Canton & Canton
[2023] FedCFamC2F 836
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Canton & Canton [2023] FedCFamC2F 836
File number(s): NCC 2375 of 2022 Judgment of: JUDGE BETTS Date of judgment: 16 June 2023 Catchwords: FAMILY LAW – Property – undefended final hearing – where the husband has failed to file any material or provide any financial disclosure during the proceedings – where the wife’s evidence is unchallenged – where the wife seeks the former matrimonial home at Town B go back into her possession – where the Court considers that a 60%/40% division in the Wife’s favour is a just and equitable outcome – indemnity costs order made – just and equitable. Legislation: Family Law Act1975 (Cth), Pt VIII Cases cited: Frederick & Frederick [2019] FamCAFC 87
Kennon & Kennon (1997) FLC 92-757
Kowaliw & Kowaliw (1981) FLC 91-555
Division: Division 2 Family Law Number of paragraphs: 119 Date of last submission/s: 15 June 2023 Date of hearing: 15 June 2023 Place: Newcastle Counsel for the Applicant: Ms Van Oosterom Solicitors for the Applicant: Braye Cragg Solicitors Solicitors for the Respondent: No appearance – Self-Represented ORDERS
NCC 2375 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS CANTON
Applicant
AND: MR CANTON
Respondent
order made by:
JUDGE BETTS
DATE OF ORDER:
16 JUNE 2023
THE COURT ORDERS THAT:
1.The proceedings be determined on an undefended final basis today.
2.That by no later than 15 September 2023, the Wife shall pay to the Commonwealth Bank of Australia credit account of the joint mortgage, account number …, the sum of $255,000.00 (the settlement sum) or such amount as required to discharge the totality of the mortgage as at the date of these Orders in exchange for the Husband's interest in the property at C Street, Town B NSW, portfolio identifier … (the Town B property).
3.Contemporaneously with and in consideration of the payment pursuant to Order 2, the Husband shall do all acts and things so as to transfer to the Wife his interest in the Town B property free of any encumbrance.
3A. Pending payment of the settlement sum in accordance with Order 2:
(a)The Husband is entitled to sole use and occupation of the Town B property;
(b)The Husband is to meet all minimum mortgage repayments and all rates, insurances and other property outgoings for the Town B property during his occupation;
(c)The Husband is to keep the property in good order and repair, fair wear and tear excepted;
(d)Within fourteen (14) days at a date and time to be advised by the Wife's solicitor in writing to the husband, the Husband is to allow the Wife or an agent appointed by her to attend the Town B property to inspect the property and to take photographs on the property. The Husband is restrained from being present during such inspection, although the Husband may engage an agent to attend on his behalf; and
(e)The Husband is restrained from redrawing any money from the Commonwealth Bank of Australia mortgage encumbering the Town B property or from further encumbering the property or in any way dealing with his interest in the property save in accordance with these Orders.
4.As soon as possible after these Orders are sealed, the Wife is to serve a copy of this Order on the Commonwealth Bank of Australia quoting the account reference number.
5.The Wife shall bear the Husband's costs of and incidental to registering the transfer of the Town B property to the Wife.
6.Each party shall do all acts and things reasonably required by the other including the signing or execution of all necessary documents to give effect to the provisions of these Orders within seven (7) days of being requested to do so.
7.If either party refuses or neglects to sign or execute and return a document within seven (7) days of a written request to do so then the Judicial Registrar of the Newcastle Registry of the Federal Circuit and Family Court of Australia is hereby appointed under Section 106A of the Family Law Act 1975 to sign or execute such document on behalf of that party upon lodgement of such documents and the filing of an Affidavit of the requesting party as to the said neglect or refusal.
8.No later than three (3) days prior to the date of payment referred to in Order 2 herein, the Husband shall vacate the Town B property and shall have removed from the Town B property all of the Husband's furniture, appliances and effects referred to in order 13(A).
9.Upon the Husband vacating the Town B property pursuant to Order 8 herein, the Husband shall thereafter be restrained from attending the property or having any other person attend the property on his behalf.
10.Within forty-eight (48) hours of the Husband vacating the property in compliance with Order 8 herein, he is to provide his keys to the Town B property to the Wife's solicitor.
11.In the event that the Husband fails to vacate the Town B property and/or remove his possession from the Town B property as required by these Orders, the Wife may apply by email to the Associate to his Honour Judge Betts for the issue of a Warrant of Possession.
12.The Husband be restrained from intentionally or recklessly damaging the Town B property. In the event that the Husband damages the Town B property, the Wife is at liberty to seek that the matter be relisted by way of email to the Associate to his Honour Judge Betts' associate.
13.The parties do all acts and things necessary for the Motor Vehicle 1 and all spare parts for the vehicle to be transferred or registered in the sole name of the Wife. The Husband leave all vehicle parts on the property in good Order and repair and that he be restrained from removing, disposing, damaging or dealing with any parts of the Motor Vehicle 1.
13A.The Husband is declared to be the owner of the C artworks, the household contents at the Town B property, his Motor Vehicle 2, the business stock, the Husband's tools and any other property in his possession which is located at the Town B property.
