to state:
“There is a material distinction between being a “creditor” and asserting an indebtedness which is disputed. A jurisdictional basis other than s 79 thus needs to be enlivened in order for the court to entertain disputed debt claims.”
With regard to these comments of the Full Court in Puddy (supra) I note that no party in this matter is disputing the quantum of the amount claimed by the Intervener in its application. Furthermore, the amount claimed by the Intervener was affirmed by judgment of the District Court of New South Wales dated 11 January 2011.
The application of s.79(10)(a) of the Act, as well as its origin, was considered in I Ltd v Chester [2010] FamCAFC 251, in which the Full Court of the Family Court stated at 177:
“The position of a third party creditor whose interests may be affected by an order pursuant to s 79 of the Act has now been put beyond doubt by s 79(10)(a) which provides that a creditor of a party to proceedings is entitled to become a party to proceedings in which an application is made for an order under s 79 by a party to a marriage if the creditor may not be able to recover his or her debt if the order were made. Section 79(10)(a) was inserted in the Act by the Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth) and commenced in April 2005. We observe that s 79(10) was amended by the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth) by the insertion after "this section" of "by a party to a marriage (the subject marriage)".”
In consideration of the Intervener’s arguments under s.79(10)(a) and the relevance of the section in light of the orders sought by the husband, I granted the Intervener leave to become a party to the proceedings.
I note that in the matter of Ferdinand & Ferdinand & Anor [2010] FMCAfam 465, my brother Judge Burchardt FM observed that “there is a tendency for the Court to assess the claims of an intervenor at the fourth stage of the methodology, namely deciding what is just and equitable”. As an example, Burchardt FM pointed to the matter of Worsnop v Worsnop (No.2) [2007] FamCA 1315.
I propose to follow this approach in addressing the Intervener’s application, so will defer considering the submissions advanced in support of the application until later in these Reasons.
Legal principles applicable to the property settlement application
The Court has jurisdiction under the Act to make such order as it considers appropriate with respect to the property of the parties to the marriage or either of them by altering their interests to the property: s.79(1).
Amongst other things, s.79(2) limits those powers in that the Court shall not make an order under the section unless it is satisfied that it is just and equitable.
In considering what order, if any, to make with regards to property, s.79(4) provides that the Court must consider a number of factors set out in the section.
The authorities indicate that in the exercise of this power a ‘four-step approach’ is preferred. In Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) 30 Fam LR 355 the Full Court of the Family Court stated at paragraph 39:
“The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps.
• First, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing.
• Second, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties.
• Third, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), ("the other factors") including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two.
• Fourth, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere (1985) FLC 91-626; Ferraro (1993) FLC 92-335; Davut & Raif (1994) FLC 92-503; PRPIC (1995) FLC 92-574; Clauson (1995) FLC 92-595; Townsend (1995) FLC 92-569; Biltoft (1995) 92-614; McLay (1996) FLC 92-667; JEL & DDF (2001) FLC 93-075 and Phillips (2002) FLC 93-104.”
With respect to superannuation, the Full Court in C v C (2005) 33 Fam LR 414 stated the preferred approach was to consider superannuation and non-superannuation interests separately. However, the Full Court stated that a trial judge has a discretion as to how superannuation interests will be treated in a particular case:
“Nothing we have said in this judgment would prevent a Court in the exercise of its discretion from including a superannuation interest as an item of property in the list of property which is drawn as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. This approach could be adopted where the parties agree that it should be adopted, or where the Court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the Court to conclude that this would be an appropriate approach.”
I note that none of the parties in this matter have requested a superannuation-splitting order, and that the superannuation is, to use the words of the Full Court in C v C (supra) “of relatively small value in the context of the value of the other assets in the case”. I also note that in the agreed table of assets and liabilities submitted to the Court, the parties included superannuation in the primary list of property. I am therefore of the opinion that a one pool approach is appropriate.
In relation to add-backs, the applicable law is laid out in decisions such as AJO v GRO (2005) FLC 93-218, in which the Full Court stated that:
30. To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In DJM and JLM (1998) FLC 92-816 the Full Court said at 85,262:
“11.6 For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.”
(b) Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
“In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.”
(c) In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec.75(2)(o) to applications for settlement of property instituted under the provisions of sec.79.”
31. As the Full Court said in Browne and Green (1999) FLC 92-873 at 86,360:
“44. We agree with her Honour that the principles stated by Baker J in Kowaliw certainly do not constitute any form of fixed code. They are no more than guidelines for use in the exercise of the discretionary jurisdiction conferred by s 79 of the Family Law Act 1975. Nevertheless, they have over the considerable period of time since they were enunciated, become a well accepted guideline in this jurisdiction – a guideline the use of which assists in the achievement of the important goal of consistency within the jurisdiction.”
Assets and Liabilities
The parties are agreed that the pool of assets and liabilities in this case, without having regard to add-backs and adjustments, is as follows:
| Property | ||
| 1. ANZ Bank account in the name of Michael Conley and Robert Van Alsk, on trust for husband and wife | Joint | $258,464.50 |
| 2. [P] options | H | $34,347 |
| 3. BMW Motor Vehicle | H | $18,000 |
| 4. NAB account # 1 | H | $2,796 |
| 5. NAB account # 2 | H | $15 |
| 6. Jewellery | W | $7,683 |
| 7. Jewellery | H | $7,100 |
| 8. [G] Finance Pty Ltd | H | $30,511 |
| 9. Musical Instruments | H | $4,000 |
| 10. Artwork (in storage and at wife’s residence) | Joint | $6,700 |
| 11. Furniture (in storage) | Joint | $3,000 |
| 12. Wife’s furniture | W | $3,000 |
| 13. Husband’s furniture | H | $3,000 |
| 14. Michael Conley Trust Account | W | $4,334 |
| 15. [M] Superannuation Masters Fund | H | $27,820 |
| $410,770.50 | ||
| Liabilities | ||
| 16. David Jones Credit Card | H | $7,625 |
| 17. Commonwealth Credit Card | H | $20,823 |
| 18. [G] Finance Pty Ltd Loan | H | $30,511 |
| 19. [I] Pty Ltd Loan | H | $30,000 |
| 20. Personal loan from Ms H | W | $20,000 |
| 21. Personal loan from the [C] | W | $10,000 |
| 22. Personal loan from Aunt G | W | $4,500 |
| 23. Wife’s debt to husband re: ICL report, reimbursement | W | $13,120 |
| $136,579 | ||
| Total net property | $274,191.50 | |
The husband submits that the asset pool should be enlarged through the addition of a number of add-backs. The add-backs contended by the husband take two forms. Firstly, there are the amounts that were paid to both the parties by way of interim distributions. Secondly the husband submits that all legal fees accrued by both parties since November 2009 should be considered an add-back into the asset pool, for which the wife be solely responsible. The husband’s summary of argument document states that these legal fees total $366,711.
