BARNES & BARNES

[2015] FCCA 2528

FEDERAL CIRCUIT COURT OF AUSTRALIA

BARNES & BARNES [2015] FCCA 2528

Catchwords:
FAMILY LAW – Alteration of property interests – undefended – valuation – assessment of contribution – just and equitable order.

Legislation:

Family Law Act 1975, ss.75, 79

Federal Circuit Court Rules 2001, r.16.05

Bevan & Bevan [2013] FamCAFC 116
Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA 395
Stanford & Stanford [2012] HCA 52
Zane& Allan [2008] FamCAFC 115

Applicant: MS BARNES

Respondent: MR BARNES

File Number: WOC 203 of 2015

Judgment of: Judge Altobelli

Hearing date: 4 September 2015

Date of Last Submission: 4 September 2015

Delivered at: Wollongong

Delivered on: 25 September 2015

REPRESENTATION

Solicitors for the Applicant: Rossi Simicic Lawyers

No appearance by the Respondent:

ORDERS

1. Within 42 days of the making of these orders, the Husband do all such acts and things and sign all necessary documents so as to transfer to the Wife free of all encumbrance all his right, title and interest in the property situated at Property R being the whole of the land comprised in Folio Identifier (omitted).

2. The Husband pay to the Wife the sum of $436,013.00 (The Payment).

3. Pending the Husband’s compliance with Orders 1 and 2 the husband is restrained and an injunction is hereby granted restraining the Husband from dealing with, disposing of or further encumbering the property at Property S in the State of NSW being the whole of the land comprised in Certificate of Title Identifier (omitted) other than for the purposes of complying with these orders.

4. In order to secure The Payment, the Wife is at liberty to register a caveat against the property at Property S in the State of NSW being the whole of the land comprised in Certificate of Title Identifier (omitted).

5. In the event that the Husband fails to comply with Orders 1 and 2 herein, then the Wife be appointed as Trustee for the parties to effect an immediate sale of the property at Property S in the State of NSW being the whole of the land comprised in Certificate of Title Identifier (omitted) (hereinafter referred to as “The Property”) for the best price reasonably obtainable, subject to these Orders and that such sale be by public auction.

6. The Respondent Husband forthwith vacate the Property and pending the sale of The Property the Applicant have exclusive occupation of the Property.

7. In order to give effect to these Orders the Trustee:

   (a)cause to be prepared a Contract for Sale of The Property;

   (b)list the Property for sale by auction with (omitted) Real Estate;

   (c)execute all documents requested by the agent for the sale of The Property;

   (d)direct the agent to market the Property for sale by public auction on a date within eight (8) weeks of the date of these Orders;

   (e)That the reserve price of the auction shall be fixed as recommended by the listing agent in writing.

   (f)In the event The Property does not sell at first auction, The Property shall be marketed for sale by private treaty for a further period of 12 weeks.  For the purposes of the sale by private treaty the list price of The Property shall be as recommended by the listing agent and the Trustee shall accept any offer made to purchase The Property within 10% of the listing agent’s recommended sale price.

   (g)In the event that The Property is not sold at the first auction and is not sold in the period provided for sale by private treaty, the Trustee shall list The Property for sale by public auction within eight (8) weeks of the conclusion of the period for sale by private treaty (second auction);

   (h)The reserve price for the Property at the second auction will be 10% below the reserve price of the first auction;

   (i)The Trustee shall attend any auction pursuant to this Order and in the event that the reserve price for the auction is not reached he shall negotiate with the highest bidder and shall accept any offer to purchase made within 10% of the reserve price set for the auction.

8. Upon the sale of the Property, the sale proceeds to be disbursed in the following priority:

   (a)In payment of all reasonable costs of sale, agent’s commission and legal fees;

   (b)In payment of the mortgage to (omitted) Bank

   (c)In discharge of any Trustee’s legal fees and disbursements incurred by the Trustee as a result of these Orders;

   (d)Reimburse the trustee for any costs necessarily incurred to prepare the property for sale

   (e)In payment to the Applicant of the sum of $439,973 together with interest accrued pursuant to the Family Law Act and any costs order made in her favour that remains unpaid;

9. Order 10 has effect from the operative time.

10. Pursuant to section 90MT(1)(b) of the Family Law Act 1975 whenever a splittable payment becomes payable in respect of the interest of the Wife in the (omitted) Superannuation Fund, the Husband is entitled to 100% being the specified percentage of the splittable payment and there be a corresponding reduction in the entitlement of that the Wife would have had but for these orders.

