Etheridge and Goddard
[2017] FCCA 800
•27 April 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ETHERIDGE & GODDARD | [2017] FCCA 800 |
| Catchwords: FAMILY LAW – Application by respondents for summary dismissal of application brought pursuant to provisions of section 79A(1)(a) of the Family Law Act 1975 – respondents married between 1991 and 2014 – respondents separated in 2005 and entered into informal agreement in respect of division of matrimonial property – agreement never formally ratified – respondents successfully sought consent property order from Family Court in May of 2016 – applicant and first respondent engaged in de facto relationship between disputed date in 2009/2011 and 2016 – during this period they occupied former matrimonial home of the respondents – property transferred into sole name of second respondent in 2013 – transfer confirmed by consent order of May 2016 – applicant seeks to set aside consent order on the basis that a miscarriage of justice has occurred – matters to be considered – principles applying to application for summary dismissal – no reasonable case – justice and equity. |
| Legislation: Family Law Act 1975 (Cth), ss.4, 4AA, 75, 78, 79, 90, 117, 118 Federal Circuit Court of Australia Act 1999 (Cth), s.17A |
| Cases cited: Gebert & Gebert (1990) FLC 92-137 |
| Applicant: | MR ETHERIDGE |
| Respondents: | MS GODDARD & MR GODDARD |
| File Number: | ADC 2868 of 2016 |
| Judgment of: | Judge Brown |
| Hearing date: | 12 December 2016 |
| Date of Last Submission: | 12 December 2016 |
| Delivered at: | Adelaide |
| Delivered on: | 27 April 2017 |
REPRESENTATION
| Counsel for the Applicant: | Ms Fuda |
| Solicitors for the Applicant: | Peter Fisher Lawyers |
| Counsel for the First Respondent: | Ms Dickson |
| Solicitors for the First Respondent: | Minney & Associates |
| Counsel for the Second Respondent: Solicitors for the Second Respondent: | Ms Ross Hume Taylor |
ORDERS
The application against the second named respondent, Mr Goddard be dismissed.
The application against the first named respondent Ms Goddard in so far as it is brought pursuant to the provisions of section 79A(1)(a) of the Family Law Act 1975 be dismissed.
The applicant pay the second respondent, Mr Goddard’s, costs fixed in the sum of $2,500.00.
Pursuant to Section 26 of the Federal Circuit Court of Australia Act1999 the parties and their legal representatives do attend a Conciliation Conference with a Registrar of the Court on 24 August 2017 at 11:00am.
Unless otherwise exempted from payment the Applicant must pay the Conciliation Conference fee in accordance with the Family Law (Fees) Regulation 2012 twenty eight (28) days prior to the Conciliation Conference.
Should the Applicant fail to comply with Order 5 herein the conciliation conference is to be vacated and the matter is to be listed for mention before the Court.
No later than 28 days prior to the conciliation conference the parties exchange informal discovery of all relevant documents as specified in Order 24 Rule 4 of the Federal Circuit Court Rules.
Further consideration of this matter is adjourned to 8 September 2017 at 9:30am for directions.
IT IS NOTED that publication of this judgment under the pseudonym Etheridge & Goddard is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 2868 of 2016
| MR ETHERIDGE |
Applicant
And
| MS GODDARD & MR GODDARD |
Respondents
REASONS FOR JUDGMENT
Introduction
The applicant in these proceedings is Mr Etheridge “Mr Etheridge”. He commenced proceedings, in this court, on 4 August 2016, naming Ms Goddard “Ms Goddard” and Mr Goddard “Mr Goddard” as respondents. Ms Goddard and Mr Goddard were married in (omitted), on 12 January 1991. They finally separated in late 2005. They were divorced in May of 2014, on Mr Goddard’ application.
As a consequence of the breakdown of their marriage and subsequent divorce, on 12 May 2016, Mr Goddard and Ms Goddard jointly applied to the Family Court at Adelaide for a consent order to be made in order to formalise arrangements for the settlement of property and end their financial relationship with one another.
The application for consent orders indicates that Mr Goddard and Ms Goddard’s most significant asset, in monetary terms, was a property situated at Property L which they had jointly owned until July of 2013.
At the time of the application for consent orders, they valued this property at $285,000.00. It was subject to a mortgage of $195,000.00. In addition, the consent order indicated that Ms Goddard owned a motor vehicle worth $32,000.00; whilst Mr Goddard had a motor vehicle worth $4,500.00.
Neither had any other assets of significant value and each had responsibility for modest debts, to credit cards and/or school fees. The application also indicates that Mr Goddard and Ms Goddard had a marked disparity in respect of superannuation.
Mr Goddard had superannuation to a value of approximately $152,000.00; whilst Ms Goddard’s superannuation was $3,200.00. Against this background, Mr Goddard estimated his net worth, not including superannuation, to be $48,850.00; whilst Ms Goddard estimated her net worth to be $66,792.00.
The application for consent orders records Mr Goddard as the applicant. He deposed that the information provided by him, in the application, was true and that he had received independent legal advice, in respect of the proposed orders. A lawyer certified that this was so. Ms Goddard also deposed that the content of the application was true, from her perspective. She also indicated that she had received independent legal advice but no lawyer formally confirmed that this was the case.
