Casboult and Close
[2013] FMCAfam 130
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CASBOULT & CLOSE | [2013] FMCAfam 130 |
| FAMILY LAW – Property – application for interim property settlement by wife– no appearance by husband – husband seeks adjournment of proceedings due to ill health – wife seeks sale of property occupied by husband – property registered in her sole name and subject to mortgage – mortgagee in question demanding payment of mortgage arrears – threat of foreclosure – husband ordered to pay mortgage in question – bank no longer prepared to extend hardship provisions and defer repayment – both parties in straitened financial circumstances – proceedings previously delayed – husband has no proposals to satisfy mortgagee – court satisfied husband knows of wife’s application – balance of prejudice – justice and equity – interests of justice – whether appropriate to make such an order. |
| Family Law Act 1975, ss.75(2), 79(1); 79(2); 79(4) & 80(1)(h) |
| Stanford v Stanford [2012] HCA 52 Strahan v Strahan (2010) 42 Fam LR 203 |
| Applicant: | MS CASBOULT |
| Respondent: | MR CLOSE |
| File Number: | ADC 2567 of 2010 |
| Judgment of: | Brown FM |
| Hearing date: | 15 February 2013 |
| Date of Last Submission: | 15 February 2013 |
| Delivered at: | Adelaide |
| Delivered on: | 19 February 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr J McGinn |
| Solicitors for the Applicant: | Nelson & Co |
| Counsel for the Respondent: | No Appearance |
| Solicitors for the Respondent: | Self represented |
ORDERS
The property situate at [1] Property A in the State of South Australia being the whole of the land comprised and described in Certificate of Title Register Book Volume [omitted] registered in the sole name of the husband and the property at [2] Property A, [A] in the State of South Australia being the whole of the land comprised and described in Certificate of Title Register Book Volume [omitted] registered in the sole name of the wife be placed on the market for sale forthwith with Mr R of [omitted] upon such terms and conditions as the parties agree or in default of agreement as determined by this Honourable Court.
Each of the parties do all things and execute all documents necessary to appoint the said Mr R to market the said properties and each of them for sale.
By way of consequential arrangement for the sale of each of the said properties that the parties forthwith:
(a)provide instructions to Mr R to offer the properties for sale together by auction in the first instance; and
(b)that for the purposes of such auction that the reserve price be such sum as the parties agree or in default of agreement the sum of $380,000.00 in respect of number [2] Property A and $450,000.00 in respect of number [1] Property A.
In default of either party executing any document necessary to give effect to these orders within seventy-two (72) hours of the same having been provided to him or her then and in such event a Registrar or a Federal Magistrate of this Honourable Court upon proof by affidavit of such default or neglect or omission is hereby authorized and directed to sign all such documents and if in his or her opinion it is necessary to do so to settle the same and to do all things to give effect to the within orders.
The husband do all things necessary to ensure that each of the said properties be vacant for the purposes of there being inspections by or conducted by the said agent upon forty-eight (48) hours notice in writing have been delivered to number [1] Property A.
The husband do deliver up to the wife’s solicitors within forty-eight (48) hours of service of these orders the key or a duplicate key to number [1] Property A, [A] for the purposes of providing the same to Mr R.
The wife be at liberty to instruct such locksmith that she may determine to facilitate access to the said properties or either of them by herself or Mr R or any other agent or any members of the public for the purposes of inspection of the said properties or either of them.
Pending sale of the said properties or either of them the husband be restrained and injunction is hereby granted restraining him from selling, transferring or encumbering his interest in number [1] Property A, [A] aforesaid or the wife’s interest in number [2] Property A, [A] from drawing upon any account, loan or accommodation which is secured against the said property.
The husband be restrained and injunction be granted restraining him damaging or altering the said properties or either of them.
The wife be at liberty to accompany the said agent for the purposes of the inspections referred to in paragraph 5 of these orders.
In any event within twenty-one (21) days of these orders the husband do vacate each of the said properties known as [2] Property A and [1] Property A, [A] aforesaid and remove all items of personal property from the said properties and do deliver the keys to each of the said properties up to Mr R.
The net proceeds of sale of each of the said properties be paid to such account as the parties agree or in default of agreement as determined by this Honourable Court to abide further order of this Honourable Court or written agreement of the parties.
The wife’s application filed 12 November 2012 do otherwise stand dismissed.
The wife’s costs of the said application be reserved to trial.
Further consideration of the matter is adjourned to 15 March 2013 at 9:30am for the allocation of a trial date and trial directions.
A copy of the orders made today are to be personally served on the respondent.
Liberty to apply in respect of consequential orders upon forty-eight (48) hours notice.
IT IS NOTED that publication of this judgment under the pseudonym Casboult & Close is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC 2567 of 2010
| MS CASBOULT |
Applicant
And
| MR CLOSE |
Respondent
REASONS FOR JUDGMENT
Introduction
On 15 February 2013, in the absence of the husband Mr Close, I ordered that he vacate the properties in which he lives, situate at [1] and [2] Property A, [A] and the properties concerned be placed on the market for sale. This order was made on the application of the wife, Ms Casboult (formerly Close).
It is a significant thing to exclude a person from his or her home, particularly if that person is not present to hear the reasons explaining the decision in question. In addition, it is common ground that
Mr Close is currently in poor health and has recently undergone cardiac surgery.
At the time, I indicated that I would write the reasons why I had reached the conclusion that it was both just and proper that the properties be sold, so that Mr Close could be provided with an explanation for the decision.
As will become clear, the circumstances of the case are complex and the case itself has been on foot for in excess of two and a half years. I was satisfied that Mr Close knows of Ms Casboult’s application and has neither attended at Court as requested, either in person or through a lawyer, nor engaged constructively with the Court’s processes for an extended period of time. This was not withstanding the fact that I accepted that he has been in poor health.
