Ferman & Lapham
[2022] FedCFamC2F 415
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Ferman & Lapham [2022] FedCFamC2F 415
File number(s): NCC 1719 of 2017 Judgment of: JUDGE KEARNEY Date of judgment: 5 April 2022 Catchwords: FAMILY LAW – property adjustment and spousal maintenance – de facto relationship of about four years – global approach to considering contributions – holistic approach to property adjustment which is just and equitable – overarching purpose Legislation: Family Law Act 1975 (Cth) ss 90SF, 90SM
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 190 & 191
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Benson & Drury [2020] FamCAFC 303
Bevan & Bevan [2013] FamCAFC 116
Fields & Smith [2015] FamCAFC 57
Grier & Malphas [2016] FamCAFC 84
Hall & Hall [2016] HCA 23
In the Marriage of Weir (1992) 16 Fam LR 15
Koch & Kest [2021] FamCA 408
Pierce v Pierce [1998] FamCA 74
Stanford v Stanford [2012] HCA 52
Wallis & Manning [2017] FamCAFC 14
Division: Division 2 Family Law Number of paragraphs: 360 Date of last submission/s: 24 February 2022 Date of hearing: 21-24 February 2022 Place: Newcastle Counsel for the Applicant: Mr Rugendyke Solicitor for the Applicant: Joplin Family Lawyers Counsel for the Respondent: Mr Page QC and Mr Kelly Solicitor for the Respondent: Catherine Henry Partners ORDERS
NCC 1719 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS FERMAN
Applicant
AND: MR LAPHAM
Respondent
ORDER MADE BY:
JUDGE KEARNEY
DATE OF ORDER:
5 APRIL 2022
THE COURT ORDERS THAT:
1.By way of property adjustment, no later than 5 July 2022, MR LAPHAM (‘the de facto husband’) shall pay to MR LAPHAM (‘the de facto wife’) the sum of four hundred and eleven thousand, six hundred dollars ($411,400) by way of Joplin Lawyers Trust Account BSB …, …87.
2.In the event the de facto husband does not make the payment to the de facto wife in accordance with Order 1, the following will apply:
(a)The de facto wife is appointed as the sole trustee in relation to the sale of the properties at D Street, Suburb E (title reference …), F Street, Town G (title reference …) and H Street, Suburb J (title reference … ) all in the State of New South Wales (‘the properties’).
(b)The de facto wife shall take all steps and execute all necessary documents to cause the properties to be listed with a real estate agent and sold by private treaty.
(c)The properties shall be sold for a price agreed between the de facto wife and the agent.
(d)The proceeds from the sale of the properties shall be distributed in the following manner and priority:
(i)Payment of agents’ commission, fees and expenses (if any) due on the sale;
(ii)Payment of any legal costs and other usual conveyancing adjustments of the sale;
(iii)Payment of the mortgage and other encumbrances affecting the property;
(iv)Payment as to the balance then remaining –
1.to the de facto wife an amount representing 15% of the property pool (including superannuation) by way of Joplin Lawyers Trust Account BSB … Account …87 plus any interest calculated from ninety (90) days from the date of the Orders until payment is received in accordance with Rule 10.17 of the Federal Circuit and Family Court Rules 2021 (Cth);
2.to the de facto husband the remainder of the balance,
NOTING THAT to calculate each party’s entitlement identified at Order 2(d)(iv) above, the property pool (including superannuation) consists of:-
A.the de facto wife retaining property assessed as being valued at $10,763; and
B.the de facto husband retaining property assessed as being valued at $1,423,023; and
C.the balance of sale proceeds remaining after the deductions identified at Order 2(d)(i)-(iii).
3.The de facto husband is restrained and an injunction shall issue prohibiting him from further encumbering the mortgages on the properties at D Street, Suburb E, F Street, Town G and H Street, Suburb J all in the State of New South Wales until Order 1 or Order 2 is complied with .
4.By way of spousal maintenance, no later than 12 April 2022, the de facto wife receive the sum of forty seven thousand dollars ($47,000.00) from the joint monies held with Joplin Lawyers Trust Account (Reference …).
5.Immediately upon compliance with Order 4 above, the parties shall do all acts and things to authorise Joplin Lawyers to disburse to the de facto husband the remaining balance of the joint monies held with Joplin Lawyers Trust Account (Reference …) and this Order shall serve as an irrevocable authority for that purpose.
6.Except as otherwise set out in these Orders, the de facto wife shall be solely entitled, to the exclusion of the de facto husband to all other property both real and personal in her ownership, possession and/or control.
7.Except as otherwise set out in these Orders, the de facto husband shall be solely entitled, to the exclusion of the de facto wife, to all other property both real and personal in his ownership, possession and/or control including but not limited to:
(a)K Street, Town L in the State of New South Wales;
(b)The Lapham Family Trust;
(c)Lapham Industry Pty Limited;
(d)Lapham Holdings Pty Limited;
(e)his share portfolio;
(f)in the event that Order 1 is complied, with the following:
(i)D Street, Suburb E (title reference …);
(ii)F Street, Town G (title reference …); and
(iii)H Street, Suburb J (title reference …)
8.Unless otherwise specified in these Orders and except for the purposes of enforcing the payment of any money under these or subsequent orders:
(a)each party hereby forgoes any claim they may have to any superannuation benefit that is belonging to or owned by the other save as provided for in these orders;
(b)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
9.Save for any application for costs, all outstanding applications are withdrawn and dismissed.
THE COURT FURTHER ORDERS THAT:
10.The proceedings are adjourned to Friday 13 May 2022 at 10.00am for an interlocutory hearing of any costs applications inclusive of any application pursuant to the Federal Proceedings (Costs) Act 1981 (Cth).
11.Insofar as it may be applicable, the notation made at Order 3 on 18 February 2022 is discharged.
12.In support of the costs hearing, no later than Friday 22 April 2022, the de facto wife is to file and serve:-
(a)an application in a proceeding particularising the relief sought;
(b)an updated single consolidated affidavit; and
(c)other witness affidavits upon which they intend to rely.
13.In support of the costs hearing, no later than Friday 29 April 2022, the de facto husband is to file and serve:-
(a)an application in a proceeding particularising the relief sought;
(b)an updated single consolidated affidavit; and
(c)other witness affidavits upon which they intend to rely.
14.No later than Friday 6 May 2022 the de facto wife is to file and serve any affidavit(s) in reply addressing only the evidence presented in the de facto husband’s affidavit(s).
15.No later than Wednesday 11 May 2022, all parties are to file and serve a case outline document which shall include:
(a)a list of the material relied upon;
(b)a brief chronology listing significant events that are relevant to the issues to be determined by the Court;
(c)a summary of contentions including as to s 117 factors relied upon to satisfy the Court to make the orders sought; and
(d)the findings of fact each party invites the Court to make.
16.No later than Wednesday 11 May 2022 each party shall file and serve a list of authorities which they intend to cite to the Court during the presentation of any argument, together with copies of any unreported decisions to which it is intended that reference shall be made.
17.No later than Wednesday 11 May 2022 each party is to file and serve a costs notice setting out the information specified at r 12.06(2) and/or 12.06 (3)(b) (as may be applicable).
18.Each party will be permitted to only rely on one consolidated affidavit and one affidavit in reply (if applicable). Reliance on earlier or additional affidavits will not be permitted.
19.On the basis of s 102NA(1)(a), (b) & (c)(i) of the Family Law Act 1975 (Cth) the Court is satisfied that the parties should have the protection that is provided by s102NA(2) so that if either party is unrepresented they not be permitted to personally cross-examine the other party.
IT IS NOTED THAT:
A.The Court will conduct the costs hearing at Wauchope and in anticipation that a party or their legal representative may not able to appear personally, dial-in details will be provided in due course.
B.Pursuant to rr 5.02(2)(c) and 5.09, and unless the Court directs otherwise, the costs hearing will be listed for two (2) hours with no cross-examination.
C.In the event, that a party fails to comply with the orders made regarding the costs hearing and/or fails to appear on the adjourned date, then consideration will be given to the hearing proceeding on an undefended basis.
D.As there are allegations of family violence and the provisions of section 102NA of the Family Law Act 1975 apply (see Family Violence Information Sheet), any unrepresented party will not be permitted to personally cross-examine the other party/parties.
E.Affected unrepresented parties may apply to the Commonwealth Family Violence and Cross-Examination of Parties Scheme (“the Scheme”) for representation but any such application must be made as soon as possible, noting that the costs hearing is scheduled to occur in just over four (4) weeks.
F.Further information about the legislation and the Scheme can be found at Part 4 of the Family Violence Information Sheet.
G.If section 102NA applies and a party becomes unrepresented, that party is required to promptly advise the Court.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Ferman & Lapham has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE KEARNEY
INTRODUCTION
These proceedings invoke Part VIIIAB of the Family Law Act 1975 (Cth) (‘the Act’) and to a lesser degree s117[1] of the Act. The parties to the proceedings are:-
(a)MS FERMAN (‘the de facto wife’); and
(b)MR LAPHAM (‘the de facto husband’).
[1] Unless otherwise stipulated, a legislative reference is a reference to a provision within the Family Law Act 1975 (Cth)
At the outset of this trial I handed down to the parties a list of all the court events in which they had participated over the course of these proceedings. I observed then, and now, that the parties’ procedural history is concerning and reminds me of the infamous fictional case of Jarndyce v Jarndyce which formed the background to Charles Dickens’ novel, “Bleak House” which at times is a satirical commentary about how the Court of Exchequer operated in 19th century England. For the reasons that will follow, this decision is unlikely to be the end of the parties’ litigation journey, but it is my intent to give them “closure” over their substantive property adjustment and spousal maintenance dispute, inasmuch as my standing as the trial judge can.
The de facto relationship between the parties ceased after 1 March 2009 so as to superficially attract the jurisdiction of the Act.[2] However up until 22 November 2019, the length of the relationship remained in contest, meaning that an interlocutory application for spousal maintenance filed by the de facto wife in December 2019 was held in abeyance because this jurisdictional aspect of the dispute only came to light after the hearing itself had concluded. This is but one aspect of the litigation pathway which reminds me of Jarndyce.
[2] See ss90SB & 90SD of the Act
The genesis for the proceedings was the final separation of the parties on 25 June 2016 and the subsequent desire on (at least) the part of the de facto wife, to secure her financial future in circumstances where she held no legal interest in any significant assets.
Both parties asked the Court to make property adjustment orders which necessarily involves the Court considering whether the parties’ respective contributions warrant an adjustment (if any) of their existing property and superannuation interests (‘the property pool’) and, if so, how that adjustment should be achieved.
In addition, the de facto wife asked the Court to make a lump sum spousal maintenance order (in lieu of her original application for regularised instalments) and there were consequential orders sought by the de facto husband pertaining to a reimbursement to him for part of the single expert costs paid by him along the litigation pathway.
Further, it was evident from the procedural history of the proceedings, the parties’ relief and the evidentiary concessions made by at least the de facto wife; that a costs hearing was going to be required once I made orders regarding the substantive issues.
These reasons will also make comment about the overarching purpose[3].
