BROWNSLOW & PIERCE

[2017] FamCA 718

FAMILY COURT OF AUSTRALIA

BROWNSLOW & PIERCE [2017] FamCA 718

FAMILY LAW – DE FACTO RELATIONSHIPS – Where the parties disputed the nature and length of their relationship – Where the respondent asserted the relationship lasted a year, whereas the applicant asserted to a 10 year relationship – Where the respondent’s evidence was the relationship became hostile and dysfunctional but the applicant remained in the relationship – Where the respondent conceded the length of the relationship – Declared that the relationship existed for 10 years

FAMILY LAW – PROPERTY SETTLEMENT – De facto – Where the respondent is incarcerated – Where final parenting orders provide for the child to live with the mother and spend no time with the father – Where the respondent made greater financial contributions whereas the applicant has had sole care of the child since separation – Where the applicant will bear the whole of the financial obligations for the child – Where the respondent does not pay child support – Concluded a substantial adjustment should be made in favour of the applicant due to her continuing obligations to the child – Concluded a 54 to 46 per cent property settlement in the favour of the applicant is just and equitable

FAMILY LAW – COSTS – Legal aid – Where the Legal Aid Commission of New South Wales has caveats secured against the property from legal fees incurred in the respondent’s criminal trial – Where the debt to Legal Aid was incurred after separation and is personal to the respondent – Ordered the debts to Legal Aid are paid from the respondent’s share of the sale of property

Family Law Act 1975 (Cth) ss 90RD, 90SF, 90SM

Stanford v Stanford (2012) 247 CLR 108

APPLICANT: Mr Brownslow

RESPONDENT: Mr Pierce

INDEPENDENT CHILDREN’S LAWYER: Not Applicable

FILE NUMBER: NCC 1146 of 2016

DATE DELIVERED: 25 August 2017

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Cleary J

HEARING DATE: 7 & 23 August 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Not Applicable

SOLICITOR FOR THE APPLICANT: Boyd Olsen Lawyers

COUNSEL FOR THE RESPONDENT: Mr Davies

SOLICITOR FOR THE RESPONDENT: Barbara Garrick & Associates

Orders

1. A declaration is made pursuant to Section 90RD of the Family Law Act (Cth) 1975 (“the Act”) that:

   A de facto relationship existed between Mr Brownslow and Mr Pierce between November 2005 and August 2015.

2. Forthwith the Respondent transfer to the Applicant, Mr Brownslow, as trustee for sale, the property situate and known as B Street, Suburb C in the State of New South Wales being the land in Folio Identifier … (“the home”) as Trustee for Sale.

3. To give effect to Order 2 the Respondent forthwith execute a Real Property Act Transfer transferring the home to the Applicant.

4. Forthwith upon the Transfer provided for in Order 2, the Applicant Mr Brownslow do all acts and things and sign all documents necessary to sell the home and upon settlement of the sale pay and distribute the proceeds as follows and in order of priority:

   4.1Payment of agents’ commission and advertising expenses and legal expenses of the sale;

   4.2Discharge of the mortgage to Westpac Banking Corporation;

   4.3The amounts required to pay all municipal and water rates outstanding; and

   4.4Net proceeds to be divided between the parties 54 per cent to the wife and 46 per cent to the husband NOTING that the charge in favour of the Legal Aid Commission of NSW (“the Commission”) arising from the agreements between the Respondent Mr Pierce and the Commission shall be discharged in whole or in part from the share of the Respondent in the proceeds of sale.

5. Pending the settlement of the sale of the home the Respondent or anyone acting on the Respondent’s behalf be restrained from dealing with it.

6. Pursuant to Section 90AE(2)(a) of the Act within 21 days of the Applicant notifying the Legal Aid Commission of NSW of exchange of contracts for the sale of the home the Legal Aid Commission of NSW provide to the legal representatives for the Applicant Withdrawal of Caveats numbered AK…32 and AK…28.

7. That other than as provided herein the Applicant transfer to the Respondent all of her right, title and interest in any item of property or personalty in the Respondent’s possession and or control as at the date of orders.

8. That other than as provided herein the Respondent transfer to the Applicant all his right, title and interest in any item of property or personalty in the Applicant’s possession and control as at the date of orders.

9. That other than as provided herein the Applicant indemnify and keep indemnified the Respondent in respect of any liability in her sole name as at the date of orders or attaching to any property transferred to her pursuant to these orders.

10. That other than as provided herein the Respondent indemnify and keep indemnified the Applicant in respect of any liability in his sole name as at the date of orders or attaching to any property transferred to him pursuant to these orders.