More importantly, I was persuaded that the mortgagee in respect of one of the properties concerned – the Adelaide Bank – was no longer prepared to forebear in respect of mortgage arrears due to it and it was thus expedient for the Court to act to avoid the property being potentially sold in a mortgagee’s sale, to the financial detriment of both the husband and the wife.
The parties married [in] 1993. They are the parents of three children: [X], born [in] 1995; [Y], born [in] 1999; and [Z], born [in] 2002.
The property at [2] Property A (“[2] Property A”) was purchased at some time around 1993 and registered in the wife’s sole name, as at the time, she qualified for a First Homeowner’s Grant and the husband did not. He had sold a property elsewhere and the proceeds were used as a deposit on [2] Property A.
In 1995, an adjoining property at [1] Property A (“No [1]”) was purchased and registered in the husband’s sole name. It was subject to a mortgage, which the husband paid.
The wife says the parties separated in 2004. This is contentious. She has been in receipt of a supporting parent’s benefit, from Centrelink, since 2004. The husband has been in receipt of an invalid pension, again from Centrelink, since around 2000, as a result of cardiac problems and a psychological condition described as anxiety.
It is the wife’s position that, from 2004 onwards, she and the children lived at [2] Property A and the husband lived at No [1] and the two ran separate households. The husband refutes this assertion. He says the parties lived as a family at [2] Property A, until the parties separated in late April 2010, when he moved into No [1], which had previously been rented.
In May 2010, the wife and children vacated [2] Property A and obtained rental accommodation in Property P. It is the wife’s position that she did so because of the husband’s poor behaviour and abusive conduct towards her and the children.
She alleges that Mr Close was also cultivating marijuana hydroponically in a shed at [2] Property A, unbeknownst to her. When she discovered the planting, she became distressed, which was a further factor causing her to leave the property. The husband’s position is that the marijuana was for his own use and was utilised by him to assist with his insomnia.
This was the background to the wife commencing proceedings, in this Court, on 8 July 2010. She sought orders in respect of both children and property. At this stage, on a final basis, she sought the sale of both No [1] and [2] Property A and the division of the resulting proceeds be divided 75/25 percent in her favour. She also sought that the children live with her and spend time with their father as the parties otherwise agreed.
The husband responded to this application on 9 August 2010. It was his position that the parties’ marital estate be divided 70/30 percent in his favour. He sought orders that [Y] and [Z] live with him, with [X] to be at liberty to chose where she wished to live.
On 29 November 2010, following an unsuccessful Conciliation Conference, the parties’ competing applications were fixed for final hearing on 16 and [1] May 2011. Both property and children’s issues remained in contention between the parties. In this context, a family report was ordered.
The relationship between the parties is a poor one. After she left [2] Property A, the wife was working as a [omitted]. She needed a motor vehicle to get to her work. She alleges that the husband removed her vehicle from outside her rented home. She alleges that his motivation for this action was spite for her.
As a consequence, on 7 December 2010, she applied for the vehicle’s return. An order to this effect was made by the Court on 15 December 2010. The wife also alleges that the husband has previously threatened her with violence.
In January 2011, the wife was diagnosed with breast cancer. She underwent surgery approximately a fortnight after her diagnosis. She was told that traces of cancer remained in her lymph node and she had a further operation in February 2011. Thereafter, it was necessary for her to undertake a regime of both chemo and radio therapy.
In anticipation of the trial scheduled for May 2011, the parties arranged for valuations of both [2] Property A and No [1]. [2] Property A was valued at $405,000 and No [1] at $570,000. However, the valuer concerned considered that if the two properties were sold together, for development purposes, they would be worth approximately 15 percent more in total. In this context, a valuation of $1,120,000 was provided.
The family report, ordered by the Court, was released to the parties in March 2011. The report writer described [X] as a “strong willed teenager”. [X] indicated to the report writer that she preferred to live with her mother and chose when she saw her father. [X] was described as having been “influenced by her mother’s strongly negative views of her father”.
The report writer described [Y] and [Z] as “feeling torn between the parents”. As such, it was considered that both children were living under a significant level of stress at the time the report was written. In this context, the report writer provided the following opinion:
“Based on the level of conflict between the parents, it is the writer’s opinion that an equal week about arrangement for [Y] and [Z] is unlikely to be successful and therefore not in their best interests.”
The trial, scheduled for 10 and 11 May 2011, came on before Sexton FM. On 11 May 2011, the parties reached agreement in respect of final arrangements for the parenting of the three children concerned.
It was agreed that the three children should live with their mother. So far as [X] was concerned, she was to spend time with her father subject to her wishes. In relation to [Y] and [Z], they were to spend time with their father, during school terms, on alternate weekends and for two overnight periods in the other week of each fortnight, as well as for regular periods during school holidays.
In his Affidavit, filed in anticipation of the trial, the husband had indicated that he had taken out a mortgage, in favour of the ANZ Bank in respect of No [1]. The amount being borrowed was $300,000. He further deposed that he had lent $60,000 of this sum to his cousin
Mr M. The agreement between the husband and Mr M being that the latter would repay the money on demand.
Sexton FM was not in a position to complete the trial scheduled before her in respect of its property aspect. Accordingly, she re-fixed the matter before herself on 29 and 30 March 2012. This was the background to her making the following orders:
“6.Until further order the husband be restrained and an injunction be granted restraining him from selling, encumbering or dealing with the properties known as and situate at [1] and [2] Property A being the land comprised and described in Certificate of Title Register Book Volume [omitted] and Volume [omitted] respectively without the wife’s consent first had and obtained.
7.Subject to paragraph 16, until further order the husband be restrained and an injunction be granted restraining him from drawing upon ANZ Equity Manager Account Number [omitted] (ANZ loan) without the wife’s written consent first had and obtained or an order of this Honourable Court.
