Deng & Galinski

Case [2021] FCCA 843

FEDERAL CIRCUIT COURT OF AUSTRALIA

Deng & Galinski [2021] FCCA 843

File number(s): SYC 1120 of 2016
Judgment of: CHIEF JUDGE ALSTERGREN
Date of judgment: 30 April 2021
Catchwords: FAMILY LAW - Property – undefended proceedings – relationship of approximately seven years duration – small asset pool consisting of former matrimonial home – where the applicant wife is not participating in proceedings – where the wife’s former legal representatives are joined as an intervener seeking payment of wife’s outstanding legal fees – where the respondent husband seeks that the wife’s application under s 79 be dismissed– assessment of contributions and considerations of justice and equity required - order for property division under s 79 made – order for payment to intervener for outstanding legal fees – no order as to costs
Legislation:

Family Law Act1975 (Cth) ss 75, 79, 81

Legal Profession Uniform Law (NSW) s 180

Federal Circuit Court Rules 2001 (Cth)

Cases cited:

 Bevan & Bevan [2013] FamCAFC 116

Chapman & Chapman [2014] FamCAFC 91

NHC & RHC [2004] FamCA 633

Farnell & Farnell (1996) FLC 92-681

Ferraro & Ferraro [1992] FamCA 64

Kennon v Kennon [1997] FamCA 27

Mallet v Mallet (1984) 156 CLR 605

AJO & GRO [2005] FamCA 195

Ryland & Ryland and Anor [2018] FamCA 134

Stanford v Stanford  (2012) 247 CLR 108

GS & TS [2005] FamCA 40

Zdravkovic & Zdravkovic [1982] FamCA 23

Number of paragraphs: 136
Date of hearing: 14 August 2020, 17 December 2020, 3 March 2021, 26 March 2021
Place: Melbourne
Counsel for the Respondent: Mr Apelbaum
Solicitor for the Respondent: Stojanovic Solicitors
Solicitor for the Intervener: Marsdens Law Group

ORDERS

SYC 1120 of 2016
BETWEEN:

MS DENG

Applicant
AND:

MR GALINSKI

Respondent  
AND:

MARSDENS LAW GROUP

Intervener

ORDER MADE BY:

CHIEF JUDGE ALSTERGREN

DATE OF ORDER:

30 APRIL 2021

THE COURT ORDERS THAT:

1.There be an alteration of property interests between the wife and the husband pursuant to s 79 of the Family Law Act 1975 (Cth).

2.Within sixty days of the date of these orders the Respondent pay to the Applicant the sum of $90,200 by way of property settlement as follows:

(a)$70,200 directly to the Applicant; and

(b)$20,000 directly to the Intervener on behalf of the Applicant by way of repayment of the Applicant’s outstanding legal fees.

3.The Respondent be declared to have the sole right, title and interest in the former matrimonial home.

4.The Respondent be declared to have the sole right, title and interest in all other real and personal property now in his possession, custody or control.

5.The Applicant be declared to have the sole right, title and interest in all other real and personal property now in her possession, custody or control.

6.In the event that the Respondent fails to comply with order 2 above, the Respondent do all acts and things necessary including executing all documents necessary to cause the former matrimonial home to be sold at the earliest possible date at a price to be agreed upon between the…

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AGLC
Deng & Galinski [2021] FCCA 843
Case
[2021] FCCA 843
Decision Date

CaseChat Overview and Summary

This matter concerned an application for alteration of property interests between Ms Deng (the Applicant wife) and Mr Galinski (the Respondent husband), with an intervention by Marsdens Law Group concerning legal fees. The proceedings were before Chief Judge Alstergren.

The court was required to determine the appropriate division of the parties' property interests pursuant to section 79 of the *Family Law Act 1975* (Cth), considering the contributions of each party and their future needs, and to address the intervener's claim for outstanding legal fees. A key issue was whether to proceed on an undefended basis due to the wife's non-attendance at previous hearings.

The court applied the four-step process for property division, involving identification of net assets, assessment of financial and non-financial contributions, consideration of section 75(2) factors, and a holistic assessment of whether the proposed orders were just and equitable. Despite the wife's lack of participation since March 2020, the court found that dismissing her application for want of prosecution would not be just and equitable. The court noted the wife's limited financial resources and employment skills, and the husband's sole responsibility for the child's expenses. Ultimately, the court determined a 10% / 90% division of the net asset pool of $902,000 in favour of the husband was just and equitable, reflecting the parties' respective contributions and future needs.

