Doyle and Bayliss
[2016] FCCA 1055
•19 May 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DOYLE & BAYLISS | [2016] FCCA 1055 |
| Catchwords: FAMILY LAW – Property – Maintenance – short de facto relationship – litigation guardians – contributions – de facto husband’s mental health. |
| Legislation: Family Law Act 1975, ss.4AA, 72, 74, 75, 79, 90SE, 90SF, 90SM, 90ST |
| Beck & Beck (1982) FLC 91-235 Stanford v Stanford (2012) FLC 93-518; (2013) 293 ALR 70 |
| Applicant: | MR DOYLE (BY HIS LITIGATION GUARDIAN MS LENNARD) |
| Respondent: | MS BAYLISS (BY HER LITIGATION GUARDIAN MR DIGBY) |
| File Number: | MLC 764 of 2014 |
| Judgment of: | Judge Roberts |
| Hearing dates: | 10 and 11 August 2015 |
| Date of Last Submission: | 11 August 2015 |
| Delivered at: | Launceston |
| Delivered on: | 19 May 2016 |
REPRESENTATION
| The Applicant’s Litigation Guardian appeared unrepresented |
| Counsel for the Respondent’s Litigation Guardian: | Mr McIvor |
| Solicitors for the Respondent’s Litigation Guardian: | Gadens Lawyers |
ORDERS
That the funds held to the credit of MR DOYLE and MS BAYLISS in (omitted) Bank Account No. (omitted) be distributed:
(a)Firstly, by paying ONE HUNDRED THOUSAND DOLLARS ($100,000) to MR DOYLE; and
(b)Secondly, by paying the remaining balance to MS BAYLISS.
That unless otherwise specified in these Orders:
(a)each party is solely entitled to the exclusion of the other to all other property in possession of that party as at the date of these Orders;
(b)any claim that either party may have to any superannuation benefit belonging to or earned by the other is extinguished;
(c)all insurance policies become the sole property of the person in whose name the policy stands as owner;
(d)each party will be solely liable for and must indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders; and
(e)any joint tenancy of the parties in property is hereby expressly severed.
That these Orders are intended to finally determine the financial relationships between MR DOYLE and MS BAYLISS and avoid further proceedings between them.
That all extant Applications are otherwise dismissed and the matter is removed from the list.
IT IS NOTED that publication of this judgment under the pseudonym Doyle & Bayliss is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 764 of 2014
| MR DOYLE (BY HIS LITIGATION GUARDIAN MS LENNARD) |
Applicant
And
| MS BAYLISS (BY HER LITIGATION GUARDIAN MR DIGBY) |
Respondent
REASONS FOR JUDGMENT
Introduction
The Applicant is MR DOYLE (“Mr Doyle”) and the Respondent is MS BAYLISS (“Ms Bayliss”). Their dispute is in relation to financial matters under Part VIIIAB of the Family Law Act 1975, arising out of their de facto marriage relationship.
The conduct of the proceedings
Mr Doyle commenced these proceedings by filing an Initiating Application on 31 January 2014, seeking orders for:
·Ms Bayliss to pay him maintenance at the rate of $500 per week;
·the payment out to him of all funds standing to the credit of the parties in a joint (omitted) Bank account into which funds had been placed following the sale of a property at Property M (“the invested funds”);
·a payment to him by Ms Bayliss of a further sum of $85,000; and
·the parties to otherwise each retain their own property.
Ms Bayliss filed a Response on 12 March 2014. She sought the dismissal of Mr Doyle’s application for maintenance and sought to particularise her property claim at a later time after discovery.
The matter came before Judge Connolly on 13 March 2014 and a number of Consent Orders were made. The matter was set down for hearing in September 2014. However, when the matter came before the Court in September 2014 it was adjourned for further mention in December 2014.