11. The operative time for the purposes of these orders is four business days after the date of service of these orders upon the trustee of the fund.

12. Having been afforded procedural fairness in relation to the making of this order, this order binds the trustee of the (omitted) Superannuation Fund.

13. Upon the implementation of Order 10, the Wife shall sign all documents necessary to resign as a trustee and member of the (omitted) Superannuation Fund.

14. Upon the implementation of Order 10, the Wife shall sign all documents necessary to resign as director of (omitted) Pty Ltd and transfer all shareholding interest to the Husband within 48 hours thereafter. 

15. The Husband transfer to the Wife all his right title and interest in the Chrysler Jeep registered (omitted).

16. The Husband make available for collection by the Wife, within 21 days of these orders, the silver bullion and in the event the Husband fails to make the silver bullion available, the Husband shall forthwith pay the Wife the sum of $5,000 and he is thereafter solely entitled to the bullion. 

17. 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 name and they shall be solely liable for and indemnify the other against any personal liabilities.

18. The husband and wife do all acts and things and give all consents and execute all documents and writings necessary to give effect to the orders made herein.

19. In the event that either party 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 and to do all acts and things necessary to give validity and operation to the said deed or instrument and such Registrar of the Court shall be satisfied upon Affidavit evidence of the party alleging the refusal or neglect that a party is in breach of these Orders.

20. The party in default is ordered to pay all reasonable solicitor/client costs incurred by the party not in default for the purpose of enforcing this Order such amount to be in accordance with the scale of the Federal Circuit Court/Family Court unless otherwise agreed.

21. There be leave to the Wife to relist the proceedings on the issue of implementation of these orders.

22. Within 7 days, the Applicant is to serve a copy of these orders on the Respondent.

23. Judgment be reserved to a date and time to be fixed.

NOTATIONS

A.There was no appearance by or on behalf of the Respondent when the matter was called at 9:07am on 4 September 2015.

B.These orders were made in the absence of the Respondent Husband and he is at liberty to make such application as he may be advised pursuant to Rule 16.05 of the Federal Circuit Court Rules 2001.

C.These Orders have been amended pursuant to rule 16.05(2)(e) of the Federal Circuit Court Rules as follows:

a.In Order 2, to show the number “$436,013.00” in lieu of the number “$437, 013.00”;

b.To remove Order 23;

c.In Notation A, to include the words “9:07am on 4 September 2015.”

d.In Notation B, to show the word “were” in lieu of the word “are”.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT WOLLONGONG

WOC 203 of 2015

MS BARNES

Applicant

And

MR BARNES

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 4 September 2015, the Court made Final Orders for property settlement on an undefended basis in terms of the Orders that are set out in these reasons for judgment.  These reasons for judgment explain why the Orders were made in those terms. 

Background

1. The Applicant Wife in this case is 53 years old, the Respondent 65 years old.  They married on (omitted) 1984 and separated on 13 December 2013.  They have five children born 1986, 1987, 1997, 1989 and 1994. 

2. The present application was commenced by the Wife on 9 March 2015.  The application had been personally served on the Respondent on 9 May 2015.  When the matter came before the Court on 2 June 2015, there was no appearance by or on behalf of the Respondent when the matter was called at 10:42 am.  The Respondent was directed to file and serve a Response, Financial Statement and an Affidavit in support within 35 days.  The Respondent failed to do so.  The matter was then adjourned to 4 September at 9:00am for Mention or Undefended Hearing.  The matter proceeded on an undefended basis.

The Undefended Hearing

1. Rule 13.03C of the Federal Circuit Court Rules 2001 provides, in effect, that if a party to a proceeding is absent from a hearing, the Court may proceed with the hearing generally.  The Court did so on this occasion. 

