Cavendish & Cavendish
[2023] FedCFamC1F 145
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Cavendish & Cavendish [2023] FedCFamC1F 145
File number: SYC 7595 of 2016 Judgment of: HARPER J Date of judgment: 14 March 2023 Catchwords: FAMILY LAW – PROPERTY – Proceedings listed for final hearing – Where wife was represented at case management and final hearings – Where wife was in breach of trial directions – Alleged failures of solicitor to prepare for trial – Trial affidavit served two days before commencement of final hearing – Where husband unable to deal with evidence filed late – Wife represented by counsel at final hearing – Adjournment application refused – Wife’s application for property orders – Husband seeks no adjustment of property – Orders made dismissing wife’s application. Legislation: Family Law Act1975 (Cth) s 79 Cases cited: Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395
Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52
Division: Division 1 First Instance Number of paragraphs: 46 Date of hearing: 8 March 2023 Place: Sydney Counsel for the Applicant: Mr Schonell Solicitor for the Applicant: York Law Counsel for the Respondent: Mr Levet Solicitor for the Respondent: AAT, Legal Exchange Lawyers ORDERS
SYC 7595 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR CAVENDISH
Applicant
AND: MS CAVENDISH
Respondent
order made by:
HARPER J
DATE OF ORDER:
14 March 2023
THE COURT ORDERS THAT:
1.The respondent wife’s (“the wife’s”) application for final relief be dismissed.
2.The applicant husband (“the husband”) be declared the sole legal and beneficial owner of:
(a)his interest in the Cavendish Family Trust;
(b)his interest in his deceased mother’s estate through the B Trust; and
(c)all items of personal and real property in his possession or of which the husband is the registered proprietor as at the date of orders, including but not limited to all or any money standing to the credit of the husband in any bank or building society, shareholdings, motor vehicles and any present or future expectation under a trust or estate.
3.The wife be declared the sole legal and beneficial owner of:
(a)her savings; and
(b)all items of personal and real property in her possession or of which the wife is the registered proprietor as at the date of orders, including but not limited to all or any money standing to the credit of the wife in any bank or building society, shareholdings, motor vehicles and any present or future expectation under a trust or estate.
4.Each party be entitled to their respective superannuation interests to the exclusion of the other.
5.Any application seeking an award of costs is to be filed and served with an affidavit in support within 21 days of the date of these orders, and in the event no application is filed within the time specified, there shall be no order as to costs.
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 the pseudonym Cavendish & Cavendish has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
These are property proceedings under Pt VIII of the Family Law Act1975 (Cth) (“the Act”) between the applicant husband (“the husband”) and the respondent wife (“the wife”).
The matter was listed for final hearing in the Sydney Rolling List commencing on 6 March 2023. By orders made on 7 November 2022, the parties were required to prepare consolidated trial affidavits, a joint balance sheet, and case outlines, and to deal with valuation issues and comply with other standard ancillary directions to prepare for final hearing.
Notation B, made on 7 November 2022, read:
The Court has identified this matter as suitable for inclusion in the Sydney Rolling List, to be conducted from 6 to 17 March 2023.
Notation C read:
For the purposes of these trial directions, the commencement of final hearing is taken to be 6 March 2023.
The husband was represented by a solicitor on 7 November 2022. The wife was represented by counsel. The husband complied with the trial directions. The wife did not. Emails were sent by my chambers, on 2 March 2023 and 3 March 2023, pointing out to the solicitors on the record for the wife that there had not been compliance with the Court’s orders.
When the matter was called for hearing on 8 March 2023, the wife was represented by the same counsel who had appeared on 7 November 2022. Counsel made an application on the wife’s behalf to adjourn the hearing. The basis for the adjournment was a most unhappy recitation of failures by the solicitor on the record for the wife, which culminated, apparently, in counsel being contacted for the purpose of preparing a consolidated trial affidavit and taking other steps for final hearing well after the timetable for compliance had already been breached. Counsel submitted that on Thursday, 2 March 2023, he was informed by the solicitor on the record that the matter was listed only for a case management hearing on 8 March 2023.
While I accepted the submissions of counsel were based upon his instructions, I was entirely unconvinced by the wife’s reasons for applying for an adjournment. These proceedings were listed in the Rolling List for the purpose of bringing them to finality after they had initially been commenced in 2016. The wife’s arguments, in substance, blamed her solicitor for failure to prepare adequately for final hearing. She provided no reason why any of the matters to which she pointed should be laid at the feet of the husband, who assiduously complied with pre-trial directions.
Her counsel argued that any prejudice to the husband could be cured by an order for costs. I disagree.