The court ordered an alteration of property interests, requiring the Respondent to pay the Applicant $90,200 within sixty days, with $70,200 to the Applicant directly and $20,000 to the Intervener for the Applicant's legal fees. The Respondent was declared to have sole title to the former matrimonial home and all other real and personal property in his possession, while the Applicant was declared to have sole title to all other real and personal property in her possession. Provisions were made for the sale of the former matrimonial home if the Respondent failed to comply with the payment order, with specific disbursement priorities. The Registrar was appointed to execute necessary documents if either party failed to do so, and all other extant applications were dismissed with no order as to costs.

Orders

Orders of the court

SYC 1120 of 2016

BETWEEN:

MS DENG

Applicant

AND:

MR GALINSKI

Respondent

AND:

MARSDENS LAW GROUP

Intervener

ORDER MADE BY:

CHIEF JUDGE ALSTERGREN

DATE OF ORDER:

30 APRIL 2021

THE COURT ORDERS THAT:

1. There be an alteration of property interests between the wife and the husband pursuant to s 79 of the Family Law Act 1975 (Cth).

2. Within sixty days of the date of these orders the Respondent pay to the Applicant the sum of $90,200 by way of property settlement as follows:

(a) $70,200 directly to the Applicant; and

(b) $20,000 directly to the Intervener on behalf of the Applicant by way of repayment of the Applicant’s outstanding legal fees.

3. The Respondent be declared to have the sole right, title and interest in the former matrimonial home.

4. The Respondent be declared to have the sole right, title and interest in all other real and personal property now in his possession, custody or control.

5. The Applicant be declared to have the sole right, title and interest in all other real and personal property now in her possession, custody or control.

6. In the event that the Respondent fails to comply with order 2 above, the Respondent do all acts and things necessary including executing all documents necessary to cause the former matrimonial home to be sold at the earliest possible date at a price to be agreed upon between the parties and failing such agreement at a price to be determined by the President of the Real Estate Institute of New South Wales or his/her nominee and to disburse the proceeds of sale in the following priority:

(a) Payment of agent’s commission and advertising expenses and legal expenses of the sale;

(b) Payment of costs incurred, if any, in relation to determination of value or selling price by the President of the Real Estate Institute of New South Wales or his/her nominee;

(c) The balance then remaining to be divided as to:

A. A sum of $70,200 to the Applicant;

B. A sum of $20,000 to the Intervener; and

C. The balance remaining to the Respondent.

7. In the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.

8. All extant applications be otherwise dismissed.

9. There be no order as to costs.

AND THE COURT NOTES THAT:

(A) Pursuant to r 16.05(2)(a) of the Federal Circuit Court Rules 2001 (Cth), the Court may vary or set aside a judgment or order made in the absence of a party.

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.

Background

Background to the litigation

It is appropriate to first deal with the application of property division as between the wife and husband, and then address the intervener’s application. BACKGROUNDHistory of relationship The wife and husband were in a seven-year relationship. They met in 2008, lived together briefly in 2008 when the wife visited the husband in Australia from Country B, and commenced cohabitation in 2009. The parties married in Australia in 2009 and separated on 4 January 2016 when the wife left the former matrimonial home. They are not yet divorced. There is one child of the relationship born in 2010 and currently aged ten. The child lives with the husband and spends time with the wife as agreed between the parties, although he has not spent time with the wife often since separation. There are disputed allegations of family violence by each party. While this evidence cannot be tested, it is evident that there was marital discord between the parties.Undefended nature of these proceedings The wife has not participated in these proceedings since 20 March 2020 when she filed an updated Notice of Address for Service to notify the Court that she became self-represented. The wife has not appeared at the court hearings heard on 16 March 2020, 11 June 2020, 22 July 2020, 14 August 2020, 17 December 2020, 3 March 2021, and 26 March 2021. On 16 March 2020, the Court ordered that the matter may proceed to final hearing on an undefended basis should the wife not attend on the next occasion. A further order was made that the independent children’s lawyer serve a copy of those orders on the wife. The matter was next listed on 11 June 2020 for a mention hearing. The wife did not appear although she was emailed the Microsoft Teams invitation link to appear electronically. The email sent to the wife bounced back to the Court. The Court also called the wife by telephone three times during the hearing and there was no response. The Court ordered that the wife attend by electronic means or in person at the next court event, and should she fail to do so, the parenting proceedings may proceed on an undefended basis. The Court further ordered the husband’s solicitor to file and serve upon the wife a minute of precise orders sought by the husband, any supporting affidavit, and a copy of the orders made that day. The husband complied with these orders and filed an affidavit of service on 16 July 2020 evidencing service by hand at the wife’s last known address. On 22 July 2020, there was again no appearance by or for the wife, and, after considering the supporting material and having heard submissions from the independent children’s lawyer and Counsel for the father that the proposed orders were in the best interests of the child, final parenting orders were made on an undefended basis by consent of the husband and the independent children’s lawyer. The property aspect was adjourned and orders were made that the solicitor for the husband personally serve on the wife the orders of that day, a further copy of his Amended Response, and a letter outlining the precise final orders sought and notifying the wife that if she fails to attend on 14 August 2020 those orders may be made in her absence. The intervener was ordered to personally serve on the wife a letter notifying the wife of the next court date, and detailing the amount of outstanding legal fees sought.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