8.Until further order the husband be restrained and an injunction be granted restraining him from paying any monies repaid or paid to him in respect of the husband having any proceeds from the ANZ loan to any person or account other than the wife’s solicitor for and on account of the wife, such monies to be brought to account in such way as this Honourable Court deems just and equitable at the trial of the property settlement applications of the parties and that the wife be at liberty to utilise such funds as she sees fit.
9.The husband do forthwith:
9.1Make demands for the repayment in full of the referred to in paragraph 108 of the husband’s trial affidavit sworn 5 May 2011; and
9.2Cause such monies to be paid to the wife’s solicitor’s trust account to be dealt with pursuant to paragraph 8 of these orders.
10.Within twenty one (21) days the husband do give discovery on oath of:
10.1All applications, statements and correspondence relating to obtaining the ANZ loan;
10.2All documents relating to method and/or manner of payment of monies from or to the ANZ loan;
10.3All documents relating to the agreement referred to in paragraph 108 of the husband’s affidavit sworn 5 May 2011;
10.4Husband’s tax returns since 1 December 2004;
10.5Share transactions and share holdings since 1 December 2004;
10.6Husband’s superannuation;
10.7Bank accounts in the husband’s name (solely or jointly with any other person) since 1 December 2004;
10.8Correspondence with Centrelink since 1 December 2004;
10.9All correspondence with Department of Transport and Motor Vehicles;
10.10All accounts and memberships with any vendor of Carparts for the last four (4) years; and
10.11All settlement statements for Property R and Property W properties.
11.The husband do file and serve an affidavit within twenty one (21) days providing particulars of:
11.1The parties to the agreement referred to in paragraph 108 of the husband’s affidavit sworn 5 May 2011;
11.2When and how monies were paid and repaid and form of such payments and repayments; and
11.3Purpose of all advances made.
12.Within twenty one (21) days the husband do file and serve an affidavit of the other party or parties to the agreement referred to in paragraph 108 of the husband’s affidavit sworn 5 May 2011 providing particulars of:
12.1The parties to the agreement referred to in paragraph 108 of the husband’s affidavit sworn 5 May 2011;
12.2How monies were paid and repaid and form of such payments and repayments; and
12.3The purpose of such borrowings.
13.The husband do make available for inspection all documents referred to in paragraph 10 available for inspection at his solicitor’s office upon seven (7) days written notice from the wife’s solicitor.
14.The parties do all things and ensure all documents to cause the following to be sold upon such terms and conditions as the parties agree or in default of agreement as determined by the Honourable Court:
14.1motor vehicle [1],
and the proceeds of sale be retained by the wife to be brought to account in such way as this Honourable Court deems proper at the trial of the property settlement applications of the parties.
15.The parties do all things and execute all documents and pay all monies equally to cause the following items to be valued at the joint and equal expense of the parties by [omitted] Auctions:
15.1motor vehicle [2] and furniture at the wife’s residence;
15.2motor vehicle [3], furniture and contents at [1] and [2] Property A, motor vehicle [4] motor vehicle [5] motor vehicle [6], motor vehicle [7] (at Mr C’s garage), tools and car trailer;
15.3motor vehicle [8] at the husband’s mothers’ house.
16.The husband do cause to be paid from the ANZ loan such monies to the wife’s solicitor’s trust account as to make the total of the monies referred to in paragraph 8 and 9 and this paragraph total $70,000.00 such monies to be brought to account in such way as this Honourable Court deems just and equitable at the trial of the property settlement applications of the parties and the wife be at liberty to utilise such funds as she sees fit.”
The husband described the loan obtained by him from the ANZ Bank as being an “equity loan”. It was apparently not fully drawn down. As a consequence, by way of partial or interim property settlement, it was ordered that the husband advance the sum of $70,000 to the wife.
The wife deposes that she received $47,181 of this sum on 7 June 2011. She commenced proceedings to recover the balance on 2 September 2011. Sexton FM ordered that the husband to pay the balance to the wife forthwith, by way of an order made on 7 September 2011. She also ordered that the parties attend a further Conciliation Conference scheduled for 11 November 2011. This Conference was unsuccessful.
Regrettably, the trial scheduled for 29 and 30 March 2012 before Sexton FM, who had been managing the case for some time, did not proceed due to Her Honour’s ill health.
As at 8 March 2012, it was the husband’s position that he owed $73,000, to the ANZ Bank, in respect of the mortgage on No [1] and the wife owed approximately $80,000, to the Adelaide Bank, in respect of the mortgage secured over [2] Property A.
Following the aborted trial, on 24 April 2012, the wife filed an urgent Application in a Case. She deposed that she continued to live in rented premises, in Property P, with the children, at a weekly rent of $340. At the time, in spite of her serious ill health, she continued to work as a personal carer, receiving an average weekly income of $676.00. It was her position that she was in a parlous financial situation.
In her Application, she sought orders with the intent of requiring the husband to pay arrears in respect of the Adelaide Bank mortgage (for which she was legally liable as the mortgagee of [2] Property A) and the water and Council rates relating to both No [1] and [2] Property A. In support of her Application, she deposed that she had received a Statutory Demand, in the sum of $76,030, from the Bank in respect of the mortgage. In addition, she indicated that she had received a Demand for monies due to SA Water.
It was Ms Casboult’s position that, as the husband was living at [2] Property A, he should be responsible for all the payments arising in respect of this property, particularly as her financial circumstances precluded her from making any payment.
In response, the husband confirmed that he was living in [2] Property A (the property registered in the wife’s sole name) because No [1] was “unliveable”. He further deposed that he was in receipt of a pension of $818 per fortnight, whilst his liabilities were $1,231.20 per fortnight. The major component of this sum was the required mortgage payments and the equity loan, which he deposed came to $560.37 per fortnight.
In all these circumstances, he deposed that he had difficulties paying the mortgage. As a consequence, he had applied for “hardship” to the Adelaide Bank. He further deposed that he would pay the water bill, when he could, but had been advised by SA Water that they would not disconnect his water supply.
