Barami and Barami

[2010] FamCA 1204

FAMILY COURT OF AUSTRALIA

BARAMI & BARAMI [2010] FamCA 1204

FAMILY LAW – PROPERTY – Undefended proceedings

Family Law Act 1975 (Cth)

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

APPLICANT: Mr Barami

RESPONDENT: Ms Barami

FILE NUMBER: MLC 6510 of 2010

DATE DELIVERED: 16 November 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 16 November 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kent-Hughes

SOLICITOR FOR THE APPLICANT: Hogg & Reid

Orders

1. That there be orders in accordance with the minutes of proposed orders marked Exhibit “A” sealed and attached hereto AND IT IS DIRECTED that such minutes remain upon the Court file.

2. That the solicitor for the husband engross the minutes and deliver them by electronic transmission to my Associate within 7 days.

3. That the husband serve a copy of these orders upon the wife by post.

4. That the application of the husband filed 8 October 2010 is otherwise dismissed.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 6510 of 2010

MR BARAMI

Applicant

And

MS BARAMI

Respondent

REASONS FOR JUDGMENT

1. This is the husband’s application filed on 19 July 2010 for a variety of orders relating to property distribution.  The Court fixed a hearing date for 27 September 2010.  Pending that hearing date, on 13 August 2010 the wife was served personally in India with the husband’s application and a financial statement.  There is an affidavit on the Court’s file by KS in which that person said that he or she knew who the wife was.  On 27 September, Registrar Field had the case before her, and there was no appearance for the wife.  The Registrar adjourned the matter to 4 November 2010 and made orders that the wife be served by post to an address in India and by email to an email address of the wife.  That was all to be done by 8 October.  The Registrar also ordered that the wife file and serve any response by 1 November and gave the husband liberty to apply to proceed on an undefended basis, if no response was filed.

2. On the same day, 27 September 2010, an affidavit was filed by Ms M in which she said she served a copy of the order of 27 September 2010 as Registrar Field had required.  On 8 October 2010, the husband filed an amended application, and that too was served by post, and to that extent, I have an affidavit by a Ms J.  On 4 November, when the matter returned to Registrar Field, there was no attendance of the wife.  The Registrar ordered that the husband advise the wife of the consequences of failure to attend on 10 November. 

3. The matter came before me on 10 November in a very busy duty list, and there was still no appearance of the wife, and therefore I adjourned the matter until today.

4. On 11 November, the wife was served by electronic communication to her email address.  I have not had any evidence presented to me that any of the documents that were sent by post have been returned, nor that there is any indication that the email address of the wife was not accepting the documents.  Accordingly, the wife has had several notifications of the existence of these proceedings and not participated. 

5. The power to proceed to hear a case on what is often described as an undefended hearing is set out in rule 11.02 subrule (2)(c) of the Family Law Rules 2004, which provides that if a party does not comply with the Rules, the regulations, or a procedural order, the Court may, amongst other things, determine the case as if it was undefended. An undefended hearing means literally that the respondent has not participated at all. In Tate & Tate (2000) FLC 93 047, the Full Court discussed the subject only briefly, pointing out that as the appellant’s response in that case had been struck out, from the Court’s perspective, there was no live issue between the applicant and the respondent.

6. This Court, however, is not a court in which parties can obtain judgment on a default basis.  Section 79(2), to which I shall return, requires that an order shall only be made if it is just and equitable to do so.  That means that an applicant in an undefended proceedings, so called, still has to prove his or her case according to law.  In this case, the wife has not chosen to participate in the proceedings.  She has not filed any documents in compliance with the rules of the Court, nor has she complied with any of the orders that I am satisfied have been served upon her.  In those circumstances, the Court can take a robust approach and not be particularly concerned about issues to protect her interests.

7. The respondent is entitled to presume that the Court will be dealing with the matters on the documents filed, and if the respondent has a view that an applicant cannot prove their case, it may be the basis upon which they do not participate at all.  In this case, however, notwithstanding there are considerable evidentiary difficulties for the husband, it seems to me that I can make certain assumptions on the evidence and having regard to the size of the pool.  I propose to allow him to proceed, notwithstanding the difficulties that he faces. 

