GABLER & GABLER

[2020] FCCA 512

FEDERAL CIRCUIT COURT OF AUSTRALIA

GABLER & GABLER [2020] FCCA 512

Catchwords:
FAMILY LAW – Property – failure to make disclosure – contributions – future needs – justice and equity.

Legislation:

Family Law Act 1975 (Cth), ss.4, 75(2), 79, 80, 81

Federal Circuit Court Rules 2001 (Cth), r.25B.03

Cases cited:

In the Marriage of Weir (1992) 110 FLR 403

Stanford v Stanford (2012) 247 CLR 108

Applicant: MS GABLER

Respondent: MR GABLER

File Number: BRC 7732 of 2018

Judgment of: Judge Howard

Hearing date: 23 September & 22 November 2019

Date of Last Submission: 22 November 2019

Delivered at: Brisbane

Delivered on: 12 March 2020

REPRESENTATION

The Applicant attending as a self-represented litigant.

The Respondent attending as a self-represented litigant.

ORDERS

1. That each party shall provide a copy of a proposed Final Order (reflecting the Reasons for Judgment) to each other party by 4:00pm on 26 March 2020.

2. That the parties shall attempt to reach an agreed position in relation to the wording of the Final Order (reflecting the Reasons for Judgment) and shall send a copy of same to the Court by no later than 4:00pm on 2 April 2020.

3. That in the event the parties are unable to reach an agreed position in relation to the wording of the Final Order (and send a copy of same to the Court) within the time frame stated in paragraph (2) – the matter shall be listed for Mention and each party shall attend personally along with their legal representative (if any) on a date to be fixed by the Court.

IT IS NOTED that publication of this judgment under the pseudonym Gabler & Gabler is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRC 7732 of 2018

MS GABLER

Applicant

And

MR GABLER

Respondent

REASONS FOR JUDGMENT

1. The application before the Court relates to property settlement proceedings under section 79 of the Family Law Act 1975 (Cth) (“the Act”). The applicant is Ms Gabler and the respondent husband is Mr Gabler. The matter came on for final hearing on 18 April 2019. On that occasion there was no appearance by the husband. He had not, prior to that time, filed a response, nor had he filed an affidavit or a financial statement. The Court heard evidence from the wife on that day, had regard to her submissions and delivered ex tempore reasons for judgment. However, the Court only made an interim order in relation to the matter. The Court was very concerned in relation to the lack of participation and cooperation from the respondent husband. Having delivered the reasons for judgment, the Court adjourned the matter and issued an interim order on 18 April 2019 requiring the husband to attend in Court on 6 June for a mention of the matter. There was also an order that if the respondent failed to attend Court on 6 June 2019, the Court would consider issuing a warrant for his arrest. On 6 June 2019, the respondent husband again failed to appear in Court. The Court made various orders including the following:-

   “That if the respondent fails to attend Court on 17 June 2019 without any reasonable explanation, the Court shall issue a warrant for his arrest to forthwith bring the respondent before the Court.”

2. Notwithstanding the very clear order made by the Court on 6 June 2019 – when the matter returned to Court on 17 June 2019, the respondent husband again failed to appear. The husband had maintained (via a communication to the Court) that he was suffering from some illness. The matter was then adjourned until 8 July 2019. Again, on 17 June 2019, the Court had made it clear that if the respondent failed to attend Court on 8 July 2019 then the Court will issue a warrant for his arrest. On 8 July 2019, the Court made an order that the children X born 2002 and Y born 2007 move to the full-time into the care of the mother. At that stage they were in a week about arrangement by agreement between the parents. Once the children moved to the full-time care of the mother – the mother notified the Court. Then, on 9 July 2019, the Court issued a warrant for the arrest of the respondent, Mr Gabler. The arrest warrant was issued pursuant to rule 25B.03 of the Federal Circuit Court Rules 2001 (Cth). The arrest warrant was also issued in accordance with the general powers of the Court under section 80(1)(k) of the Act. That subsection states:-

   “The court, in exercising its powers under this Part, may do any or all of the following:

   …

   k) make any other order (whether or not of the same nature as those mentioned in the preceding paragraphs of this section), which it thinks it is necessary to make to do justice; and

   …”

3. It will be apparent by reference to the reasons for judgment that were delivered following the hearing on 18 April 2019 that the Court had come to the conclusion that there was a large amount of debt in the case and that in the absence of some proper disclosure from the husband – – a very great injustice was going to be suffered by the applicant wife.  By issuing a warrant for the arrest of the husband and bringing him before the Court.  The Court was able to put in train various orders, directions and outcomes which will undoubtedly lead to a more just conclusion to the matter than would otherwise have been the case. 