Against this background, on 26 May 2016, a registrar of the Family Court, formally made the orders sought by Mr Goddard, pursuant to the provisions of Part 10.4 of the Family Law Rules, which authorise the making of consent orders. The orders in question have a lengthy preamble, which the court was asked to note. This preamble included the following matters:
·Mr Goddard was born on (omitted) 1965;
·Ms Goddard was born on (omitted) 1968;
·Of the parties’ four children, only one was under the age of 18. This was X, who lived with Mr Goddard;
·At the time of the commencement of the parties' relationship, Mr Goddard and Ms Goddard had assets of approximately equal value;
·During their marriage, Mr Goddard’s financial contributions had been greater than those of Ms Goddard;
·Whilst Ms Goddard’s non-financial contributions had been greater than those of Mr Goddard;
·Significantly, the parties had agreed as to the manner of their property division at their separation, in 2005, but had never implemented that agreement;
·In these circumstances, Mr Goddard and Ms Goddard wished for the division of their assets to be based on the value of their property at the date of their separation, which was 12 October 2005;
·At separation, Mr Goddard had transferred his interest in a motor vehicle to Ms Goddard and paid her the sum of $14,000.00;
·Following Mr Goddard and Ms Goddard’s separation, Ms Goddard and her new partner (Mr Etheridge) had enjoyed the sole use and occupation of Property L, whilst Mr Goddard had maintained all the mortgage payments;
·It had been understood that, whilst Mr Goddard paid the mortgage on the Property L property, it was expected that Ms Goddard would pay all rates and taxes associated with the property, whilst she lived there. However, she had not;
·In July of 2013, Mr Goddard and Ms Goddard had transferred their interests in the Property L property to Mr Goddard alone, at which time Mr Goddard had paid all outstanding rates and levies on the property, which amounted to $8,360.00;
·Ms Goddard had vacated the Property L property, in early 2016.
In this context, the consent orders stipulated that the following items of property were available to be divided between the parties:
·Property L – net equity $53,428.00;
·Ms Goddard’s two cars – $36,500.00;
·Mr Goddard’s superannuation – $152,016.00;
·Ms Goddard’s superannuation – $3,200.00;
·Ms Goddard’s credit card debt – $8,558.00.
These figures were supported by the information provided in the body of the application for consent orders document. In summary, this document indicated that Mr Goddard gross income was $3,800.00 per week; whilst Ms Goddard’s was $423.00.
Against this background, the consent orders provided as follows:
·Mr Goddard pay to Ms Goddard the sum of $22,000.00;
·There be a split, in Ms Goddard’s favour, of $92,400.00, from Mr Goddard’s superannuation holdings;
·Otherwise, each party retain all other assets and financial resources, standing in their respective names, as at the date of the orders. Necessarily, this would include the Property L property, which had been transferred to Mr Goddard, in July 2013.
On my calculations, Mr Goddard and Ms Goddard’s total superannuation - $155,216.00 has been apportioned approximately 61.5%/38.5% in Ms Goddard’s favour. Their disclosed non superannuation assets - $81,370.00 have been divided 72%/28%, again in Ms Goddard’s favour.
It is Mr Etheridge’s position that he and Ms Goddard lived together as a de facto couple, between early 2009 and March 2016, at the Property L property, in (omitted). During which time, he was employed as a (occupation omitted). He asserts that he made contributions to the mortgage on the Property L property between 2009 and the date of its transfer to Mr Goddard in mid-2013.
He also asserts that he made other financial contributions, referable to the Property L property, particularly in regards to the payment of rates and other maintenance expenses. In addition, he claims that he improved the property by a number of renovations, which he undertook. This is the central controversy in the case. Mr Etheridge asserts that he has been adversely and unfairly affected by the consent orders of May 2016, to which he was not a party.
Mr Etheridge’s application
Against this background, on a final basis, Mr Etheridge seeks an order that Ms Goddard pay him a sum of money, as determined by the court, presumably in settlement of his claim brought pursuant to Part VIIIAB of the Family Law Act 1975, which deals with financial matters arising from de facto relationships.
Significantly, as a preliminary to such an order, on an interim or procedural basis, he seeks that the consent orders made between Mr Goddard and Ms Goddard, on 26 May 2016, by the Family Court at Adelaide, be set aside pursuant to the provisions of section 79A(1A) of the Act. In specific terms, Mr Etheridge seeks the following order:
“That pursuant to s79A(1A)of the Family Law Act 1975, the orders made on 26 May 2016, under file number ADC 1065 of 2014 between Mr Goddard, the Applicant, and Ms Goddard, the Respondent, be set aside."
It would seem that the solicitor for Mr Etheridge has incorrectly drawn the application. The section specified in his application reads as follows:
“A court may, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, and with the consent of all the parties to the proceedings in which the order was made, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.”
It is clearly the case that there is no consensus between the parties concerned in these proceedings that the order of 24 May 2016 be set aside or otherwise varied. In these circumstances, I presume Mr Etheridge’s solicitor makes application pursuant to section 79A(1a) of the Act, which reads as follows:
Section 79A(1)(a) of the Family Law Act 1975 reads as follows:
“Where, on application by a person affected by an order made by a Court under section 79 in property settlement proceedings, the Court is satisfied that:
(a)there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance;
…
the Court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.”
Accordingly, in circumstances where the court is satisfied that there has been a miscarriage of justice, a discretion is provided to set aside any orders considered to be vitiated by any such miscarriage. The burden falls on Mr Etheridge to establish that there has been a miscarriage of justice, in all the circumstances of the current case.
It does not appear to be Mr Etheridge’s position that he has been the subject of any fraud or duress. In addition, it does not appear to be the case he alleges either Mr Goddard or Ms Goddard have provided materially false evidence.
In this context, it is established that the phrase any other circumstance arising in section 79A(1)(a) is not to be read ejusdem generis with the preceding words of the section. However the expression is to be read within the concept of a miscarriage of justice being established.[1]
[1] See Gebert & Gebert (1990) FLC 92-137
In Gerbert the Full Court said as follows:
“The important matter that must be established for an application under this part of the section to succeed is that there has been a miscarriage of justice…the words miscarriage of justice must not be given a restrictive meaning…”
From other authority it is clear that the expression miscarriage of justice relates to a failure by the court to attain justice according to law. It relates fundamentally to the integrity of the judicial process, including principles of law, equity, of natural justice and the application of proper judicial procedures to ensure that justice is done.
