Garrett and Schone - [2011] FMCAfam 1141

FEDERAL MAGISTRATES COURT OF AUSTRALIA

GARRETT & SCHONE

[2011] FMCAfam 1141

FAMILY LAW – Property – undefended proceedings – husband wasted funds on addiction – orders proposed by wife just and equitable.

Family Law Act 1975 (Cth), ss.81, 106A, 117
Federal Magistrates Court Rules 2011 (Cth), sch.1

Applicant:

MS GARRETT

Respondent:

MR SCHONE

File Number:

MLC 5350 of 2010

Judgment of:

Hartnett FM

Hearing date:

30 September 2011

Delivered at:

Melbourne

Delivered on:

30 September 2011

REPRESENTATION

Counsel for the Applicant:

Ms Treyvaud

Solicitors for the Applicant:

Bayani Harvey Lawyers

The Respondent:

No appearance

ORDERS

That the husband be restrained by injunction from further encumbering the former matrimonial home at Property E, [E], Victoria (“the property”).
That the husband sign all documents and do all things necessary to forthwith place the property on the market for sale with an agent as directed by the wife’s solicitor (“the agent”).
That in the event that the husband fails to comply with any direction by the wife’s solicitor or the agent pursuant to paragraph 2 within seven (7) days then the Registrar of the Federal Magistrates Court of Australia and pursuant to s.106A of the Family Law Act 1975, is appointed to execute all necessary documents in the name of

Mr Schone and do all acts and things necessary to give validity to any documents Mr Schone is required to execute by these orders.
That the wife’s solicitors Bayani Harvey Lawyers be the solicitor on the sale for the vendor.
That the property be sold and the proceeds of sale be applied as follows:
(a)Firstly to pay all agents costs and commissions of sale including conveyance fees;
(b)Secondly to pay any outstanding mortgaged loan;
(c)Thirdly the residue of the sale proceeds including deposit to be divided 50% to the wife and the wife to be paid that divided amount;
(d)Fourthly to pay out of the husband’s share the amount referred to in paragraph 6 below; and
(e)Fifthly the balance to the husband.
That the husband pay the wife her legal costs in the sum of $13,900.
That unless otherwise specified in these orders and save for the purposes of enforcing any moneys due under these or any consequent orders:
(a)Each party be solely entitled to the exclusion of the other to all the other property (including choses in action) in the possession of such party including superannuation as at the date of these orders (furniture, personal possessions and like chattels in the property being deemed to be in the possession of the husband) save for the engagement and marriage gifts and jewellery still in the possession of the husband, such items to be divided between the parties by agreement;
(b)Insurance policies remain the sole property of the beneficiary named therein;
(c)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; and
(d)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
That the wife be at liberty to apply in relation to the implementation of the orders contained herein in regards to the sale of the property.
That pursuant to s.81 of the Family Law Act 1975 these orders are intended as far as practicable to finally determine the financial relationship between the parties to the marriage and avoid further proceedings between them.

AND THE COURT NOTES:

A.That the balance of the National Australia Bank mortgage loan account no [1] secured over the property was $233,890.92 as of 31 August 2011.
B.That the husband has failed to comply with orders 2, 3 and 4 of the orders made by consent on 4 May 2011.
C.That the costs sought by the wife ($13,900) are calculated in accordance with the Federal Magistrates Court Rules 2011, Schedule 1, as follows:
a.Stage 5: Preparation for 4 May 2011 final hearing for a 1 day matter lump sum $3,990; and
b.Counsel’s fees for 4 May 2011 $3,000; and
c.Stage 5: Preparation for 30 September 2011 final hearing for a 1 day matter lump sum $3,990; and
d.Counsel’s fees for 30 September 2011 $3,000.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLC 5350 of 2010

MS GARRETT

Applicant

And

MR SCHONE

Respondent

REASONS FOR JUDGMENT

Proceedings commenced in this matter on 10 September 2010 upon the wife filing an application for property orders. The wife subsequently filed further amended initiating applications, and the one on which she relies for the purposes of this proceeding is that filed by her on

29 September 2011. That application in essence sets out the orders which she seeks this day. The last amended initiating application was served upon the respondent husband by courier on 29 September 2011, together with a further affidavit of the wife sworn 29 September 2011.
The wife relies upon the amended application filed 29 September 2011, affidavits sworn by her on 29 September 2011, 29 April 2011, and

8 September 2010 and a financial statement sworn 8 September 2010. The husband initially participated in the proceedings, filing a response on 4 November 2010 together with an affidavit sworn 27 October 2010 and a financial statement sworn 27 October 2010. Since that time, the husband has filed no further affidavits in the proceeding.
The matter proceeded this day undefended as provided for in the orders of 4 May 2011 (being orders by consent) and in particular order 5. The husband was called outside the courtroom this day and failed to answer the call. Further, on 4 May 2011, the husband was ordered to pay $3,000 to the wife’s solicitors, being costs thrown away and on or before 25 May 2011. The husband has not made such payment. Further, the husband was ordered to, on or before 4 June 2011, file and serve an affidavit of evidence-in-chief, an updated financial statement and affidavits of any other person’s evidence upon which he relied. The husband has failed to comply with this order.
Finally, the husband was to obtain two appraisals of the former matrimonial home known as and situate at Property E in the State of Victoria and provide copies of same to the wife’s solicitor. This also was to be done on or before 4 June 2011. The husband has failed to comply with that order. On the basis of the husband’s failure to comply with the orders of 4 May 2011 and his failure to attend this day on the hearing of the matter, the matter is heard on an undefended basis. The husband had lawyers acting on his behalf until those lawyers filed a notice of withdrawal of lawyer on 5 May 2011. Thereafter, the husband has been a litigant in person.