14.Except as otherwise provided for in these Orders, each party be declared the sole owner of and solely entitled to all property of whatsoever nature and wheresoever situate in his or her respective sole name, possession or control, including motor vehicles, furniture, furnishings, bank accounts and superannuation accounts, and each party is liable for any liabilities in this party's sole name or encumbering any item of property retained by the party pursuant to these Orders.
15.The Wife is to serve the Husband with a copy of these Orders within forty-eight (48) hours of serving the Commonwealth Bank of Australia.
16.The Wife has liberty to apply on seven (7) days' notice in the event of any issues arising concerning the enforcement or implementation of these orders.
17.The Husband pay the Wife's costs on an indemnity basis fixed in the amount of $15,000.00 NOTING that this not quite a complete indemnity having regard to exhibit 3. The Husband is to make such payment to the Wife contemporaneously with vacating the property in accordance with these Orders.
18.A copy of these reasons be taken out and provided to the parties.
19.If the Husband seeks to re-open these Orders pursuant to Rule 10.13 of the Federal Circuit and Family Court of Australia 2021 (Family Law Rules) he is required to:
(a)File and serve a Response, Affidavit and Financial Statement by 4 August 2023;
(b)Attend Court in person upon the return date of such application. Leave will not be granted to appear by telephone or video. Prior to the Court entertaining any application to re-open, the Husband will be required to explain his non-participation in the proceedings to date and the Court will also expect the Husband to pay the Wife's costs or satisfy the Court as to why he should be relieved of the obligation to do so.
20.Unless the Court is advised otherwise, the proceedings be removed from the list of active pending cases on 18 September 2023.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Canton & Canton has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BETTS
These reasons for judgment were delivered orally. They have been corrected from the transcript in order to make them easier to read.
BACKGROUND
These are property settlement proceedings arising out of the breakdown of the marriage between the applicant wife, Ms Canton and the respondent husband, Mr Canton.
The parties commenced cohabitation in 2003, married in 2007 and separated on 20 August 2017 when the wife fled the former matrimonial home at C Street, Town B. The husband has remained living there ever since. There are no children of the marriage.
The wife commenced these proceedings seeking property settlement orders on 12 August 2022. To say that the husband had been “uncooperative” would be accurate. Ultimately, in consequence of various orders made along the way the proceedings came before me for a Compliance and Readiness Hearing yesterday. On that occasion the husband failed to appear and I acceded to the application by the wife’s counsel, Ms Van Oosterom, to proceed on an undefended basis.
To that end, Ms Van Oosterom took me to the following material:
·the Amended Initiating Application of the wife filed 12 April 2023;
·the wife’s affidavit filed 12 April 2023; and
·the wife’s Financial Statement filed 12 April 2023.
Ms Van Oosterom took me to relevant orders which have been made in the proceedings to which I will shortly refer. She also tendered three (3) separate documentary exhibits consisting of:
·exhibit 1 - a draft minute of order;
·exhibit 2 - an email sent by the wife’s solicitors to the husband on 13 June 2023 indicating the wife’s intention to seek that the matter be dealt with on an undefended basis at the Compliance and Readiness Hearing on 15 June 2023; and
·exhibit 3 - a Costs Notice and relevant Costs Agreement from which it is apparent that the wife’s costs of and incidental to the proceedings, on an indemnity basis, amount to $18,200 as at the Compliance and Readiness Hearing.
WHY THE COURT IS PROCEEDING ON AN UNDEFENDED FINAL BASIS
Before proceeding any further with the matter, I will briefly set out why I am dealing with these proceedings on an undefended final basis.
As indicated, the wife commenced these proceedings on 12 August 2022.
The first return date was on 27 September 2022 when the matter came before Judicial Registrar D. On that occasion Mr E solicitor appeared for the wife; the husband did not appear. The Judicial Registrar made orders for disclosure as well as ordering that by no later than 4 pm on 29 September 2022 the wife was to serve on the husband at his last known address a copy of the orders made that day and the possible consequences of a further non-attendance at the next Court event. The husband was ordered to file and serve his response material by 15 November 2022 and the proceedings were adjourned to a further procedural hearing on 20 December 2022 at 12 pm. It was specifically noted in the orders that if the husband failed to file documents in accordance with the orders and/or if he failed to attend court on 20 December 2022 then the wife’s application may proceed that day and be determined on an undefended basis.
The matter next came before the court on 20 December 2022 before Judicial Registrar F. Again Mr E appeared for the wife and this time the husband did appear, representing himself. He appeared electronically via Microsoft Teams. On that day Judicial Registrar F ordered that the husband file and serve a Notice of Address for Service by 28 December 2022 and that the timeframe for him to file his material be extended to 27 January 2023. All outstanding applications were otherwise adjourned to 21 February 2023 at 12 pm before Judicial Registrar F for a directions hearing. It was specifically noted in the orders that if the husband failed to comply with the orders and/or failed to attend Court on the next occasion the wife proposed to seek that the final orders sought in her Initiating Application, filed 12 August 2022, be listed for hearing on an undefended basis and/or in the absence of the respondent.