On 1 December 2014 the matter was set down for final hearing before me in Melbourne on 10 August 2015. At that time, Orders were also made by consent appointing Ms Lennard (“Ms Lennard”) as Litigation Guardian for Mr Doyle and Mr Digby (“Mr Digby”) as Litigation Guardian for Ms Bayliss. At that time the Court had the benefit of a psychiatrist’s affidavit in relation to Mr Doyle’s mental health.
Six days before the final hearing Ms Lennard filed an Application in a Case seeking orders that:
·she be removed from her position as Litigation Guardian;
·Mr Doyle “have standing before the court”; and
·that she be a witness for Mr Doyle.
That Application in a Case and two supporting affidavits were not served upon the Respondent’s lawyers until the first day of the hearing.
When the matter came on for hearing on 10 August 2016, Ms Lennard was not represented by a lawyer. Counsel appeared for Mr Digby.
I dismissed the Application in a Case to remove Ms Lennard from her position as Litigation Guardian, primarily because she was appointed on the basis of psychiatric evidence and no psychiatric evidence was available in support of her removal.
At the start of the hearing Ms Lennard also misguidedly sought leave to file an “application for contempt” because she alleged that Mr Digby had not told the truth in his affidavit. I indicated to her that I would not grant leave for the filing of that application.
In relation to the substantive matter, Ms Lennard appeared at the start of the hearing to be seeking orders that were essentially the same as those set out in paragraph 2 above. However, she filed a Case Summary on the first day of the hearing which purported to seek orders for:
·maintenance of $300 per week;
·all the funds in the (omitted) Bank account to be paid to Mr Doyle (approximately $128,000);
·Ms Bayliss to pay Mr Doyle an additional $85,000; and
·a superannuation split of 79% in favour of Mr Doyle and 21% to Ms Bayliss.
On the second day she confirmed that Mr Doyle’s claim for maintenance was reduced to $300 per week as set out in the Case Summary, but sought that in a lump sum of $15,600 (being $300 per week for a year) but did not pursue a superannuation splitting order. It would appear that the claim for a superannuation split as set out in the Case Summary had been a mistake because Ms Lennard’s tooth had been playing up.[1]
[1] See pages 56 to 60 of the transcript.
In her closing submissions, Ms Lennard appeared to abandon the claim for an additional payment of $85,000.[2]
[2] See pages 78 to 80 of the transcript
Orders being sought on behalf of Ms Bayliss were:
·that $50,000 be paid from the (omitted) Bank account to Ms Bayliss and the balance be paid to Mr Doyle;
·that the parties otherwise retain all property in their respective possession (including superannuation); and
·that Mr Doyle’s application for maintenance be dismissed.
On the second day of the hearing, Counsel for Mr Digby made an open offer reducing the sum to be paid to Ms Bayliss from the (omitted) Bank account from $50,000 to $38,000. That open offer was not accepted.
The evidence
At the start of the hearing Counsel for Mr Digby, Mr McIvor, submitted that because both Litigation Guardians were essentially repeating the parties’ evidence and were not able to give direct evidence in relation to the matters themselves, the Court should rely upon:
·those matters that are agreed in the affidavits filed by Mr Doyle and Ms Bayliss on 31 January 2014 and 12 March 2014 respectively;[3] or
·where the parties are in dispute, the version that is supported by independent documentary evidence.[4]
[3] I will refer to those affidavits in these reasons as “Mr Doyle’s affidavit” and “Ms Bayliss’ affidavit”.
[4] See page 15 of the transcript
I agree with that submission. It is quite clear that, in addition to the general hearsay nature of most of the evidence in the affidavits of both Ms Lennard and Mr Digby, much of the “evidence” in Ms Lennard’s voluminous affidavit filed 17 July 2015 (“Ms Lennard’s affidavit”) is also inadmissible because she is not qualified to give that evidence. [5] For example, she purports to give evidence about medical matters but she does not have any medical expertise. I also comment that much of the “evidence” about Mr Doyle’s medical conditions is somewhat bizarre, but I will refer further to that below.