There is no evidence before the Court that either party has re-partnered or is co-habiting with another person. Conclusions The wife’s lack of financial resources and lack of employment skills are a concern to the Court, and her future needs are greater in this respect. On the other hand, the husband has no future employment capacity, in his chosen occupation, and he will continue to meet all expenses for the child of the relationship for the foreseeable future, with potentially no assistance from the wife. His future needs are therefore greater in this respect. In these circumstances I do not consider it appropriate to make any adjustment in favour of either party under s 75(2) of the Act. OVERVIEW - WHAT DIVISION IS JUST AND EQUITABLE? I am not satisfied that an order dismissing the wife’s application for want of prosecution, as sought by the husband, would be just and equitable, for the reasons stated above. Likewise, I am not prepared to make orders pursuant to the Minute of Consent Orders submitted by the husband and intervener on 3 March 2020. In a net asset pool of $902,000, the sum awarded to the wife pursuant to those proposed orders equates to just over 2% of the asset pool, and the entirety of that sum would be paid to the intervener. Based on the material before the Court, this outcome would leave the wife with effectively no assets, and is a significantly smaller proportion of the asset pool being awarded to the wife than originally contemplated in the orders sought by either of the parties in the Initiating Application and Amended Response. In light of the length of the relationship, the parties’ respective contributions, and the parties’ future needs as canvassed above, I consider that such an order would be fundamentally unfair to the wife. It is evident that the wife made indirect financial contributions to the former matrimonial home, as well as contributions to the welfare of the family, whilst the husband brought in the one significant asset of the relationship and has made far greater post-separation parenting contributions. Although the husband has changed his position regarding the property division he seeks, his evidence regarding the parties’ respective contributions remains the same in his most recent affidavit sworn 11 February 2021, as in his affidavit sworn 17 May 2016 at the commencement of these proceedings when he proposed provision of $122,500 (being 14.45% of the then-asset pool) to the wife. The most significant difference between the parties’ contributions now and when these proceedings commenced, are the greater post-separation parenting contributions by the husband in the past six or so years. Based on the evidence before the Court, in my view it is just and equitable that there be a 10% / 90% division of the property pool in favour of the husband. This equates to a sum of $811,800 to the husband and $90,200 to the wife. Although an order for 10% or less of the property pool in favour of a spousal party is not common under s 79, this division is supported by case authority where such an order was made where one spousal party made significantly lower contributions than the other party, as in this case.[36][36] See for example GS & TS (2005) FLC 93-213; Kennon v Kennon ([1997] FamCA 27.

Ratio Decidendi

Legal Principle Established

Section 79 of the Act relevantly provides the principles the Court is required to consider when asked to determine property disputes:79Alteration of property interests(1)In property settlement proceedings, the court may make such order as it considers appropriate:(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them — altering the interests of the parties to the marriage in the property; or(b)…including:(c)… (d) an order requiring:(i) either or both of the parties to the marriage; or(ii) … to make, for the benefit of either or both of the parties to the marriage … such settlement or transfer of property as the court determines.…(2)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.(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage … to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage … to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and(e)the matters referred to in subsection 75(2) so far as they are relevant; and(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage. As the Full Court has iterated on a number of occasions, this is broadly speaking a four-step process involving:[2](a)Identification of the parties’ net assets and liabilities at the date of trial; (b)Assessment of the financial and non-financial contributions made by the parties pursuant to s 79(4)(a) - (c) of the Act;(c)Consideration of s 75(2) factors; and(d)Undertaking a holistic overview in considering whether the proposed orders are just and equitable. [2] AJO & GRO [2005] FamCA 195 at [46] citing Ferraro & Ferraro (1993) FLC 92-335 at 79,560.