2. The documents read in the Applicant Wife’s case consisted of:

   ·Financial Statement, filed 9 March 2015;

   ·Affidavit of Service, filed 15 May 2015;

   ·Affidavit of Ms Barnes, sworn 1 September 2015;

   ·Expert’s Report of Mr I (annexed to the Affidavit of Ms Barnes);

   ·Letter of 2 June 2015 to the Respondent Husband (annexed to the Affidavit of Ms Barnes); and

   ·Letter to (omitted) Pty Ltd, Trustee of the (omitted) Superannuation Fund, dated 6 August 2015 (annexed to the Affidavit of Ms Barnes).

The applicable law

1. This is an application under s.79 of the Family Law Act 1975 (hereafter referred to as ‘the Act’) which relevantly provides:

   Alteration of property interests

   (1)  In property settlement proceedings, the court may make such order as it considers appropriate:

   (a)  in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or

   (b)  in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property;

   including:

   (c)  an order for a settlement of property in substitution for any interest in the property; and

   (d)  an order requiring:

   (i)  either or both of the parties to the marriage; or

   (ii)  the relevant bankruptcy trustee (if any);

   to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.

   (2)    The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

   (4)    In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:

   (a)  the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and

   (b)  the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and

   (c)  the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and

   (d)  the effect of any proposed order upon the earning capacity of either party to the marriage; and

   (e)  the matters referred to in subsection 75(2) so far as they are relevant; and

   (f)  any other order made under this Act affecting a party to the marriage or a child of the marriage; and

   (g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.

2. Section 79(4) incorporates the provisions contained in s.75(2) of the Act, which states:

   (2)  The matters to be so taken into account are:

   (a)  the age and state of health of each of the parties; and

   (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; and

   (c)  whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and

   (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; and

   (e)  the responsibilities of either party to support any other person; and

   (f)  subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

   (i)  any law of the Commonwealth, of a State or Territory or of another country; or

   (ii)  any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

   and the rate of any such pension, allowance or benefit being paid to either party; and

   (g)  where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and

   (h)  the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and

   (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; and

   (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; and

   (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; and

   (l)  the need to protect a party who wishes to continue that party's role as a parent; and

   (m)  if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and

   (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; and

   (naa)  the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:

   (i)  a party to the marriage; or

   (ii)  a person who is a party to a de facto relationship with a party to the marriage; or

   (iii)  the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or

   (iv)  vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and

   (na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and

   (o)  any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and

   (p)   the terms of any financial agreement that is binding on the parties to the marriage; and

   (q)  the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.

3. In Bevan & Bevan [2013] FamCAFC 116, the Full Court of the Family Court of Australia considered the High Court’s decision in Stanford & Stanford [2012] HCA 52, which provided guidance on how s.79 was to be interpreted and implemented. Bevan endorsed the continuing application of the four-step approach articulated by the Full Court in Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA 395, but on the basis that it is a shorthand distillation of the words of s.79, as opposed to being a statutory edict. The four steps articulated in Hickey at paragraph 39 are:

   a)Identify and value the property, liabilities and financial resources of the parties; and

   b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and

   c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and

   d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.

4. The decisions in Stanford and Bevan also emphasise the importance of making findings that any order is just and equitable for the purposes of s.79(2), independent of the s.79(4) process. In most cases, such as the present one, it makes no difference to the outcome of the alteration of property interests exercise. Even if the just and equitable consideration were treated as a threshold issue in this case the parties have, by their actions (separation, and re-ordering of their financial lives since then), and claims (divergent claims about their property under s.79 of the Act), indicated that they themselves consider it just and equitable that some order be made under s.79 adjusting their property interests as presently held. It is clearly just and equitable in this case to make an Order.