In Suriker & Suriker[2] the Full Court determined that the expression “miscarriage of justice” did not refer exclusively to the integrity of the judicial process. Rather, the expression had a multifarious application. The court said as follows:
“It is neither necessary nor desirable to attempt to define the matters which may amount to a miscarriage of justice by reason of any other circumstance in the relevant sense.”
[2] See Suriker & Suriker [1993] FLC 92-436 at 80,472
In Semmens v Commonwealth of Australia & Collector of Customs (SA)[3] the Full Court indicated that the failure to notify a third party, with a potential interest in pending proceedings, could constitute a miscarriage of justice for the purposes of section 79A. The Full Court said as follows:
“…it must be recognised that the failure to do so in particular cases can severely impinge upon the ‘legitimate interests of third parties’ and may almost invariably in many cases constitute a ‘miscarriage of justice’ within section 79A.”
The Full Court further noted that it was a matter of justice and common sense in property proceedings that such third parties be given notice.
[3] Semmens v Commonwealth of Australia & Collector of Customs (SA) (1990) FLC 92-116
In Lancer & Lancer[4] Bryant CJ noted that the section 79A contained two aspects. The first being a fact finding exercise, that is whether the applicant concerned could establish, to the relevant evidentiary standard – the balance of probabilities – that there had been a miscarriage of justice by reason of one of the matters set out in sub‑section (1).
[4] Lancer & Lancer [2008] FamCAFC 112
The second part being what followed from such a positive finding, namely whether the court, in its discretion, should set aside or vary the original order.
Section 79A is a piece of beneficial legislation. Accordingly, it is not to be interpreted in an unduly restrictive fashion.[5] I also acknowledge that it is a fundamental requirement of all matrimonial property litigation that the parties to such proceedings make a full and frank disclosure of their financial matters, both to each other and to the court.
[5] See Gebert & Gebert (supra) at 77, 935
This a matter of public policy interest, given the high volume of matters coming before this court and the Family Court, involving property issues. It is essential to the administration of justice that as many as possible of these case be resolved consensually and both the individuals concerned and the community generally have confidence in the probity of such settlements. As such, a failure to make proper disclosure can amount to a miscarriage of justice.[6]
[6] See Suiker & Suiker (1993) FLC 92-436 at 80,471
In his response, filed on 1 September 2016, Mr Goddard seeks the following orders:
“1. That the Application of Mr Etheridge be dismissed pursuant to Rule 13.10 of the Federal Circuit Court Rules 2001.
2. In the alternative, that the second Respondent Mr Goddard be severed from these proceedings.
3. That the Applicant pay all cost of and incidental to the second respondents participation in these proceedings.”
In her response, filed on 27 September 2016, Ms Goddard has made the same application for summary dismissal pursuant to Rule 13.10 of the Federal Circuit Court Rules. In addition, she also seeks dismissal on the basis that Mr Etheridge’s application can be characterised as being frivolous or vexatious and therefore liable to dismissal pursuant to the provisions of section 118 of the Family Law Act 1975.
In the alternative, Ms Goddard seeks that Mr Goddard be severed from the proceedings as a party and in the resulting proceedings between her and Mr Etheridge both she and Mr Etheridge retain their existing property and there be a splitting order in respect of their superannuation, so that it is equalised.
Some relevant legal provisions
As Mr Goddard and Ms Goddard were married, the legal provisions applicable to the division of their property, at the end of their marriage, are contained within Part VIII of the Family Law Act 1975. There are analogous provisions relating to the division of the property of individuals in de facto relationships contained in Part VIIIAB of the Act.
The major provisions relating to marital property division are contained in sections 79(1); 79(2); 79(4); & 75(2) of the Act.
Pursuant to section 79(1) the court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a marriage in relevant property.
The expression “property” is defined in section 4(1) in relation to the parties to a marriage or either of them as meaning “…property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.”
Pursuant to section 79(2) 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 the circumstances prevailing. This follows from the use of the prohibitive words “shall not” in the relevant section.
Section 79(4) provides the mechanics of how a court is to make an order altering marital property interests. It provides seven matters [in paragraphs (a) – (g)] to be considered, as relevant.
Paragraphs (a); (b); and (c); categorise contributions made by marital partners, which are relevant. Paragraph (d) directs the court to take into account the effect of any order upon the earning capacity of either party to the marriage concerned.
Paragraph (e) directs the court to consider a list of matters contained in section 75(2), which are germane to spousal maintenance or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs.
Finally, Paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.
Over a number of years, the Full Court has delineated a process to be applied to the resolution of matrimonial property cases, which is well settled and required the application of a four step process, described by the Full Court as follows:
·identification and valuation of the property of the parties;
·identification and evaluation of contributions to the property (including property no longer owned by the parties) – the contribution phase – section 79(4) (a) to (c);
·identification and assessment of the various matters in section 79(4)(d) to (g) including to the extent they are relevant, the matters in section 75(2) – the prospective needs phase;
·considerations of justice and equity.[7]
[7] See Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39] and Bevan & Bevan [2013] FamCAFC 116 at [60]
Section 79(10) is significant in the context of the current proceedings. It details the individuals, who are entitled to become a party to the proceedings arising from an application to alter proprietary arrangements, as a consequence of the end of a marriage between spouses.
These persons include a creditor of one of the parties to the proceedings, if such a creditor may not be able to recover his or her debt, if the order was made and, pursuant to placita (aa):
(aa) a person:
(i) who is a party to a de facto relationship with a party to the subject marriage; and
(ii) who could apply, or has an application pending, for an order under section 90SM, or a declaration under section 90SL, in relation to the de facto relationship;
…
(b) any other person whose interests would be affected by the making of the order.
