Dabrowa and Dabrowa and Ors

[2014] FamCA 711

FAMILY COURT OF AUSTRALIA

DABROWA & DABROWA AND ORS [2014] FamCA 711

FAMILY LAW – PROPERTY – marriage – delay due to respondent’s health issues – where a case guardian is appointed – where the first and second respondents entered into a deed – where the mother is primary caregiver – where alteration of property interests is just & equitable.
FAMILY LAW – CHILDREN – parenting – where mother seeks sole parental responsibility – where expert recommends no contact with father – where mother is main caregiver and provider of financial support – where mother has sole parental responsibility.

Family Law Act 1975 (Cth) ss106A & 106B
Family Provision Act 1982 (NSW)

APPLICANT: Ms A Dabrowa

FIRST RESPONDENT:	Mr B Dabrowa
SECOND RESPONDENT:	Ms C Dabrowa
THIRD RESPONDENT:	Mr D

INDEPENDENT CHILDREN’S LAWYER: Mark MacDiarmid

FILE NUMBER: PAC 6475 of 2007

DATE DELIVERED: 29 July 2014

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 21 July 2014

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Naidovski
Legal Aid NSW Parramatta

COUNSEL FOR THE FIRST RESPONDENT: Mr Tockar of counsel

SOLICITOR FOR THE FIRST RESPONDENT:	John R Qinnn & Co acting as Case Guardian
SOLICITOR FOR THE SECOND RESPONDENT:	Ms C Dabrowa appeared in person
COUNSEL FOR THE THIRD RESPONDENT:	Mr Greenaway
SOLICITOR FOR THE THIRD RESPONDENT:	White & Associates

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Mark MacDiarmid Family Law Specialist

Orders

Parenting

1. That the mother have sole parental responsibility for the children, namely:

   E born … 1999

   F born … 2000  and

   G born … 2001.

2. That the children live with the mother

3. That the mother be permitted to remove the children from Australia for the purpose of holidays.

4. That the mother be authorised and permitted to obtain passports for the children without the consent of the father.

Notation:  These orders are consented to by the Applicant and the Independent Children’s Lawyer.  The First Respondent’s Case Guardian abides by the decision of the court.

The Claim of the Third Respondent

1. That the husband and wife do all acts and things to authorise Legal Aid New South Wales to pay from the money held in the trust account of Legal Aid New South Wales (Westpac Banking Corporation BSB no: … Account no: …) on behalf of the husband and wife:

   a.$30,357.66 to Mr D (being repayment of principal and interest and costs on the Local Court judgment);

   b.$20,000 to White & Associates (being costs of and incidental to these proceedings);

2. That in the event that either party refuses or neglects to comply with the provision of any order herein the Registrar of this court is hereby appointed pursuant to section 106A of the Family Law Act to execute all deeds and documents in the name of either the husband or the wife and do all acts and things necessary to give validity and operation to the said order.

The Claim of Ms C Dabrowa that She is Entitled to Ninety Five Percent Interest in the Net Proceeds of Sale of the Property H Street, Suburb I

1. That pursuant to section 106B of the Family Law Act the deed entered into between the first Respondent and the second Respondent be set aside.

Alteration of Property Interests as Between the Husband and the Wife

1. That the husband and wife do all acts and things to authorise Legal Aid New South Wales to pay from the money held in the trust account of Legal Aid New South Wales (Westpac Banking Corporation BSB no: … Account no: …) on behalf of the husband and wife:

   a.$30,357.66 to Mr D being repayment of principal and interest and costs of the Local Court judgment;

   b.$20,000 to White & Associates (being costs of and incidental to these proceedings;

   c.$134,221.85 to Ms C Dabrowa;

   d.        $50,000 to the wife;

   e.$65,191.70 to J & Co being costs of the Case Guardian, Counsel’s fees and disbursements;

   f.balance to the husband.

2. That unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money due under these or any subsequent orders each party be solely entitled to the exclusion of the other to all property in the possession of such party as at this date.

