Darcey & Paine
[2023] FedCFamC2F 305
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Darcey & Paine [2023] FedCFamC2F 305
File number: ADC 2664 of 2022 Judgment of: JUDGE DICKSON Date of judgment: 6 March 2023 Catchwords: FAMILY LAW – PROPERTY – undefended final hearing – de facto relationship – small asset pool – where respondent has failed to engage in proceedings – where Court is satisfied that respondent is on notice of these proceedings –– significant post separation contributions by the applicant – future needs – just and equitable for there to be a 81/19% split in the applicant’s favour of the net non-superannuation assets – parties to retain their respective superannuation – just and equitable – costs Legislation: Family Law Act 1975 (Cth) ss 69ZL, 75, 79, 117
Federal Circuit and Family Court Rules of Australia (Family Law) Rules 2021 (Cth) rr 10.26, 10.27
Cases cited: Bevan & Bevan [2013] FamCAFC 116
In the Marriage of Hayne (1977) FLC 90-265
In the Marriage of Hickey (2003) 30 FamLR 355
In the Marriage of Phillips [2002] FamCA 350
In the Marriage of Russell [1999] FamCA 1875
Jabour & Jabour [2019] FamCAFC 78
Norbis & Norbis [1983] FamCA 47
Ragusa & Ragusa [2021] FedCFamC2F 470
Stanford & Stanford (2012) 247 CLR 108,
Watson & Ling [2017] FamCA 57.
Division: Division 2 Family Law Number of paragraphs: 111 Date of hearing: 17 February 2023 Place: Adelaide Counsel for the Applicant: Mr Boehm Solicitor for the Applicant: Westley Di Giorgio Norcock ORDERS
ADC 2664 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS DARCEY
Applicant
AND: MR PAINE
Respondent
order made by:
JUDGE DICKSON
DATE OF ORDER:
6 March 2023
THE COURT ORDERS THAT:
1.A Judicial Registrar or Registrar of this Court be appointed as necessary pursuant to section 106A of the Family Law Act (Cth) (‘the Act’), to execute any deeds, documents or instruments in the name of the husband and to do all such acts and things necessary to give validity to the operation to the deed, document or instrument and to implement the within orders.
2.Within one hundred and twenty (120) days of today’s date, the wife do all such things as necessary to transfer the husband’s interest in the whole of the property located at B Street, Town C in the State of South Australia, being the property contained in the Certificate of Title Volume … Folio … (‘the B Street, Town C Property’) and at the sole cost of the wife.
3.Contemporaneously with the transfer of the B Street, Town C property, the wife shall:
(a)Pay out and discharge the joint ANZ Bank Loan secured against the said property; and
(b)Pay any further costs and disbursements arising from implantation of these orders.
4.The wife shall otherwise retain the following assets and liabilities to exclusion of the husband:
(a)The B Street, Town C property subject to any loan secured against that property;
(b)Her share and interest in any bank accounts held in her sole name;
(c)Her Motor Vehicle 1;
(d)Any furniture, items and possessions currently in the wife’s name, possession and/or control; and
(e)The wife’s interest in and the benefits held by Super Fund 1.
5.The husband shall otherwise retain the following assets and liabilities to exclusion of the wife:
(a)His share and interests in any bank accounts held in his sole name;
(b)His share and interest in the Super Fund 1.
(c)Any furniture, items and possessions currently in the Respondent’s name, possession and/or control.
6.The parties do otherwise indemnify the other in relation to any liabilities incurred in their respective sole names including any credit cards or personal loans.
7.Pursuant to section 117 of the Act, the husband do pay the wife’s costs of and incidental to these proceedings fixed in the sum of $18,530.00.
8.That all applications for property settlement and for costs are otherwise dismissed as finalised.
Application for Divorce
9.A divorce order be made, such divorce order to take effect and thereby terminate the marriage on the 6 April 2023.
10.The wife’s Application for Divorce filed on 28 November 2022 is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Darcey & Paine has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
(Ex tempore reasons settled from transcript)JUDGE DICKSON
INTRODUCTION
These proceedings concern an Initiating Application for Final Orders for property settlement filed by Ms Darcey (‘the wife’) on 21 June 2022, an Application for Divorce filed by the wife on 28 November 2022 and the wife’s Application for costs.
The Trial came before this Honourable Court on 6 March 2023. The respondent husband, Mr Paine (‘the husband’) was called in the precincts of the Court but failed to appear.
