Baressi and Baressi

[2016] FCCA 890

FEDERAL CIRCUIT COURT OF AUSTRALIA

BARESSI & BARESSI [2016] FCCA 890

Catchwords:
FAMILY LAW – Undefended matrimonial property proceedings – service –matters to be considered – just and equitable – small property pool.

Legislation:

Family Law Act 1975 (Cth), ss.4(1), 75(2), 79, 79(4)(c)

Federal Circuit Court Rules: r 13.03A(2), 13.03(2)(d), 13.1A

Cases cited:
Taylor v Taylor (1979) 143 CLR 1
Lee Steere v Lee Steere (1998) FLC 91-626
Ferraro v Ferraro (1993) FLC 92-335
Clauson v Clauson (1995) FLC 92-595
Hickey v Hickey & Attorney General of the Commonwealth of Australia (Intervenor) 2003 FLC 93-143
Wardman & Hudson (1978) FLC 90-466
Biltoft & Biltoft (1995) FLC 92-614
Russell v Russell (1999) FamCA 187

Applicant: MS BARESSI

Respondent: MR BARESSI

File Number: ADC 4146 of 2015

Judgment of: Judge Brown

Hearing date: 8 April 2016

Date of Last Submission: 15 April 2016

Delivered at: Adelaide

Delivered on: 15 April 2016

REPRESENTATION

Counsel for the Applicant: Ms McDonald

Solicitors for the Applicant: Rossi Legal

Counsel for the Respondent: No appearance

ORDERS

Property D

1. That the property at Property D, which is jointly owned by the Husband and Wife and which is comprised and described in Certificate of Title Register Book Volume (omitted) Folio (omitted) (hereinafter referred to as ‘the Property D property’) be sold by private treaty.

2. That the Wife appoint a Real Estate Agent to sell the Property D property.

3. That the sale price of the Property D property be determined by the Wife after consultation with the appointed Real Estate Agent.

4. That the Husband sign and return to the appointed Real Estate Agent a signed Sales Agency Agreement within 5 working days of the said Agreement being provided to him.

5. That in the event that the Husband does not sign and/or return the Sales Agency Agreement to the Wife that a Registrar or Deputy Registrar of this Honourable Court be appointed to execute the said Sales Agency Agreement for the sale of the Property D property in the name of the Husband, if required, and to do all acts and things necessary to give validity and operation to the said Sales Agency Agreement.

6. That pending the sale of the Property D property:

   (a)As and from the date of the making of these Orders and until the settlement of sale of the Property D property the Husband make and be responsible for the payment of all moneys due and owing pursuant to the mortgage no. (omitted) to the (omitted) Bank as and when they fall due and the respondent indemnify the applicant in relation to it.

   (b)As and from the date of the making of these orders and until the settlement of sale of the Property D property the Husband pay all other outgoings associated with the Property D property, including but not limited to, council rates, water rates, emergency services levy, home and contents insurance and utility bills.

   (c)the Husband is to maintain the property in good order and repair whilst it is being sold.

   (d)the parties each co-operate in every way with the Real Estate Agent including (without limiting the generality of the foregoing):

   (i)making the key available to the agent;

   (ii)allowing inspection of the Real Property at all reasonable times requested by the agent;

   (iii)doing or saying nothing to hinder or prevent a sale being effected; and

   (iv)ensure the Property D property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers.

7. On settlement of the sale of the Property D property the proceeds of sale be paid in the following manner and priority:

   (a)all costs and expenses of sale including any costs, disbursements and commissions to the real estate agent and conveyancing fees and disbursements;

   (b)the amounts required to discharge the outstanding mortgage No. (omitted) to the (omitted) Bank secured over the Property D property;

   (c)the amounts required to pay all municipal and water rates outstanding with respect to the Property D property;

   (d)the balance then remaining will be divided as follows:

   (i)firstly to reimburse the Wife any amounts arising from the Husband’s failure to comply with paragraph 6(a) to 6(c) of these Orders;

   (ii)secondly to the Wife - 65% of the proceeds of sale by way of bank cheque made payable to Rossi Legal Trust Account;

   (iii)thirdly the remaining balance to the Husband by way of bank cheque made payable to the Husband.

8. That a Registrar or Deputy Registrar of this Honourable Court be appointed to execute in the name of the Husband all other documents or instruments as shall be required to sell and transfer the Property D property and to deal with the proceeds of sale of the said property and to do all acts and things necessary to give validity and operation to the said documents or instruments.

Liabilities

1. The Husband be liable for and indemnify the Wife against all payments with respect to all and any credit cards in his sole name.

