Einarsson & Joshi (No 2)
[2024] FedCFamC1F 820
•29 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Einarsson & Joshi (No 2) [2024] FedCFamC1F 820
File number(s): MLC 8590 of 2021 Judgment of: CARTER J Date of judgment: 29 November 2024 Catchwords: FAMILY LAW – PROPERTY & PARENTING – Where the father declined to participate in the proceedings – Where leave was granted to proceed undefended – Where final orders were made in the father’s absence – Where the father seeks to have the final orders set aside – Where the father’s non-participation in the final hearing was as a result of a myriad of social, financial and legal factors – Where the father was concurrently involved in Magistrates Court proceedings initiated by his previous lawyers – Where the father was briefly involved with a sovereign citizens group – Where the father was suffering from a range of physical and psychological symptoms in the lead up to the final hearing – Where the father contends that different orders may have been made had he participated in the proceedings – prejudice to the respondent partially addressed by an order for costs Legislation: Family Law Act 1975 (Cth) s 90
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 10
Cases cited: Barbey & Tuttle (2013) FLC 93-534
Clifford & Mountford (2006) 219 FLR 437
Division: Division 1 First Instance Number of paragraphs: 54 Date of hearing: 22 November 2024 Place: Melbourne Counsel for the Applicant: Mr Mellas Solicitors for the Applicant Pearsons Lawyers Pty Ltd Counsel for the Respondent: Ms Southey Solicitors for the Respondent Lardners Solicitors ORDERS
MLC 8590 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR EINARSSON
Applicant
AND: MS JOSHI
Respondent
ORDER MADE BY:
CARTER J
DATE OF ORDER:
29 NOVEMBER 2024
THE COURT ORDERS THAT:
1.Pursuant to rule 10.13(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), the orders made 24 June 2024 are set aside.
2.Within 60 days the father pay the mother’s costs for the final hearing on 27 May 2024 thrown away, fixed at $15,600.
3.The Amended Application in a Proceeding filed 30 September 2024 and the Response to an Application in a Proceeding filed 18 November 2024 are otherwise dismissed.
4.The Initiating Application filed 30 September 2024 be listed for a directions hearing before Judicial Registrar McGee on 12 February 2025.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUSTICE CARTER:
Final orders regarding property and parenting were made on 24 June 2024 on an undefended basis. The father had failed to attend at the final hearing listed on 27 May 2024. He had sent correspondence to the Court advising he would not be participating in any further proceedings notwithstanding he was on notice that the matter could proceed on an undefended basis. He was also aware of the orders sought by the mother.
After being provided with the final orders, the father filed an Application in a Proceeding on 9 August 2024 seeking relief pursuant to r 10.13(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth). He seeks the final orders made in his absence be set aside.
The father has now also filed an Application for Final Orders specifying the relief he seeks in the event the orders made 24 June 2024 are set aside.
The application for the orders to be set aside is opposed by the mother.
For the reasons that follow I am satisfied it is appropriate that the orders made 24 June 2024 be set aside.
THE EVIDENCE
For the purposes of the hearing the father relied on
(a)his amended Application in a Proceeding filed 30 September 2024;
(b)the affidavit in support filed 30 September 2024; and
(c)the financial statement filed 30 September 2024.
The mother relied on her Response to the Amended Application in a Proceeding filed 18 November 2024 and the affidavit filed with that Response dated 18 November 2024.
THE LAW
The approach to be adopted by the Court in relation to applications of this nature is well established; see Barbey & Tuttle (2013) FLC 93-534; Clifford & Mountford (2006) 219 FLR 437. The relevant considerations in determining whether or not to vary or set aside orders include:
(a)the reason for the party’s non-appearance and whether that explanation is reasonable;
(b)whether there are arguments that could be advanced by the applicant that may reasonably lead to the making of different orders to those made; and
(c)whether there is prejudice to the respondent that cannot be adequately addressed by the Court.
Matters relevant to those three criteria include;
(a)whether a party with notice of the proceedings disregarded the opportunity of appearing at and participated in the trial;
(b)whether the applicant delayed in bringing the application to set aside the orders; and
(c)the conduct of the applicant since the orders were made.