History

The parties met in the year 2000. They commenced their relationship in that same year. In or around February 2004, the parties became engaged and commenced to cohabit. They married [in] 2006 in [omitted] in Victoria and separated in or around August 2007. Thus, their period of cohabitation was approximately three years and five months. There are no children of their marriage. The parties divorced on 28 August 2010. The wife was born [in] 1980 and is now aged 31 years. The husband was born [in] 1978 and is now aged 33 years.
The financial statement filed by the husband on 4 November 2010 described his occupation as a [omitted] and his total average weekly income as being $1,670 gross, which included rental income received from the tenant of the former matrimonial home. That rental income has been received by the husband since the parties’ separation but has not been applied to the mortgage repayments, being a matter to which I shall return.
The husband is residing with his parents, and the wife, upon separation, commenced to reside with her parents for a period of some two years before she was again in a position to purchase a home in which she could reside.
In the wife’s financial statement filed 10 September 2010, she deposes to a total average weekly income of $790 gross from her employment as a [omitted]. The husband thus has a slightly greater income than that of the wife.
The husband sought, in his response, that he retain the former matrimonial home at Property E and that there be such other property division as determined by the Court.
The asset pool comprises the following:
a)The former matrimonial home with a value on the wife’s appraisals of $420,000 to $460,000 and on the husband’s of $390,000. Those appraisals were determined at a time when the market was more robust and it may be that the property is now worth something less than those figures but I was urged in submissions today to accept that the value of the property is somewhere around those figures and that the current mortgage outstanding is in the sum of $233,000, leaving an equity of perhaps $200,000 in the property. The wife obtained a valuation of the former matrimonial home from a local real estate agent. That valuation is annexed to her affidavit sworn 29 April 2011 and marked exhibit “AMG-1”. The wife did not have access to the former matrimonial home for the purposes of the conduct of the valuation;
b)The wife’s motor vehicle which she values in the sum of $10,000;
c)The husband’s two motor vehicles, value unknown, but which he valued in his financial statement as totalling approximately $5,500;
d)Household furniture and contents which the wife claims were purchased for approximately $36,000 and of which the husband retains the totality of, but which the husband refers to as having a value in his financial statement of $5000, but which value is unknown to the Court;
e)Other personal property including jewellery, tools and car parts, valued at approximately $10,000 as agreed by the parties;
f)The husband’s superannuation entitlements with [omitted], which 12 months ago were in the sum of approximately $28,414; and
g)The wife’s superannuation entitlements of approximately $13,000.
At the time of the marriage, neither party had assets of any significance. They both lived with their respective parents.
During the parties’ cohabitation, the wife claims the contribution of each, both direct and indirect, to be equal, save that the husband wasted the parties’ funds on i) his drug addiction, which cost in the sum of $400 per week; and ii) his applying funds to poker machines. The wife claims that approximately five or six months into the marriage she discovered that the husband had an addiction to the illicit drug methamphetamine (“ice”) and that he had told her he was using around $400 each week to support that habit. Her evidence was that caused considerable strain on their relationship and, in particular, because there were unexplained amounts of money left owing on the redraw facility that formed part of the mortgage secured against the former matrimonial home.
The land on which the former matrimonial home in [E] was built was purchased in or around 2003, by the husband’s father, for approximately $129,000. The husband’s father paid a deposit of $10,000, with the block of land being eventually transferred solely into the husband’s name.
In late 2003 or early 2004, the husband and wife decided to build on the block of land in anticipation of their marriage. Although the wife requested that any new loan be in the names of the parties jointly, the husband declined such request. The parties planned to live at the former matrimonial home for around 12 months to satisfy the first home buyer’s grant rules and then purchase another home solely in the name of the wife in order for her to take advantage of the first home buyer’s grant, with their intention being to then live in the second home and rent out the first home. Accordingly, the husband solely borrowed the funds to build. This borrowing was approximately $300,000 and the husband’s parents were guarantors in respect of the line of credit advanced.
The husband made the repayments on the mortgage from the start of 2004 and continued to do so solely, until the wife moved into the home in or around June or July of 2004. From that point onward, the wife contributed all of her income to assist in the mortgage repayments and general household expenses. She also used savings that she had accumulated of $15,000 toward the new household expenses. The parties together brought furniture and fittings for the home, which the wife estimated to have cost approximately $36,000. In addition, some of the furniture in the former matrimonial home was given to the wife by her parents. All of that furniture has remained in the possession of the husband.
The parties together received approximately $27,000 worth of cash payments upon their engagement and wedding. In addition, they received household goods as presents. These household goods were left in the home when the wife departed it in 2007 and have remained in the possession of the husband. The cash sums received by the husband and wife were placed in the redraw facility in two payments, one for $14,000 in July 2000 and the second forming part of an amount of $30,000 in January 2006.