Section 90SM(10) is in analogous terms to section 79(10) of the Act.
Although counsel for Mr Etheridge has not put her client’s case on this basis, it is implicitly Mr Etheridge’s position that he falls within this description and accordingly was theoretically entitled to apply to be a party to the proceedings between Mr Goddard and Ms Goddard. It follows, I think, that he contends that this constitutes some species of miscarriage of justice.
The provisions relating to the settlement of de facto property proceedings are contained in Part VIIIAB to the Family Law Act 1975 and are broadly similar to those which apply to marital relationships. Section 90SM is analogous to section 79; whilst section 90SL is analogous to section 78.
The concept of de facto relationship is defined by section 4AA of the Act. In broad terms, it arises when a couple live together on a genuine domestic basis. As I understand matters, neither Mr Etheridge nor Ms Goddard assert anything other than that they lived together as a couple for a period of time, although they disagree when they began to do so – Ms Goddard asserts it was January 2011; whilst Mr Etheridge asserts it was early 2009.
There were no formal proceedings on foot between Mr Goddard and Ms Goddard, when they approached the court for a consent order to be made on their behalf. As such, pursuant to rule 10.15 of the Family Law Rules, it was necessary for them to file an application for consent orders.
This is a pro forma document, which delineates the nature and extent of the information required to be disclosed to the court, prior to the making of any consent order by posing a number of questions, which are required to be answered. Of relevance to the current proceedings, question (19) on the form reads as follows:
Is there any person who may be entitled to become a party to the case under subsection 79(10) or subsection 90SM(10) of the Act?
On the application for consent orders filed on behalf of Mr Goddard and Ms Goddard, the answer No has been provided in respect of this question.
The legislative basis for the application in a case
Both Mr Goddard and Ms Goddard seek the summary dismissal of Mr Etheridge’s case against them in its entirety. As is clear, the nature of their respective relationships with Mr Etheridge is very different. It is Mr Goddard’s position that he has no relationship with Mr Etheridge whatsoever, which is relevant to any provision within the Family Law Act 1975. On the other hand, Ms Goddard concedes that she does have a form of relationship with Mr Etheridge, which is potentially amenable to Part VIIIAB of the Act.
Section 17A of the Federal Circuit Court of Australia Act 1999 (Cth) provides as follows:
“(1)The Federal Circuit Court of Australia may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a)the first party is prosecuting the proceeding or that part of the proceeding; and
(b)the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.
(2)The Federal Circuit Court of Australia may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a)the first party is defending the proceeding or that part of the proceeding; and
(b)the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
(4)This section does not limit any powers that the Federal Circuit Court of Australia has apart from this section.”
Rule 13.10 of the Federal Circuit Court Rules 2001 reads as follows:
“The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a)the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
(b)the proceeding or claim for relief is frivolous or vexatious; or
(c)the proceeding or claim for relief is an abuse of the process of the Court.”
The jurisdiction of the court to dismiss a claim upon the basis that it discloses no reasonable cause of action is to be sparingly invoked.[8] The case “must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination … by the court …”[9] In Webster v Lampard[10] the High Court said as follows:
“The power to order summary judgment must be exercised with exceptional caution … and should never be exercised unless it is clear that there is no real question to be tried.”
[8] See McKellar v Container Terminal Manager Services Limited (1999) 165 ALR 400 per Weinberg J at 415 [12]
[9] See Dey v Victorian Railway Commissioners (1949) 78 CLR 62
[10] See Webster v Lampard (1993) 177 CLR 598 at 602
In McKellar Weinberg J, after summarising the various authorities, relating to summary dismissal, said as follows:
“… a proceeding should not be dismissed summarily merely on the ground that it appears, at the early stage of the hearing of the motion brought for that purpose, to advance a highly implausible claim which will very probably fail, but only where the claim may properly be described as unarguable, and almost incontestably bad, or where the claim is otherwise objectionable as an abuse of the process of the court.”[11]
[11] Ibid at 416 [18]
Section 118 of the Family Law Act 1975 reads as follows:
The court may, at any stage of proceedings under this Act, if it is satisfied that the proceedings are frivolous or vexatious:
(a) dismiss the proceedings; and
(b) make such order as to costs as the court considers just.
It is Ms Goddard’s position that the proceedings against her are frivolous and vexatious. The basis of this assertion is that she contends Mr Etheridge’s case against her is inherently weak. In this context, I bear in mind what was said by Kirby J in Lindon v The Commonwealth (No.2):
“An opinion of the Court that a case is appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant termination… Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently uncompromising cause into a successful judgment…”[12]
[12] See Lindon v The Commonwealth (No.2) (1996) 70 ALJR 541 cited in Bigg v Suzi (1998) FLC 92-799 at 84,975
Mr Goddard’s position
Mr Goddard confirms that he and Ms Goddard separated in 2005. At this stage, they negotiated an informal financial settlement. This envisaged their net assets being divided 60/40% in Ms Goddard’s favour. It was also agreed that Ms Goddard would retain the Property L property subject to financial institution approval. This informal financial agreement was drawn up following a community based mediation.
Mr Goddard has provided the Memorandum of Understanding produced by the mediator in question.[13] This document utilises the values which subsequently were utilised in the May 2016 application for consent orders. In my view, this is highly significant. The agreement said to have been reached in 2005 was for a division of superannuation and assets of 60%/40% in Ms Goddard’s favour.
[13] See Annexure G 1 to Mr Goddard’s affidavit filed 1 September 2016
The agreement also stipulated as follows:
“As Ms Goddard and Mr Goddard (sic) have agreed that Ms Goddard could retain ownership of the house, upon financial institution approval, Mr Goddard will pay Ms Goddard the sum of $14,000.00 and not split his superannuation entitlements.