2. That hereinafter the Wife meet payments of all her personal debts and liabilities incurred in her own name to the complete exoneration of the Husband who shall have no liability with respect hereto and the Wife hereby indemnifies the Husband against all claims, expenses, losses or demands incurred by her as a result of her refusal, failure, neglect so to pay.

3. That hereinafter the Husband meet payments of all his personal debts and liabilities incurred in his own name to the complete exoneration of the Wife who shall have no liability with respect hereto and the Husband hereby indemnifies the Wife against all claims, expenses, losses or demands incurred by him as a result of his refusal, failure, neglect so to pay.

Chattels and Personal Property

1. The Wife do retain for her sole use and benefit absolutely:

   (i)Mitsubishi (omitted) motor vehicle registration number: (omitted);

   (ii)furniture, furnishings and personal possessions in the wife’s possession;

   (iii)proceeds in her bank accounts; and

   (iv)any and all entitlements arising from her employment

2. The Husband to retain for his sole use and benefit absolutely:

   (i)furniture, furnishings and personal items currently in his possession;

   (ii)proceeds in his bank accounts; and

   (iii)any and all entitlements arising from his employment

3. That contemporaneously with the settlement of the Property D property that the joint (omitted) bank account number: (omitted) be closed.

Consequential orders

1. Liberty to either party to apply as to any consequential Orders particularly in regard to an enforcement warrant for seizure and sale of the Property D property. 

2. That the Wife be at liberty to apply for superannuation splitting orders once details of the husbands superannuation entitlements have been ascertained.

3. A copy of the orders and there reasons for judgment are to be served on the Husband by pre-paid post at his last known address at Property D.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADC 4146 of 2015

MS BARESSI

Applicant

And

MR BARESSI

Respondent

REASONS FOR JUDGMENT

Introduction

1. These reasons for judgment relate to undefended matrimonial property proceedings.  The applicant in the proceedings is Ms Baressi “the wife”.  The respondent is Mr Baressi “the husband”. 

2. The parties married on (omitted) 1997 and separated on 11 April 2015, when the wife left the former matrimonial home situated at Property D[1] with the two children of the marriage, X born (omitted) 1999 and Y born (omitted) 2002.

   [1]  Hereinafter referred to as the former matrimonial home

3. Currently, the wife and the two children concerned live in rented accommodation in (omitted).  X and Y spend time with their father infrequently.  No formal orders have been made in respect of their parenting arrangements and no proceedings commenced in respect of them.

4. The wife commenced these proceedings on 6 November 2015.  It is her positon that the parties’ most significant asset, in financial terms, is the former matrimonial home.  The husband continues to occupy this property.  The wife seeks that the property be sold and its net proceeds divided so that she receives sixty-five percent of them and the husband thirty-five percent.

5. At present the husband does not pay any child support in respect of either X or Y.  It is also the wife’s position that she is struggling financially at present.  In these circumstances, the wife submits that it is just and equitable that she receives the greater proportion of the proceeds of sale to reflect her currently greater level of financial responsibility for the children both since separation and into the future. 

6. In her application, the wife seeks the following orders:

   “That the wife retain the Mitsubishi (omitted) motor vehicle, savings and contents of her rental property in her sole name.

   That the contents of the former matrimonial home be divided equally between the parties.

   That the husband retain his savings and credit card debt.

   That the former matrimonial home at Property D in the State of South Australia be sold and that the wife receive 65% of the proceeds of sale and that the husband receive 35% of the proceeds of sale.

   Any other orders that are just and equitable in the circumstances.”

7. The wife’s application was made returnable on 18 February 2016.  It was supported by an affidavit of Ms Baressi and a statement on oath of her financial circumstances.  These documents were served personally on the husband at the former matrimonial home on 15 December 2015. 

8. The husband did not attend at court on 18 February 2016.  On this occasion the following orders were made:

   1.  The respondent file and serve a Response and Affidavit in support and a statement of his financial circumstances within 28 days of today’s date. 

   2.  A copy of the orders made today are to be personally served on the respondent.

   3.  If the husband fails to comply with order 1 hereof or appear on the adjourned date the applicant has leave to proceed on an undefended basis.

   4.  Further consideration of the matter is adjourned to 8 April 2016 at 9:30am.

9. The person who served the husband with the wife’s application was Mr J, a process server.  He obtained an acknowledgement of service from Mr Baressi which he signed on 15 December 2015.  Mr J was subsequently instructed by the wife’s solicitor, Anne McDonald, to serve the orders of 18 February 2016 on the husband.

