ABAIR & SARINEN

[2020] FCCA 1212

FEDERAL CIRCUIT COURT OF AUSTRALIA

ABAIR & SARINEN [2020] FCCA 1212

Catchwords:
FAMILY LAW – Property settlement – undefended hearing – orders made.

Legislation:

Family Law Act 1975 (Cth), ss.121(9)(g),75(2),75(2)(o),79(2)

Family Law Rules 2004 (Cth), r.7.02, r.17.02A(b)

Cases cited:

Lotta & Lotta [2017] FamCA 50

Applicant: MR ABAIR

Respondent: MS SARINEN

File Number: PAC 5998 of 2017

Judgment of: Judge Newbrun

Hearing date: 20 February 2020

Date of Last Submission: 20 February 2020

Delivered at: Parramatta

Delivered on: 13 March 2020

REPRESENTATION

Solicitors for the Applicant: There was no appearance for the Applicant

Solicitors for the Respondent: King & York Lawyers - Mr Seeney

ORDERS

1. That within 90 days of the making of these orders, the applicant husband do all such acts and sign all necessary documents to transfer to the respondent wife his right, title and interest in the former matrimonial home situated at A Street, Suburb B (“A Street, Suburb B property”).

2. That contemporaneously with the transfer set out above in order 1, the parties do all such acts and things and sign all necessary documents so as to discharge the mortgage on the subject property and replace it with a mortgage in the respondent wife’s sole name;

3. Once the transfer has occurred, the respondent wife shall forever indemnify the applicant husband against all rates, taxes, statutory charges, mortgage repayments, debts and other outgoings affecting or associated with the A Street, Suburb B property.

4. Simultaneously with the transfer as set out in order 1, the husband shall vacate the A Street, Suburb B property forthwith.

5. If the wife is unable to secure the necessary finance required to effect order 2, then both parties shall take all necessary steps and execute all necessary documents to cause the A Street, Suburb B property to be sold by private treaty at the earliest possible date at a price to be agreed on between the parties and failing such agreement to be determined by the proper officer of the Real Estate Institute of New South Wales or their nominee and that the proceeds of the said sale be disbursed as follows:

   (a)Payment of agent’s commission and advertising expenses and legal expenses of the sale;

   (b)Payment of any money due and owing to the mortgagee;

   (c)The net balance to be transferred directly to the wife’s nominated bank account.

6. That in the event that the A Street, Suburb B property fails to be sold by private treaty within a period of 3 months hereof, then each party take all necessary steps and execute all necessary documents to cause the said property to be sold by auction at the earliest possible date at a reserve to be agreed upon between the parties and failing such agreement to be determined by the proper officer of the Real Estate Institute or their nominee and that the proceeds of the said sale be disbursed as follows:

   (a)Payment of agent’s commission and advertising expenses and legal expenses of the sale;

   (b)Payment of any money due and owing to the mortgagee;

   (c)The net balance to be transferred to the wife.

7. The wife has sole discretion to nominate and appoint the real estate agent required for the sale of the A Street, Suburb B property.

8. That the parties retain all their right title and interest in and to their superannuation entitlements and have no further claim on such entitlements of the other.

9. That, except as otherwise provided herein, each party respectively be and remain entitled, to the exclusion of the other, to all other property in that party’s possession, control or name.

10. That, except as otherwise provided herein, each party be and remain solely responsible in relation to any and all liabilities presently in the name of each of them respectively. Each party shall indemnify the other in respect of all actions, claims suits and demands as may be made against the other party.

11. That the respondent and applicant do all acts and things and give all consents and execute all documents and writings necessary to give effect to the orders made herein.

12. That in the event that either party refuses or neglects to execute any deed or instrument, the registrar of the court be appointed pursuant to section 106A of the Family Law Act 1975, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.

13. Pursuant to rule 16.05 of the Federal Circuit Court Rules 2001, the court or registrar may set aside or vary an order if it was made in the absence of a party. Any application by the husband pursuant to rule 16.05 of the Federal Circuit Court Rules 2001 to vary or set aside the above property orders shall be made within 14 days of being notified of such orders.

14. All outstanding Applications and Responses are dismissed and the proceedings removed from the list.

IT IS NOTED that publication of this judgment under the pseudonym Abair & Sarinen is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 5998 of 2017

MR ABAIR

Applicant

And

MS SARINEN

Respondent

REASONS FOR JUDGMENT

1. These are reasons for judgment relating to an undefended hearing held before the court on 20 February 2020 relating to property proceedings.