[3] Section 190 Federal Circuit and Family Court of Australia Act 2021 (Cth)
For the reasons that I follow I propose to make orders that:-
(a)adjust the parties’ property interests so that the de facto husband shall (overall) receive 85% of the property pool, with the de facto wife to receive 15% of the property pool;
(b)award the de facto wife lump sum spousal maintenance payable by the de facto husband fixed in the sum of $47,000.
In addition, I will list for hearing, the parties’ costs applications (including any claim related to single expert fees and/or the Federal Proceedings (Costs) Act 1981 (Cth)). Directions will also be made with which I expect both parties to comply, failing which, it is likely that any non‑compliance will be treated by the Court as a party being in default with the consequential effects that arise from such a finding (see rr 10.26 and 10.27 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)[4]).
[4] Unless otherwise stipulated, a subordinate legislative reference is a reference to a provision within the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
If a party is in default (either with the procedural orders to support the costs hearing and/or they fail to appear), then any application/submission made seeking relief other than contained within r 10.27 must be supported by an affidavit.
Even if a defaulting party appears at the costs hearing, then it shall remain open to the Court for the costs hearing to proceed on an undefended basis without further notice or the taking of submissions from the defaulting party.
THE EVIDENCE
The de facto wife relied on/read the following documents:
(a)Affidavit of Ms Ferman filed 14 January 2022[5] (‘her/the de facto wife’s trial affidavit’);
(b)Financial statement of Ms Ferman filed 14 January 2022 (‘her/the de facto wife’s financial statement’);
(c)Affidavit of Mr M filed 24 September 2021;
(d)Affidavit of Mr N filed 15 February 2022;
(e)Affidavit of Mr O filed 15 February 2022;
(f)Affidavit of Mr P filed 16 February 2022;
(g)Affidavit of Mr Q filed 15 February 2022.
(h)Amended Case Outline filed 18 February 2022 – marked exhibit “W1”;
(i)Various documents that were tendered into evidence.[6]
[5] For convenience, references to any content within the trial affidavit of Ms Ferman shall be prefaced by “FF” followed by the numbered paragraph enclosed within square brackets and any exhibits to the affidavit identified alpha-numerically.
[6] Exhibit “W2” consisted of an indexed and paginated tender bundle with the index identifying the documents contained therein bearing markings from “W2.1” to “W2.26”.
Before the de facto wife gave evidence, I heard and determined various objections to her written evidence and I do not intend to repeat them here.
The de facto husband relied on/read the following documents:
(a)Affidavit of Mr Lapham filed 2 February 2022[7] (‘his/the de facto husband’s trial affidavit’);
(b)Amended financial statement of Mr Lapham filed 18 February 2022 (‘his/the de facto husband’s latest financial statement’);
(c)Affidavit of Ms R filed 2 February 2022;
(d)Affidavit of Mr S filed 2 February 2022;
(e)Affidavit of Ms T filed 31 January 2022;
(f)Amended Case Outline filed 18 February 2022 – marked exhibit “H1”;
(g)A number of documents were tendered into evidence.[8]
[7] For convenience, references to any content within the trial affidavit of Mr Lapham shall be prefaced by “L” followed by the numbered paragraph enclosed within square brackets and any annexures to the affidavit identified alpha-numerically.
[8] Exhibit “H3” consisted of an indexed and paginated tender bundle with the index identifying the documents contained therein bearing markings from “H3.1” to “H3.54”. Additional tenders were accepted from the de facto husband, and as may be relevant, shall be identified in the judgment.
As alluded to above, each party sought the tender of various documents, most of which were drawn from the documents contained within their bundles of documents marked respectively as “MFI-1” (the de facto wife’s tender bundle) and “MFI-2” (the de facto husband’s tender bundle). This occurred before closing submissions. In accepting exhibit “H3”, I heard argument from counsel for the de facto wife that not all of the content within the 100+ pages contained within exhibits H3.12 to H3.44 were put to the de facto wife. Junior counsel for the de facto husband accepted that was the case.
With the goal of ensuring the trial concluded within the allocated four (4) days, a discussion followed between bar and bench. The upshot was that I acknowledged that I would only read the content within exhibits H3.12 to H3.44 (being pages 200 to 307) that had been put to the de facto wife. On behalf of his client, junior counsel for the husband undertook not to make an appeal point out of my failure to read any other content within those same pages.
The de facto wife objected to the late filing of the de facto husband’s latest financial statement. Having heard the argument, I gave leave for the de facto husband to read his latest financial statement. In doing so, I indicated that it would remain open to me as to what weight to give the document, in circumstances where Exhibit “M1” expressed significant scepticism about the veracity of its contents.
Counsel for the de facto wife accepted that his objections to the de facto husband’s trial affidavit were sent over the weekend, but of course, this timing could not have been assisted by the de facto husband’s failure to comply with the trial directions of the Court. Queen’s Counsel for the de facto husband submitted that those objections were still being considered. Queen’s Counsel submitted that given the order of witnesses, it would not be prejudicial if he was given more time to consider those objections, particularly in light of his junior counsel taking the lead insofar as cross-examination of the de facto wife. Again, given the time lost already in housekeeping matters, and without objection from counsel for the de facto wife, I acceded to Queen’s Counsel’s request.
At the commencement of the trial, the Court heard that neither Mr U nor Mr V, whose affidavits were sought to be relied upon by the de facto husband, were single experts. This was of surprise to the Court because the cover page to Mr U’s affidavit read “Affidavit of Single Expert Witness”, as did the cover page to Mr V’s affidavit.
Concerningly, nowhere in the de facto husband’s Amended Case Outline (‘exhibit H1’) is there a reference to a rule being relied upon to support the admission of the expert evidence of Messrs Mr U and Mr V, nor any application or affidavit in support of the requisite leave application. To be absolutely clear about this I set out below the relevant entries drawn from the document referred to above –
Husband’s Documents
4.The de facto husband relies upon the following documents, noting of course that at this stage the de facto husband does not have leave to rely upon any documents pursuant to order 4(b) of the Orders of 1 February 2022:
…
f. Affidavit of Mr U filed 2 February 2022;
…
h. Affidavit of Single Expert Valuer, Mr V filed 31 January 2022.
7.In addition, the de facto husband will rely upon the affidavit annexing the valuation by Mr V from W Valuations. Mr V valued the Town L property on 17 January 2018 at $1.35million.
8.The wife also seeks to rely upon Mr V’s valuation. Mr V’s valuation forms Exhibit F6 of the wife’s trial affidavit.
…
10.It is submitted that the affidavit of Mr U gives a good overview of the contract between the de facto husband and the company, Company X. Company X is otherwise known as Company Y.
11.Mr U is a commercial barrister.
12.Mr U provides a review and analysis of the contract.
13.Mr U gives evidence that the contract, inter alia:
a.is a personal contract between husband and Company X;
b.does not attach to the land;
c.provides Company X significantly discretionary power to not only terminate the contract but also to formally suspend or take action against the de facto husband which would make the de facto husband liable to Company X for significant sums;
d.is therefore not saleable or transferable;
e.has no equity in it;
f.There is no equity in the contract;
g.has a significant amount of compliance requirement for the de facto husband.
…
23.The valuation of the Town L property by Mr N as at December 2021 provides two valuations for the property.
24.One valuation “In Use” is $1.9 million.
25.The second valuation “As Is” is $1.45 million.
26.Mr V does not value the property using “In Use” or “As IS” method.
In exhibit “H1” no order is sought for leave to rely upon the affidavits of Messrs U and V and self-evidently there was no identification that leave was required.
It was common ground that Mr N was the single expert real estate valuer, with correspondence sent by the de facto wife’s solicitor to Mr N on 3 December 2021 seeking an “updated valuation” of the identified property. A circular copy of the letter was sent to the de facto husband’s solicitor. Although I did not read Mr V’s affidavit, it is apparent from the above excerpt from exhibit “H1” that there was some controversy about the methodology used by the two different real estate valuation experts.
Although Mr V may have produced a valuation on 17 January 2018 as a single expert, it was clear from the correspondence referred to above, that Mr N had been tasked by the parties with producing a fresh valuation. In those circumstances, and noting r 7.08, I do not understand why exhibit “H1” did not explain more fulsomely that Mr V was now being relied upon by the de facto husband, not as a “single expert valuer” but rather as an expert seeking to give evidence on the same issue as addressed by the more recent appointee.
All in all, I found this aspect of exhibit “H1” somewhat disingenuous, having the potential to waste the Court’s time. This was because had the de facto husband pursued his claim for the admission of Messrs U and V’s evidence, I may well have been asked to read what seemed to be written submissions about the admission of the material in circumstances where it was not overtly clear what was the legislative/evidentiary basis for the admission of their evidence. In this regard, I note that:-
(a)In the case of Mr U, it seemed that he was to give expert evidence about the effect of a commercial contract between the de facto husband and Company X which (based on exhibit “H1”) appeared to have some relevance to the value to be attributed to the property upon which the commercial livestock enterprise operated and/or the likelihood of any transferable value associated with it; and
(b)In the case of Mr V, he was to give expert evidence about the same issue as Mr N (the single expert witness) regarding the methodology adopted by Mr N, this conclusion being drawn from what was said within exhibit “H1”.
In other words and drawn from exhibit “H1”, as best I could understand the roles of the two experts, Mr U was being relied on as the de facto husband’s expert pursuant to r 7.10 and Mr V was being relied on as an alternative or adversarial expert pursuant to r 7.08. If I have that wrong, then I can only say that I am taking my lead from exhibit “H1” but the point is, if there had been a contest about the admission, more time would have been lost while the de facto husband’s bases for leave was properly articulated.
In any event, before the problems with exhibit “H1” became apparent to me, I asked and heard nothing which satisfied me that the de facto husband had attempted to resolve any dispute he may have had with the existing single expert evidence through the use of the various mechanisms set out within Division 7.1.6 of the Family Law Rules.
I expressed my concern about the failure by the de facto husband to do so, because that Division addresses ways in which a party can resolve disputes regarding the contents of a single expert’s evidence - including the provision of specific questions and conferencing with the single expert – without the need for Court time being spent on the exercise. The Court also reflected on the process by which a party can seek leave of the Court to rely on an alternate or “adversarial” witness who, if appointed, can confer with the single expert with a view to reducing the issues in dispute and/or nullifying them completely.
The explanatory statement to the Family Law Rules specifically says that when the Court is considering an application for leave to permit an alternate expert, the Court should have regard to the overarching purpose (r 1.04) as well as the purpose of the expert evidence.[9] The considerations and obligations of the various users of the Court in relation to the overarching purpose are set out at ss190 and 191 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (‘the FCFCOA Act’).
[9] See item “Rule 7.10” Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (F2021L01197) Explanatory Statement (Cth)
Time was lost at the start of the trial, while counsel for the de facto wife summarised the objections to the proposed experts. Time is a precious and expensive commodity for parties and the Court. The Court reiterated its concern to Queen’s Counsel for the de facto husband about why it should entertain an oral application to seek leave to rely on the two proposed experts, in the absence of any evidence of attempts being made to comply with the relevant rules and/or to otherwise resolve the dispute? Over and above the obvious failings to comply with the Family Law Rules, I was also concerned that the introduction of two more witnesses would have the potential of derailing the trial, leaving it part heard. It was agreed that the issue be put to one side, to be returned to if the de facto husband intended to press his application.