The matter next came before the Court on 21 February 2023 before Judicial Registrar F. On that day Mr E appeared for the wife and Mr Canton again appeared on his own behalf by electronic means, via Microsoft Teams. He still had not filed any material. In the circumstances the timeframe for him to do so was again extended - this time to 7 March 2023. It was specifically ordered that, pending his filing of a Notice of Address for Service, the wife could serve documents on the husband at his email address provided to the court being “….” The proceedings were otherwise listed at 4 pm on 8 March 2023 for a chambers hearing with no requirement for appearances noting that:
(a)in the event of compliance by the husband with these orders that the matter be forward listed for further case management directions; and
(b)in the event of the husband not complying with the orders the matter may be forward listed for an undefended final hearing. The order specifically noted that the husband was encouraged to seek urgent, independent legal advice.
On 8 March 2023 Judicial Registrar F considered the matter in chambers consistent with the previous orders. On that occasion the Judicial Registrar specifically noted that the husband had not complied with the filing directions made by the Court on any of the previous occasions, namely 27 September 2022, 20 December 2022 or 21 February 2023. The Judicial Registrar elected to set the matter down for an undefended hearing and specifically listed the matter before Senior Judicial Registrar G at 10 am on 12 May 2023. There were other orders as well, relating to service upon the husband of this particular order and an order for the wife to file and serve amended or updated material by 6 April 2023.
The matter then came before SJR G on 12 May 2023 for undefended hearing. Somewhat curiously, the husband in fact appeared when the matter came on at 10 am. In the circumstances the wife’s counsel who appeared that day, Ms Van Oosterom, was in the difficult if not impossible position in terms of proceeding with the hearing.
What ultimately happened was that SJR G stood the matter over to 3 pm - while the wife made clear, through Ms Van Oosterom, that she would be seeking costs in the event the matter was unable to proceed undefended.
At 3 pm when the matter was called back on, the husband was no longer present. The wife's solicitor apparently called him and sent him an SMS text message but without success. In the circumstances, perhaps out of an abundance of caution more than anything else, SJR G set the matter down for a Compliance and Readiness Hearing before me on 15 June 2023 but also ordered that the husband pay the wife’s costs fixed in the amount of $1,800 by no later than 4 pm on 9 June 2023.
As I have already indicated, when the matter came before me for the Compliance and Readiness Hearing the husband did not appear. Ms Van Oosterom appeared, instructed by her solicitor, and the wife was also present. I heard submissions and determined to proceed to hear the matter on an undefended final basis.
The reasons for my proceeding in this way are obvious. The husband has failed to comply with any orders of the Court for filing of material. Indeed he has not filed a scrap of paper in these proceedings. He has not made any attempt to provide full and frank disclosure. He has not in any meaningful way participated in these proceedings. It would be an affront to justice, not just to the wife in this case but also more broadly to the administration of justice in this Court, if I were to do anything other than proceed on an undefended basis. It is an unreasonable waste of this Court’s resources to see matters linger on unnecessarily - particularly where one party has made abundantly clear that they have no intention of respecting or complying with orders and directions of the Court. For these reasons I formally order that the proceedings be determined on an undefended final basis.
THE LAW
I turn then to the law and I make the following observations.
These being property settlement proceedings pursuant to Part VIII of the Family Law Act 1975 (Cth) (“the Act”), the Court is positively enjoined not to make an order under section 79 of the Act unless it is satisfied that in all the circumstances it is “just and equitable” to make the order.
The approach I propose to take in this matter in arriving at a just and equitable outcome is:
·firstly to identify the assets, liabilities and financial resources of the parties as best they can be discerned on the inevitably somewhat limited and circumscribed material I have before me given the husband's non-participation in the proceedings (“the Balance Sheet”);
·secondly, to consider whether it would be just and equitable to make any order in this case;
·thirdly, if it is just and equitable to make an order, I will assess each party’s contributions pursuant to section 79(4) of the Act;
·fourthly, I will then consider whether any further adjustments to either party’s contributions-based entitlement are warranted having regard to section 75(2) of the Act, colloquially referred to as the “future factors”.
·I will then consider the effect of my proposed orders to satisfy myself that they are just and equitable.
BALANCE SHEET
The evidence in this respect is set out in the wife's affidavit.
It was supplemented to some extent by the Outline of Case Document which was prepared on the wife's behalf and filed on 11 May 2023. There were some additions to the Balance Sheet set out in that Outline of Case Document and in the circumstances I had the wife give some brief oral evidence at the hearing yesterday to confirm that she considered that the values set out in the Balance Sheet and set out in the Outline of Case Document were true and accurate to the best of her knowledge, information and belief; she so confirmed.
I have already indicated that there are some limitations in terms of the quality of the evidence in this case but it cannot be said that the wife is in any position to do much about it. For example, she estimates the value of the Town B property as best she can by reference to two (2) appraisals prepared by real estate agents which are annexed to her affidavit and she takes the mid-point of those appraisal values. The fact is that the husband is uncooperative; the wife cannot gain access to the property to actually have it valued and she expresses a concern, quite legitimately, that the property may not be particularly well kept.
I do note that in the Full Court decision of Frederick & Frederick [2019] FamCAFC 87 it was observed at paragraph 39 of the judgment that:
We consider that generally speaking a person can give some evidence by way of admission as to the value of real estate owned by them which can be accorded weight notwithstanding such weight might be very much less than the weight given to that of a professional valuer, for example. The ordinary common experience of people is that where they own only a few significant assets, such as cars and houses, they are well aware of the purchase price and have some knowledge obtained from a variety of sources about their value.