This is under the proviso that Ms Goddard can refinance the family home and get approval to retain sole ownership of the house.”
Mr Goddard asserts that Mr Etheridge made no equitable or financial contributions to the Property L property whatsoever. Rather, it is Mr Goddard’s position that Mr Etheridge benefitted from being able to live in the property rent free for a period of at least five years. On this basis, he would characterise Mr Etheridge’s action against him as lacking merit and being vexatious in nature.
Mr Goddard has provided bank records for the period between 2011 and May 2013, which he contends evidence that he paid the mortgage payments, formally in his and Ms Goddard’s joint names, relevant to the Property L property.[14] These evidence that the mortgage on the property in January 2011 was $187,593.91 and in June 2013 was $175,927.00.
[14] Ibid at Annexure G 2
In June of 2013, the loan on the property was refinanced into Mr Goddard’s name alone with a fresh loan advance of $246,500.00, which Mr Goddard has paid thereafter.[15] In my view, what these documents demonstrate incontrovertibly is that between June 2011 and January of 2016, Mr Goddard directly paid the mortgage relating to the Property L property.
[15] See ibid at Annexure G3
Mr Goddard agrees that Ms Goddard vacated the property in mid-January of 2016, after which Mr Etheridge continued to occupy it for a further period of two weeks. It is Mr Goddard’s evidence that, when Mr Etheridge vacated the property, he left it in a state of disarray and disrepair, which cost him a significant sum to rectify. He further asserts that during the years Ms Goddard and Mr Etheridge occupied the property, they did not maintain the property adequately, causing a diminution in its value.
In addition, it is Mr Goddard’s position that Mr Etheridge was aware that he and Ms Goddard were engaged in negotiating a property settlement in 2016 and chose not to involve himself in the negotiations or subsequent application for consent orders. In addition he points to the fact that he and Ms Goddard elected to utilise property values for 2005 – the date of their separation – in reaching an agreement. As previously indicated, this assertion is supported by a comparison of the 2005 Memorandum of Understanding and the 2016 Application for Consent Orders.
In these circumstances, he rejects the submission that there has been any miscarriage of judgment, vis-à-vis him and Mr Etheridge, resulting from the consent orders between him and Ms Goddard, as Mr Etheridge knew of them and the orders, in any event the orders related to a period prior to any cohabitation between Mr Etheridge and Ms Goddard. As a consequence, he asserts that it would be fundamentally unfair to him to allow Mr Etheridge to proceed with the action against him.
Mr Goddard has elected not to provide a statement of his current financial circumstances in these proceedings. However, in late April of 2016, he obtained an appraisal of the property from a (omitted) real estate agent. This indicated that the property was worth in the range of $270,000 to $280,000.00.[16] Accordingly, if this appraisal is accurate, the property has not appreciated significantly between 2005 and 2016. As a consequence, Ms Goddard was not disadvantaged by the delay in the finalisation of the property settlement. Indeed Mr Goddard asserts that he utilised the appraisal to finalise the 2016 orders. It is his case that the appraisal supports his assertion that the period of Ms Goddard and Mr Etheridge’s occupation of Property L resulted in the reduction of the property’s value.
[16] Ibid at Annexure G 4
Mr Goddard vehemently refutes any suggestion that Mr Etheridge was extensively involved in parenting any of his and Ms Goddard’s four children. He accepts that it is likely Mr Etheridge cooked some meals for the household of which he was a part. He denies that Mr Etheridge provided any extensive homemaking contributions at Property L.
Ms Goddard’s position
Ms Goddard confirms that she and Mr Goddard entered into an informal agreement regarding property settlement in late 2005. She was living in the Property L property at the time with her and Mr Goddard’s four children, who were then each under eighteen years of age. She hoped to purchase Mr Goddard’s interest in the property. However, her application for finance was refused. In these circumstances, she deposes as follows:
“I told Mr Goddard that I was not able to refinance the Property L property in my sole name and he agreed that we should leave the Property L (sic) in our joint names and that the mortgage would be paid from our joint bank account, which my income and the child support maintenance were deposited into.”[17]
[17] See Ms Goddard’s affidavit filed 27 September 2016 at paragraph 10
Ms Goddard’s financial position did not improve and she remained unable to obtain finance. In these circumstances, she contends that she agreed to transfer her interest in the Property L property to Mr Goddard in July 2013 because she was not able to meet the required mortgage payments alone, along with the other outgoings referrable to the property. As indicated above, this assertion is supported by the bank records provided by Mr Goddard which indicate he re-financed the Property L property in July of 2013.
Ms Goddard agrees that she commenced her relationship with Mr Etheridge in late 2008. However, she refutes any suggestion that he lived with her at Property L from that time. It is her position that Mr Etheridge and his adult son only moved in with her in January 2011, when Mr Etheridge’s previously rented accommodation was sold. She has provided evidence of the settlement of this property.
Ms Goddard contends that Mr Etheridge and she lived in the Property L property between early 2011 and early 2016, essentially rent and mortgage free, due to the arrangement between her and Mr Goddard. As a corollary of this, she and Mr Goddard agreed that he (Mr Goddard) would pay less child support to her whilst he was paying the mortgage.
Prior to July 2013, child support payments of about $750.00 per fortnight were paid by Mr Goddard into a joint account standing in her and Mr Goddard’s name and were allocated in part to the mortgage on Property L. After this date, she received child support of between $265.00 and $400.00 per fortnight, the reduction representing rent notionally due to Mr Goddard. It is her position that Mr Etheridge was aware of the details of the various arrangements between her and Mr Goddard.