3. That in the event that either party refuses or neglects to comply with the provision of any order herein the Registrar of this Court is hereby appointed pursuant to section 106A of the Family Law Act to execute all deeds and documents in the name of either the husband or the wife and do all acts and things necessary to give validity and operation to the said order.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Dabrowa & Dabrowa and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: PAC 6475 of 2007

Ms A Dabrowa

Applicant

And

Mr B Dabrowa

First Respondent

Ms C Dabrowa

Second Respondent

Mr D

Third Respondent

REASONS FOR JUDGMENT

the proceedings

1. The parties to these proceedings are the husband, Mr A Dabrowa; the wife, Mr Dabrowa; the husband’s mother, Ms C Dabrowa and the third Respondent, Mr D.  The proceedings concern the following issues:

   1.Parenting orders in relation to the three children of the husband and wife:

   E born in 1999 (14)

   F born in 2000 (13)

   G born in 2001 (12).

   2.Alteration of property interests as between the husband and the wife.

   3.The claim of Ms C Dabrowa that she is entitled to ninety five per cent of the proceeds of sale of a property H Street, Suburb I pursuant to a deed executed by her and the husband on 3 January 2002.

   4.The claim of the third Respondent for payment from the proceeds of sale of the Suburb I property of all monies due to him pursuant to a mortgage dated 20 February 2009.

Background

1. Ms C Dabrowa was born in 1944 and is presently 70 years of age.  The husband was born in 1971 and is currently aged 43 years.  The wife was born in 1974 and is now 40 years of age.

2. The husband and wife began a relationship in 1996 and married in 1998.  They first separated in 2000 but reconciled after living apart for approximately four months.  They separated again for a period of about twelve months in approximately 2005 and their relationship broke down finally on 19 November 2007.  An order for divorce was pronounced on 23 January 2012.

3. In August 1997 the Suburb I property was purchased for $215,000 in the name of the husband’s father, Mr K Dabrowa.  The purchase money consisted of $194,000 held on behalf of the husband’s father by the Protective Office of New South Wales and $21,000 from the proceeds of sale of a town house owned by Ms C Dabrowa.  The Protective Office held funds on behalf of the husband’s father as the result of a successful claim for compensation for medical negligence.

4. The husband’s father died in 1998.  The husband was the sole beneficiary of his estate pursuant to a will dated 30 January 1989. 

5. On 22 February 1999 the husband and his mother entered into a deed pursuant to the Family Provision Act 1982 (NSW), which provided that Ms C Dabrowa was entitled to a fifty per cent interest in the Suburb I property.  On 3 January 2002 the husband and his mother entered into another deed which provided that she was entitled to a ninety five per cent interest in the property.  The period within which Ms C Dabrowa was entitled to make an application pursuant to the Family Provision Act, in respect of the estate of her late husband, expired on 6 October 1999.

6. In September 2006 the husband sustained a back injury and has not since engaged in paid employment.  He suffers from chronic ill-health and finalisation of these proceedings has been delayed considerably for that reason and also due to an issue as to his capacity to conduct the litigation.

7. On 17 December 2007 orders were made by consent, which provided that the children live with the wife and spend time with the husband from 9:00 am until 5:00 pm each Sunday and every Wednesday from the conclusion of school until 7:30 pm during term time and from 9:00 am until 5:00 pm in holidays.  Further orders were made by consent on 14 February 2008, which provided that the children live with the wife and spend time with the husband each alternate weekend from 9:00 am on Saturday until 5:00 pm on Sunday and continued the existing arrangement for weekday visits.

8. On 12 May 2008 orders were made that the husband return the children to the wife and that they spend time with him each alternate weekend from Friday afternoon until Monday morning and for half of the short school holidays.  On 8 December 2008 orders were made by consent, which provided that the children spend time with the husband each alternate weekend from Friday afternoon until Monday morning;  from Wednesday afternoon until Thursday morning in every other week and during school holidays.

9. A single expert, Dr K, prepared the first of five reports on 28 March 2009.  He referred to “the adverse and undermining influence of the paternal grandmother” and “spurious allegations and trivial reports to the police” made by the husband.  He recommended that the children continue to live with the wife and spend time with the husband on one weekend per month and, if he were to make further spurious allegations, there should be a reduction to day periods only.

