Adcock & Sealy (No 2)

Case [2024] FedCFamC1F 123

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Adcock & Sealy (No 2) [2024] FedCFamC1F 123

File number(s): MLC 6991 of 2022
Judgment of: MCNAB J
Date of judgment: 6 March 2024
Catchwords: FAMILY LAW – PROPERTY - De facto relationship - where the relationship is of short duration -where credit findings are made against the applicant -where the quantum of the asset pool is substantial -where the applicant has not made any substantial financial contribution - where the standard of living that has been enjoyed by the applicant during and after the relationship is by her own admission irresponsible and problematic -where it would not be reasonable to factor into orders the continuation of that lifestyle  – where the contributions made by the respondent to the applicant and her children largely satisfy any claim that the applicant has- where property has been purchased in joint names but where the funds have been wholly supplied by the respondent- where an order is made transferring the applicant’s interest in the property upon a payment being made by the respondent.
Legislation:

Family Law Act 1975 (Cth) ss 75(2), 79, 90SE, 90SF, 90SM, 121

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) 10.13, 10.14

Cases cited:

Aroney and Aroney (1979) FLC 90-709

Carmel-Fevia & Fevia [2010] FamCA 502

Carmel-Fevia & Fevia (No 3) [2012] FamCA 631

Guthrie & Ruston [2009] FamCA 1144

Hickey and Hickey and the Attorney-General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143

VAK and AK [2005] FamCA 803

W& W (1980) FLC 90-872

Division: Division 1 First Instance
Number of paragraphs: 95
Date of last submission/s: 1 November 2023
Date of hearing: 30 – 31 October 2023, 1 November 2023
Place: Melbourne
Counsel for the Applicant: Mr A Berger KC
Solicitor for the Applicant: Farrar Gesini Dunn
Counsel for the Respondent: Mr G Dickson KC with Mr K Ryan
Solicitor for the Respondent: Westminster Lawyers Pty Ltd

ORDERS

MLC 6991 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS ADCOCK

Applicant
AND:

MR SEALY

Respondent

ORDER MADE BY:

MCNAB J

DATE OF ORDER:

6 MARCH 2024

THE COURT ORDERS THAT:

1.The Amended Initiating Application of the applicant filed 12 October 2023 be dismissed.

2.The applicant forthwith do all acts and things necessary to transfer (“the transfer") to the respondent, at his expense, all of her right, title and interest in the real property situate at and known as N Street, Suburb B ("N Street").

3.Within 60 days from the date of this order, being 5 May 2024, the applicant vacate N Street.

4.Contemporaneously with the transfer the respondent indemnify the applicant with respect to all liabilities encumbering N Street as and when they fall due.

5.Within 60 days from the date of this order, being 5 May 2024, the respondent pay the applicant the sum of $750,000.

6.The respondent cause Motor Vehicle 1 to be transferred to the applicant and that the applicant retain Motor Vehicle 1 vehicle…

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AGLC
Adcock & Sealy (No 2) [2024] FedCFamC1F 123
Case
[2024] FedCFamC1F 123
Decision Date

CaseChat Overview and Summary

In the case of Adcock & Sealy (No 2), the Federal Circuit and Family Court of Australia (Division 1) addressed a property dispute arising from the dissolution of a de facto relationship. The central issue before the court was the division of assets between Ms Adcock, the applicant, and Mr Sealy, the respondent. The relationship was of short duration, and the applicant had not made any substantial financial contribution to the relationship. The applicant sought to retain the Suburb B property and to be compensated for her contributions and lifestyle. In contrast, the respondent sought to have the property transferred to him and to dismiss the applicant’s claims.

The court considered various factors, including the short duration of the relationship, the substantial financial resources of the respondent, the applicant’s lifestyle, and the contributions made by the respondent. The court found that the applicant’s claim to retain the property was not supported by her financial contributions or the standard of living she had enjoyed during and after the relationship, which she admitted was irresponsible and problematic. The court determined that it would not be reasonable to factor in the continuation of that lifestyle in its orders. The respondent’s contributions to the applicant and her children largely satisfied any claim she had. The property was purchased with funds entirely supplied by the respondent, and it was just and equitable to order the transfer of the applicant’s interest in the property upon payment by the respondent.