4. On 11 July 2019, the respondent husband was brought to the Court once the arrest warrant was executed by the Australian Federal Police.  Various directions were made requiring the husband to file and serve response material, especially in relation to his own superannuation account.  The husband was also forthwith released from custody.  I note that he had only been arrested on 11 July 2019 in any event. 

5. The next date in Court was 25 July 2019.  Mr A of Counsel appeared for the respondent husband.  Various orders were issued and directions made.

6. On 17 September 2019 both parties attended in person, the respondent husband proceeded with an application to set aside the earlier property orders.  The Court decided to set aside the earlier property orders.  They were in fact only interim orders that had been made on 18 April 2019. 

7. Up until that point, it will be apparent, from the history noted above, that the matter had an unusual litigation history.  It should be noted that the applicant wife had initiated property proceedings on 12 July 2018 and, as noted earlier, the matter came on for final hearing on 18 April 2019. 

8. What essentially occurred thereafter was leave was granted to the husband to file material and to be heard in relation to property.  He also filed an application for parenting orders. 

9. In relation to the property I think that the correct characterisation of what has occurred is as follows:-

   i)On 18 April 2019 the final property hearing commenced and the Court heard evidence from the wife.  This occurred in the absence of the husband because he had chosen not to participate. 

   ii)On 23 September 2019 final property trial continued.  In the interim period between 18 April 2019 and 23 September 2019 – the Court had granted leave to the husband to a file, serve and rely upon a response, a trial affidavit and a financial statement.  On 23 September 2019 the matter continued and both parties gave evidence.  It became apparent during 23 September 2019’s hearing that further investigations are required by the parties to ascertain whether or not it was possible to refinance the B Bank line of credit which is secured against the former matrimonial home – the house registered in the name of the wife at C Street, Suburb D, Brisbane. 

   iii)The matter was adjourned to 16 October 2019 and subsequently that date was vacated and a further final hearing day was allocated for 22 November 2019. 

   iv)On 22 November 2019, the Court again heard evidence from both parties and submissions and reserved its judgment.

10. It should also be noted that, in relation to parenting initially the children had lived primarily with the mother.  More recently, they began to live in a week about shared care arrangement.  However, that ceased following the order of the Court on 8 July 2019.  By that order the children again commenced living primarily with the mother, the Court then made orders that they live with the mother and alternate weekend time with the father basis and subsequently on 19 November 2019 – when the parenting matter was again mentioned – the Court made a further parenting order limiting the alternative weekend time with the father to after school Friday until before school Monday each alternate weekend.  It is important to note that on 19 November 2019, the respondent husband (father) had, once again, failed to appear in Court.  He had no reasonable excuse. 

11. On 22 November 2019 for the hearing of the property case proceeded.  As noted, both parties gave evidence and made submissions.  The final property decision was then reserved. 

Section 79 Proceedings

1. The parties in this case commenced cohabitation in April 1998.  They married in October 1998.  They separated on a final basis in 2012.  There are two children of the marriage.  They are aged 16 and 11.  As noted earlier, they lived primarily with the mother; more recently, they began to live in a week about shared care arrangement between the mother and the father.  Now, from about mid-2019, they have returned to live primarily with the mother and spend time with the father on alternate weekends. 

2. The mother lives in the property at C Street, Suburb D.  This property was purchased by her prior to the time of the marriage.  At the time of the marriage the wife owned this property outright.  It was unencumbered. 

3. The husband lives in rented accommodation in Suburb E. 

4. According to the principles enunciated by the High Court in Stanford v Stanford 2012 247 CLR 108 – the Court is required to firstly consider whether or not it is just and equitable to make a property adjustment order under section 79 of the Act. In this case it is just and equitable. This couple no longer live together. They no longer wish to have any joint property. They have no intention of reconciling. They live in different residences.