The husband’s position, at this stage (May 2012) was that he did not wish the properties to be sold together, as he was desirous of purchasing one of the properties following the final hearing, which had been relisted on 20 and 21 September 2012.
The matter came before me on 16 May 2012. On that date, I made the following orders and notations:
“UPON NOTING that any legal costs, penalties and other sanctions threatened by the Adelaide Bank in its default notice dated 15 March 2012 and how those charges to be levied is a live issue at the trial.
THE COURT ORDERS THAT:
1.The husband pay all outgoings including council rates, SA Water and Emergency Services Levy in respect of the two properties located at [1] Property A & [2] Property A respectively and make all necessary arrangements and all necessary sums to the Adelaide Bank to ensure the bank’s threat of foreclosure is not proceeded with.
2.The costs of today’s hearing is adjourned to the trial.
3.The final hearing listed on 20 & 21 September 2012 at 10.00am NOTING 2 days hearing time is confirmed.”
Regrettably, the trial scheduled for 18 and 19 September 2012 did not proceed. On 14 September 2012, the husband’s solicitors filed an Application seeking an adjournment of the trial. Mr Close did not appear, at Court on 18 September 2012. Baumann FM, the presiding Federal Magistrate, directed him to attend at 2.15pm on the adjourned date.
In support of his Application for an adjournment of the final hearing, Mr Close deposed that his “main witness” Mr M was not available, as he had a work commitment in Queensland. He was said to be material to the issue as to when the parties had finally separated. In addition, he deposed that Centrelink had commenced investigation into the date of the parties’ separation and allegations made by him that the wife had forged his signature. These investigations had relevance as to the wife’s entitlement to receive a Supporting Parent Benefit from 2004 onwards.
On 19 September 2012, with the wife’s apparent acquiescence, the trial was vacated pending the Centrelink investigations. The matter was adjourned to 22 November 2012, when it came before me.
The current application
This complex history of delay, mistrust and mutual impecuniosity was the background to the wife bringing a further urgent Application in a Case on 13 November 2012. In this Application, she sought the following orders:
“1.That the respondent husband Mr Close vacate the property known as [2] Property A, [A] registered in the sole name of the wife within 21 days of the date of this Order.
2.That the properties situate at [1] Property A, [A] registered in the sole name of the husband and the property situate at [2] Property A, [A] registered in the sole name of the wife be placed on the market for sale forthwith with such licensed real estate agent as agreed between the parties within seven days or failing agreement as directed by the wife.
3.In the alternative that the property situate at [2] Property A, [A] registered in the sole name of the wife be placed on the market for sale forthwith with such agents as directed by the wife.
4.That this matter be allocated a Trial date at the Court’s earliest opportunity.”
In her Affidavit in support of this Application, the wife deposed that she was struggling to maintain her working hours because of the residual effects of her breast cancer treatment. She also deposed as to being highly stressed as a result of the Centrelink investigation. She further deposed that the Adelaide Bank had agreed to defer payments on the mortgage in its favour secured against [2] Property A only until 21 January 2013.
In a later Affidavit, filed on 29 November 2012, the wife deposed that she was on “stress leave and unable to work”. As she had no remaining entitlement to sick pay, she was then in receipt of a Centrelink payment.
It was her position that the husband had informed Centrelink that the parties had separated in 2004 essentially to create difficulties for her, notwithstanding that the husband himself might be implicated, with the wife, for receiving benefits to which they were not entitled.
The husband opposed the wife’s Application for a partial settlement of the proceedings, by way of a sale of either No [1] or [2] Property A, either individually or together. Given the complex nature of the matter, on 30 November 2012, I determined that the appropriate course was to fix the matter for an urgent final hearing, rather than to proceed piecemeal. The date allocated for what was by now the fourth final hearing scheduled, was 14 and 15 January 2013, during the Court’s customary vacation.
On 20 December 2012, the husband filed material which indicated that an Authorised Review Officer, at Centrelink, had found that for the period from 6 December 2004 to 18 April 2010, the parties should have been regarded as a couple for the purposes of payment of Social Security. As a consequence, the husband deposed that Centrelink were in the process of determining firstly how much he had been paid in respect of his Disability Support Pension for this period and secondly how this overpayment should be recovered from him.
In his Statement of Financial Circumstances, filed on 20 December 2012, the husband indicated that the ANZ Bank loan stood at an amount of approximately $79,000 and the debt to the Adelaide Bank in an amount of $43,000.
On 4 January 2013, the wife filed a further Affidavit, in anticipation of the trial scheduled to commence on 14 January 2013. In this Affidavit, she confirmed that she too had been informed by Centrelink that she had received benefits, to which she was not entitled, for the period from 6 November 2004 to 18 April 2010 and the relevant Commonwealth authorities intended to recoup the amount unlawfully obtained by her.
Ms Casboult has been informed that the amount overpaid to her by Centrelink is at least $17,393. However, she has also been advised that there may be a further tax over payment of an additional $30,856. The wife is currently seeking legal advice as to whether she can challenge the Authorised Review Officer’s decision in either the Social Security Appeals Tribunal or elsewhere.
In her Affidavit, the wife deposed as follows in respect of her current situation:
“… I have a current sick certificate from my General Practitioner, Dr. C indicating that I am unfit to work at the present time due to stress and physical pain in my arm. My current certificate expires on the 14 January 2013 and I understand that it will be extended past that date, if necessary. I say that I am highly stressed largely because of the ongoing Court proceedings and the behaviour of the husband towards myself and the children, and the ongoing Centrelink investigation that was initiated by the husband. I also have a residual problem with the muscles in my right arm due to my cancer treatment, which has caused a weakening in that arm and I experience pain and soreness. This has hampered my ability to carry out my functions at [workplace omitted] and, in turn, caused me additional stress with respect to my employment, which I had previously enjoyed at that facility. I no longer have a permanent position there and in December 2012 agreed to accept a casual position so as to access some holiday pay entitlements as may financial situation was poor. I am uncertain as to whether I will be able to return to work at [omitted] and I am actively looking for other employment such as a [omitted] or alike, which would avoid the heavier physical activity that I had to undertake at [workplace omitted].