[5] Ms Lennard’s affidavit comprises 31 pages of affidavit and 289 pages of annexures
I specifically reject the belated attempts by Ms Lennard to establish that the parties’ de facto relationship commenced in June 2007 and ended in November 2012.[6] That was not the stated position of either party in their own affidavits filed at the start of the proceedings and I note that at that time both parties were represented by law firms well-known in Melbourne for their expertise in Family Law.
[6] Concluding at paragraph 65.3 of Ms Lennard’s affidavit filed 17 July 2015
Brief background
Where I refer to any fact in these Reasons, it should be regarded as a finding of fact unless a contrary intention is clear from the context.
There is some dispute between the parties about when their de facto marriage relationship commenced. Mr Doyle said in the affidavit filed when he commenced these proceedings that he “commenced a de facto relationship” with Ms Bayliss in April 2009,[7] but he conceded that they did not start living together in Ms Bayliss’ residence until August 2009.[8] Ms Bayliss also says that they started living together in August 2009.[9]
[7] Paragraph 2 of Mr Doyle’s affidavit
[8] Paragraph 15 of his affidavit
[9] Paragraph 7 of Ms Bayliss’ affidavit
Subsection 4AA(1) of the Family Law Act 1975 refers to “a couple living together on a genuine domestic basis”. As mentioned in the paragraph above both parties say that their “living together” in Ms Bayliss’ residence did not start before August 2009. They clearly had a relationship prior to that, but I am satisfied that it was not a de facto relationship. Subsection 4AA(2) refers inter alia to “the degree of mutual commitment to a shared life” and I have no evidence that there was a mutual commitment to a shared life before Mr Doyle moved into Ms Bayliss’ residence. Consequently, I conclude that their de facto relationship commenced in August 2009.
Mr Doyle and Ms Bayliss agree that they separated in February 2012,[10] so their de facto relationship lasted for approximately two and a half years.
[10] Paragraph 3 of Mr Doyle’s affidavit and paragraph 7 of Ms Bayliss’ affidavit.
Mr Doyle had sold a property at Property S (“the Property S property”) shortly prior to the start of their cohabitation. His evidence is that he cleared $199,335 from that sale but he also states that his solicitors retained $20,000 to meet costs in relation to family law matters between himself and his former wife.[11] Mr Doyle subsequently received a further payment of $39,000 from his former wife and his solicitors also refunded approximately $4,780 to him.[12]
[11] See paragraph 18 of Mr Doyle’s affidavit.
[12] See paragraph 29 of Mr Doyle’s affidavit.
The sale by Mr Doyle of the Property S property triggered a Capital Gains Tax liability for him. He subsequently received an assessment of $46,901, and he says that it “principally arose from the capital gains tax payable on the sale of the Property S property during the financial year ended 30 June 2009”.[13] I will refer to that further below.
[13] At paragraph 42 of his affidavit
The parties purchased a block of land in Property M for $617,500 at around the time that they started living together (“the block”). Neither party has provided me with a settlement statement in relation to the purchase of the block but it is clear from the (omitted) Bank statement attached to Ms Bayliss’ affidavit[14] (“the mortgage statement”) that the (omitted) Bank also advanced funds on 9 and 12 November 2009 to enable them to pay stamp duty and other charges amounting to $33,666. It is therefore clear that the total cost of the block was $651,166.
[14] Annexure “B1”
Mr Doyle initially contributed more than $100,000 towards the purchase of the block. The parties are not in agreement about the exact amount that he contributed initially but I will refer to that further below. However, it is agreed that Ms Bayliss contributed $50,000,[15] and the balance was borrowed from the (omitted) Bank pursuant to a mortgage loan (“the mortgage”).
[15] Paragraph 25 of Mr Doyle’s affidavit and paragraph 16 of Ms Bayliss’ affidavit.
It is agreed that Mr Doyle made further lump sum payments off the mortgage in excess of the regular fortnightly payments required by the mortgagee. I will also refer to those below.