5. As to the pool of property – the easiest way to approach this is to include the table below:-

Assets	Ownership	Value
C Street, Suburb D	Wife	$540,000
B Bank account (wife)	Wife	$3,263
Motor Vehicle F	Wife	$10,000
Household contents	Wife	$5,000
Jewellery	Wife	$10,000
G Shares	Joint	$3,366
Household contents	Husband	$3,000
Motor Vehicle H	Husband	$5,000
I Bank Savings account	Husband	$1,000
I Bank account	Husband	$100
TOTAL ASSETS: $580,729

Liabilities	Ownership	Value
Line of credit – B Bank secured against the Suburb D property	Joint	$340,000
B Bank Visa Credit Card	$31,044
J Timeshare loan	Joint	$12,578
School K	Wife	$4,000
Rates – C Street, Suburb D	Wife	$1,900
Water Rates – C Street, Suburb D	Wife	$815
TOTAL LIABILITIES: $390,337
NET ASSETS: $190,392

Superannuation	Ownership	Value
L Superannuation	Wife	$143,986
L Superannuation	Husband	$109,000
TOTAL SUPER: $252,986

Total NET (including Super): $443,378

1. The Court has been told (and there is no evidence to the contrary) that the J Timeshare loan has no value.  The wife has given evidence (which I accept) that there is no market to purchase this J Timeshare. 

2. In relation to any items in the property pool that are not the subject of valuation (that would be most if not all of the items) – they have been included in the stated amounts as a result of concessions made by the parties. The wife had also contended that the husband may have access to further property in the form of capital losses in the names of private companies – namely, M Pty Ltd and N Pty Ltd. There is no evidence of such capital losses. In any event, I am not convinced that an accumulated capital loss in a private company would come within the definition of property in section 4(1) of the Act. There is no need to make any further reference to this. In the absence of evidence it is a moot point.

3. As to contributions I noted earlier that the wife brought the major asset into the pool – namely the property at Suburb D.  It was unencumbered at the time of the commencement of the cohabitation and the marriage. 

4. The debt is mainly comprised by the line of credit in the sum of $340,000.  Having heard the parties’ evidence and listened to their submissions I have come to the conclusion that the debt arose as a result of the husband’s desire to purchase a building at Town O to run his business.  When he came to purchase the building at Town O it was apparent that he needed to actually provide some other security.  The B Bank would not lend the money for the purchase unless additonal security was provided.  The husband spoke to the wife about this.  A line of credit needed to be secured over the family home at Suburb D.  There was no debt on the home at that stage.  The wife agreed to this course of action.  The wife was doing the books for the business.

5. What happened next can only be described as extremely unfortunate if not tragic.  The 2011 Brisbane floods occurred and the Town O property was flooded.  The business basically ceased operation.  The bank foreclosed and sold the Town O property.  There was a significant shortfall on the sale.  There therefore remains secured over the Suburb D property the debt in the sum of $340,000. 

6. The wife maintains that the husband failed to diligently run the business.  This is almost certainly correct.  I found the wife to be a reliable witness.  She was a good historian and had an excellent knowledge and memory in relation to what had occurred between the parties. 

7. On the other hand I note the husband’s evidence – his memory was poor.  His recollection of events was minimal at best.  It would have to be said that he was, generally, an unreliable witness and an unreliable historian.  For instance, he told the Court that all of the records of the business were contained in a filing cabinet that was lost in the flood.  However, the wife pointed out to the Court that, in fact, prior to the flood occurring, the furniture in the building at Town O and the filing cabinet containing the documentation, was moved to the upstairs floor at the building and thus was saved from destruction.  I accept the wife’s testimony.  The husband, of course, has failed to adequately disclose documentation.  His failure to make adequate or appropriate or timely discovery has been referred to many times during the interlocutory processes and in the course of this hearing. 

8. Further, as an example of the husband’s unreliability – on 23 September 2019, the Court issued the following direction:-

   “2. That the parties use their best endeavours and do all things necessary to ascertain whether or not the B Bank (or any such other bank) is able and/or willing to re-finance the mortgage owed to the B Bank Ltd., encumbering the property situated at C Street, Suburb D in the State of Queensland, being more particularity described as (omitted), as well as what circumstances and/or arrangements the loan can be re-financed in.”