10. The proceedings were listed for final hearing before me for three days to commence on 20 July 2009.  The husband informed the court that he was not ready to proceed and sought an adjournment to obtain legal representation.  I acceded to the husband’s application but warned him that no further adjournment would be granted, other than in exceptional circumstances.  Interim orders were made which provided that the children have telephone contact with the husband at 6:00 pm each Friday.

11. Dr K prepared an updated report on 21 January 2010.  He recommended that the children continue to live with the wife and spend one day per fortnight with the husband and the paternal grandmother.  He recommended also:  “Should the father not be able to contain his negativity towards the mother it may be necessary for the contact to be supervised once every three months”.  He proposed that a reintroduction of time with the father should take place in a supervised setting.  Dr K recommended further:  “Should the father and the paternal grandmother continue to alienate the children, or not participate in the legal proceedings or not be in contact with the children it creates a major dilemma for the children.  Then daytime recognition contact may be the only alternative of perhaps once every two or three months supervised”. 

12. The final hearing was listed for four days to commence on 25 January 2010.  On 29 January 2010 counsel for the Independent Children’s Lawyer (“the ICL”) commenced his cross-examination of Dr K.  The husband was too ill to conduct his cross-examination of Dr K and/or to present his final submissions.  The hearing was thus adjourned to 21 April 2010 and the husband was advised to be ready to complete the matter on that occasion.

13. On 4 March 2010 a Registrar was advised that the husband had been hospitalised in a critical condition and that the matter could not be completed on 21 April 2010.  The husband underwent three open heart surgery procedures and was fitted with a pacemaker. 

14. On 2 August 2010 leave was granted to the husband’s mother to intervene in the proceedings.  She asserted that she was “the owner in equity of a ninety five per cent interest in the property situated at  [H Street, Suburb I]”. 

15. On 5 October 2010 orders were made by consent which provided for the sale of the Suburb I property and for the net proceeds to be lodged in the trust account of Legal Aid NSW.  The property was sold for $515,000 and the sum of $318,801 was deposited into the trust account.

16. On 20 April 2011 I made directions to prepare the matter for finalisation.  The husband was represented by a solicitor on this occasion.  On this occasion, it was noted that the children last saw the husband in June 2009.

17. Another case management event took place before me on 10 October 2011.  By consent, the third Respondent Mr D was joined as a party to the proceedings.  Dr K agreed to prepare an updated report for no fee, as Legal Aid NSW declined to provide any further funding.  The husband was refused legal aid and again represented himself.  The proceedings were listed for a five day hearing to commence on 30 January 2012.

18. On 1 February 2012 the husband failed to appear, in circumstances where Dr K’s updated report raised serious concerns as to his capacity to conduct the litigation.  Dr K diagnosed a delusional disorder and opined that the husband was detached from reality.  He Offered the view that the husband’s detachment from reality “does impair his ability to behave and argue logically and therefore I believe his ability to conduct his case in a court sitting is impaired.  I don’t believe that he is capable of being responsible for managing his own legal case.”

19. On 1 February 2012, on the application of the ICL, I ordered that a Case Guardian be appointed for the husband and requested that the Attorney-General for the Commonwealth arrange for a suitable person to fulfil that role.  It proved to be extremely difficult to achieve that aim and, ultimately, my legal Associate ascertained that the Attorney-General’s Department has no procedure for the implementation of such orders.

20. On 28 February 2014 Mr Quinn, a private solicitor, agreed to take on the role of Case Guardian for the husband and I made orders accordingly.  These arrangements were able to be put in place only after extensive enquiries by my legal Associate of the Attorney-General’s Department and the Law Society of New South Wales.  The proceedings were listed for finalisation for five days to commence on 21 July 2014.

21. On 20 February 2012 the third Respondent filed a Notice of Motion in the Local Court of New South Wales, seeking default judgment against the husband and Ms C Dabrowa in the sum of $20,000, plus interest at thirty per cent per annum and costs.  Judgment was entered in his favour in an amount of $38,949.40 on 23 February 2012.