There was no dispute between the parties that the interim distributions would be added back into the property pool. These amounts total $90,000 to the husband and $175,000 to the wife.
The husband’s proposal that $366,711, representing the sum of all legal fees incurred by both parties since November 2009, should also be added back, is more contentious. The authority relied upon by the husband is Kowaliw and Kowaliw (1981) FLC 91-092, in which Baker J stated at 76,644:
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec.75(2)(o) to applications for settlement of property instituted under the provisions of sec.79.”
In his affidavit sworn 14 February 2011, The husband specifically states that the wife acted “recklessly, negligently or wantonly within the definition in Kowaliw”. The conduct of the wife he relies upon in making this assertion is detailed in paragraph 11 of the affidavit:
(a) Firstly the incident on 29 November 2009 where the police attended after the wife lapsed into unconsciousness after consuming alcohol and sedatives. [X] and [Y] were removed from her care and lived with me from that time. [Z] was also removed from her care and into the care of his father Mr H and has lived there ever since.
(b) Orders were made on 1 April 2009 refraining (sic) the wife from consuming alcohol and illicit substances. Further that each of the parties cause all alcohol at the [B] property to be removed and/or destroyed and further restrained from bringing alcohol to the said property. The wife was in breach of the order.
The husband states in the affidavit that despite the wife being in breach of orders, she:
“Maintained a position in the proceedings that the children live with her. She maintained this position until the first day of the hearing in relation to the children’s matters. I was required to maintain the proceedings to ensure that the children remained in my care. If the children remained in the care of the wife and I did not take legal action, they would likely be removed and placed into foster care because of the wife’s issues with alcohol, exemplified by the incident 29 November 2009.”
During oral submissions, Counsel for the husband submitted that:
“[The wife’s] solicitors continued to act until 16 June 2010. After the children were removed from the wife in November 2009, in the absence of the wife abiding by any treatment recommended for her - that was by Dr W - in that he opined that there ought to be complete abstinence from alcohol whilst the children were in her care. After that time, the children were likely to be at risk in her care. Despite this, the wife - together with her legal representatives - maintained the position that the children live with her. That position was maintained until the first day of the trial; that’s 22 November 2010. The husband, in those circumstances, had no choice but to maintain his position that the children live with him.”
The husband further states, at paragraph 14 of the affidavit sworn
14 February, that he spent $35,000 in legal costs associated with the “AVO proceedings which had been brought by the wife”. The husband goes on to state that the AVO proceedings were dismissed, and that the wife conceded a number of matters in cross examination.
The wife, in her cross-examination of the husband, questioned the reliability of a urine sample which showed that one of the children had been given medication containing benzodiazepines while in her care. The wife insinuated that the husband had the opportunity and the incentive to tamper with the sample. The implication was that the husband therefore bore at least some responsibility for extending proceedings. Counsel for the husband objected to the line of questioning. I allowed the wife to proceed, but made it clear that it was a matter for me to determine how much weight I would give to the answers adduced.
In her cross examination, the wife also queried the husband’s claim that she was responsible for the $35,000 he spent defending the AVO proceedings:
Wife: The debt to Murphy’s Lawyers of 35,000. Who brought the AVO proceedings and the assault charge against you?
Husband: You did
Wife: I put it to you that that’s not the truth. That is incorrect. [suburb omitted] police brought those proceedings against you. So I say that that’s incorrect. Do you disagree or agree?
Husband: I can’t agree or disagree with that. I thought it was you.
After considering the arguments of the parties with relation to this issue, I cannot see how the conduct of the wife in November 2009 and thereafter fits either of the scenarios described in Kowaliw (supra), namely:
·where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
·where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Furthermore, the husband’s statement, in his affidavit of 14 February 2011, that if he had not maintained the legal proceedings after
29 November, the children “would likely be removed and placed into foster care because of the wife’s issues with alcohol, exemplified by the incident 29 November 2009” is a hypothetical claim on which I cannot rule.
In the matter of Re NHC and RCH (2004) FLC 93-204, the Full Court conducted an exhaustive review of key authorities on the issue of legal fees as add-backs. Among the principles which emerged from the review were that it is appropriate to add back legal fees paid using joint funds. The Full Court also stated, at paragraph 59, that “outstanding legal fees themselves are generally not taken into account as a liability.”
Another apposite case is Finlayson and Finlayson [2002] FamCA 898, which concerned whether a liability arising from legal costs should be notionally added back. I note the commentary of Ryan J[1], writing extra-judicially, with regards to that case:
“Finlayson [2002] FamCA 898 confirmed that it is appropriate to notionally add back paid legal costs, where it is found that this amounted to a premature distribution of matrimonial assets. It also confirmed that, where funds are borrowed to pay legal fees, and the liability is still outstanding, neither the payment of fees nor the liability should be taken into account.”
[1] The Honourable Justice Judy Ryan, ‘Enlarging the Asset Pool – Adding Back Notional Assets’, a paper given to the NSW Young Lawyers Annual Family Law Conference, 4 March 2006
Having regard to the authorities cited, and also to the inability of the husband to show that the conduct of the wife fits the requirements of Kowilaw (supra) – which is, in any case, not a “fixed code” – I find that the unpaid legal costs of both parties accrued since November 2009 should not be characterised as notional property.
I note that neither party sought in submissions to add back two items of matrimonial property that were disposed of during proceedings, namely:
a)the 20,000 [P] shares that were not subject to injunction; and
b)the XC70 Volvo Station Wagon registration number [omitted] that was transferred to the sole name of the Wife pursuant to orders of this Court dated 20 August 2009 and, on the husband’s evidence[2], subsequently sold by her.
Further evidence would need to have been adduced if either party had sought to have the Court deal with these items. I have therefore not included them as notional property in the asset pool.
