Balen & Balen
[2022] FedCFamC2F 336
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Balen & Balen [2022] FedCFamC2F 336
File number: SYC 5731 of 2015 Judgment of: JUDGE MORLEY Date of judgment: 25 March 2022 Catchwords: FAMILY LAW – Property – final undefended hearing –matter has had a protracted litigation history – circumstances preventing matter proceeding to final defended hearing – Respondent dropped out of proceedings in adjourned period – delay in the matter proceeding to final undefended hearing – matter proceeds to final undefended hearing as against the Respondent.
FAMILY LAW – Property – consideration of involvement of third party caveators on former matrimonial home – unknown to Court at times whether caveators have or have ever had a caveatable interest – failure to participate by third party caveators – matter proceeds on an undefended basis as against third party caveators.
FAMILY LAW – Property – short marriage – Court finds that the Applicant made 95% of contributions – Court finds that Respondent made 5% of contributions – pattern of badgering and demanding conduct by the Respondent to the Applicant to change her financial circumstances – at cohabitation Respondent was an undisclosed undischarged bankrupt –Applicant’s financial position dramatically worsened by the Respondent’s actions during the short marriage – adjustment under section 79(4)(e) of 5% to the Applicant.
Legislation: Family Law Act 1975 (Cth) ss 4AB, 75, 79, 79A, 90AE, 90AF, 92, 117.
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 6.01.
Federal Circuit Rules 2001 (Cth) rr r 15.12, 15A.11, 15A.15, 24.03, 24.04.
Legal Profession Uniform Law Australian Solicitors Conduct Rules 2015 (NSW) r 3.
Cases cited: Anastasio & Anastasio [1981] FamCA 76
Calverley v Green (1984) 155 CLR 242
Chancellor & McCoy [2016] FamCAFC 256
Dickons & Dickons [2012] FamCAFC 154
Fields & Smith [2015] FamCAFC 57
Fontana & Fontana [2018] FamCAFC 63
Grier & Malphas (2017) 55 Fam LR 107
Hepworth v Hepworth (1963) 110 CLR 309
Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395
In the Marriage of Black (1992) 106 FLR 154
In the Marriage of Harris (1991) 104 FLR 458
In the marriage of Kowaliw (1981) FLC 91-092
Jabour & Jabour [2019] FamCAFC 78
Kennon v Kennon (1997) 139 FLR 118
Melville & Melville (No 3) [2020] FamCAFC 231
Newett & Newett [2020] FamCAFC 76
Stanford & Stanford (2012) 247 CLR 108
Division: Division 2 Family Law Number of paragraphs: 246 Date of last submission/s: 2 August 2021 Date of hearing: 7 May 2021 Place: Sydney Counsel for the Applicant: Ms Snelling Solicitor for the Applicant: Suanne Wyman & Associates Solicitor for the Respondent: The Respondent did not appear ORDERS
SYC 5731 of 2015 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS BALEN
Applicant
AND: MR BALEN
Respondent
ORDER MADE BY:
JUDGE MORLEY
DATE OF ORDER:
25 MARCH 2022
THE COURT ORDERS THAT:
1.Pursuant to section 79 of the Family Law Act 1975 (Cth):
(a)That within 28 days from the date of this order, the Respondent Husband Mr Balen (‘the Respondent’) do all acts and things and sign all documents necessary so as to transfer to the Applicant Wife Ms Balen (‘the Applicant’) all of his right title and interest in the property known as C Street, Suburb D in the State of New South Wales being all that land contained in Certificate of Title Folio Identifier …(‘the matrimonial home’).
(b)That simultaneously with order (a) herein, the parties do all acts and things and sign all documents necessary so as to discharge the mortgages secured on the matrimonial home with registration numbers … and …, and that the Applicant refinance the property into her sole name.
(c)That the Respondent (pursuant to section 80) and Company E (pursuant to section 90AE) jointly and severally without delay do all such things and take all such steps as are necessary to remove the caveat on the title to the former matrimonial home.
(d)That the Respondent (pursuant to section 80) and Company F (pursuant to section 90AE), jointly and severally without delay do all such things and take all such steps as are necessary to remove the caveat on the title to the former matrimonial home.
(e)That the parties retain all their right title and interest in and to their respective superannuation entitlement and have no further claim on such entitlements of the other.
(f)That other than as otherwise set out in this agreement the parties have the sole right title and interest in any other property which is at the date hereof in their possession, title or that they shall be solely liable for and indemnify the other against any personal liabilities.
2.That in the event that either party or any of Company F or Company E refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to section 106A, 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.
3.That each party pay their own costs of these proceedings.
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 Balen & Balen has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MORLEY:
Look, the Applicant Wife after a marriage of – a relationship of 14 months has been put through what I would describe as almost torture trying to get the property issues resolved.
The aforementioned was expressed by counsel appearing for the Applicant Wife at the undefended hearing of this matter. I cannot but concur with that assessment.
These Reasons for Judgment relate to property proceedings between Ms Balen (‘the Applicant’) and Mr Balen (‘the Respondent’). As will be clear from the extracted litigation history of this matter that follows this introduction, the matter came before me for final defended hearing, was adjourned ‘not commenced’ to 2020, and then proceeded on an undefended basis over a series of Court events between 2020 and 2021.
HISTORY OF THE PROCEEDINGS
I have had recourse to the complete Court record as regards the history of this litigation. Where I have not explicated portions of the litigation, I say that I have nonetheless have had full regard to them.
The matter was commenced by the Applicant filing her Initiating Application and supporting material on 1 September 2015. At that time, the Applicant sought that:
(1)The Respondent transfer his right, title, and interest in the real property at C Street, Suburb D (‘the C Street, Suburb D property’) to her;
(2)Simultaneous with item 1, the parties discharge the mortgages secured on title and the Applicant refinance the property into her sole name;
(3)Each party otherwise keep their right, title, and interest in all other property in their sole name, including superannuation.
Her Honour Judge Henderson (as her Honour then was) made directions on 17 November 2015 for the Respondent to file Response material, and her Honour adjourned the matter to 11 December 2015.
The Respondent filed his Response material on 9 December 2015, with solicitors on record on the documentation. In his Response, he sought:
(1)A sale of the C Street, Suburb D property with the proceeds of sale divided equally between the parties; and
(2)Each party otherwise keep their right, title, and interest in all other property in their sole name, including superannuation.
On 11 December 2015, her Honour made orders for the parties to attend a Conciliation Conference on 3 May 2016, and otherwise adjourned the matter to 30 June 2016.
The matter did not settle at the Conciliation Conference.
On 16 June 2016, the Respondent filed a Notice of Address for Service, indicating he was acting for himself, but still including an email address for his former solicitor.
On 29 June 2016, the Respondent filed an affidavit sworn by him prepared with the assistance of new solicitors, who at that time were not on record for the Respondent. The affidavit purports to “correct errors” in the affidavit field in support of his Response.
When her Honour mentioned the matter on 30 June 2016, the Respondent’s solicitors had withdrawn from the matter. Her Honour made orders for valuations of marital property to be undertaken and filed by 2 September 2016. The Respondent was also ordered to “provide all profit and loss statements and financials, income tax returns, BAS statements for G Pty Ltd and his personal tax returns within 28 days.”
On 27 October 2016, the Applicant filed an affidavit affirmed or sworn by Mr H on 21 September 2016. Mr H valued the C Street, Suburb D property at $875,000. It is evident on the face of that valuation that it was prepared as a joint valuation, indicating the Respondent’s solicitors as the same firm who prepared his 29 June 2016 affidavit, notwithstanding they were not formally on the record as at that time.
When the matter came before her Honour on 1 November 2016, her Honour adjourned the matter for a Call-Over for the allocation of hearing dates on 25 September 2017. A notation was made that the parties would “endeavour” to attend private mediation.
The Call-Over was adjourned to 6 March 2018 and parties were notified by her Honour’s Chambers.
On 29 January 2018, a different firm of solicitors filed a Notice of Address for Service for the Respondent. This was the third firm of solicitors involved in these proceedings for the Respondent.
On 1 May 2018 the matter came before his Honour Judge McGuire (as his Honour then was) for Call-Over. I surmise that this would have been one of the Chief Judge’s seasonal initiatives to investigate stagnant matters.
His Honour made orders adjourning the matter to Judge Henderson for Call-Over on 7 September 2018 and, as characteristic of his Honour’s ever-observant and pragmatic attitude (of which I remain a great admirer), his Honour made the following notation:
This matter has had the benefit of a lengthy mediation before Ian Coleman SC unsuccessfully and some judicial intervention at the call over without success. Its [sic] a short marriage of approximately 1 year duration with asserted overwhelming contributions by one party. The husband is a discharged bankrupt it is the view of the call over Judge that further mediation would be futile [sic]. No objection by either party to Judge McGuire conducting the trial.
The Applicant filed an affidavit on 29 June 2018 sworn by her. Nothing turns on that affidavit for present purposes.
On 5 September 2018, the matter came again before her Honour Judge Henderson for mention. The matter was stood over for a further Call-Over on 11 March 2019. I note the notation her Honour made:
It is the courts [sic] view that the husband’s response that he receive 50% of the current matrimonial pool is not an order the court could make, if the wife’s case that she contributed more than 50% to the acquisition of the former matrimonial home from pre-acquired assets, is accepted.
By this point, the Respondent had received at least two written indications from the Court that his application for a 50% property adjustment was not likely to be realistic.
The Applicant filed a Notice of Address for Service on 5 September 2018. That document has been lost from the Court file, though I note nothing tremendous turns on this document in circumstances where the Applicant’s long-time solicitors came back on record on 21 September 2018.
On 4 October 2018, the Respondent filed an affidavit by Mr J, valuer, containing an ‘adversarial’ valuation report of the C Street, Suburb D property. Pursuant to the then-operational rules of Court, the Respondent was not at liberty to file this evidence without the leave of the Court.[1] Mr J’s report valued the C Street, Suburb D property at $1,000,000.