These are the Court’s reasons in relation to the wife’s Applications for property settlement and for costs, with the wife’s Application for Divorce being considered simultaneously with the Application for property settlement.
These short form reasons for judgment pursuant to section 69ZL of the Family Law Act 1975 (Cth) (‘the Act’) were delivered orally following the hearing between the parties concerned. These reasons have been corrected for errors of expression and syntax in an attempt to make the orally delivered reasons amenable to being read.
RELATIONSHIP BACKGROUND
The applicant wife is 43 years of age. The respondent husband is 44 years of age.
The parties commenced cohabitation in 1999 after obtaining a rental property together in Town C.
The parties were married in 2016, and separated for a final time in November 2018.
There are two children of the relationship, namely, Mr D, born in 1999 and now aged 23 years and Mr E, born in 2002, now aged 21 years. The two subject children are now adults and not the subject of any proceedings between the parties.
It is the wife’s case that the parties separated as a consequence of the husband developing an addiction to a drug known as “Ice”, being a derivative of methamphetamine.
It is the wife’s case that in mid-2017 she commenced to observe changes to the husband’s behaviour, mood and appearance. In addition, the wife alleges, as contained in paragraph 27 of her Trial affidavit, that she found drug paraphernalia in the home and when confronted, the husband admitted his drug usage.
The wife alleges that she gave the husband an ultimatum, being a choice between continued illicit drug consumption or his family. Regrettably, for reasons known only to the husband, it is alleged that he chose continued drug use and the relationship subsequently broke down.
Post separation the wife obtained an Intervention Order. A final Intervention Order is annexed to the wife’s Trial affidavit, being ‘Annexure -1’ dated 15 March 2019.
HISTORY OF PROCEEDINGS
The Initiating Application was originally filed by the wife on 21 June 2022.
On the first return date, being 27 July 2022, Judicial Registrar F noted that there was no appearance by or on behalf of the husband. The wife sought an adjournment for service to be effected upon the husband.
The husband was subsequently served on 3 September 2022 as deposed in the Affidavit of Service filed 12 September 2022. The Court subsequently identified that ‘Part F’ of the affidavit of service was incomplete. Regrettably, the process server had not deposed as to how he was able to identify the husband when the documents were personally served on him.
At the next return date on 12 September 2022, there was no appearance by or on behalf of the husband and the following notations were entered into the Court record as follows:
(a)The applicant’s legal representative advises the court that the process server experienced difficulty with service of court documents on the respondent.
(b)The respondent was served on 3 September 2022 as deposed in the Affidavit of Service filed on even date.
(c)In the event that the respondent fails to engage in the proceedings, communicate with the applicant’s legal representative or fails to comply with orders herein and fails to attend the adjourned date the matter will proceed on an undefended basis.
The Court otherwise ordered, inter alia, that the husband file and serve a Response to an Initiating Application, a Response to an Application in a Proceeding, a Financial Statement, a Genuine Steps Certificate, a supporting affidavit and a Notice of Address for Service.
The husband has failed to comply with any orders of the Court and, in particular, the orders of the Court in relation to the filing of answering material.
The husband was again served on 13 September 2022 as deposed in the Affidavit of Service filed on even date. Again, regrettably, ‘Part F’ of the Affidavit of Service was incomplete in that the process server had not deposed as to how he was able to identify the husband when the documents were personally served.
The Court consequently made orders in chambers on 12 October 2022 that the matter be listed in the City G circuit on 14 November 2022 and granted leave for the matter to proceed on an undefended basis noting the following:
(a)The applicant wife filed an application for final orders on 21 June 2022.
(b)The respondent husband had been served with Court documents and Court orders as deposed in the affidavits of service filed on 13 and 16 September 2022.
(c)The respondent had not communicated with the applicant’s solicitor and had not engaged in proceedings and had failed to comply with orders of the Court to date.
(d)The matter proceeds on an undefended basis and is hereby referred for listing before a Judge.
At the Court hearing on 14 November 2022, there was no appearance by or on behalf of the husband and Trial directions were made.
The matter returned before the Court for Trial management on 14 February 2023. The Court raised with the legal representative on behalf of the wife that the ‘Part F’ sections of both Affidavits of Service filed 12 September and 16 September 2022 were incomplete as referred to herein. Counsel for the wife confirmed a hiatus in the evidence and an application was made to remedy the deficiency with respect to service given that the proceedings were sought to proceed on an undefended basis.