[2] Affidavit of Mr Wu sworn 14 February 2011, paragraph 4(a)
Accordingly, I find that the parties’ assets, liabilities and financial resources as at the date of the hearing, available for distribution between them, are:
| Property | ||
| 1. ANZ Bank account in the name of Michael Conley and Robert Van Alsk, on trust for husband and wife | Joint | $258,464.50 |
| 2. [P] options | H | $34,347 |
| 3. BMW Motor Vehicle | H | $18,000 |
| 4. NAB account # 1 | H | $2,796 |
| 5. NAB account # 2 | H | $15 |
| 6. Jewellery | W | $7,683 |
| 7. Jewellery | H | $7,100 |
| 8. [G] Finance Pty Ltd | H | $30,511 |
| 9. Musical Instruments | H | $4,000 |
| 10. Artwork (in storage and at wife’s residence) | Joint | $6,700 |
| 11. Furniture (in storage) | Joint | $3,000 |
| 12. Wife’s furniture | W | $3,000 |
| 13. Husband’s furniture | H | $3,000 |
| 14. Michael Conley Trust Account | W | $4,334 |
| 15. [M] Superannuation Masters Fund | H | $27,820 |
| 16. Monies released to the Husband (add-back) | H | $90,000 |
| 17. Monies released to the Wife (add-back) | W | $175,000 |
| $675,770.50 | ||
| Liabilities | ||
| 18. David Jones Credit Card | H | $7,625 |
| 19. Commonwealth Credit Card | H | $20,823 |
| 20. [G] Finance Pty Ltd Loan | H | $30,511 |
| 21. [I] Pty Ltd Loan | H | $30,000 |
| 22. Personal loan from Ms H | W | $20,000 |
| 23. Personal loan from the [C] | W | $10,000 |
| 24. Personal loan from Aunt G | W | $4,500 |
| 25. Wife’s debt to husband re: ICL report, reimbursement | W | $13,120 |
| $136,579 | ||
| Total net property | $539,191.50 | |
Contributions
I must now consider all the contributions, both financial and non-financial, to the acquisition, conservation and improvement of the parties’ assets as well as to the welfare of the family before and after separation. With regard to this step of the process, the Full Court said in Aleksovski & Aleksovski (1996) FLC 92-705 (at 83,437):
“It is therefore necessary…[to] weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such assessment into a percentage of the overall property of the parties.”
The question then arises as to whether I should adopt a global or an asset-by-asset approach to contribution. In the case of Norbis & Norbis (1986) 161 CLR 513 at 534-5, the High Court held that either approach is available to the Court in part or in whole. The discretion as to which approach is to be adopted should be exercised having regard to the facts of the particular case. I am of the view that a global approach should be adopted in this case.
Summary of contributions
Interim judgment of this Court delivered on 12 March 2010 contains, at paragraphs 28-38 a history of the contributions of both parties. For the sake of completeness, I include those paragraphs in the body of this judgment, with alterations as necessitated by changes in circumstances. Much of the information on contributions below was adduced at prior hearings for the property aspect of the matter.
In terms of contributions made by the parties, they were married for just under 9 years. There were two children of the marriage, both of whom I have referred to earlier. The wife has a child from a previous relationship. The parties allocated their family roles traditionally, with the Husband working full-time while the Wife cared for the children and attended to household duties.
The Husband made a greater on-going financial contribution to the marriage as a result of his full-time employment as a [omitted]. His current financial statement indicates presently he earns a gross salary of $3236.00 per week, although this varied throughout the relationship. The Wife’s affidavit of 10 September 2009 annexes his notice of tax assessment which indicates his taxable income for the preceding years. His incomes for the financial years ending June 2002 until June 2007 were: $63,410.00; $139,817.00; $141,452.00; $152,934.00; $234,084.00; and $192,165.00 (the latter also included $50,000.00 capital gains).
The Wife worked as a [omitted] at the beginning of their relationship for a short period of time and later became a full-time homemaker. I note that during the marriage she attempted to open two businesses [omitted], although I give limited weight to this as both ventures were short lived.
Both parties have, however made significant lump-sum contributions at various stages throughout their relationship.
The husband made an early financial contribution to the relationship from sale of property held jointly with Ms S (though the figure is in dispute, either $60,000.00 or $120,000.00). In September 2000 the Husband entered into two deeds with [I] Pty Limited: one for him to provide services as a [omitted] and another for sale of [business]. Upon entering the Sale Deed he received $249,000 in consideration for the sale of the goodwill of his previous [occupation] as a lump sum. He claimed that since meeting his Wife the business had accrued $180,000.00 in goodwill. In February 2003 the Husband was granted 40,000 [P] Options which became exercisable on 14 September 2009. In June 2007 his contract with [P] was extended and he received a further sum of $100,000.00.
The husband presently has 20,000 options to purchase [P] Shares, which are frozen pursuant to injunctive orders of this Court made 15 September 2009. The husband seeks to have this injunction discharged, and I will do so.
The Wife also made a financial contribution to the marriage in the sum of $182,250.00 being 50% of the sale proceeds from her deceased father’s estate and $21,643.00 being 50% of the residual estate.
In June 2007 the parties made a $50,000.00 Personal Tax Deductible Superannuation contribution, with 50% contributed by the Husband from his lump sum payment from [P] that year.
The Husband indicated he has invested in [G] Project, an agricultural tax effective investment, in about June 2002 and currently owes over $30,000.00 to [G] Finance Pty Ltd. He states in his affidavit of August 2009 that the investment is worth around the same as the debt.
The parties purchased a property at [H] in December 2000 for approximately $460,000.00 with a mortgage of $360,000.00. The Wife claims she worked on renovations to the property between 2000 and 2004, although the Husband indicated he also assisted with some of the renovations. The parties sold this property in 2004 for $810,000.00. In December 2004 the parties purchased a property in [B], which is the former matrimonial home, for $1.64 million with a mortgage to [omitted]. The Wife was involved in preparing the property for sale after orders were made in August 2009.
Prior to orders of this Court made as a result of the wife’s alcohol abuse disorder, which regulate her time with the children, the wife made the greater contribution to the welfare of the family and assumed full time responsibility as a mother, although the husband also contributed to the parenting of the children.
In my interim judgment in this matter handed down 27 October 2009, I found that;
“Ms Heaton-Wu has been engaged in home duties since the birth of her daughters. Although [Mr Wu’s] counsel at hearing did not concede the mother has always been the primary carer, Mr Wu’s affidavit evidence states that Ms Heaton-Wu has been “[f]or the majority of [their] relationship”, “a stay-at-home mother” (with sporadic employment) but contends that she has had difficulties fulfilling this role.
The mother asserts that Mr Wu worked long hours and has been a relatively uninvolved parent. He spent time with the children when he could and has been actively involved in the children’s activities.
I find that the mother has been the primary carer of all three children, including being the primary carer for [Z] since separation from Mr H. However, I find that Mr Wu has been actively involved in many of [Y] and [X]’s activities, including assisting with housework and caring for the children when the mother could not.”
The Husband played a substantial role in caring for the children when the Wife could not because of her alcohol abuse, including when she was attending the Sydney Clinic. I do note the Husband has previously disputed the extent of the Wife’s homemaker role and I note the parties have in the past engaged the assistance of domestic workers in the home such as a nanny and a cleaner. In his most recent financial statement, the husband notes that he is at present engaging a nanny to assist with care of the children.