22. On 31 March 2014 an order was made for Dr K to prepare an updated report.  He made very clear and firm recommendations in his report of 18 June 2014.  Dr K wrote:  “the husband is unable to provide any effective or adequate parenting” and recommended that “if there were any contact it would need to be very brief and controlled”.  He recommended that:

    ·    the children reside with the wife

    ·    there be no contact with the husband.

23. On 18 June 2014 Dr K wrote: 

    whilst I would like to be able to say that the children should have some sort of contact, even recognition contact with the father, I believe that this is now fraught.  The father hasn’t changed his belief systems.  He is likely to try and undermine the children.  I don’t believe he can contain his belief system, or that he would try to undermine them.  Therefore I don’t believe that any contact at this point is likely to be helpful. To the children now the father is more of a distant memory.  The children have very little recollection of him.  The children need to be of adult age, perhaps eighteen, before they could have contact with him or his mother.

    Dr K also opined:  “I believe it would be too risky unfortunately to allow him to have contact with the children”. 

    1.Parenting Orders

24. The mother and the ICL agreed upon the orders which should be made in relation to the children and the Case Guardian indicated that he “abides by the decision of the court”.  In light of the very strong recommendations of Dr K, I had no hesitation in making orders in terms of the agreement between the mother and the ICL.  These orders were as follows: 

    1.That the mother have sole parental responsibility for the children, namely:

    [E] born … 1999

    [F] born … 2000  and

    [G] born … 2001.

    2.That the children live with the mother

    3.That the mother be permitted to remove the children from Australia for the purpose of holidays.

    4.That the mother be authorised and permitted to obtain passports for the children without the consent of the father.

    Notation:  These orders are consented to by the Applicant and the Independent Children’s Lawyer.  The First Respondent’s Case Guardian abides by the decision of the court.

    2.        The Claim of the Third Respondent

25. Mr D held a second mortgage on the title to the Suburb I property as security for a loan of $20,000 to the husband.  This mortgage was executed in February 2009, with Mr D as mortgagee, the husband as mortgagor and Ms C Dabrowa as guarantor. 

26. The first mortgage was discharged upon the sale of the Suburb I property in June 2011.  The second mortgage to Mr D was not discharged and, as noted, he obtained judgment against the husband and Ms C Dabrowa in February 2012. 

27. The third Respondent sought orders that he receive a sum of $30,357.66, being principal, interest and costs of the Local Court judgment, together with $20,000 on account of his costs in these proceedings.  I was informed by his counsel that the amount of interest was calculated at the rate prescribed by the Family Law Rules, rather than thirty per cent per annum as was set out in the mortgage document.  I was informed further by his counsel that Mr D’s costs were calculated on a party/party rather than an indemnity basis. 

28. I can see no reason why Mr D should be any further denied his funds.  He is a secured creditor and has the benefit of a judgment debt.  He is entitled to his costs incurred in the Local Court and these proceedings.  Accordingly I made orders as he sought, which were as follows:

    1.That the husband and wife do all acts and things to authorise Legal Aid New South Wales to pay from the money held in the trust account of Legal Aid New South Wales (Westpac Banking Corporation BSB no: … Account no: …) on behalf of the husband and wife:

    a)      $30,357.66 to [Mr D] (being repayment of principal and interest and costs on the Local Court judgment);

    b)      $20,000 to White & Associates (being costs of and incidental to these proceedings);

    2.That in the event that either party refuses or neglects to comply with the provision of any order herein the Registrar of this court is hereby appointed pursuant to section 106A of the Family Law Act to execute all deeds and documents in the name of either the husband or the wife and do all acts and things necessary to give validity and operation to the said order.

    3.        The Claim of Ms C Dabrowa that She is Entitled to Ninety Five Percent Interest in the Net Proceeds of Sale of the Property H Street, Suburb I

29. It was common ground as between the wife and the Case Guardian that the deed entered into by the husband and Ms C Dabrowa on 3 January 2002 should be set aside pursuant to section 106B of the Family Law Act.  The Case Guardian made no challenge to the deed executed on 22 February 1999, by which Ms C Dabrowa acquired a fifty per cent interest in the Suburb I property.  Ms C Dabrowa sought to maintain the provisions of the deed of 3 January 2002 and thus take ninety five per cent of the funds held in the trust account of Legal Aid NSW. 

