Gibbs & Gibbs (No 2)
[2022] FedCFamC1F 831
Federal Circuit and Family Court of Australia
(DIVISION 1)
Gibbs & Gibbs (No 2) [2022] FedCFamC1F 831
File number(s): SYC 5405 of 2018 Judgment of: CHRISTIE J Date of judgment: 31 October 2022 Catchwords: FAMILY LAW – FINAL PROPERTY – where the parties were married for over 20 years – where both parties made initial contributions – where the husband’s initial contributions formed the basis for the majority of the property pool – where the husband has foregone entitlements to claim on his sister’s estate - where it is necessary to appreciate the nature and characteristics of various assets. Legislation: Family Law Act 1975 (Cth), Part VII, ss 79, 75, 117
Federal Circuit Family Court of Australia Act 2021, s 67
Succession Act 2006 (NSW), s 102, 129
Federal Circuit and Family court of Australia (Family Law) Rules 2021, r 12.17
Cases cited: Dickons & Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
Farmer and Bramley (2000) FLC 93-060; [2000] FamCA 1615
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Meadows & Meadows (No 3) [2020] FamCAFC 124
Money and Money (1994) FLC 92 – 485; [1994] FamCA 54
NHC & RCH (2004) FLC 93-204; [2004] FamCA 633
Pierce & Pierce (1999) FLC 92 – 844; [1998] FamCA 74
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Division: Division 1 First Instance Number of paragraphs: 110 Date of hearing: 11 – 14 October 2022 Place: Sydney Counsel for the Applicant: Mr Watkins Solicitor for the Applicant: Solari & Stock Lawyers Counsel for the Respondent: Ms Winfield Solicitor for the Respondent: Nora Michael Family Lawyers ORDERS
SYC 5405 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GIBBS
Applicant
AND: MR GIBBS
Respondent
order made by:
CHRISTIE J
DATE OF ORDER:
31 October 2022
THE COURT ORDERS THAT:
1.The husband shall within 42 days of the date of these orders pay to the wife $3,303,714 ("the settlement sum").
2.In the event the husband fails or neglects to pay to the wife the amount provided for in Order 1 of these orders, then the amount, or any portion that remains outstanding after the due date, then the husband shall pay interest to the wife at the rate prescribed by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) from the date of default in these orders until payment is made in full.
3.In the event the husband fails or neglects to pay to the wife the amount provided for in Order 1 of these orders, then within 28 days of the default the parties shall do all things and sign all documents necessary to cause the properties situate at and known as H Street, Suburb F in the State of New South Wales being Folio Identifier …("H Street, Suburb F") and E Street, Suburb F being folio identifier … (“E Street, Suburb F”) (“the properties”) to be sold by private treaty within 14 weeks of the date of these orders, at the best possible price and at the earliest possible date on the following terms:
(a)The parties shall list the properties for sale with a real estate agent as agreed upon by the parties or in the absence of agreement within 14 days of the date of these orders, then with such real estate agent as the President of the Real Estate Institute of NSW shall appoint ("the Agent"), the costs of and incidental to such appointment to be borne equally by the parties as and when they fall due.
(b)The sale price at which the properties shall be listed shall be as mutually agreed upon by the parties or, in the absence of agreement, within 14 days of the date of these orders, as determined by a valuer agreed between the parties, and failing agreement from J Valuers, on the basis that the parties are equally responsible for the costs of the valuation report, and the husband is responsible for the costs of the valuer at first instance.
(c)The parties shall each cooperate in every way with the Agent including (without limiting the generality of the foregoing):
(i)Making the key available to the Agent;
(ii)Allowing the inspection of the properties at all reasonable times requested by the Agent;
(iii)Doing or saying nothing to hinder or prevent a sale being effected;
(iv)Ensuring the properties, including the grounds, are in a neat and clean condition at the time of inspection by the Agent and prospective purchasers; and
(v)Signing all documents requested by the Agent in relation to the listing for sale of the properties, except a contract or agreement for sale of which the terms have not been agreed upon by both parties.
(d)Neither party may confer on any agent, without the consent of the other party, any right to sole or exclusive agency in respect of the properties or to any commission.