10. Mr J reported to Ms McDonald that he was unable to serve the order on Mr Baressi.  In an affidavit filed on 18 March 2016 he deposed that he had left several messages on Mr Baressi’s voicemail and attended at the Property D property on three occasions both in the morning and early evening.  On each occasion he left a card requesting that Mr Baressi contact him.  On one occasion he believed that the premises were occupied. 

11. Mr Baressi did not contact Mr J.  Accordingly, no arrangements could be made for Mr Baressi to receive the orders of the court made on 18 February 2016.  In all these circumstances, it is Mr J’s view that Mr Baressi was attempting to avoid service. 

12. After Mr J reported back to her his difficulties in serving Mr Baressi, Ms McDonald wrote to Mr Baressi at the Property D property by registered mail enclosing the court’s order.  In addition, she sent an email letter in the same form to Mr Baressi’s email address.  The email was accessed by Mr Baressi.  Mr Baressi declined to collect the registered letter.[2]

    [2]  See affidavit of Anne Karen McDonald filed 4 April 2016

13. I am satisfied that Mr Baressi has been properly informed of the wife’s application for settlement of matrimonial property.  Mr Baressi did not attend at court on the first date scheduled for the return of the wife’s application. 

14. Thereafter reasonable attempts have been made to bring adjourned dates to Mr Baressi’s attention and inform him of what he is required to do to take part in the proceedings.  These attempts have involved personal service; service by electronic means; and service by post.

15. The court’s rules authorise the court to find that a document has been served and make orders for substituted service. In particular, Rule 6.12 of the Federal Circuit Court Rules 2001 provides that a document sent by electronic means is deemed to have been served the day following its transmission.

16. In addition, pursuant to Rule 6.15, the following matters are to be taken into account in determining whether it is appropriate to dispense with service:

    “When making an order for dispensing with service or for substituted service, the Court may have regard to:

    (a)whether reasonable steps have been taken to attempt to serve the document; and

    (aa)whether it is likely that the steps that have been taken have brought the existence and nature of the document to the attention of the person to be served; and

    (b)whether the person to be served could become aware of the existence and nature of the document by means of advertising or another means of communication that is reasonably available; and

    (c)the likely cost to the party serving the document, the means of that party and the nature of the proceedings; and

    (d)     any other relevant matter.

17. In all the circumstances of these case, I am of the view that it is appropriate to dispense with the personal service of the order of 18 February 2016 on Mr Baressi.  On balance, it seems to me to be more likely than not the Mr Baressi is aware that the proceedings are continuing but he has elected not to take part in them or make any attempt to enquire of either the court or Ms McDonald what is their current status. 

18. He takes such a stance at his peril.  In my view, in all these circumstances, it would represent an unwarranted expense for the wife to be required to take further steps to bring the proceedings to Mr Baressi’s notice.

19. As a consequence of Mr Baressi’s failure to take part in the proceedings, I am satisfied that it is appropriate that Ms Baressi’s application be dealt with on an undefended basis.

The nature of an undefended hearing

1. It is a significant thing for proceedings to be determined in the absence of one of the parties.  The court has an obligation to ensure that the parties to proceedings before it have an opportunity to participate in those proceedings. 

2. Before a person can be adversely affected by judicial order, he or she must be afforded an adequate opportunity to be heard.[3]  I am satisfied that Mr Baressi has been given an adequate opportunity to appear in these proceedings and put his position before the court. 

   [3]  See Taylor v Taylor (1979) 143 CLR 1

3. Ms Baressi is entitled to have her application for settlement of matrimonial matters determined within a reasonable period of time pursuant to the applicable principles of law. 

4. As such, she needs neither Mr Baressi’s formal imprimatur nor his cooperation to have her application determined.  Rather, there is an obligation on Mr Baressi’s part if he wishes to be involved in the proceedings for him to attend at court as required and pursue any application put by him or on his behalf with due diligence.

5. The Federal Circuit Court is a court of private law.  It determines disputes between parties according to law.  In this case, according to the provisions of Part VIII of the Family Law Act 1975, which relate to the division of property following the breakdown of a marital relationship. 

6. The court cannot compel a respondent to engage with litigation.  It is however obliged to give a respondent the opportunity to put evidence before the court and, if he or she wishes to do so, contest any evidence relied upon by the applicant.

7. However, a respondent, whether by intransigence, disinterest or manipulation cannot succeed in denying an applicant a just resolution, according to law, to his or her application, by choosing not to take part in proceedings because they do not proceed in the manner of his or her preference.

8. Order 13.1A of the Federal Circuit Court Rules deals with the court’s authority to enter judgment against a respondent if that respondent defaults in complying with a court order or fails to prosecute any proceedings with due diligence. 