In early 2012 the parties knew that their relationship was not working and that it was likely that they would separate. They decided to sell the block.[16] It was sold for $650,000 in March 2012 and when the sale settled, they realised net proceeds of $254,000. Those funds were invested in a (omitted) Bank account in their joint names (“the invested funds”).
[16] Paragraph 38 of Mr Doyle’s affidavit
A number of payments have been made from the invested funds, as follows:
·In September 2013 the sum of $46,901 was released by agreement from the invested funds to enable Mr Doyle to pay his debt to the Australian Taxation Office, which he says was principally a Capital Gains Tax debt incurred as a consequence of selling the Property S property.
·In September 2013 the parties also agreed to the release of $10,000 to each of them.
·As mentioned above, a number of Orders were made by consent by Judge Connolly on 13 March 2014. They included an Order that the parties do what was necessary to pay $50,000 to Mr Doyle’s solicitors from the invested funds “for the benefit of the husband, the said payment to be part property settlement to the applicant.” That $50,000 was subsequently released from the invested funds.
·When the matter was before Judge Curtain on 1 December 2014, Orders were made setting it down for hearing before me and for a further $10,000 to be released to Mr Doyle “by way of partial property settlement”.
As can be seen from paragraph 29 above, Mr Doyle has had the benefit of $116,901 from the invested funds and Ms Bayliss has had the benefit of $10,000.
I will refer further to the facts of this matter in the light of the legal principles that I must apply.
Relevant law
The law with respect to financial matters relating to de facto relationships is found in Part VIIIAB of the Family Law Act 1975 (“the Act”).
The law in relation to de facto spouse maintenance is governed primarily by sections 90SE and 90SF of the Family Law Act 1975. In essence, they mirror the provisions of sections 72, 74 and 75 (which relate to spouse maintenance applicable to married couples).
It is therefore clear that, following the reasoning in Bevan & Bevan,[17] that to make an award of maintenance requires the following:
a)a threshold finding under subsection 90SF(1);
b)consideration of section 90SE and subsection 90SF(3);
c)no fettering principle that a pre-separation standard of living must be automatically awarded where the Respondent’s means permit; and
d)discretion exercised, with “reasonableness in the circumstances” as the guiding principle.
[17] Bevan & Bevan (1995) FLC 92-600
Subsection 90SF(1) sets out the relevant threshold test. It reads:
In exercising jurisdiction … the court must apply the principle that a party to a de facto relationship must maintain the other party to the de facto relationship:
(a) only to the extent that the first-mentioned party is reasonably able to do so; and
(b) only if the second-mentioned party is unable to support himself or herself adequately whether:
(i) by reason of having the care and control of a child of the de facto relationship who has not attained the age of 18 years; or
(ii) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(iii) for any other adequate reason.
Subsection 90SM(1) provides that in property settlement proceedings after the breakdown of a de facto relationship, the court may make such order as it considers appropriate altering the interests of the parties to the de facto relationship in the property. However, subsection 90SM(3) provides that the court must not make an order under the section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Subsection 90SM(4) states:
In considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) 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 de facto relationship 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 de facto relationship, or a child of the de facto relationship:
(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) 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 de facto relationship or either of them; and
(c) the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, 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 de facto relationship; and
(e) the matters referred to in subsection 90SF(3) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.
Because sections 90SM and 90SF of the Act largely mirror sections 79 and 75 of the Act, it is clear that the approach that courts should take when determining de facto relationship property disputes is essentially the same as that which would apply if the parties had been legally married. Consequently, the Court can have regard to relevant cases decided over the years pursuant to Part VIII of the Act, notwithstanding that Part VIIIAB of the Act only became law in 2009.