(e)The parties shall instruct such solicitor or conveyancer as they agree upon to have the conduct of the sale of the properties on behalf of the parties or, in the absence of agreement, within 14 days of the date of these orders, instruct such solicitor as may be appointed by the President for the time being of the Law Society of NSW ("the Solicitor"), the costs of and incidental to such appointment to be paid by the wife as and when they fall due.
(f)The Contract for Sale shall contain such terms and conditions as agreed upon by the parties and, failing agreement, in accordance with the recommendations of the Solicitor.
4.If either of the properties are not sold within five months from the date of these orders then each party shall take all necessary steps and execute all necessary documents to cause the properties to be sold by auction at the earliest possible date on the following terms:
(a)The parties shall list the properties for sale with a real estate agent as agreed upon by the parties or, in the absence of agreement, within 14 days of the date of these orders, then with such real estate agent as the President of the Real Estate Institute of NSW shall appoint ("the Agent"), the costs of and incidental to such appointment to be borne by the wife as and when they shall fall due.
(b)The auctioneer shall be as agreed to by the parties and, failing agreement, in accordance with the recommendation of the Agent.
(c)The auction shall take place at a time and place as agreed upon by the parties and, failing agreement, as nominated by the Agent so as to enable sufficient time for the said properties to be advertised for sale (“the Auction Date”);
(d)The reserve price shall be as agreed upon by the parties and, failing agreement, in accordance with the recommendation of the Agent;
(e)The husband shall be responsible for and pay any auction expenses payable before the properties are auctioned;
(f)The parties shall instruct such solicitor or conveyancer as they agree upon to have the conduct of the sale of each of the properties on behalf of the parties or, in the absence of agreement, within 14 days of the date of these orders, instruct such solicitor as may be appointed by the President for the time being of the Law Society of NSW ("the Solicitor"), the costs of and incidental to such appointment to be met by the wife as and when they fall due.
(g)The Contract for Sale shall contain such terms and conditions as agreed upon by the parties and, failing agreement, in accordance with the recommendations of the Solicitor.
(h)In the event that the properties are not sold at the auction or private treaty within 14 days of the Auction Date, the parties shall do all acts and things and sign all documents and the wife shall pay all monies as necessary to procure a second auction within a further period of eight weeks of the Auction Date, unless otherwise agreed, on the same terms as set out in Orders 4(a) to 4(f);
(i)If an offer is made to purchase either or both of the properties and one of the parties do not agree on acceptance of the offer, then the parties shall abide by the recommendation of the Agent as to the sale price and if that price is agreed to by the purchaser, the parties shall do all acts and things to accept the offer and to sell the property or properties to the offeror.
5.Upon completion of the sale of the properties or either of them, the parties shall do all acts and things and sign all documents necessary to cause the proceeds of sale to be paid in the following manner and priority:
(a)All costs and expenses of sale, including legal costs and disbursements, agent’s commissions, advertising expenses, valuer’s fees and auction expenses (including repayment to either or both the parties in full any funds expensed by them on such costs and expenses prior to the sale).
(b)In payment of the amount necessary to discharge the mortgage to the Commonwealth Bank of Australia;
(c)In payment of the settlement sum, or balance of the outstanding settlement sum, plus interest calculated in accordance with the Rules to the wife.
6.Pending the settlement of the sale of the properties:
(a)The husband shall be responsible for meeting all outgoings associated with the properties including, all mortgage repayments, all council rates and water rates, all household insurances and/or taxes arising from H Street, Suburb F and E Street, Suburb F as and when they fall due up until the settlement date;
(b)The husband holds his interest in H Street, Suburb F and E Street, Suburb F upon trust for the wife pursuant to these orders until such time as he complies with their terms;
(c)The husband shall not encumber H Street, Suburb F or E Street, Suburb F without the written consent of the wife, save for the husband taking steps to arrange finance to pay the settlement sum to the wife in accordance with Order 1 herein;
(d)The wife is permitted to lodge and/or maintain a caveat over H Street, Suburb F and/or E Street, Suburb F, at her cost, and the wife shall cause the caveat secured over the properties to be removed when the settlement sum is paid to the wife pursuant to Order 1 herein.
