FURLAN & SOULIS
[2015] FCCA 1373
•8 May 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FURLAN & SOULIS | [2015] FCCA 1373 |
| Catchwords: FAMILY LAW – Property – spouse maintenance – short marriage – 11 months on the wife’s case – 13 months on the husband’s case – summary dismissal – no reasonable prospects of success. |
| Legislation: Family Law Act1975 (Cth), ss.75, 79 |
| Aon Risk Management Services Ltd v Australian National University (2009) 239 CLR 175 Bushby & Bushby (1988) FLC 91-919 |
| Applicant: | MS FURLAN |
| Respondent: | MR SOULIS |
| File Number: | MLC 9614 of 2013 |
| Judgment of: | Judge Harland |
| Hearing date: | 8 May 2015 |
| Date of Last Submission: | 8 May 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 8 May 2015 |
REPRESENTATION
| The Applicant: | No appearance by or on behalf of the Applicant |
| Solicitor for the Respondent: | Mr Rickards |
| Solicitors for the Respondent: | Rickards Legal |
ORDERS
Pursuant to Rule 13.10 of the Federal Circuit Court Rules2001 (Cth) the initiating application filed by the Applicant on 9 January 2014 is summarily dismissed.
The Applicant pay the Respondent’s costs of $3,460.00 within 6 months from the date of this Order.
All outstanding applications are dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Furlan & Soulis is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT AT MELBOURNE |
MLC 9614 of 2013
| MS FURLAN |
Applicant
And
| MR SOULIS |
Respondent
REASONS FOR JUDGMENT
These reasons for judgment were delivered orally. They have been corrected from the transcript. Grammatical errors have been corrected and an attempt has been made to render the orally delivered reasons amenable to being read.
The applicant seeks final property orders and maintenance orders on an ongoing basis. The applicant commenced the proceedings on 1 January 2014. In her initiating application she sought a lump sum payment of $20,000, 50 per cent of the husband’s superannuation and spousal maintenance. She also sought those orders on an interim basis.
In her own affidavit which she affirmed on 23 December 2013 in support of the orders she sought, she said that prior to the relationship and post the relationship she was in receipt of a disability pension. She also says that the husband paid half of the rent to her and they each paid half of the household expenses during the period they lived together.
The husband applied for a divorce and that divorce became final on 7 March 2014. In a further affidavit filed by the wife on 6 August 2014, she says that they lived together for a period of 13 months and not 11 months as the husband alleged.
The matter first came before the Court on 29 April 2014 and on that occasion the applicant wife was ordered to file an amended initiating application and the husband’s costs were reserved, fixed in the amount of $1,200.
The matter next came before the Court for trial directions on 6 August 2014. Those trial directions were detailed and I do not propose to refer to them further.
The wife did file an amended initiating application where she sought a $15,000 superannuation splitting order from the husband’s superannuation and $200 a week maintenance on both an interim and final basis. The wife’s interim maintenance application was dismissed.
The matter was listed for hearing on 10 March 2015. The matter did not proceed on that day. The orders made on that day noted that the wife had not served her notice to admit facts or an application in a case, which she filed on 2 February 2015 on the husband. Her further application in a case was dismissed and the matter was listed for hearing today.
The wife has sent a series of emails to the Court in the past couple of weeks. Essentially, she sought an adjournment of today’s hearing date. Mr Rickards, the Solicitor for the husband, quite properly raised the emails with chambers and the fact that, in effect, the wife was seeking an adjournment application even though it was not in the proper form which would have been an application in a case and supporting affidavit.
I think it is important to note that Mr Rickards’ conduct in this regard was quite proper because it is clear from the emails that the wife is highly critical of him. It would have been open to him to not raise the issue that the wife was seeking an adjournment application and to seek a listing of that application, as he did. By doing that, Mr Rickards was taking a sensible approach in trying to deal with the substance of the matter, rather than simply relying on the Rules. He was also clearly trying to minimise the cost to his client.
I listed the matter for Mention on Monday of this week to determine the wife’s application for adjournment. The wife did not attend on Monday and sent a series of emails with respect to that. The emails included a medical certificate which indicated that she was unwell. I determined the application for adjournment in her absence.
The wife’s primary reason for seeking the adjournment is that she was booked in for an endoscopy and colonoscopy yesterday. In effect, she says that she is unwell and would be under the effect of anaesthetic and unable to appear and prepare for the hearing. The procedures that the wife had yesterday are fairly routine minor day surgery procedures.