11. That each of the parties do all acts and things and sign all documents necessary to give effect to these orders.

12. That pursuant to Section 106A of the Act, in the event that any party shall fail, neglect or refuse to sign any document required to give effect to these orders within seven days of being requested in writing by another party who has an interest in the execution of such document, then upon the filing of an affidavit evidencing such failure, neglect or refusal, a Registrar of the Newcastle Registry of the Family Court of Australia is appointed to execute such document in lieu of the defaulting party.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Brownslow & Pierce has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: NCC1146/2016

Mr Brownslow

Applicant

And

Mr Pierce

Respondent

EX-TEMPORE

REASONS FOR JUDGMENT

Introduction

1. These are competing applications for adjustment of interest in property of a de facto relationship pursuant to section 90SM of the Family Law Act 1975.

2. The applicant is Ms Brownslow, aged 38 years.  Ms Brownslow is living at an undisclosed address in the Newcastle area.  She has recently accepted an offer of employment as a health professional.  Her anticipated gross salary will be $1170 a week. 

3. Ms Brownslow has the full time care of the parties’ only child, D, age nine.  She also has the care of E, her 15 year old daughter from a previous relationship.

4. The respondent is Mr Pierce, aged 43 years.  Mr Pierce has, since March 2017, been incarcerated, and is presently in a correctional centre in New South Wales.  He has been convicted of criminal offenses involving indecent assaults on girls under 16.  His sentence was eight years with five and a half years non-parole. 

5. Mr Pierce has three teenage sons from his first marriage.  They live with their mother.  He is also the father of the parties’ child, D.  Mr Pierce was a tradesman throughout his adult life.  He discloses income of about $21,000 per annum in his tax return.  His counsel refer to this being an understatement, but there is no proper basis for assuming higher income.

The Relationship

1. During the hearing there was a conflict between the parties as to the length of their relationship and whether it could be categorised as a de facto relationship.

2. Mr Pierce asserted that the association began with a tenancy of the mother and her daughter in his home, and that a relationship started in 2007 and ended in 2008. 

3. Ms Brownslow, at all times, asserted that the relationship endured between November 2005 and August 2015 in the character of a de facto relationship between man and wife.

4. Through his counsel in final submissions, Mr Pierce appropriately conceded that the relationship did have that character.  His own evidence[1] was that the relationship became, in his view, dysfunctional, hostile and negative over the years, although he and his partner remained in the relationship. 

   [1] Exhibit 5

5. The parties had a common residence, shared the care of five children, of whom one was the child of their relationship, whom they raised together.  Exhibit 6, cards and letters, reflect their efforts at being a family. 

6. A declaration will be made on the basis both of the evidence and the concession by Mr Pierce that a de facto relationship existed between the parties for almost 10 years.

History of Events

1. The evidence is that the parties met in April 2005. 

2. At that time, Mr Pierce was married but separated from his wife.  His children were age seven, five and two.  Ms Brownslow’s daughter was almost three.

3. In June 2005, Mr Pierce was divorced from his wife, and in the following month the property settlement was effected.[2]  Mr Pierce paid out the interest of his former wife in their property at B Street, Suburb C (“the Suburb C property”).  The Suburb C property was transferred into his sole name. 

   [2] Orders dated 12/07/2015 in the matter of Pierce and Pierce

4. The parties began living together in November 2005 when Ms Brownslow moved into the Suburb C property with Mr Pierce.

5. In August 2015, Mr Pierce was arrested and charged with a raft of offenses in relation to sexual indecent assaults on young people.  He was bailed to live at his parents’ home. 

6. The relationship between the parties ended with those events.  Ms Brownslow remained living in the Suburb C property with her daughter and the parties’ daughter until June 2016. At that time, Ms Brownslow moved with the two children to her current residence.

7. On 1 July 2016, orders were made pending further order that:

   (1)the mother have sole parental responsibility for D;

   (2)the child live with the mother;

   (3)the father be restrained from contacting the child by any means.

8. Late in 2016, Mr Pierce’s bail conditions were altered to allow him to go to the Suburb C property.  To the observation of Ms Brownslow, there were people staying in the Suburb C property from March 2017.  In February and March 2017 there was a criminal trial in the District Court.  Mr Pierce was convicted and jailed late in March 2017.

