BRADY & HARRIS - [2012] FamCA 420

FAMILY COURT OF AUSTRALIA

BRADY & HARRIS

[2012] FamCA 420

FAMILY LAW - PROPERTY – Application brought under the Domestic Relationships Act 1994 (ACT) for an adjustment of property interests on the basis of cross-vested jurisdiction – determination of preliminary issues

FAMILY LAW - JURISDICTION – Whether the Family Court of Australia has jurisdiction to make orders in relation to property under the Domestic Relationships Act 1994 (ACT) where some of that property is outside of the Australian Capital Territory – the Court is not able to make orders in rem – the Court may make orders in personam directed towards the parties – in what way can orders in personam be enforced

FAMILY LAW - PROPERTY – Length of the domestic relationship – where property in the parties’ joint names was transferred to the respondent’s sole name – where no consideration was paid to the applicant for the transfer – parties slept in the same bed – where applicant may have paid board to the respondent – where applicant declared himself to be single in his application for social security benefits – consideration of personal or financial commitment and support – finding that the domestic relationship ended in 2008

FAMILY LAW - PRACTICE AND PROCEDURE – Whether applicant should be granted leave to commence proceedings where application was filed out of time – where application was filed a matter of months out of time – where the applicant has a case to be argued – hardship suffered by the respondent can be remedied by an order for costs – finding that the applicant did not deliberately or recklessly commence proceedings out of time – finding that hardship to the applicant in refusing leave is greater than the hardship to the respondent in granting leave

Domestic Relationships Act 1994 (Cth), ss 3, 11, 12, 13 and Dictionary
Family Law Act 1975 (Cth), ss 109A and 112AP
Family Law Rules 2004, Ch 20

Aldridge & Mazzoti [2009] FamCA 1048
Bullivant & Holt [2012] FamCA 134
Docklands & Marshman [2011] FamCA 144
Ferris v Winslade [1998] ACTSC 172
SJS v MLS [2010] QSC 263
Re Wakim; Ex parte McNally (1999) 198 CLR 571

APPLICANT:

Mr Brady

RESPONDENT:

Ms Harris

FILE NUMBER:

CAC

1889

2010

DATE DELIVERED:

6 June 2012

PLACE DELIVERED:

Canberra

PLACE HEARD:

Canberra

JUDGMENT OF:

Faulks DCJ

HEARING DATE:

6 April 2011, written submissions filed on 27 April 2011, 3 May 2011 and 20 May 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr G Howard

SOLICITOR FOR THE APPLICANT:

Farrar Gesini & Dunn

COUNSEL FOR THE RESPONDENT:

Ms A Tonkin

SOLICITOR FOR THE RESPONDENT:

Strong Law Pty Ltd

Orders

The applicant, Mr Brady (born … June 1948), and the respondent, Ms Harris (born … February 1951), were in a domestic relationship in accordance with s 3 of the Domestic Relationships Act 1994 (ACT) from 1988 until on or about May 2008.
Leave pursuant to s 13 of the Domestic Relationships Act 1994 (ACT) to commence proceedings for an adjustment…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: BRADY & HARRIS [2012] FamCA 420
Case: [2012] FamCA 420
Decision Date: 6 June 2012

CaseChat Overview and Summary

In *Brady & Harris*, the applicant, Mr Brady, and the respondent, Ms Harris, sought an adjustment of property interests under the *Domestic Relationships Act 1994* (ACT). The primary dispute concerned the determination of preliminary issues, including the court's jurisdiction and whether the applicant should be granted leave to commence proceedings out of time. The court was required to consider the length of the domestic relationship, the circumstances surrounding the transfer of jointly owned property into the respondent's sole name without consideration paid to the applicant, and the applicant's declaration of being single for social security purposes.

The court was tasked with determining whether it possessed jurisdiction to make orders concerning property located outside the Australian Capital Territory, noting that while it could not make orders *in rem*, it could make *in personam* orders directed at the parties. Furthermore, the court had to decide whether to grant the applicant leave to commence proceedings out of time, considering the relatively short delay and the potential hardship to each party. The court also needed to assess the nature of the domestic relationship, specifically its commencement and termination dates, and the financial contributions and commitments between the parties.