An affidavit of Mr H, the process server, was filed on 13 February 2023. The affidavit is extensive and addresses the previous concerns raised by the Court with respect to the identity of the person served with the wife’s documents and orders of the Court. The Court is satisfied, having read the said affidavit of Mr H, that the husband has been personally served and is on notice as to the orders sought by the wife at this hearing.
At the hearing on 14 February 2023, the Trial was formally adjourned to proceed by way of an undefended hearing on 6 March 2023 following the further procedural matters that were sought by the wife.
The Court observes that those procedural matters have now been completed and the Court is satisfied to proceed on an undefended basis in the absence of the husband this day.
EVIDENCE RELIED UPON AT TRIAL
The wife gave brief evidence-in-chief and has tendered into evidence two exhibits, namely,
(1)A letter dated 21 February 2023 from the wife’s solicitors to the husband; and
(2)A revised balance sheet dated 6 March 2023.
In addition, the wife’s outline of case document sets out the documents relied upon by the wife at this Trial and they are as follows:
(1)Outline of Case Document of the applicant wife;
(2)Financial Statement filed by the wife 21 June 2022;
(3)Genuine Steps Certificate filed by the wife 21 June 2022;
(4)Application for Divorce filed by wife 28 November 2022;
(5)Affidavit of the wife filed 1 February 2023;
(6)Amended Application for Final Orders filed by the wife 2 February 2023;
(7)Affidavit of Mr H filed 13 February 2023;
(8)Costs Notice filed 21 February 2023;
(9)Superannuation Information Form filed by the wife 21 February 2023;
(10)Affidavit of Service filed 23 February 2023;
(11)Revised balance sheet 6 March 2023; and
(12)Letter from wife’s solicitor to the husband dated 21 February 2023.
ORDERS SOUGHT BY THE WIFE
The wife seeks by way of full and final settlement of property the following orders:
1.That a Registrar or Judicial Registrar of the Court be appointed pursuant to section 106A of the Act to execute such deeds, documents or instruments in the name of the husband and to do all acts and things necessary to give validity to the operation to the deed or instrument and these orders.
2.That within 120 days of the date hereof the wife do all such things as is necessary to transfer to the wife the husband’s interests in the whole of the property located at [B Street, Town C] in the State of South Australia, being the property contained in Certificate of Title volume number …, folio … (the [B Street, Town C] property) and at the sole cost of the wife.
3.That contemporaneously with the transfer of the [B Street, Town C] property the wife shall:
a.Pay out discharge the joint bank loan with Commonwealth Bank Australia secured against the said [B Street, Town C] property.
b.Pay such sum into Court on behalf of the husband as is ordered by this honourable Court (if any) after deducting the following cost expenses from the amount the applicant shall be required to pay into Court on behalf of the respondent.
c.The wife’s legal fees and disbursements previously paid.
d.The wife’s current outstanding and anticipated legal fees, counsel fees and disbursements to the conclusion of the matter.
4.That the wife shall otherwise herein after retain the following assets and liabilities to the exclusion of the husband:
a.The property located at [B Street, Town C] subject to the loan secured against that property.
b.Her share and interest in any bank account in her sole name.
c.Her [Motor Vehicle 1].
d.Any furniture items and possessions currently in the wife’s name, possession and/or control.
e.The wife’s interest in and benefits held by [Super Fund 1].
f.Her Commonwealth Bank personal loan.
g.Her ANZ credit card.
h.Her Commonwealth Bank credit card.
5.That the respondent shall otherwise herein after retain the following assets and liabilities to the exclusion of the applicant:
a.His share and interest in any bank account held in his sole name.
b.His share and interest in any superannuation fund.
c.Any furniture items and possessions currently in the husband’s name, possession or control.
In addition, as previously referred, the wife seeks today and that order be made granting a divorce and the wife further seeks that her Application for costs which have been identified on scale as totalling $18,530.61 be brought to account in any orders made by the Court.
SUBMISSIONS ON BEHALF OF THE WIFE
The submissions on behalf of the wife are identified in the Outline of Case Document filed by the wife’s counsel on 3 March 2023.
The wife’s evidence with respect to the position taken by her at this hearing is also identified in her Trial affidavit under the heading of ‘Contributions’.[1]
[1] See the Affidavit of the wife filed 1 February 2023 at page 9 of 58.