There was no agreement about a balance sheet and rather than lose more time, and having heard submissions from the parties, I determined to press on with the de facto wife’s evidence, anticipating that the parties could resolve this issue in a short time. No one opposed that course.
A joint balance sheet was tendered and marked exhibit “A”.
At times both parties were evasive or argumentative during cross-examination causing me to reflect on whether they were witnesses of credit. Their behaviour could have been a by-product of their personality traits, the (unsurprisingly) emotional and financial toll that this protracted litigation has had on them, a pre-emptive reaction to the question itself, reflective of a more sinister motivation or a combination of all or some of the above.
It was uncontroversial that the de facto wife continued to receive Centrelink benefits during the relationship without notifying Centrelink of her changed financial circumstances, namely her entering into a domestic relationship with a man earning over $100,000 in each of the four relevant financial years.
In his trial affidavit, the de facto husband denies that he coerced the de facto wife into staying on Centrelink benefits and says instead that he objected to her doing so and this caused fights between them.[10] The de facto wife says that the de facto husband told her to keep claiming the single parent’s benefit because she could then pay rent, allowing her to make a contribution towards the running costs of the H Street, Suburb J home and also increase the income stream received by the de facto husband.[11] She says that she has now approached Centrelink to make it right.[12] She was cross-examined about this issue and I accept that she has engaged with Centrelink and for this reason I do not intend to refer the matter for investigation.
[10] L [25]
[11] F [165]
[12] F [169]
On 5 February 2015, the de facto husband emailed his personal mortgage adviser, Mr Z saying that the de facto wife had been renting F Street, Town G (‘the F Street, Town G property’) for four years[13], something that was clearly misleading given that nowhere in the evidence is it suggested that the de facto wife lived in that property.
[13] F [171] & exhibit “F10”
Having considered the evidence, I am not satisfied that it supports a finding about the de facto husband financially coercing the de facto wife. I am satisfied that both parties are capable of financial dishonesty which (at times) informed the weight that I gave to their evidence.
In addition to the above circumstances, another example of why I have some difficulties with the de facto wife’s credibility was because I found her to be unnecessarily argumentative when asked questions about her son’s AA Bank account and her control over the account despite it not being in her name. Time was wasted on a line of questioning that was (in my view) going to lead to the inevitable conclusion that the de facto wife had control of that account which contained funds directly attributable to the parties’ de facto relationship and this was ultimately conceded by the inclusion of the account in the joint balance sheet.
The presentation of the de facto husband’s case also raised issues about whether he was a witness of credit. This was particularly so given the backdrop to the preparation of his written evidence - he engaged his current solicitor in October 2021 and had additional time to finalise his trial material because of his failure to comply with not one, but two sets of court orders regarding trial preparation. Despite this, the de facto husband’s latest financial statement filed on the Friday before the hearing was incomplete (on his oral evidence), with the potential to mislead. A more fulsome explanation of this aspect will be provided further on.
In addition, despite the de facto wife not being cross-examined at all about the authenticity of the voluminous text message and email communications that she said were exchanged between the parties, when taken to the documents, the de facto husband would repeatedly respond by saying words to the effect of “they are just words on a piece of paper”, “I would need to see the phone to prove it”.
Furthermore, a clearly significant issue in the case was when the de facto relationship commenced. I say that because the outcome of the wife’s spousal maintenance was held up (in part) over a jurisdictional argument about the relationship not having endured for two years. At the latest, by 13 September 2021, the de facto husband would have known about this issue because it was the subject of the short-listing of a procedural hearing on that date to consider that aspect, and ultimately, in light of the impending trial in October 2021, the parties agreed to have the spousal maintenance issue determined then.
Despite all of this background, during cross-examination he had a very vague recollection of significant dates or events that would either support or discount when the relationship commenced and at one point said words to the effect of - “I have written on a calendar anytime we did anything – because I didn’t want to get it wrong”. The calendar was never produced and from his trial affidavit (see paragraphs 119 to 124 and paragraph 5 versus 231) and in his oral evidence, I remained unclear about whether he was sure about when the de facto relationship commenced, let alone other significant events like the occurrence of overseas holidays (which would have lent support [or otherwise] for example, to the level of commitment the parties had) or when the de facto wife left the farm in 2015, etc.
BACKGROUND
The de facto husband was born in 1969 and is aged 52 years.
The de facto wife was born in 1980 and is aged 42 years.
There are twins born of the relationship between the de facto husband and his former partner Ms BB (‘Ms BB’).
In January 2006 the de facto husband separated from Ms BB.
In 2007, CC was born, who is the de facto wife’s son to her relationship with Mr DD (‘Mr DD’). CC is 14 years old.
In 2008, EE (‘EE’) was born, and her parents are the de facto wife and Mr DD. EE is 13 years old.
In 2011, the parties met on-line and struck up a relationship.
In July 2012, the de facto wife and her children moved into H Street, Suburb J (‘the H Street, Suburb J home’). The de facto husband returned to the H Street, Suburb J home on weekends when he was not working and rooms within the home were tenanted to other persons. In closing submissions it became an agreed fact that from this point, the de facto relationship commenced.
In 2013, following the breakdown of his earlier relationship, the de facto husband says that a property settlement was achieved which left him with five parcels of real estate and superannuation interests. In exchange, the de facto husband paid Ms BB $553,000.
At some point in 2014, the de facto husband resigned from his position at Employer FF.
The same year, Lapham Holdings (‘LH’) as trustee for the Lapham Family Trust (‘the family trust’) purchased K Street, Town L (‘the farm’) for $1,350,000. After that, LH as trustee, entered into a deed of assignment with the vendors and Company X Pty Limited (‘Y). The deed related to the assignment of the existing “growing contract” which facilitated the raising of livestock that were delivered to the farm by Y and after a certain period, the collection of the livestock for processing (‘the commercial livestock enterprise’).
By late 2014, the parties commenced living together at the farm.
In mid-2015, the de facto wife took her children and left the farm, staying with her parents.
On 20 July 2015, a new contract was executed between the relevant parties that was reflective of the operational commercial livestock enterprise being conducted on the farm.[14]
[14] L [213]
In October 2015, the parties reconcile with the de facto wife and the children returning to live at the farm.
In April 2016, the family trust purchased a small business at Town L Village.
On 25 June 2016, the parties separated.
On 28 June 2016, the de facto husband was charged with various offences and became the defendant to a preliminary apprehended domestic violence order (‘ADVO’) protecting the de facto wife and the children.
The de facto husband has been convicted of assaulting the de facto wife and CC as well as one charge of stalk/intimidate related to his domestic relationship.[15] He has also been convicted of breach ADVO. During this same period a final ADVO issues to protect the de facto wife and her children against the de facto husband. The term of the final ADVO was two (2) years.
[15] L [45] & [53] & exhibit “H3.5”
In June 2017, the de facto husband commenced a relationship with Ms R (‘Ms R’) who has two children, GG and HH.
On 14 June 2017, the de facto wife commenced these proceedings.
On 12 September 2017, the Court ordered the de facto husband to file and serve his responding material and make disclosure pursuant to the Family Law Rules. The proceedings were adjourned for about two months.
On 22 November 2017, the proceedings were adjourned for four months with provision made for the Court to finalise the proceedings in chambers in the event that satisfactory consent orders were received. In addition, interlocutory consent orders were made for the transfer of the Motor Vehicle 1 and the Town L business to the de facto wife. By way of procedural orders, the parties agreed to appoint a single expert witness to value the farm including a specified mechanism to facilitate the appointment.
On 29 March 2018, the proceedings were adjourned for another four months.
On 27 July 2018, the parties were ordered to attend a conciliation conference in just over two months’ time. Various orders were made to support the conciliation conference process and interlocutory consent orders were made for the parties to make mutual disclosure of various business records and to try and identify and (if possible) narrow the outstanding valuation issues.
On 24 October 2018, the parties attended a conciliation conference and with no resolution achieved, the proceedings were adjourned for about three weeks. There were various notations recorded which in summary identified that:
·The de facto husband had not transferred the business name for the Town L business as previously ordered;
·The de facto husband had not provided real estate valuations for various properties despite an order by consent, but instead had provided market appraisals;
·The de facto wife asserted that the de facto husband had not made full disclosure despite requests to do so;
·The parties had obtained a valuation for the farm but not of various aspects related to the operation of the farm’s commercial livestock enterprise;
·A joint balance sheet could not be settled.
In addition, the Registrar recorded that –
Notwithstanding the above, the Applicant indicated that she was prepared to engage in negotiations at the conciliation conference. The Respondent indicated that he was not prepared to engage in negotiations at the conciliation conference.
On 12 November 2018, the proceedings were adjourned for three months with each parties’ costs reserved.
On 14 February 2019, the de facto wife was granted leave to file an application in a case and the Court subsequently ordered the de facto husband to pay costs of $2,984 with the de facto wife’s costs reserved for this event and on 12 November 2018. A further order was made for the parties to exchange a list of what they said remained outstanding insofar as disclosure was concerned. Finally, the proceedings were adjourned for four months.
On 30 July 2019 the proceedings were adjourned to a callover with each party’s costs reserved. In exhibit “H1”, and relative to this event I note that in late May 2019, the parties had apparently reached a final settlement of the proceedings but at this court event, the Court declined to make the orders sought.[16] It was apparent from the de facto husband’s trial affidavit that at some point he paid $100,000 into the trust account of the de facto wife’s then solicitors, Firm B (‘the trust account money’).
[16] Exhibit “H1” at page 10
On 12 September 2019, the trial was set down and various orders were made in support of that event. In addition, interlocutory orders were made by consent appointing Mr JJ (‘Mr JJ’) as a single expert real estate valuer to value the H Street, Suburb J home and two other properties owned by the de facto husband. The de facto husband was ordered to pay Mr JJ’s costs.
On 2 December 2019, both parties had counsel appear following an interlocutory application filed by the de facto husband regarding the trust account money. An injunction issued prohibiting the de facto wife and her solicitor from dealing with the trust account money. Each parties’ costs were reserved and the proceedings adjourned for a short period. A notation was made about the potential relevance of the Court and the parties inspecting three transcripts.
On 12 December 2019, the de facto wife filed an amended initiating application which (relevant to the trial) sought leave for the de facto wife to be granted leave pursuant to s 44(6) to bring a spousal maintenance application and if leave was granted, for the de facto husband to pay the de facto wife $500 per week by way of interim spousal maintenance.
On 12 December 2019, the parties’ costs were reserved and the proceedings adjourned for interim hearing in three months’ time with notations made identifying the issues to be determined at the hearing.
On 20 March 2020 the interim applications were adjourned for a short period.
On 26 March 2020 the Court reserved its decision, with the parties permitted to re-list on short notice once a copy of the complaint made about the wife’s solicitor had been obtained.