Prior to the recent High Court case of Stanford v Stanford,[18] the general approach to the determination of a property settlement application appeared to have been well established by authority as a multi-step process.[19] The steps were said to involve:
a)Firstly, an identification and valuation of the property, liabilities and financial resources of the parties;
b)Secondly, an evaluation of the contributions made by the parties as defined in subsections 79(4) or 90SM(4)of the Act;
c)Thirdly, a consideration of any relevant matters under subsections 75(2) or 90SF(3) of the Act; and
d)Fourthly, before making an order adjusting property interests, being satisfied in all the circumstances that it is just and equitable to do so under subsections 79(2) or 90SM(3).[20]
[18] Stanford v Stanford (2012) FLC 93-518; (2013) 293 ALR 70
[19] See Lee Steere (1985) FLC 91-626; Ferraro (1993) FLC 92-335; Clauson (1995) FLC 92-595, Hickey (2003) FLC 93-143 and C & C (2005) FLC 93-220
[20] Also see Russell v Russell (1999) FLC 92-877
However, in Stanford, at paragraph 37, their Honours French CJ, Hayne, Kiefel and Bell JJ said:
37. First, 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.
In paragraph 40 of Stanford, their Honours went on to say:
40. Third, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”.[21] To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
[21] R v Watson; Ex parte Armstrong [1976] HCA 39; (1976) 136 CLR 248 at 257
In the majority judgment in Bevan & Bevan,[22] Bryant CJ and Thackray J said:
The High Court in Stanford has laid down three “fundamental propositions” which will provide useful guidance to trial judges in approaching the task under s 79. These were recited above, and could be summarised thus:
1. Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2. The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties' interests in the property are or should be different from those determined by common law and equity;
3. A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.[23]
[22] Bevan & Bevan (2013) FLC 93-545
[23] At paragraph 73
However, it is important to note that their Honours said this in paragraph 42 of Stanford:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a 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 wife. No less importantly, the express and implicit assumptions that underpinned 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 made 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 effected consensually as needed or desired is also 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 s 79(4).
This is one of those cases where it will be just and equitable to make a property settlement order because neither party is expecting that there should be any common use of property by the parties. However, it is important to recall that subsection 90SM(4) states that ‘in considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account” the matters listed therein. The specific use of the words “what order (if any)” in the subsection clearly allows the court to make no order altering property interests if that is considered appropriate.
In general, there are two differing ways in which courts can assess the entitlements of the parties to property under the Act. They are the global approach and the asset-by-asset approach. A global approach involves the division of the parties’ assets on a global view of the asset pool, whereas the asset-by-asset approach involves an assessment of the parties’ interests in individual items of property. The High Court has held that either approach is valid.[24]
[24] See Norbis v Norbis (1986) FLC 91-712; (1985-1986) 161 CLR 513.
It is clear that most matters that are resolved by this Court and the Family Court of Australia are dealt with on a global approach. While the asset-by-asset approach may be less commonly used, it can be more useful or more appropriate in some cases. For example, in McMahon and McMahon[25] the Full Court of the Family Court said this:
In our view, the particular circumstances of this case made an asset-by-asset approach preferable to a global approach.
The short duration of and the unhappy nature of the marriage, coupled with the parties’ strict division of assets and their method of dealing with them lent itself to an asset-by-asset approach, particularly where they had separately identified another group of assets as joint.
We are conscious of the remarks of Mason CJ and Deane J in Norbis v Norbis (1986) FLC 91-712 at p 75,168; (1985-1986) 161 CLR 513 at 523, where their Honours indicated that in most cases the global approach is more convenient.
[25] McMahon and McMahon (1995) FLC 92-606 at page 82,043 (Nicholson CJ, Ellis and Buckley JJ)
In this matter, Mr McIvor submitted that:
Given the shortness of the relationship, it’s appropriate, in my submission, to treat this matter on an asset by asset basis rather than the global basis contended by the applicant …[26]
[26] See page 75 of the transcript
Discussion
Notwithstanding that section 90SF comes before section 90SM in the Act, it seems logical to consider the parties’ property entitlements first. That is because any consideration of de facto spouse maintenance will entail a consideration of the “property and financial resources of each of the parties”.