In addition to the Outline of Case Document and the wife’s Trial document, submissions were made on behalf of the wife by her counsel in support of the wife’s position at Trial.
The submissions made by the wife’s counsel were, inter alia, as follows:
(1)That the wife seeks a clean break pursuant to section 81 of the Act.
(2)That the wife seeks to retain the B Street, Town C property in her own right and to pay such sum, if any, to the husband by way of final orders.
(3)The wife seeks otherwise to retain all assets in her control and for the husband to do likewise.
The wife’s counsel urges the Court to adopt a ‘one pool approach’, noting that the Court has a discretion to do so as identified in the decision of Norbis& Norbis.[2]
[2] [1983] FamCA 47.
It is the wife’s case that approaching the matter on a one pool basis would result in her receiving 68 per cent of the net pool, including her legal fees.
Submissions were made by the wife’s counsel with respect to section 117 of the Act which is the relevant section relating to costs. The Court is urged to make an order for costs in circumstances where the husband has failed to engage in these proceedings and has failed to comply with orders of the Court, and where the wife has been wholly successful with respect to her application.
The wife’s counsel submitted that the wife has been diligent in prosecuting her case. In those circumstances where unnecessary costs have been incurred by the wife, this is a case where an order for costs is justified on the evidence available before the Court.
The wife’s counsel urges the Court to make orders as promoted by the wife as being just and equitable in all of the circumstances.
NATURE OF AN UNDEFENDED HEARING
It is trite to observe that proceedings to be determined in the absence of one party is a significant matter.
The Court has an obligation to ensure that parties to proceedings before it have an opportunity to participate in those proceedings. However, there must be limits on such an obligation which cannot be indefinitely prolonged.
It has been held that before a person could be adversely affected by a judicial order, they must be afforded an adequate opportunity to be heard.[3]
[3] Ragusa & Ragusa [2021] FedCFamC2F 470, [51].
For the purposes of these reasons, and with particular reference to the volume of Affidavits of Service that have been filed by the wife, the Court is satisfied that the husband has been given adequate opportunity to appear in these proceedings and to put his position before the Court. Regrettably, for reasons that are not known and may never be known, the husband has elected not to do so.
The wife is entitled to have her application for property matters determined within a reasonable period of time pursuant to the applicable principles of law. This is important given the delays which have arisen in the conduct of the case none of which are attributable to any act or omission attributable to the wife. As such, she needs neither the husband’s formal imprimatur nor his cooperation to have her application determined. Rather, there is an obligation on the part of the husband if he wishes to be involved in the proceedings for him to attend at Court as required and to pursue any application put by him or on his behalf with due diligence.
The Federal Circuit and Family Court of Australia is a Court of private law and it determines disputes between parties according to law. In this case, according to the provisions of Part VIII of the Act, the Court cannot compel a party to engage in litigation.
It is, however, obliged to give each party the opportunity to put evidence before the court and if he or she so wishes to do contest any evidence relied upon by the opposing party. However, a party, whether by intransigence, disinterest or manipulation, cannot succeed in denying an applicant a just resolution according to law to his or her application by choosing not to take part in proceedings. That would be fundamentally unfair to the opposing party and an affront to the proper administration of justice which requires that a properly instituted application be finalised within a reasonable period of time relative to the complexity and issues raised in the application.
Part 10.6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Rules’) deals with the Court’s authority to enter Judgment against a respondent if that respondent defaults in complying with a Court order or fails to prosecute any proceedings with due diligence.
Pursuant to Rule 10.26 of the Rules, a party is in default if, among other things, he or she has failed to:
(1) For the purposes of rule 10.27 an applicant is in default if the applicant fails:
(a) To comply with an order of the Court in the proceeding.
(b) File and serve a document required under these rules.
(c) Produce a document as required by division 6.2.2.
(d) Do any act required to be done by these rules.
(e) Prosecute the proceeding with due diligence.
In this case, the Court is satisfied that the husband has failed to prosecute these proceedings with due diligence or at all and has failed to comply with numerous orders of the Court.
In circumstances pursuant to the provisions of Rule 10.27 of the Rules, the wife is entitled to proceed with her application on an undefended basis.
Rule 10.27(3) permits the Court, if the Court considers that it is just, to enter judgment and to make orders in favour of a party on an undefended basis. However, as has been observed in this Court, the wife is not entitled as of right to the orders that she seeks simply because the husband has failed to engage in these proceedings or prosecute a case. The onus still remains on the wife to establish to the Court that the orders she seeks are just and equitable according to law. In essence, the wife must still satisfy the Court that she has sufficient evidence to establish her case and to persuade the Court that the result she proposes is just and equitable.