9. The parties were ordered by the Court to use their best endeavours as outlined in the order above.  The wife did use her best endeavours and she corresponded with the B Bank.  The husband, inexplicably, failed to make contact with the B Bank – notwithstanding that the order itself referred to the fact that the parties were required to "ascertain whether…B Bank…(was) able… to refinance the mortgage" over the Suburb D property.  That, of course, should have read “line of credit registered over the more Suburb D property” instead of mortgage. 

10. Therefore, without any reasonable explanation the husband failed to contact the B Bank.  He did contact (apparently) three other institutions who said they wouldn't lend him the money because of his current expenses.  The husband provided no documentation in relation to that.  One thing is for sure, the husband did not use his best endeavours as required by the order of 23 September 2019 to attempt to find out about refinancing the line of credit.  The husband's history of avoiding his responsibility is well portrayed in a document which became an exhibit in the final hearing on 23 September 2019.  That is an email from a person named Mr P of the B Bank.  That gentleman set out the number of times the B Bank had attempted to make contact with Mr Gabler.  I note that the document says:-

    “Hi Ms Gabler,

    I can confirm that the B Bank has attempted to make contact with Mr Gabler in regards to the Line of Credit …98.

    Collections House:

    21/09/18 - Attempted call

    05/11/18 - Attempted call

    09/11/18 - Attempted call

    10/11/18 - Attempted call

    05/02/19 -Attempted call

    06/02/19 -Attempted call

    07 /02/19 - Attempted call

    08/02/19 - Attempted call

    26/02/19 - SMS notification

    01/03/19 - SMS notification

    11/03/19 - SMS message - contents 'URGENT Your B Bank Line Of Credit account is currently 39 days past due with an outstanding amount of $2187.96. Please call 07… quoting ref …65 to make a payment or discuss your options'

    25/03/19 - SMS message - contents 'Mr Gabler- Your B Bank Line Of Credit account remains in arrears and will soon be reviewed for legal action. If you are having difficulty meeting your payments or would like to make an arrangement please contact us on 07… today quoting …65 to discuss your options'

    Retail Credit Management Team at the B Bank:

    08/04/19 -Attempted Call - Message left requesting contact No further attempts at contact have been made with Mr Gabler after this date. This is the result of contact with yourself and the subsequent arrangement that has been entered into.

    The attempts to contact Mr Gabler have been unsuccessful.

    Regards,

    Mr P”

11. Mr Gabler has no explanation for this failure to engage with the B Bank.  Mr Gabler has clearly avoided making contact with the B Bank.  The Court noted in the reasons delivered on 18 April that the husband, Mr Gabler, has completely abrogated his responsibilities in relation to the $340,000 debt which is encompassed the line of credit.  The above email from the B Bank, which in fact is dated 30 July 2019 and addressed to the wife and the evidence which it contains – makes it abundantly clear that my conclusions as to the lack of reliability of the husband and his total abrogation of his financial obligations is undoubtedly correct.  The email dated 30 July 2019 is in fact exhibit 1 in the proceedings, exhibit 2 in the proceedings was handed up on 22 November 2019, that sets out the significant amount of money paid by the wife to the B Bank in order to ensure that the B Bank did not attempt to sell the Suburb D property.  From 2014 until present that document shows that the wife has paid a total of $100,836 to the B Bank in respect of the line of credit.  The husband has paid absolutely nothing. 

12. To clarify the evidence concerning the line of credit and the Town O property and the Suburb D property – I do note that in fact there was a separate loan over the Town O property.  This was paid out when the property was sold in 2014 in the amount of approximately $395,000.  The line of credit was established in the first place to help the husband run the business.  It ballooned.  It has never been repaid by the husband.  As noted, since separation it is the wife who was made all the repayments in respect of the line of credit.  The interest rate on the line of credit is more than 6%.  The whole point of the Court issuing the direction on 23 September was to try to bring about a situation whereby the loan could be refinanced as a housing loan to assist the wife to retain the property.  The difficulty is that the line of credit is in the name of the husband.  It would have required him to contact the B Bank to try to negotiate a refinancing arrangement.  The B Bank will not discuss in any detail with the wife the arrangements concerning the line of credit – even though she is the only person making repayments in relation to it. 