There is no requirement that the Court give one consideration more weight than any other. The discretion is unfettered. However, it is to be exercised judicially. The Court is also to consider the public interest in bringing an end to litigation.
It is agreed the father did not delay in bringing his application to set aside the orders. There is also no argument regarding his conduct since the orders were made.
Explanation for failure to attend
The father bears the onus of satisfying the Court that he has a reasonable explanation for his failure to attend on 27 May 2024.
It is not in dispute that the father was well aware of the final hearing date. It is not in dispute that he was served with the mother’s trial material – although he blocked many attempts to serve him – and that he was squarely on notice that the matter could proceed in his absence.
It is also not in contention that he filed no trial material.
There is also no doubt that the father made a conscious, albeit woefully ill-informed decision not to attend Court or participate in the hearing on 27 May 2024. However, the father’s behaviour in this case does not include a persistent failure to comply with court orders. Nor did he fail to appear at other court events. Rather, what the chronology reveals is that until around August/September 2023 the father remained appropriately engaged in litigation, including attending court events, instructing his lawyers and filing documents.
It is the father’s evidence that from around August 2023 and until the final hearing in May 2024 he faced a plethora of legal, financial and physical and psychological health issues that impacted his ability to meaningfully engage with the proceedings – and that taken altogether these matters provide a reasonable explanation as to his failure to file trial material and attend at the final hearing in May 2024. These circumstances included him becoming involved with a sovereign citizens group either in late 2023, or early 2024, which the father now deeply regrets.
The father’s engagement with the sovereign citizens group
It is not entirely clear when the father became involved with this group who style themselves as the R Organisation (“the organisation”).
A piece of correspondence purporting to be from the Board of Trustees of the organisation was received by the Court in March 2024. In that correspondence it was asserted the father had been advised that he “must not participate or enter any corporate court buildings”. The letter also demanded that I “cancel” court orders.
In line with the position he was urged to adopt as a member of the organisation, a letter from the father, naming himself as a private member of the organisation was sent to the Court dated 20 May 2024. In that letter the father wrote he would “not be participating in any further proceedings regarding this matter”, and he considered “this matter closed”.
A further email was received on 24 June 2024 in which the father wrote that he considered the matter closed and would not be appearing.
In his recently filed affidavit, the father deposed that he did not understand what the group really stood for – and he very much regretted having been involved with them in any way. Counsel advised the father now fully understood and accepted the authority of this Court to determine parenting and property matters.
The father’s additional evidence as to his non-attendance
The father relied on a letter from his general practitioner dated 4 August 2024. In that letter the father’s general practitioner described the father as having experienced a “torrid” time over the last six months, during which time he suffered a great deal of stress and was experiencing a range of physical and psychological issues including significant anxiety, insomnia, difficulties concentrating, severe fatigue and sleep apnoea. His doctor described him as at August 2024 as “…so impaired psychologically that he cannot cope with the legal onslaught. He needs assistance as he is simply too impaired to handle the issues”.
The father deposed that on 6 September 2023 he spoke with his general practitioner and it was "decided that I required a break from litigation for 8 to 12 weeks". A letter was then sent to the mother's lawyers on 15 November 2023 in which his general practitioner advised that the father was unable to attend to any matters regarding family law, and that he required "approximately 8 weeks to manage his medical matters".
It would seem that the father’s poor functioning on a medical and psychological level is accordingly reasonably long standing, and referable to the period in which he was required to prepare for, and attend, the final hearing.
In addition to poor physical and mental health, the father asserted he was financially unable to afford lawyers. He said he was able to access funds until shortly before Christmas 2023 at which time the bank prevented him from accessing funds pursuant to an injunction that had been made. The financial pressures were exacerbated by proceedings being issued against the father by his previous solicitors seeking to recover their fees. Those proceedings overlapped the proceedings in this Court – with the hearing being initially listed in the Magistrates Court on 15 July 2024. The father deposed that those solicitors had also misrepresented him at a previous hearing, having consented to orders on his behalf without instructions. The father also deposed to his business being significantly financially affected in early 2024 – experiencing difficulties with his vehicle. Of course, parties without funds can appear on their own behalf in this Court. However, it appears from the father’s material that these matters somewhat overwhelmed him.