The Court’s preeminent responsibility is to ensure a just result between the parties notwithstanding the failure by one party to participate properly in the proceedings. However, in the absence of satisfactory rebutting evidence the wife’s affidavit material in this case is to be accepted by the Court unless it appears inherently unreliable or unsatisfactory or result in an unjust decision.
LEGAL PRINCIPLES
The major provisions relating to marital property division are contained in section 79(1), 79(2), 79(4) and 75(2) of Part VIII of the Act.
Pursuant to section 79(1) of the Act, the Court is authorised to make such order as it considers appropriate in order to alter the interests of the parties to a marriage in relevant property.
Pursuant to section 79(2) of the Act, 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 of the circumstances. This follows from the use of the prohibitive words “shall not” in the relevant section.
As the Court has previously indicated in these reasons, one of the central issues arising is whether it would be just and equitable to make an order altering the existing property rights of the parties as proposed by the wife given the overall circumstances of the case.
Section 79(4) of the Act provides the mechanics of how a Court is to make an order altering marital property interests. It sets out seven matters to be considered as relevant. For the purposes of these reasons, the Court refers to the wife’s Trial affidavit in relation to the issue of contributions and future needs.
It is the wife’s case that at the commencement of the relationship she had assets of a modest value comprising a fully-furnished home, a motor vehicle and modest savings.[4] The wife estimates the combined value of her assets at the commencement of the relationship at $8,000 with there being no liabilities or other credit card debts.
[4] See the Affidavit of the wife filed 1 February 2023 at page 9.
The wife deposes in her Trial affidavit that the husband had no furniture, no motor vehicle nor any assets of significance at the commencement of the relationship.[5]
[5] Ibid at paragraph 50.
Under the heading ‘My Contributions during the Relationship’ of her Trial affidavit, the wife sets out the history of her engagement in employment up and until the wife took maternity leave upon the birth of the parties’ two subject children.[6] Paragraph 58 of her Trial affidavit sets out a list of her taxable income for each year, which was obtained through the use of a ‘MyGov account’.
[6] Ibid at page 10.
Under the heading of ‘The Respondent’s Direct Contributions’, the wife sets out that the husband had been engaged in full-time work with Employer K for a period of 12 years before transferring his employment to Employer L.[7] To the best of the wife’s knowledge, the husband had not worked since separation when he allegedly lost his employment due to drug use.
[7] Ibid from paragraph 59.
Under the heading of ‘My Contributions Post Separation’, the wife sets out with particular detail the arrangements made by her for the payment of joint liabilities following separation.[8] It is the wife’s case that the husband’s illicit drug use and his consequent behaviour resulted in liabilities arising of which she was unaware as to the full particulars until the parties had separated for the final time. Paragraph 64 of her Trial affidavit sets out that at the time of separation:
(1)The ANZ home loan had been overdrawn by more than $8,000. The wife deposes that she was unaware that the facility had been overdrawn as she had been meeting her share of the repayments to the husband for him to pay the loan down. The wife is unaware as to where her contributions were then applied;
(2)The unpaid council rates totalled $7,000 as at 2018;
(3)Unpaid water and gas bills totalling $3,000 as at 2018,
(4)A joint ANZ credit card which was “maxed out” with a balance of $8,000; and
(5) A CBA credit card in the wife’s name but which was used by the husband which was “maxed out” with a balance of $5,000.
[8] Ibid at page 12.
Paragraph 65 of the wife’s Trial affidavit sets out that the wife was required to negotiate a payment plan with both the local council and the ANZ Bank to ensure that the wife was able to retain the B Street, Town C property where she was residing. In 2021 the wife obtained a debt consolidation loan of $25,000 which then paid out the joint liabilities referred to above. The wife has paid that loan since separation without any assistance by the husband.
In addition the wife refers in her Trial affidavit to having to repair damage inflicted by the adult children of the relationship, who according to the wife caused the damage intentionally as an act of “teenage rebellion and a misguided belief” that the wife should have remained married to the husband despite his drug use.[9] The damage described included holes into the walls, damaged fittings and stains to the wall and flooring.
[9] Ibid at paragraph 68.