30. The deed of 3 January 2002 obviously would defeat a claim by the wife for alteration of property interests.  The only asset is the sum of $318,801 lodged in the trust account of Legal Aid NSW.  Ninety five per cent of that sum amounts to $302,861, which would leave only about $16,000 to satisfy the wife’s claim. 

    1.That pursuant to section 106B of the Family Law Act the deed entered into between the first Respondent and the second Respondent on be set aside.

    4.        Alteration of Property Interests as Between the Husband and the Wife

1. For the purposes of the High Court decision in Stanford v Stanford (2012) 243 ALR 70 I am comfortably satisfied that it is just and equitable to make orders for alteration of property interests.  The husband and wife separated in November 2007 and have not intermingled their funds, nor made any use of jointly owned property, for almost seven years.  There is absolutely no prospect that they will do so in future and they both need an end to any existing financial entanglement between them. 

2. The wife and the Case Guardian agreed that she should receive the sum of $50,000 from the funds held in the trust account of Legal Aid NSW and that a total amount of $50,357.66 should be paid to the third Respondent and his solicitors.  They agreed further that a sum of $134,221.85 should be paid to Ms C Dabrowa and the balance to the husband, after payment of legal costs and disbursements of the Case Guardian.

3. The relationship between the husband and the wife subsisted for some twelve years, during which three children were born to them.  The wife has been their primary carer throughout their lives and continues to fulfil that role.  The husband has played no part at all in their care for the past five years.  The wife has been solely responsible for the financial support of the children since the separation in November 2007.

4. The funds in the trust account were derived from an inheritance which the husband received in 1998.  Accordingly, he made a significant direct financial contribution to these monies.  On the other hand, the wife was the primary homemaker and parent both before and after separation with no input whatsoever from the husband since 2009.  She alone has shouldered the burden of financial support of the children with no assistance at all from the husband for the last six and a half years.  The wife thus made significant contributions both before and after the separation. 

5. In my view, it would be legitimate to take an approach whereby the husband and Ms C Dabrowa have a joint debt to the third Respondent of $57,357 and that they are each entitled to fifty per cent of the money in the trust account.  Accordingly, the husband and Ms C Dabrowa are each entitled to a net sum of $134,222 after the deduction of principal, interest and costs payable to the third Respondent.  A sum of $50,000 equates to thirty seven per cent of the husband’s share of $134,222.  In all of the circumstances, a division of the net assets as to thirty seven per cent to the wife and sixty three percent to the husband seems well within the range of just and equitable outcomes to the wife’s application for alteration of property interests.

6. Accordingly I consider that orders as agreed between the Case Guardian and the wife, in the following terms, would be a just and equitable outcome to the proceedings: 

   1.That the husband and wife do all acts and things to authorise Legal Aid New South Wales to pay from the money held in the trust account of Legal Aid New South Wales (Westpac Banking Corporation BSB no: … Account no: …) on behalf of the husband and wife:

   a)$30,357.66 to Mr D being repayment of principal and interest and costs of the Local Court judgment;

   b)$20,000 to White & Associates (being costs of and incidental to these proceedings;

   c)$134,221.85 to Ms C Dabrowa;

   d)$50,000 to the wife;

   e)$65,191.70 to J & Co being costs of the Case Guardian, Counsel’s fees and disbursements;

   f)balance to the husband.

   3.That unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money due under these or any subsequent orders each party be solely entitled to the exclusion of the other to all property in the possession of such party as at this date.

   4.That in the event that either party refuses or neglects to comply with the provision of any order herein the Registrar of this Court is hereby appointed pursuant to section 106A of the Family Law Act to execute all deeds and documents in the name of either the husband or the wife and do all acts and things necessary to give validity and operation to the said order.

7. I will not grant liberty to apply on seven days’ notice, as these proceedings finally must be brought to conclusion.

I certify that the preceding thirty eight (38) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 29 July 2014.

Associate: 

Date:              29 July 2014