5. As this matter proceeded on an undefended basis, the Court is cognisant of the discussion of this topic in the Full Court’s decision in Zane& Allan [2008] FamCAFC 115. In particular, the Court derives from that Full Court’s decision an acceptance of a number of principles, including that the Applicant has a duty to the Court to make full disclosure and deal with the Court in good faith, the Applicant must establish the case with admissible evidence, and the Court must have regard to all of the evidence before the Court, including the evidence filed on behalf of any Respondent who does not appear at the final hearing. Obviously, that is not an issue in this case, as the Respondent Husband elected not to file any material. An important principle derived from Zane & Allan, however, is the recognition that a Court does not have to insist on detailed evidence, make elaborate findings and give detailed reasons in undefended matters, that it must be satisfied that the evidence supports its findings and Orders. 

1. In any event, it must be noted, as indeed it was formally noted in the Orders of 4 September 2015, that the Respondent Husband retains his rights under r.16.05 of the Federal Circuit Court Rules 2001, which states:

   Setting aside

   (1) The Court may vary or set aside its judgment or order before it has been entered.

   (2) The Court may vary or set aside its judgment or order after it has been entered if:

   (a) the order is made in the absence of a party; or

   (b) the order is obtained by fraud; or

   (c) the order is interlocutory; or

   (d) the order is an injunction or for the appointment of a receiver; or

   (e) the order does not reflect the intention of the Court; or

   (f) the party in whose favour the order is made consents.

   (3) This rule does not affect the power of the Court to vary or terminate the operation of an order by a further order.

The balance sheet

1. The balance sheet tendered on behalf of the Applicant became Exhibit A2, and is reproduced below: 

Ownership		Description	Wife / de facto partner’s value	Husband / de facto partner’s value
ASSETS
1.	H	Property S	$     1,750,000	$
2.	H	Property R	$        887,500	$
3.	H	(omitted business)	$        141,822	$
4.	H	Landrover	$          10,000	$
5.	H	(vehicle omitted)	45,000
6.	H	Jeep	$          20,000	$
7.	W	(omitted) Bank	$          10,045	$
8.	W	Silver Bullion	$            5,000
9.	H	Gold Bullion	NK
10.	H	Furniture at Property S	10,000
11.	W	Furniture at Property R	$            2,000
12.	H	Bank Accounts (personal)	$               NK
13.	W	(omitted) Bank Xmas acc (omitted)	$               871
14.	W	(omitted) Bank (omitted)	$            1,161
15.	H	Toyota Camry	$            2,000
16.	H	(vehicle omitted)	$           20,000

Total $     2,905,399 $                  0

ADDBACKS
17.	$	$

Total $                  0 $                  0

LIABILITIES
18.	H	(omitted) Bank Loan Acc (omitted) at 14 July, 2015)	$        473,874	$
19.	H	(omitted) Bank Business cheque Account (omitted)	$        129,755	$
20.	W	Visa	$            2,380	$

Total $        606,009 $                  0

SUPERANNUATION
Member		Name of Fund	Type of Interest	Wife / de facto partner’s value	Husband / de facto partner’s value
21.	H	(omitted) Superannuation Fund @ 30/6/2014	Pension Fund	$        270,783	$
22.	H	(omitted) Superannuation Fund @ 30/6/2014	Accumulation	$           12,681
23.	W	(omitted) Superannuation Fund @ 30/6/2014	Accum	$         144,247	$
24.	W	(omitted) Super	Accum	$            2,761

Total $        430,472 $                  0

FINANCIAL RESOURCES
Ownership		Description	Wife / de facto partner’s value	Husband / de facto partner’s value
25.	$	$

Total $                  0 $                  0

1. The Court makes findings in accordance with the balance sheet reproduced above.  The Court accepts the assertions of value advanced on behalf of the Wife, as being the best evidence available.  It should be noted that most of the assets are in the Husband’s name and that his decision not to participate in these proceedings inevitably made the Wife’s task of maintaining the application more difficult.  Her contention as to values was clearly put to the Husband, but he declined to respond.  In the circumstances, she should not be prejudiced by his inaction.  Significantly, the value of the (business omitted) is established by way of a valuation from an appropriate expert.  The values of the liabilities and the superannuation are established by way of documents that were tendered in evidence, which are annexed to the Wife’s Affidavit. 

The Orders sought by the Wife

1. The Orders made by the Court on 4 September reflect those sought by the Wife.  In effect, the Orders require the Husband to transfer to her the home at Property R, together with a payment to her of $436,013.00.  Should he fail to make this payment, the property at Property S would need to be sold.