It is also clear that the wife was aware from 30 March 2015 that the matter was listed for a final hearing today, already having been adjourned once. The wife does not give any satisfactory explanation as to why she booked this procedure for 7 May 2015, rather than another day. She says it was for financial reasons but she does not adequately explain why she could not have booked it on another day that week or another month or indeed with another surgeon.
I refused the wife’s application for an adjournment because, in my view, it served no good purpose to adjourn the matter and on that occasion I raised the possibility of the court today exercising on its own motion the right to summarily dismiss the wife’s application. I specifically referred to that in the Orders and instructed chambers staff to include with a copy of the Orders emailed to the wife, a copy of section 17A of the Federal Circuit Court of Australia Act 1999 (Cth) which addresses the circumstances in which either a party or the court of its own motion may summarily dismiss a matter.
Whenever the Court is considering whether or not to adjourn matters, the Court needs to consider not just the issues in the case before it, but also case management principles in general and in that regard I refer to the High Court decision of Aon Risk Management Services Ltd v Australian National University (2009) 239 CLR 175. Ms Furlan is aware that the matter was adjourned to today and that her adjournment application was refused. This has resulted in further emails to the Court, essentially, repeating what she had said previously.
I propose to accept as part of the evidence in the wife’s case, noting that Mr Rickards did not object to this course, the emails from the applicant to the court and the other parties dated 28 April 2015, 30 April 2015, 1 April 2015, 1 May 2015, 6 May 2015 and 4 May 2015.
I have done so to be fair to her because it includes some comments with respect to the property aspect of the proceedings and the maintenance aspect of the proceedings, as well as her application for an adjournment.
The wife was also clearly on notice, specifically from the Orders made previously but also from correspondence from Chambers to her, that the matter could be dealt with on an undefended basis if she did not attend court. Having considered the material, in my view, it is more appropriate to deal with this matter summarily pursuant to section 17A, (2) of the Federal Circuit Court Act.
Section 17A is set out as follows:
The Federal Circuit Court of Australia may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is prosecuting the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.
(2) The Federal Circuit Court of Australia may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is defending the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
(4) This section does not limit any powers that the Federal Circuit Court of Australia has apart from this section.
Rule 13.10 is set out as follows:
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a) the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
(b) the proceeding or claim for relief is frivolous or vexatious; or
(c) the proceeding or claim for relief is an abuse of the process of the Court.
The court may of its own motion determine that a matter should be summarily dismissed if the court is satisfied that a party, in this case, the applicant, has no reasonable prospect of successfully prosecuting her case. It is important to note at section 17A(3) that the proceedings do not need to be hopeless or bound to fail in order to have no reasonable prospects of success.
In determining that the wife’s application has no reasonable prospects of success, I only need to look at her own material with respect to the property aspect of the proceedings. I have referred to, previously, her affidavit material where, on her own case, the relationship only lasted for 13 months and that during that relationship the parties contributed equally to the financial expenses being the household expenses and rent.
The wife claims that she made the homemaker contributions and says many of the issues the husband raises in his case are false. It is clear from the wife’s application that she does not appreciate the legal principles which apply to property proceedings. It is clear that she feels very aggrieved by the husband and feels that she has a moral claim and that he has a moral claim to pay her a property settlement and maintenance. It is clear that she has taken the separation very hard and has not let go of that.
It is important for the wife to understand that property proceedings under the Family Law Act1975 (Cth) are dealt with according to the principles which are set out in section 79(4).
Section 75(2) is set out as follows:
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party’s role as a parent; and
(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
It is a no fault jurisdiction. Therefore, complaints about conduct are not relevant to property and maintenance applications except in a very limited context with respect to severe domestic violence and even in those cases, the principles are very narrow.
In accordance with the High Court decision of Stanford & Stanford [2012] HCA 52, I have to give consideration as to whether or not it would be just and equitable to make any property adjustment at all. There is no principle of law under the Family Law Act that a party is entitled to a property settlement by reason of having been married and there is certainly no principle in law that there should be an equal division of property.
The Full Court in Bushby & Bushby (1988) FLC 91-919 make this very clear. In that case, the marriage lasted for four years and not a mere 13 months taking the wife’s case at its highest and it makes it clear that in short marriages where there are no children, the court must place significant weight on the financial contributions of the parties.
Considering the evidence in the wife’s own case, it is clear that there was no great intermingling of finances, there was no purchase of property together, the parties shared their living expenses equally and she disputes the amount of homemaker contributions that the husband made versus her homemaker contributions.