7.Pending payment of the settlement sum to the wife, the husband be and is restrained from selling, transferring, mortgaging or in any way encumbering or otherwise dealing with any property currently held in his name either jointly or together with others including but not limited to:
(a)H Street, Suburb F;
(b)2 G Street, Suburb F;
(c)3 G Street, Suburb F;
(d)2 H Street, Suburb F;
(e)The husband's shares in K Pty Ltd; and
(f)The husband's shares in D Pty Ltd.
Without the written consent of the wife or order of the Court, excepting where such sale or dealing is necessary to enable the husband to procure funds to enable payment of the settlement sum to the wife, provided at least 28 days (or such lesser period as the wife consents in writing) notice of sale or dealing is provided to the wife.
8.Until payment of the settlement sum to the wife, the husband's interests in the properties in Order 7 hereof, is charged with the outstanding amount of the settlement sum and the wife is permitted to lodge a caveat in respect of such charge.
9.Otherwise, except as provided for in these orders, the wife be solely entitled to the exclusion of the husband to the following:
(a)Any savings or investments held in her sole name or with any other person;
(b)Her motor vehicle;
(c)Her superannuation entitlements; and
(d)Any other items of personalty in her possession or control.
10.Upon payment of the settlement sum to the wife, the husband is solely entitled to the exclusion of the wife to the following:
(a)His interests in real estate and companies listed in Order 7 hereof;
(b)Any savings or investments held in his sole name or with any other person;
(c)His motor vehicle;
(d)His superannuation entitlements; and
(e)Any other items of personalty in his possession or control.
11.In the event either party refuses or neglects to execute any deed or instrument within seven days of that deed or instrument being forwarded to him or her or his or her solicitor, an officer of the Federal Circuit and Family Court of Australia (Division 1) is hereby appointed pursuant to s 106A of the Family Law Act1975 (Cth), to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument.
12.The husband pay to the wife or as she may direct in writing the sum of $29,832.
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 the pseudonym Gibbs & Gibbs has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J:
The parties do not agree what adjustment of property interests between them would be just and equitable following the breakdown of their marriage and so each of them asks this Court to make orders.
Background
The husband and wife commenced cohabitation at the time of their marriage in mid-1997.
At the time of marriage, the husband was the owner, either in his name or jointly with other family members, of several pieces of real property in Sydney. It is not plain what liabilities were secured against the various titles but it is plain that some (perhaps all) were subject to mortgage.
The wife had funds in a term deposit in her own name.
The year prior to the parties’ marriage, the husband and his brother Mr L incorporated K Pty Ltd (“K Pty Ltd”). The husband and his brother each held 50 per cent of the 100 shares in the company.
The husband was working as a professional at the time of marriage and the wife had most recently been employed in hospitality. Following marriage, after a brief leave of absence from the paid workforce, the wife undertook paid work for the husband’s brother and then subsequently hospitality work.
In 2015 the husband commenced working for D Pty Ltd (“D Pty Ltd”), a company which was incorporated during the marriage and whose shares were held by the husband and his siblings.
In late 2017 the wife was made redundant when her employer, M Corporation, moved to Melbourne. The wife was unemployed for a period of three months.
The parties separated on 22 January 2018. At that time the wife moved in with her father and brother and the husband continued to live in the home previously occupied by the husband and wife.
At the time of hearing the wife was working as a co-ordinator in hospitality The husband was working for the companies of which he is a director and otherwise in receipt of rental income.
PROCEDURAL BACKGROUND
On 24 August 2018 the wife filed an Initiating Application seeking orders for property adjustment. On 20 June 2019 she amended that application and it is on that amended application that the wife moves at the final hearing. The husband filed a Response on 16 October 2018 which was amended on 2 October 2019.
In November 2021 this matter was listed for final hearing on 16 May 2022. I vacated those hearing dates in circumstances where the husband had failed to file trial material and there were significant outstanding valuation issues. I reserved the wife’s costs of the vacated hearing.
On 10 May 2022 the husband was again directed to file his trial material on or before 30 June 2022 (the first extension of time).
The husband did not comply with the order to file his trial material. The valuation material was filed (albeit late).
On 14 September 2022 I made a direction that, if the husband failed to file trial material on or before 23 September 2022, he would require leave to rely on any material served after that date (the second extension of time).
The husband did not file material in accordance with the terms of the second extension (or at all).