9. Pursuant to Rule 13.03A(2) a respondent is in default if, amongst other things, he or she has failed to:

   ·Comply with an order of the court in the proceedings;

   ·Produce a document as required; or

   ·Defend the proceedings with due diligence.

10. I am satisfied that Mr Baressi has failed to comply with relevant orders of the court.  As such, he has not defended the proceedings with due diligence.  In these circumstances, pursuant to the provisions of Rule 13.03B(2)(d), Ms Baressi is entitled to judgment in default.

11. In addition, I am satisfied that Mr Baressi has been given adequate notice of these proceedings.  Particularly that he was required to file answering material and, if he did not do so, the proceedings would be heard on an undefended basis. 

The legal principles applicable

1. The applicant is not entitled, as of right, to the orders which she seeks.  Rather, the onus remains on her to establish to the court that the orders which she seeks are just and equitable according to law. 

2. In this context, the wife must lead sufficient evidence to establish to the court that the orders which she seeks are just and equitable ones.  Otherwise, the court must impose the result in the case which it considers fair according to the law and the evidence available to it.

3. The process to be followed for the division of the parties’ property is well established by law.[4] The relevant legal principles are primarily contained in sections 79 and 75(2) of the Family Law Act 1975. I am required to follow a number of specific steps.

   [4]  See Lee Steere v Lee Steere (1998) FLC 91-626; Ferraro v Ferraro (1993) FLC 92-335;

4. Firstly, I must ascertain what are the parties’ assets and liabilities as at the date of trial.[5] This is because there is only one exercise by the court of the power conferred on it by section 79 to make a matrimonial property order.

   [5]  See Wardman & Hudson (1978) FLC 90-466; and Biltoft & Biltoft (1995) FLC 92-614

5. The second step involves the court ascertaining the contributions which each party has made towards the assets identified following the first step.  Contributions fall into two broad categories. 

6. The first kind is contributions to the property: financial contributions and non-financial contributions made directly or indirectly by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.  

7. The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage, including any contribution made in the capacity of home maker or parent.”[6] 

   [6] See Family Law Act s79(4)(c)

8. It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.

9. The third step involves the assessment of the parties’ prospective needs by reference to the factors set out in section 75(2) of the Family Law Act 1975. Pursuant to section 75(2)(o), the court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”. 

10. Finally in determining what order the court should make under section 79, the court must be satisfied that in all the circumstances it is just and equitable to make the relevant orders. Overall, it is the justice and equity of the actual orders that the court must consider.[7] 

    [7]  See Russell v Russell (1999) FamCA 187

The wife’s evidence

1. The wife was born on (omitted) 1970.  The husband was born on (omitted) 1970.  Currently, Ms Baressi works as a (occupation omitted) in the (omitted) industry.  The husband has worked as a (occupation omitted) for (employer omitted). 

2. When the parties commenced their relationship they had modest assets.  Both were in full-time employment.  The wife took maternity leave following the birth of both Y and X.  She recommenced employment on a part-time basis in (omitted) 2004. 

3. The parties’ first real property was located at Property F and was purchased as an investment which was initially rented out but later occupied by the parties.  The husband and wife contributed equally to a deposit of approximately $11,000.00 utilised to purchase the property, with the balance being borrowed from the (omitted) Bank and secured by way of mortgage against the property. 

4. The Property F property was sold in September 2012 at a significant profit.  This, in part, funded the purchase of the former matrimonial home which was acquired for the sum of $720,000.00 in July of 2012.  The parties borrowed funds from the (omitted) Bank to assist with the purchase.

5. It is the wife’s case that, as well as being engaged in full-time employment, she was also the main home-maker and carer of the children during the marriage.  In her affidavit evidence, she deposes as follows:

   “I was the main homemaker and carer of the girls during the marriage. I undertook all of the housework and most of the cooking.  I would drop the girls to childcare and pick them up and when they commenced school I would take them to before school care and pick them up from after school care.  I took the children to (hobbies omitted) on most occasions.  Mr Baressi would drop off and pick up the girls from school or (hobby omitted) only occasionally.”[8]

   [8]  See affidavit of Ms Baressi filed 6 November 2015

6. It is the wife’s case that the marriage fell into difficulties in mid-2011.  It is her case that the husband was verbally abusive towards her.  She attributes his change in behaviour to Mr Baressi’s involvement with methamphetamine which she believes Mr Baressi ingested in the shed of the former matrimonial home.  From Ms Baressi’s perspective, this behaviour was intolerable and led to her and the children leaving the home. 