8. I am also a little perplexed as to the fact that the case was even issued in this Court, having regard to the size of the pool involved.  The husband’s amended application on 8 October, which has been replicated by a minute handed to me today, seeks that he gives to the wife $10,000, in return for which he retains the equity in the property at B.  The equity is limited by the fact that there is an encumbrance to the Commonwealth Bank, but also the husband’s evidence, which is unchallenged, is that he borrowed the funds that there were then needed to buy the property, and so he has paid a loan to his uncle.  He also says that he has motor car, and he seeks to retain that, but there is also an encumbrance by a way of some form of leasing arrangement. 

9. The husband relies on an affidavit filed on 8 October and a financial statement filed on 19 July.  In respect of both of those documents, he has given evidence today that they are still true and correct.  He has earned more income than what he was earning in July, but that matters little in this case. 

10. The husband is a 34 year old financial controller who came to Australia from India in 1999 and was made a permanent resident in 2002.  The wife is a 31 year old administrator, although I am not entirely sure what she is currently doing.  The husband’s evidence today is that the wife is managing the family’s business, which is some form of investment company.  The family made its money in India from a franchise and now has investments in the stock market and in real estate. 

11. The wife was born in India and has only lived in Australia for a limited period of time during the marriage.  The husband’s evidence is there is no logical reason why the wife would come back to Australia. 

12. The parties married in May 2005 in India but did not live together in Australia until the following year.  They separated in February 2010.  Their relationship is therefore approximately five years’ duration.  There are no children, and the parties have not yet divorced. 

13. The fact that the case is undefended makes it a little more difficult, because on the one hand, the evidence of the husband is unchallenged.  Some of the material in his affidavit is not particularly helpful in respect of the section 79 application.  He says that when he married, he had a Toyota Camry motor vehicle, some savings of approximately $15,000, and $14,000 approximately in superannuation.  He said that he was unclear as to the wife held any property in India, because that was never discussed during the marriage, but he thought that was possible.  He said that when the wife arrived in 2006, the parties lived in rented accommodation.

14. During the period that the wife returned to India, and that seems to have been on a number of occasions during the marriage, the husband changed his employment to his current position where he is a financial controller, although he described himself in the affidavit as a managerial accountant.  He has now been promoted and his earnings are around $98,000 per annum.  The wife did not work in paid employment during the relationship, and the husband otherwise supported her.  The period of time that the parties were actually together is limited to about two and a half years. 

15. After the husband returned to Australia from an Indian visit in February, when the parties separated, he purchased the property at B.  He paid $618,000 and the purchase was in his name alone.  The finance came by way of a Commonwealth Bank mortgage for $566,000 and a loan of approximately $44,000 from an uncle who lives in England.  That left a very modest shortfall which had to also cover stamp duty.  He said he borrowed a deposit from a friend and repaid him when he received the bank loan. 

16. Whichever way one looks at it, at that stage there was no equity.  There is no evidence as to how the husband now attributes the value of the property to $650,000 but I can take judicial notice of the fact that the market in 2010 has probably risen.  How the value gets to $650,000 is not at all clear, but I am prepared in the circumstances to take that as an admission against interest by the husband.  Similarly, the husband does not set out how he values the Honda CRV 2006 motor car at $20,000, but I think it matters little in this case because of the fact that he concedes that there is a $22,000 leasing arrangement.  To that extent, he clearly has no equity in the property of the motor car.

17. The husband also says in his affidavit that he has three credit cards which total $26,000 and he is personally responsible for those.  The equity in the assets in this case is extremely modest.  The husband said that he moved into the property and renovated it by painting, polishing floorboards, renovating the bathroom, installed curtains, installed a gas stove, and renovated the garage.  Those renovations were paid by way of credit card.  He is personally responsible for those debts, although that is not entirely clear from his evidence.

18. The husband also said that he has $37,000 in superannuation.  I take into account that he said that at the start of the relationship, some five years ago, he had superannuation entitlements of approximately $14,000.  I have concluded, therefore, that the increase in the superannuation, presuming it is an accumulation fund, has come as a result of the investment by the trustee and also by his contributions as an employee.  It seems to me that on any view of the facts in this case, there is a very modest amount of equity in the superannuation. 