As I had indicated to the parties in my reasons for judgment of 10 May 2022, balancing the interests of the parties and other litigants using the Court, it was necessary for this matter to be heard and determined on a final basis.
On the first day of trial, counsel who appeared for the husband handed the Court an Outline of Case document which set out the material upon which the husband sought to rely at final hearing. Given the nature of the previous directions concerning filing, the husband needed leave to rely on this material. The material set out in the Case Outline was:
(a)An affidavit filed on 18 December 2018;
(b)A Financial Statement filed on 28 February 2019; and
(c)An affidavit filed on 9 May 2022.
I indicated that given the material was not recent, the wife had had notice of its content for some time and hence I could not see any apparent prejudice to her in my granting leave for the husband to rely on that material. Sensibly, the wife did not oppose leave and leave was granted.
The husband was at a disadvantage as a consequence of his failure to file in accordance with the Court’s directions because he did not have any evidence of his current financial circumstances before the Court. However, his affidavit of 18 December 2018 dealt with issues relating to the parties’ financial and non-financial contributions and his affidavit of 9 May 2022 provided some evidence about his current health.
The husband and his counsel referred to work having been undertaken to complete a new statement of financial circumstances and it seemed apparent that a draft document had been prepared. No application was ever made on behalf of the husband to receive an updated financial statement into evidence. Similarly, no application was made by the husband at the trial for an adjournment of the final hearing and accordingly the hearing proceeded on the relisted dates for trial.
The wife seeks an order that the husband pay costs associated with his failure to comply with the Court’s orders, his failure to follow Court directions and the necessity for consequent relistings.
The law
The approach to property adjustment is governed by the provisions of Part VII of the Family Law Act 1975 (Cth) (“the Act”).
The Court shall not make an order unless satisfied that it is just and equitable to do so: s 79(2) of the Act.
In approaching this exercise it is useful to determine the assets, liabilities, financial resources and superannuation of the parties, or either of them, as a first step where same are in dispute and make findings about the net assets of the parties available for adjustment (if any).
In reaching a conclusion as to whether it is appropriate to adjust the interests of the parties in the available assets, it is necessary to have regard to their contributions to the acquisition conservation and improvement of the assets.
In a similar vein, it is necessary to consider any non-financial contributions by one or other of the parties to the marriage and ensure that such contributions are afforded appropriate weight.
All contributions financial, non-financial, direct and indirect over a long marriage must be assessed in totality. An initial contribution will be one of the financial contributions taken into account in that assessment: Jabour & Jabour (2019) FLC 93-898.
The contributions which will be considered include contributions made before the marriage, during the marriage and after the parties have separated.
It is not necessary that a party demonstrate that he or she has made a specific financial contribution to a specified asset in order to recognise his or her financial contributions.
In examining the parties’ respective contributions it will be important to understand what assets a party brought to the relationship that is his or her initial contributions. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife: Pierce & Pierce (1999) FLC 92-844 (“Pierce”) at [28].
Consideration
As the issues emerged from the material filed and the cross-examination, it was made plain that those aspects of the matter which were (relevantly) contentious were:
(a)The value (but not necessarily the identity) of the assets of the parties at the commencement of cohabitation and accordingly, what might be regarded as each party’s initial contribution;
(b)Whether the husband’s work in the company, undertaken in addition to his paid employment, should be recognised as his having made a greater contribution than the wife during the parties’ relationship;
(c)Whether the wife contributed funds from her income and savings to the acquisition or improvement of assets;
(d)Whether the circumstances between separation and hearing give rise to an adjustment in favour of one party or the other;
(e)How the Court should treat the husband’s rights under the Succession Act 2006 (NSW) (“the Succession Act”) as they relate to the estate of his late sister, Ms B;
(f)Whether the husband’s ownership of E Street, Suburb F is subject to a trust in favour of his nephews; and
(g)Whether the financial circumstances of one or other of the parties warrant an adjustment to their contribution based entitlements.
It is appropriate to deal with the composition (and value) of the asset pool of the parties available for adjustment between them as a preliminary step in considering the parties’ respective applications.
I was provided with a document (exhibit 15) which sets out the Joint Balance Sheet adopted by the parties for this hearing.
