Absolom & Hallett
[2023] FedCFamC2F 291
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Absolom & Hallett [2023] FedCFamC2F 291
File number(s): ADC 1901 of 2022 Judgment of: JUDGE DICKSON Date of judgment: 17 March 2023 Catchwords: FAMILY LAW – PROPERTY – interim proceedings – partial property settlement – where the husband brings an application for the transfer of a property into his sole name by way of partial property settlement pending Trial – where the husband’s application is brought on the basis that he requires “ financial autonomy “and to obtain a credit card – where the matrimonial asset pool is unknown - where it is not just and equitable for the orders sought by the husband to made at an interim hearing- costs. Legislation: Family Law Act 1975 (Cth) ss 79, 80, 117 Cases cited: Gabel & Yardley [2008] FamCAFC 162
Sresbodan & Sresbodan [2013] FamCA 480
Strahan v Strahan [2009] FamCAFC 166
Division: Division 2 Family Law Number of paragraphs: 36 Date of hearing: 3 March 2023 Place: Adelaide Counsel for the Applicant: Mr Boehm Solicitor for the Applicant: Brite Legal Counsel for the Respondent: Mr Bowler Solicitor for the Respondent: ASW Lawyers ORDERS
ADC 1901 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR ABSOLOM
Applicant
AND: MS HALLETT
Respondent
order made by:
JUDGE DICKSON
DATE OF ORDER:
17 MARCH 2023
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed 17 January 2023 and the Response to Application in a Proceeding filed 21 February 2023 ( “ the interim applications “ ) are dismissed.
2.That at final settlement of the parties competing applications for adjustment of property, the husband do pay the wife’s costs of and incidental to the said interim applications in such sum as the parties agree in accordance with Schedule 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 and in default of agreement as ordered by the Court.
3.The matter be listed for Trial Directions and Management on 15 May 2023 at 10:00am in the D Street, City E Circuit, such hearing to take place in open Court on a face-to-face basis in accordance with Court protocols.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Absolom & Hallett has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE DICKSON
INTRODUCTION
Before the Court are completing interim applications filed by the parties on 10 January 2023 and 21 February 2023 respectively in relation to partial property settlement and ancillary orders.
The interim proceedings came before the Court for argument on 3 March 2023. Each of the parties filed a Summary of Argument which has been considered by the Court.
For the Reasons set out herein the Court proposes to dismiss the interim applications and make an order for costs in favour of the wife.
BACKGROUND
The applicant husband is aged 58 years and the respondent wife is aged 65 years.
The parties were married in 2011 and separated on a final basis on 25 January 2022.
There are no children of the marriage.
On 5 May 2022 the husband filed an Initiating Application seeking Final Orders that he retain the property situate at B Street, Town C in the State of South Australia (‘the B Street, Town C property’) and that the parties otherwise retain all other assets in their respective names or under their control. It is an agreed position that the husband will need to discharge the existing mortgage which is currently in the joint names of the parties and refinance to a mortgage in his sole name at settlement.
By way of Response to Final Orders filed on 29 September 2022, the respondent wife seeks orders that the matrimonial assets be divided between the parties so that the wife receives “70% of the net matrimonial assets after due consideration of the entitlements” of the wife.
The parties attended a Conciliation Conference on 6 October 2022 but were unable to resolve the matter. A Trial has now been listed for 14 November 2023. The parties have agreed to attend a further Conciliation Conference on 28 April 2023. It is anticipated that by the date of the second Conciliation Conference, all available valuation evidence will be to hand.
As at the date of argument the parties had not complied with paragraph 8 of the order made on 29 June 2022 in relation to valuations of the B Street, Town C property and a property purchased by the wife post separation at D Street, City E (‘the D Street, City E property’). The values of the two subject properties are now agreed and reflected in the Balance Sheet below.
The parties have also instructed Mr F of Company G to value the husband’s 40% interest in the company, “H Pty Ltd”, with the valuation available sometime in April 2023.
THE BALANCE SHEET
The assets, liabilities and superannuation of the parties presently can be described as:
Item
Description
Owner
Wife’s value
Husband’s value
1.