The asset pool
The parties appear to agree that they have the following non-superannuation assets:
Asset His value Her value Ms Bayliss’ residence[27] $325,000 $325,000 Balance of the invested funds[28] $128,235 $128,235 Mr Doyle’s car Nil[29] $1,000 Mr Doyle’s household contents Nil[30] $4,000 Ms Bayliss’ car $4,000 $4,000 Ms Bayliss’ household contents $4,000 $4,000 [27] Value agreed – see page 63 of the transcript
[28] See Exhibit “A1”
[29] Financial Statement filed 7 August 2015
[30] Financial Statement filed 7 August 2015
Because there is only $5,000 difference in the party’s estimates of values of their cars and household contents, I propose to ignore them in my consideration of this matter. In any event, I am of the view that the maxim de minimus non curat lex should apply.[31]
[31] For a discussion of the application of the de minimis principle see the Full Court decision in Milankov and Milankov (2002) FLC 93-095
In his material, Mr Doyle appears to make much of his claimed contributions to a business that Ms Bayliss had prior to and during their relationship. That business sold (omitted), which was initially run as a (omitted) business but subsequently became an online business. Although Mr Doyle did some work in relation to the online aspect of that business, it is quite clear that the business no longer exists and therefore has no value. In any event, the evidence that I have is that the business only averaged approximately $400 per year net of expenses in the five years leading up to 30 June 2013.[32] It has not made any income since then.
[32] Paragraph 39 of Ms Bayliss’ affidavit
At paragraph 45 of his affidavit, Mr Doyle noted that both parties appeared to have accrued liabilities after separation. For that reason, I will not include those in my consideration of the asset pool. Similarly, I am of the view that Mr McIvor made an appropriate concession that the $36,000 borrowed by Ms Bayliss to pay legal costs should not be taken into account.
Ms Bayliss’ has a superannuation entitlement worth in excess of $47,000.
In his affidavit filed when he commenced these proceedings, Mr Doyle said that his superannuation was worth $27,661. However, a Financial Statement filed by Ms Lennard on his behalf on 7 August 2015 states that his superannuation has a gross value of only $10,000. The confusion in my mind in relation to his superannuation is further complicated by the fact that in that first affidavit he stated that he had superannuation entitlements worth approximately $80,000 in April 2009.[33]
[33] See paragraph 6.2.5.
In those circumstances, I propose to ignore the parties’ superannuation entitlements in the calculations that I make because:
·neither party can claim much contribution to the superannuation entitlement of the other during their short relationship; and
·neither party is seeking a superannuation splitting order, in any event.
Contributions
At the start of the parties de facto relationship Ms Bayliss had her residence which she attributed an estimated value of $245,000[34] and she had savings of $50,000.
[34] At paragraph 18 of her affidavit
Mr Doyle had the Property S property, which he subsequently sold and claims he contributed $111,318 towards the purchase of the block. At paragraph 24 of his affidavit he stated that he had paid that sum from the proceeds of sale that he “netted from the sale of the Property S property”. In my view, that is an incorrect characterisation of his contribution, because the sale of his Property S property was an event which triggered a capital gains tax liability in the vicinity of $46,000. Consequently the real net value of his contribution was in the vicinity of $65,000 from the sale of the Property S property.
However, he subsequently made additional payments off the mortgage liability of $60,000 on 7 October, $1737 on 3 November and $39,000 on 6 November 2009. Consequently, inclusive of the $65,000 referred to in the paragraph above, his initial contributions to the purchase of the block were $165,737 and Ms Bayliss’ contribution was $50,000 (total $215,737). Their proportional contributions to the equity in the block were therefore 77% by Mr Doyle and 23% by Ms Bayliss.
As mentioned, Ms Bayliss had her unencumbered residence at the start of the parties’ de facto relationship so her initial contribution in relation to that asset was 100%.
The parties lived in that residence while that relationship continued. Although, Ms Bayliss concedes that Mr Doyle “helped [her] paint the house and put a brace on the side fence”,[35] there is no evidence that those activities contributed to any increase in the value of her residence.