Those observations apply similarly to various other assets in the Balance Sheet.
Having regard to the wife’s evidence set out in her affidavit and from the Balance Sheet which she adopted from the Outline of Case Document, I am satisfied that the assets and liabilities are as follows:
ASSETS
(1)Town B property valued at $555,000.
(2)The C artworks valued at $12,100. I pause here to observe that the wife has checked their value on an official website related to this artist. There are three (3) pieces in question and all are originals, not prints. The wife's evidence is the best evidence I have before me particularly where the paintings are in the husband’s possession.
(3)The wife estimates that the household contents are worth $10,000. This is a conservative estimate. She told me in the witness box that they had a lounge that they had bought for $5,000, a fridge, two computers, beds and various other items all of which effectively were left behind in the former matrimonial home when she fled.
(4)The husband’s bank accounts of an unknown value.
(5)The husband’s Motor Vehicle 2 which has an estimated value of $50,000. The wife bases this on a ‘Red Book’ valuation. She has the relevant details for the model and year of production and I accept her evidence as the best evidence there is.
(6)The stock which the wife values at $150,000. In this respect the parties, through a corporate entity, had acquired a stock as part of a business which was conducted by them during the marriage. The wife has experience in the business and was obviously in a relationship with the husband when the stock for the business was purchased. She has also spoken to the former franchisor who supplied at least some of the stock. This figure of $150,000 is her best estimate. Again, while it is not the most satisfactory way to proceed it is the best evidence that the Court has. All of these items are in the husband’s possession.
(7)The husband’s tools which the wife estimates at $5,000 and I accept that estimate.
(8)The wife's bank accounts with Bank H which have a combined value of $11,500.
(9)The wife's Motor Vehicle 3 with a value of $9,000. Again this is calculated by reference to ‘Red Book’. The wife has all of the relevant vehicle details to be able to make those inquiries and I accept her estimate of value.
(10)A Motor Vehicle 1. The wife says she bought this vehicle for between $500 and $800 and I will adopt the figure of $800 for present purposes. It is apparently in parts at the moment at the former matrimonial home. It is unknown whether the parts have been properly cared for or whether any of them are still even on the Town B property at this point in time as the wife hasn’t been physically back there since 2017. The wife advises the Court that according to ‘Red Book’ the private trade-in value of such a vehicle is between $13,900 and $18,600 but this figure seems, with respect to be, “pie in the sky” for a vehicle that consists essentially of parts laying about. I consider a fair value to be $800 being the upper end of what the wife says she paid for it.
Separately, though not specifically in the Balance Sheet, there is a Motor Vehicle 4. This was owned by the parties and used in their business prior to separation. It has since gone missing or otherwise been disposed of. It formed part of the business. I do not know and nor does the wife what its value is but it is something which the husband has no doubt retained or had the benefit of.
I make the sub-total of the assets at $803,400 plus the unknown value of the Motor Vehicle 4.
In terms of liabilities:
(11)The only liability is a Mortgage over the Town B property of $257,155.
In terms of superannuation:
(12)The wife has an ANZ fund with $72,000 in it.
(13)The husband has superannuation of an unknown amount. The wife has a superannuation statement of the husband’s from 2015 in which it is revealed that the then-balance was $40,844. But, the husband seemingly have been in employment fairly consistently since then, presumably that balance should have increased.
I make the superannuation as $112,844 +. The plus sign (+) simply represents the fact that it is likely to be more than that given that the husband’s value is a historic figure.
Overall, I make the assets - liabilities + superannuation as $659,089 plus the value of the Motor Vehicle 4 which is unknown plus whatever additional increase the husband has made on his superannuation. But for broad purposes I work on a figure of $659,089 because the others are unable to be quantified exactly.
The husband has had every opportunity to put his own evidence of value before the Court in relation to any of these assets, liabilities and superannuation. He has chosen not to put any evidence before the Court.
IS IT JUST & EQUITABLE TO MAKE AN ORDER?
I turn then to the question of whether it is just and equitable to make a property settlement order in this case.
The parties here were in a relationship for 14 years from 2003 until 20 August 2017. They acquired the property at Town B together, they conducted a business together, they had intertwined bank accounts. Even now the former matrimonial home at Town B remains in joint names and the mortgage encumbering the property is a joint mortgage.
In this case it is manifestly just and equitable to make a property settlement order and I so find.
ASSESSMENT OF CONTRIBUTIONS
I turn then to the assessment of contributions.
I indicate at the outset, both in terms of contributions but also section 75(2) factors, that I accept the unchallenged evidence set out in the wife’s affidavit of 12 April 2023. If I do not refer specifically to any particular paragraph of that affidavit, it ought not be assumed that it has been overlooked or otherwise not taken into account.
When the parties commenced a relationship in 2003 the wife had approximately $15,000 in cash savings, she had a Motor Vehicle 5 worth approximately $5,000 and she had some furniture. The husband owned a property in Sydney which seemingly had equity in it of around $50,000.
Very early in the relationship the wife inherited $10,000 from the estate of Mr J and those monies were applied for the joint benefit of the parties.
By way of overview, both parties worked throughout the relationship and the wife overwhelmingly attended to the homemaking contributions.