Post-separation the Husband claims he has paid various household expenses for the matrimonial home such as the council rates, water rates, energy bills and household insurance. He has also met some of the Wife’s health expenses such as those related to her alcohol abuse disorder and elective surgery in 2009. Both parties have cared for the children after separation; however the husband now acts as full-time carer.
Conclusion on contributions
Weighing all of the factors relating to contributions, both financial and non-financial, I assess the husband’s overall contributions at 40 % and the wife’s at 60 %.
Impact on earning capacity and Section 75(2) considerations
The proposed orders do not impact on the earning capacity of the husband. The orders proposed by the husband do arguably impact on the earning capacity of the wife, as they would leave her without funds to pay either her day-to-day expenses or her myriad liabilities. I note, however, that the wife is currently enrolled in a TAFE course, with a view to gaining related employment upon completion of the course. In order to support herself while studying, it is feasible that the wife could find part-time work to supplement her Newstart allowance, given that the husband is now full-time carer for the children.
(a) the age and state of health of each of the parties;
In respect of future needs, I note that the Husband is 49 years of age and the wife is 39 years of age. The wife has been diagnosed with Alcohol Abuse Disorder, and submitted at hearing that she has continuing appointments with doctors and psychiatrists to assist her in addressing this condition.
b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The husband’s most recent financial statement states that he receives total average weekly income of $3236.00. However he has personal expenditure totalling $4,046 per week, with the result being that his weekly expenditure outstrips his weekly income. The husband’s total property is valued at $62,111. I note that the husband’s earning capacity may have been impacted by orders granting him primary responsibility over the children.
The wife is currently studying a [omitted] course at TAFE and receives a fortnightly Newstart pension. As I note elsewhere in this Judgment with regard to spousal maintenance, it is feasible that the wife could obtain part-time employment while completing her course, before finding employment related to her TAFE studies after the course concludes at the end of 2011.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
Final parenting orders of this Court dated 23 December 2010 required that the children live with the husband and spend limited time with the wife, with such time to be increased dependent on the wife completing a regime of successful drug and alcohol testing. At hearing, however, the husband stated that he currently has full time are and control of the children.
d) commitments of each of the parties that are necessary to enable the party to support:
i) himself or herself; and
ii) a child or another person that the party has a duty to maintain;
No relevant matter was put to the Court concerning this factor.
e) the responsibilities of either party to support any other person;
The husband previously assisted with the care of the wife’s child from a previous relationship; however this is no longer the case.
f) subject to subsection (3) the eligibility of either party for a pension, allowance or benefit under:
i) any law of the Commonwealth, of a State or Territory or of another country; or
ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia, and the rate of any such pension, allowance or benefit being paid to either party;
The wife is currently in receipt of a Centrelink allowance and rent assistance totalling $532.60 per fortnight.
g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
Both parties are at present living in rented accommodation. The husband indicated at hearing that he had a desire to purchase permanent accommodation to provide a “more stable home” for himself and the children.
On the evidence it appears that both parties enjoyed a high standard of living prior to separation and this is a relevant consideration in the matter. I note, however, that a standard of living that in all the circumstances is reasonable is not necessarily the same standard of living enjoyed by either of the parties during cohabitation: Wilson and Wilson (1989) 13 Fam LR 205.
h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
With regard to this consideration, the wife stated that:
“I’m continuing my TAFE course and intend to do that to the end of the year, which is fulltime and if given the spouse maintenance, that could continue fairly stress free.”
ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant
The claims of the intervening creditor will be addressed fully below. However Counsel for the intervener submitted that the intervener was entitled to be considered under s.79(ha) due to the impact that the order proposed by the husband would have on the ability of the intervener to recover its debt.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
The wife’s acceptance of the primary role of homemaker and parent for the duration of the marriage enabled the husband to prosper in his career and provide financially for his family. The husband worked long hours but was actively involved in many aspects of the children’s lives.
k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
The wife stated during submissions that:
“Both [Mr Wu] and I agreed that I would be a stay-at-home mum, which means that I haven’t worked - haven’t worked for the 13 years - 12 or 13 years that we were together, which means I really do need to - to undertake and finish a course to get some ability to earn money.”
The wife’s time out of the workforce due to her role as a homemaker and parent has undoubtedly affected her earning capacity to an extent. However, as I noted in my interim judgment of 12 March 2010, I am of the opinion that this impact on her earning capacity is minimal, because the wife was not working in any specialised field prior to her marriage.
l) the need to protect a party who wishes to continue that party's role as a parent;
No relevant matter was put to the Court concerning this factor.
m) if either party is cohabiting with another person, the financial circumstances relating to the cohabitation;
No relevant matter was put to the Court concerning this factor.
n) the terms of any order made or proposed to be made under section 79 in relation to:
the property of the parties; or
vested bankruptcy property in relation to a bankrupt party;
No relevant matter was put to the Court concerning this factor.
na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage
The wife is providing $13.80 child support to the husband per fortnight, through a deduction from her Centrelink allowance.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
The wife submitted that the following should be taken into account under this subsection of the act:
“[The husband’s] future income will always be - I’m fairly positive that it will always be greater than mine - and I also intend, in the future, to have the children more – more often than I do - if not, more often - if not, week about, but it’s certainly - not over week about; at least week about, which means that I will need the same things that he’s seeking the money for - ie a place to have them, etcetera.”
(p) the terms of any financial agreement that is binding on the parties.
No relevant matter was put to the Court concerning this factor.
In consideration of all of the above s.75(2) factors, I am of the view that there should be an adjustment of 10 per cent made in favour of the husband, taking the share in total net property to 50 per cent each. An adjustment of 10 per cent of the asset pool equates to approximately $53,919.15. This outcome reflects the cumulative outcome of the findings made pursuant to s.75(2) see Tomasetti & Tomasetti (2000) FLC 93-023.
Just and Equitable Order
The husband and wife are both entitled to 50% of the matrimonial asset pool of $539,191.50, or $269,595.75 each.
Both parties wish to retain their current assets and liabilities. There are, however, two items on the balance sheet which are marked as jointly owned and on which the court must rule. These are the stored furniture and stored artwork.
The stored furniture, ascribed a value of $3,000 on the balance sheet, is currently in a storage unit. The costs associated with the unit have been paid by the husband since the wife defaulted. During cross examination by Counsel for the husband, the wife stated that the items in storage would have been seized and sold by the storage company, had the husband not intervened and paid the outstanding sum.
The wife seeks to retain the stored furniture. The husband, in his affidavit, summary of argument and submissions, did not state a firm position on what he believed should be done with it. I will therefore allow the wife to retain the stored furniture, conditional on her giving any children’s possessions or children’s items currently in the storage unit to the husband.