[1] See especially Federal Circuit Court Rules 2001 (Cth) r 15.12.
The matter finally came before me for the first time on 3 May 2019 for Call-Over. I listed the matter for a two day hearing in October 2019, and made relevant and ordinary trial directions.
Both parties amended their applications before the Court prior to the hearing. For the Applicant, she sought additional orders requiring the Respondent and Company E (‘Company E’) to remove a caveat on title to the C Street, Suburb D property, and a ‘fall-back’ order providing for a Registrar to execute any discharge document should either the Respondent or Company E fail to do so. The caveat in question lodged by Company E was lodged around April 2018, the Applicant having received a Notice of Caveat in the mail on 13 April 2018. The caveat was lodged by Company E consequent upon a loan agreement in existence between them and G Pty Ltd (‘G Pty Ltd’).
The Respondent still sought a sale of the property and distribution of the sale proceeds, amending the amount sought by him to $200,000 with the balance to go to the Applicant. He also sought an order for the Applicant to sign all documents necessary to relinquish her interest as director or shareholder in G Pty Ltd.
The October 2019 final hearing
The matter came before me for final hearing on 2 October 2019. On that date, both the Applicant and the Respondent briefed counsel.
I have had recourse to the audio record of the day’s events.
At the outset of the day, the Applicant sought to draw the Court’s attention to some updating documents she would rely upon, including an Amended Financial Statement and an affidavit by her solicitor setting out the steps she took to involve the corporate caveator in the proceedings. Neither of those documents had been filed at that time.
As is evident, the matter did not proceed to hearing on that date. There were a number of preliminary matters ventilated with the Court by both parties which, each in their own way, prevented the matter proceeding to hearing.
In broad summary terms, those items were:
(1)Inspection of subpoena material
(2)Matters relating to valuations
I will turn to each of those matters and briefly outline the circumstances of the matter.
Subpoenas
As part of the trial directions made on 3 May 2019, I made an order providing for all subpoenas to be filed so as to provide for production of documents no later than 21 days prior to the first day of the hearing, being 11 September 2019. The Applicant filed two subpoenas on 12 September 2019, one to the Commonwealth Bank of Australia (‘CBA’) and one to Bank K, and each with a production date of 30 September 2019. Strictly speaking, the Applicant should not have filed those subpoenas without seeking and obtaining leave.
On the morning of the hearing, counsel for both the Applicant and the Respondent sought time to inspect what they described as the lengthy sleeves produced by each bank (CBA producing two sleeves). They were afforded that time, which was initially anticipated to be an hour or so.
It became apparent to the Court when the matter was re-mentioned in the morning that a subpoena issued by the Court to X Law Firm on the request of the Applicant had never been answered by that entity. The Applicant’s solicitor, on the request of the Court, made enquiries of that solicitor’s practice during the day. It became apparent that correspondence had been sent by X Law Firm shortly after being served with the subpoena to the Applicant’s solicitor (though it was misplaced until the hearing when it was located).
Counsel for the Applicant advised the Court that that correspondence indicated that the subpoenaed practice would not comply with production of documents in answer to the subpoena until they were paid $275.00 in further conduct money (the practice had been provided with $25.00 by the Applicant already).
As I noted in Court at that time, that was an unacceptable course of conduct for a practice of solicitors to take in answer to a subpoena. Solicitors are officers of the Court and are entrusted with a paramount duty to the Court and the administration of justice.[2] In circumstances where the then-operational Federal Circuit Rules 2001 (Cth) were abundantly clear that a party served with a subpoena for production of documents must produce those documents to the Court,[3] the solicitor’s practice’s recourse was to satisfy the Court that the funds requested would, in fact, be incurred by the practice in complying with the subpoena.[4]
[2] Legal Profession Uniform Law Australian Solicitors Conduct Rules 2015 (NSW) r 3.
[3] Federal Circuit Rules 2001 (Cth) r 15A.15.
[4] Federal Circuit Rules 2001 (Cth) r 15A.11.
In relation to the sleeves produced in response to the subpoenas issued by the Applicant on 12 September 2019, it became apparent that neither counsel would be able to obtain instructions on the balance of the sleeves, and both counsel felt it was important to do so in order to obtain proper instructions from their respective clients.
I note here that both subpoenas sought documents relating to the Respondent. If, in the balance of time, it becomes apparent that the material produced by those banks related to documents the Respondent should have properly disclosed,[5] it is open to this Court to bear this matter in mind in relation to the issue of costs.[6]
[5] See especially Federal Circuit Court Rules 2001 (Cth) rr 24.03, 24.04; see also Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 6.01.
[6] Family Law Act 1975 (Cth) s 117(2A)(c).
Valuations
As will become apparent, this issue was of greater weight in the reality of the Court adjourning the matter ‘not commenced’.
At the outset of the hearing on 2 October 2019, the Applicant sought to rely upon a further affidavit of Mr H (the single expert) containing an updating valuation of the property. That valuation was dated 30 September 2019 and had not, at that time, been filed or served upon the Respondent. As at the writing of these Reasons, the affidavit has still not been filed.
While it would be the ordinary course to consider first the Applicant’s case in favour of the valuation being admitted and then the Respondent’s reply, the submissions happened to come to me in reverse order, and so I will deal with them in that fashion as well.
The Respondent objected to the Applicant relying on that valuation. Counsel for the Respondent submitted that the updating valuation had come in late and he had not yet had an opportunity to consider its contents let alone get instructions.
Orders were made (he asserted) allowing the parties to rely upon their own expert, presumably rendering this updating valuation a partisan valuation. When asked where the Court had made such orders, counsel referred the Court to order 5 of the trial directions:
5. In the event that either party seeks to call evidence by any medical practitioner or expert then they shall give the other party/ies not less than 42 days notice of this and in the event that any party wishes to cross examine that person they are to give 28 days notice of same and in that circumstance the question of costs with respect to the expert’s appearance is reserved to the hearing.[7]
[7] Emphasis added.
To rely upon this order misapprehended the totality of the Court’s intent in setting the matter down for trial, as the Court also made notations as follows:
A. The relative [sic] experts are to confer by 28 June 2019 for the purpose of providing to the Court a document listing the matters on which they agree, and the matters on which they disagree, and indicating on both parts their reasons for any disagreement. That document is to be provided to the Court by the legal representative for the Applicant.
B. In the event the parties are still in disagreement at the time of the final hearing, then the valuers will give evidence together in the witness box in a ‘hot tubbing’ process.
The Respondent’s counsel had to concede that no such conference between the experts took place. Notwithstanding the Court’s clear view expressed at that time, that no leave had been granted to the Respondent to obtain an adversarial expert’s report, the Husband’s counsel insisted that “it was in the parties’ minds the whole time to rely upon their own experts” and relied upon notation A.
The Respondent instructed that the property had been recently damaged and that by virtue of that damage, the value of the property had dropped. This matter ought to have given the Respondent’s valuer an opportunity to inspect the premises and prepare an updating report, counsel for the Respondent submitted.
It became clear during this exchange that the Applicant was of the view that they had not been served with the Respondent’s affidavit, only discovering it on the Commonwealth Courts Portal. Furthermore, the Respondent’s expert was not available for cross-examination on that day, which gave the Court pause to even consider the Respondent’s affidavit.
In support of her application to rely upon the affidavit (and in reply to the Respondent), the Applicant’s instructor advised that she had made attempts to obtain agreement from the Respondent to prepare an updating valuation. No correspondence let alone agreement was forthcoming, and in circumstances where there was such disparity between the two valuations undertaken, she elected to proceed with solely instructing Mr H with the same points of instruction as had been jointly provided to him in the first place. Counsel for the Applicant was prepared to seek to tender into evidence correspondence evidencing such attempts by her instructor, however that did not eventuate.
I note here that that submission belies any suggestion that the Respondent’s adversarial valuation came as an actual surprise to the Applicant on the morning of the hearing or shortly prior to the hearing. While the document may not have been properly served, the Applicant was clearly aware of it to recognise the distance between the parties’ respective positions.
The Applicant made submissions about the Respondent’s recalcitrance in paying for his share of the valuation, however nothing appears to turn on that matter as the Applicant on her own submissions was only ever charged for a half share of the initial value.
I have set out the course of this exchange with the Court by counsel for each party to give context to what transpired thereafter.
After a further adjournment, it became readily apparent that the matter was no further ahead in being ready to proceed. After allowing the parties time to consider arbitration, I stood the matter over for hearing not commenced to November 2020. In addition to the ordinary orders for the preparation of trial material, I made the following orders:
…
[3] Vacate order 2 of orders made 30 June 2016 by Judge Henderson, as Her Honour then was, which by necessary implication appointed Mr H [sic] as Single Court Expert for the purpose of valuation of the real estate property at C Street, Suburb D.
[4] Unless, by 4:00pm on 7 August 2020, the parties agree on the appointment of a Single Court Expert and agree that they will be bound by the valuation of that Single Court Expert for the purpose of valuation of C Street, Suburb D, then by no later than 4:00pm on 4 September 2020 each of the parties file and serve an affidavit by their adversarial Real Estate valuer in relation to the valuation of the C Street, Suburb D property.
[5] Each of the parties shall do all things necessary to have their adversarial valuers confer in the event that there is disagreement between them as to valuation by no later than 4:00pm on 2 October 2020
[6] Each of the parties will do all things necessary to ensure that in the event that the adversarial valuers do not reach full agreement as to value at the conference on 2 October 2020, then no later than 4:00pm on 9 October 2020, those adversarial valuers produce a joint statement setting out the matters in relation to which they are in agreement, and the matters in which they are in disagreement, and the contentions of each of those Expert witnesses in support of their position in relation to which there is disagreement.
[7] In the event that following conference, there is still disagreement between the adversarial valuers, then the parties shall do all things necessary to ensure that each of those Experts are available for cross-examination on hearing of this matter, and in relation to those Experts, those cross-examinations will come after the completion of cross-examination of both of the parties.