9. The Legal Aid Commission of New South Wales has two caveats secured on the Suburb C property to secure legal costs incurred under three grants of Legal Aid made to Mr Pierce for his criminal proceedings.  As at 26 July 2017, the amount owing was $63,217 with interest accruing.[3]

   [3] Affidavit of Ms Brownlsow filed 2 August 2017, Annexure A

The Law

1. In applications such as this, the law requires a staged process of consideration, in accordance with the principles in Stanford v Stanford (2012) 247 CLR 108. The Court must:

   i.Identify the legal interests of the parties;

   ii.Ask whether if there is a reason to make any adjusting order at all and if there is a reason, to make an adjusting order;

   iii.What the contributions of the parties have been pursuant to s 90SM(4) of the Family Law Act 1975 (Cth) (“the Act”);

   iv.What the present and future needs of the parties are in accordance with the considerations in s 90SF of the Act.

   v.Is the outcome of the proposed adjustment just and equitable?

1. Identify the assets and liabilities of the parties

1. The legal interests of the parties are set out in a balance sheet which became exhibit 2.  Notes to that balance sheet are as follows:  the 4WD motor vehicle and its associated debt can be removed given that the value is asserted as $5000 and the associated debt to Ms Brownslow’s family is $5000. 

2. The debts of Mr Pierce are post-separation and personal to him, not relationship debts.  They are debts to the Legal Aid Commission, and also to his parents.

3. The credit card debt of Ms Brownslow is a post-separation debt and personal to her. 

4. Accordingly, joint assets and liabilities are the Suburb C property at $370,000; household contents in the possession of Ms Brownslow, $2500; and superannuation interest of Mr Pierce’s at $21,493.  Liabilities are the mortgage secured on the Suburb C property at $192,012.

5. Accordingly, the net asset pool is assessed to be $201,981.

1. Is there a reason to make an adjusting order?

1. There is indeed a reason to make an adjusting order which is quite compelling when mortgage debt is accruing on the Suburb C property and no money is coming in.  The title is in Mr Pierce’s name alone.

1. Contributions by the parties pursuant to s 90SM(4)

1. At the commencement of the relationship, the parties had the following assets:

2. Ms Brownslow probably had some personal possessions in furniture, but no valuable assets are disclosed.  Mr Pierce had the Suburb C property subject to a mortgage, which was in the order of about $200,000.  Mr Pierce had acquired his former wife’s interest in the property and paid her $82,000 pursuant to Court orders.  He also was required to refinance the current debt, then standing at about $112,000.  He was required to discharge the existing mortgage and refinance. 

3. Mr Pierce also had a truck, tools of trade, some furniture, furnishings and personal possessions.

4. Accordingly, I cannot make an exact assessment of the value of possessions when the parties began living together.  Ms Brownslow asserts that there was probably about $37,000 worth of equity in the property at that time, and I accept that that was approximately the case. 

5. The Suburb C property, however, provided a home for the parties and their daughter for the whole of the relationship.  It is a matter to be taken into account as a substantial initial and ongoing contribution by Mr Pierce, especially as during the course of the relationship he made the mortgage repayments and paid the outgoings in respect of the property.

6. Undoubtedly, Ms Brownslow had the primary care of the parties’ child as an infant.  She also contributed Centrelink and family tax benefits for food and necessities. 

7. In 2011, Ms Brownslow began her professional studies at university and from that time there was a greater contribution by Mr Pierce to the care of the parties’ child and to the mother’s older child, and to the household as Ms Brownslow both attended university and studied at home. 

8. Ms Brownslow provided care, supervision and meals for Mr Pierce’s three children when they were part of the household on a regular basis, pursuant to parenting orders between Mr Pierce and the children’s mother.

9. To give proper effect to the financial contribution of Mr Pierce in his provision of a home, I consider that his overall contribution was greater financially than that of Ms Brownslow and equal overall in terms of contributions to the welfare of the family, in the order of a division 70/30 per cent in favour of Mr Pierce.

10. Post-separation, two years ago, Ms Brownslow has had the sole care of the parties’ child and has been solely financially responsible for her.  This requires an adjustment in favour of Ms Brownslow to bring the ratio to 65/35 per cent in favour of Mr Pierce.

1. Consideration of s 90SF(3) factors

1. Ms Brownslow is in her late 30s and is in reasonable health.  She is about to start her career as a health professional.  She will earn about $60,000 per annum, gross.

2. Mr Pierce is in his mid-40s and likely to remain in jail for the next five years, longer if parole is not granted immediately after the non-parole period.  Less if he appeals successfully against his sentence.  He has the capacity to earn income as a tradesman.

3. There is reference in his material to an appeal, although I am not sure whether it is on all grounds or severity, or whether the appeal has been formulated.  But it has not yet been lodged and there is no basis for assessing what might happen in that regard.  I proceed on the basis of current information.

4. In the future, Ms Brownslow will need to tailor her work in order to meet the requirements for care and supervision of the parties’ daughter for at least the next five years.  She may need to call on the assistance of her family and friends.  She also has a commitment to provide for care and supervision of her older daughter, E, for at least the next three years.