The storage unit also contains an artwork by Mr C. The wife stated that the other jointly-owned artworks - a print by an artist named [omitted] and a lithograph by [omitted] – are currently stored at her mother’s home in [omitted]. The balance sheet accords these three artworks a total value of $6,700.
The husband stated that he wished to retain the Mr C drawing. He did not indicate a preference as to the other two artworks, nor did the wife state whether she desired to keep them. As the artworks were listed together in the balance sheet and not given individual values, there is a difficulty in assigning them separately. I therefore order that the husband should have possession over the artworks listed on the balance sheet as jointly-owned.
Accordingly, I find that the parties’ shares of the matrimonial asset pool are to be comprised as follows:
| Property to be retained by husband | Value |
| [P] options | $34,347 |
| BMW Motor Vehicle | $18,000 |
| NAB Account #1 | $2,796 |
| NAB Account #2 | $15 |
| Jewellery | $7,100 |
| [G] Finance Pty Ltd | $30,511 |
| Musical instruments | $4,000 |
| Artwork (in storage and at wife’s residence) | $6,700 |
| Husband’s furniture | $3,000 |
| [M] Superannuation Masters Fund | $27,820 |
| Monies released to husband (add-back) | $90,000 |
| Monies from ANZ Bank Account in the name of Michael Conley and Robert Van Alsk, held on trust for husband and wife | $134,265.75 |
| TOTAL | $358,554.75 |
| Liabilities to be met by the husband | |
| David Jones Credit Card | $7,625 |
| Commonwealth Credit Card | $20,823 |
| [G] Finance Pty Ltd Loan | $30,511 |
| [I] Pty Ltd Loan | $30,000 |
| TOTAL | $88,959 |
| TOTAL NET PROPERTY | $269,595.75 |
| Property to be retained by the wife | |
| Jewellery | $7,683 |
| Furniture (in storage) | $3,000 |
| Wife’s furniture | $3,000 |
| Michael Conley Trust Account | $4,334 |
| Monies released to the Wife (add-back) | $175,000 |
| Monies from ANZ Bank Account in the name of Michael Conley and Robert Van Alsk, held on trust for husband and wife | $124,198.75 |
| TOTAL | $317,215.75 |
| Liabilities to be met by the wife | |
| Personal loan from Ms H | $20,000 |
| Personal loan from the [C] | $10,000 |
| Personal loan from Aunt G | $4,500 |
| Wife’s debt to husband re: ICL report, reimbursement | $13,120 |
| TOTAL | $47,620 |
| TOTAL NET PROPERTY | $269,595.75 |
As can be seen, the husband will receive $134,265.75 from the trust account held in the names of both parties, and the wife will receive $124,198.75, pending the Intervener’s claim (see below). The husband, in his submissions, argued that notwithstanding the contributions and relevant adjustments as determined by the Court, he should receive the full sum of $258,464.50 from the trust account held in the names of both parties. The grounds on which the husband based this claim are set out in paragraphs 18 and 19 of his summary of argument:
18. The husband seeks all the proceeds of sale to be paid to him. It will enable him to use the monies to purchase a property.
19. If the monies were to be paid to the wife on the other hand, the children would receive no benefit from this. The wife receives no benefit from the payment of the settlement monies to her. It is likely that the whole of any settlement monies she might receive are to be paid to her solicitors.
In essence, the husband is arguing that the Court should ensure that the trust fund representing the proceeds of sale is utilised for the betterment of the children, and not spent on legal bills. The husband did not indicate what, if any, provisions of the Act or relevant authorities supported this line of argument, so I have assumed that the husband was basing this submission on notions of justice and equity. I note the words of s.79(2) of the Act:
The Court shall not make an Order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.
The financial needs of the husband due to his present role as sole carer of the children is one of the factors I took into account when considering whether an adjustment should be made under s.75(2) of the Act. Specifically, s.75(2)(c) requires the Court to consider “whether either party has the care or control of a child of the marriage who has not attained the age of 18 years”. I note that after considering the factors in ss.79(4)(d), (e), (f) and (g) and s.75(2) as a whole, I made a 10 per cent adjustment in favour of the husband. I do not believe that a further adjustment is warranted due to s.79(2) of the Act.
Consideration of the Intervener’s claim
The Intervener, Michael Conley Lawyers, states in its affidavit of
22 November 2010 that it provided legal services to the wife from
25 March 2009 to 26 June 2010. In its affidavit sworn 22 November 2010, the Intervener states at paragraph 14.1 that the total amount invoiced to the wife “in accordance with the Cost Agreement executed by the firm and the Respondent Wife and dated 27 March 2009” is $328,833.98. Of this amount, the wife has made payments of $127,738.13 to the Intervener.
On 11 January, the Intervener obtained from the District Court of NSW a judgment ordering the wife to pay $198,079.65 to the Intervener. This figure represents the wife’s outstanding invoices plus the Intervener’s costs associated with filing the application in the District Court.
The orders sought by the Intervener are listed in paraphrased form in paragraph 8 above. Also noted above is the clarification made by counsel for the Intervener during submissions, which is that while the orders are drafted so as to be sought against both parties, the Intervener is only seeking payment from the wife’s share of the fund, as determined by the Court. Counsel for the Intervener explained this as follows:
“The court has a power to order a party to pay a third party creditor, but I would have thought that’s not controversial. In this particular case, the fund of money that would be available to the wife - to the extent that the court determines it is - by a section 79 order - is a fund presently standing in the names of both parties. In order to, therefore, obtain a payment out of that fund, the order has to be sought against the two parties in whose name that fund stands. Although that appears to be an order against the husband, as well as the wife, it isn’t, in essence, because the court before making that order, will have made a determination in the section 79 proceedings between the parties to the marriage, as to how much of that fund is to go to the wife, and how much is to go to the husband. And if the court determined, for example, that $198,079.65 was to go to the wife, well, then my client would be successful as to the whole of his order, but if the court determined between the parties to the marriage that the division of that fund should - just for argument’s sake - be a 50/50 division - the fund is about $260,000, so that would only leave 130,000 available for the wife to be allocated to her creditors and, therefore, we would not be successful to the extent of the difference.”
The Intervener submits that there are three different bases for the application. Firstly, the Intervener stated in submissions that “the court’s section 79 power founds the jurisdiction to make an order in favour of paying a third party against a party to the marriage”. The Court’s section 79 powers with regard to third parties are contained at Section 90AE(1) and (2) of the Act, which state:
(1) In proceedings under section 79, the court may make any of the following orders:
(a) an order directed to a creditor of the parties to the marriage to substitute one party for both parties in relation to the debt owed to the creditor;
(b) an order directed to a creditor of one party to a marriage to substitute the other party, or both parties, to the marriage for that party in relation to the debt owed to the creditor;
(c) an order directed to a creditor of the parties to the marriage that the parties be liable for a different proportion of the debt owed to the creditor than the proportion the parties are liable to before the order is made;
(d) an order directed to a director of a company or to a company to register a transfer of shares from one party to the marriage to the other party.