I say that due to changes with respect to the Commonwealth Government Parenting Payments commencing in 2013 my parenting payment has been reduced by some $70.00 per week, which has added to my poor financial position.
Furthermore, due to the recent Centrelink finding that I have received a substantial overpayment with respect to my parenting payment I have been told by Centrelink that they will be shortly deducting monies from my pension to recover their arrears. I say that I am unaware of this amount, at this stage, however this will only add to my financial difficulties.
I say that it has been necessary for me to move out of the Property P home as I am unable to pay the rent required and I have fallen into arrears of rent because of my poor financial circumstances. I am in the process of relocating to a rental home at [omitted], which is $40.00 per week cheaper than the previous home and will assist to some degree. This property will also place me within the zone for [omitted] High School where I wish to enrol [Y] for 2013 for Year 8.”
Once again, the trial scheduled for 14 and 15 January 2013 did not take place. This was not due to any default on the part of the wife. Mr Close did not personally appear at Court on 15 January 2013. Rather his solicitor, Mr Reynolds appeared and applied for an adjournment of the case. Mr Reynolds advised that he had been contacted by the husband’s “partner”, who advised that Mr Close had been admitted to the [R] Hospital with chest pains.
In all the circumstances, I was somewhat dubious about this application, which was not then supported by any independent medical evidence. In those circumstances, I made the following orders:
“1. The trial is adjourned to 16 January 2013 at 10.00 am.
2.The husband is directed to provide either in person or via his counsel to both the court and the solicitor for the wife a medical report detailing the following:
a.the medical reasons for his admission to the [R] Hospital on 14 January 2013;
b.the diagnosis of any condition which led to his admission and the details of the treatment prescribed for him; and
c.the prognosis in respect of any such conditions suffered by him.
3.The husband or his solicitor provide the medical report to the wife’s solicitor as soon as it is to hand.
4.The wife’s costs be reserved.
5.The wife is granted leave to attend upon the premises at [1] and [2] Property A, [A] in the State of South Australia in the presence of a real estate agent of her own choosing to obtain current appraisals of the properties.”
On 16 January 2013, I was provided with a Certificate of Sickness, from the [R] Hospital, which indicated that Mr Close was suffering from an “indisposition” and would be unfit for work up to and including 16 January 2013. I was however informed that Mr Reynolds understood that his client was in hospital because of a serious heart complaint and was due to undergo a bypass procedure.
Against this background, the proceedings were again adjourned to 21 January 2013. On this date, the following orders and notations were made:
“UPON NOTING that the solicitor/Counsel for the husband has indicated in court that his client has undergone cardiac surgery and a certificate/medical report has been produced by the [R] Hospital, but not yet received by him and will be faxed to the court and the wife’s solicitor as soon as they are to hand.
THE COURT ORDERS THAT:
1.Pending final hearing, the matter be listed for interim hearing regarding the sale of the properties at [1] and [2] Property A, [A] in the State of South Australia to 15 February 2013 at 2.15 pm.
2.The wife file and serve any answering affidavit by 28 January 2013.
3.The husband file and serve any answering affidavit by 8 February 2013.”
In anticipation of the interim hearing, scheduled for 15 February 2013, the wife has filed a further Affidavit. The husband has not complied with the order directing him to file material by 8 February 2013.
In her most recent Affidavit, the wife deposed that she had attended at No [1] and [2] Property A with a real estate agent, who had provided an appraisal of the two properties concerned.
The wife deposed that No [1] was in a particularly poor state of repair. Floor boards in the corridor and bedroom had been removed, with the earth beneath being exposed. A toilet and light fittings had been removed. In addition, the wife deposed her belief that marijuana had been cultivated in the property recently.
Ms Casboult also deposed that she found [2] Property A to be in a poor condition. The bathrooms, in particular, were filthy. She was also concerned that the outside areas around both properties were littered with cars, car bodies, scrap metal and general rubbish.
The estate agent concerned indicated a view that No [1] was likely to sell for a price between $450-$500,000. He regarded it as being “substandard” in nature. He regarded [2] Property A as having a sale potential between $380-$400,000. He described it as being “average” in presentation. Accordingly, if these figures are correct, the properties have reduced in value by a sum of around $75,000.
The wife is concerned that the properties have apparently reduced in value since 2010, due to the husband’s neglect. As previously indicated, the husband has conceded that No [1] is not habitable. From what she has seen of [2] Property A, the wife is concerned at the prospect of [Y] and [Z] staying there overnight.
It is also Ms Casboult’s position that her financial position has deteriorated further. She has not been allocated any shifts at the [workplace omitted]. In addition, she has been prescribed anti-depressant medication, due to her anxiety. She has school expenses, which she cannot pay, in respect of [Y] and her car is undriveable. She has received a letter of demand for the payment of [X]’s TAFE fees in a sum of $534.25.
On 6 February 2013, the wife received a further Demand from the Adelaide Bank. She has been informed that the Bank will not extend the hardship provisions in place beyond the end of February 2013. The amount currently outstanding is $79,755.83 and arrears of $8,820.53 are required.
In a letter dated 6 February 2013, a representative of the Bank has written to Ms Casboult as follows:
“As discussed with you, upon our review of your situation from the information provided, it appears that there is no appropriate arrangement acceptable to the Bank. Based on our calculations, your current expenses of $3,349.00 per month exceed your current income of $2,728.00 per month.”