…
[18] Any further subpoena for the production of documents shall be filed and served so as to require production of material to the Court not less than 21 days prior to the allocated Hearing dates.
…
[20] On the occasion of the hearing of this matter on 16-17 November 2020, no delay to commencement of hearing will be allowed on the basis that subpoena documents have not been inspected, and the Court will require full compliance with the trial directions made today in relation to issue of and inspection of material produced in response to subpoenas to produce.
[21] Reserve the costs of both parties for consideration at the hearing to take place on 16-17 November 2020.
At this point, it should have been clear to both parties and their legal representatives that the following issues were still unresolved, had impacted the hearing that day, and unless they were properly managed and resolved, would impact the hearing in November 2020:
(1)All outstanding material to be sought by the issuance of a subpoena for production would have to be issued, produced, and (crucially) inspected in a timely manner; and
(2)The valuation of the C Street, Suburb D property remained unresolved and would need to be resolved in accordance with the process and the deadlines explicated in the orders.
Preparation for further hearing
In the months of September and October 2020, the parties filed the following documents:
(1)On 23 September 2020, the Applicant filed an affidavit sworn by her;
(2)On 23 September 2020, the Applicant filed an Amended Financial Statement;
(3)On 12 October 2020, the Applicant filed an affidavit by real property valuer Mr L containing an adversarial valuation. She filed the affidavit again on 13 October 2020 (described on the Commonwealth Courts Portal as an ‘affidavit of a single expert witness’);
(4)On 20 October 2020, the Respondent’s solicitors filed a Notice of Withdrawal as Lawyer; and
(5)On 12 November 2020, the Applicant filed an affidavit sworn by her solicitor setting out steps she took to communicate with the Respondent once his lawyers withdrew from the proceedings.
Notably, none of the filed material addressed the issue of involving the corporate caveator in these proceedings.
The matter then came before me for a second shot at a final hearing on 16 November 2020.
Hearing in November 2020
Counsel again appeared for the Applicant. There was no appearance by or for the Respondent. Though the matter was proceeding by Microsoft Teams due to the SARS-CoV-2/COVID-19 pandemic, my Associate called the matter three times at the door of the Court, in the event that the Respondent had appeared in person. The call was not answered.
As I noted at the hearing, the Respondent had been represented before the Court on all occasions prior. He was present and represented before the Court when the further hearing dates had been allocated. I considered that the Respondent knew of the proceedings.
The Applicant made an application for the matter to proceed undefended on a date to be allocated by the Court and for an opportunity to notify two caveators on title to the C Street, Suburb D property, Company F (‘Company F’) having lodged a caveat since the October 2019 hearing.
I allocated the matter an date for undefended hearing. That date was another nine months away in August 2021, being the first available date I had in my calendar for undefended hearing. This prompted counsel for the Applicant to observe “it is unfortunate it is so far away”.
While counsel was entirely correct to observe the misfortune of the matter being ‘kicked down the road’ yet again, what might have been a more measured observation by learned counsel is that the matter not proceeding to undefended hearing on 16 November 2020 was avoidable by her instructor serving, at least, her client’s Amended Initiating Application upon those third parties. It was unexplained by counsel for the Applicant why that task had not been attended to yet by their instructor, in circumstances where she had had notice at least as and from 20 October 2020 that the Respondent was self-represented, and experience in the previous years of the Respondent’s conduct in litigation.
I listed the matter for undefended hearing on 5 August 2021 and made the following directions:
(1)I directed the Applicant to serve her Amended Initiating Application, her affidavit sworn 23 September 2020, and the sealed orders made that day on Company E and Company F;
(2)I directed the Applicant to serve a sealed copy of the orders made that day by ordinary post to the Respondent at two specified addresses; and
(3)I listed the matter for mention on 26 April 2021 to allow Company E and Company F a chance to appear before the Court prior to the undefended hearing in the event they would seek orders.
Mention on 26 April 2021
The mention came around in April 2021 without any further document being filed. Counsel again appeared for the Applicant. There was no appearance for the Respondent.
Counsel for the Applicant advised the Court that the Applicant had complied with the Court’s orders of 16 November in relation to service, and that they had received no response by the Respondent except for one email. Counsel for the Applicant advised that the email was sent by the Respondent after the November 2020 date and asked what had happened at that date, that he was currently overseas, and that he would not be likely to return to Australia before February 2021.
Importantly, neither caveator had indicated any intention to participate in the proceedings by this time.
I enquired with counsel for the Applicant as to whether she had instructions or had a view about whether the caveators had an actual caveatable interest in the property – that is, had they had a contractual relationship with the Respondent that gave rise to a caveatable interest. Understandably, counsel could not say, in circumstances where the Respondent had more or less fallen out of the proceedings. She was able to articulate the caveats as arising from “judgment debts for debts the Respondent incurred in his business”.
Finally, counsel for the Applicant requested any earlier date than the August 2021 listing the matter currently had. Fortunately, a slot had unexpectedly opened up in my diary, and I was able to offer the Applicant a listing on 7 May 2021 for undefended hearing.
I made orders for the orders made that day to be served upon the Respondent and upon Company F and Company E and otherwise stood the matter over to 7 May 2021.
Undefended hearing on 7 May 2021
When the matter came before me on 7 May 2021 counsel for the Applicant again appeared for the Applicant. There was no appearance by or for the Respondent, Company E, or Company F.
While the tenor of the last mention had been optimistic that this matter might, finally, be resolved on this date, two further issues arose due to the conduct of the Applicant which, again, stalled the progress of the matter.
Caveats
At the outset, I discussed with counsel for the Applicant whether the two caveators had a caveatable interest on the property. Whilst I was able to satisfy myself that the terms of the contract between Company E and G Pty Ltd entitled them to lodge a caveat on the C Street, Suburb D property, I was not able to ascertain the entitlement of Company F to lodge a caveat on title. Company F having purchased the loan from Company E did not, of itself, entitle Company F to do so.
I noted to counsel for the Applicant that had the Applicant lodged lapsing notices, the matter might have been able to flesh itself out by the corporate entities defending their interest in the Supreme Court. I am sympathetic to the reply from counsel for the Applicant, that the Applicant had run out of funds and resources to litigate in such a matter. However, I noted that the manner in which the Applicant had pursued the litigation before me – not giving adequate notice to Company F of the amended application – ran the risk of the Applicant having to pursue further litigation with the caveator corporations in any event.
Further Amended Initiating Application
The Applicant filed a Further Amended Initiating Application and affidavit on 5 May 2021, just two days prior to the undefended hearing.[8] In a fashion similar to what she had done with her first Amended Initiating Application, the Applicant added additional orders sought on a final basis to require Company F to remove the caveat lodged on title by them, with a fall-back order providing for a Registrar of the Court to sign the relevant documentation.
[8] The Applicant also filed an Amended Financial Statement on 3 May 2021 and a Balance Sheet on 5 May 2021, however these were of no great consequence for the procedural fairness matter.
Counsel for the Applicant made submissions indicating her client’s view that the two days notice given to Company F was enough time to brief an agent to appear before me, and that they had had constructive notice[9] since November 2020.
[9] My phraseology, and not the Applicant’s.
For reasons I explained at the time and will explain again, I did not accept that submission.
At the outset, I note that it was entirely sensible for the Applicant to amend her application before the Court, in circumstances where I would not have been minded to make those orders (were I satisfied to do so) had it not been contained in a formal application.[10]
[10] See especially Newett & Newett [2020] FamCAFC 76; Melville & Melville (No 3) [2020] FamCAFC 231 [63].
Unfortunately, the time at which she chose to do so was deleteriously close to the undefended hearing, I considered that it denied the caveator parties (but especially Company F) the opportunity to participate in proceedings. Company F especially would have been entitled to assume from the application served upon them (which made no mention of Company F at all) that even if the proceedings resolved entirely in the Applicant’s favour, it would not affect their interest, as the orders sought made no mention of Company F and their caveat on title. It was, with respect, an unrealistic submission that the Applicant’s conduct had given Company F adequate notice of the proceedings.
Moreover, the Court was left in the position of having to formulate an order under section 90AE in Chambers. It was clear that there was some ambiguity in the Applicant’s case as to whether the Court had the power to remove the caveat on title.
I did that on 25 May 2021, having had an opportunity to properly examine the matter, and to give an indication of the level of involvement in this task, I reproduce the orders of 25 May 2021 in their entirety:
THE COURT NOTES THAT:
A. There are proceedings for property adjustment pursuant to section 79 of the Family Law Act 1975 (“the Act”) between Ms Balen as the Applicant Wife (“the wife”) and Mr Balen as the Respondent Husband (“the husband”), (“the proceedings”).
B. The husband and the wife are the registered proprietors as joint tenants of the real property known as C Street, Suburb D in the State of New South Wales, being the whole of the land in Certificate of Title folio identifier … (“the property”).
C. Company F (“Company F”) caused a caveat to be registered on title to the property on 5 December 2019 (“the Company F caveat”) pursuant to an agreement between Company F and Company E (“Company E”) dated 23 October 2019 pursuant to which Company F purchased from Company E a debt owed by the husband to Company E in consequence of a loan agreement between Company E and G Pty Ltd (“G Pty Ltd”) in which the husband guarantee the obligation of G Pty Ltd to Company E.
D. Company E obtained a default judgment in the sum of $65,483.35 against G Pty Ltd and the husband and caused a Writ for Levy of Property issued from the Local Court Sydney on 30 January 2019 and case number … to be registered on title to the property on 13 November 2019 (“the Company E writ”).
E. Company E had caused a caveat to be registered on title to the property on 12 April 2018 (“the Company E caveat”).
F. The proceedings were heard on an undefended basis as against the husband on 26 April 2021 and it is in the contemplation of the Court that orders will be made pursuant to section 90AE(2) and/or section 90AF(2) of the Act requiring Company F to provide to the wife a Withdrawal of Caveat in relation to the Company F caveat and requiring Company E to provide to the wife a Withdrawal of Caveat in relation to the Company E caveat and a Cancel Recording of Writ form in relation to the Company E writ.