Ms Goddard agrees that Mr Etheridge utilised a bank account standing in her sole name from March 2013 onwards. It is her position that this was a matter of convenience, for Mr Etheridge, as he needed somewhere to deposit cheques made payable to him arising from casual employment. In addition, she asserts that Mr Etheridge was attempting to avoid his commitments to his own financier.
Ms Goddard has provided the statements for the account which she asserts was her primary bank account between early 2013 and February 2016. This account was notionally in her and Mr Goddard’s name. The statements confirm that some of Mr Etheridge’s wage cheques were deposited into this account. The statement indicates that these deposits were neither regular nor for significant amounts. In addition, it is Ms Goddard’s evidence that Mr Etheridge would withdraw the sums in question quickly and use them for his own purposes, usually gambling.
Ms Goddard contends that when she began her relationship with Mr Etheridge, she had net assets valued at around $77,300.00 and superannuation to a value of $6,000.00. She was employed as a part time (occupation omitted) at a (employer omitted) throughout the relationship. Mr Etheridge was employed from time to time as a (occupation omitted). Ms Goddard contends that the longest period Mr Etheridge worked was for about eighteen months.
Ms Goddard asserts that Mr Etheridge owned a motor cycle; motor vehicle; and a boat; when she and he began their relationship worth in total about $45,000.00. He had a personal loan of $20,000.00, which he serviced from his income from time to time until defaulting. The picture Ms Goddard paints of Mr Etheridge is of a person who was not financially responsible.
It is Ms Goddard’s position that she paid all the outgoings – utilities; insurance; and the like; in respect of the Property L property without contribution from Mr Etheridge. It is also her case that Mr Etheridge did very little as a homemaker or around the house generally leaving these responsibilities to her.
Ms Goddard asserts that Mr Etheridge was aware of the fact that her interest in Property L had been transferred to Mr Goddard in mid-2013. Mr Etheridge refutes this. He also denies that he was fully aware of the discussions between Mr Goddard and Ms Goddard which led to the May 2016 consent orders.
Ms Goddard concedes that Mr Etheridge replaced the panels of a fence at the Property L property; began to build a retaining wall; replaced a cistern and toilet; and hung an air conditioner. However, she asserts that all of this work was done either incompetently or not finished and therefore decreased the value of the property concerned. She does not indicate when these allegedly incompetent works were done.
Essentially, it is Ms Goddard’s position that she and Mr Etheridge have few, if any assets referrable to their relationship and, in any event, Mr Etheridge made no contributions towards the acquisition, conservation or improvement of any items of property; or as a parent or homemaker. Further, she contends that Mr Etheridge was fully aware of her financial arrangements with Mr Goddard.
Mr Etheridge’s position
It is Mr Etheridge’s case that he and Ms Goddard met in (omitted) and lived together from early 2009. Accordingly, he concedes that his relationship with Ms Goddard postdates her separation from Mr Goddard and the informal settlement between the two. Mr Etheridge asserts that he did not know of either the informal settlement of 2005 and had only a cursory understanding that there were any negotiations going on between Ms Goddard and Mr Goddard in early 2016.
Mr Etheridge asserts that he lived at Property L between 2009 and early 2016. This is a significant evidentiary controversy which cannot be satisfactorily resolved in these proceedings. He further asserts that he made regular financial contributions toward the support of Ms Goddard from his wages which were greater than hers by a significant degree and his recurrent wages went into an account operated by Ms Goddard which she utilised for joint purposes.
Again, this is a significant area of evidentiary dispute, which cannot be resolved at this stage of proceedings, particularly seeing as the date on which cohabitation at Property L commenced remains controversial and given the absence of comprehensive banking records.
It is Mr Etheridge’s position that he had assets and superannuation valuing approximately $125,000.00 at the time of the commencement of his relationship with Ms Goddard. He further contends that he provided a new fence at Property L; fitted an air conditioner, toilet and steps; replaced the patio deck; and built a new retaining wall. He does not indicate when these works were done or what was their cost, approximate or otherwise.
He further disputes that Mr Goddard paid out Ms Goddard’s car loan, asserting that he made regular payments towards it, as well as paying for insurance, internet and telephone for the home. He asserts that he made contributions to the welfare of the family unit as a whole, including assisting in the parenting of Ms Goddard and Mr Goddard’ children. He also asserts that he made significant non-financial contributions, at Property L, from 2009 onwards, including gardening, painting and repairs.
Mr Etheridge concedes that the mortgage payments for Property L were paid from Mr Goddard and Ms Goddard’s joint account between 2005 and 2013. He asserts that he indirectly enabled Ms Goddard to pay her part of the mortgage due by advances he made to her. He refutes that Mr Goddard paid the mortgage in lieu of child support. He deposes as follows:
“I was always under the pretence that we used the Child Support income to pay mortgage repayments.”
Accordingly, he refutes the suggestion that he and Ms Goddard lived rent free at Property L, either before or after 2013. I am not sure I fully understand this submission. Mr Etheridge had no entitlement to child support. The liability was on Mr Goddard to pay child support. In this context, it is Mr Goddard and Ms Goddard’s evidence that they mutually agreed that Mr Goddard would continue to pay the mortgage on Property L in lieu of child support. There is no doubt that Mr Goddard did not seek rent for the property from either Ms Goddard or Mr Etheridge after mid-2013.
Consideration
In my view, this is a difficult case. It is difficult because, over a reasonably significant period of time, a complex factual matrix has been built up. These difficulties are compounded by the stage at which the application arises. Necessarily, the evidence available to the court is complete.
Given the provisional and untested nature of this evidence, it is difficult, if not impossible, to determine precisely what occurred and when particularly in respect of the exact date on which Ms Goddard and Mr Etheridge began to live together in Property L and what was the state of understanding of each of the individuals concerned at that as yet indeterminate point.