On 15 February 2013, Mr Close emailed an Application seeking the adjournment of the wife’s Application to May 2013. This was supported to a brief Affidavit, to which was attached a letter dated 8 February 2013 under the hand of the Cardiothoracic Surgery Registrar of the [R] Hospital.
The letter confirmed that Mr Close had been an in-patient at the Hospital until 25 January 2013. He had undergone a triple coronary artery bypass operation on 20 January 2013. He was described as having a long history of ischaemic heart disease, with multiple risk factors.
It was said that he was unfit to attend the Court hearing on 15 February 2013. His Final Discharge Summary was also provided. Counsel for the wife, Mr McGinn pointed out that this Summary indicated the operation in question was described as being “elective” on the Separation Summary. I am not in a position to resolve the implications, if any, of this description.
I was also provided with a letter from Mr Close’s general medical practitioner Dr M. He wrote as follows:
“Whilst I understand his legal matters need to be dealt with, his medical condition remains frail to say the least. He remains unstable and I expect Mr Close to take at least 6 months to recover from his recent illness, both from a physical and psychological viewpoint.”
It was on the basis of this medical material that Mr Close apparently sought to adjourn the proceedings. The Cardiothoracic Surgery Registrar opined that a reasonable timeframe for his Court date would be “2-3 months post surgery”.
Summary of the current circumstances
It seems to me that the following matters can be established from the circumstances as I have identified them:
·The wife is in a parlous financial situation.
·She has a large debt to Centrelink, which will result in her Social Security payments being reduced.
·Due to her impaired health, she has a limited capacity to seek paid employment.
·She is the major provider of care for the parties’ three children. Mr Close pays her no child support.[1]
[1] The husband provided a Child Support Assessment, dated 28 October 2012, which indicates this.
·The wife is being pursued in respect of a mortgage debt for a property which she does not occupy and which she has no capacity to pay.
·The husband is in default of the order made on 16 May 2012 that he make all necessary arrangements and pay all necessary sums to the Adelaide Bank to ensure the Bank’s threat of foreclosure is not proceeded with.
·On the husband’s own case, No [1] is uninhabitable.
·Accordingly, the husband is in occupation at [2] Property A. However, it seems incontrovertible that he is not in a position to make an acceptable accommodation with the Bank of Adelaide to prevent it from foreclosing on the mortgage secured against the property.
·The husband is in poor health. In addition, he has not been in the paid workforce for many years.
·The husband’s sole source of income is Social Security.
·Like the wife, at this stage, the husband is likely to have a significant liability to Centrelink for the overpayment of Social Security payments apparently unlawfully obtained.
·The husband also has a significant debt to the ANZ Bank in respect of No [1].
·The properties are likely to secure a great return if sold together.
·Given the indication made by the Bank of Adelaide, it appears that the sale of [2] Property A is inevitable.
·The husband concedes that he cannot live at No [1].
The legal principles applicable
It is a significant thing for proceedings to be determined in the absence of one of the parties. The Court has an obligation to ensure that the parties to the proceedings before it have an opportunity to participate in those proceedings.
In this case, I accept that Mr Close is unwell. However, these proceedings have been on foot since July 2010. For various reasons, a number of trial listings have been aborted.
During this period, the parties’ mutual financial position has worsened. The husband has been in sole occupation of the two most significant matrimonial assets – No [1] and [2] Property A, [A].
It has been the wife’s consistent position that neither she nor the husband can afford to retain the properties in question, as neither she nor Mr Close has an assured and regular source of income and so no capacity to maintain the mortgages secured against the properties.
It is clear to me that, since the proceedings began, the husband has had the benefit of living in both properties concerned. It is also apparent that he has failed to meet the recurrent mortgage payments due on [2] Property A. In these circumstances it seems inevitable that unless this property is sold expeditiously, the Bank of Adelaide will act to secure its sale.
Given the evidence regarding the property’s current state of presentation, which appears to be solely due to the husband’s neglect, it would appear unlikely that such a Mortgagee’s Sale would secure the best possible return for the parties. Certainly, this is the wife’s position and one of the motivating factors behind her current Application.
It is my finding that, since at least September 2012, the husband has failed to provide any feasible proposal outlining how he can retain one or other of the properties and either re-finance the liability to the Bank of Adelaide or obtain finance from another source. These issues obviously pre-date the husband’s recent incapacity arising from his cardiac surgery.
Given the husband’s application to the Bank of Adelaide for it to grant a hardship exemption in respect of the payment of the mortgage for much of last year, which the Bank is now unwilling to extend further, it seems axiomatic that the husband is unable to maintain the mortgage in question, particularly given his current state of health. I accept the wife’s evidence that she is in the same position so far as payment of the mortgage is concerned. Accordingly there appears to be no other option than that the property be sold.
In all these circumstances, it seems inevitable that the husband will have to find some alternative form of accommodation for himself, even if the wife’s application is deferred because of the apparently inevitable foreclosure proceedings to be instituted by the Bank of Adelaide. On his own case, it is not open to him to move to No [1], as it is currently uninhabitable, a state of affairs confirmed by the wife’s recent inspection of it.
Accordingly, although I have sympathy for the husband’s current state of physical incapacity, the fact remains that it seems inevitable he must re-accommodate himself in the short term. In addition, it also seems to be axiomatic that he has failed to engage with the financial catastrophe engulfing not only the wife but also himself.
I acknowledge that he has sought an adjournment of these proceedings. However, in seeking that adjournment, he makes no proposals as to how the parties’ current parlous financial affairs are to be managed. In addition, it is common ground that both parties face a more problematic financial future because of the actions of Centrelink.
The husband seeks an adjournment of the proceedings for approximately five months, which application is supported by credible medical material. Clearly the husband’s surgery was major in nature. However the period sought is too long to be fair to the wife, given the Bank of Adelaide’s intransigence.