In the 12 month period prior to the filing of the wife’s Trial affidavit the wife sets out in paragraph 71 extensive works that have been undertaken by her to repair and improve the B Street, Town C property with her current partner. Those costs have been met fully by the wife, in addition to meeting the full cost of all joint liabilities at separation.
In relation to the wife’s non-financial contributions, the Court refers to paragraph 75 onward of the wife’s Trial affidavit, which sets out that during the relationship she undertook the majority of domestic chores and parenting of the children whilst they were young.
Post separation it is evident that the children lived with the wife before eventually moving to reside with the husband. It is the wife’s case, which the Court accepts in the absence of evidence to the contrary, that post separation she did not receive any financial support for the care of the children.
In relation to Section 75(2) factors, the wife deposes that she is now 43 years of age. The wife is in a de-facto relationship with a Mr M. He is employed as a tradesman. The relationship has resulted in the birth of a young child, N. Only very recently the wife has returned to work and is now receiving a slightly modified income to that as set out in her financial statement.
It was the wife’s evidence-in-chief that she is now working three shifts per week with a gross income of $715.05 per week. With the wife only very recently returning to work, this will necessarily involve N attending childcare.
Until recently the position in respect of the process to be applied for the resolution of matrimonial property cases was said to be well-settled as it required the application of a “preferred approach”. This approach entailed a ‘Four Step Process’ which has been described by the Full Court as follows:
(1)Identification and valuation of the property of the parties;
(2)Identification and a valuation of contributions to the property, including property no longer owned by the parties;
(3)Identification and assessment of the various matters in section 79(4)(d) to (g), including the extent to which they are relevant, the matters in section 75(2) the prospect of needs phase; and
(4)Considerations of justice and equity.[10]
[10] In the Marriage of Hickey (2003) 30 FamLR 355, Bevan & Bevan [2013] FamCAFC 116.
The general applicability of the Four Step Process has been recast to some extent in light of the High Court decision of Stanford& Stanford.[11] In that case the majority held that:
It will be recalled that section 79(2) provides that “[t]the 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 subsections are not to be conflated. In every case in which a property settlement order under section 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. It is not possible to chart its metes and bounds.[12]
[11] (2012) 247 CLR 108.
[12] Ibid at [35] and [36].
Accordingly, considerations of what is just and equitable flavour all applications pertaining to property settlement. What is fair is impossible to define with certitude and will, of course, depend on the prevailing circumstances of each case. It is impossible to define what is or is not a just and equitable outcome in isolation. Care must be taken to avoid conflating the stipulation contained in section 79(2) with the discretionary exercise contained in section 79(4). The first consideration now for the Court is whether it is just and equitable to make any order adjusting proprietary interests in this case.
In the decision of Stanford& Stanford,[13] the High Court indicated that in the vast majority of matrimonial property cases the requirements of section 79(2) will be readily satisfied largely as a result of the consideration of the circumstances of the parties concerned, particularly the nature of their separation. The majority said as follows:
In many cases where an application is made for property settlement the just and equitable requirement is readily satisfied by observing that, as a result of the choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and the wife. No less importantly the express and implicit assumptions that underpin the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship and the assumption that any adjustment to those interests could be affected consensually as needed or desired is brought to an end. Hence, it will be just and equitable that the Court make a property settlement order. What order, if any, should then be made is determined by applying section 79(4).[14]
[13] (2012) 247 CLR 108.
[14] Ibid at [42].
In this case, the Court is satisfied that it is appropriate and just and equitable to adjust the parties’ property. It accords with the principles of justice and equity, particularly in the circumstances of this case that there be an adjustment of property given that the husband has failed to participate in these proceedings. The Court is entitled to consider the wife’s application, in the absence of any material by the husband.
As a consequence of Stanford& Stanford,[15] it has been said that the four step process has a holistic flavour to it. In Watson & Ling,[16] Justice Murphy stated:
As a result of those matters, the Court’s approach to s 79/s 90SM may be less compartmentalised than what a strict or unthinking adherence to four (or three) “steps” might otherwise reveal. The task is essentially holistic; is it just and equitable in the particular circumstances of the particular relationship or marriage under consideration to make an order and, if so, its terms must similarly meet that criteria. Of course, holistic though the approach is, it must be referenced to what the Act requires and care must be taken to ensure that the Court’s reasons make that clear. (See, for example, Davut & Raif (1994) FLC 92-503 at 81,237).[17]
[15] Ibid.