Factors such as these dictate that the court should take a cautious approach to the summary judgment application. On the other hand, on any view, the potential pool of assets to be divided regardless of whether or not the earlier consent orders are set aside is extremely modest. As a consequence, given the potential evidential and legal complexity of the case, there is a grave risk that the overall costs of the proceedings will grossly outweigh what is at stake in monetary terms.
However, the court is not to be governed by pragmatic considerations in the exercise of its discretion to summarily dismiss a case. As Kirby J pointed out even a weak case is entitled to have the hearing of the court and with such a hearing nuances and subtleties arising from the evidence are liable to come into focus and be more easily resolved, particularly if they arise in a case of some legal complexity.
To secure a summary dismissal, Ms Goddard and Mr Goddard must demonstrate not through their respective cases but on the face of Mr Etheridge’s documents alone, that he (Mr Etheridge) lacks a reasonable cause of action.[18] The test is a high one. Mr Etheridge’s evidence, in its current affidavit form, untested as it is, is to be taken at its highest, unless it is demonstrably wrong or unreliable.
[18] See Lindon v The Commonwealth (No.2) (1996) 70 ALJR 541 cited in Bigg v Suzi (1998) FLC 92-799 at 84,975
As Kirby J indicated in Lindon:
“If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts…”
However, the guiding factor in the determination of a summary dismissal application is what is just. [19]
[19] Ibid
The factors about which there is controversy in the current case include the following:
·when did Ms Goddard and Mr Etheridge begin cohabitation at Property L – was it early 2009 or January 2011;
·what did Mr Etheridge know, if anything, of either the 2013 transfer of Property L to Mr Goddard or the consent orders of May 2016;
·when did Mr Etheridge complete the alleged improvements to Property L.
·what was their value;
·significantly did they improve or diminish the value of the property;
·what sums, if any, did Mr Etheridge contribute towards the acquisition, conservation or improvement of Property L, in either a direct or indirect sense prior to 2013.
The first issue to be considered is whether the evidence currently available to the court discloses that the consent orders of May 2016, between Ms Goddard and Mr Goddard could have constituted a miscarriage of justice, in the sense envisaged by section 79A(1)(a), so far as the interests of Mr Etheridge are concerned.
If orders, in similar form to those ultimately made in 2016, had been made in 2005, after Ms Goddard and Mr Goddard had finally separated, it is difficult to see how they could have been impugned in any way whatsoever. After a marriage of significant length, which produced four children, the parties agreed on a division of property which markedly favoured Ms Goddard.
However, there can be no doubt that Mr Goddard had a superior income earning capacity; whilst Ms Goddard’s ability to derive income was significantly reduced by her homemaking and parenting responsibilities. In these circumstances, in 2005 terms, the 2016 orders were clearly just and equitable.
In my view, Ms Goddard and Mr Goddard have adequately explained why the 2005 agreement was not formally implemented. I accept that Ms Goddard was not able to access finance to buy Mr Goddard out of the Property L property. The next question to be posed is whether there has been a change of circumstances, which is liable to render the application of the 2005 agreement unfair in 2016 terms.
From Mr Goddard’ perspective, little, if anything, had changed. The pool of assets directly attributable to the efforts of him and Ms Goddard remained of modest value and had not increased in value. His and Ms Goddard’s major asset in monetary terms – Property L – remained of the same approximate value. From his perspective, on the basis of the 2016 appraisal, the improvements allegedly provided by Mr Etheridge had had no impact on the property’s value.
The advent of the relationship between Ms Goddard and Mr Etheridge, whether it began in 2009 or 2011, had no financial implications for Mr Goddard. He remained liable for child support for his children. Mr Etheridge had no legal obligation to make any provision for these children. How and in what form Ms Goddard and Mr Goddard elected for the child support to be provided was a matter for them and not Mr Etheridge.
Up until mid-2013, the legal responsibility for the payment of the mortgage payments due for Property L remained solely with Mr Goddard and Ms Goddard. Even if Mr Etheridge did provide monies, from time to time, to Ms Goddard, this was of no benefit to Mr Goddard. There was no direct financial relationship between him and Mr Etheridge. In addition, there was no familial relationship between the two. At all times they lived in separate households.
There is no evidence that Mr Goddard in any way solicited Mr Etheridge to improve or repair the Property L premises in any way whatsoever. Again that that was a matter for Mr Etheridge and Ms Goddard alone who were living in the property concerned and were free to do whatever they considered would make the premises more amenable to their mutual occupation. Mr Goddard could not forbid Ms Goddard from inviting Mr Etheridge from becoming an occupant of the premises.
In all these circumstances, in my view, there was no form of either legal or equitable relationship between Mr Goddard and Mr Etheridge at any time. Mr Goddard was not in a position to seek rent from Mr Etheridge. In effect, Ms Goddard was free to grant any person a licence to occupy the Property L property on whatever terms or conditions she saw fit without demur from Mr Goddard. This was the same both before and after mid-2013.
In addition, in my view there was no homemaking or other familial relationship between Mr Goddard and Mr Etheridge. At best, Mr Etheridge can be described as a volunteer in respect of any parenting, which he provided for Mr Goddard’s children. As he never lived in Property L whilst Mr Etheridge was occupying it, it seems difficult to see that Mr Goddard can have ever benefitted from any homemaking Mr Etheridge provided either for Ms Goddard or the children.
For these reasons, in my view, it is clear that from Mr Goddard’s perspective, the orders of May 2016 represented a just and equitable settlement of claims for alteration of matrimonial property proceedings between him and Ms Goddard according to the principles contained in section 79 of the Act.
Mr Etheridge cannot establish that the formulation of the matrimonial pool, as calculated by Mr Goddard and Ms Goddard in both the 2005 agreement and in May of 2016 is materially incorrect. His complaint is that the orders do not recognise contribution which he has made as a consequence of his de facto relationship with Ms Goddard.