On 4 May 2020 the Court dismissed the de facto husband’s application to restrain the de facto wife’s solicitor from continuing to represent her and the proceedings were adjourned for a short period for procedural hearing with a notation to the effect that the trial may need to be vacated. The Court left open submissions being made by the parties regarding costs.
On 6 May 2020, all outstanding interlocutory applications were listed for hearing and the trial vacated with the proceedings listed for callover on a priority basis. Each party’s costs of and incidental to the most recent interim application and this court event were reserved.
On 7 May 2020, the de facto husband filed a Notice of Address for Service which reflected that he had changed legal representatives.
On 8 May 2020, the de facto wife filed a Notice of Address for Service which reflected that she had changed legal representatives.
On 28 May 2020 the Court granted leave for the de facto wife to apply for spousal maintenance with the outstanding interlocutory applications adjourned for hearing and all parties’ costs reserved.
On 1 June 2020 the interlocutory hearing was adjourned for priority hearing with procedural orders made to support the new hearing date and all parties’ costs reserved.
On 9 and 10 July 2020 the de facto wife’s interlocutory application for spousal maintenance was heard, with the hearing noted as part-heard and all parties’ costs reserved.
On 21 July 2020 the proceedings were adjourned to two separate dates, the first being related to issues regarding subpoenae and the de facto husband’s compliance with a Notice to Produce, and the second date appeared to be related to the part-heard spousal maintenance hearing. The parties’ costs were reserved.
On 14 August 2020 the Court recorded that the parties had reached consent regarding the objection to subpoena and otherwise confirmed the further interlocutory hearing date.
On 17 August 2020 a chambers order was made addressing the subpoena notice of objection to the effect that the de facto wife was restrained from viewing or disseminating documents produced relating to the commercial livestock enterprise. In addition, the restraint as to dissemination included the solicitor for the de facto wife, with leave given to both parties’ legal representatives to copy.
On 22 September 2020, at the callover, the proceedings were allocated a four-day trial in just over a year’s time with various procedural orders made to support that event.
On 5 May 2021, consent orders were made relative to restraints on access for inspection and copying of material produced under subpoenae in a similar manner to the previous restraints made by consent on 17 August 2020. In addition, a mechanism was put in place to ensure that a single expert valuer was appointed. Each parties’ costs were reserved.
On 25 June 2021 an interlocutory hearing took place with the Court reserving its decision.
On 30 August 2021, and with the consent of the parties, the timeframe for filing each party’s trial documents was extended, with the Court confirming the trial in October 2021.
On 7 September 2021, the de facto wife’s interim spousal maintenance application was adjourned for possible directions as to the re-opening of the case. Although not apparent from the Orders, it seems from the submissions of the de facto wife, that at about this time, it had become apparent that there may be a jurisdictional issue (related to the duration of the de facto relationship not being two years) which needed to be addressed before the Court could make a decision.
On 13 September 2021 a consent order was made for the de facto wife’s interim spousal maintenance application to be determined at the final hearing.
On 8 October 2021, the trial was confirmed with orders made to support the parties’ personal attendance, access to a subpoena packet by the parties’ legal representatives only and the parties’ costs being reserved.
At the start of the trial on 11 October 2021, the de facto husband’s lawyers were granted leave to withdraw due to not having instructions. The trial was vacated and a determination of the de facto wife’s costs was adjourned for hearing later that same week. The effect being that the de facto wife’s spousal maintenance application remained outstanding.
On 14 October 2021, the de facto wife’s costs application was adjourned. On the adjourned date, the de facto husband was to inform the Court whether he intended to pursue his claim about the de facto wife’s former solicitor. Other orders were made including for the de facto husband to pay costs of $16,500 to the de facto wife’s former solicitor for her costs thrown away because the trial did not proceed. Those costs were to be deducted from the trust account money. In addition, new trial dates were set together with trial directions.
On 22 October 2021, the de facto husband filed a Notice of Address for Service indicating he had instructed a new legal representative.
On 22 November 2021, orders were made by consent for the de facto husband to pay the costs of the de facto wife for the aborted trial, fixed in the sum of $28,750. The costs were to be deducted from the trust account moneys. The former solicitor for the de facto wife was removed as a party. A notation was made that –
the de facto husband now accepts that the period, or the total of the periods, of the de facto relationship is at least 2 years.
On 18 January 2022 a chambers order was made by consent relative to the preparation of a tender bundle.
On 1 February 2022, various orders were made including that:
(a)the de facto husband’s application to have the court issue various subpoenae was dismissed;
(b)the de facto husband was permitted to issue a late subpoena;
(c)the de facto husband was permitted to request the de facto wife’s father, Mr M (‘Mr M’) produce his diary notes, failing which the de facto husband had leave to issue a subpoena for the production of same;
(d)the de facto husband was given leave to file and serve his trial material the following day with a determination on the admissibility of such material to be an issue at trial.
On 18 February 2022, following an application by the de facto husband, the trial judge recused himself and the trial was listed before me. The outstanding reserved judgement in the interim spousal maintenance application was vacated noting that the Court will consider in chambers any relevant application that may arise pursuant to the Federal Proceedings (Costs) Act 1981 (Cth).
On 21 February 2022, the trial proceeded and I reserved my decision at the conclusion of the fourth day.
PARTIES’ PROPOSALS
The de facto wife sought relief which in summary proposed that:-
(a)The de facto husband pay her $711,238 by way of property adjustment, failing which to secure her entitlement, the de facto wife be appointed sole trustee to sell three properties located at D Street, Suburb E and F Street, Town G as well as the H Street, Suburb J home with the sale proceeds to be disbursed to pay the usual sale expenses and property liabilities that may exist at the time, after which, she would receive her entitlement (plus default interest) and the de facto husband would receive the balance.
(b)Pending receipt of her entitlement, the de facto husband be restrained from further encumbering the three properties mentioned above.
(c)The de facto husband pay $47,555.15 to the de facto wife by way of lump sum spousal maintenance which, in effect, would see the trust account money being disbursed entirely to the de facto wife.
(d)Declarations pursuant to s 90SL for each party to retain their existing interests in the property they have power, possession or control over.
(e)A superannuation splitting order of $173,450.50 in favour of the de facto wife.
The de facto husband sought relief which in summary proposed that:-
(a)The de facto husband pay $300,000 to the de facto wife by way of property adjustment.
(b)The dismissal of the de facto wife’s spousal maintenance application.
(c)Declarations pursuant to s 90SL for each party to retain their existing interests in the property they have power, possession or control over.
THE DE FACTO RELATIONSHIP
It was uncontroversial that the parties were in a de facto relationship for a period of or the total of the periods amounting to two (2) years, ending 25 June 2016.[17]
[17] See Orders of the Court made 22 November 2021
At the commencement of the trial, there was a dispute about when the de facto relationship commenced which meant that either the de facto relationship endured for about four (4) years (the de facto wife’s case) or for about two years (the de facto husband’s case).
The de facto wife asserted that the de facto relationship commenced not later than July 2012 when she and the children moved into the H Street, Suburb J home. At paragraph 118 of his trial affidavit, the de facto husband agreed that this was when the de facto wife moved in.
From his trial affidavit and exhibit “H1” it was unclear when the de facto husband said the relationship commenced. At paragraph 126 of his trial affidavit, the de facto husband says that the parties did not live together full-time until I stopped working at Employer FF and moved out of my F Street, Town G house and into the H Street, Suburb J house a few months before we moved to the farm in October 2014.
By the conclusion of the trial, and in light of the oral evidence given by the de facto husband, the dispute had resolved and I heard from Queen’s Counsel for the de facto husband that his client accepted that the parties were in a de facto relationship of about four (4) years from July 2012 to June 2016. In my view, the de facto husband’s concession was entirely consistent with the evidence.
The evidence easily established the parties’ commitment to the relationship, their commitment to a shared life and the public recognition of their domestic union. I am satisfied that on the balance of probabilities, the parties were in a de facto relationship for about four (4) years from July 2012 to June 2016.
In making this finding I accept that between July and October 2015, the parties were physically separated. Although there appeared to be some contest about exactly when the parties considered their de facto relationship resumed (from an emotional and/or psychological perspective) - there was consensus that by late 2015, the de facto wife and the children had moved back to the farm to live with the de facto husband. In my view, this factual dispute is not significant, particularly given the final submissions made by both parties’ counsel that the relationship endured for about four years.
PROPERTY ADJUSTMENT – sections 90SM(4) and 90SF(3)
As identified within the High Court’s decision in Stanford v Stanford [2012] HCA 52, there is a legislative pathway that I should follow and in doing so, I am obliged not to assume the parties’ rights to or interests in property should be different from those that now exist or that a party has the right to have the parties’ property divided in accordance with the statutory considerations.
Although Stanford related to a married couple, the principles apply equally to applications brought by de facto couples pursuant to Part VIIIAB of the Act.[18]
[18] See for example, Lotta & Lotta [2017] FamCA 50 at [281] – [290]
The Court may rely on the factors set out within s 90SM(4) of the Act to inform its inquiry about the justice and equity of making property adjustment orders pursuant to s 90SM(3) of the Act (see Bevan & Bevan [2013] FamCAFC 116 at [83] – [89], [163], [169], [171[-[172]).
I am required to make a holistic value judgement when exercising my discretion pursuant to the Act and in doing so, I should not engage in an accounting exercise. In Fields & Smith [2015] FamCAFC 57, Bryant CJ and Ainslie-Wallace J said at [168]:
...the task is to consider the contributions holistically over the whole period from the commencement of cohabitation to trial, and the analysis requires the Court to weigh all of the contributions of all types prescribed by section 79(4) (s90SM (4) for my purpose) made by both parties across the entirety of the relationship until the time of Hearing, including the post-separation period.
In support of my observations about the Court’s approach to a property adjustment decision, I set out the comments of the Full Court in Grier & Malphas [2016] FamCAFC 84at [129], where Murphy and Kent JJ said:
As the Chief Justice points out, with those principles in mind, the trial judge adopted a broad-brush approach to the parties’ respective expenditure. Nowhere error is established by reason alone of that approach; authority eschews “overly pernickety analysis” and section 79 demands neither an audit nor an exercise in accounting. However, when significant sums of money are said by one party or the other to have been “wasted” or to amount to a unilateral “premature distribution of property” and the evidence is suggestive of either or both, an analysis of the relevant sums and their use is needed.
I heard submissions to the effect that the de facto wife pressed for the Court to adopt a global approach to a consideration of the parties’ contributions towards the property pool whereas the de facto husband submitted that an asset-by-asset approach be adopted.
I have had regard to the High Court decision in Norbis v Norbis (1986) 161 CLR 513 which held that both approaches (global or asset-by-asset) were legitimate and that the Court could exercise its discretion based on which approach was more convenient, dependant on the circumstances of each case.
The de facto wife submitted that a global approach be adopted with a consequential adjustment of the non-superannuation property pool in her favour of 25% and an equalisation of the parties’ respective superannuation interests to reflect the different contributions made pursuant to s90SM(4) (a) – (c) and the matters raised by 90SF(3).
Within exhibit “H1” the de facto husband submitted that a “two pool” approach be taken and that the payment of $300,000 to the de facto wife would reflect about a 10% adjustment of the property pool.