19. The husband’s financial statement shows that he has an income of about $105,000 per year, and he is in full time employment which seems relatively secure, because he has been in that job for three and a half years or thereabouts.   

20. Section 79(2) says that a court shall only make an order under Part VIII relating to property division if it is satisfied it is just and equitable. 

21. Section 79(4) requires a court to consider, if it is making an order, insofar as they are relevant, the financial and non-financial contributions of the parties, the contributions made to the welfare of the family, the effect of any proposed order on the earning capacity of either party, and the matters set out in section 75(2). 

22. Section 79 requires a consideration of a number of matters.  It is a subjective judgment about the nature, form, substance, and origin of the contribution of the parties to their assets.  It takes into account the non-financial contribution because of the nature and origin of the asset, that is, how the parties got what they have and what they did to retain to those assets.  Similar considerations apply to the marriage partnership, generally having regard to what each did in what is a very short relationship.  There is virtually no equity here and what little there is can be seen to have been a direct result of the husband’s efforts. 

23. It was partly, I suspect, the way in which the parties lived that enabled the wife to return to India and remain there, away from the husband.  That must be seen to reduce the non-financial contributions between the parties, and having regard to the fact that the wife was not working, I accept that it was the husband who was providing the support. 

24. The pool in this case, as was required to be established was and is clearly nominal.  On any view, the contributions made by the parties as assessed show that the husband’s contributions exceed those of the wife. 

25. I take into account, having regard to the evidence of the initial contributions, the various contributions in their many forms during the relationship, and the fact, importantly, that the husband acquired the interest in the real property subsequent to separation.  At some point in the assessment, the qualitative assessment has to be converted to a quantitative one.  I find the disparity significantly favours the husband as to 90 per cent and the wife as to 10 per cent.  I find that applies in respect of the non-superannuation assets and also as to the superannuation assets. 

26. In this case, notwithstanding there is no indication as to why I should deal with the assets as two pools and no submission put by the husband as to why that should be so, it is clear that the husband has a long way to go before he reaches retirement age and has no capacity to use those superannuation assets as if they were property in the same sense as non-superannuation assets.  To simply lump all of the assets into one pool would be trying to compare apples and oranges.  Contributions, however, must be assessed in respect of two pools if that is the way the Court proposes to treat them.  In this case, I see no distinction between the contributions as to either pool, and therefore I would make the same assessment in respect of the superannuation assets. 

27. The third step in the process is to make an assessment having regard to the matters set out in section 75(2) of the Act, and that requires a consideration of a number of factors.  In this case, the evidence about age, health, income, and earning capacity are very limited, but I also have a very limited understanding of what assets, if any, the wife has.  It is a very limited snapshot on the parties’ lives, but having regard to the age of the parties, their duration together, and presumably the fact that the husband has been the major provider in this case, as the wife has not filed any material, I can conclude that she is not making any claims that would justify an assessment of some factors in her favour.  Under those circumstances, I would make no adjustment on the evidence to section 75(2) factors. 

28. The fourth step in the process is to make the ultimate overall assessment such that it satisfies section 79(2) and is a just and equitable outcome.  Ironically, in this case the husband offers the wife $10,000 and that he take not only what limited assets there are, if there are any at all, but also responsibility for all of the liabilities.  On one view, what he is offering is a generous sum, particularly where the pool is largely nominal.  Having regard to the assessment that I have made, it would seem to me that 10 per cent would probably cover the sum of $10,000 that is he is offering.  In the circumstances, it is the underlying value of the division rather than the percentage that the Court must find to be just and equitable.  I see no reason, in those circumstances, to say that what the husband is otherwise offering is anything other than a just and equitable outcome. 

29. The husband’s counsel described it as a commercial decision, but in this case it seems to me that there is some contribution by the wife, and therefore $10,000 probably reflects that in a pool of this size.  In the circumstances, I am satisfied that it is appropriate to make an order in terms of what the husband is proposing. 

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 16 November 2010.

Associate: 

Date:  31 December 2010