In all these circumstances, it seems to me to be fundamentally unjust, from Mr Goddard’s perspective, that he should be put to the trouble and expense of having to defend the May 2016 consent orders against a person with whom he has no equitable or legal relationship whatsoever, particularly as the orders concerned provide a just settlement of the matrimonial property claims of his former wife.
Mr Etheridge is not in a position to assert that Mr Goddard and Ms Goddard were engaged in some form of clandestine agreement to defeat his claims so far as Property L was concerned. From Mr Goddard’s perspective, Mr Etheridge did indeed live in the premises rent free. Certainly, Mr Goddard did not receive any direct recompense from Mr Etheridge for his (Mr Etheridge’s) occupation of the property.
In these circumstances, in my view, even taking Mr Etheridge’s evidence at its highest, he has not established any miscarriage of justice involving Mr Goddard directly. He cannot establish that Mr Goddard has committed any species of fraud; subjected anyone to duress; or has provided false evidence in any material sense.
Mr Etheridge is not in a position to establish that Mr Goddard knew anything of the circumstances prevailing between him (Mr Etheridge) and Ms Goddard other than they lived together. He is not in a position to assert that Mr Goddard was privy to the details of the financial relationship between him and Ms Goddard or knew what each of them did with their respective wages.
In these circumstances, I do not consider that Mr Goddard’s answer of no to the question of whether there was any other person who may become a party to the proceedings was materially false, given the level of his relationship with Mr Etheridge and so was, of itself, capable of constituting a miscarriage of justice. In my view, the evidence indicates that he was entitled to answer the question in this way.
As a consequence of these considerations, I have reached the conclusion that Mr Etheridge does not have reasonable prospects of success of having the consent orders between Mr Goddard and Ms Goddard set aside on the basis of the principles contained in section 79A(1)(a). For those reasons I propose to make the orders, as sought by Mr Goddard, in his response filed on 1 September 2016.
If the application to set aside the consent orders of May 2016 is unsustainable against one of the parties to those orders, it follows as a matter of logic that it must be unsustainable against both such parties. Accordingly, it must follow that the application, so far as it pertains to section 79A(1)(a), against Ms Goddard should also be dismissed.
Notwithstanding this determination, Mr Etheridge is entitled to pursue his application for settlement of his application for settlement of de facto property against Ms Goddard, notwithstanding the likely small extent of the pool of property concerned and the many controversies of evidence arising between him and Ms Goddard.
Ms Goddard’s prior interest in the Property L property was converted into a cash sum with the orders of May 2016. Mr Etheridge is entitled to have the court adjudicate what are his contributions to this sum according to the provisions set out in Part VIIIAB of the Family Law Act 1975. In these circumstances, I will refer Mr Etheridge and Ms Goddard to a conciliation conference with a registrar of the court to see if there are any prospects of this remaining aspect of the case being resolved consensually.
It is Mr Goddard’s position that he is a stranger to the controversy arising between Mr Etheridge and Ms Goddard as a consequence of the end of their de facto relationship. He contends that he has been drawn into this controversy unwittingly and unfairly after having appropriately resolved his matrimonial affairs with Ms Goddard justly and equitably. In these circumstances, he seeks an award of costs against Mr Etheridge.
Pursuant to section 117(1) of the Family Law Act 1975, the ordinary rule in family law proceedings is that each party should bear his or her own costs. However, pursuant to section 117(2), if the court is of the opinion that there are circumstances that justify it in so doing, the court may make an order for costs as it considers just.
The power to make an order for costs arising under section 117(2), is subject to a number of considerations which are delineated in section 117(2A). They include the following:
·the financial circumstances of each of the parties concerned;
·whether any of the parties to the proceedings was in receipt of a grant of legal aid;
·the conduct of the parties to the proceedings generally and in respect of procedural matters specifically;
·whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
·whether any party to the proceedings has been wholly unsuccessful in the relevant matter;
·whether an offer has made to settle the proceedings, in writing;
·any other matter the court considers relevant.
Mr Etheridge is clearly not in a strong financial position. I have not been provided with any current evidence regarding Mr Goddard’s financial position, but it does not seem probable that he could be considered a wealthy person. He has been drawn into de facto property proceedings between his former wife and a person with whom he has no legal relationship.
In mounting that application, Mr Etheridge has been wholly unsuccessful in his application against Mr Goddard. Necessarily, given the complexity of the factual situation given rise to the application, the proceedings have been involved and will have put Mr Goddard to a significant level of expense. In my view, these circumstances warrant an award of costs being made.
The court has a wide discretion as to the calculation of costs. Pursuant to Rule 21.02(2) of the Federal Circuit Court Rules:
“In making an order for costs in a proceeding, the Court may:
a) set the amount in costs; or
b) set the method by which the costs are to be calculated; or
c) refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
d) set a time for payment of costs, which maybe before the proceeding is concluded.”
Rule 21.10 provides a mechanism by which costs can be calculated by reference to a schedule of fixed events. The amounts calculated for: opposing an application in a family law proceeding, including an interim aspect is $2,704.00; a summary hearing, as a discrete event is $1,801.00 together with a daily hearing fee; advocacy loadings apply of 50% apply to the hearing fee.
In all these circumstances, I propose to make an order that Mr Etheridge pay Mr Goddard’s costs fixed in an amount of $2,500.00. In this regard, I note that the proceedings involving Mr Goddard have been brought to a conclusion at a comparatively early stage, which is obviously advantageous to Mr Goddard in the longer term.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and twenty-five (125) paragraphs are a true copy of the reasons for judgment of Judge Brown
Date: 27 April 2017
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Discovery
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Jurisdiction
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Remedies
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