2. The wife appeared and legally represented; the husband failed to appear in person, however, he had filed and served trial-related documents.  In his written argument document, he husband referred to the death of his parents, and stated that:

   Due to that reason, the applicant is unable to travel overseas.  I am submitting my written arguments under the review of honourable Court.

3. At page 6 of that written argument document, under the health “Plea”, the husband states:

   Please accept my application on merits and decide the documents already submitted to the honourable Court.  The death certificates of my both parents are enclosed with my written arguments under the review of honourable Courts.

   In the circumstances, and observing that these proceedings were set down for hearing on 7 January 2020, it is in the interests of justice that the Court proceed to determine on a final basis these property proceedings.

4. In relation to property proceedings, the husband sought final property orders, as set out in his Initiating Application filed 30 November 17 (see paragraphs 1-8 inclusive of that document).

5. The wife sought orders, as set out in her Amended Response filed by her on 30 January 2020.  Effectively, the wife sought property orders that she receive the whole of the net equity in the parties’ former matrimonial home at A Street, Suburb B; and that each party retain, to the exclusion of the other, all other property in that party’s possession, control or name (and in this context, the Court observes that two Country C properties are presently registered in the name of the husband, and each party has superannuation entitlements in their separate names). 

6. The Court has had regard to the wife’s material set out on page 2 of her case outline, dated 19 February 2020, including that case outline.  She also relied upon paragraphs 9 and 17 of the husband’s affidavit filed 1 March 2018 relating to two particular Country C properties having been transferred into the husband’s name;  one in 2005 - 2006, and the second in 2016.  She also relied upon her financial statement filed 30 January 2020. 

7. The Court has had regard to the husband’s material, comprising of his written argument document, his affidavit filed 10 February 2020;  his affidavit filed 12 February 2020;  and his Financial Statement filed 12 February 2020. 

Financial Disclosure

1. The husband asserts that the wife failed to make financial disclosure adequately to him in various respects.  However, the wife’s trial affidavit expressly refutes these assertions of the husband, giving reasons.  By reason of the husband’s failure to attend the trial of these proceedings, he has deprived the wife’s side of cross-examining him on this issue.  The Court does not accept that the wife failed to make adequate financial disclosure to the husband.

2. The wife asserts that the husband failed to make financial disclosure adequately to her in various respects, and, in this regard, the Court refers to paragraph 186 of the wife’s trial affidavit, including annexure L to that affidavit.  In annexure L, a letter dated 22 October 18 from the wife’s solicitors to the then-husband’s solicitors, the wife’s solicitors refer to various bank transactions of the husband, which are unexplained by him;  the total of the particularised withdrawals is some $10,440.

3. The Court finds that the husband has failed to make adequate financial disclosure to the wife in relation to this sum of $10,440. Such nondisclosure will be taken into account in favour of the wife under section 75(2)(o) of the Family Law Act 1975 (the Act). 

Evidence

1. At the outset, the Court should state that where the parties’ respective factual assertions in their evidential material are in conflict with the other, then the court prefers the evidence of the wife by reason of the husband failing to attend in person the trial of the proceedings, and thereby having deprived the wife of cross-examining him through her counsel. 

2. The parties married in 1997, initially living in Country C.  The husband first came to Australia in 2003.  The wife followed and came to Australia in 2004.

3. The parties had three children; the eldest child is now aged 21 years, the second oldest, 19 years, and the youngest child now 11 years.  The wife is the primary carer of the youngest child.

4. Again, two Country C properties were transferred into the husband’s name from his late father; one in 2005-2006, and the second in 2016.  The husband’s late father died in 2019. 

5. The parties separated in about February 2017.

6. The Court refers to its findings under the headings “Contributions” and “Section 75(2)”.

Legal Principles: Property

1. In Lotta & Lotta [2017] FamCA 50, Foster J stated:

   The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman [2014] FamCAFC 91 and Scott & Danton [2014] FamCAFC 203.

   The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.

   Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.

   There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.

   In many cases this requirement is readily satisfied where the parties are no longer in a marital or defacto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.

   In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here the wife seeks an order for adjustment of property and the husband contends that there should be no such adjustment.

   It is thus important to ascertain the present property and resources of the parties so as to facilitate a consideration of the s 79(2) question.

   In some circumstances it is not possible to determine whether it is just and equitable to make adjustment orders as to the parties present property rights without a consideration of s 79 (4) matters.

   Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g) in particular the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).

   The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell [1999] FamCA 1875; (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.