The father also moved back to Melbourne in around April 2024 – asserting he was unable to afford living on the Region L at that time. This made it more difficult for him to spend time with the parties’ child.
Taken as a whole, I am satisfied that the father has provided a reasonable explanation for his failure to participate in the final hearing. On his evidence, it appears he was functioning quite poorly – physically and psychologically – for a number of months leading up to the final hearing date. The father’s evidence suggests that in the months leading up to the final hearing, he was somewhat chaotic, and overwhelmed. He also became foolishly involved with a sovereign citizens group – with little understanding of the consequences of his disengagement from the family law proceedings. Whilst it was a deliberate choice he made to not participate at the final hearing, the context in which that decision was made needs to be considered.
Whether different orders may have been made
I must consider whether the father has demonstrated that had the Court been aware of his evidence at the final hearing in May 2024, the determination made would have been materially different.
In relation to parenting the father asserted that some of the evidence before the Court at the undefended hearing was inaccurate. That included:
(a)the father had not withdrawn from the child’s life. He said he was temporarily spending less time with the child, as he had moved back to Melbourne and travelling was difficult; and
(b)the father had not attended upon multiple medical professionals between May 2019 and February 2024. He acknowledged he does have medical issues but he said he attends to each of these issues appropriately, and that he does not currently have significant mental health issues that impact on his ability to care for X.
It is not in dispute that since around August, X has resumed spending alternate weekends with his father.
The father also asserted that a number of matters in the Family Report were not taken into consideration – and certainly the Court did not have the benefit of hearing from the Report writer. Had the father participated in the hearing, the contents of the Family Report and in particular the concerns raised by the Family Report writer as to the mother’s attitude towards the father, would have been squarely raised.
The father also noted that the Family Report writer’s recommendations included that the parents share decision making for X, and that X spend approximately equal time with each parent during term and school holidays. Of course, the Court is under no obligation to accept the recommendations of the Family Report writer. However it is apparent that the report writer had a very different view of what orders could best meet X’s interests – and accordingly, had the father participated in the hearing and the Family Report writer’s evidence been brought more into focus, different parenting orders may have been made.
I also accept that I did not have current evidence as to the views expressed by X. The report was nine months old at the time of the undefended hearing. It is now more than 12 months old.
The orders I made in the father’s absence reduced the child’s time with his father. My orders also did not provide for X to have any holiday time with the father. Those orders were made in circumstances where I understood the father was electing to withdraw substantially from X’s life. The father challenges that evidence and says there was only a short period of time when he was unable to see X regularly. Indeed, my understanding that the father was electing to play a minimal role in X’s life was central to the orders that I made – including the order for the mother to have sole responsibility for decision making in relation to X’s health and education.
I am satisfied that if all the evidence was more thoroughly canvassed and if the father’s evidence is correct, the parenting orders may well have been materially different.
In relation to property the father asserted the Court did not have correct information regarding his initial contributions. It was his contention that the equity in the property at G Street, Melbourne was closer to $500,000, and not $360,000, and the equity in the property at J Street, Suburb D was $1,800,000 not $1,700,000 (due to asserted growth in the market between the purchase of the property and the commencement of cohabitation). Additionally, the father said he had jewellery at the commencement of the relationship worth approximately $350,000. Whilst I had referred to the husband having jewellery, watches, accessories and handbags at the commencement of the relationship, I did not ascribe to those items a dollar value.
If the father’s evidence as to the value of the assets was accepted, the husband’s initial contributions would be approximately $590,000 greater than I understood at the time of the undefended hearing. That would make his initial contributions approximately $3,000,000. In the context of the pool of around $2,321,675 as I found it, and given the relatively short nature of the relationship, this is a material difference that could affect the overall determination.
It was the father’s case as well that there were liabilities that were not properly taken into account. First he said he owes his father $140,000. I understood at the undefended final hearing there was earlier material filed by the father asserting the existence of such a loan. However there was, in the absence of the father, no evidence before me about that asserted liability and accordingly I disregarded it. I accept that if the father is able to establish that such a loan exists, and that there is an obligation to repay that loan or is able to establish that the funds were advanced by his father, this may be a matter the Court would take into account. I also accept that could, together with the other matters outlined, make a difference to the overall determination as to property adjustment.