1. I have no doubt that the wife was the primary carer of the children and fulfilled most if not all of the homemaking duties.  The husband did contribute by going to work and providing income for the family.  Unfortunately, post separation, the husband completely ignored his obligations in relation to addressing the financial problems which were created as a result of the purchase and sale of the Town O property and the running of the husband's business. 

2. As matters currently stand, the wife is going to be the person responsible to repay the line of credit to the B Bank.  As matters currently stand, the wife is going to be the person responsible to repay all of the Visa credit card – even though the husband was responsible for 50% of that debt.  In addition, as matters stand, it is the wife who will have to repay all of the money owing in respect of the loan for the J Timeshare.  The husband is completely unreliable and he is unable and he is unwilling to take any steps to address any of the issues that he should be addressing.  I do note that the wife contacted the B Bank in accordance with the Court's direction of 23 September 2019.  The bank sent an email dated 21 November 2019.  It is exhibit 3.  The analysis that was referred to in the email was assuming that the husband would take over part of the debt.  That is clearly not going to occur.  It does also stated in the last paragraph:-

   “At this point I haven't heard from Mr Gabler."

3. This comes as no surprise to the Court.  Mr Gabler, again, had failed to comply with his obligations. 

4. I am particularly mindful of section 81 of the Act. That section states, inter-alia:-

   “In proceedings under this Part…the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.”

5. The Court had earlier made orders requiring the husband to repay amounts of money in respect of the line of credit.  He failed to comply with the order.  That order was made on 18 April 2019.  The Court also made orders requiring the husband to pay spousal maintenance.  He again failed to comply.  That order was also dated 18 April 2019.  The difficulty in this case is that the Court can have absolutely no confidence that the husband will comply with any order that requires him to actually make any payment of money.  He gave evidence that it would not be possible for him to obtain a loan from family or friends.  I find that he has no inclination to do so.  The husband has no intention of assisting in relation to addressing the debts and obligations which the married couple are left with. 

6. The conclusion I reached is that the only way that some justice and equity could occur in the case is if the husband actually had a superannuation account.  I note the husband's affidavit filed by leave on 25 July 2019.  On the last page there is a snapshot of an L Superannuation account in the name of the husband.  His member number is …56.  The closing balance of the super account as at 23 July 2019 was $106,060.78. 

7. The very great difficulty in this case will be putting in place orders which ends the financial relations between the parties.  The wife had asked the Court to make orders that the husband make various payments or make various arrangements in relation to the line of credit.  Such orders would be futile.  If the Court was to make an order that the husband pay 50% of the amount of the line of credit – all that would be likely to occur is it would lead to the bankruptcy of the husband.  He doesn't appear to have the income to obtain a loan and no interest in seeking to obtain a loan.  His stated income is dropping – according to him.  Of course, he is an unreliable witness and I have difficulty accepting anything he says.  If he is to be believed however, his income was stated in his financial statement filed 12 August 2019 as $55,432 per annum.  He gave evidence on 22 November that that income had reduced and was closer to $50,000 per annum. 

8. I cannot see any other approach except to leave the house in the name of the wife and require that she become responsible for the line of credit. 

9. In relation to the assessment of contributions I make particular note of the fact that the wife provided the vast majority of the caring for the children.  The wife also provided the majority of the other homemaking contributions.  The husband did provide some homemaking contributions. 

10. Both parents worked throughout the marriage and made contributions in that regard. 

11. Since separation and, indeed, since 2014 in particular – the wife has provided a very significant amount of contributions.  In assessing the contributions I think it is worthwhile in this case to note the following.  An assessment of the contributions up to the time of separation in 2012 would probably lead to an outcome of approximately 60% – 40% in favour the wife.  However, since separation, the wife has overwhelmingly made the greater contribution.  The wife has provided most of the care for the children.  The wife has also shared with the husband the payment of private school fees.  In addition, the wife has made more than $100,000 by way of payments in respect of the line of credit.  This has meant that the primary asset (the former matrimonial home) has been preserved – and not sold by the bank.