[35] At paragraph 54 of her affidavit
In relation to the parties’ contributions to general living, I am satisfied that they reached an agreement that Mr Doyle would make the fortnightly mortgage payments in relation to the block and Ms Bayliss would pay all expenses in relation to her residence (including rates, insurance, utilities and general maintenance costs) and she would be responsible for payment of the rates for the block. I am also satisfied that they agreed that she would meet many of their general day to day expenses as they arose. In this regard, I accept the evidence set out under the heading “General Finances” in her affidavit
In view of the shortness of the parties relationship, I am of the view that I should deal with this matter on an asset-by-asset approach and if this matter was to be dealt with solely on the basis of contributions, I would attribute contributions by the parties as follows:
·the total contribution by Ms Bayliss in relation to her home as being made by her alone; and
·a 77% contribution to the net proceeds of sale of the block by Mr Doyle and a 23% contribution by Ms Bayliss.
Consequently, if this matter was to be decided on the basis of contributions alone, I would have awarded 77% of the initial deposit of $254,000 to Mr Doyle and 23% to Ms Bayliss, being $195,600 and $58,400 respectively. That would mean that, because she has only received $10,000 so far:
·Ms Bayliss should receive a further sum of $48,400; and
·Mr Doyle should receive the remaining balance of slightly less than $80,000.
However, these matters are not decided solely on the basis of contributions.
The subsection 90SF(3) factors
Mr Doyle is nearly 54 and his health is not good.
When Ms Lennard was appointed as his Litigation Guardian, there was psychiatric evidence that he was presenting as “someone who was seriously disturbed and mentally quite unwell”.[36] The psychiatrist said:
His primary problem stems from an extremely dysfunctional early family background in which he had an extremely poor relationship with his mother. He feels that she already had a son, his older brother, and wanted a girl. When he arrived she was angry, manipulative and their relationship was never able to be resurrected.
[36] The affidavit of Dr K filed 2 September 2014
He went on to say:
In summary, Mr Doyle is a man who is mentally unwell, having a Major Depressive Disorder, and a Generalised Anxiety Disorder. He is constantly bursting into tears, he is agitated, and he is unable to represent himself in the property proceedings …
Although I am not a psychiatrist, I cannot help but conclude that Mr Doyle’s mental condition has deteriorated since he saw that psychiatrist. His behaviour at the hearing was somewhat unusual and his Litigation Guardian filed a copy of a letter of 3 June 2015 from the (omitted) Clinic to another doctor which stated: [37]
I suspect that [Mr Doyle] suffers with paranoid schizophrenia. Would you be able to refer to a psychiatrist as I think this would be a better option.
[37] See Annexure 11 at page 222 of the Litigation Guardian’s affidavit.
I have no evidence to suggest that he was referred to another psychiatrist.
I am also more than a little concerned that one particular GP in (omitted) may have ordered tests through a laboratory in (country omitted) in early July 2015 (apparently arising from a spider bite) at a cost to Mr Doyle of €1,642 (approximately $2,500 at current exchange rates).[38] That same GP said this on 29 July 2015 about his ongoing medical costs:[39]
[38] See Annexure 12 at page 224
[39] See page 8 of the Annexures to Mr Doyle’s affidavit filed 4 August 2015
This is to certify that Mr Doyle is in need of the following treatments
Twice weekly medical visits at $145 estimated average cost per visit $1120 per month. 12 months' treatment
Intravenous antibiotics, giving sets and materials $500 per month for 12 months
Antibiotics as itemised by [a named pharmacy] $1500 per month for 12 months.
Herbal and supplement treatment $500 per month estimated.
Hyperthermia and intensive intravenous antibiotic treatment at (omitted) Hospital in (country omitted) may be required if she (sic) has not improved satisfactorily within six months.
Estimated cost $40,000 for travel, accommodation and treatment.
The quoted cost for the next twelve months could be $70,000.
