Carswell & Tenson (2022) FedCFamC1F 467
The July 2022 decision by Smith J of Carswell & Tenson  FedCFamC1F 467 discusses the concepts involved in the Practice Direction and also considers spouse maintenance and interim property settlement.
The case also provides a good set of Orders for the sale of a property by auction and the distribution of proceeds.
It is also interesting in that the court made a notation specifically about the husband’s income and the position of each party as to the husband’s 2021 income.
On 1 April 2022, a Senior Judicial Registrar made certain Orders. They were for spouse maintenance to the wife, partial property settlement to the wife and a dollar-for-dollar payment to the wife for any funds expended in the litigation by the husband from the date of the Orders. The Judicial Registrar also made an Order that in default of payment of the $250,000, a property was to be sold to make the payment.
The husband has filed an application for review and now acts for himself to avoid the impact of the dollar-for-dollar Order.
The husband applied for a stay of the Senior Judicial Registrar’s decision and the application for review was listed before Justice Smith.
Reviews of Registrars’ decisions are a significant part of the everyday process for practitioners given the greater likelihood of an appearance being in front of a Registrar than a Judge.
The wife sought to have the husband’s application for review struck out. She argued that the husband had not complied with the court’s filing directions for court books.
The wife, by this stage, had filed seven Affidavits. As the court said, “In the third and final Affidavit allowed, of the seven Affidavits the wife insisted she was entitled to rely upon, she stated that she sought orders” and these were set out.
The wife in fact sought the same Orders as she had before the Senior Judicial Registrar.
The husband was willing to consent to a partial property distribution to the wife of $150,000, although she had sought $250,000.
The wife was to receive $100,000 and $50,000 was to be deposited into an offset account from which the interest only payments and any fees and charges on that $150,000 were to be paid.
The husband was willing to continue to pay the wife’s weekly rent of $1,295.
The husband had filed an Affidavit of 25 pages and he was permitted to rely on that. He also was allowed to rely on an updating Affidavit of 2.5 pages of text.
The wife had been asked to specify the 25 pages and 10 documents in accordance with the rules upon which she proposed to rely. There was no engagement with the request and a repeated assertion.
The court then asked her to identify what factor meant the application should be exempted from the Rules limiting material to be relied upon. No basis for material in excess of the rules was identified, and she merely maintained her position.
Paragraph 30 of the Judgment is interesting. It provides:
“Litigants with a long purse and a litigious disposition, or who are willing to spend a disproportionate percentage of their net assets on litigation, or with a litigious disposition and the time and inclination to act as their own advocate, have contributed significantly to the notorious delays in the Family Law lists in Australia by taking up a disproportionate amount of the Court’s time while other citizens who abide by the Rules patiently await their turn.”
The court referred to section 63 and the case management provisions of Part 6 Division 4 of the FCFCOA Act as well as the provisions of the Rules such as Rule 5.08.
The court went on to say:
“The wife had a positive obligation pursuant to s 68 to act consistently with the “overarching purpose” pursuant to s 67 of the FCFCOA Act”.
That was extracted and section 67(2) was set out as follows:
(b) the efficient use of the judicial and administrative resources available for the purposes of the Court;
(c) the efficient disposal of the Court’s overall caseload;
(d) the disposal of all proceedings in a timely manner;
(e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.”
At paragraph 35:
“The process of allowing the wife to select segments of different affidavits has further complicated the hearing and determination of this matter. To avoid the risk of confusion identified Franklyn & Franklyn  FamCAFC 256 at  it has been necessary to have the hearing tapes reviewed to confirm the material the wife was permitted to rely upon. This has used Court resources that could have been better applied to other tasks and has delayed the preparation and delivery of this Judgment.”
At paragraph 36:
“As a consequence this matter has taken up more judicial time than it should have.”
The parties own a house that is valued at $6,600,000. The husband has paid legal fees of $242,325 and the wife $325,000.
At paragraph 58, the court said:
“I am satisfied that the wife’s remaining inchoate interest in the matrimonial property, and particularly in Suburb C, would be more than sufficient to cover the claimed interim payment.”
The court then moved to consider the husband’s capacity to pay.
The court said, in paragraph 65:
“I note, for later consideration by a Trial Judge, that in the context of the wife’s many allegations of non-disclosure, and conduct said to be intended to defeat the Court’s capacity to determine the husband’s true financial position, that the husband was specifically put on notice that as a professional, and acting as his own advocate, that if the wife’s current assertions about his conduct of the litigation are established at the final hearing then he should anticipate a referral to the appropriate professional conduct bodies to consider whether he is a fit and proper person to hold a professional licence.”
He explained that his income would have reduced because he had taken two months’ paternal leave following the birth of his child in 2021 and he was working at a reduced capacity since then so as to share the child-caring obligations and endeavouring “not to take on any work that will or have the potential to fall on a day that I have custody of the children”.
It is interesting to the writer to reflect that the child support legislation considers a change in earning capacity in the context of increased carer responsibilities.
The husband said that he had expenses of around $331,000 per year before income tax. His Statement of Financial Circumstances left a net income of approximately $8,200 per week and the husband said that he spent $3,878 per week supporting the children.
The court considered the wife’s capacity for gainful employment.
The wife explained that she was presently home schooling their children and not working. The wife particularly raised Y’s care needs.
Y has been diagnosed with Adjustment Disorder and a probable Autism Spectrum Disorder.
The wife has a business, and the husband asserts she has earning capacity.
The husband pointed to the wife’s tertiary qualifications. She has a Bachelor’s Degree and a Master’s Degree which she obtained after separation, a Bachelor’s Degree obtained after receiving her Master’s Degree, and a Certificate III which she obtained in the last year or so.
The essence of the husband’s case was “that capacity for appropriate gainful employment is based on available skills and not restricted by a desire to work in a field, particularly if that field does not have many apparent opportunities for employment or remuneration”.
The wife’s expenses were investigated.
The court then considered the wife’s ability to adequately support herself.
The court said at paragraph 135:
“The wife is only 44. She suffers from no physical or psychological incapacity. She has a wide range of transferrable skills based on her education, training and experience which would make her a viable candidate for appropriate gainful employment in the current strong labour market, and in her reasonably accessible area at the centre of Sydney.”
At paragraph 139 the court said:
“That earning capacity is, however, subject to the wife’s duties as the primary carer of Y.”
At paragraph 141, the court accepted that the wife’s obligations as primary carer meant that “regular employment was unrealistic”.
The court then considered the wife’s reasonable standard of living.
The court then considered the husband’s capacity to meet spouse maintenance obligations.
The court said at paragraph 154:
“I have the historical material as to his income earning capacity and rely upon that.”
The court then considered the interim property settlement and litigation funding.
The court awarded the wife $250,000 and found that “the wife has no other source of funds, that her likely entitlement on a proper assessment of contributions exceeds $250,000, and that there is little real risk that the payment of this interim sum will mean that a Trial Judge cannot do justice and equity between the parties on a final basis, see for example, Strahan & Strahan (Interim property orders)  FamCAFC 166.“
The court determined to characterise the entire sum as an interim partial property settlement order.
Then the court made default Orders.
This is an interesting case and covers many complex issues.
The court’s comments about compliance are interesting and heed perhaps could be taken of them by practitioners as required.