[16] [2017] FamCA 57.
[17] Ibid at [13] (Murphy J).
I have also had reference to the Full Court decision of Jabour& Jabour,[18] where the Full Court directs the Court to consider the myriad of contributions made by each of the parties during their relationship in determining what orders should be made as being just and equitable.
[18] [2019] FamCAFC 78.
What is clear is that the Court’s overwhelming and preeminent obligation is to deliver a just and equitable outcome in the case by a thorough analysis of all relevant aspects of the evidence available to it.
CONTRIBUTIONS & NEEDS
I have already set out in these reasons, the contributions made by each of the parties, which have been described as a holistic exercise.
The Court accepts the wife’s evidence that she made a greater initial contribution than the husband at the commencement of the relationship, albeit it was in the scheme of things a relatively modest initial contribution, but nonetheless one that needs to be considered by the Court.
The Court accepts the wife’s evidence that both parties made financial and non-financial contributions to the relationship up and until the time that the husband’s illicit drug usage impacted on his capacity not only to engage in employment but also to prioritise the wife and the children in the relationship.
And, thirdly, the Court accepts the wife has had a considerable burden post-separation in relation to maintaining the former matrimonial home and also taking on all of the joint liabilities incurred during the course of the relationship, but with most of those liabilities having been incurred without the wife’s knowledge or consent.
The prospective needs of the parties are that as the wife now works in part-time employment and also remaining as a caregiver to her new child, N.
The wife has re-partnered and the financial circumstances as they relate to her new partner are identified in the wife’s Financial Statement at ‘Part E’, whereby the wife deposes that her new partner, Mr M, brings home an average gross weekly income of $1,200 per week.
REVISED ASSET POOL
The wife sets out in her revised balance sheet dated 6 March 2023, the assets that the wife considers should be brought to account at this final hearing. The assets and liabilities below are taken directly from ‘Exhibit W2’, the revised balance sheet dated 6 March 2023, noting that the Court intends to adopt a slightly different balance sheet for the purposes of making orders that the Court considers to be just and equitable as between the parties.
Asset / Liability Current Value B Street, Town C SA $340,000.00 ANZ Home Loan (Joint) -$215,181.73 Motor Vehicle 1 (W) $2,000.00 CBA Savings Account (W) $3,404.65 CBA Complete Access Account $274.29 Household Contents (Joint) $2,000.00 CBA - Personal Loan -$18,609.47 ANZ Bank – Credit Card (W) $0 CBA – Credit Card (W) -$876.67 Outstanding Council Rates $0 Unpaid water & gas accounts $0 Super Fund 1 (W) $89,466.26 Superannuation (H) $86,046.00 Legal fees – Scale (W) -$18,530.61 $269,992.72
In the circumstances of this case, the Court is proposing to rely on a different asset pool to that promoted by the wife. The Court finds that the assets are as follows:
Assets Current Value B Street, Town C SA $340,000 Motor Vehicle 1 (W) $2,000 Furniture and effects (W) $1,000 Furniture and effects (H) $1,000 $344,000
I decline to add into the asset pool the wife’s personal savings as identified in the CBA Savings Account and the CBA Complete Access Account in the absence of any evidence from the husband as to his personal savings. To do otherwise, in my view, would be prejudicial to the wife in circumstances where the husband has failed to put any evidence before the Court. Accordingly, I decline to bring to account the wife’s post-separation savings as identified in her CBA Savings Account and her CBA Complete Access Account.
For the purposes of the revised balance sheet, I bring to account the following liabilities:
Liabilities Current Value ANZ Home Loan $215,181 CBA Personal Loan (W) $24,000 $239,181
In bringing to account those figures, the Court observes the following contributions made by the wife post separation:
(1)The wife’s Trial affidavit sets out that at the date of separation the mortgage balance was $233,675. The wife has, therefore, paid down in excess of $15,000 towards the reduction of the ANZ home loan.
(2)The wife has paid all of the joint liabilities through the consolidation of those debts with the use of a CBA personal loan, which previously had been $24,000. At the time of Trial, the CBA personal loan had been reduced to $18,604. In circumstances where the wife has been paying joint debt on behalf of each of the parties, such debt was incurred without the wife’s knowledge or consent, I propose to include the CBA personal loan at the full amount of $24,000.
Therefore, the total liabilities were $239,181. The net total of the asset pool excluding superannuation is $104,819.
