CANION & CANION (No.2)

[2020] FCCA 1043

FEDERAL CIRCUIT COURT OF AUSTRALIA

CANION & CANION (No.2) [2020] FCCA 1043

Catchwords:
FAMILY LAW – “Machinery or consequential order” on final orders where husband has unilaterally ceased making a payment on a mortgage during the period of a judgment being reserved.

Legislation:

Family Law Act 1975 (Cth)

Applicant: MS CANION

Respondent: MR CANION

File Number: HBC 1071 of 2017

Judgment of: Judge McGuire

Hearing date: 3 April 2020

Date of Last Submission: 17 April 2020

Delivered at: Launceston

Delivered on: 7 May 2020

REPRESENTATION

Counsel for the Applicant: Mr M Foster

Solicitors for the Applicant: Murdoch Clarke

Counsel for the Respondent: Mr M Trezise

Solicitors for the Respondent: Wallace Wilkinson & Webster

ORDERS

1. That the husband be solely responsible for and pay all arrears of mortgage secured by the property at LL Street Suburb OO in Tasmania and to do so in accordance with the execution of any transfer of interests in real property pursuant to final orders made 13 November 2019.

IT IS NOTED that publication of this judgment under the pseudonym Canion & Canion (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT HOBART

HBC 1071 of 2017

MS CANION

Applicant

And

MR CANION

Respondent

REASONS FOR JUDGMENT

Application

1. This matter appears to have taken on something of a life of its own.  The substantive issues of property settlement and child support departure were heard over two days on 17 and 18 April 2019.  The Court received joint requests from the parties to delay the handing down of judgment due to some outstanding issues being initially matters of procedural fairness to a relevant superannuation fund and then the proposed sale of one of the numerous pieces of real property owned by the parties or either of them such apparently having been agreed between the parties following the completion of the evidence.  This in turn caused me to alert the parties’ legal representatives to possible capital gains tax ramifications and for me to request any further relevant submissions.  In the end, my orders and reasons were handed down on 13 November 2019 following the receipt of the last submission from Counsel on 14 October 2019.  Those orders provided inter-alia that the parties’ property inclusive of superannuation be divided as to a net 57.5% to the applicant wife and a net 42.5% to the respondent husband.  Order [3] provided:

   That within 28 days of the date of these Orders the parties solicitors bring in detailed Orders in accordance with the percentage distribution above as to the assets and liabilities to be retained by each of the parties including as to any capital gains tax obligations in respect of the sale of the property situate at FF Street, Suburb GG.

2. The matter was listed for further submissions, if necessary, and in respect of the machinery orders, in Hobart on Wednesday, 15 January 2020.

3. The Court was advised that issues of capital gains tax and distribution of the assets were resolved between the parties.  Draft detailed orders were apparently prepared and exchanged.  I am told that procedural fairness was properly afforded the relevant superannuation fund.  Consequently, and whilst ordinarily the Court might now be satisfied and pleased that these collateral issues have been resolved and the matter finalised, it seems that there is yet another issue between the parties.

4. There is now controversy between the parties as to arrears of approximately $12,000 having accrued since the completion of the evidence at the trial and in respect of a mortgage loan secured over a property at LL Street Suburb OO in Tasmania.  Firstly, it is proper that I comment that I harbour some doubt as to whether this issue is, in fact, properly the province of the Court to deal with under ‘machinery or consequential matters’?  That is, at the conclusion of the evidence the factual situation was stable in that the wife had and was anticipated to remain in occupation of the LL Street Suburb OO property; the husband was receiving rentals from the portfolio of properties; the husband was meeting all outgoings on all properties including that at LL Street Suburb OO.  Notably, no submissions were made on behalf of either party as to the circumstances during the course of the decision being reserved.  No further application was made prior to the handing down of my judgment in November 2019.  Nevertheless, and given that both parties ask me to resolve this issue then I am content to accept the responsibility as a 'consequential or machinery matter'.

5. The husband proposes that the arrears of mortgage relevant to the LL Street Suburb OO property be shared and paid equally between the parties.  He argues that the applicant wife has had the sole use and enjoyment of the LL Street Suburb OO property since the completion of the evidence in circumstances where the care of the children has been shared equally.  He properly notes that 'no obligation was imposed by this Court on the respondent to pay the LL Street Suburb OO mortgage' during the course of the reserved judgment.  Whilst this is undoubtedly correct, I repeat that no submissions were received from either party in respect of this issue and noting that the delay in the handing down of the judgment was not, in my respectful view, in any way attributable to this Court.  Further, the respondent says that, from the perspective of the bank, the parties are jointly and severally liable for the mortgage loan.

6. The applicant wife proposes that the husband be responsible for the arrears.  She concedes that she has had use of the property since my decision was reserved.  Notably, however, she also had use of that property in the period up to the reserving of my judgment and notably neither application nor submissions were made in respect of the ongoing mortgage payments during that period of the judgment being reserved.  The tenor of the wife's Counsels’ submissions is that the husband had been meeting the mortgage payments during the period prior to the trial and during the taking of the evidence and that she was entitled to proceed on the basis of that status quo short of the husband bringing any application seeking orders to the contrary.  She notes that the husband's decision to stop making payments on the mortgage during the period of the judgment being reserved was unilateral.

7. I prefer the wife's argument.  Firstly, it is a matter of common sense and usual practice in my experience that a form of status quo in respect of the parties’ assets and liabilities will continue during any period of a judgment being reserved save and except any discrete application.  No such application was made by the husband in this matter.

8. Secondly, it does not appear to be controversial that the husband acted unilaterally in circumstances where he had to that time being meeting the outgoings on that mortgage but whilst being in receipt from the rentals from the numerous other properties the subject of my consideration and determination.

9. The documents filed by the parties throughout these proceedings indicate unambiguously that the husband had been meeting the mortgage on the property at LL Street Suburb OO.  Again, at no time during the trial or during the period of the judgment being reserved did the husband raise an issue with the status quo.  To the contrary, all indications were thus that such status quo would continue during the course of the judgment being reserved.  If he had done so then the Court would have properly been seized of the of the issue but also of all possibilities including the husband continuing to meet such payments in the interim; the wife being responsible for payments; the payments being shared and perhaps an issue of spousal maintenance?  The onus is on parties to raise issues and not to act unilaterally.

10. In all of those circumstances, I am of the view that the husband is and should remain responsible for the mortgage payments on the property at LL Street Suburb OO until such time as the final orders in their settled form are made and executed. 

I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date: 7 May 2020