The wife’s employment was consistent. When the wife was not employed she was in receipt of workers’ compensation but it would be fair to say that she either worked or received compensation throughout the whole of the marriage. Initially she was working at K Company at Suburb L where she worked until 2005. She also did some community work in the early years of the marriage as well as working at various businesses.
In 2003 the husband bought into a company called M Pty Ltd with a few other friends, namely Mr N, Mr O and Ms P. The husband sold the property that he had in Sydney in order to buy into that company. Initially the company began as a business and in 2005 the other owners effectively divested themselves of their interest in the company and it became entirely the property of the husband.
Although the wife was herself working at various businesses at the time, she also worked for the company, initially for free. She did paperwork relating to financial matters for the company, sometimes working up to 24 hours at a time. I have little doubt that she put in significant effort for which she was not paid any formal wage as such.
I also accept her evidence that many expenses of the company were paid for by the parties out of their joint bank account. To be fair, though, as the wife observes in her material, she had an income for the majority of the relationship whereas the husband’s income essentially came through the company for the most part. Accordingly, most of the money funding their “joint account” was in fact coming out of the wife’s own salary, so the practical effect is that she was effectively subsidising many of the company expenses. The joint account was also used to pay for the company phone bill, car services, registration, electricity and water bills and the company’s insurance policies.
The same year, in 2003, the husband had used $50,000 worth of equity from the house he owned in Sydney in order to purchase a house at Suburb Q. The parties purchased it jointly for $212,000. The wife was paying the mortgage monthly. She was making all of the mortgage repayments although, obviously, the husband’s equity in the Sydney property gave the parties a financial advantage in that respect.
In 2005, the wife used $9,000 of her inheritance money to meet the company tax bill.
Around 2008, the company started doing transport work. The wife started to receive a wage as an employee of the company while also receiving workers' compensation payments, as I understand it until around 2009. Thereafter, the wife worked for about three (3) years at R Company from 2009 to 2012.
In 2011, the company took out a ‘business options loan’ with the NAB Bank for $53,000 secured against a six (6) month term deposit in the company's name of $20,000. The company had an offset account with NAB.
Around 2011, the husband transitioned the company away from transport work to selling and managing the business The wife gave oral evidence that ‘S Company’ was the relevant franchiser and that they provided stock to the parties on the basis that the parties could, through the company, use the stock in particular exclusive locations as part of the franchise agreement.
It is clear, however, that this business was not particularly successful and the wife’s evidence is that around 2012 the company stopped making money and ran out of funds.
The wife says she continued to pay for company expenses on her personal credit cards and used personal loans to keep the company afloat. Although she was still working for the company, her company wage ceased.
The wife started working for T Company around 2012, where she stayed until 2016. It is quite clear that the parties were under financial pressure.
Returning to the property that the parties had acquired at Suburb Q, I had indicated earlier that the wife had been paying the mortgage repayments each month. In 2011, the parties had re-mortgaged the property with the CBA. They structured the repayments to come out of a joint account owned by the husband and the wife. Between 2011 and 2014, the husband made irregular sporadic contributions of approximately $300 each towards the mortgage. The wife was effectively paying the balance and, indeed, from January 2014 onwards, she paid it effectively out of her own income. She also paid for the premium for the insurance in terms of meeting all of the monthly instalments as well as paying rates, electricity, gas and water at the Suburb Q property.
I should also add that, in 2015, the husband had taken out a loan of $74,356 to acquire a Motor Vehicle 2, this being the vehicle in his possession. The wife was making the repayments each month on this loan as well as paying the registration and insurance on the vehicle when the parties separated. She had also been paying for registration and insurance on the Motor Vehicle 4.
In July of 2016, the parties sold the Suburb Q house for $310,000 and purchased the house at Town B for $380,000. They did so as joint tenants, taking out a joint mortgage with CBA. The wife was meeting the monthly repayments of $1,461 from her account. By around that stage, she was working for a business called U Company. She was subsequently made redundant and they paid just under $20,000.
In around 2016, the husband took out another business loan with the Commonwealth Bank. He did so apparently putting the wife’s name on the loan so that she was jointly liable. He also contacted the wife’s father who she was not, I gather, perhaps on speaking terms with at the time, or certainly not having a good relationship with, and the husband convinced the wife’s father to guarantee the loan.
Around December 2017 or February 2018, the husband defaulted on that loan and the Commonwealth Bank ended up selling the wife’s father’s company for an unknown amount to recover their funds. Nonetheless, there was still a loan of $350,000 left outstanding.
During the marriage the parties acquired the art pieces to which I have referred, as well as the Motor Vehicle 1.
There are a couple of other issues that need to be considered in the context of contributions. The first is that it is the wife’s case that the husband was violent to her throughout the relationship. She says that he was aggressive and controlling towards her from a very early date. She says that he “kept tabs” on where she was and that if she went out somewhere he would become angry and yell at her. She says that she was financially coerced throughout the relationship. To some extent, this is evident from the financial history I have already set out. The wife gives a further specific example of a “money tin” that she had as savings and she says that when it had a balance of $5,000 - $6,000, the husband, at one stage when he was out of work, decided that he needed the money so he simply took it. She doesn’t know how it was spent.
Conversely, the husband had his own small bowl that he would put loose coins into, but the rule in relation to his bowl was that the wife was not allowed to touch those coins as the husband regarded it as “his money” and the wife said that he would get very angry and yell and scream at her if she took any of that money. He was critical of her in relation to purchases that he disagreed with.