First, there may be considerable force in the proposition that it ought to be the solicitor on the record for the wife who should be ordered to pay any costs, but that would require an additional hearing to provide that individual some procedural fairness before any such order was made. The Court would also have to be satisfied that there was a realistic prospect the husband could recoup the costs thrown away by the adjournment. This would delay finalisation and potentially create further costs for the husband.
Secondly, an order for costs in the husband’s favour, even if it was ultimately satisfied, would not address the significant prejudice to him in the matter being adjourned for a considerable period of time until fresh hearing dates could be allocated.
As noted, the trial directions in this matter were made on 7 November 2022, some four months prior to the commencement of the final hearing. The wife claimed through her counsel that she had not been made aware of the orders made on 7 November 2022. However, I observe that although the wife was able to prepare an affidavit for trial, she gave no evidence of the matters raised by her in support of her application for an adjournment.
In my view, none of the matters relied upon by the wife constituted any sufficient basis to grant an adjournment. No satisfactory explanation for the wife’s failure to prepare and make herself ready for trial was provided. Accordingly, I refused her application for adjournment.
Against the background of the proffered reasons for adjournment and its refusal, the wife further sought leave to rely upon a trial affidavit filed on 6 March 2023, that is, two days prior to the commencement of final hearing. The husband submitted that there were numerous matters in the affidavit which embarrassed him and with which he could not deal if the proceedings commenced and the wife was given leave to rely on the affidavit. In those circumstances, I declined to grant leave to the wife to rely upon her affidavit, filed well outside the time required and so close to the commencement of final hearing.
Accordingly, the trial commenced and, although it was occasionally referred to as an undefended hearing, this is not strictly correct. Counsel for the wife remained at the bar table and, ultimately, conducted some cross-examination of the husband. The wife was granted leave to rely upon her case outline filed on 6 March 2023.
The husband relied upon the following:
(a)Case outline filed on 27 February 2023;
(b)Affidavit filed on 1 February 2023;
(c)Affidavit of Ms C filed on 1 February 2023;
(d)Financial Statement filed on 1 February 2023;
(e)Single Expert Report dated 21 March 2021; and
(f)Affidavit of his solicitor filed on 7 March 2023.
BACKGROUND
The husband originally commenced the proceedings on 17 November 2016 seeking parenting orders only. In her Response filed on 8 December 2016, the wife sought parenting and property orders. The parenting dispute was finalised by consent on 7 December 2021.
The parties commenced cohabitation in late 2006 and married in 2007.
There is one child of the relationship, X, who is now 13 years old. There was no dispute that X has some special needs, having been diagnosed to be on the autism spectrum disorder and with attention deficit hyperactivity disorder. Nonetheless, X currently is receiving mainstream education at D School in E Region.
The parties’ relationship initially commenced in Sydney. In about mid-2008, the husband moved to City F, New Zealand. The wife followed shortly thereafter in 2009. They then lived at G Street, Suburb H, City F (“the City F property”) with X, before returning to Sydney and settling in E Region in early 2011.
From about mid-2013 until separation in around June 2014, the husband rented a room in a share house in Suburb J during the week and returned to the family home in E Region on weekends.
Following separation, the husband continued to live in Suburb J before moving into an apartment in Suburb K. The wife continues to live in E Region. Both parties rent their present accommodation.
The parties therefore cohabited for over eight years and have been now separated for longer than they were in a relationship.
In determining an application under s 79, the Court must be satisfied it is just and equitable to make an order adjusting the property interests of the parties (s 79(2)) and it must consider each of the matters set out in s 79(4)(e).
It has long been the approach to employ the “four step process” set forth in Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143, as follows:
1.Identify and value, the parties' property, liabilities and financial resources at the date of the hearing;
2.Identify and assess the contributions of the parties as referred to in s.79 of the Act and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties, whether examined on a global approach or an asset by asset approach;
3.Identify and assess the other factors relevant including, the matters referred to in s.75 of the Act and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
4. Consider the effect of the above and resolve what order is just and equitable in all the circumstances of the case.
In Stanford & Stanford (2012) 247 CLR 108 (“Stanford”) the High Court made clear at [37] it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. The Full Court in Bevan & Bevan (2013) FLC 93-545 (“Bevan”) at [72]–[73] has held that the decision in Stanford has not overruled the four step approach.
Stanford made clear that requirement pursuant to s 79(2) that it would be “just and equitable” to make orders altering property should not be conflated with the requirements of s 79(4). The Full Court in Bevan emphasised that although the pre-condition to making any order for property adjustment is a finding that it is just and equitable to do so in accordance with s 79(2) of the Act, such a finding does not form a threshold issue, nor must the requirements of s 79 be followed in a particular order.