G. Both section 90AE(3)(c) and section 90AF(3)(c) of the Act require that before making any such orders the third parties, Company F and Company E, be accorded procedural fairness in relation to the making of the orders.
THE COURT ORDERS:
1. That within 14 days the wife is to cause a sealed copy of these orders, together with a copy of the further Amended Initiating Application (Family Law) filed 5 May 2021 by the wife, to be served:
a. upon Company F at the registered office of that Corporation;
b. upon Company E at the registered office of that Corporation; and
c. upon M Law Firm, who acted for Company F.
2. That in the event that either or both of Company F and/or Company E oppose the orders foreshadowed in notation 6, then they are to be represented before the Court on 2 August 2021 at 9:30AM in court 4C, Lionel Bowen Building, 99 Goulburn Street, Sydney for the further mention of this matter, at which time consideration will be given, if they are so represented, to whether or not orders should be made under section 92 of the Act joining either or both as interveners in the proceedings or as a party to the proceedings under rule 11.01 of the Federal Circuit Court Rules 2001.
3. That in the event that either Company F or Company E, or both, is not or are not represented before the court on 2 August 2021 at 9:30AM then the orders foreshadowed in notation 6 will be made in relation to the non-represented Corporation or corporations without further notice and on a finding on the available evidence in the proceedings that such order or orders pursuant to section 90AE(2) and/or section 90AF(2):
a. are reasonably necessary, or reasonably appropriate and adapted, to affect a division of property between the husband and the wife;
b. that it is not foreseeable at the time that such orders are made or injunctions granted that to make the orders or to grant the injunctions would result in the debt owed by the husband and by G Pty Ltd to Company F not being paid in full;
c. that both Company F and Company E have been accorded procedural fairness in relation to the making of the orders or injunctions;
d. that the court is satisfied that, in all the circumstances, it is just and equitable to make e. the orders or that, in all the circumstances, it is just or convenient to grant the injunctions; and
e. that the court is satisfied that the orders or injunctions take into account the matters mentioned in section 90AE(4) and section 90AF(4) of the Act.
4. That the proceedings are listed for further mention and directions and further consideration before the court at 9:30 AM on 2 August 2021.
5. That the listing on 10 June 2021 is vacated.
Mention on 2 August 2021
Counsel again appeared for the Applicant. There were no other appearances on that occasion.
THE EVIDENCE
Counsel for the Applicant helpfully provided a comprehensive Case Outline for the undefended hearing on 7 May 2021. I have had recourse to that document.
I have also had recourse the following documents specifically referred to in the Applicant’s counsel’s Case Outline document:
(1)The Applicant’s affidavit sworn on 4 September 2019’;
(2)The Applicant’s affidavit sworn on 5 May 2021;
(3)The Applicant’s Amended Financial Statement filed 3 May 2021; and
(4)The affidavit of Suzanne Wyman (the Applicant’s solicitor) filed on 15 November 2020.
The Case Outline document makes reference to an “updated valuation” contained in an affidavit “sworn” on 26 September 2019. Having had recourse to the audio record of the proceedings on 2 October 2019, counsel for the Applicant sought leave to rely upon an affidavit with an updated valuation by Mr H and to file that affidavit in Court. The Court did not, in fact, accept that document for filing on that date (nor did the Court reject the document), or on any subsequent date, and the Court file does not contain any such affidavit.
There is some reference in the audio record of a tender bundle provided by the Applicant on 26 April 2021. However no documents were tendered into evidence on that occasion.
Except where I explicitly indicate otherwise, I accept all of the following recount of the evidence before the Court.
The Applicant was born in 1963 in Country N. She came to this country with her family in 1975. She is an Australian citizen.
As at 2019, the Applicant was working as an office worker. She ceased that employment in about 2020.
The Respondent was born in 1970 in Country O. He may have come to this country as a refugee in 1996.
The parties met online in 2013 and then in person for the first time in 2014.
The Applicant was in between employment when she met the Respondent for the first time, taking eight weeks off before re-commencing her work as an office worker in 2014. She earned $56,875.00 per year from this employment.
When she met the Respondent, he was self-employed and working as a tradesman. His income at that time was not known to her nor has she learned of it during these proceedings.
The parties commenced cohabitation in 2014, five months after meeting online and two months after meeting in person. They were married in 2014, and divorced on 6 October 2016.
At the time of cohabitation, the Applicant had real property at P Street, Suburb Q (‘the P Street, Suburb Q property’) subject to a mortgage in favour of CBA. The mortgage was $141,982.05 in March 2014. The initial contributions of the Applicant are detailed later on in these reasons.
At the time of cohabitation, the Respondent was an undischarged bankrupt. He had a motor vehicle worth about $2,000.00. The Respondent was first bankrupted on 24 April 2006 and was again bankrupted on 14 October 2014. The second bankruptcy did not discharge until 15 October 2014.
The Respondent insisted that the Applicant sell the P Street, Suburb Q property so that they could “buy somewhere else together” as he “[didn’t] want to live in a house where [the Applicant] lived with [her] ex-husband”. She initially resisted but he wore her down, also insisting that they leave the furniture in the house. I do not have any evidence whether the furniture in the house was included in the sale price for the P Street, Suburb Q property.
Contracts exchanged for the sale of the P Street, Suburb Q property on 12 April 2014 and settlement occurred on 26 May 2014. On settlement, the Applicant asserts that she received $478,702.57. The evidence (including annexures to the Applicant’s affidavit) indicates:
(1)After payment of the mortgage, outstanding utilities, and legal fees, not including the deposit the Applicant received $416,302.57;
(2)The deposit on settlement without accounting for any agents’ commission was $74,600.00;
(3)This total of the net proceeds on sale and deposit is $490,902.57;
(4)This total is $12,200.00 greater than the total amount the Applicant asserts she received on settlement ($478,702.57).
While I assume that the $12,200.00 may have been paid to agents for commission and fees on the sale, I do not have any evidence to find that that is the case.
I accept that the Applicant received $478,702.57 on settlement of the sale of the P Street, Suburb Q property.
Prior to settlement of the P Street, Suburb Q property’s conveyance in May 2014, the Respondent identified the C Street, Suburb D property to the Applicant. The conversation proceeded to the following effect:
Respondent: I found a property and it is worth $850,000.00
Applicant: I cannot afford it. If you want to go half then I can do it.
Respondent: I am in trouble with Company R and the bank will not lend me money. I owe Company R $10,000.00. They made me bankrupt. So you borrow the money. Don’t worry I am making a lot of money.
On this evidence, the Applicant knew as early as May 2014 that the Respondent was a bankrupt of some kind, though she did not know the full extent of the monies owed by him to creditors. The Applicant deposes that “When I learnt that [the Respondent] was an undischarged bankrupt I became very careful in making joint financial decisions.” The is some force in the observation that the Applicant did not always act very carefully.
The Applicant agreed to purchase the C Street, Suburb D property albeit in circumstances where she asserts she was not fully aware of the Respondent’s financial position.
To pay for the deposit on the property and stamp duty, at some time between 10 March 2014 and 30 April 2014 the Applicant redrew $111,000.00 from her CBA “No-Fee Investment Home Loan Summary” account ending #...00.
I pause to observe here that for real property in which the Applicant deposes she lived and had lived for some time, a loan account for an “Investment Home Loan” seems a curious financial instrument to utilise.
The Applicant purchased the C Street, Suburb D property in her sole name for $850,000.00. Contracts were exchanged on 20 May 2014 and settlement took place on 16 June 2014.
In between the sale of the P Street, Suburb Q property and the purchase of the C Street, Suburb D property, the parties cohabited in the Respondent’s rental accommodation in Suburb S. The Respondent paid rent in the amount of $650.00 per week and the Applicant paid for the weekly “outgoings”.
When the parties married in 2014, the Applicant had paid for the Respondent’s wedding suit and three shirts for his selection on the day. The Respondent paid for the cost of the wedding at the Location T in the sum of about $2,500.00, as the Applicant “would not pay for the wedding and [the Respondent] used his own funds for it to go ahead. He wanted the marriage to happen very quickly.”
About a week later, on 16 June 2014, settlement of the purchase of the C Street, Suburb D property occurred. The amount due on settlement was $765,365.31 (plus stamp duty) which was financed by:
(1)$376,000.00 by way of a loan secured by mortgage on the C Street, Suburb D property; and
(2)$483,200.24 by way of equity.
The parties moved into the C Street, Suburb D property on 18 June 2014.
The Applicant asserts that the Respondent installed a “feature ceiling” in the living room of the property, but that the “workmanship was poor” and that it reduced the value of the property. I have read and considered the affidavit of Mr L, the Applicant’s expert witness, filed on 13 October 2020. The valuation report annexed to that affidavit does not make any comment in relation to the “feature ceiling”, favourably or otherwise. Accordingly, I do not find that the installation of the feature ceiling had any effect on the value of the property.
The Applicant asserts that the Respondent purchased a lounge suite for $2,000.00 using funds withdrawn from a joint account held with the CBA. When the suite arrived, the Respondent did not like it, and asked the Applicant for $6,000.00 to purchase a different suite from Store U promising to repay the money to her. The Applicant asserts that he did not repay the money to her.
I have no evidence by way of bank withdrawals or receipts to evidence these transactions. Moreover no lounge suite appears on the Balance Sheet filed on 7 May 2021. While the conduct asserted by the Applicant (assuming it is true) is distasteful, section 79 property proceedings are not a moralistic exercise. Accordingly, I can make no findings about the purchases of the lounge suites.
