Castilla and Keene

[2018] FCCA 3473

FEDERAL CIRCUIT COURT OF AUSTRALIA

CASTILLA & KEENE [2018] FCCA 3473

Catchwords:
FAMILY LAW – Undefended property proceeding.

Legislation:

Family Law Act 1975 s.90SF(3)

Applicant: MS CASTILLA

Respondent: MR KEENE

File Number: MLC 5664 of 2018

Judgment of: Judge Harland

Hearing date: 20 November 2018

Date of Last Submission: 20 November 2018

Delivered at: Melbourne

Delivered on: 20 November 2018

REPRESENTATION

Counsel for the Applicant: Ms Tulloch

Solicitors for the Applicant: JH Legal Pty Ltd

The Respondent: No appearance

ORDERS

1. Within 60 days of the date of these Orders (“the date”), the Respondent De Facto Husband pay to the Applicant De Facto Wife’s solicitors’ trust account (JH Legal Trust Account) on behalf of the Applicant De Facto Wife, the sum of $173,437.00 (“the payment”).

2. In default of the payment on or before the date, the Respondent De Facto Husband forthwith do all such acts and things as may be necessary to sell the real property situate and known as Property A in the State of Victoria, being all that piece of land more particularly described in Certificate of Title Volume … Folio … (“the real property”) by public auction (“the sale”) and, upon the settlement of the sale, the proceeds be applied as follows:

   (a)Firstly to pay all costs, commissions and expenses of the sale;

   (b)Secondly, to discharge the mortgages and any other encumbrance affecting the real property;

   (c)Thirdly, to the Applicant De Facto Wife’s solicitors’ trust account (JH Legal Pty Ltd Trust Account) on behalf of the Applicant De Facto Wife, an amount equal to:

   (i)35% of the net amount of the sale price less the expenses in sub-paragraphs 2(a) and (b) plus penalty interest of 7.5% per annum calculated monthly from the date until the settlement of the sale;

   (ii)$14,681.70; plus

   (iii)$11,695.00 (being costs to the extent that they remain unpaid).

   (d)Fourthly, the balance then remaining to the Respondent De Facto Husband.

3. Pending the payment in full, or the settlement of the sale:

   (a)The Respondent De Facto Husband continue to have sole use and occupation of the real property provided that he complies with sub-paragraph 3(b) of these Orders;

   (b)The Respondent De Facto Husband pay as and when they fall due, all instalments of the mortgages secured against the real property and all rates, taxes and other outgoings of the real property;

   (c)The Respondent De Facto Husband be and is hereby restrained from further encumbering the real property, save as may be necessary to comply with these Orders; and

   (d)Each party to hold their interests in the real property upon trust for the other, pursuant to the terms of these Orders.

4. Each party have liberty to apply in relation to the sale of the real property and the implementation of these Orders.

5. Pursuant to Section 106A of the Family Law Act 1975, if the Respondent De Facto Husband refuses or neglects to comply with any of these Orders and/or fails or neglects to execute any deed or instrument as may be necessary to give effect to these Orders, a Registrar of the Federal Circuit Court at Melbourne be appointed to execute such deed or instrument in the name of the Respondent De Facto Husband, Mr Keene.

6. Save as may be required to enforce these or any subsequent Orders, or as otherwise specified by these Orders:

   (a)Each party be solely entitled to the exclusion of the other to all property in their possession as at the date of these Orders, the furniture, chattels and other like items located in the real property being deemed to be in the possession of the Respondent De Facto Husband.

   (b)Each party to forego any claim they may have to any superannuation benefits belonging to or earned by the other; and

   (c)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.

7. On or before the date, the Respondent De Facto Husband pay to the Applicant De Facto Wife’s solicitors’ trust account (JH Legal Pty Ltd Trust Account) on behalf of the Applicant De Facto Wife’s costs fixed in the sum of $11,695.00.

8. All extant applications be dismissed.

9. That pursuant to rule 21.15 of the Federal Circuit Court Rules 2001, the Court certifies that it was reasonable for the parties to brief Counsel to appear in these proceedings.

IT IS NOTED that publication of this judgment under the pseudonym Castilla & Keene is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 5564 of 2018

MS CASTILLA

Applicant

And

MR KEENE

Respondent

REASONS FOR JUDGMENT

1. These reasons for judgment were delivered orally.  They have been corrected from the transcript.  Grammatical errors have been corrected and an attempt has been made to render the orally delivered reasons amenable to being read.