In determining what orders to make under Section 117 of the Act, the Court is not required to undertake a precise mathematical exercise but rather to consider the competing claims and relevant considerations broadly, though fairly. In the Marriage of Hayne,[19] it was held:
In matters such as this one cannot approach the problem with an eye for meticulous detail. It should rather be dealt with broadly so that the end result can be said to be just and equitable.[20]
[19] (1977) FLC 90-265 (Pawley J).
[20] Ibid at 76, 415.
In addition, the Full Court has emphasised that it is ultimately the actual value of the property that each party is to receive and not the percentage that is important.[21]
[21] In the Marriage of Russell [1999] FamCA 1875, In the Marriage of Phillips [2002] FamCA 350.
CONCLUSION
The Court finds for the Reasons set out in this Judgment that it is just and equitable to make an adjustment in favour of the wife of 81 per cent of the net non-superannuation asset pool and with the balance to the husband. That would result in the following:
·A gross asset pool of $344,000;
·Gross liabilities of $239,181; and
·A net total of $104,819; and
·The husband to retain assets of $1,000.
Based on those calculations, the husband will receive a settlement sum of $18,915, in addition to retaining the $1000 in furniture and effects as set out in the balance sheet above.
Superannuation
Each of the parties have superannuation of a not dissimilar amount.
The wife had proposed at Trial, that there be a one pool approach adopted and that the parties’ superannuation entitlements be included in the balance sheet as assets.
Whilst the Court accepts the one pool approach is available,[22] the Court declines to adopt the approach sought by the wife. The parties are a long way from retirement and the superannuation would be considered as a resource available to them. The parties shall each retain their respective superannuation entitlements without adjustment.
[22] Norbis & Norbis [1983] FamCA 47.
THE WIFE’S APPLICATION FOR COSTS
The Court is also asked to consider today the wife’s costs application. At Trial, the wife owes costs to her solicitor and counsel of $18,530.61 (on scale).
Section 117 of the Act provides that:
Subject to certain other sections each party to proceedings under the Act shall bear his or her own costs.
Section 117(2) provides that:
If in proceedings under this Act the Court is of the opinion that there are circumstances that are justified in doing so the Court may –
And the relevant section for this purpose if section 117(2A) of the Act and the applicable Rules of Court:
…make such order as to costs as the Court considers just.
In considering section 117(2A) and whether or not such order should be made the Court is directed to have regard to the following:
(a) The financial circumstances of each of the parties to the proceedings.
The husband has failed to put any evidence before the Court as to his financial circumstances. The wife earns a modest income supplemented by that of her partner, but it could not be said that the wife and her partner are high income earners.
(b) Whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
Not relevant.
(c) The conduct of the parties to the proceedings in relation to the proceedings, including the conduct of the parties in relation to pleadings, discovery, directions, production of documents and similar matters.
This is a relevant section given that the husband has failed to engage in these proceedings since they commenced. The facts of this case are straightforward. It should not have been necessary for the wife to go to the expense of preparing for an undefended hearing.
Undefended property hearings can be more difficult than defended property hearings, because a party still bears the onus of persuading the Court that the orders promoted are just and equitable.
(d) Whether the proceedings were necessitated by the failure of a party to proceedings to comply with previous orders of the Court.
The husband has simply failed to engage and has failed to comply with orders of the Court for the preparation of answering material.
(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings.
Not relevant.
(f) Whether either party to the proceedings has made an offer in writing.
The Court is unaware as to whether or not there have been any offers in writing.
(g) Such other matters as the Court considers not relevant for the purposes of these reasons.
Not relevant.
CONCLUSION
Costs
For the Reasons set out herein, I am satisfied that it is just to make an order for costs as sought by the wife pursuant to section 117(2) of Act in her favour for the amount sought in the sum of $18,530.61.
Bringing to account the wife’s costs and offsetting it against the settlement sum to the husband of $18,915, it results in a settlement sum payable to the husband of $385. In exercising the Court’s discretion, I propose to round down that sum, such that there is to be no further settlement sum paid to the husband and that the husband will thereafter retain as his sole property his furniture and effects in the sum of $1,000 and his superannuation balance of $86,046.
I conclude that for those Reasons, the orders pronounced at the commencement of these Reasons are just and equitable in the circumstances of this case.
I certify that the preceding one hundred and eleven (111) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of Judge Dickson. Associate:
Dated: 6 March 2023
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