In exhibit “H1”, in support of the “two pools” approach it was urged that the three real properties at D Street, Suburb E, (‘the D Street, Suburb E property’), the F Street, Town G property and the H Street, Suburb J home be dealt with differently. The de facto husband submitted that this was because of his overwhelming contributions towards those assets because he held them at the commencement of the de facto relationship and the de facto wife made no contributions towards the conservation or improvement of the three properties during the de facto relationship or after separation.
During the course of cross-examination, and noting the limitations I have found as to the de facto husband’s credibility, I am satisfied that whilst the de facto wife made no significant direct financial contributions to the three properties, she did make other contributions towards the properties. For example, I accept that:
(a)she paid weekly ‘rent’ of at least between $100 and $200[19] with those funds deposited into a variety of accounts over time including an account associated with the management of the F Street, Town G property and at least one other account in the name of the de facto husband. The significance of this arrangement is self-evident when the de facto husband had to engage with the ANZ Bank about the farm debt because he expressly relied on the rental income being paid by the de facto wife to support the business plan.[20] I am able to make this finding because despite the de facto wife exhibiting email communications between the de facto husband and a personal mortgage adviser at the ANZ Bank, she was not challenged about this. Conversely, when the de facto wife’s contention was put to the de facto husband, he denied it, saying he had never seen the email communications before and that he definitely did not write it.
(b)she took on various administrative roles to support the ongoing tenancies of the thee properties including organising WIFI for tenants, drafting and placing advertisements for the rental of rooms, attending to maintenance checks of the F Street, Town G property and monitoring CC’s account to make sure rent was paid;[21]
(c)she carried out works to improve the H Street, Suburb J home including painting, with the de facto husband saying by text, U r a good wifey. Will need to do a min. of 2 coats. She also records other actions including varnishing floors, creating a Gumtree advertisement to rent out rooms and the removal and replacement of the kitchen floor.[22]
(d)she carried out maintenance at the D Street, Suburb E property including painting the bathroom ceiling, applying sugar soap to the walls, sanding and re-painting the walls (after the de facto husband had to repair holes in them caused by a former tenant).[23] Exhibit “F25” shows photographs of the work she says she assisted with and/or carried out.
(e)she attended the F Street, Town G property on at least one occasion to clean up after a tenant had vacated the property - vacuuming the third bedroom and washing down the walls and on other occasions she would assist the de facto husband in general cleaning and maintenance chores at that property.[24]
(f)she continued to assist with the rental management of the three properties after moving to the farm including the use of an account in CC’s name to collect rent from the various tenants, with an expectation from the de facto husband that she would check the account to make sure the rent was being paid.[25]
[19] L [159]
[20] F [171] & exhibit “F10” being an email sent by the de facto husband to his mortgage adviser about the payment of rent by the de facto wife.
[21] F [25] & [214]
[22] F [324] & exhibit “F26”
[23] F [235] & [236]
[24] F [237]
[25] F [227] & [228]
Given the above findings about the de facto wife’s payment of “rent” and her non-financial contributions to the three properties sought by the de facto husband to be treated differently, I am satisfied that it is more convenient for me to adopt a global approach when considering the parties’ myriad of contributions towards the property pool.
The Court has power to grant injunctions pursuant to s 114 if satisfied that such orders are proper for the protection of property, inclusive of positive and prohibitive restraints to maximise the equity available to parties arising from the sale of real estate assets included within the property pool.[26]
[26] Botsis & Botsis [2016] FamCA 249 at [41] to [44]
The parties’ existing property interests
By consent, the parties tendered a joint balance sheet (exhibit “A”).
Taken from the joint balance sheet, the de facto wife’s property interests currently comprise:
Description Value ($) Total ($) Assets Westpac account #...48 (item 9, joint balance sheet) 3,391 Westpac account #...15 (item 10, joint balance sheet) 2,152 AA Bank account #...18 in the name of CC (item 13, joint balance sheet) 7,964 Westpac account #...29 – related to Town L business (item 14, joint balance sheet) 10 Westpac account #...10 – related to Town L business (item 15, joint balance sheet) 123 Motor Vehicle 2 (item 17, joint balance sheet) 20,000 Sub-total 33,640 Liabilities ATO HELP debt (item 27, joint balance sheet) (9,443) KK Bank car loan #...44 (item 29, joint balance sheet) (26,273) Sub-total (35,716) Nett assets (2,076) Superannuation Suncorp (item 30, joint balance sheet) 12,823 ATO super held (item 31, joint balance sheet) 16 Sub-total 12,839 Nett property 10,763
Taken from the joint balance sheet, the de facto husband’s property interests currently comprise:
Description Value ($) Total ($) Assets H Street, Suburb J (item 1, joint balance sheet) 900,000 D Street, Suburb E, (item 2, joint balance sheet) 840,000 F Street, Town G (item 3, joint balance sheet) 280,000 Lapham Holdings, Lapham Industry, The Lapham Family Trust (item 4, joint balance sheet) 1,051,576 Shares – Company LL (item 5, joint balance sheet) 3,056 Shares – Company MM (item 6, joint balance sheet) 5,628 ANZ bank account #...72 (item 11, joint balance sheet) *702 Sub-total 3,080,962 Liabilities ANZ mortgage #...92 (D Street, Suburb E) (item 22, joint balance sheet) (143,534) NN Bank mortgage #...58 (H Street, Suburb J) (item 23, joint balance sheet) (405,952) ANZ mortgage #...28 (F Street, Town G) (item 24, joint balance sheet) (90,168) ANZ credit card/loan #...72 (item 25, joint balance sheet) (125) Sub-total (639,779) Nett assets 2,441,183 Superannuation Super Fund OO (item 32, joint balance sheet) 362,186 Sub-total 362,186 Nett property 2,803,369 * In the absence of specific submissions and noting that the only documentary evidence I have is the de facto husband’s latest financial statement specifying a balance of $702, I have relied on that evidence.
Relying on the information set out in the above tables, the property pool consists of:-
·Nett combined non-superannuation property $ 2,439,107
·Superannuation in the de facto husband’s name $ 362,186
·Superannuation in the de facto wife’s name $ 12,839
·TOTAL PROPERTY POOL $ 2,814,132
Section 90SM(3)
The de facto relationship endured for about four years, between July 2012 and June 2016. There was a period of about three months in the second half of 2015 when the parties were physically separated. During this period, it is common ground that the de facto husband sold the land adjacent to the H Street, Suburb J home[27] and entered into a contract with Y regarding the commercial livestock enterprise. I also note that during this time, EE had surgery and the de facto wife was primarily responsible for caring for her during her recovery which, at least at the start, occurred at the home of Mr M and his wife.[28]
[27] See for example, F[193]
[28] F [58]
In my mind, not much turns on this period of separation as it is evident from the communications between the parties that during this time, the de facto husband relied on the de facto wife to assist him with the ongoing financial management of the farm and the commercial livestock enterprise.
The principle assets are real property and commercial interests held in the de facto husband’s name or in entities he solely controls. In addition, the de facto husband holds a significant interest in superannuation. It is undisputed that the de facto husband made the overwhelming initial financial contributions and without his property interests, the farm would not have been acquired.
The parties did not hold or acquire property in joint names. However, during the course of the relationship, their finances were intermingled insofar as, for example, they used the de facto husband’s rental income (deposited into CC’s account and otherwise called “the holiday account”) to pay for their travel. CC’s account is listed on the joint balance sheet and it was common ground that the account continues to hold the remainder of the rental income.
Both parties seek that a property adjustment order be made.
The de facto wife asserts that a 25% adjustment should be made in her favour out of the parties’ non-superannuation property and that there be an equalisation of the parties’ superannuation interests. The de facto husband proposes that he pay the de facto wife a lump sum of $300,000 in addition to the other property interests she has now.
I am satisfied that arising out of the de facto relationship between the parties, each of them has acquired legal and equitable interests in property that are now held separately by them.
Although there is a dispute about how their respective property interests should be adjusted, I am assisted by the agreement of the parties that their respective property interests and rights require alteration.
On the basis of the above, I am satisfied that it is just and equitable to consider each party’s respective property interests and rights to determine an alteration of their various interests pursuant to s 90SM and possibly s 90XT.
Section 90SM(4) and 90SF(3)
At the commencement of the relationship the de facto husband was employed as a contract tradesman at Employer PP. There is no evidence about the value of the de facto husband’s initial contributions as at July 2012.
It is apparent from paragraph 73 of his trial affidavit and some of the business records at exhibit “W2.13” that in 2013, the de facto husband borrowed $500,000 on the Suburb QQ property to pay to his former wife.
In addition, the single expert report from Mr O (‘the business valuation’) identified that as at 30 June 2013, Lapham Pty Limited (‘LI’) operated a construction business and opined the net value of LI to be $57,637. It is common ground that the de facto husband is the sole director and shareholder of LI.
Doing the best I can - relying on the 2011 retrospective valuations exhibited by the de facto wife at exhibit “F9”, the business valuation and the de facto husband’s trial affidavit at paragraph 71 – as at July 2012, I have drawn the following information about what the de facto husband may have held an interest in or a right to (and its value where ascertainable):-
(a)Super Fund OO superannuation $95,000
(b)Cash at bank 23,500
(c)RR Street, Suburb QQ* NK
(d)LESS mortgage debt ($92,500) NK
(e)D Street, Suburb E E$380,000
(f)LESS mortgage debt ($ 92,500) 287,500
(g)F Street, Town G $ 230,000
(h)LESS mortgage debt ($110,000) $120,000
(i)H Street, Suburb J $375,000
(j)H Street, Suburb J** NK
(k)LESS mortgage debt secured over one or
both (?) H Street, Suburb J properties 110,000 E$265,000
(l)LI E57,000
* ‘the RR Street, Suburb QQ property’
** ‘the H Street, Suburb J land’
In 2013, the de facto husband said that he changed sites to work at Employer FF and traded through Lapham Pty Ltd (‘LI’), being a one man business.[29] There is evidence that LI also operated some sort of construction business[30] but this did not appear to be a significant issue in the case.
[29] L [182]
[30] Affidavit of Mr S at [31] and affidavit of Mr O at Annexure D, Appendix E, [E.2]
On 2 April 2014, L was incorporated and acts solely as the trustee for the family trust. It is common ground that the de facto husband is the sole director and shareholder of LH. The de facto husband is the appointor of the family trust.[31]
[31] Affidavit of Mr O at Annexure D, Appendix D, [D.1]
On 19 September 2014, LH entered into a contract to buy the farm. The purchase price was $1,350,000 using a deposit of $135,000.[32] In cross-examination, the de facto husband was challenged about paragraph 80 of his trial affidavit where he asserted the “actual cost” was $1,428,000. Having heard the de facto husband’s evidence, and reflecting on exhibit “W2.13” (being a diary note from staff at the ANZ who were being asked to finance the purchase), I am satisfied that irrespective of whether $5,000 was spent purchasing or repairing heaters on the farm, the de facto husband paid for and/or was responsible for securing finance for the capital cost of the purchase including incidentals such as legal fees and stamp duty. It is apparent from the above exhibit, that the ANZ was considering the finance of the farm based on the sale of the RR Street, Suburb QQ property and the H Street, Suburb J land.