He regularly abused her by putting her down and calling her names, such as “stupid, dumb, cunt, ugly, thick, fat and useless”. The wife says he did so every day. She says that he was not often physically or sexually abusive but she does not give me any detail of what physical or sexual abuse she complains of, and I have to be very careful in the absence of any more particular evidence.
The wife does say that the husband threatened her that if she ever cheated on him: “I'll put you in concrete boots and throw you off the back of a boat.” Shortly after saying this, he did in fact purchase a boat which he kept for a couple of years and the wife had genuine apprehension that one day when they were out in the boat he just might make her “disappear”. He also made threats that he knew “bikies” who could make her disappear very easily.
The wife gives general evidence that the husband excluded her from family and friends and generally isolated her. She gives a specific example of the husband calling her a “stupid fucking cunt” when they were at the home of friends of hers and that these friends told the husband to leave.
It would be fair to say, having regard to all of this unchallenged evidence, that the wife was definitely a victim of family violence - broadly speaking of a coercive and controlling nature. The sorts of descriptions the wife gives are the archetypal or classic descriptors of a coercive, violent relationship in which there was an imbalance of power.
Nonetheless, cases that warrant an adjustment on account of family violence fall into a narrow band, as was identified by the Full Court of the Family Court in Kennon & Kennon (1997) FLC 92-757. While I do not doubt that the wife was the victim of family violence, on the evidence before me I simply do not consider that I could safely find that a Kennon adjustment would be warranted in this case. I do, however, take into account the husband's financial abuse of the wife in the sense that she clearly bore a disproportionate share of the expenses of the parties during the relationship which was a direct result of the manner in which the husband insisted that it be conducted and the wife acquiesced. In that sense, the wife's financial contributions are being given real weight and they arise as a result of that unfortunate disproportionate sharing that was effectively forced upon her.
I should add that the wife makes complaints of the husband harassing her after separation but I do not consider that these of themselves are strictly relevant to a Kennon argument because they arise post-separation at a time when the parties were living separately and apart. I accept that the husband has harassed the wife, that he has attended upon a place trying to talk to her, that Police subsequently found a gun in his motor vehicle and that he has sent her harassing messages. I don’t take away from the seriousness of any of those things. His conduct has been deplorable, but I do not consider that I can legitimately take such matters into account in terms of assessing contributions.
The other matter raised by the wife was the issue of alleged ‘waste’ by the husband. Again, although the wife's evidence is unchallenged, the evidential basis is insufficient for me to make an adjustment. In short, the wife says that the husband became addicted to computer gaming and that he used her credit card to purchase computer games and other items, and at times also taking cash from the business for this purpose.
Of course such matters cannot ever be properly assessed / quantified because I do not have any evidence from the husband. But equally, the wife does not give me any expenditure figure either - not even an estimate - save that she says he would have spent “thousands of dollars”. In the grand scheme of the marriage, I just do not consider that I can take such matters into account as rising to the level of ‘waste’ in the sense identified by Baker J in Kowaliw & Kowaliw (1981) FLC 91-555. The one piece of objective evidence I have about his expenditure, namely a bank statement excerpt, falls well short of establishing anything like ‘waste’. To be clear, I am not saying that I do not accept the wife’s evidence. What I am saying is that I do not consider that I can give it any particular weight.
The wife paid all of the mortgage repayments as well as all of the rates, electricity, gas and water at the Town B property until she left the home in 2017. Post-separation, I should indicate that the wife paid the mortgage for the Town B property for the first month. Thereafter, the husband has had to pay for it himself, as he should. The husband has had exclusive use of the property. The wife has also been left with some debts that she had to pay out after separation and these need to be taken into account as well. Specifically, the debts were approximately $25,000 and $6,000 and they were effectively joint debts which the wife paid out.
The wife has gone on to obtain work in customer service, although she does not want to reveal the details of her employer because she expresses fear of the husband on account of his past family violence towards her.
In 2021, the wife engaged the Financial Ombudsman for assistance with what she asserted was financial coercion during the marriage and the consequence is that she was able to have her name removed from that loan liability. She is unaware of whether the husband knows about this. I suspect that he probably does and that the bank was probably obliged to let him know as a joint borrower, but it is not necessary for me to make any particular finding.
It might be asked at this point: why is such a liability not included in the Balance Sheet?
The answer is that I accept the wife’s evidence that the husband took out the loan in her name in circumstances where the wife did not consent to same and where, self-evidently, she has been able to have herself released from it. Moreover, the husband has not put any evidence before the Court seeking to include such loan as a liability and, accordingly, I disregard it in its entirety.
Overall, when I consider questions of contributions, I take into consideration in this case the fact that the husband probably had the superior initial contribution in terms of his Sydney property. I take into account that the wife made superior financial contributions as well as making post-separation contributions that were significant in a financial sense. She also bore the overwhelming bulk of all of the homemaking and other related “unpaid” contributions.
In circumstances where the husband in this case puts no evidence before the Court and where the Court is anxious to avoid a situation where the wife is “short-changed"” as a result, consistent with the authorities, I will assess contributions in the wife's favour at 60% - 40% over the whole of the property, including the superannuation and the non-superannuation property.