Once the parties were married, the Respondent pressed the Applicant to combine their finances, saying “Now that we are married, everything has to be together”. The Applicant initially refused as she was concerned that the Respondent had no assets of his own. It appears that the Respondent’s comment aforementioned was specifically in reference to holding the C Street, Suburb D property jointly.
The Applicant loaned the Respondent $17,000.00 to open the company G Pty Ltd with the Respondent as the sole director. Some time thereafter the Applicant was appointed as a director in 2014. The Applicant asserts her belief that a Cessation of Company Officeholder was registered in 2015, presumably effecting a cessation of her office, though she deposes that she did not sign any documents to this effect. She deposes that she never withdrew any company funds, and that the $17,000.00 loan was repaid to her three months later.
It is the evident case of the Applicant that the Respondent badgered the Applicant into providing him with money and in some cases just took joint funds of his own volition and for his personal benefit without informing the Applicant. Some of these incidences detailed in her evidence include:
(1)The Applicant asserts that the Respondent was “continually” withdrawing funds from the joint account and “constantly” asking the Applicant for more money from her savings. The Applicant concedes that the Respondent deposited moneys into the joint account, but asserts that he “continually” withdrew amounts for his own purpose and without her consent. In particular, the Applicant asserts that the Respondent used joint funds to pay for his two children’s private school fees, car insurance, registration, and eTag fees.
(2)The Applicant deposes that she sold a funeral plot she had purchased for $15,000.00 back to Company V for $12,180.00 as the Respondent “forced” her to do so. I cannot find that the remittance advice annexed to her affidavit is evidence of this sale, as the provenance of the document is impossible to ascertain, however I accept that she received $12,180.00 for the sale. She asserts that the funds were used by the Respondent.
(3)The Applicant became suspicious of the Respondent having no income, despite him insisting that he earned $60,000.00 per year, as he would constantly ask her for money. She specifically suspected he was gambling, which is supported by her assertion that an estimated $12,170.00 was withdrawn from the parties’ joint account with the CBA at “gambling venues” such as a local tavern between 8 July 2014 and 2 October 2014.
(4)The Respondent asked the Applicant to pay out a loan owed by him to Company W. The Applicant took out a personal loan with the CBA and $26,000.00 was paid into her account on 11 November 2014. The next day the Applicant pay $21,059.23 to Company W.
(5)The Respondent pressured the Applicant to transfer the C Street, Suburb D property into joint names so heavily that a “domestic dispute” ensued necessitating the Applicant to call the police. The Respondent returned to the home two weeks later.
(6)Having worn the Applicant down, the Applicant transferred the C Street, Suburb D property into “joint names” in December 2014. She deposes that she went to a different solicitor so that the transfer could take place, though it is not apparent on its face what this means. The Respondent possibly immediately thereafter took the Applicant to a CBA branch near her workplace and increased the mortgage secured on title.
(7)Once the joint tenancy was registered, the Respondent told the Applicant “now I can do what I want” and left her for three to four weeks.
(8)The Respondent withdrew $18,000.00 from the joint account in December 2014 so that he could purchase a Motor Vehicle 1, over the protests of the Applicant.
(9)Between 1 January 2015 and 28 January 2015, the loan account secured on the C Street, Suburb D property increased by $101,423.28, from $360,476.72 to $461,900.00. The Applicant evidences this increase by annexing a statement from 1 January 2015 and a statement from 28 January 2015. It is evident on the face of those documents that the loan account had been refinanced with CBA and the type of loan account changed with that refinance. I accept that the loan amount increased with the refinance. The Applicant asserts that this was the Respondent’s “theory” and that she is now left with the increased indebtedness of the loan account.
(10)On 23 March 2015, the Applicant gave the Respondent $22,500.00 to pay his employees.
(11)The Respondent “gave” the Applicant a Motor Vehicle 2 purchased from his business account in May 2015 saying “It is yours for all you have done for me”. The Applicant asserts that the Respondent was the only one who ever drove the vehicle and when he left he “demanded that I sign the car over to him”. The Applicant annexes a letter purportedly authored by the Respondent, though the provenance of the document cannot be ascertained.
(12)The Applicant gave the Respondent another $24,000.00 to pay his employees. She evidences this assertion by annexing an extract of a CBA statement she asserts is for a company account ending #...58, however it is not possible to ascertain that this is, in fact, a company account for G Pty Ltd on the document’s face.
(13)The Respondent withdrew $35,000.00 from the joint loan account secured on the C Street, Suburb D property to purchase another motor vehicle. The Applicant asserts that she was with the Respondent when this occurred, and that while she did not want the withdrawal to take place the Respondent “convinced her otherwise”. Annexed to her affidavit is an extract from a CBA transaction listing without account number or holder attribution. $35,000.00 is indeed withdrawn from that account.
(14)The Applicant further advanced $25,000.00 to the Respondent between 9 June 2015 and 15 June 2015. She annexes a page from a statement for her personal account ending #...73 which shows a series of cash withdrawals, cash deposits, and in-branch withdrawals over the statement period. There are three transactions between 9 June 2015 and 15 June 2015 that total $25,000.00.
(15)Eventually the Applicant grew suspicious again that the Respondent was gambling. She caught him at the pokies at the local tavern and he threw his wallet at her containing $3,000.00 cash inside which was his winnings for the day. On their way home the Respondent confessed that he was a heavy gambler.
The Applicant deposes that she did not contribute to the mortgage between cohabitation and separation as she was responsible for all other “outgoings” for the property, including groceries, utilities, and all other household expenses excepting internet, which was paid for by the Respondent’s company.
The Applicant asked the Respondent to leave their home on 7 July 2015, after which time the parties lived separate and apart.
Post separation
Since separation, the Applicant was responsible for the Respondent’s liabilities including the mortgage.
In a rather cruel twist of fate, the Applicant is now paying off the additional monies borrowed by the Respondent, which he had borrowed for the purported purpose of repaying the Applicant.
It is not in question that the evidence shows that the Applicant’s present financial circumstances are far worse off than when she met the Respondent.
The Applicant asserts that there was a break-in to the C Street, Suburb D property but I cannot make any findings relevant for these Reasons as a result of that criminal incident.
The Applicant asserts that the Respondent diverted council rates and water rates notices for the C Street, Suburb D property to his new address and company email without notifying the Applicant. As a result, the rates accrued with arrears. The Applicant had to pay the outstanding arrears using money drawn from her superannuation entitlements.
The Applicant hypothesises that the Respondent did this access paperwork purporting to evidence his residential address at C Street, Suburb D in order to borrow more funds, however I cannot make a finding that that is the case or that the Respondent has indeed borrowed more funds against the C Street, Suburb D property. Irrespective of this, that was a vile act by the Respondent.
The Respondent emailed the Applicant’s solicitor on 5 January 2018 threatening to file for bankruptcy in the event that the Applicant did not “agree to pay to him back [sic] for all alleged monies invested by him during the marriage”.
Caveats
On 13 April 2018, the Applicant received a Notice of Caveat lodged against the C Street, Suburb D property by a creditor of the Respondent. That caveat was lodged by X Law Firm in favour of Company E. The Case Outline document by Counsel (an unsworn document) indicates that Company E obtained a writ at the Sydney Local Court, though I have no evidence in relation to same.
To get a sense of the factual matrix of this issue, I quote from the Case Outline of the Applicant, though I note that this is not sworn evidence:
The Caveats are the result of an unpaid debt of the husband, incurred after separation of the parties. The husband borrowed money from Company E. He failed to repay the loan. Company E lodged a Caveat on the title of the parties’ unit. Company F subsequently entered an agreement to pursue the Company E debt and lodged another Caveat.
At the time of swearing her affidavit, X Law Firm had failed to produce documents requested on subpoena issued to them and had not replied to the Applicant’s solicitor. The Sherriff’s Office wrote to the occupier of the C Street, Suburb D property in relation to a debt owed by the Respondent in the sum of $67,921.75.
On 5 December 2019, Company F lodged their caveat on title.
Initial contributions
At the commencement of cohabitation, the Applicant asserts that she had the following assets and liabilities in a table as follows:
ASSETS 1 Sale proceeds from the P Street, Suburb Q property E$478,402.57 2 Savings E$70,000.00 3 “Add Back C Street, Suburb D property deposit, stamp duty, legals” $111,000.00 4 Motor Vehicle 3 $9,000.00 5 Superannuation $108,000.00 Subtotal $776,402.57 LIABILITIES 6 “I had no liabilities” $0 TOTAL $776,402.57
The figure for the sale proceeds of the P Street, Suburb Q property is incorrect. That figure should be $478,702.57.
I accept that the Applicant had savings of $70,000.00.
On the evidence before me, the items listed in item 3 are things that the Applicant spent the $111,000.00 redrawn from her loan account. It is not apt to describe these as an “Add back”, but I find it is appropriate to include that figure in the list of assets as to not do so would be to ‘double count’ the impact of the mortgage from which the funds were redrawn.
I accept that the Applicant had a Motor Vehicle 3 worth $9,000.00.
I accept that the Applicant had superannuation entitlements valued at $108,000.00.
On the Applicant’s own evidence, it is not correct to assert she had “no liabilities”. At paragraph 18 of her affidavit, she describes that the mortgage she owed to the CBA at the date of settlement of the P Street, Suburb Q property (the point in time this matrix of initial contributions is taken) was $253,431.78. This figure includes the liability for the $111,000.00 redraw described at item 3.
Accordingly, I find that the Applicant had the following assets and liabilities at the point of cohabitation:
ASSETS 1 Sale proceeds from the P Street, Suburb Q property E$478,702.57 2 Savings E$70,000.00 3 Funds redrawn from the mortgage and available $111,000.00 4 Motor Vehicle 3 $9,000.00 5 Superannuation $108,000.00 Subtotal $776,702.57 LIABILITIES 6 Mortgage to Commonwealth Bank of Australia $253,431.78 NET TOTAL $523,270.79
The Applicant’s evidence of the Respondent’s assets held at the commencement of cohabitation is conflicting. At paragraph 7, she describes the Respondent has having an “old motor vehicle” worth about $2,000.00. At paragraph 27, she describes the Respondent has having “had no assets as he was an undischarged bankrupt”.