(2) In proceedings under section 79, the court may make any other order that:
(a) directs a third party to do a thing in relation to the property of a party to the marriage; or
(b) alters the rights, liabilities or property interests of a third party in relation to the marriage.
Sections 90AE(3) and (4) of the Act list the matters that the Court must take into account in exercising this power.
(3) The court may only make an order under subsection (1) or (2) if:
(a) the making of the order is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; and
(b) if the order concerns a debt of a party to the marriage--it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full; and
(c) the third party has been accorded procedural fairness in relation to the making of the order; and
(d) the court is satisfied that, in all the circumstances, it is just and equitable to make the order; and
(e) the court is satisfied that the order takes into account the matters mentioned in subsection (4).
(4) The matters are as follows:
(a) the taxation effect (if any) of the order on the parties to the marriage;
(b) the taxation effect (if any) of the order on the third party;
(c) the social security effect (if any) of the order on the parties to the marriage;
(d) the third party's administrative costs in relation to the order;
(e) if the order concerns a debt of a party to the marriage--the capacity of a party to the marriage to repay the debt after the order is made;
Note: See paragraph (3)(b) for requirements for making the order in these circumstances.
Example: The capacity of a party to the marriage to repay the debt would be affected by that party's ability to repay the debt without undue hardship.
(f) the economic, legal or other capacity of the third party to comply with the order;
Example: The legal capacity of the third party to comply with the order could be affected by the terms of a trust deed. However, after taking the third party's legal capacity into account, the court may make the order despite the terms of the trust deed. If the court does so, the order will have effect despite those terms (see section 90AC).
(g) if, as a result of the third party being accorded procedural fairness in relation to the making of the order, the third party raises any other matters--those matters;
Note: See paragraph (3)(c) for the requirement to accord procedural fairness to the third party.
(h) any other matter that the court considers relevant.
Secondly, the Intervener submitted that “the court - in its accrued jurisdiction - given that this is a property proceeding, has power, of course, to make orders to enforce the judgment of another court - which we have here.”
The Full Court of the Family Court in Warby and Warby (2001) FLC 93-091 held that the court had accrued jurisdiction to determine non-federal aspects of justiciable controversies of which a family law claim or cause of action forms a part. With respect to the Federal Magistrates Court, Section 18 of the Federal Magistrates Act 1999 (Cth) provides that:
“To the extent that the Constitution permits, jurisdiction is conferred on the Federal Magistrates Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Federal Magistrates Court is invoked.”
The Intervener submitted that the third basis for the application is that the circumstances of the case give rise to a “fruits of the action” lien possessed by the Intervener over the funds in the managed account.
The wife does not oppose the application. Counsel for the husband, submits that the application should be dismissed. In submissions, Counsel for the husband drew the Court’s attention to s.90AE(3) of the Act, which states that before the Court makes an order binding or affecting a third party, it must consider whether “the making of the order is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage”. Counsel for the husband contended that “justice and fairness would dictate that any moneys that the wife receive, ought to be equally distributed amongst all her creditors”.
Counsel for the Intervener acknowledged that the Intervener sought a preference over other creditors, but submitted that this would be a just outcome, given the distinct nature of the Intervener as compared to the wife’s other creditors:
“In one sense he [the Intervener] does [gain a preference], but he does because he has a - what’s akin to a proprietary right in the fund itself, being the share of the fund the court determines the wife should have.”
With regard to the purported “fruits of the action” lien, the Court was directed to the matter of Trustee for the Bankrupt Estate of N Lasic & Lasic [2010] FamCA 682, in which Stevenson J considered the operation of a solicitor’s lien. At paragraph 135 of this judgment, her Honour includes a lengthy extract from Firth v Centrelink [2002] NSW SC 451, in which Campbell J summarises numerous authorities in order to ascertain the nature of a “fruits of the action” or solicitor’s lien.
Campbell J extrapolated a number of “propositions” from the authorities he examined on the topic. Of these propositions, Counsel for the Intervener submitted that the following were salient in the present matter:
“(c) It [the right of the solicitor] exists over money which is in the possession of the solicitor, and also over money which is in court (Re Meter Cabs Ltd [1911] 2 Ch 557 at 562) and money which is owed to the client but not paid into court (In the Estate of Fuld, Decd (no 4); Re De Groot [2001] 2 Qd R 359 at 375.
…
(g) The solicitor’ s equitable right exists before the court is asked to intervene to protect it; it ‘arises immediately upon the recovery of monies through the exertions of the solicitor’; Carew Counsel Pty Ltd v French (at 476 [33).
…
(h) The right of the solicitor is one which the solicitor can enforce against the client, entitling the solicitor to an injunction to prevent the payment of the fund to the client without notice to the solicitor until such time as the quantum of the solicitor’s entitlement to be paid from the fund is ascertained: In the Estate of Fuld, Decd (no 4). If the quantum of the solicitor’s entitlement has been ascertained, the solicitor is entitled to an order that the amount of his entitlement be paid to him from the fund, notwithstanding opposition from the client: Leamey v Heath [2001] NSWSC 1095 (Campbell J, 22 November 2001, unreported)
…
(k) Likewise if the client is a natural person who becomes bankrupt, the solicitor is not required to prove in the bankruptcy for the amount of costs incurred, but can recover the costs from the debt which is the result of his efforts: Guy v Churchill (1887) 35 Ch D 489; Worrell v Power & Power [1993] FCA 551; (1993) 46 FCR 214. The trustee in bankruptcy takes that debt subject to the equitable right of the solicitor to be paid his costs, and if the amount of the solicitor’s costs exceeds the value of the debt, the debt does not vest in the trustee in bankruptcy at all; if the client is discharged from bankruptcy he can sue to enforce the debt as it never was property divisible among the creditors, and any amount that the client then receives is also subject to the solicitor’s lien: Kison v Papasian.
Later in the extract relied upon by the Intervener, Campbell J quotes the decision of the Full Federal Court in Worrell v Power & Power [1993] FCA 551 (at 224) in which their Honours said that the decision in Ex Parte Patience; Makinson v Minister:
“indicates that the lien involves more than a personal right of the solicitor to approach the Court to obtain a charging order, and that the lien arises when the judgment for costs is obtained, and before there has been a taxation of the costs. The assistance of the Court is invoked not to create rights but to enforce them.”