B Street, Town C, South Australia
Wife
A $750,000
A $750,000
2.
D Street, City E, South Australia
Wife
A $395,000
A $395,000
3.
Offset account
Husband
NK
$133,000
4.
Motor Vehicle 1
Husband
E $15,000
E $15,000
5.
Boat
Husband
NK
E $15,000
6.
House contents
Wife
E $4,000
E $5,000
7.
Share Portfolio
Wife
E $10,000
E $40,000
8.
40% shareholding in H Pty Ltd, held by J Pty Ltd ATF Absolom Family Trust
Husband
NK
E $100,000
9.
Personal savings
Husband
NK
E $4,800
10.
Personal savings
Wife
E $9,032
NK
TOTAL VALUE OF ASSETS
E $1,183,032
E $1,457,800
LIABILITIES
1.
Home Loan secured against B Street, Town C property
Joint
E $386,459
E $394,000
2.
Loan from parents
Husband
Opposed
$35,000
TOTAL VALUE OF LIABILITIES
E $386,459
E $429,000
NET NON-SUPERANNUATION POOL TOTAL
E $796,573
E $1,028,800
SUPERANNUATION
21.
Husband’s super
Husband
NK
$410,000[1]
22.
Wife’s superannuation
Wife
$255,000[2]
NK
TOTAL VALUE SUPERANNUATION
E $255,000
E $410,000
NET ASSET POOL (Inc. Superannuation) TOTAL
E $1,051,573
E $1,438,800
[1] Taken from the husband’s Financial Statement filed 4 May 2022.
[2] Taken from the wife’s Financial Statement filed 29 September 2022.
The parties are in agreement that the wife will retain the D Street, City E property and that the husband will retain the B Street, Town C property subject to any orders that may be made at Trial for payment of a settlement sum.
The parties are in dispute over a number of issues, including but not limited to:
(1)The value of the assets introduced by each of them at the commencement of the relationship;
(2)The financial and non-financial contributions made by each of them during the relationship;
(3)The weight to attach to a redundancy package received by the wife in 2011 which was utilised to pay down a mortgage secured over a previous property occupied by the parties at D Street, City E;
(4)Whether or not cash payments made by the husband’s parents during the relationship should be categorised as a “loan” or a “contribution” and further, whether such sums should be included as matrimonial liabilities; and
(5)Whether or not there should be an adjustment in favour of the wife on account of the disparity in the parties’ ages and their respective incomes, and with the wife alleging that she has a number of health problems which impact on her capacity to work.
LEGAL PRINCIPLES
The law in relation to interim property settlements in this jurisdiction is well established.
If an interim property order is to be made, the order must be granted under a power to make such orders and the issues attaching to the exercise of such power must be taken into account.
In this case the husband seeks an order for partial property settlement pursuant to section 79 of the Family Law Act1975 (‘the Act’) which confers on the Court a power to make orders for the adjustment of property between parties. While there is only a single exercise of power under section 79, the Court may exercise the power through “a succession of orders until the power ... is exhausted” or until a final order dealing with all the known property of the parties is made.[3]
[3] Gabel & Yardley [2008] FamCAFC 162 at [57] (Bryant CJ and Coleman J).
The overarching consideration is the interests of justice. Whilst it is not necessary for an applicant to establish compelling reasons, the majority of the Full Court have held that regard is to be had to the fact that the usual order pursuant to section 79 of the Act is a “once and for all order made after a final hearing.”[4] This has been referred to as the ‘procedural step.’
[4] Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 (Boland, Thackray & O’Ryan JJ).
The second stage is the ‘substantive step’. With respect to the second stage of the process, the majority have held that:
In relation to the second matter, as the jurisdiction under s 79 of the Act is being exercised the provision of that section must be considered and applied but with limitations given that it is not the final hearing. There is also no requirement of compelling circumstances in relation to the substantive step.[5]
[5] Ibid [135].
A “conservative approach” is said to apply to any interim application because the Court is not able to properly evaluate the evidence.[6]
[6] Sresbodan & Sresbodan [2013] FamCA 480.