I would have thought it reasonable for a GP to obtain specialist opinion before contemplating sending a patient to (country omitted) for treatment and perhaps some enquiries about his GP’s competence should be made through the AMA or the Medical Board of Australia. However, that is a matter for Mr Doyle (or his Litigation Guardian, who also claims to be his Administrator appointed through the Victorian Civil and Administrative Tribunal).
Unfortunately, Mr Doyle does not appear to be receiving the psychiatric help that he needs and I have little difficulty in concluding that he does not have the mental capacity to obtain appropriate gainful employment. He is in receipt of a disability support pension of $494 per week.
Ms Bayliss is 54 and has not coped well with the stress of these proceedings. However, she does have full-time employment and has a weekly income of $1,315.
As mentioned above, Mr Doyle’s property entitlement based on contributions alone would be in the vicinity of $80,000. Against that, Ms Bayliss will retain her residence worth $325,000 and could possibly receive the further sum of $48,000 also referred to above.
Subsection 90SF(3) refers to “the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration”.[40] Although there was some early debate about whether the word “it” referred to the relationship or to its duration,[41] it seems quite clear that neither the relationship, nor the duration of it has been the cause of Mr Doyle’s mental illness. The only evidence that I have is that his mental illness “stems from an extremely dysfunctional early family background in which he had an extremely poor relationship with his mother”.
[40] At paragraph (k)
[41] See Petterd & Petterd (1976) FLC 90-065, Beck & Beck (1982) FLC 91-235 and Hirst and Rosen (1982) FLC 91-230
Clearly, Ms Bayliss’ financial position in all respects is much better than that of Mr Doyle. However, that in itself does not necessarily mean there should be a capital adjustment in favour of Mr Doyle.
In Hirst and Rosen, Nygh J said:[42]
I also reject any argument based solely upon the disparity in financial resources between the parties. Section 79, as I have indicated in argument, does not entitle the Court to adopt “a soup kitchen” approach. … It is, therefore, not an open sesame for the Court to administer such justice as it thinks fit. That, indeed, would be a grievous error.
[42] Hirst and Rosen (1982) FLC 91-230 at p 77,251
In a way, that was perhaps a more colourful way of putting it than Wilson J did in the High Court a short time later in Mallet v. Mallet,[43] when he said:
The objective of the section is not to equalise the financial strengths of the parties. It is to empower the Court … to effect a redistribution of the property of the parties if it be just and equitable to do so having regard, inter alia, to the respective contributions of the parties.
[43] Mallet v. Mallet (1984) FLC 91-507; (1984) 156 CLR 605
Notwithstanding that, I am of the view that there should be an adjustment in favour of Mr Doyle to take account of the disparity in the parties’ financial situations. In my view, a just and equitable adjustment would be an additional $20,000, to the $80,000 that I have assessed to be appropriate on the basis of contributions. In short, he should receive $100,000 from the invested funds and Ms Bayliss should receive the balance.
I do not consider that Mr Doyle should receive any additional amount by way of de facto spouse maintenance. In relation to this, I note that the relationship was quite short and Mr Doyle’s mental condition was not caused by Ms Bayliss or the relationship.
I also note that section 90ST requires that “the court must, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the de facto relationship and avoid further proceedings between them”. In those circumstances, I will make orders to provide for:
·a division of the invested funds by a payment to Mr Doyle of $100,000 and a payment of the balance to Ms Bayliss; and
·the parties to each retain their other property and superannuation entitlements free from any claim by the other.
The balance payable to Ms Bayliss will exceed $28,000.
Procedure
I heard this matter in Melbourne but I will be delivering this decision by telephone from Launceston. My Associate will make arrangements to provide copies of these Reasons and the Orders to the parties or lawyers by mail or by electronic means.
I certify that the preceding eighty-three (83) paragraphs are a true copy of the reasons for judgment of Judge Roberts
Date: 19 May 2016
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Res Judicata
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Constructive Trust
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