2. This is an application by the applicant de facto wife for property orders.  The matter proceeds on an undefended basis today.  I am satisfied that the respondent de facto husband is on notice of today’s hearing, and more specifically, is on notice of the case that he has to meet. I refer to the affidavit sworn and filed by the applicant’s solicitor on 3 September 2018 which sets out the documents sent by way of service to the respondent and the responses received from him.  I also refer to exhibit A which is a handwritten letter that the respondent has sent the applicant’s solicitor in response to receiving the case outline, which sets out in detail the orders sought by the applicant, and exhibit B which is a handwritten letter that the respondent has sent to the Court in response to the notice of relisting of today’s date.

3. The applicant gave brief oral evidence and identified the handwriting as belonging to the respondent. She also gave evidence that she has seen him make entries in notebooks during the period that they were renovating frequently and is familiar with his handwriting. 

4. I am satisfied that the respondent has chosen not to engage in these proceedings despite having the opportunity to do so. The responses that he has provided are somewhat bizarre, but certainly indicate his knowledge of the proceedings and also that the applicant is represented, and how to contact the applicant’s representative.

5. The applicant also gave oral evidence that the respondent sent her an email in response to her bringing proceedings, where he expressed his shock but said that he forgive her.  He said he lost the love of his life. 

6. The matter first came before me on 4 July 2018.  The respondent did not appear and I reserved the applicant’s costs in the sum of $2,200.  The matter then came before me on 18 September 2018.  Again, the respondent did not appear, and on that occasion I ordered that the respondent pay costs fixed in the sum of $2,200. That amount remains outstanding. I also set the matter down for trial on in November 2018 on an undefended basis.

7. The respondent was called outside this morning and has not appeared.  It is now 11:55am.  The matter was listed at 9.30am.

8. The applicant has filed detailed evidence outlining her contributions to the relationship and her needs, including providing financial documents. She has also filed an affidavit by a valuer who has provided a kerbside valuation of the home which the respondent occupies and which he bought in 2005.  The valuation is a kerbside valuation which provides figures both at the commencement of the parties’ relationship and currently. 

9. Given the respondent’s lack of cooperation and lack of engagement in these proceedings, the kerbside valuation is the best evidence that the Court has.  The applicant has also filed several affidavits by supporting witnesses who give evidence with respect to her employment and also refer to their observations of her, and where they have experienced of the respondent. 

10. It is also apparent from the applicant’s material that she has had to issue subpoenas to financial institutions in order to obtain the figures with respect to the mortgage and also in an attempt to find out what bank accounts the respondent has. 

11. The applicant refers to these figures in her affidavit, and for the purpose of the calculations of her entitlement, she has used the figure for the mortgage as at the date of separation, being $216,414.15, and not the current value because the mortgage has increased by $30,000. I accept in those circumstances that that is the appropriate figure to use.

12. Exhibit C is an aide memoire prepared by the applicant’s counsel setting out the calculations of the applicant’s entitlement.  The main asset is the house the respondent lives in.  As best as the applicant knows, the respondent has a Motor Vehicle 1 and a Motor Vehicle 2.  The applicant has an Motor Vehicle 3 which is subject to finance, leaving about $1,000 equity in it, and the applicant also has a personal loan of approximately $19,000 which she says relates to various expenses she incurred, including $5,000 to pay towards the mortgage at the respondent’s demand in 2016.

13. I am satisfied on her evidence that that personal debt relates to the relationship and should be included in overall calculation.  The applicant seeks an adjustment of the non-superannuation pool of 35 per cent, which is 35 per cent of the known non-superannuation pool given the respondent’s failure to engage which has meant that there is incomplete disclosure.  Whilst the applicant has done the best she can to identify the asset pool, I cannot be satisfied in those circumstances that the respondent does not have some assets such as cash or bank accounts elsewhere.

14. The respondent has had the opportunity to put that information before the Court.  As best as the applicant knows, she has minimal superannuation, as does he.  The parties were in a de facto relationship for about five and a half years.  The parties registered their relationship with the Victorian Registry of Births Deaths and Marriages which means that there can be no issue in dispute that they were in a de facto relationship and not some other sort of relationship. 