2. The Court finds the parties’ relevant assets and liabilities for the purposes of property adjustment to be as follows:

Assets:

a)In the parties names:

i)Former matrimonial home at A Street, Suburb B:  $720,000

1. The Court disregards the itemised assets on the wife’s balance sheet, exhibit A, being items 5 to 14, there being no significant evidence indicating that such itemised assets are matrimonial assets of the parties.  Similarly, the court disregards the husband’s asserted assets, apart from his itemisation of the former matrimonial home, in paragraph 60 of his trial affidavit, in the sum of $720,000.

   b)In the husband’s name:

   i)Real estate:  plots 1 and 2, D Town:  $242,341

2. The Court observes that the husband, in his written argument document, states in paragraph 58:

   I accept the submitted valuation of expert valuer Mr E, which already been submitted to honourable Court.

   The valuations of Mr E are the wife’s valuations of these two Country C properties.  In any event, the Court would have preferred Mr E’s valuations, by reason of that valuer having provided a persuasive critique of the husband’s own valuation.

Liabilities:

c)Mortgage loan outstanding balance over the former matrimonial home:  $379,330.

1. The Court disregards the itemised liabilities on the wife’s balance sheet, exhibit A, being items 18 to 31, there being no significant evidence indicating that such itemised liabilities are matrimonial debts of the parties.  Similarly, the Court disregards the husband’s asserted liabilities, apart from his itemisation of the mortgage loan (with the Court accepted the wife’s up-to-date outstanding mortgage loan balance in her balance sheet) in paragraph 60 of his trial affidavit. 

Superannuation:

d)Husband:  $80,000.

e)Wife:  $194, 235.

1. From the above, it can be seen that the parties’ net non-superannuation assets are $583,011, the wife’s superannuation entitlement is $194,235, and the husband’s superannuation is $80,000.  The total asset pool is, accordingly, $857,246.

Section 79(2) of the Act

1. The Court is satisfied that it is just and equitable in this case to alter the property interests of the parties in light of the breakdown of their relationship, the fact that they will no longer have the joint use and enjoyment of their property, and the fact that the continuance of the current legal ownership of their property would not afford them justice and equity. 

Contributions

1. The Court adopts a two pool approach;  there is a paucity of evidence relating  to the history of the parties’ superannuation contributions. 

Pool A: Non-superannuation assets

1. The wife made a direct financial contribution towards the purchase of the former matrimonial home in the sum of $22,000 in about 2007.  The purchase price of the property was about $421,000. 

2. The husband acquired the first Country C property (plot 1) from his late father in 2005-2006. 

3. The second Country C property (plot 2) was acquired by the husband from his late father in 2016.

4. In relation to the two Country C properties in the name of the husband, the Court does not accept that the husband has any legal obligation to pay or repay to his late father’s estate any sum of money pursuant to any alleged arrangement that the husband had with his father at the time those properties were transferred into the name of the husband.  The husband has adduced no evidence of any legal obligation to so repay to his late father’s estate any such sum of money.

5. From 2007, the parties pooled their incomes into a joint account, however, the wife’s contributions always exceeded the husband’s contributions as a result of her greater income throughout the relationship.  From this joint account, the parties paid the mortgage loan and general household expenses. 

6. With the exception of brief periods of maternity leave, the wife was in paid employment prior to, and throughout the marriage.  She mostly worked five days a week throughout the marriage.  The husband was in paid employment during the relationship. 

7. During the parties’ relationship and post-separation, the wife has been the primary homemaker and carer of the children.  These were significant contributions made by her. 

8. The Court finds that since separation the husband has had limited to no involvement with the children and has not spent any time with them since he left Country C in 2018.

9. Post-separation, the wife has made the repayments on the mortgage loan in respect of the former matrimonial home (including payment of its other outgoings), apart from the husband’s payment of $100 per week towards a mortgage loan since June 2017 and up to May 2018.

10. Post-about mid-2018, the wife has been solely responsible for the household expenses.  She has also paid all the costs associated with the children’s care, welfare and development, including school fees. 

11. From the above findings, it can be seen that during the parties’ relationship and post-separation, not only did the wife make superior financial contributions through her greater income and employment, compared to the husband, but she also was the primary homemaker and carer of the children.  In relation to both Country C properties, the husband paid no sum of money to his late father for the transfers.  And the Court observes, and takes into account, that the first Country C property was held by the husband over the course of the parties’ relationship of about 20 years.

12. Taking into account the above matters, and viewing the parties’ overall contributions holistically, the Court assesses the parties’ contributions to non-superannuation assets, as the present time, to be 60 per cent to the wife and 40 per cent to the husband.  That results in a disparity of about $116,602 in favour of the wife in relation to non-superannuation assets.