[32] Exhibits “W2.14” & “W2.15”
It was conceded by the de facto wife that without the de facto husband’s financial circumstances, the farm would not have been acquired.
As noted earlier, on 3 October 2014, the deed of assignment was entered into.[33]
[33] Exhibit “W2.11”
Arising from a scheduled financial review conducted between the de facto husband and the ANZ Bank, the de facto husband sold the RR Street, Suburb QQ property for $941,000 and the H Street, Suburb J land for $370,000. The de facto husband says that in January 2015 (after the sale of the RR Street, Suburb QQ property) sale proceeds of $400,000 were deposited to the farm mortgage.[34] In October 2015, the de facto husband says he sold the H Street, Suburb J land for $370,000 and says that $300,000 was used to reduce the loan on the farm and at the same time the mortgage over the H Street, Suburb J home was re-financed to cover a capital gains tax liability of $47,812.90 which arose from the sale of the H Street, Suburb J land.[35]
[34] L [85]
[35] L [90] & [91]
In his affidavit, Mr S (‘Mr S’) identifies that he has been the accountant for the de facto husband since 2006. Mr S says that in December 2014, he recorded a $400,000 loan from the de facto husband to the family trust arising from the sale of the RR Street, Suburb QQ property. About a year later in October 2015, Mr S says that $300,000 from the sale of the H Street, Suburb J land was paid into the ANZ loan held by the family trust and again this amount was recorded as a loan from the de facto husband to the family trust.
As at 30 June 2016, the business valuation assessed the value of the de facto husband’s interests as follows:-
(a)Family Trust $NIL
(b)LI $124,000
(c)LH $NIL
(d)Related party loans $675,352
In addition, it was uncontroversial that sometime between 2018 and 2020 the de facto husband caused a new shed (‘Shed 3’) to be built on the farm and the upgrade of the existing two sheds so that he could run a “free range” operation. At paragraphs 103 and 104 of his trial affidavit, it appears that it cost either $440,000 to build a third shed and upgrade the other two, or $440,000 to build Shed 3 and another $80,000 to upgrade the other two sheds. From the evidence, it is unclear to me whether funds were borrowed to construct Shed 3 although the de facto wife says she thought he may have.[36] In any event this lacuna is a moot point in circumstances where there was no evidence of a lump sum amount being contributed by the de facto husband at the relevant time, the parties adopted a nett value for the various entities held by the de facto husband (which included the farm upon which Shed 3 is located) and there was single expert evidence about the farm which included alternate current values for Shed 3.
[36] F [74]
Taking up that latter point, Mr N in his single expert report (‘the real estate valuation’), records Shed 3 has having been built circa 2019. The real estate valuation applied a summation valuation approach on an ‘in use’ basis subject to a commercial livestock contract to record that Shed 3 as adding value (including fixed plant and equipment) of $411,470. In the same report, adopting the same summation valuation approach but on a ‘vacant possession’ basis excluding a commercial livestock contract, Shed 3 is recorded as adding value (including fixed plant and equipment) of $241,515.
I did not hear or read any specific submissions about these competing values but either way, there is no doubt that Shed 3 has improved the overall value of the farm, albeit that impact may have been ameliorated if there was an increase in debt to fund construction. Nonetheless, to the extent that the evidence allows me to, I have had regard to this post-separation contribution made by the de facto husband post-separation.
It was uncontroversial that the de facto husband has worked long hours on the farm[37] and continues to operate the commercial livestock enterprise on his own, albeit it would appear that at times, such as when the livestock babies first arrive, other people help out. It is also uncontroversial that the de facto husband has had the benefit of exclusive occupation of the farm since the parties separated and there was no evidence to suggest that he has done anything to diminish its value or has otherwise failed to maintain the farm.
[37] L [240] to [244].
It was apparent to me that the farm has become his passion, in which he has invested significant amounts of capital, time and energy - so much so, that in cross-examination I observed his face to physically redden with emotional distress when questions were asked about whether (and at what price) he would consider selling the farm.
I was invited to look at the parties’ (and in particular) the de facto husband’s direct financial contributions through the income he earned and the increase in his superannuation. I have had regard to the evidence but also note that property adjustment proceedings should not become an “accounting exercise.”[38]
[38] See Fields & Smith and Grier & Malphas above
For the reasons above, I am satisfied that initially, during and after the de facto relationship ended, the de facto husband has made very significant financial and non-financial direct and indirect contributions towards the operation of the commercial livestock enterprise and to the acquisition, conservation and improvement of the property pool.
At the commencement of the relationship the de facto wife was in receipt of Centrelink benefits and although entitled to child support, rarely received any payments. It was common ground that when she moved into the H Street, Suburb J home, she operated a mobile business and also worked as an entertainer.
The de facto wife was cross-examined about the income she earned during the relationship. Although I acknowledge that, at times, the de facto wife’s evidence about her employment was argumentative and/or evasive (at one point she described her activities as “I wouldn’t call it a business…it’s a hobby…it’s not a registered business”); in the absence of any business records showing substantial and consistent sums received by her or purchases made by her, I am satisfied that her income was insignificant as compared to that of the de facto husband.
Her evidence was largely consistent with her written evidence and the dearth of business records that would ordinarily be produced if a profit or income-earning enterprise existed. At no relevant time has the de facto wife earned any significant income, and it was uncontentious that if she made a profit from her work, it was (respectfully) insignificant to the income of the de facto husband.
The de facto wife says at paragraph 147 of her trial affidavit that in 2012, her nett non‑superannuation property was worth about $12,000 and her superannuation worth about $9,000. She did not contribute any property during or after the de facto relationship ended. The de facto wife said that at separation she had personal savings of $22,000.[39]
[39] F [260]
It was common ground that post-separation and as a result of consent orders made on 22 November 2017, the de facto wife was entitled to the business at Town L (‘the Town L business’) and a Motor Vehicle 1 (which she subsequently traded in for the Motor Vehicle 2 she currently owns).
It was uncontentious that the Town L business was purchased by the family trust just before the parties’ final separation with start-up costs of under $10,000. The de facto wife says (and I accept) that she was the driving force behind this acquisition which post-separation has ultimately closed down. There may be some remaining stock and/or equipment held by the de facto wife (just as the de facto husband may have had the benefit of cash taken from a bank account associated with the Town L business); but in the absence of any compelling submissions, I make no finding about the parties’ contribution towards the Town L business.
I note my earlier findings about the de facto wife’s contributions towards the D Street, Suburb E property, the F Street, Town G property and the H Street, Suburb J home. In addition, given the issues of credit arising from the de facto husband’s oral evidence, I accept that the de facto wife also created the Gumtree advertisement for the sale of the RR Street, Suburb QQ property and that she helped paint its exterior.[40] Against her own interests, she also acknowledged the work that the de facto husband did on the property, which only lends weight to her evidence.
[40] F [233] & exhibit “F24”
The de facto husband was challenged about the assistance the de facto wife gave the de facto husband in the operation of LI when he was a contractor. Various exhibited communications were put to the de facto husband including for example, an email from the de facto wife to “Ms SS” dated 17 May 2013. In summary, the de facto husband challenged the authenticity of the emails and said that his bookkeeper (Ms T) handled that work and/or that he did not produce invoices but rather he got paid by filling out time sheets.
Within Ms T’s affidavit she says that she carried out all bookkeeping activities for the business including data input and reconciliation of entries to his (the de facto husband’s) business MYOB file…I was also responsible for the preparation and lodgement of the quarterly BAS statement for the business. The affidavit was filed after the de facto wife filed her trial affidavit and in my view the lack of specificity in Ms T’s evidence as to the tasks she undertook, combined with the argumentative manner in which the de facto husband responded towards the tendered emails and more generally this issue during cross examination, causes me to infer that the evidence of the de facto wife should be preferred over the de facto husband because her evidence is not inconsistent with Ms T’s.
The de facto wife asserted that she had made non-financial contributions towards the acquisition of the farm. In support of this contention, the de facto husband was challenged about exhibit “W2.13” and he agreed that he was aware that the de facto wife had experience working on a farm. The de facto wife’s evidence of farming experience at paragraphs 221 and 223 of her trial affidavit, lends support to her involvement in the acquisition process, because even before the farm was purchased the preferred financier, the ANZ Bank was being informed about the experience that the de facto wife and her father would bring to the future operation of the farm.[41] In response to a question in cross-examination, about whether his evidence remained that the de facto wife had no involvement in the purchase of the farm, the de facto husband said, “We were in a relationship, she was around all the time.” In my view, his response was particularly evasive when it didn’t need to be. Given the documentary evidence I am satisfied that the de facto wife did assist in the acquisition process, albeit I wish to be clear to say, that without the de facto husband’s financial resources, the parties’ dream to have in effect a “tree change” would never have come to fruition.
[41] See diary note dated 15.07.2014 at exhibit “W2.13”
I heard from both witnesses that the use of the AMEX account causes an accumulation of the Qantas frequent flyer points. I accept that from the presentation of her evidence, the de facto wife has been less than transparent about the specific source of support or benefits she has received from her father, but in my view, her evidence was not inconsistent with his. Their oral testimony demonstrated that her intention has been and remains that any funds she uses is repaid and his is, that he will leave it up to his daughter to pay back what she wants.
As opined by the High Court in Hall[91] -
54. The reference to "financial resources" in the context of s75(2)(b) has long been correctly interpreted by the Family Court to refer to "a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency”. The requirement that the financial resource be that "of" a party no doubt implies that the source of financial support be one on which the party is capable of drawing. It must involve something more than an expectation of benevolence on the part of another. But it goes too far to suggest that the party must control the source of financial support. Thus, it has long correctly been recognised that a nominated beneficiary of a discretionary trust, who has no control over the trustee but who has a reasonable expectation that the trustee's discretion will be exercised in his or her favour, has a financial resource to the extent of that expectation.
55. Whether a potential source of financial support amounts to a financial resource of a party turns in most cases on a factual inquiry as to whether or not support from that source could reasonably be expected to be forthcoming were the party to call on it.
(excluding footnotes)
[91] Hall & Hall [2016] HCA 23 at [54]
The de facto wife’s written evidence on the “benevolence” of her father, is set out with limited specificity in her financial statement and more generally at paragraphs 403 and 418 of her trial affidavit. After a careful cross-examination of both the de facto wife and her father, it was apparent to me that Part F of her financial statement and aspects of Part G of that document may be inconsistent with what her father sees as her current financial obligations towards him.
As submitted by counsel for the de facto wife, the informal arrangement between father and daughter should be considered through the prism of the procedural history of her application. She had identified a need for support back in December 2019 and yet, over two years later (and despite the de facto husband accepting he had capacity to support her), no regularised financial support was available to the de facto wife, except from her family. Part of the delay was attributed to a jurisdictional argument that fell away in November 2021. Exhibit “H4” shows the de facto wife’s use of the AMEX account from 26 January 2020 onwards; that is after she had commenced spousal maintenance proceedings.