The jewellery in the home, which included the wife’s engagement ring and diamond earrings, remained in the possession of the husband despite the repeated request of the wife to have such items returned to her. The husband has now returned the pair of diamond earrings.
The husband swore in his affidavit filed 10 September 2010, that he had borrowed further monies from his parents of around $150,000 and that as a result he now had no equity in the former matrimonial home. The wife is unaware of any borrowings of the husband from his parents nor such borrowings application to the line of credit, save that the wife concedes that the line of credit secured over the former matrimonial home is approximately $70,000 less than it was at the time she departed the home.
In August 2009 and being some two years after the parties separation, the wife purchased a home and land package at Property M in the State of Victoria. The husband has made no contribution to that property and the wife used the savings that she accrued following the ending of the relationship and during the period of time that she resided with her parents, as a deposit. She pays the mortgage repayments on the home in Property M from her own income and is now in occupation of that property.
Although the husband’s parents made a contribution on the part of the husband in the sum of $10,000 at the commencement of the parties’ cohabitation, I accept the wife’s evidence that the husband squandered such greater contribution on his part on his taking of illicit drugs and the cost in relation thereto. The parties are still young and there are no children of their marriage. The husband has a greater earning capacity than the wife and a greater income. The husband has wasted the parties’ assets in his drug habit and gambling which sets off any greater contribution made by the injection of funds from his parents.
The husband was addicted to ice and used same on a daily basis. The wife and his family called the Crisis Assessment and Treatment Team for help regarding his addiction. He was admitted to the [omitted] Hospital in [E] on a number of occasions to control his habit and he was prescribed medications to help with his psychosis. In August 2007, he was in a psychiatric ward for two weeks and unable to attend the wife’s brother’s wedding. The wife spent many months trying desperately to help her husband but ultimately left the former matrimonial home and after obtaining an intervention order against the husband.
During the period of the marriage, there were a number of withdrawals against the mortgage that were, at the time, unaccounted for. The husband would make withdrawals and not replace the funds. These withdrawals of cash occurred without the wife’s knowledge until she was able to view a bank statement, sometimes not until months later.
Despite the husband having placed tenants in the former matrimonial home and been solely in receipt of the rental repayments, the husband has not applied same to repayment of the mortgage and, in June 2011, the National Australia Bank forwarded correspondence indicating its intention to exercise its power of sale over the former matrimonial home.
The husband’s behaviour during the course of the proceedings resulted in the wife having to issue subpoenas to the Commonwealth Bank, National Australia Bank and Bankwest. The issue of subpoenas incurred unnecessary legal expense to the wife.
The wife discovered the monies outstanding on the mortgage account by the necessary issue of a subpoena which discovered an outstanding debit balance, as of 31 August 2011, in the sum of $233,890.92. In the period of non-payment of the mortgage by the husband and being a period from 1 April 2011 to 12 September 2011, the husband was in receipt of monthly rental in the amount of $1,635.88 from the former matrimonial home. He has not accounted to the wife for any of those rental receipts.
The husband raises contrary assertions and denies some of the matters put by the wife before the Court in his affidavit sworn on 27 October 2010. He is not before the Court however to prosecute his application as set out in his response, nor to challenge the evidence of the wife by way of cross‑examination. He has not made himself available for cross‑examination for his evidence to be challenged. The wife’s evidence is unchallenged and I accept it.
The orders as proposed by the wife are just and equitable in the circumstances of this case. The husband will retain the furniture of the parties, his motor vehicles, his greater earning capacity and income and his greater superannuation entitlements, but will share equally in the division of the net proceeds of sale of the former matrimonial home with the wife. The wife will retain her interest in the Property M property in which she currently resides, it being accumulated entirely with funds earned following the separation and the husband having made no contribution to same. The equity the wife has in such property is in any event limited.
The wife has incurred considerable legal expenses in these proceedings. She previously instructed her solicitors to prepare a binding financial agreement for the parties to sign on the basis of what she believed the husband and she had agreed, only for the husband to refuse to see a solicitor to finalise the document. The wife then filed her application which was listed for final hearing on 4 May 2011. The earlier referred to orders were made, none of which the husband has complied. On 1 June 2011, the solicitors for the wife gave the husband a further opportunity to pay the $3,000 outstanding in costs that were ordered in May, failing which the husband was advised that the wife would proceed on this day on an undefended basis and would seek costs against the husband. A further letter was sent by the solicitors for the wife in similar terms on 26 August 2011. It is appropriate when looking to s.117 of the Family Law Act 1975 that a costs order be made in favour of the wife. The husband has had ample warning of the intention to bring such an application and his conduct throughout, including failure to comply with orders of the Court, has occasioned considerable expense to the wife. The wife has been entirely successful in her application and her application for costs is acceded to. The amount being calculated on scale.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Hartnett FM

Date: 27 October 2011