The father further asserted that the final orders made for the transfer of the vehicle from the business to the mother has incurred a taxation liability of $5,376. This was not taken into account in my determination of the pool.
It was also the father’s case that I had misunderstood the circumstances in which he was not paying child support. He said there are review processes on foot – as he has overpaid child support. If he is correct about that, there would be no arrears of child support, and it would be inappropriate for me to have considered his failure to meet his obligations to pay child support as a matter pursuant to s 90SF(3) of the Family Law Act 1975 (Cth). I note the mother’s evidence that the Administrative Appeals Tribunal wrote to her only on 2 October 2024 regarding the father’s review application. I do not know when the father actually filed his initial review application – and whether or not that was on foot at the time of the undefended hearing.
The father also denied gambling to such a degree that warranted consideration in determining the property dispute. He also referred to having paid for the Family Reports and the first valuations of the real properties – paying $15,400 for these reports – which was not adjusted despite earlier orders that he be reimbursed, or that the Court consider these payments at final settlement. Again, these matters taken together with the matters outlined could make a difference to the overall property settlement.
The father also deposed to the mother’s lawyers holding some jewellery with a combined value of approximately $35,800. This jewellery was not taken into account by me. I note this is denied by the mother who says nothing is being held by her lawyers.
Lastly the father noted that the mother had received in excess of $153,000 in financial support from him post separation. It was his case that these post separation contributions should have been factored into my consideration of the parties’ contributions. In my reasons for judgment I referred only to the sum of around $20,000 having been provided to the mother post separation. If the father is correct, it is not unreasonable that these payments could be considered as a material post separation contribution that should have been taken into account.
I note in the father’s amended Initiating Application he seeks an adjustment to the mother of 20 per cent of the non-superannuation pool and a smaller percentage of the parties’ self‑managed superannuation fund. My orders – in relation to a different pool than contended by the father – provide for the mother to receive 40 per cent of the global pool. Even on the pool as I determined it, if the father was able to establish that a just and equitable outcome would be to divide the pool as he proposes, that would be a significant reduction in the payment to the mother.
Prejudice to the respondent
Currently the mother is entitled to rely on the final property and parenting orders as made. If the orders are set aside, she will be deprived of those orders.
I accept that setting aside the orders does prejudice the mother and an order for costs cannot wholly address that prejudice.
Counsel for the mother said if the orders were set aside, she sought a costs order of $15,600 to cover her costs thrown away of preparing for and attending the final hearing. There was no objection to that quantum by the father.
DETERMINATION
I am satisfied that the father’s explanation for non-attendance is not unreasonable in all the circumstances. He has adduced medical evidence he was struggling with his health and psychological functioning in particular from around September 2023. According to his general practitioner, those issues continued and were in existence as at the date of the undefended hearing. The father’s involvement in the sovereign citizen’s group was deeply unfortunate – and he may well have been misled as to what his engagement with that community could achieve. These factors, combined, provide an adequate explanation for the father’s failure to attend in May 2024.
I am also satisfied that a different result may have been obtained both in relation to property and parenting had the father participated for the reasons already set out.
It is most regrettable that the father determined not to participate in the proceedings. He has caused the mother considerable expense and distress. He has wasted the Court’s time. However, I cannot be satisfied that the orders I made in relation to parenting are in X’s best interests, nor that the property orders I made are just and equitable in light of the material that the father would have advanced had he attended the final hearing. Rather, I am satisfied if the father’s evidence is accepted, a different set of orders may be made.
I note further the indication by the father that he would not cavil with a costs order in the quantum sought by the mother. Whilst that would not wholly address the prejudice to the mother upon the setting aside of the order, it would go some way to doing so.
In all the circumstances I am satisfied it is appropriate to exercise my discretion and set aside the orders made on 24 June 2024 in their entirety. It is also appropriate that I make a costs order in favour of the mother for $15,600 for costs thrown away.
The matter will need to be adjourned to a directions hearing so the final hearing can be re‑listed and trial directions made. There may also need to be interim orders made particularly in relation to parenting.
The father must understand that if he fails to participate in the proceedings again, and orders are then made in his absence, the Court may well take a view to any subsequent application made to set aside orders.
I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carter. Associate:
Dated: 29 November 2024
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