15. The applicant sets out in detail the history of the relationship and the contributions both financial and non-financial that she made.  She was in Australia initially on a tourist visa and had intended to obtain further qualifications in [course].  She says what she had wanted to do was combine those qualifications with her early childhood education qualifications that she had to combine those interests, and she says she was a professional in Country A before coming to Australia. 

16. Currently she is working as a tradesperson, earning about $45,000 a year.  She works casually so she does not receive holiday or sick leave.  She says that the respondent is an professional and if he worked full time, he could earn up to $4,500 gross a week, but he elects to work part time. She annexes notices of assessment for him for 2013 and 2014 showing an income of a little over $100,000 in 2013 and a little over $53,000 in 2014.  His current income and earning capacity is unknown.

17. The respondent refers to the financial contributions that she made towards the household expenses and mortgages and annexes some supporting documents.  She also describes the state of the house when she moved in and the renovations that they carried out to that property, and she annexes some photographs in support of that as well. 

18. She describes the relationship as being characterised by the respondent’s controlling and coercive behaviour that she says commenced about a year after they started living together.  She says that the respondent was angry about her studying and wanting her to work and earn more money and would often be critical of her and critical of her financial commitments.  The applicant further says that she contributed about $7,000 she received from her grandfather’s inheritance.

19. She said that his behaviour worsened when she sought to be involved in his social life and that when they were out with his friends, he would put her down in front of them and would hold his finger up to her face to silence her.  She also says that he discouraged her from going out with her own friends and she gives other examples of his derogatory and verbally abusive behaviour. One particular example is when the applicant had to return to Country A where her father was in hospital dying, and she annexes email exchanges between them where the respondent was verbally abusive and threatened to cancel her visa whilst she was there.  She also annexes text exchanges in 2017 which continue in that sort of abusive vein.  The applicant says that the respondent’s conduct has impacted on her contributions and also on her earning capacity as she has been unable to pursue the qualifications that she sought to engage in when she came to Australia. Her current financial circumstances are such that she is not in a position to study currently but rather needs to earn funds to cover her living expenses. She gives evidence that she is living in a share household and paying about $150 a week for rent and utilities. 

20. The 35 per cent adjustment that the applicant seeks is based on the contributions that she has made during the relationship and also pursuant to section 90SF(3) which primarily relates to the impact of the relationship on her earning capacity and the difference in parties’ earning capacities. I am satisfied that the applicant’s contribution should be assessed as 25 per cent and there should be a further 10 per cent adjustment for section 90SF(3) factors bringing the adjustment to 35 per cent.

21. The applicant’s counsel has tendered a minute of order which differs to the minute in the case outline only to the extent that it addresses concerns I raised with respect to the calculations and the implementation of the orders. In substance it is still seeking the same adjustment that the respondent is on notice of and I am satisfied that it is just and equitable to make the orders and to make the orders in those terms. 

22. The respondent will have the opportunity to make a monetary payment to the applicant and retain the home which is in his sole name. If he fails to make that payment within 60 days, then the orders provide for the home to be sold and for the applicant to be paid 35 per cent of the net equity plus an adjustment for the loan that she has that I have referred to previously and also an adjustment for costs. 

23. Turning to the costs application, the applicant seeks the payment of the $2,200 that was fixed and reserved on 4 July 2018 and in addition, costs in the sum of $9,495.35 for the costs the applicant has since incurred since she commenced these proceedings.  The applicant’s counsel handed up a calculation scale of costs which I will mark as exhibit D.

24. It is clear that the applicant has had to incur additional costs with respect to issuing subpoenas and trying to establish the respondent’s financial position and the matter has come to Court on several occasions with the respondent not engaging on any of those occasions.  It appears from the evidence that the respondent is in a stronger financial position than the applicant and the applicant has been wholly successful in her application. 

25. Whilst the applicant would have incurred some costs in any event, given the nature of these proceedings, I am satisfied that it is appropriate to order that the respondent pay costs. That applicant’s costs exceed the amount sought but that is the figure Counsel sought as the respondent is on notice of that amount.  I will make the costs order sought fixed in the sum of $11,695 to the extent that it remains unpaid.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Judge Harland

Date: 6 December 2018