It is considered sufficient if the applicant would be likely to receive by way of property settlement a sum sufficient to cover the advance. This is commonly referred to as the ‘claw back issue.’[7]
[7] Ibid [137] per Boland & O’Ryan JJ.
In exercising the power under section 79 of the Act, it is important for the Court to ensure that it is just and equitable to make the order sought in circumstances where the power will not be exhausted by an interim order.[8]
[8] Ibid [136] per Boland & O’Ryan JJ.
The interim order must be capable of variation or reversal without variation or reversal without recourse to section 79A of the Act or appeal.[9]
[9] Gabel & Yardley [2008] FamCAFC 162.
Importantly, more is required than the mere fact that upon a final hearing an applicant would receive the property being sought (or an amount in excess of funds being sought) from the other party.[10]
[10] Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 [139].
The exercise of jurisdiction should be conducted in the context of and with the appreciation that as a generality, the interests of the parties and the Court are better served by there being one final hearing of section 79 proceedings.[11]
[11] Sresbodan & Sresbodan [2013] FamCA 480.
In this case, the Court is being asked by the husband at this interim stage to transfer the B Street, Town C property to him and to enable a mortgage to be secured in his sole name. The husband consents to an order restraining him from further encumbering or dealing with the property pending final orders being made.
The application is said to be brought because:
(1)The wife’s actions are alleged to “have undermined” the husband’s ability to “manage his finances” and those associated with the B Street, Town C property by cancelling joint credit cards and causing joint bank accounts to be “frozen”; and
(2)The husband has allegedly been unable to obtain a personal credit card to replace the joint credit card allegedly cancelled by the wife due to “his personal financial position and having no legal title to the property.”[12]
[12] See the husband’s Outline of Case Document at page 1.
It is alleged by the husband that, because of these reasons, it is “in the interests of justice” for orders to be made as sought by him.
CONCLUSION
In this case the Court has come to the conclusion that the husband’s Application in a Proceeding is to be refused.
The application is to be refused because:
(1)The net value of the matrimonial asset pool is far from being confirmed. A valuation of the husband’s interest in ‘H Pty Ltd’ is pending. The Court cannot ignore the potential for this figure to impact on the bottom line of the assets to ultimately be retained by the husband;
(2)There is no independent evidence that the husband has applied for and been rejected for a credit card in his sole name from any financial institution because the B Street, Town C property is in the sole name of the wife. Nor is there any evidence that the husband is in financial difficulty such as to enliven the Court’s jurisdiction;
(3)Even if there were evidence of the kind referred to in (2) above, the Court would struggle to make an order transferring a property from the name of one party to the other based on this issue alone;
(4)The husband’s desire for “ financial autonomy “ is not a matter that the Court considers at this interim stage as sufficiently compelling so as to exercise its discretion to make an order for interim property settlement as the husband seeks; and
(5)If successful on this application, there is the potential for the husband to refinance the existing joint mortgage into his sole name only to then repeat the exercise if he is required to pay the wife a settlement sum. If the husband cannot so refinance then the B Street, Town C property will need to be sold.
I am not persuaded on the evidence before me that it is just and equitable to make such an order as sought by the husband in his application and accordingly the application shall be dismissed.
COSTS
The wife seeks an order for costs.[13]
[13] See the wife’s Response to an Application in a Proceeding filed 21 February 2023 at page 3.
Subject to a number of exceptions, each party to proceedings under this Act shall bear his or her own costs.[14]
[14] Family Law Act (Cth) s 117(1).
The Court, however, has the power to make an order for costs if it is satisfied that certain circumstances so justify an order being made.[15]
[15] Ibid s 117(2).
On the facts of this case, the Court considers that section 117(2A)(a) and (e) are relevant in considering the wife’s costs application. An order for costs is justified but the Court proposes to exercise its discretion such that the costs will be paid pursuant to Schedule 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 and are to be adjusted as part of the final settlement in favour to the wife.
For all of these Reasons, the Court makes the orders as set out at the commencement of this Judgment.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Dickson. Associate:
Dated: 17 March 2023
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