Were it not for the imminent financial catastrophe confronting the parties, which is coupled with the absence of any proposals from the husband to deal with it, ordinarily the Court would grant the husband’s application for adjournment out of considerations of probity and fairness. But the gravity of the financial circumstances confronting the wife and the possibility of such an adjournment creating irretrievable prejudice to her take this case out of the ordinary run of matters.
The law applicable to adjournment proceedings is not unnecessarily complicated and is most concisely set out by Kirby J in the court of Cheung v R[2] where his Honour, as he then was, said as follows:
“…the court has both the expressed and implied power to grant an adjournment where it is necessary to do justice between the parties. Where a refusal would seriously prejudice a party, the adjournment is ordinarily be granted. At least, it ought to be granted if the opposing party can be adequately protected by orders as to costs, orders providing for a new hearing on dates suitable to it, or other order of a procedural character which take into account any prejudice which may be suffered by it.”
[2] See Cheung v R. (1999) ALJR 1093 at 1094-95
If the Court grants the adjournment sought by Mr Close, I am not persuaded that there can be any order, other than the sale of the properties in question, which would adequately protect Ms Casboult from suffering prejudice. An order for costs is likely to be meaningless, as is an expedited hearing.
In all these circumstances, it seems to me that the husband has been given a reasonable opportunity to take part in these proceedings. He has not instructed his solicitor in respect of the interim application, which was listed on 15 February 2013. For a significant period of time he has been aware of the wife’s view about the inevitability of the sale of the properties concerned.
Significantly he has not filed an affidavit detailing any proposal to deal with the financial travails surrounding the parties. The Court has obligations not only to the husband to enable him to take part in proceedings; it is also obliged to deal with the legitimate applications of the wife.
She is entitled to expect that her applications to the Court will be dealt with expeditiously and not unduly delayed, potentially exposing her to financial detriment. The Court’s responsibility is to balance the interests of both parties to arrive at an outcome which is just in all the circumstances.
The wife’s application is to be characterised as an application for interim of partial property settlement pending trial of the parties’ competing applications. However, although her application envisages the sale of the parties’ two most significant assets in monetary terms, she does not propose any actual distribution of the proceeds of the sale now between the parties themselves. Rather, she proposes the safe keeping of the monies, pending the final hearing.
Accordingly her application is analogous to one where orders are sought to preserve an asset. I accept that, if the Court declines to entertain the wife’s application, it is certain that the Bank of Adelaide will act and it is unlikely that the parties will thus secure the best possible price for [2] Property A.
Part VIII of the Family Law Act is the part of the Act dealing with property, spousal maintenance and maintenance agreement. The major provisions relating to marital property division are contained in sections 79(1); 79(2); 79(4); & 75(2) of the Act. These provisions apply both at the interim and final stage.
Pursuant to section 79(1) the court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a marriage in relevant property.
Pursuant to section 79(2) the court is actively prevented from making such an order unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing.
Section 79(4) provides the mechanics of how a court is to make an order altering marital property interests. It provides seven matters to be considered, as relevant.
Paragraphs (a); (b); and (c); categorise contributions made by marital partners, which are relevant. Paragraph (d) directs the court to take into effect of any order upon the earning capacity of either party to the marriage concerned.
Paragraph (e) directs the court to consider a list of matters contained in section 75(2), which are germane to spousal maintenance. Finally, Paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.
I accept that the orders sought by the wife amount to an alteration of the parties’ property interests. As the wife is not currently seeking an actual distribution of property in her favour, the mechanical steps created by section 79(4) do not have to be specifically applied to the circumstances of the parties.
However, in general terms, given the length of the marriage between the parties (even given the controversy as to when it ultimately ended) it seems self apparent that the wife will be entitled to a significant proportion of the marital estate. Undoubtedly she has made significant contributions during the marriage, both direct and indirect. It is also clear that she has significant prospective financial needs, as indeed so does the husband.
Accordingly, in my view, it cannot be said that the husband would be entitled to oppose the wife’s claim on the basis that she has no entitlement in the properties concerned whatsoever. His opposition must be based on the fact that he wishes to retain one or both of the properties. However he has made no proposal as to how this will occur or more importantly how the wife’s claim on the properties may be satisfied.
The prejudice to the husband is likely to be that he will be deprived of a place to live in the immediate short term. I acknowledge this is a significant detriment, particularly given his current health situation. However, it seems more likely than not that his actions have contributed to the deterioration in the state of repair of No [1] and deprived him of the opportunity of relocating there pending final hearing.
To my mind, it is also significant that, if sold together, the two properties will recoup the greater sale price. Given the mutual straitened financial circumstances of the parties, this is an important equitable consideration. If only [2] Property A is sold at this stage, possibly in a fire sale situation, this will deprive the wife of a valuable opportunity. In all the circumstances, particularly the husband’s conduct in his occupation of both properties, this seems to me to be likely to be inequitable to her, particularly given the absence of any feasible proposal from the husband as to how he can retain No [1] (even if it was habitable) and pay out the wife’s interest in both properties.
The High Court has recently considered the operation of section 79 in Stanford v Stanford.[3] It said as follows:
“It will be recalled that s 79(2) provides that "[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order". Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition.[4] It is not possible to chart its metes and bounds.”[5]
[3] See Stanford v Stanford [2012] HCA 52
[4] Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605 at 608 per Gibbs CJ
[5] Ibid at paragraphs 35-36
Section 80 of the Act provides the court with what are described as general powers. In particular section 80(1)(h) empowers the court to make an order pending the disposal of proceedings. However, it is clear that the same principles, set out above, apply both at the interim and the final hearing stage.