The court ordered that the applicant transfer her interest in the Suburb B property to the respondent, who would indemnify the applicant for any liabilities. The respondent was to pay the applicant $750,000 within 60 days and transfer a motor vehicle to her. The applicant was to vacate the property within 60 days of the order. Both parties were to retain their respective assets and liabilities, except as specified in the orders. The court also addressed the division of other assets and liabilities, ensuring that each party was solely entitled to the property in their possession, and that any joint accounts were to be closed with the funds divided equally. The court’s decision was based on a just and equitable outcome, considering the statutory provisions and the specific circumstances of the case.

Orders

Orders of the court

MLC 6991 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS ADCOCK

Applicant

AND:

MR SEALY

Respondent

ORDER MADE BY:

MCNAB J

DATE OF ORDER:

6 MARCH 2024

THE COURT ORDERS THAT:

1. The Amended Initiating Application of the applicant filed 12 October 2023 be dismissed.

2. The applicant forthwith do all acts and things necessary to transfer (“the transfer") to the respondent, at his expense, all of her right, title and interest in the real property situate at and known as N Street, Suburb B ("N Street").

3. Within 60 days from the date of this order, being 5 May 2024, the applicant vacate N Street.

4. Contemporaneously with the transfer the respondent indemnify the applicant with respect to all liabilities encumbering N Street as and when they fall due.

5. Within 60 days from the date of this order, being 5 May 2024, the respondent pay the applicant the sum of $750,000.

6. The respondent cause Motor Vehicle 1 to be transferred to the applicant and that the applicant retain Motor Vehicle 1 vehicle which she is currently in possession of.

7. Unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money under these or any subsequent orders:

(a) each party shall be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date;

(b) monies standing to the credit of the parties in any bank accounts to be the property of the party in whose name such bank account is held save for any joint account in which funds are to be divided equally and the parties do all acts and things to close such joint accounts;

(c) each party hereby foregoes any claims they may have to any superannuation benefit to or owned by the other;

(d) insurance policies remain the sole property of the beneficiary named thereon;

(e) each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to orders made; and

(f) any joint tenancy is expressly severed.