In a subsequent passage from Firth (supra), which the Intervener did not include in its submissions but which is relevant to this case, Campbell J stated that:
“In all these circumstances, it is apparent that the equitable right which a solicitor has to be paid costs and disbursements from the fund which his efforts have recovered, is a kind of proprietary interest in that fund. The fact that the right of the solicitor can survive an insolvency administration of the client, and is (as Sir Frederick Jordan CJ held in Ex parte Patience) assignable, are strong indicia of it being a right of proprietary nature. In Twigg v Keady (at 259) Fogarty J described it is ‘an equitable interest in the fund’. In Colour Point Pty Ltd v Markby’s Communication Group Pty Ltd (Federal Court of Australia, Weinberg J, 27 November 1998, unreported) at 23, Weinberg J said that the equitable right ‘confers upon the solicitor an equitable interest in the fruits of that litigation’.
For the sake of brevity, I will not include the entire extract of his Campbell J’s judgment here, however it can be found at paragraph 135 of Lasic (supra). I have, however, considered the propositions expounded therein, and have no doubt that the Intervener in this matter has a “fruits of the action” lien over the fund representing the proceeds of sale of the former matrimonial property. Furthermore, the quantum of the Intervener’s entitlement has been ascertained through the issuance of an order by the District Court of NSW.
The Intervener’s equitable interest in the fund entitles it to be paid ahead of other creditors, and I will use the Court’s powers to ensure this occurs. I note, however, that due to the division of assets and liabilities, the Intervener will not be successful to the full extent of its claim ($198,079.65) but will instead receive the sum of the wife’s share in the fund, that being $124,198.75. This outcome was foreshadowed by the Intervener during its submissions in support of the application.
It is likely that further interest will have accrued on the funds held in trust. My orders will provide for any additional interest to be shared by parties in the same ratio that was determined at step three of the property settlement process, that is 50 per cent. Due to the disparity between the amount claimed by the intervener and the amount available to be paid to it from the fund, my orders will provide that the wife’s share of any additional interest be paid to the Intervener. I consider that it is just and equitable for any additional interest to be divided in this way.
I note that the Intervener, in its Application dated 14 February 2011, claimed costs but that none of these costs have been particularised. Although it is open to the Intervener to make a formal application for costs, on the evidence presently before me I would not be disposed to make such an order, not least because the wife clearly has no assets from which to pay any order for costs made against her. Further, it appears that the wife’s solicitors allowed her to continue to incur very significant legal costs when it must have been apparent that she was not in a position to pay them. In this regard, I note that on several occasions during the conduct of these proceedings I raised concerns at the parties’ rapidly declining asset pool being consumed in litigation which more rational parties may have settled.
Independent Children’s Lawyer’s costs
The Independent Children’s Lawyer seeks that both the husband and wife pay a contribution of $1,129.60 towards its costs. This is in addition to the $1,650.00 that each party has already paid towards the provision of an Independent Children’s Lawyer.
Given the important role played by the Independent Children’s Lawyer in the parenting aspect of these proceedings, I propose to make orders of the nature sought by the Independent Children’s Lawyer. Due to the operation of the solicitor’s lien, however, the sum of the wife’s interest in the joint fund will be paid to the Intervener, and the wife would be unable to comply with any order compelling her to pay a contribution to the Independent Children’s Lawyer.
I therefore order that the full remaining costs of $2,259.20 related to provision of the Independent Children’s Lawyer be borne by the husband. Given the circumstances of the matter, this is the most just and equitable result, as required by Section 79(2) of the Act.
The application for discharge of spousal maintenance
I will now address the husband’s application to discharge his existing spousal maintenance obligation. Relevant authorities, including Clauson & Clauson [1995] 18 Fam LR 693, indicate that applications for provision, variance or discharge of spousal maintenance should only be considered after the s.79 property settlement application. This is the case even though maintenance comes within the scope of property settlement through the inclusion of s.75(2) factors in the four step process. The Court can, however, consider any application for maintenance in light of the impact of the property orders on the parties’ financial circumstances: In the Marriage of Anast and Anastopoulos [1981] 7 Fam LR 728.
The husband sought an order discharging his obligation to pay the wife $200 per week spousal maintenance. He presently pays this amount in accordance with order 5 in the orders of this Court dated 20 August 2009.
The wife sought a continuation of the order requiring the husband to pay her $200 spousal maintenance each week. In her oral submissions in support of the application, it was unclear whether the wife sought the payment for a defined period or whether she sought for it to continue in perpetuity. The wife did, however, while addressing s.75(2)(h), highlight her present circumstances:
“I’m continuing my TAFE course and intend to do that to the end of the year [2011], which is fulltime and if given the spouse maintenance, that could continue fairly stress free.”
Given that the application is for discharge of an existing spousal maintenance order, it is necessary for me to consider the words of s.83(1), s.83(1A) and s.83(2) of the Act, which state, in part, that:
(1) If there is in force an order (whether made before or after the commencement of this Act) with respect to the maintenance of a party to a marriage:
(a) made by the court; or
(b) made by another court and registered in the first mentioned court in accordance with the applicable Rules of Court;
the court may, subject to section 111AA:
(c) discharge the order if there is any just cause for so doing;
(d) suspend its operation wholly or in part and either until further order or until a fixed time or the happening of some future event;
(e) revive wholly or in part an order suspended under paragraph (d); or
(f) subject to subsection (2), vary the order so as to increase or decrease any amount ordered to be paid or in any other manner.
(1A) The court's jurisdiction under subsection (1) may be exercised:
(a) in any case--in proceedings with respect to the maintenance of a party to the marriage; or
...
(2) The court shall not make an order increasing or decreasing an amount ordered to be paid by an order unless it is satisfied:
(a) that, since the order was made or last varied:
(i) the circumstances of a person for whose benefit the order was made have so changed (including the person entering into a stable and continuing de facto relationship);
(ii) the circumstances of the person liable to make payments under the order have so changed; or
(iii) in the case of an order that operates in favour of, or is binding on, a legal personal representative--the circumstances of the estate are such;
as to justify its so doing;
…
The wide discretion accorded to the Court by s.83(1)(f) was outlined by the Full Court in the matter of Vakil & Vakil (1997) FLC 92-743, at paragraph 5.54:
“The expression “in any other manner” is no less expansive than the expression “if there is any just cause for so doing” in s.83(1)(c). We consider that it gives the court a very wide discretion to vary a maintenance order (subject, in the case of an increase or decrease in the amount to be paid, to the threshold requirements of sub-s.(2)) in whatever manner it considers appropriate, having regard to all of the circumstances of the case and the other relevant provisions of the Act (specifically, ss.72 and 75, by reason of s.83(7) but also s.81).”