SECTION 75(2) FACTORS
I turn then to section 75(2) of the Act.
In this regard, the husband is 51 years old and working as a transport worker. The wife is 41 years old and working in customer service. The husband’s income is unknown because he refuses to tell the Court or the wife what it is he earns but he has certainly been able, it would seem, to pay the mortgage for the home. The wife’s income is in the order of $70,000 per annum. Her expenses are somewhat less than her income; she is able to meet her expenses each week but, of course, the wife has had to live in rented accommodation ever since separation.
The husband has had the benefit of living in the Town B property.
Although the husband is older than the wife, each of the parties has an appropriate capacity to work. The husband’s commitments to support himself are unknown. It is not known if he his cohabiting with anyone else, although it is not suggested that he is. Nor is the wife, for that matter.
Neither party has any obligation to support any other party, nor does either party receive any Centrelink or Commonwealth benefits.
Each party, if possible, ought to have a standard of living that is reasonable.
I do not propose to make orders in this case which will impact the capacity of a creditor to recover their debt.
In relation to the parties’ earning capacities and the impact of the marriage, the fact of the matter is that the wife is the one who obtained a job for the husband as a transport worker, although his exact circumstances at this moment remain unknown. It could not reasonably be said on the wife’s evidence that the marriage has adversely impacted the husband’s income-earning capacity in any relevant sense.
The wife has had to work in hospitality and various other jobs before obtaining her current employment. She is a resourceful person who has had to find work to meet her needs.
I consider that the parties are able to meet their respective lifestyle expenses although, obviously, the husband’s circumstances are opaque, and deliberately so. I do not consider that the duration of the marriage has affected the earning capacity of either party.
The other relevant matter that I must take into account is, again, the husband’s failure to make full and frank disclosure or to in any way participate in the proceedings. I do not consider that there ought be any adjustment under section 75(2) in the husband’s favour, even on account of his greater age, having regard to his comprehensive failure to participate in the proceedings. Nor, given the circumstances in which the loan came about, do I consider that any adjustment in the husband’s favour is warranted on account of the loan liability from which the wife has been discharged, the balance of which is unknown in any event.
JUST & EQUITABLE OUTCOME
Accordingly, having regard to the above findings, I turn to the last question, and that is arriving at a just and equitable outcome.
I turn then to the orders sought by the wife.
I have determined that a 60/40 division in the wife’s favour is appropriate and is just and equitable by reason of the matters to which I have referred.
The wife specifically seeks orders that she go back into possession of the home at Town B in return for her paying out the mortgage. Effectively, the wife is seeking to take over the property and that the husband move out and take what property is there, save for the Motor Vehicle 1 or relevant parts. It was contended to me that the wife's proposed order would see approximately a 60/40 division, and I accept that.
If I make the orders sought by the wife, I have calculated that she will be retaining:
·the Town B home valued at $555,000 - the mortgage of $257,155 + bank accounts $11,500 + the Motor Vehicle 3 $9,000 + the Motor Vehicle 1 $800 + $72,000 in super, which is $391,145. This equates to approximately 59.3% of the overall matrimonial property of $659,089 that I identified earlier. Of course, that overall figure does not take into account the Motor Vehicle 4 that the husband has likely disposed of, nor does it take into account any other increase in superannuation he might have or, indeed, any other assets or income that he has that he is not going to disclose to the wife or to this Court.
When I considered the wife’s proposed order, initially my thought was that she was perhaps asking for a little too much, particularly moving back into a home she has not occupied for over five (5) years. Nonetheless, her proposed orders are consistent with the property division that I have assessed to be “just and equitable” in the circumstances of this particular case. Moreover, the husband has been on notice ever since the wife's Initiating Application of 12 August 2022 that the wife wanted occupation of that home. It has not come, or should not come, as a surprise to him if the Court makes such an order. Such an order has always been “on the cards” at least in the sense that the wife has from the very outset sought to resume occupation of the home.
I should also add in this respect that, annexed to the wife's affidavit under the heading “Attempts to Contact Mr Canton” is a long litany of letters and emails. Some of this overlaps with earlier evidence that I have referred to in the proceedings, but it suffices to say that the wife's lawyers have attempted to contact the husband and generally found it to be unsuccessful on the following dates: 29 November 2017, 3 July 2018, 3 February 2022, 24 February 2022, 19 July 2022, 24 August 2022, 23, 27 and 29 September 2022, 14 October 2022, 18 November 2022, 20 and 21 December 2022 and 15 March 2023.
The husband cannot complain in any way that he is taken by surprise by any of the orders that I propose to make.
In the circumstances, I consider that it would be “just and equitable” for the wife to resume occupation of the home. I do not however consider that her proposed timeframe of twenty-eight (28) days, is a reasonable amount of time to allow that to occur. To be fair to the husband, he has a lot of property to remove from the home, including the business stock and, no doubt, other personal property as well.
ORDERS
Broadly, what I propose to do is make the orders sought by the wife but with some amendments.
I am not evicting the husband immediately. He has an orderly period to move.
There are some additional orders not sought by the wife but which - purely in in the interests of property preservation - I consider to be “appropriate” in the exercise of the Court’s jurisdiction and having regard to section 114 of the Act.