Noting the Applicant’s evidence that the Respondent’s principal trade was in trades work (an occupation which would require mobility) and the conflicting evidence of the Applicant, I find that at the commencement of cohabitation, the Respondent had a motor vehicle worth approximately $2,000.00 and that he was an undischarged bankrupt.
Non-financial contributions
The Applicant attended to all cooking, cleaning, washing, grocery purchasing, ironing, and household chores. She would make lunch for the Respondent every day for him to take to work. The hours the Applicant asserts the Respondent worked (2:30PM to 5:00AM) grounds this.
The Applicant asserts that her adult son left his employment of 14 years to work for the Respondent. I cannot find that that is, of itself, a non-financial contribution.
THE LAW
The law relating to the alteration of property interests between two parties to a marriage is governed by section 79 of the Act.[11] Relevant in this case, section 79(1) vests the Court with power to alter the interests of the parties in property,[12] and the power to make orders providing for the settlement or transfer of property, as determined by the Court.[13]
[11] Family Law Act 1975 (Cth) s 79.
[12] Family Law Act 1975 (Cth) s 79(1)(a).
[13] Family Law Act 1975 (Cth) s 79(1)(d).
However, the Court must not make an order under section 79 unless the Court is satisfied that, in all of the circumstances, it is just and equitable to do so.[14] The legislative process required by section 79 was considered by the High Court in Stanford & Stanford.[15]
[14] Family Law Act 1975 (Cth) s 79(2).
[15] Stanford & Stanford (2012) 247 CLR 108.
In that decision, the High Court held that section 79(2) requires that at the outset of the Court’s decision-making process the Court must consider whether or not, in all the circumstances, it is just and equitable to make an order under section 79(1) altering the interests of the parties to the marriage in property.
In considering the proposition posed by this first step, a Court should start by identifying items under the following categories:
(1)The existing legal and equitable interests of the parties in property, according to ordinary common law and equitable principles;
(2)The existing liabilities of the parties, according to ordinary common law and equitable principles and under legislation; and
(3)The rights of the parties, if any, according to ordinary common law and equitable principles and under legislation, in relation to any asserted resources of the parties that may, if it is considered just and equitable to proceed with the property settlement, be taken into account in the Court’s consideration of the matters referred to in section 75(2) of the Act, to which section 79(4)(e) directs the Court’s attention.[16]
[16] Stanford & Stanford (2012) 247 CLR 108; see, especially, [37].
That the interests as described above are ‘existing’ is of importance, as the Court noted, because the text of the section gives reference to ‘altering’ the interests.[17]
[17] Stanford & Stanford (2012) 247 CLR 108, [37].
I further note the comments of the High Court in Stanford at paragraph 42 which I reproduce in full here:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).[18]
[18] Stanford & Stanford (2012) 247 CLR 108, [42].
I will examine the matrimonial asset pool and the existing interests of the parties, before determining whether it is just and equitable to make a property adjustment order.
If the Court determines that it is just and equitable to make an order under section 79, the Court must then consider what orders are appropriate to be made. In doing so, I will follow the four-step process set out in Hickey & Hickey & Attorney-General for the Commonwealth of Australia.[19]
[19] Hickey & Hickey & Attorney-General for the Commonwealth of Australia (‘Hickey’) [2003] FamCA 395, [39].
In Hickey, the Full Court of the Family Court set out a process of four inter-related steps that must be taken by a court when determining a property application:
(1)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”;[20]
(2)Second, “the Court should identify and assess the contributions of the parties within the meaning of section 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”; [21]
(3)Third, “the Court should identify and assess the relevant matters … (“the other factors”) including…the matters referred to in section 75(2) so far as they are relevant…”;[22]
(4)Fourth, “the Court should … resolve what order is just and equitable in all the circumstances of the case”.[23]
[20] Hickey [2003] FamCA 395, [39].
[21] Hickey [2003] FamCA 395, [39]. See also Family Law Act 1975 (Cth) s 79(4)(a)-(c).
[22] Hickey [2003] FamCA 395, [39].
[23] Hickey [2003] FamCA 395, [39].
The Full Court pointed out in Hickey that pursuant to the wording of section 79, there can only be one property settlement order at any one time, and that the one property settlement order is final, subject only to anything that may be properly done pursuant to section 79A of the Act.[24]
[24] Hickey [2003] FamCA 395, [47].
The Full Court held in Fontana:[25]
… Indeed, the authorities are consistent in finding that assessing contributions is not an accounting exercise but a holistic one (Brandt & Brandt (1997) FLC 92-758; Norbis & Norbis (1986) 161 CLR 513).[26]
[25] Fontana & Fontana [2018] FamCAFC 63.
[26] Fontana & Fontana [2018] FamCAFC 63, [27].
The Court is required to consider the parties’ contributions made on and from the commencement of their relationship, during their relationship, and following separation.[27]
[27] See, eg, Jabour & Jabour [2019] FamCAFC 78.
The approach to determining the appropriate percentage of the net value of property in relation to the contributions of the parties, at step two of the four-step process, requires an assessment of contributions by, or on behalf of, each of the parties in a holistic manner, rather than attaching specific contributions to a specific item of property and making a determination upon that basis. To do the latter would be to disregard the whole of the contributions made during the whole of the relevant period of the relationship by or on behalf of each of the parties.
As the Full Court said in Dickons & Dickons[28] at paragraphs 14 to 16:
[14] As is plain from earlier decisions of this Court, regard must be had to the use made of contributions of various types so as to compare the contributions made by each of the parties during the course of, and over the length of, their relationship (see, for example, In the Marriage of Pierce (1998) FLC 92-844) But that is an entirely different proposition to, as it were, causally linking contributions with their asserted financial “product” or “value”. The former recognises that the nature, form and extent of contributions made by each of the parties might differ; the latter suggests that the absence of a causal link counts as no contribution at all.
[15] The search for a causal link might be seen to come instinctively to the necessary inquiry and all the more so when regard is had to s 79(4)(a) which refers to financial contributions made “...directly or indirectly...” “...to the acquisition, conservation or improvement of any of the property ...” and goes on to also refer to the financial contribution made “...otherwise in relation to any of that last-mentioned property...” The terms of that sub-paragraph might, naturally enough, be seen to suggest a causal link between those contributions and the “financial product” which those contributions of that type are said to have produced. That same requirement might also be seen to suggest that relevant contributions of that type can be seen to be quantifiable – or, at least, conceptualised – in monetary terms, in contradistinction to contributions made pursuant to s 79(4)(c).
[16] While that apparent “causal connection” might be seen in s 79(4)(a) (and (b)), no such connection is apparent from the terms of s 79(4)(c); contributions of that latter type are not linked by the words of the sub-paragraph to the “...acquisition, conservation or improvement of any of the property...” or, indeed, to “property” at all. This is not a legislative oversight; the 1983 amendments to the Act which inserted the current s 79(4)(c) were specifically intended, relevantly, to remove any suggestion that there needed to be a causal link between contributions of that type and any particular asset or property. The Explanatory Memorandum to the Family Law Act Amendment Bill 1983 provides, at Clause 36, that a specific purpose of the re-casting of s 79(4) was, relevantly, to:
... revise sub-section 79(4) to remove the possibility of an interpretation of the sub-section requiring that there be a nexus between a spouse’s contribution and a specific item of property in section 79 proceedings ...[29]
[28] Dickons & Dickons [2012] FamCAFC 154.
[29] Dickons & Dickons [2012] FamCAFC 154, [14]-[16].
The Court is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind.[30] The principle was expressed succinctly by the Full Court in the joint judgment of Bryant CJ and Ainslie-Wallace J in Fields & Smith[31] at paragraph 168:
...the task is to consider the contributions holistically over the whole period from the commencement of cohabitation to trial, and the analysis requires the Court to weight all of the contributions of all types prescribed by section 79(4) made by both parties across the entirety of the relationship until the time of Hearing, including the post-separation period.[32]
[30] In the Marriage of Harris (1991) 104 FLR 458, 464.
[31] Fields & Smith [2015] FamCAFC 57.
[32] Fields & Smith [2015] FamCAFC 57, [168].
The Full Court has been repeatedly clear that the approach to property settlement under section 79 of the Act is not an accounting exercise. Here, I note the comments of the Full Court in Grier & Malphas[33] at paragraph 129, where Murphy and Kent JJ said:
As the Chief Justice points out, with those principles in mind, the trial judge adopted a broad-brush approach to the parties’ respective expenditure. Nowhere error is established by reason alone of that approach; authority eschews “overly pernickety analysis” and section 79 demands neither an audit nor an exercise in accounting. However, when significant sums of money are said by one party or the other to have been “wasted” or to amount to a unilateral “premature distribution of property” and the evidence is suggestive of either or both, an analysis of the relevant sums and their use is needed.[34]
[33] Grier & Malphas (2017) 55 Fam LR 107.
[34] Grier & Malphas (2017) 55 Fam LR 107, [129].
THE MATRIMONIAL ASSET POOL
The Applicant filed a Balance Sheet on 5 May 2020 containing the following:
Ownership Description Applicant’s Value Respondent’s Value ASSETS 1 J Property at C Street, Suburb D $830,000.00 Not known 2 W Savings $2,500.00 Not known 3 W Motor Vehicle 3 $3,000.00 Not known 4 H Motor Vehicle 4, year unknown Not known Not known 5 H Savings Not known Not known SUBTOTAL $835,500.00 $0 LIABILITIES 6 J Mortgage secured on the C Street, Suburb D property with CBA $416,030.00 Not known 7 W Personal loan to CBA $25,000.00 Not known 8 H MV Loan Not known Not known 9 H ATO tax liability Not known Not known SUBTOTAL $441,030.00 SUPERANNUATION 10 W Superannuation entitlements with Super Fund Y, accumulation $19,000.00 Not known 11 H Superannuation entitlements with Super Fund Z, type unknown Not known Not known SUBTOTAL $19,000.00 $0
I find that the value of the former matrimonial home at C Street, Suburb D is $810,000.00 as per the valuation evidence dated 11 October 2020, and there being nothing to contradict that evidence.