With respect to 75(2) factors, it seems clear to me that the position that the wife is in with respect to her receipt of a disability pension and her health is not related to the marriage and has not been affected by the parties’ income, property and resources.
Given those facts and the fact that there are no children of the relationship and considering those factors alone, without looking at what the husband says about contributions, it is clear to me that the wife has no reasonable prospects of establishing a property claim against the husband and for that reason the property aspects of the wife’s claim should be summarily dismissed and I will do so.
I now turn to her maintenance application. The principles which apply in maintenance applications are clear and are set out in sections 72, 74 and, in particular, 75(2) of the Family Law Act. There are two limbs to the test for maintenance. The first is that the person seeking maintenance must establish that they have a need for maintenance.
The applicant is in receipt of a disability pension. The applicant has been in receipt of that pension before the relationship commenced and continues to be in receipt of that pension. Section 75(3) requires me to disregard an income-tested pension for the purposes of assessing maintenance. Therefore, on her financial statement, it is clear that she establishes that she is unable to support herself adequately from her own resources.
But the inquiry does not end there. It is also necessary to then look at whether or not the husband has the capacity to pay. It was apparent from the financial statement prepared by the husband’s previous lawyers that they had made a mathematical error in totalling the figures at page 2 of the husband’s financial statement. It was apparent from that financial statement that they had not included the total other expenditure at part N of the husband’s financial statement.
I granted leave to Mr Rickards to hand up a financial statement today which corrects that calculation. I have compared that financial statement to the earlier financial statement prepared by the husband and I am satisfied that his figures have not changed in any way that would prejudice the wife and it is simply the totals that have been corrected and once they have been corrected it is clear, looking from the financial statement of the husband, that, currently, his expenses exceed his income.
The wife seeks a payment of $200 a week on an ongoing basis without any end date. Looking at the husband’s financial statement, I am satisfied that he does not have capacity to pay maintenance. His expenses are reasonable. He has a personal loan of some $23,643 to the Commonwealth Bank and also has a loan of $5,000 owing to his mother which he says is for legal fees with respect to defending this case. His weekly expenses shown at Part N of the financial statement also appear reasonable.
When considering a person’s capacity to pay maintenance, it is different and a lower standard than the obligation for a person to pay Child Support. It is looking at what is reasonable in the circumstances. And looking at the husband’s expenses, I am satisfied that his expenses are reasonable and I am satisfied that he does not have the capacity to pay maintenance. And I note that the wife’s interim applications for maintenance had previously been dismissed. I certainly do not see any basis for there to be an order for final maintenance, given the parties’ respective financial positions quite apart from any considerations about the short nature of the relationship.
Certainly, in short marriages it is rare to see an adjustment for 75(2) factors and I certainly do not see any justification that there would be any adjustment in this case and, I think, in fact, to make any adjustment for property would not be just and equitable in the circumstances. So for these reasons I summarily dismiss the wife’s initiating application.
Costs
The husband has made an application for costs. The applicant’s costs were previously reserved in the sum of $1200 by Judge O’Sullivan on 29 April 2014. That was the first return date and I assume from that that it was because of the application that the wife had filed, at that stage on its face, had no merit and she was ordered to amend it.
Referring to the Federal Circuit Court Scale of Costs as best as I can determine, it seems that that it is an amount that is referable to item 1 of the schedule initiating or opposing an application up to the completion of the first court date which, in total, would be $2,048 –
that being a reduced sum.
The husband seeks that amount of costs and also seeks costs for the attendance on Monday for the adjournment application; that being a short attendance in accordance with the scale would be $278. The husband also seeks costs in respect of today’s hearing and that in accordance with the schedule for a summary proceeding is $1,706. As referred to in item 3, that would also include a further $278 for a hearing fee for a short hearing. Those three amounts total $3,462.
The husband deposes in his affidavit sworn 24 April 2015 at paragraph 42 that he has incurred approximately $20,000 in costs, not including costs from that date to include this week’s appearances.
In my view, it is unfortunate that the husband’s previous lawyers did not make an application earlier for the matter to be summarily dismissed. Of course, I do not know if that is an issue that they considered or not. It seems apparent to me that this is a matter that could properly have been dealt with earlier in order to save on costs.