Faulks DCJ found that the domestic relationship subsisted from 1988 until approximately May 2008. Leave was granted *nunc pro tunc* for the applicant to commence proceedings, as the application was filed only months out of time, the applicant had a case to argue, and the hardship to the applicant in refusing leave outweighed any hardship to the respondent, which could be addressed by costs. The court noted that the transfer of the Gold Coast property was altered to include consideration to minimise capital gains tax, and that the applicant's redundancy was a factor in the transfer. The court also considered the applicant's payments towards household expenses, finding that even if characterised as board, their significance was diminished by the respondent's prior acceptance of such payments.

Orders

Orders of the court

The applicant, Mr Brady (born … June 1948), and the respondent, Ms Harris (born … February 1951), were in a domestic relationship in accordance with s 3 of the Domestic Relationships Act 1994 (ACT) from 1988 until on or about May 2008.

Leave pursuant to s 13 of the Domestic Relationships Act 1994 (ACT) to commence proceedings for an adjustment of property interests is granted nunc pro tunc to permit the filing of the application of the applicant on 1 December 2010.

Any further affidavit about matters relevant to the application of ss 15 and 19(2) of the Domestic Relationships Act 1994 (ACT) sought to be relied upon by either party must be filed on or before 4:00pm on 6 July 2012.

Each party will exchange with the other a written offer to settle the dispute on or before 11 July 2012.

The matter is otherwise adjourned to 9:00am on 13 July 2012 to make such further orders and directions as may be necessary to allow this matter to proceed finally to trial.

Notation:

(A) If the parties should reach agreement about final orders prior to 13 July 2012, I shall make such orders in chambers.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

It seems that what was originally a transfer for no nominated consideration was altered to provide for a consideration on the advice of solicitors and accountants to minimise the effect of Capital Gains Tax. The following are excerpts from itemised entries on a tax invoice prepared by the conveying solicitors:[43] 15/05/2001… letter to Short Punch & Greatorix enclosing cheque for stamp duty professional fees and registration fees et al, informing that no consideration payable for this transfer …31/05/2001… re [the respondent], rang Short Punch & Greatorix – they can’t stamp transfer because zero consideration would mean massive capital gain later – must contact [the respondent]…01/06/2002…Spoke to [the respondent] – she’ll ask accountant about what best to put on transfer and then get back to me [my emphasis][43] Applicant’s affidavit, filed on 31 March 2011, [21] and annexure ‘CC’. An email from the respondent’s accountants indicate that the respondent had contacted them “in regards to a querie [sic] she has concerning the capital gains tax if you merge into one name.”[44][44] Exhibit GPB 1. I find on the basis of this evidence that the Gold Coast property was originally to be transferred with no consideration to be paid. But, after receiving advice from her solicitors and accountants about the tax consequences of such a transfer, the transfer document was altered to provide for consideration in order to minimise the capital gains tax liability. That same email from the respondent’s accountant also records the following in the form of handwritten notes, which suggests that the applicant transferred his interest in the Gold Coast property to the respondent because of his redundancy:Gold Coast property – Joint names cost $155,000[The applicant] taking a redundancyWant to transfer mortgage to [the respondent] That was accepted by the respondent in cross-examination:[45]Now I suggest when you spoke to your solicitors… that you spoke to them about the transfer on the basis that, because [the applicant] was being made redundant, that you therefore needed to transfer the property? --- I can’t recall the actual discussion, but that would have been one of the components.[45] Transcript of proceedings on 6 April 2011, 60. I accept that one of the reasons why the Gold Coast property was transferred to the respondent was because the applicant had been made redundant. I am unclear on this evidence alone if the transfer was connected to the separation of the parties’ property following separation. That may have been but was not necessarily, the case It was suggested to the respondent that in 2001, the applicant commenced paying board to the respondent. This was disputed by the applicant, who categorised his regular payments to the respondent as “contributing to household expenses”.[46][46] Transcript of proceedings on 6 April 2011, 24. Even if I were to find that such regular payments by the applicant were “board” payments, the significance of it is somewhat diminished by the admission from the respondent during cross-examination that she regarded the applicant as having paid “board” before 2001.[47] However, the respondent did not declare that board paid by the applicant in tax returns prior to 2001.[48] The earliest tax return tendered by the respondent which records board paid by the applicant as rental income is the respondent’s tax return of 2003.[49][47] Transcript of proceedings on 6 April 2011, 63 and 66.[48] Transcript of proceedings on 6 April 2011, 64.[49] Transcript of proceedings on 6 April 2011, 55; Exhibit ‘EAH3’.