In cross-examination, the de facto wife was clear to say that she did not like having to rely on her parents and she felt obliged to repay them.
The de facto wife’s lack of full disclosure before the trial (which ultimately required for a call of the AMEX card accounts), reflected poorly on her credit but having said that, I accept what her father says about the issue and her genuine desire to stand independently and not have to rely on her parents benevolence into the future. I accept that is her intention, irrespective of whether her father expects her to do so.
In those circumstances, why should this Court make a decision in expectation that Mr M’s benevolence will continue? In my view, to do so would be an inappropriate delegation to another person of the principle of support enshrined within s 90SF.
Self-evidently, exhibit “H4” demonstrates that the de facto wife sought financial support only after she instituted the spousal maintenance proceedings and has been reliant (to a degree) on that support ever since. Her evidence is that she has and intends to repay her father and Mr M’s evidence is that he leaves it to her to pay back money, albeit there is no specific conditions around the arrangement.
In my view, exhibit “H4” reflects that chronologically, Mr M stepped in because of the vacuum created by the stalemate in the interlocutory proceedings. There was insufficient evidence to satisfy me that into the future, Mr M will continue to hold such a benevolent view and/or have the financial means to uphold any such view that he may currently hold. Nor was it apparent to me that the de facto wife will ask for her father’s help once these proceedings are finalised. In my view, the evidence does not demonstrate that Mr M could reasonably be expected to provide support were his daughter to ask for it, but even if I am wrong, given the above circumstances, it would not be proper for me to find in favour of the de facto husband’s contention that Mr M is a financial resource available to the de facto wife.
Pursuant to s 90SF(3)(k) I have also had regard to the short duration of the de facto relationship and its effect on the de facto wife’s income earning capacity. Whilst I am unable to form a concluded view about the physiological effect upon the de facto wife, the de facto wife has been the victim of serious family violence and although somewhat dated, I have had regard to Dr XX’s 2016 report which opined that she had a potential for poor judgment in relation to financial and occupational decisions at the time of increased abuse and subsequent to her failed relationship with the de facto husband. Given the evidence from Dr XX I am satisfied that the de facto wife’s income earning capacity has been at least in part exacerbated by the de facto relationship albeit, even though the relationship was quite short.
Turning then to the de facto wife’s expenses, a consideration of these requires me to disregard those expenses that she says are exclusively for the needs of the children and accordingly I will also disregard her income as including any child support that she may be entitled to.[92]
[92] For a similar approach, see Bernard & Welsby [2020] FCCA 1721 at [193]
In relation to her living expenses, I accept the de facto wife’s evidence that she lives rent-free with her parents and (in the absence of any significant cross-examination on her expenses) I accept that her reasonably necessary and unavoidable weekly living expenses (as drawn from her financial statement) can be summarised as follows:
(a)Car insurance and registration $ 23
(b)Health insurance 33
(c)KK Bank car loan (for her Motor Vehicle 2) 145
(d)Food, household supplies etc. 529
TOTAL *$730
* By way of explanation – In her financial statement, the de facto wife ascribed $125 for weekly repayments of a school loan (see item 29), $140 for various business expenses (items 22 & 30) and $529 for her average weekly expenses (see Part N). I have disregarded her contention about the payment of $125 for groceries being in lieu of rent[93] because Mr M did not give that evidence himself. In addition, in cross-examination she agreed that the payment of rates and utilities fixed at $110 was out of date because the Town L business was no longer operational and on that basis it seemed the payment of business insurance was also an unreasonable expense. On that basis, I have assessed the de facto wife’s total expenses at Part G by omitting:
(a) any expenses related to the business ($110 + $30);
(b) the children’s school loan ($125); and
(c) the groceries the de facto wife she says she pays in lieu of rent.
[93] F[403]
The de facto wife does have some capital assets that she could liquidate to provide for her support including CC’s account with a balance of just under $8,000 and accounts in her own name with a total of just over $5,500.
In cross-examination, it was evident that the de facto husband considered that the de facto wife was not utilising her full income-earning capacity. Although s 90SF(3)(b) does not speak of “earning capacity”, in my view it is a matter that should be properly taken into account at s90SF(3)(r).
Historically, the evidence suggested that the de facto wife’s past endeavours have produced only minimal profit or income. See for example, the contents of paragraph 182 of her trial affidavit which I accept demonstrate that for about six months in 2012/2013, a small business was operated out of H Street, Suburb J home, achieving a gross income of $1,415. There is no doubt that the de facto husband is an astute business operator and the decision to convert the room used by the business into another rental opportunity, in my view, is consistent with the de facto husband’s business acumen and the de facto wife’s evidence about the lack of income generated from her business.
I also accept that the de facto wife may not have been as proactive as she could have been in trying to secure paid employment post-separation, particularly given that I have accepted her father’s evidence that she has worked for him without pay.
However, the de facto wife did give evidence of her attempts firstly to keep the Town L business operational and then the commencement of (it seems) an ongoing relationship with the Company ZZ, particularly in regards to her employment. She also gave evidence of working in hospitality albeit the business closed in December 2021, causing the loss of her employment. I am also mindful of her commitments to her children. Her unchallenged evidence at paragraph 404 of her trial affidavit, was that paid work could only occur during early mornings and school hours. The de facto wife clearly described the special needs that EE has and the unpredictability of when the de facto wife may be called upon to support her daughter physically (see for example paragraph 391 of her trial affidavit).
In this regard, despite robust cross-examination of her, I am satisfied that the de facto wife’s historical income was minimal.
Given the above circumstances, irrespective of any finding about the de facto wife’s health issues, I accept her evidence that as an allied health worker (for which she has qualifications) she can only work for six hours per day.[94] On the basis of her evidence, I find that the de facto wife has engaged in paid employment to the extent of her current capacity.
[94] F[411]
For the reasons set out above, in circumstances where the de facto wife has no income, I am satisfied that the de facto wife has a weekly deficit of income over expenses in excess of $730, and that she is currently unable to support herself adequately.
Does the de facto husband have an ability to pay?
Even if I disregard my earlier findings about his capacity to earn income/access financial resources, even on his current questionable evidence, the de facto husband has disclosed to a current gross weekly income of $3,455.
Part G of the de facto husband’s latest financial statement quantifies his weekly expenses at $3,239. Just like the de facto wife (and in the absence of any strong cross-examination on the issue), I have considered whether these expenses are reasonably necessary and unavoidable.
Like the de facto wife, the de facto husband does not have accommodation expenses for his home per se, because the farm is owned by the family trust. Similarly, all expenses related to the car he uses are not borne by him.[95] I am unable to quantify the “benefit” he receives from these circumstances.
[95] Financial statement of Mr Lapham at items 21, 27 and 35
At item 20 of his financial statement, the de facto husband says he pays $500 per week for superannuation. In the context of his employment status as a director of the family trust and shareholder in LI, such payments can only be in the form of a voluntary contributions. Viewed through that prism, I am not satisfied that the payment of $500 is either reasonable or unavoidable.
The de facto husband lives with Ms R who he says earns an average of $1,200 per week and in her trial affidavit, Ms R says she is health worker. Ms R says that she and the de facto husband have totally separate finances and she does not contribute any rent or other outgoings related to either the home or the farm more generally. Ms R says that she and the de facto husband share grocery expenses, the quantification of which is not evident from the material before the court.
The de facto husband does have some capital assets that he could liquidate to provide support to the de facto wife including shareholdings in two publicly listed companies totalling over $8,000 and accounts totalling at least $6,000 (noting that there was some controversy about these which is not relevant to determine the current issue).
For the reasons above, I find that the de facto husband’s reasonable weekly expenses are $2,739, calculated by deducting $500 from $3,239 being the total at Part G of his financial statement. Although I am highly sceptical of his evidence and noting my earlier findings on this point, viewed through the prism of my task as regards his capacity to support the de facto wife, it is sufficient for me to say that the de facto husband’s income is at least $3,455 per week. I find that his reasonably necessary and unavoidable expenses are $2,739. In other words, the de facto husband has a surplus of income over expenses of over $716 and accordingly I am satisfied that he has an ability to provide to support to the de facto wife.
How much should the de facto husband pay to support the de facto wife?
The de facto husband is 52 years old and the de facto wife is 42 years old. The de facto husband is in good health and engages in appropriate gainful employment. There is evidence that the de facto wife experiences a range of mental health and physical issues outlined earlier in this judgment and in tandem with her parenting responsibilities, I have found that her capacity for appropriate gainful employment is limited. At present the de facto wife is unemployed but says she could work up to six hours per day in the allied health industry.
Both parties, to varying degrees, have capital assets that could be liquidated and applied to their support. Both of them have modest savings with the de facto husband having access to publicly-listed shares. In addition, there is the trust account money ($47,555.15), the source of which came from the de facto husband.
It is contended by the de facto husband that Mr M is a financial resource. I have addressed this issue, insofar as even if I was satisfied that into the future, Mr M had the capacity to continue supporting his daughter, why should she have to ask him in the first place?
I am satisfied, that a standard of living for the de facto wife that is in all the circumstances reasonable is reflected in her weekly expenditure as quantified earlier in the judgment. Unfortunately, I cannot strictly compare the expenses listed by the de facto wife at Part N with those of the de facto husband because he chose not to complete that section of the form. This oversight is unusual in circumstances where the form clearly identifies the need to specify expenses whenever specific types of relief are sought including orders for maintenance regarding either party. Clearly, the de facto husband was alive to this issue given the orders of the Court made 13 September 2021 and the de facto wife’s amended initiating application filed on 24 September 2021, some four months earlier than his Financial Statement.
The de facto wife seeks a one-off lump sum payment of spousal maintenance rather than ongoing periodic payments. The sum sought reflects the balance held in trust and would not require the de facto husband to borrow funds, sell capital assets or divert his income.
In the absence of any submissions to the contrary, I am satisfied that the de facto husband’s lifestyle would not decrease as a result of the relief sought by the de facto wife and conversely, it is inevitable that the de facto wife’s lifestyle would improve. Given the parties’ history of overseas travel to places such as Country AAA, Country BBB and Country CCC, and in the absence of any other evidence suggestive of a contrary finding, I am not satisfied that any lump sum spousal maintenance would improve the de facto wife’s standard of living to above that which she enjoyed in the de facto relationship.
There was no evidence upon which I could make a finding as to the extent (if any) that a payment of spousal maintenance would increase the de facto wife’s earning capacity by enabling her to undertake any course or training or to establish herself in a business or otherwise improve her employment outlook.
I rely on the previous findings made about the de facto wife’s contributions during the de facto relationship in regards to the de facto husband’s income.
The de facto relationship endured for about four (4) years. The de facto wife says that her income earning capacity has been impacted by the family violence visited upon her. I have made findings that these acts have (at the very least) exacerbated her pre-existing depression and deficits in her concentration, self-esteem and motivation. All acts of family violence are denied by the de facto husband despite convictions having been recorded.
I have already considered the Robb & Robb argument contended by the de facto husband and have given further consideration to that contention in assessing the spousal maintenance application.