5. In the circumstances, Mr Pierce is unlikely to play a significant parental role in the life of D on release from prison.  Both girls attend for counselling.  D has lost her relationship with her father. 

6. Further, there is no child support being paid.  I accept that a current assessment would likely be nil.

7. The actions of the husband have put him in that position of not earning.  He has the capacity to earn as he previously did, as a self-employed tradesman.

8. The reality is that the whole of the financial obligation for the child will fall on the mother.

9. After June 2016, when Ms Brownslow left the Suburb C property, Mr Pierce made a decision not to put tenants into the Suburb C property.  There is currently, apparently, a friend of Mr Pierce’s living in the home.  She does not pay rent or contribute to outgoings.  The explanation given by Mr Pierce was that the friend is there to mind a cat said to belong to Ms Brownslow’s sister.  It did not seem like a credible explanation.  The consequence of this decision by Mr Pierce is that the mortgage has gone unpaid for 14 months.  The bank is ready to foreclose and interest is accruing on the mortgage, daily reducing equity in the property.  Ms Brownslow is not on the title to the property and has had no control over that income.

10. Ms Brownslow has no superannuation interest, although no doubt she will now start to accrue such an interest.  Mr Pierce has a superannuation interest of about $21,493. 

11. There should be, in my view, a substantial adjustment in favour of Ms Brownslow.  D is nine.  There are nine more years of care, at least.  As a sole parent in all senses, an adjustment of 20 per cent from 65/35 per cent, favouring Mr Pierce, to 55/45 per cent favouring Ms Brownslow. 

12. The Suburb C property has been valued at $370,000.  However, it may well sell for more or less than that.  The percentage division of the proceeds of sale will be 54 per cent and 46 per cent respectively in favour of Ms Brownslow.  The husband will retain his super.

1. Is the outcome of the proposed adjustment just and equitable?

1. When looking at the overall division, taking those matters into account, Mr Pierce will retain his superannuation interest and cash in the amount of $69,398.  That is on the basis of the valuation.  It may be more or less, depending on the same price.  Ms Brownslow will retain her household contents and cash from the sale of $108,590, giving her a total of $111,090.  Ms Brownslow will therefore have a cash sum, her household contents and her car with the debts being repaid.  Mr Pierce will have a cash sum.  Most, if not all of it will be used to repay debts.  He will retain his superannuation fund. 

2. I am satisfied that that outcome is a just and equitable one, in the circumstances.

CONCLUSION

1. The applicant asks to be made trustee for sale of the Suburb C property.  There is no other course which would provide her with authority to address the diminution of the parties’ main asset.

2. In an Amended Response filed on 1 August 2017 Mr Pierce urged the Court to enable him to have control of the sale of the property.  Mr Pierce has nominated his father as his attorney, in a Power of Attorney given on 3 March 2017.[4]  The Power of Attorney is subject to the condition that Mr Pierce Senior can only exercise power with the express authority of his son on each occasion. 

   [4] Exhibit 4

3. This application by Mr Pierce has come in reaction to the wife pressing for sale after 14 months of financial neglect of the asset.  I accept there is some weight in the submission by counsel on behalf of Mr Pierce that the bank may baulk at the transfer to Ms Brownslow and press on with foreclosure.

1. However, properly advised by the solicitors for Ms Brownslow, the bank should be adequately satisfied that their interests are being protected by immediate sale.  There is no pressing incentive for Mr Pierce to act swiftly.  From his share of the net proceeds of the sale of the Suburb C property, he will be required to pay his costs to the Legal Aid Commission and debts to his parents.  Mr Pierce has owned the property for 23 years.  There will be very little of anything for Mr Pierce from the net proceeds of sale.  The position may be improved if the sale price is higher.  There is some peripheral evidence to suggest it might be.

2. In the circumstances, I consider that Ms Brownslow is more highly motivated to act swiftly to obtain the best selling price and bring the matter to conclusion. 

3. Accordingly, orders will be made for her to become the trustee for sale.

4. Summarising the orders, there is a declaration of the de facto relationship between the parties; orders for Ms Brownslow to become the trustee for sale; orders for the repayment of the mortgage; outstanding expenses and division of the net proceeds; an order for the Legal Aid Commission to be advised of these orders in order for the caveats to be removed; and other orders confirming that each party keep what is currently in their possession.

5. Orders are made accordingly.

I certify that the preceding fifty-nine (59) paragraphs are a true copy of the ex-tempore reasons for judgment of the Honourable Justice Cleary delivered on 25 August 2017.

Associate: 

Date:  13 September 2017