Specifically in relation to the injunction contained in order 3A(e) and primarily for the benefit of the wife and solicitor who are listening, the reason I include that order is that it occurred to me that the husband might, upon receiving this order, immediately redraw money on the mortgage and then the wife would be obliged to pay it out in accordance with these orders. Of course, anything might happen in this case given the husband’s past conduct but I’m going to specifically restrain him in this respect, and I will deal with the issue of service of the order a little later.
So, in short, the husband is to make the home payments. He has sole use and occupation up until the date that he is to leave. He is not to redraw, encumber or in any way deal with his interest in the property.
Specifically in relation to order 4, you probably won’t receive the sealed orders this afternoon. To the wife and the wife’s solicitor I am sorry for that, but the Court physically won’t be able to get them to you today but I expect you will have them Monday. As soon as possible after they are sealed, the wife is to serve a copy of the order on the Commonwealth Bank of Australia quoting the account reference number, and the purpose of that is obvious. I want the bank to know about this order first. There’s no specific restraint on the bank but at least they will know if the husband goes to withdraw money that he’s not allowed to.
In relation to order 8, the husband is to take everything with him from the Town B property that’s his. In the event the husband fails to vacate the Town B property and/or remove his possessions from the Town B property as required by these orders, the wife may apply by email to my Associate for the issue of a Warrant of Possession (order 11). I won’t make additional orders about that Warrant at this stage because I consider that the Warrant can be issued later if needs be.
In relation to order 12, in the event that the husband damages the Town B property the wife is at liberty to seek that the matter be re-listed by way of email to my Associate.
In relation to order 13, I express here my reservations about what will happen. There’s no guarantee the wife will receive the Motor Vehicle 1. I’m going to specifically order that the husband leave all vehicle parts on the property in good order and repair and that he be restrained from removing, disposing, damaging or dealing with any parts of the Motor Vehicle 1.
I am specifically going to make order 13A, which sets out the items the husband is to take with him when he leaves the home. That order is consistent with the 60/40 property division I have arrived at.
In relation to order 15, I am assuming here, of course, that all of this will be done quickly.
THE WIFE’S COSTS APPLICATION
The wife seeks her costs of and incidental to the proceedings on an indemnity basis. Having regard to the content of exhibit 3, I can see that the wife’s costs on an indemnity basis amounted to $18,200 as at yesterday’s Compliance and Readiness hearing.
For the purposes of considering a costs application, the Court must have regard to section 117 of the Act, subsection (1) of which provides that, ordinarily, each party bears his or her own costs. However, subsection (2) provides that if circumstances “justify” it doing so, the Court may make such order for costs as it considers “just”. The Court is obliged to have regard to the considerations set out in section 117(2A) in determining whether the circumstances “justify” the making of an order and the amount of such order that would be “just”.
In this regard, there is little more for me to say than to observe that the husband has been a recalcitrant of the highest order in these proceedings who has obstructed the Court process throughout. He has, no doubt, caused the wife to run up substantial costs. He has been in flagrant breach of Court orders more than once. But for his attendance on 12 May 2023, for example, this matter may have been determined over a month ago. His conduct has fallen so far short of what is expected of a litigant in this Court that, in my view, it warrants the making of an indemnity costs order.
This case falls into that unusual category where the husband’s conduct is such as to warrant the making of an indemnity order other than an order on the usual “standard” or “party and party” basis.
The husband has been wholly unsuccessful in the proceedings.
It suffices for me to make the observation that, having regard to the wife’s costs disclosures, I consider that it would be “justified” for the husband to pay the wife’s costs and I consider the amount of $15,000 to be “just”. It is slightly short of what would be a full indemnity but, in my view, that is an amount which is “just” and so I am going to order that the husband pay the wife’s costs on an indemnity basis fixed in the amount of $15,000, noting that this is not quite a complete indemnity having regard to exhibit 3, but I consider that’s an appropriate figure having regard to all of the circumstances of this case.
I should also say for the benefit of the wife and her solicitor, that my order for costs of $15,000 incorporates the earlier costs order of $1,800 made by SJR G because I don't want to have “doubling-up”. So, rather than having the benefit of the order of SJR G, the $15,000 incorporates that earlier costs amount.
Returning then to the orders, the costs order will be order number 17. I am going to specifically order that the husband is to make such payment to the wife contemporaneously with vacating the Town B property in accordance with these orders.
Order 18 will be that a copy of these reasons be taken out and provided to the parties. This is largely because I anticipate there is a real likelihood of difficulties with enforcement. Or perhaps the husband may even want try to re-open the orders, I don't know.
Given that this is an undefended hearing, I make this last order, order 19 if the husband seeks to re-open these orders. Leave will not be granted for him to appear by telephone or video if he does. The husband will be required to explain his non-participation in the proceedings to date and the Court will also expect the husband to pay the wife’s costs - or satisfy the Court as to why he should be relieved of the obligation to do so prior to the Court entertaining any application to reopen. In other words, the husband can “put his money where his mouth is” given the enormous stress and waste of costs that he has generated by reason of his own recalcitrance.
In the circumstances of this case, it seems premature to order that this matter be removed from the list of Active Pending Cases at the moment.
CONCLUSION
For these reasons I make the orders set out at the commencement herein.
I certify that the preceding one hundred and nineteen (119) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Betts. Associate:
Dated: 7 July 2023
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