8. Each party otherwise retain all assets and liabilities in their respective names and/or possession.

9. Any application for costs be made in accordance with the Rules of the Court.

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.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Since separation the applicant has resided in the Suburb B property and the respondent has covered all mortgage and utilities and outgoings on the property save for some relatively minor expenses paid by the applicant.EVIDENCE The applicant relied on:(1)Amended Initiating Application filed 12 October 2023;(2)Applicant’s trial affidavit filed 13 October 2023;(3)Affidavit Ms Q filed 23 October 2023;(4)Applicant’s affidavit in reply filed 24 October 2023;(5)Applicant’s Summary of Argument filed 26 October 2023;(6)Financial Statement filed 26 October 2023. The respondent relied on:(1)Amended Response to Initiating Application;(2)Respondent’s trial affidavit filed 9 October 2023;(3)Financial Statement filed 9 October 2023;(4)Respondent’s affidavit in reply filed 23 October 2023;(5)Respondent’s Outline of Case filed 26 October 2023.PROPOSALS OF THE PARTIES The applicant seeks substantially:(1)To retain the Suburb B property at N Street, Suburb B (“the Suburb B property”) in specie. In the alternative the applicant seeks:(1)Sole occupancy of the Suburb B property.Payment(2)That within 60 days of these orders and contemporaneously: (i)the applicant pay to the respondent the sum of $2,000,000 as a settlement sum;(ii)the respondent transfer to the applicant all of his interest in the Suburb B property;(iii)the applicant repay to ANZ the full amount owing against loan account numbered …39 (“the Suburb B loan”);(iv)the parties do all acts and things necessary to discharge ANZ mortgage against the Suburb B property;(v)the respondent cause Motor Vehicle 1 to be transferred to the applicant.(3)That until the due date (property is with applicant) the respondent meet all outgoings on the Suburb B property including:(i)all loan repayments;(ii)rates, insurance and utilities;(iii)reasonable gardening, lawn mowing and general maintenance including of the pool and tennis court. The applicant also seeks a number of chattels including recreational equipment, artwork and greeting cards and letters. The respondent seeks:(1)That the Initiating Application of the applicant be dismissed.(2)The applicant forthwith do all acts and things necessary to transfer (‘the transfer”) to the Respondent, at his expense, all of her right title and interest in the real property situate at and known as N Street, Suburb B (“N Street”).(3)That contemporaneously with the transfer the respondent indemnify the applicant with respect to all liability encumbering N Street as and when they fall due.(4)The applicant forthwith make available for collection Motor Vehicle 1.(5)That unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money under these or any subsequent orders:(a)each party shall be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date;(b) monies standing to the credit of the parties in any bank accounts to be the property of the party in whose name such bank account is held save for any joint account in which funds are to be divided equally and the parties do all acts and things to close such joint accounts;(c) each party hereby foregoes any claims they may have to any superannuation benefit to or owned by the other;(d) insurance policies remain the sole property of the beneficiary named thereon;(e) each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to orders made;(f) any joint tenancy is expressly severed.CREDIT FINDINGS

Decision

Reasons for decision

The respondent gave evidence in relation to s 90SF factors that he is 67 years of age, earns a salary of $200,000 a month in addition to trusts and investment income (which is substantial) and that he is in good health. He gives evidence that since separation he has paid to the applicant an additional $750,000 in addition to various expenses that he has paid for her benefit.CONCLUSION I appreciate the submission that the respondent is a wealthy person who was able to spend the money that he knew he was paying to the applicant and that he was happy to spend that money as part of the relationship with the applicant. He was not happy that his bank accounts had been accessed without his knowledge and that money had been wasted in pursuit by the applicant of what she has now repeatedly acknowledged was an unrealistic and profligate lifestyle. That lifestyle was pursued by the applicant and not the respondent. I also appreciate that, although it was not expressly put as a submission, it can be very difficult for a person who has a relationship with a person who is vastly wealthier than they are, to demonstrate that they have made a financial or non-financial contribution to financial assets, particularly where the relationship is relatively short. That circumstance should not disentitle a person from the benefit of orders in their favour when that relationship comes to an end if it is just and equitable for orders to be made having regard to the relevant statutory provisions and the particular circumstances of the case. Due recognition must be given to the contribution made to the welfare of the family (being in this case the parties to the de facto relationship) pursuant to s 90SM(4)(c). Having regard to the evidence and submissions made, the just and equitable outcome in this proceeding is for the applicant to do all things necessary to sign over her interest in the Suburb B property to the respondent, for her to retain Motor Vehicle 1 vehicle (valued at $30,000) which she is currently in possession of and for the respondent to pay her the sum of $750,000 within 60 days. Otherwise the Court will make orders in accordance with the orders sought by the respondent. There is considerable force to the submissions made by the respondent that the applicant has received, both in the course of the relationship and following, more from the respondent than sufficient to satisfy any claim that she has to retain any share of the Suburb B property. However, the payment of a further sum of $750,000 is just and equitable. I make the order not to afford “palm tree justice” as that expression was used in W& W (1980) FLC 90-872 or to provide a solatium to the applicant but in recognition of the s 90SF(3)(b) factors being the income, property and financial resources of each of the parties and the physical and mental capacity of each of the parties for appropriate gainful employment. The orders also give proper recognition to the non-financial contributions made by the applicant to the welfare of the parties: s 90SM(4)(c).

Ratio Decidendi

Legal Principle Established

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