12. Assessing contributions as at 22 November 2019 leads me to conclude that the preliminary assessment I had made in April 2019 was not correct.  The Court now has before it exhibit 2 which details precisely how much the wife has paid in respect of the line of credit since separation.  In fact, the details are only in relation to the line of credit since 2014.  I accept the wife’s evidence that she made repayments during 2012, 2013, 2014, 2015, 2016, 2017, 2018, and 2019.  The total between 6 February 2014 and 21 November 2019 is $100,836.  There were other contributions (I infer from the evidence) made by the wife in the form of repayments for the line of credit between separation in 2012 and 6 February 2014 which is the first recorded date on the typewritten document which is exhibit 2.  The wife has also been making interest payments on the B Bank visa credit card.  The wife has paid all the outgoings on the Suburb D property. 

13. I do note that the wife has had the benefit of living in the property and the husband has paid rent elsewhere. 

14. Taking into account the pre-separation contributions and post separation contributions to the property pool (including financial and non-financial contributions).  I have come to the conclusion that the wife’s contributions total 75% and the husband’s 25%. 

Section 75(2)

1. It has become increasingly apparent to the Court that, because of the total unreliability of the husband, the wife will be left to pay the entirety of the line of credit to the B Bank in the sum of $340,000. The wife will also be left with the visa credit card debt of $31,044. That was a joint debt but she will be responsible for the whole lot. In addition, there was the joint debt on the J Timeshare loan of $12,578. The wife will be responsible for all of that. The wife currently earns $78,156 per year. The husband earns $55,432, or perhaps $50,000, per year. Both are in reasonably good health. The wife is likely to be primarily responsible for the two children. The wife will be receiving most of the assets but she will also be responsible for the debts as indicated. Given the amount of the primary assessment of contributions; the age of the parties; their incomes; the proposed division of the asset and liabilities – I have come to the conclusion that there should not be any uplift pursuant to section 75(2) the Act.

Justice and Equity

1. The outcome will therefore be a split of 75% to 25% in favour of the wife.  This is unusually large.  But it is an unusual case.  I reiterate – the husband has abrogated his financial responsibilities.  It will be left to the wife to bear the burden.  In particular, the wife will have to bear the burden of the line of credit to the B Bank.  She will retain the house but will be left with the debt. 

2. One of the reasons for the 75% to 25% assessment in favour of the wife is the failure by the husband to provide proper disclosure.  The Court has made findings against the husband because of his unreliability (as referred to in these Reasons for Judgment).  For instance the husband maintained that all of the documents of the business were lost in the flood.  The wife gave different evidence.  I accept the wife’s evidence.   Further, the Court made an order requiring the husband to make inquiries about refinancing the line of credit.  It is apparent from the evidence that the husband was avoiding dealing with Q Bank.  The husband made no reasonable attempt to comply with the Court order.  The Court is inclined to leave with the husband his household contents; the Motor Vehicle H; and his two I Bank accounts totalling $1,100.  The Court is inclined to leave the husband his superannuation account in existence – but there will be a super splitting order to transfer money from the husband's superannuation account to the wife.

3. I am mindful of what was said by the Full Court of the Family Court In the Marriage of Weir (1992) 110 FLR 403. Not only has there been nondisclosure by the husband in this case – I also consider that the husband has not cooperated in the process of litigation. He has failed to attend Court despite orders to do so and he has failed to comply with obligations imposed by Court order. This is the sort of case where the Court should not be unduly cautious about making findings in favour of the wife. In any event, there is overwhelming evidence (namely the very large amount of financial contributions made by the wife post separation in order to preserve the former family home) which also leads the Court to conclude that an assessment of 75/25 in favour of the wife is just and equitable in the particular circumstances of this case.

4. I will give the parties a chance to make submissions in relation to the wording of final orders to reflect the Reasons for Judgment.

5. The wife specifically requested that there be no order for the house to be sold.  The wife brought the house into the marriage and at that point in time it was unencumbered.  This is not an unreasonable request which has been made by the wife noting the amount of money the wife has repaid to the bank since separation. 

6. If the wife changes her mind in relation to this issue I will consider her draft order (if any) to effect a sale of the property.

7. The parties will be given time to send through to the Court orders that reflect the Reasons for Judgment.

I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for judgment of Judge Howard

Date: 12 March 2020