Pool A: Section 75(2)

1. The wife will remain the primary carer of the youngest child, age 11 years.  There is a significant prospect that the husband will not reliably make payments of child support in the future, noting the husband has made no significant payments of child support to the wife post-separation. 

2. The Court observes from the wife’s Financial Statement that her weekly personal expenditure exceeds her weekly income. 

3. The wife is presently in paid employment.  The husband asserts that he is unemployed, however, he fails to adduce evidence as to why he will be unable to obtain significant employment, either in Country C or Australia.  Nevertheless, it would appear the wife’s earning capacity significantly exceeds the husband’s earning capacity insofar as employment is concerned. 

4. The husband appears to be in good health.

5. The wife suffers from Parkinson’s disease (young onset Parkinson’s disease).  It is likely that the wife will be liable to pay significant costs for treatment, including medications in relation to this condition ($400 per month approximately for medications). 

6. The Court takes into account, pursuant to section 72(2)(a), the husband’s failure to make adequate financial disclosure, as previously discussed in these reasons.  Taking into account the above matters, there should be an adjustment in favour of the wife of 10 per cent.  This results in an adjusted contributions finding for Non-superannuation assets of 70 per cent in favour of the wife and 30 per cent in favour of the husband.

Pool B:  Superannuation Assets

1. There is a paucity of evidence relating to the history of the parties’ respective superannuation entitlements. 

2. There is no evidence relating to the value of the parties’ superannuation entitlements as at commencement of cohabitation or separation. 

3. There is no evidence of direct financial contributions made by one party to the other’s superannuation entitlement, either during the relationship or post-separation, to date.

4. There is no persuasive evidence of any significant indirect contribution made by either party to the other’s superannuation entitlement, either during the relationship or post-separation to date.  In any event, even if there could be found to exist some indirect contribution by either party, it is unquantifiable by reason of the paucity of evidence before the Court.

5. The Court finds that the parties’ made no relevant contributions to the other’s superannuation entitlements. 

Pool B: Section 75(2)

1. There is a significant disparity in the parties’ respective superannuation assets. 

2. The Court refers to its discussion above, relating to section 75(2), under pool A. 

3. The husband is 52 years and the wife 49 years;  both parties have significant years ahead of income earning potential before retirement.  There is no call for an adjustment under section 75(2) by reason of the parties’ disparate superannuation entitlements. 

Justice and Equity

1. Pursuant to the Court’s contribution findings, adjusted under section 75(2), the wife should receive 70 per cent of the non-superannuation assets ($583,011) amounting to $408,107.  Pursuant to those findings, the husband should receive 30 per cent of such assets, amounting to $174,903.  Each party should retain their respective superannuation entitlements.

2. However, the wife took a pragmatic approach at the undefended hearing;  she again sought final property orders resulting in her receiving the total net equity in the former matrimonial home, retaining her superannuation entitlements, with the husband to retain the two Country C properties and his superannuation entitlements.  Summarising, this pragmatic approach of the wife results in the following: 

   – Wife receives:

   – net equity in former matrimonial home: $340,670

   – her superannuation entitlement:  $194,235.

   – Husband receives: 

   – two Country C properties:  $242,341

   – his superannuation entitlement:  $80,000.

3. Accordingly, the wife would receive and/or retain the total sum of $534,905, representing about 62.40 per cent of the total asset pool.  The husband would receive the total sum of $322,341, representing about 37.60 per cent of the total asset pool. 

4. Despite the Court’s contribution findings, adjusted under section 75(2), the Court is of the view that this pragmatic approach will result in a just and equitable property settlement between the parties.  The wife will be able to stay in the former matrimonial home with at least the youngest child, and continue to pay the mortgage loan.  The husband will retain the two Country C properties and his superannuation entitlement, and again, he continues to have a work capacity in employment. 

5. The Court makes orders accordingly.

6. The Court makes orders 1 to 12 inclusive of the wife’s proposed property orders, set out in annexure A to her amended response filed 30 January 2020.

7. Pursuant to rule 16.05 of the Federal Circuit Court Rules 2001, the Court or a registrar may set aside, or vary an order, if it was made in the absence of a party. Any application by the husband, pursuant to rule 16.05, to vary of set aside the above final property adjustment orders shall be made within 14 days of being notified of such orders.

I certify that the preceding fifty seven (57) paragraphs are a true copy of the reasons for judgment of Judge Newbrun

Associate: 

Date: 22 May 2020