7. It is also Ms Baressi’s evidence that she has become increasingly concerned about the husband’s credit card spending.  However, she concedes as far as she knows that Mr Baressi is attending to the mortgage on the former matrimonial home and the property appears properly maintained at least from its outside appearance. 

8. X and Y currently attend private schools.  The wife has been paying their fees and other education expenses.  Ms Baressi deposes that she has borrowed money from a friend to pay for her rental bond and rent for her current accommodation.  At present, she earns an annual salary of approximately $80,000.00 as a (occupation omitted) with (employer omitted).  It is her position that this income does not cover her current level of recurrent expenditure. 

9. It is the wife’s position that the parties have a modest pool of assets.  She is fearful that the husband’s drug use, antagonistic attitude towards her and his failure to take part in these proceedings indicate there is a real risk that the asset pool will be eroded by him if steps are not taken urgently to finalise her application. 

10. Given the non-involvement of Mr Baressi in these proceedings and his failure to file any answering material, I have no evidence regarding his plans for the future.  It is Ms Baressi’s position that the husband is not currently well disposed towards her or the children.  She plans to continue working and providing financial support for the children. 

Step One – the pool of assets

1. I accept the wife’s evidence is that the parties pool of assets is as follows:

Former matrimonial home	$700,000
Mortgage	($381,702)
Savings	$14,000
Wife’s motor vehicle	$9,400
Household contents	$20,000
Wife’s superannuation ((omitted))	$95,000

1. The wife believes that the husband has his own superannuation entitlements.  She is unaware of their value.  However, given that the husband has been employed full-time throughout the marriage, she anticipates that they are likely to be either equal or more likely superior to her own superannuation entitlements.

Step Two – assessment of contributions

1. It is the wife’s case that during the parties’ marriage of approximately eighteen years, their respective contributions should be assessed to all intents and purposes as essentially equal.  I agree with this submission.

Step Three – the assessment of section 75(2) factors

1. In my view, on the evidence available to me, the most significant factors which favour the wife arising under section 75(2) are the fact that Ms Baressi has the care and control of the two children of the marriage who have not yet attained eighteen years of age [section75(2)(c)] and the failure of the husband to provide child support for the two children [section 75(2)(na)].

2. X is currently sixteen years of age and Y is thirteen.  Both children have part-time jobs but I accept that given their needs, it is an expensive exercise to support the children particularly given the extramural activities and mode of education.  I also accept that Ms Baressi is carrying this burden without any assistance from Mr Baressi whatsoever. 

3. In Clauson & Clauson[9] the Full Court said as follows:

   “The weight to be attached to a child support assessment will vary with the circumstances of each case, including the amount of the assessment, the financial circumstances of the parties, the needs of the children, whether the assessment is being paid regularly, and whether it is likely that it will continue to be paid at a regular and adequate rate in the future.”

   [9]  Clauson & Clauson (1995) FLC92-595 at 81,911

4. In this case, I consider it more likely than not that Ms Baressi will not receive a regular and adequate supply of child support from Mr Baressi for the remainder of the period until the children either cease their education or attain the age of eighteen.  As such, they will remain the financial responsibility of Ms Baressi.  In my view, this is a factor which significantly favours her. 

5. Given the modest extent of the asset pool, I believe that an appropriate allowance in the wife’s favour for the section 75(2) factors which favour her is in the vicinity of fifteen percent.

Conclusions

1. It is highly regrettable that the court has been compelled to deal with the wife’s application in the husband’s absence.  However, I am satisfied that he knows of these proceedings and for reasons about which I can only conjecture he has chosen not to take part in them formally.  Rather, it seems to me he has preferred to passively resist the wife’s proper entitlement to end her financial relationship with him. 

2. In difficult circumstances the wife has been compelled to rehouse herself and the children.  The husband has been able to retain occupation of the parties’ former matrimonial home.  It is not fair to the wife that this state of affairs should continue.  The wife has no wish to occupy the home.

3. In the absence of any offer by the husband to acquire Ms Baressi’s interest in the former matrimonial home, the only course open to the court is for the property to be sold.  Given Mr Baressi’s stance in the proceedings to date, it seems highly probable that he will not cooperate in this process. 

4. For all these reasons, I propose to make the orders as sought by the wife, which are set out at the commencement of these reasons for judgment.  I am satisfied that these orders represent a just and equitable outcome of these proceedings. 

I certify that the preceding sixty two (62) paragraphs are a true copy of the reasons for judgment of Judge Brown

Date:         15 April 2016

and Clauson v Clauson (1995) FLC 92-595; Hickey v Hickey & Attorney General of the Commonwealth of Australia (Intervenor) 2003 FLC 93-143