In accordance with her Financial Statement filed on 3 May 2021, I find that the Applicant’s Motor Vehicle 3 is worth $2,000.00
Notwithstanding the plentiful evidence of the Respondent’s penchant for purchasing luxury vehicles, I do not have enough evidence to include the Motor Vehicle 2 or the Motor Vehicle 1 in the Balance Sheet, nor do I have enough evidence of the value of the Motor Vehicle 4 to include that in the Balance Sheet.
I do not have enough evidence of the Respondent’s savings to include that as a line item in the Balance Sheet.
At paragraph 42 of her Financial Statement filed on 3 May 2021, the Applicant lists her household contents as being valued $3,000.00. I accept that value and will include this in the Balance Sheet.
I accept the value of the personal loan owed to CBA as $25,000.00. In the Applicant’s Financial Statement filed on 3 May 2021, that liabilities is valued at $25,197.02, and it is within the range of expected fluctuation for a personal loan.
It is not clear what “MV Loan” refers to at item 8, nor is it clear which specific taxation liability is referenced at item 9. Accordingly I will not include those liabilities on the Balance Sheet.
While there is evidence that the Respondent is indebted to at least two entities – Company E for a loan amount, and Company F for a judgment debt – I have no evidence before me of the nature of those liabilities, let alone their precise quantum. Accordingly, in my discretion, I will not include those liabilities on the Balance Sheet.
In her Financial Statement of 3 May 2021, the Applicant asserts her superannuation entitlements with Super Fund Y are $16,000.00. She deposes in her affidavit filed on 5 May 2021 that she is not working which might explain the small increase in that figure to $19,000.00 per the Balance Sheet. Accordingly I find that the value of her superannuation holdings is $16,000.00.
Finally, there is no evidence of the Respondent’s superannuation holdings. Accordingly I will not include that in the Balance Sheet.
WHAT ARE THE EXISTING LEGAL AND EQUITABLE INTERESTS OF THE PARTIES IN THE PROPERTY?’
Accordingly, I find that the relevant assets and liabilities are as follows:
Ownership Description Applicant’s Value ASSETS 1 J Property at C Street, Suburb D $810,000.00 2 W Savings $2,500.00 3 W Motor Vehicle 3 $2,000.00 4 J Household contents $3,000.00 SUBTOTAL $817,500.00 4 J Mortgage secured on the C Street, Suburb D property with CBA $416,030.00 5 W Personal loan to CBA $25,000.00 SUBTOTAL $441,030.00 SUPERANNUATION 6 W Superannuation entitlements with Super Fund Y, accumulation $16,000.00 SUBTOTAL $16,000.00
I find that:
(1)The net asset pool excluding superannuation is $376,470.00
(2)The net asset pool including superannuation is $392,470.00
IS IT JUST AND EQUITABLE TO MAKE AN ORDER UNDER SECTION 79?
In this matter, the parties are divorced which has ended their legal marital relationship. It is settled that the act of entering into a marriage does not itself invest either party to the marriage with a legal or equitable interest in the other party’s property.[35]
[35] Hepworth v Hepworth (1963) 110 CLR 309; see also Stanford & Stanford (2012) 247 CLR 108, [39]; Chancellor & McCoy [2016] FamCAFC 256.
The main asset in this matter is the C Street, Suburb D property in which the parties are joint tenants. If the current circumstance is allowed to remain, the Respondent will continue to have the benefit of being on title to the C Street, Suburb D property and, as he appears to have been to date, will continue to be at liberty to have his creditors continue to lodge caveats and other instruments on title. This would be a parlous situation for the Applicant.
Accordingly, I find that it is just and equitable in all the circumstances to make an order under section 79 of the Act effecting a property settlement between these parties.
Contributions
This is one of those unusual cases where the contributions overwhelming favour one party.
Financial contributions per section 79(4)(a)
At the commencement of cohabitation, the main assets the Applicant had were the P Street, Suburb Q property, her superannuation entitlements ($108,000.00 on her evidence), and a mortgage with a redraw facility.
By contrast, the Respondent may have had an old motor vehicle and was definitely an undischarged bankrupt.
The Applicant contributed her earnings from her employment to the cost of utilities, groceries, and household expenses for the family.
The Respondent earned an unknown figure from his work as a tradesman and spent some of that on the mortgage, however his contributions in this regard are at best unknown and in any case severely limited by his withdrawals from the joint account and redraws on the mortgage. I accept the Applicant’s submission, citing Calverley & Green,[36] that mortgage repayments by the Respondent (such as they were) are not financial contributions towards the purchase price of the C Street, Suburb D property.
[36] Calverley v Green (1984) 155 CLR 242.
The Applicant loaned the Respondent money to start his company, which enabled the Respondent to engage in his trade work. The loan was repaid.
The Applicant provided significant and lump sums of money to the Respondent which appears to have been used for his own enjoyment and not for the benefit of the family unit.
I accept the submission by the Applicant and I find that the Applicant made overwhelming financial contributions.
Non-financial contributions per section 79(4)(b)
The Respondent purportedly conducted works in the C Street, Suburb D property, however the value of this work (positive or negative) is not in evidence.
I find that neither party made any particular non-financial contributions.
Contributions to the welfare of the family per section 79(4)(c)
The Applicant was responsible for all cooking, cleaning, groceries, and other homemaker duties. There is no evidence of the Respondent undertaking any homemaker duties.
I find that the Applicant made overwhelming contributions to the welfare of the family.
Accordingly, this is a case where I find that contributions favour the Applicant as to 95% and the Respondent as to 5%, a differential of 90%.
Earning capacity of either party per section 79(4)(d)
I have evidence that the Applicant is not working. I have no evidence as to the Respondent’s work.
It is plausible that an end to these proceedings may enable the Applicant’s current mental state to improve, thereby enabling her to return to her former profession as an office worker. However I cannot make a finding on this basis.
I do not find that there is likely to be any impact of the orders upon the earning capacity of a party.
Factors under section 75(2)
Where I do not explicitly refer to a factor under section 75(2) of the Act I say that I consider that consideration to not be relevant for these proceedings.
(a) the age and state of health of each of the parties
The Applicant is in poor health in part, she asserts, due to the stress of these proceedings. She was 58 at the time of the undefended hearing in May 2021.
The Respondent’s health is unknown. He was 51 at the time of the undefended hearing in May 2021.
(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 relative income of the parties is not known as the Respondent’s income is not before the Court. The Applicant presently has income from JobSeeker benefits in the amount of $295.50 per week.
The evidence of the asset pool as held by the parties is set out above. The capacity of each party to engage in gainful employment is not known.
(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
There is no evidence that the Applicant supports any other person. The Respondent has two children from a previous relationship, though it is possible that they are adults now. There is no evidence before the Court of the Respondent’s commitments in this regard.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit
The Applicant receives JobSeeker payments totalling $295.50 per week.
The Court has no evidence of the Respondent in this regard.
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable
The Applicant currently experiences a worse standard of living than that which she enjoyed prior to meeting the Respondent, consequent upon her increased indebtedness and her mental health deteriorating.
I have no evidence of the standard of living that the Respondent enjoys, nor what standard of living would be reasonable for the Respondent.
(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
Were I to make the orders as sought by the Applicant, the creditors with caveats on title would lose the opportunity to pursue the debt owed to them through security on the C Street, Suburb D property.
The creditors were each served with the Applicant’s Further Amended Initiating Application and relevant sealed orders of the Court. They have had adequate notice of these proceedings were they minded to assert any claim as creditors.
I find that while the orders sought by the Applicant would affect creditors of the Respondent, this consideration is mitigated by those creditors having been afforded procedural fairness and declining by their conduct to participate in these proceedings.
(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 Applicant contributed to the earning capacity of the Respondent by lending him funds to start a company. That loan was paid back by the Respondent.
The Respondent did not in any way contribute to the earning capacity of the Applicant.
(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 marriage was extremely short, some 14 months. The duration of the marriage did not of itself affect the earning capacity of either party.
(m) if either party is cohabiting with another person - the financial circumstances relating to the cohabitation
The Applicant has not re-partnered.
There is some suggestion in the submissions by counsel for the Applicant that the Respondent has remarried. I have no evidence of that, nor evidence of the financial circumstances of any cohabitation by the Respondent.
(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
While the Respondent has been bankrupted twice before, it is not clear on the evidence that he is currently bankrupt, nor is it evident that any property forming the marital asset pool is currently vested bankruptcy property.
I do not find that there is any weight to be given to this consideration.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
I accept the submission by the Applicant that the conduct of the Respondent had the effect of wasting the marital asset pool.[37]
[37] See especially In the marriage of Kowaliw (1981) FLC 91-092.
I accept the submission by the Applicant of the relevance and applicability of Anastasio & Anastasio[38] to this matter.
[38] Anastasio & Anastasio [1981] FamCA 76
I am mindful of the Full Court’s judgment in In the Marriage of Black.[39] This is a case where the proceedings were defended for a substantial portion of time before the Respondent’s solicitors withdrew, and that at the conclusion of the undefended hearing, lacunae in relation to facts that the Respondent ought to have set out – for example, his income at the time of the hearing, assets and, in particular, liabilities held by him – remained.
[39] In the Marriage of Black (1992) 106 FLR 154.