I accept the de facto wife’s unchallenged evidence that she is unlikely to receive ongoing child support from the children’s father due to his recent unemployment.[96] It was evident from the de facto husband’s submissions as regards Robb & Robb that during the relationship, the family received little (if any) financial support from the children’s father and I accept that sadly, a substantial lump sum payment received by the de facto wife post-separation has now been spent (mainly if not all of it on legal fees for these proceedings).
[96] F[418]
I also need to consider the property adjustment order being made in these proceedings. It would appear that the de facto husband will need to increase his debt level to raise the cash payment to the de facto wife, however the lump sum spousal maintenance sought by the de facto wife comes from a pre-existing cash deposit. That sum has been there for some years and in the absence of the de facto husband having the benefit of it, he has still been able to continue to manage the farm, including the construction of Shed 3, as well as his managing his other expenses.
Given the level of his income and (for example) the voluntary nature of his contribution towards superannuation, I am satisfied that he is capable of providing lump sum spousal maintenance to the de facto wife.
I also acknowledge that the property adjustment order will permit the de facto wife the opportunity to house herself independently of her parents although her intentions as to future accommodation remain unclear, including whether she could afford to buy her own home. The de facto wife will be in receipt of property greater than currently held by her but she should not be expected to dip into those funds in order to support herself and the children.[97]
[97] In the marriage of Bevan at page 288
As mentioned earlier, the amended initiating application introducing spousal maintenance relief was filed on 12 December 2019. In the absence of any submission to the contrary, I am satisfied that at least by the court event on 28 May 2020, the de facto husband was aware of the relief being sought because orders were made granting leave for the de facto wife to apply out of time.
I have already referred to the unchallenged submission made by counsel for the de facto wife that at the hearing of the interim spousal maintenance application, the de facto husband conceded that he had the capacity to pay $500 to support the de facto wife. In submissions, that sum was extrapolated over 1 year and 42 weeks (being the time between date of filing of the amended initiating application and the final hearing) with the total coming to $47,000.
I note that in the calculation of her claim, the lump sum payment does not make up the entire shortfall identified by me. Given the circumstances set out above, in my view, it is appropriate that the claim be less than the total shortfall to take account of possible future income that she may secure.
For the reasons above, I am satisfied that it is proper for the de facto husband to pay to the de facto wife lump sum spousal maintenance fixed in the sum of $47,000, with such payment facilitated by a transfer of part of the trust account money.
APPLICATION FOR COSTS
Self-evidently, one of the reasons why I have traversed the procedural history of the proceedings is because both parties have sought costs orders against the other.
The de facto husband sought that the de facto wife reimburse him one-half of the single expert fees that he paid in the first instance. The de facto husband’s claim was quantified at $18,204.50.
In her amended initiating application, the de facto wife sought that the de facto husband pay her costs incidental to these proceedings. When making concessions about objections to her evidence, counsel submitted that such evidence was not relevant to the substantive proceedings but may become relevant with respect to costs.
On 18 February 2022, the Court observed that it would consider in chambers any application pursuant to the Federal Proceedings (Costs) Act 1981 (Cth).
Rather than deal with these competing claims in an ad hoc way, I have formed a view that I should take a holistic approach to the costs dispute which should result in a more efficient use of both the parties’ time and financial resources and the resources of the Court.
For the reasons above, I have decided to fix a date for the hearing of all costs applications with directions to be made in support of that event occurring in a timely and efficient manner with a view to the early disposal of that aspect of the dispute.
OVERARCHING PURPOSE – the law
Finally, upon reflection, I consider that it is appropriate that I make some comments about the general conduct of the trial. These observations are made in a vacuum, devoid of the parties’ motivations (if relevant) but rather meant for the advancement of the Court’s process, the practice of those who appear before it and may inform any costs applications that the parties agitate before me.
During proceedings and (from my perspective this trial), the Court is invited to make decisions that relate to the civil practice and procedure of the Court, whether it is the admittance of evidence that is late or requests for short adjournments so that parties and their lawyers can confer before proceeding further.
Every time this occurs, the Court is mandated to consider the overarching purpose, see s190 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (‘the FCFCOA Act’) which is set out below:-
Section 190 – Overarching purpose of civil practice and procedure provisions
(1)The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:
(a)According to law; and
(b)As quickly, inexpensively and efficiently as possible.
Note 1: see also paragraphs 5(a) and(b).
Note 2:The Federal Circuit and Family Court of Australia (Division 2) must give effect to principles in the Family Law Act 1975 when exercising jurisdiction in relation to proceedings under that Act.
(2)Without limiting subsection (1), the overarching purpose includes the following objectives:
(a)the just determination of all proceedings before the Federal Circuit and Family Court of Australia (Division 2);
(b)the efficient use of the judicial and administrative resources available for the purposes of the Court;
(c)the efficient disposal of the Court's overall caseload;
(d)the disposal of all proceedings in a timely manner;
(e)the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute
(3)The civil practice and procedure provisions must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose.
(4)The civil practice and procedure provisions are the following, so far as they apply in relation to civil proceedings:
(a)The Rules of Court
(b)Any other provision made by or under this Act or any other Act with respect to the practice and procedure of the Federal Circuit and Family Court of Australia (Division 2).
To emphasise the importance of the overarching purpose in the administration of justice, the Commonwealth Parliament chose to oblige parties and their lawyers to conduct the proceedings before the Court in a manner that is consistent with the overarching purpose (see s 191 of the FCFCOA Act). For ease of reference s 191 is replicated below:-
Section 191 - Parties to act consistently with the overarching purpose
(1)The parties to a civil proceeding before the Federal Circuit and Family Court of Australia (Division 2) must conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose.
(2)A party's lawyer must, in the conduct of such a proceeding before the Federal Circuit and Family Court of Australia (Division 2) (including negotiations for settlement) on the party's behalf:
(a)take account of the duty imposed on the party by subsection (1); and
(b)assist the party to comply with the duty.
(3)The Federal Circuit and Family Court of Australia (Division 2) or a Judge may, for the purpose of enabling a party to comply with the duty imposed by subsection (1), require the party's lawyer to give the party an estimate of:
(a)the likely duration of the proceeding or part of the proceeding; and
(b)the likely amount of costs that the party will have to pay in connection with the proceeding or part of the proceeding, including:
(i)the costs that the lawyer will charge to the party; and
(ii)any other costs that the party will have to pay in the event that the party is unsuccessful in the proceeding or part of the proceeding.
Note:Paragraph (b)--in relation to a family law or child support proceeding, the Federal Circuit and Family Court of Australia (Division 2) may make an order as to costs under section 149 of the Family Law Act 1975 if the Court is of the opinion that there are circumstances that justify it in doing so.
(4)In exercising the discretion to award costs in a civil proceeding, the Federal Circuit and Family Court of Australia (Division 2) or a Judge must take account of any failure to comply with the duty imposed by subsection (1) or (2).
(5)Without limiting the exercise of that discretion, the Federal Circuit and Family Court of Australia (Division 2) or a Judge may order a party's lawyer to bear costs personally.
(6)If the Federal Circuit and Family Court of Australia (Division 2) or a Judge orders a lawyer to bear costs personally because of a failure to comply with the duty imposed by subsection (2), the lawyer must not recover the costs from the lawyer's client
The Court adopted the legislative mandate set out in ss 190 and 191 of the FCFCOA Act by including the overarching purpose within its Rules of the Court and noting that the Rules must be interpreted and applied in a manner that best promotes the overarching purpose: see r1.04 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the FLR 2021’).
The Full Court of the Federal Court of Australia in Crown Resorts Ltd v Zantran Pty Ltd [2020] FCFCA 1 said this about the court as a public resource:
The existence and enforcement of these obligations and of the overarching or overriding purpose are informed by, and a product of, the high public purpose and public policy that, to the extent possible, the exercise of judicial power by the courts should be available to the public to resolve their disputes in a timely and cost-effective way. Such availability and access to the administration of justice can be seen to be an incident of the Rule of Law.[98]
[98] Crown Resorts Ltd v Zantran Pty Ltd [2020] FCFCA 1 at [3]
The impact of the overarching purpose on the obligations of legal practitioners and parties is significant and applies irrespective of whether they have legal representation. In Camm v Linke Nominees, the Federal Court observed at paragraph [54] that:
One element of the overarching purpose is “the efficient use of the judicial and administrative resources available for the purposes of the Court”. Another is the “efficient disposal of the Court’s overall caseload”. Conduct on the part of a litigant or a practitioner which impacts adversely on the pursuit of these purposes may be taken into account when costs are awarded.
To reinforce the significance of the obligations imposed by the overarching purpose, r 1.04 says this:
1.04 Overarching purpose
(1)The overarching purpose of these Rules, as provided by section 67 of the Federal Circuit and Family Court Act, is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.
Note 1:These Rules must be interpreted and applied, and any power conferred or duty imposed by them must be exercised or carried out, in the way that best promotes the overarching purpose (see subsection 67(3) of the Federal Circuit and Family Court Act).
Note 2:See sections 190 and 191 of the Federal Circuit and Family Court Act in relation to the overarching purpose of the Rules of the Federal Circuit and Family Court (Division 2). See also the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 which applies these Rules with modifications.
(2)Parties to family law proceedings must conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose.
Note:See subsection 68(1) of the Federal Circuit and Family Court Act.
(3)A party’s lawyer must, in the conduct of a proceeding before the court (including negotiations for settlement) on the party’s behalf
(a)take account of the duty imposed on the party referred to in subrule (2); and
(b)assist the party to comply with the duty.
Note:See subsection 68(2) of the Federal Circuit and Family Court Act.
In addition, r 12.08 demands that legal costs be fair, reasonable and proportionate.
OVERARCHING PURPOSE – discussion
When this trial started, I observed that Ms Ferman and Mr Lapham had been parties to litigation longer than either of them thought they had been parties to a de facto relationship. I made reference to the fictitious case of Jarndyce v Jarndyce. My point in doing so was to try and focus both the parties and their legal teams on how much time had been lost along the litigation pathway and that it was imperative that the trial stay on track, on time and be finalised as quickly and efficiently as possible.
Benjamin J in Simic v Norton [2017] FamCA 1007 made fairly frank assessments about the trial before him and although this case was not a “Sydney matter”, there is the potential to find that the conduct of parties and/or their lawyers, has some synchronicity with what His Honour observed below -
[2]In the Sydney Registry of the Family Court I have observed what seems to be a culture of bitter, adversarial and highly aggressive family law litigation. Whether this win at all costs, concede little or nothing, chase every rabbit down every hole and hang the consequences approach to family law litigation is a reflection of a Sydney-based culture by some or many litigants or whether it is an approach by some legal practitioners or a combination of both, I do not know.
[3]Whichever is the cause, the consequences of obscenely high legal costs are destructive of the emotional, social and financial wellbeing of the parties and their children. It must stop.
I have not been asked to determine any costs applications at this stage so I cannot take issues of conduct any further, but given the recent introduction of the overarching purpose I thought it worthwhile to engage in the above exercise as it may be relevant to the upcoming costs hearing.
I certify that the preceding three hundred and sixty (360) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Kearney. Associate:
Dated: 5 April 2022
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