Section 83(7), referred to in Vakil (supra), states that “for the purposes of this section, the court shall have regard to the provisions of sections 72 and 75”. I now turn to these sections.
Section 72(1) of the Act explains where a spouse has a right to spousal maintenance:
A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if and only if, that other party is unable to support herself or himself adequately whether-
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason,
having regard to any relevant matter referred to in Section 75(2).
Section 75(2) of the Act sets out the matters relevant to the exercise of discretion:
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties;
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party;
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
(l) the need to protect a party who wishes to continue that party's role as a parent;
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation;
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties.
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In the matter of Vailes & Vailes [2010] FMCAfam 391, Altobelli FM explained at paragraph 12 the interaction between s.83 of the Act and Sections 72 and 75:
“Section 83(7) is an important contextual provision. By referring back to s.72 it establishes an important contextual framework for the s.83 enquiry - it is about spouse maintenance. Section 83 is not about child support. It is not about property settlement. The context is spouse maintenance. True it is that s.75(2) refers to both child support and property settlement as relevant considerations, but these matters do not set the agenda so to speak for the s.83(2) enquiry.”
The husband raised a number of matters relevant to the determination of his application for cessation of spousal maintenance. In his summary of argument, he notes that “the husband has full time care and control of the young children.” This represents a significant change in circumstances from 20 August 2009, the date of the original order, at which time the children resided with the wife in the matrimonial home in [B], and spent the following periods of time with the husband as follows, pursuant to Consent Orders dated 1 April 2009:
·From 4.00pm to 7.00pm each Tuesday and Thursday
·Each Sunday from 10.00am to 5.00pm
·For one half of school holiday periods.
By agreement between the parties, the children were also spending overnight time with the husband every second weekend and every Wednesday, as at 20 August 2009.[3]
[3] Wu & Heaton-Wu and Hunt & Heaton-Wu [2009] FMCAfam 1112, at 12
The situation has now changed to the extent that the husband has full time care and control of the children. According to his financial statement sworn 14 February 2011, this care of the children includes financial costs of $400 each week on child minding, and $80 each week on children’s activities. The husband also gave evidence that he has altered his working hours to facilitate his new role as full-time carer.
As the husband’s weekly expenditure on the children has increased commensurate with his role as full-time carer, the Court has to assume that the wife’s expenditure has decreased. The wife did not present any evidence that she has any weekly expenses associated with the children. This represents a change in circumstances from 20 August 2009, when the wife’s parenting commitments would have been a strain on her financial resources.
The husband’s new role as full-time carer fits within the requirements of a change in circumstance as outlined by s.83(2)(a)(i) and s.83(2)(a)(ii) of the Act. However, before I make any ruling as to a variation or modification of the existing spousal maintenance arrangement, it is necessary for me to consider arguments advanced by the parties pertaining to sections 72 and 75 of the Act, pursuant to s.83(7) of the Act.
The husband, in his most recent financial statement, states that he is currently earning an average of $3,236 each week, and has personal expenditure of $4,046 each week. His property totals $62,111, and he has superannuation of $27,280. The husband also has liabilities of $226,728, the vast majority of which are outstanding legal costs. The husband currently lives in rented accommodation.
Counsel for the husband submitted at hearing that “he has not received child support; is not likely to receive child support, in my submission, for the duration of these children’s lives. He will have the full financial burden of caring for the children.” Counsel for the husband also questioned the wife during cross-examination as to whether she had made any employment applications. The wife answered “I haven’t, no.”
The wife’s income, comprising Newstart Allowance ($469.70), Rent Assistance ($115.20) and with Child Support (-$13.70) and Lump Sum Advance Repayment (-$38.50) deducted, totals $532.60 each fortnight. She informed the Court that she has been attending a [omitted] course at TAFE since July 2010, with the goal of finding related work upon completing the course at the end of 2011.
The wife made a submission under s.75(2)(h) of the Act, stating that “I’m continuing my TAFE course and intend to do that to the end of the year, which is fulltime and if given the spouse maintenance, that could continue fairly stress free”. With reference to s.75(2)(k), she stated that her earning capacity had decreased during “12 or 13 years” as a “stay-at-home mum”, and that she needed to “undertake and finish a course to get some ability to earn money”.
I acknowledge the wife’s argument that her attendance at TAFE will enable her to obtain an adequate independent income from 2012 onwards, and I also note that due to her Alcohol Abuse Disorder, the wife may have difficulty combining long working hours with full-time TAFE. I see no reason, however, why the wife cannot obtain limited part-time employment with which to supplement her Centrelink allowance while she completes her course of study, particularly as she no longer has the responsibility of caring for the children. I am also of the view that the wife should have a limited period of time to enable her to adjust, to look for work and consider her options.
I note that as at 30 March 2011, the policy of Centrelink is that Newstart allowance payments may be maintained, at least in part, once paid part-time or casual work is entered into. For the information of the wife, I provide the addresses of two relevant pages from the Centrelink website in the footnote to this paragraph.[4]
[4] See and
Conclusion on spousal maintenance
Having regard to the matters addressed above, I order that the husband continue to pay the wife spousal maintenance of $200 per week until
3 July 2011, upon which date the husband’s obligation to pay spousal maintenance will be discharged. For the sake of clarity, the last payment of $200 will be for the week commencing Monday 27 June 2011. In making this order, I have noted the changes in circumstances of the parties as required of me under s.83(2) of the Act, have considered s.75(2) factors, and have in turn exercised the broad discretion afforded by s.83(1)(f).
Conclusion
The husband, in his summary of argument, states that “the cost of the litigation has effectively consumed the parties’ assets which would otherwise be available for distribution.” An examination of the relevant figures proves this statement correct.
Evidence provided to the Court by the husband states that he has paid legal costs of $153,600 to date and owes a further $168,638. The wife, on the evidence of her former legal representative, now the Intervener, has accumulated total invoices of $328,833.98, of which more than half remain unpaid. Taken together, this equates to $651,072 in legal fees, paid and unpaid, that this matter has produced so far, which is to say nothing of the associated costs that have no doubt arisen.
Section 81 of the Act requires that the Court, in conducting proceedings under part VIII of the Act, “shall, as far as practicable, make such orders as will finally determine the financial relationship between the parties of the marriage and avoid further proceedings between them.” It is my opinion that the orders I have made fit this requirement, and I hope that both parties are able to now put the acrimony of the past behind them and work together to ensure the best interests of their children are met.
I certify that the preceding one hundred and sixty-three (163) paragraphs are a true copy of the reasons for judgment of Pascoe CFM
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