The husband’s solicitor also refers to the fact that the wife has retained the wedding ring and a bracelet which was a wedding gift from his mother to her which he says, at paragraph 93, that the wife had valued and told him that it was valued at $4,500. The husband did not decide to make an application or a cross-claim to seek the return of those items because he would have incurred further costs which, in the circumstances, is reasonable.
So the relevant section when determining whether or not to make an order for costs is section 117 of the Family Law Act. The usual rule with respect to costs is that each party pays their own costs. However, there may be circumstances which justify a departure from that rule and the circumstances that the court must consider are set out at section 117(2A).
The first matter to consider is the financial circumstances of each of the parties. It is clear from the parties’ financial circumstances that both parties are in modest financial positions. The wife is dependent upon a disability pension and discloses only modest assets.
The husband is employed and earns more than the wife but he has also taken on, which in the circumstances of this case, are significant liabilities, including a Commonwealth personal loan which he deposes to repay in the sum of $145.25 a week and a loan to his mother to cover legal proceedings. He also has superannuation, most of which he would have accumulated outside of the relationship.
Neither party is in receipt of Legal Aid.
Section 117(2A)(c) is significant because that relates to the conduct of the parties in the proceedings. I am satisfied, taking into account the email correspondence that I have seen from the wife as well as her affidavit material and, for the purposes of the costs application, exhibits A and B which is a letter from the husband’s lawyers making an offer to resolve the matter this week with her on the basis of proceedings being dismissed with no order as to costs, which, in the circumstances of this case, is a proper offer as there is already reserved costs on two occasions that the husband could have pursued. That offer, of course, comes late in the piece but, nevertheless, is a relevant factor.
What is of most significance in terms of conduct is the wife’s response which is completely disproportionate and unrealistic. The wife’s correspondence has a hysterical tone to it and she accuses the husband’s solicitor of blackmailing her, bullying her and acting improperly.
It is not improper for a solicitor to forward an offer to resolve proceedings and, in fact, one might say that an issue could arise about a solicitor not acting in a client’s best interests in proposing that an offer of settlement be made. There is nothing in the tone of the correspondence from Mr Rickards that would cause me any concern that he has acted in anything other than a professional manner that I would expect of solicitors who are officers of the Court.
If the wife had sought legal advice from any lawyer competent in family law, she would have received advice that she did not have reasonable prospects of success in these proceedings. The wife has had ample opportunity to seek advice, given that these proceedings were commenced at the beginning of last year. She would have had opportunities to see the duty lawyers at Court and also to seek advice at an advice clinic with Legal Aid or another community organisation.
The wife refers to, in some of her correspondence, the husband’s failure to comply with pre-action procedures. Pre-action procedures apply to Family Court proceedings and not proceedings in this Court. It is indicative of the wife doing some research on her own into proceedings.
The wife is very dismissive of the fact that the husband has incurred costs and that seems to be part of her focus on what she says is moral misconduct and her own moral outrage.
Section 117(2A)(d) is also relevant here. That section talks about the proceedings being necessitated by the failure of a party to comply with previous orders of the Court. I think that is relevant insofar as the wife has not attended Court either on Monday or today to prosecute her claim. She has had ample opportunity to do so and there is an obligation on parties to properly pursue their claims without undue delay.
Subsection (e) is also relevant. It refers to whether or not a party has been wholly unsuccessful in the proceedings and it is obvious from the reasons I have given that the wife has been wholly unsuccessful and, more than that, never had a reasonable prospect of success.
I have previously referred to the offer that the husband has made. I acknowledge that the offer is made very late in the piece but it is still a matter that is relevant. I am mindful that the wife has very modest financial circumstances and that a costs order will have some financial burden on her but I am also mindful that the husband has been wholly successful and has also incurred significant costs in defending a claim that had no reasonable prospects of succeeding.
The husband has incurred costs that are far more significant than the amount of costs that I am going to order but I do think it is appropriate to order costs in this case given the fact that the case had no reasonable prospects of success, the wife’s conduct in the proceedings has been unreasonable and has not focused on the issues that are actually in dispute.
The wife has not made any reasonable proposal to resolve these matters and, in fact, her response to the offer is really a diatribe and does not make any offer. She claims to be somehow immune from a costs order because of her being in receipt of a pension and that is not the case. What it simply means is that I will give the wife a longer than usual period to pay costs.
I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of Judge Harland
Associate:
Date: 25 May 2015
Key Legal Topics
Areas of Law
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Civil Procedure
Legal Concepts
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Summary Judgment
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Costs
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Procedural Fairness
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