2. The effect of the Orders sought by the Wife is set out in the balance sheet which is reproduced below:

Ownership		Description	WIFE RETAINS	HUSBAND RETAIN
ASSETS
26.	H	Property S	$     1,750,000
27.	H	Property R	887,500	$
28.	H	(business omitted)	$        141,822
29.	H	Landrover	$          10,000
30.	H	(vehicle omitted)	45,000
31.	H	Jeep	20,000	$
32.	W	(omitted) Bank (omitted)	$          10,045
33.	W	Silver Bullion	$            5,000
34.	H	Gold Bullion	NK
35.	H	Furniture at Property S	10,000
36.	W	Furniture at Property R	$            2,000	$
37.	H	Bank Accounts (personal)	$               NK
38.	W	(omitted) Bank Xmas acc (omitted)	$               871
39.	W	(omitted) Bank – (omitted)	$            1,161
40.	H	Toyota Camry	$            2,000
41.	H	(vehicle omitted)	$           20,000
42.	W	Husband’s Payment	$        436,013

Total $     1,362,590 $     1,978,822

ADDBACKS
43.	$	$

Total $                  0 $                  0

LIABILITIES
44.	H	(omitted) Bank Loan Acc (omitted) at 14 July, 2015)	$        473,874
45.	H	(omitted) Bank Business cheque Account (omitted)	$        129,755
46.	W	Visa	$            2,380	$
47.	H	Payment to Wife	$        436,013

Total $            2,380 $     1,039,642

SUPERANNUATION
Member		Name of Fund	Type of Interest	Wife / de facto partner’s value	Husband / de facto partner’s value
48.	H	(omitted) Superannuation Fund @ 30/6/2014	Pension Fund	$        270,783
49.	H	(omitted) Superannuation Fund @ 30/6/2014	Accumulation	$           12,681
50.	W	(omitted) Superannuation Fund @ 30/6/2014	Accum	$         144,247
51.	W	(omitted) Super	Accum	$            6,680	$

Total	$            6,680	$        427,711
TOTALS RETAINED	$     1,366,890	$       1,366,891

1. In short, the Husband would retain the Property S property, his (business omitted), his Land Rover and (vehicle omitted), the furniture at Property S and his Toyota Camry and (vehicle omitted) motor vehicles.  He would, of course, have to make a payment to the Wife.  He would retain the (omitted) Bank liabilities, but the Wife would retain her Visa card.  The Wife would relinquish her interest in superannuation in favour of the Husband.  A number of incidental Orders are made to implement this.

A just and equitable Order

1. When one has regard to the evidence before the Court, particularly the Wife’s evidence in her Affidavit sworn 1 September 2015, the Court believes that the Orders made are just and equitable.  Both parties worked during the relationship and contributed their income, directly or indirectly, to the benefit of the family, and to the acquisition, improvement and maintenance of the parties’ properties.  The Husband’s income was certainly greater than that of the Wife.  In a financial sense, he probably made the greater contribution.  In a non-financial sense, however, the Wife made the greater contribution as parent and homemaker, particularly bearing in mind that the parties have five children.  In the circumstances, given a long relationship during which different types of contributions were made, a contribution of equality is appropriate.  Contribution would thus be assessed as being equal. 

2. Turning to the future, however, is there any basis for an adjustment under s.75(2)? The Court concludes in the negative. Whilst the Husband, as a self-employed (occupation omitted), clearly earns more than the Wife and has the benefit of his own (business omitted), he is 65, whereas she is 53. Even though she earns less than him and has the ongoing care for V, their oldest child, nonetheless there are no s.75(2) factors which work in her favour. An equal division of assets remains appropriate.

3. Of course, the Husband takes more of the non-superannuation assets, than the Wife.  This is appropriate.  He is closer to retirement than the wife is.  She has the need to reaccommodate herself, and the Order facilitates this.  Superannuation, at his stage of his life, is more important than to the Wife. 

4. The Court concludes that these Orders are just and equitable.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Judge Altobelli

Associate: 

Date:       25 September 2015