In Strahan, apropos the making of an interim property order, the Full Court said as follows:
“Once a court proceeds to exercise the power in s 79 of the Act, being in the substantive phase, a court is required to undertake consideration of the matters in section 79(4) including by reference to s 79(4)(e) the matters in section 75(2) so far as they are relevant. However consideration of such matters may be brief and if it is established that ‘it seems likely to the Court that…the applicant…will be likely to receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made.”[6]
[6] See Strahan v Strahan (2010) 42 Fam LR 203 at 230 [137]
It would seem to me on what is admittedly a truncated and cursory examination of the matters at hand, the sale of both properties seems to be unavoidable. In addition, it seems unfair to expose the wife to the loss of the potential benefit of selling both properties together, when it appears inevitable that Mr Close cannot continue to live at [2] Property A for much longer, given the clear intentions of the Bank of Adelaide.
On even a brief consideration of the matters set out in section 79(4) and 75(2) the wife is entitled to a significant proportion of the value of these properties, which in any event will be preserved pending final hearing. In this sense the husband’s position will be safeguarded, at least in dollar terms.
In Strahan, the Full Court considered an earlier decision of the Full Court Harris & Harris.[7] In this case, the Full Court delineated the relevant considerations applicable to the making of what is conveniently described as an interim property order. The Full Court, in the case, considering it unnecessary to draw a distinction, in terminology, between an interim order and a partial order.
[7] See Harris & Harris (1993) FLC 92-378 at 79,930
In Harris, the Full Court, whilst affirming the preference that there be only one final hearing of property proceedings, identified three criteria applicable to the exercise of the power to make an interim property order namely:
·the exercise of the power should be confined to cases where the circumstances at the time were “compelling”;
·the exercise of the power, depending as it did on section 79 of the Act, must be exercised within the parameters provided by that section, notwithstanding the difficulty arising for any decision maker concerned in making final findings;
·the exercise of the power must be exercised “conservatively” in the sense that any remaining property needed to be sufficient to meet the “legitimate expectations” of both parties at final hearing, or the order being contemplated is itself capable of being reversed or adjusted at a later stage, if necessary.
In Strahan, the Full Court affirmed Harris in the sense that it accepted that an interim property application comprised a two-step process. Firstly what was described as an “adjectival stage” and secondly what was described as the “substantive stage”. The first step being concerned with the description or particularization of the circumstances required to be established before an interim property order was made. The second step dealing with the mechanisms applicable to the making of such an order.
The controversy ventilated in Strahan centred on the phrase “compelling circumstances” used in Harris and whether such a formulation unduly fettered the court’s power to make an interim property order, which was “appropriate” at that stage of proceedings. This being the expression used in the enabling provision contained in section 79(1) of the Act.
In this regard, the Full Court said as follows:
“In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.”[8]
[8] Strahan v Strahan (2010) 42 Fam LR 203 at 236 [132]
Examples of where it may be appropriate to use the power to make an interim property order include where both the parties agree to the disposal of some assets pending trial; urgent situations to avoid injustice being wreaked upon one party if the power was not exercised; and where one party requires funds to assist in the defrayal of legal costs arising from the litigation involved.[9]
[9] See Strahan (ibid) at [133]
In my view, the circumstances currently confronting the Court are compelling in the sense envisaged by the Full Court in Harris. The wife is confronting a mortgagee’s sale in respect of a property she does not occupy and which is subject to a degree of neglect not attributable to her. She has no capacity to redress the arrears accruing in respect of the mortgage in question.
On the other hand, the husband who is obliged, by virtue of the order of the Court made in May of 2012, to make the required mortgage payments, has as a consequence of his illness currently no capacity to make such payments, even if did beforehand. The resulting forced sale of the property will be a financial disaster for both.
In my view, it is compellingly in the interests of justice that both properties concerned be sold as expeditiously as possible and the forced sale of one be avoided. This step is required to preserve particularly the wife’s likely entitlements at final hearing, which appear to have been reduced as a result of the many delays in the proceedings to date.
In my view, this preservation of the wife’s likely entitlements outweigh the prejudice to the husband of not being able to be present before the Court on 15 February 2013. However, notwithstanding this prejudice, I am satisfied that prior to his recent indisposition the husband was given an opportunity to provide any relevant evidence and proposals as to how the sale of one or both of the properties in question could be avoided.
He did not avail himself of this opportunity. His affidavit of 20 December 2012 focussed on issues to do with the parties’ liabilities to Centrelink and his contention that the sale of the properties should be delayed until such time as it was clear how much each of them owed the Commonwealth Government.
In my view, the sale of the properties concerned will have no application to the question of how much Centrelink is owed. In due course, each party will have to either seek to review the relevant decision or seek some accommodation with Centrelink regarding monies outstanding.
The proceedings in this case have been delayed significantly. None of the delays have been attributable to the wife. However she has been the party who has been more prejudiced by the delays arising. She has been living in rented accommodation, with the predominant care of the parties’ three children, whilst the husband has maintained control and deprived the benefits accruing from the parties’ two most significant assets.
The trial in September 2012 was delayed, on the husband’s application, as a result of his provision of information to Centrelink regarding the parties’ social security entitlements. As a member of one of the arms of the Commonwealth Government, I cannot condone the actions of any person who attempts to gain a benefit from the Australian Government to which he or she is not entitled.
However the actions of the husband do not appear to relate to any desire on his part to safeguard the public purse. Rather his motives appear to relate to his desire to gain the upper hand in his struggle with the wife, even if this results in some detriment to himself. He cannot be described as an entirely honest broker in this regard.
The delay entailed to the wife, in the finalisation of the proceedings, resulting from the husband’s actions on this occasion in September, were extremely prejudicial to her. Notwithstanding the natural sympathy to be accorded to the husband for his recent serious ill health, given that his actions resulted in the earlier delay of the case, it is incumbent on the Court not to occasion further prejudice to the wife by yet more delay.
For all these reasons, I find that it both justice and equitable and in the overall interests of justice that the orders sought by the wife be made. Accordingly I confirm the orders set out at the commencement of these reasons for judgement.
I certify that the preceding one hundred and twenty-one (121) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate:
Date: 19 February 2013
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