Finally, the particular factual matrix of this case gives rise to a unique consideration that I consider the justice of the case requires to be taken into account. The Applicant’s evidence before the Court paints a vivid picture of the Respondent’s conduct, summarised as:
(1)Badgering the Applicant to change the status quo of her financial circumstances in relation to her assets under the dubious assessment that as the parties were married, they had to now join their finances. The flavour of this evidence indicates pressure exerted on the Applicant – that because the she was now the spouse of the Respondent, she was expected by him to conduct her finances in a certain fashion;
(2)Notwithstanding the necessity for the Applicant’s assets to be held jointly with the Respondent, continuing his course of badgering the Applicant to reduce her savings and increase her indebtedness without increasing the indebtedness of the Respondent by withdrawing cash from the Applicant’s personal account, drawing on her home loan account, and taking out a personal loan in her sole name;
(3)Using the credit accrued from the Applicant increasing her indebtedness for the, in general, sole benefit of the Respondent. The increased indebtedness of the Applicant was rarely used to purchase assets that the parties had decided to purchase together. Even when the asset purchased was something that, theoretically, could be enjoyed by both parties (for example, a motor vehicle), the evidence is relatively clear that the purchases were in fact enjoyed by the Respondent only, with the Applicant retaining misgivings about the purchases.
This pattern of the Respondent’s conduct asserted to have taken place by the Applicant gives this Court pause for concern.
The Court is well apprised of the principle arising from the case of Kennon,[40] which when applying is a contribution consideration.
[40] Kennon v Kennon (1997) 139 FLR 118.
At page 140, their Honours Fogarty and Lindenmayer JJ indicated their view that:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79. We prefer this approach to the concept of “negative contributions” which is sometimes referred to in this discussion.[41]
[41] Kennon v Kennon (1997) 139 FLR 118, 140 (Fogarty and Lindenmayer JJ).
His Honour Baker J noted similarly in his judgment:
The incidence of domestic violence in a marriage would generally be a relevant factor when the court comes to assess contributions pursuant to the provisions of s 79 for the reason that the contributions made by a party who has suffered domestic violence at the hands of the other party may be all the more onerous because of that violence and therefore attract additional weight.[42]
[42] Kennon v Kennon (1997) 139 FLR 118, 186 (Baker J).
On the state of the evidence before the Court, the Kennon principle cannot be said to apply here. There is no evidence of any family violence occurring for the purposes of section 4AB.[43]
[43] Family Law Act 1975 (Cth) s 4AB.
Furthermore, it is oft noted that this Court and its predecessor Courts are not ‘Courts of punishment’. Litigants cannot come to this Court in the family law jurisdiction and sue for damages consequent upon tortious or criminal incidences. The purpose of section 79 of the Act is (insofar as making an order is a just and equitable act to do) to make a property adjustment order in relation to marital assets upon the breakdown of a relationship. It cannot bring into that consideration questions of ‘punishments’ for bad behaviour that falls short of a legitimate consideration under the legislative pathway.[44]
[44] An occasional exception to this is the issue of costs where “the conduct of the parties to the proceedings …” is an explicit consideration; Family Law Act 1975 (Cth) s 117(2A)(c).
Notwithstanding this matter, the Court is also mindful that the nature of proceedings in this Court involve an assessment of the relational affairs of people in marital and de facto relationships – how a couple constitutes itself with regards to wage-earning and parenting, how each member of that couple treats the other regarding issues of family violence, how the two members of a couple will continue living after the relationship has concluded, and so on. It is a factual consideration unique to the jurisdiction of family law.
Inherent in this is a recognition of the economic value of non-financial labour, including the labour of being a parent. It gives consideration to the economic realities of a family unit and in particular the factors under section 75(2) enable the Court to view the relational dynamics of a marriage or de facto relationship in financial terms.
Related to this is the recognition in the property jurisdiction of socially-informed principles in the common law. For example, the Kennon principle aforementioned arises from the social realities of family violence. Moreover, inherent in the first step under Stanford – the Court assessing whether it is just and equitable as a matter of fact to make a property adjustment order – is a cognisance of the social reality that each individual marriage or de facto relationship is distinct, and constitutes itself in distinct fashions, and that it is not in every case necessary or appropriate to interfere with the ordinary construction of marital assets.
These principles advert to this jurisdiction’s proper consideration of the social dynamics at play in relationships. To do otherwise would be to consider property adjustment applications in an unrealistic vacuum.
This was a relationship where at cohabitation, the Applicant was in a stronger financial position than the Respondent, and the Respondent was dishonest about his financial circumstances. When the parties married, the Respondent undertook a course of conduct that was persistent and badgering of the Applicant. The ultimate goal of this persistent badgering was to cause the Applicant to share her assets with the Respondent, and for the Respondent to gain financial advantages through sums of money, debt repayments, and purchases of assets at the sole cost of the Applicant. At the conclusion of the short marriage, the Respondent was left in at least as good a financial position as at the commencement of cohabitation, and arguably better, having been able to use the C Street, Suburb D property as security for his creditors. The Applicant was left far more indebted and with fewer assets to her name.
This is not necessarily a situation replicable between any two members of the population – on the evidence before the Court, the Respondent relied upon the paradigmatic nature of the parties’ marriage to enforce upon the Applicant that there were expectations of her to conduct her finances in a specific fashion to ‘give effect’ to the marriage.
The reality of this matter is that the Applicant is now financially far worse off than she was when she met the Respondent for the, astonishingly, sole reason of his badgering her to change her finances to his satisfaction until she caved.
I am of the view that it is necessary for this Court to take matters such as this into account under section 75(2)(o). I view this case as being rather exceptional. Analogous to Kennon, I do not consider that the mere presence of some pressuring in relation to financial matters in a relationship would give rise to this consideration. I have viewed this course of conduct and its persistence as a whole.
This kind of conduct cannot be considered ‘ordinary’ or unremarkable in the context of property adjustment applications. To ignore this matter is to ignore the reality of its impact on a party to a relationship when the relationship breaks down, which I consider contrary to the requirements of the legislative pathway. I consider that an adjustment of 5% is favour of the Applicant is appropriate in relation to the relevant considerations under section 75(2).
I consider that the justice of this case requires that orders be made adjusting the interests of the parties in the marital property so as to return the parties, so far as is feasible, to the financial position they were in prior to commencing cohabitation.
WHAT ORDERS UNDER SECTION 79 ARE APPROPRIATE TO BE MADE?
I find that it is appropriate to make an order adjusting the property interests between the parties as to 100% to the Applicant and 0% to the Respondent.
I find that it is appropriate to make the orders substantially as sought by the Applicant and set out at the commencement of these Reasons. I consider that it is appropriate to make an order in relation to section 106A of the Act, rather than making the orders in the form sought by the Applicant affecting the Respondent and the third party caveators being referable to section 80.
THE APPLICANT’S APPLICATION FOR COSTS
At order 10 of the Applicant’s Further Amended Initiating Application, the Applicant seeks that the Respondent pay her costs of these proceedings. The Applicant’s written submissions in the Case Outline do not address this application.
As I am required to do, I have considered the application in light of section 117 of the Act.
The general rule in family law proceedings is that each party pays their own costs.[45] The Court may make such order as to costs and for security of costs as the Court considers just.[46] In determining whether any orders as to costs should be made, the Court is to have regard to the matters listed under section 117(2A). I will turn to such of those considerations as are relevant now.
[45] Family Law Act 1975 (Cth) s 117(1).
[46] Family Law Act 1975 (Cth) s 117(2).
(a) The financial circumstances of each of the parties to the proceedings
The financial circumstances of the parties is detailed above.
I do not find there is anything in particular in the Respondent’s likely financial circumstances (such as the Court is able to ascertain with the evidence available) to contra-indicate the making of a costs order.
(c) The conduct of the parties to the proceedings
The Applicant commenced these proceedings and pursued them at all times. The final hearing of the matter not commencing on 2 October 2019 was in part due to the conduct of the Applicant, in issuing subpoenas for production late.
Notwithstanding this matter, it may have been the case that the material produced on subpoena were documents that the Respondent ought to have disclosed and provided to the Applicant, however I have no evidence of this matter.
Moreover, the undefended hearing on 7 May 2021 could not proceed in its entirety due to the Applicant filing and serving a Further Amended Initiating Application. The Applicant is correct that had she not done so, the Court would have been without power to make the orders for failure to give Company F procedural fairness. However, this amended application could have been filed far more promptly than mere days before the undefended hearing, and ought to have been raised at the mention in April 2021. It is not generally appropriate for a Court to identify defects in an Applicant’s moving document, and in this case, due to the opacity of the situation with regards to the caveators, I do not consider that this would have been possible.
The Respondent fell out of the proceedings in October 2020 and has not participated since. His non-disclosure of financial documents during the proceedings, in addition to his failure to properly prepare an expert witness in relation to the value of the C Street, Suburb D property was a major cause of the matter not proceeding to hearing on that date.
On the balance of the matter, I consider that the Applicant contributed to delays in the proceedings just as much as the Respondent did.
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court
In failing to adequately prepare his expert witness in accordance with the Court’s orders, the Respondent contributed to the prolonging of the proceedings.
The Applicant in amending her moving application between the mention in April 2021 and the undefended hearing in May 2021 went against a notation made by the Court on 26 April 2021. Notations do not constitute orders, and the Applicant was at liberty to amend her moving application (and, as discussed, was correct to do so).
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings
The Applicant has been wholly successful. The Respondent has been wholly unsuccessful.
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer
I have no evidence of any offers made between the parties.
(g) such other matters as the court considers relevant
I find that the conduct of the Respondent in dropping out of the proceedings in October 2020 caused the Applicant unnecessary costs in briefing a further expert witness valuer for the C Street, Suburb D property. Had the Respondent formally withdrawn earlier, it is possible that the Applicant would not have been put to the expense of preparing for the defended final hearing in November 2020.
However, I find that the cause for the prolonged delay of these undefended proceedings was in part caused by the Applicant in amending her application without sufficient notice to the third party caveators.
Accordingly, I am not minded to make any orders as to costs of these proceedings. The general rule will stand.
I certify that the preceding two hundred and forty-six (246) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Morley. Associate:
Dated: 25 March 2022
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