Stanford also emphasised that the discretion reposed in the Court by s 79 must be exercised judicially (at [38]). At [39], the Court expressly emphasised that in Australian law there is no concept of “community ownership” arising from marriage and whether it is “just and equitable” to make an order “is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist”.
The very fact of separation may lead to the ready satisfaction of just and equitable requirement: Stanford at [41]–[42]. However, here, it is the husband’s case that it would not be just and equitable for there to be any property adjustment. I will return to this question later in these reasons.
The husband was cross examined by counsel for the wife. I found him to be a credible witness and generally accept his evidence.
The husband submitted a balance sheet of the asset pool available for possible division pursuant to s 79 of the Act. It is unnecessary to set out the individual items in this judgment.
At cohabitation, the main asset held by the husband was the property in City F which he purchased in 1998 for NZD185,000. The purchase was funded using a loan from a family trust, called the B Trust, in the sum of NZD34,000 and a mortgage from L Bank secured over the property for NZD151,000.
He also had some nominal savings and superannuation of approximately $40,000. The husband contended the wife held savings at cohabitation which, in cross-examination, he agreed may be in the order of $100,000. He also agreed she owned Motor Vehicle 1 and superannuation of an unspecified amount.
The husband gave evidence, which I accept, that he made the following financial and nonfinancial contributions prior to separation. He was continuously employed, apart from short periods between contracts. Prior to separation, he contributed his savings and salaries towards the use and benefit of the parties and their daughter by way of rent, groceries, and other household expenses. He was the breadwinner who met the majority of the parties’ living expenses. He funded the care and maintenance of the parties’ homes in New Zealand and Australia. He undertook domestic duties, including cleaning, laundry, almost all outside maintenance, and meal preparation.
He paid for the improvement of the City F property. However, he accepted in cross-examination that the wife also made significant contributions to the renovations. He also managed the City F property as a rental property, which was rented to tenants, with the exception of the period from mid-2008 to mid-2009. The rent from these tenancies was applied to the L Bank mortgage, but later paid into a family trust called the Cavendish Family Trust. Although the husband accepted that the wife was the primary carer for X, he also contributed to her care as an infant and young child.
Post separation, the husband continued to maintain and manage the City F property. He continues to provide care for X during those times when she resides with him in accordance with court orders. He has paid child support for X since separation. The husband agreed that the wife worked part-time as a health professional, but predominantly retained her income, although she made modest financial contributions from time to time.
There was no dispute that the husband is a discretionary beneficiary of the B Trust, which was established by his late mother in 1996. It is not under his control, although he accepted it should appear on the balance sheet as an asset. He is also the appointor and a beneficiary of the Cavendish Family Trust, which holds the City F property and receives rental income. He also agreed the assets of this trust should be included on the balance sheet.
The wife candidly conceded that she received an inheritance from her late mother’s estate in the sum of approximately $183,000 after separation.
For the purposes of s 79(4)(e), there was no dispute that both parties are in good health. However, the husband is 63 years old, and the wife is 49 years old. The husband intends to retire from the workforce upon reaching retirement at 67 years. The wife is a qualified health professional who will reach retirement age in a little over 17 years’ time. She currently works part-time and there was no evidence that she was unable to work more hours or full-time if she chose to do so.
Both parties have superannuation with similar balances. The husband’s is $269,054 split over two accounts while the wife’s is approximately $269,302.
The wife will continue to be the primary carer for X until she reaches her majority.
Having considered the parties’ competing contentions, I am not satisfied that it would be just and equitable to make any property adjustment.
A consideration of the s 79(4)(e) matters does not lead to a conclusion that any property adjustment order would be just and equitable.
But, a consideration of the requirement in s 79(2) separately leads to the same conclusion. In addition to the matters already discussed in these reasons, I point to the following. The wife by her case outline contended that there should be a cash payment in her favour. There was no evidence which would support a conclusion that such a payment should be made. Moreover, the husband gave evidence that, in correspondence between 2017 and 2021, numerous disclosures were sought from the wife which were only ever partially answered. I am satisfied this supports the husband’s submission that the Court could not be satisfied that the wife’s financial resources have been fully disclosed.
I note that one of the orders sought by the husband was for delivery up to him of a piece of jewellery which formed part of his inheritance from his mother. However, at final hearing the husband did not press this order. I note the wife undertook to pass the jewellery on to X.
The husband sought costs against the wife. She has been wholly unsuccessful. However, there was no clear evidence going to the other factors to be considered in s 117(2A). I will make provision for the filing of any application for costs in the orders.
For the reasons given, I otherwise make orders as proposed by the husband.
I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 14 March 2023
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