Property Ownership Wife’s Value Husband’s Value ASSETS H Street, Suburb F H $2,590,000 $2,590,000 2 G Street, Suburb F 50% H $1,000,000 $1,000,000 3 G Street, Suburb F 20% H $390,000 $390,000 2 H Street, Suburb F 20% H $560,000 $560,000 E Street, Suburb F H $1,000,000 $1,000,000 G Street, Suburb F (life estate) H $334,000 $334,000 Husband’s interest in the estate of his late sister H $666,413 NK CBA account ending in …56 W $29,833 $29,833 CBA account ending in …60 W $2,005 $2,005 CBA account ending in …29 W $8,007 $8,007 Motor Vehicle 1 W $7,000 $7,000 Personal effects W $1,000 $1,000 N shares H $1,617 $1,617 N shares W $3,873 $3,873 D Pty Ltd 25% H $483,000 $483,000 K Pty Ltd 50% H $1,412,000 $1,412,000 Furniture and home contents H $10,000 $10,000 CD collection H $1,000 $1,000 Total: $8,499,748 $7,833,335 SUPERANNUATION Superannuation Fund 1 W $203,935 $203,935 Superannuation Fund 2 H $239,035 $239,035 Total: $442,970 $442,970 Total Assets: $8,942,718 $8,276,305 LIABILITIES NAB Investment loan (2 H Street) H $107,600 $107,600 Viridian Line of credit H $119,350 $119,350 CBA Gold credit card H $19,340 $19,340 CBA home loan (H Street) H $184,089 $184,089 Total: $430,379 $430,379 Net Assets: 8,512,339 $7,845,926 ADDBACKS Money paid by the husband on legal fees H $197,000 $197,000 Money paid by the wife on legal fees W $109,000 $109,000 Total add backs: $306,000 $306,000
The issues which emerge from the Joint Balance Sheet are as follows:
(a)How should the Court treat the husband’s evidence that he will forgo any entitlements to the estate of his sister as may have been available to him pursuant to ss 102 and 129(1) of the Succession Act?
(b)Is the husband’s interest in E Street, Suburb F affected by any legal or moral claim?
(c)Is the nature and character of the husband’s interest in G Street, Suburb F (a life estate) a relevant consideration?
(d)How should the Court treat the parties’ paid legal fees?
Section 102 of the Succession Act provides: An intestate is a person who dies and either does not leave a will or leaves a will but does not dispose effectively by will of all or part of his or her property.
Section 129 of the Succession Act provides: The brothers and sisters of an intestate are entitled to the whole of the intestate estate if the intestate leaves –
(a)no spouse, and
(a)no issue, and
(b)no parent.
The husband does not dispute that his sister died intestate. He told the Court in his oral evidence that a solicitor has been engaged to apply for Letters of Administration and that, if I understood his evidence correctly, that application had already been filed. Notwithstanding that evidence, the husband did not provide any documents or file any affidavit which touched on this issue.
At the time of the death of the husband’s sister she had the following property:
(a)One third owner of O Street, Suburb F;
(b)20 per cent interest in 3 G Street, Suburb F;
(c)20 per cent interest in 2 H Street, Suburb F;
(d)25 per cent interest in D Pty Ltd; and
(e)One third of a loan to K Pty Ltd – shareholder’s loan.
There were some modest liabilities.
It is evident from that schedule, prior to the death of the husband’s sister, she and the husband (together with their remaining siblings) owned several of the properties together. The wife says that the husband has a legal entitlement to one fifth of the estate.
The husband said in oral evidence that he and his brother Mr L do not intend to exercise that right and intend that their sisters (Ms P and Ms Q) are to receive any property from the estate of Ms B.
The wife was not provided with documentation about the Letters of Administration despite multiple written requests and court directions. It placed her in a position where it was difficult for her to challenge the veracity of the husband’s assertion. This difficulty was compounded by the husband’s decision not to call evidence from any of his siblings.
The wife said I should include the foregone claim of the husband as an asset. The husband said I should exclude it as the property is not in his name and he does not intend to have it conveyed into his name, nor does he intend to take any part of it or payment for it.
In reaching a conclusion about the proper approach to the estate of the husband’s sister I am conscious that his entitlements arose on her death – which occurred in 2022, some four years after the parties’ separation. If I were minded to include the entitlement as property for the purpose of constructing the pool available for adjustment it would be necessary to observe that the wife had made no direct or indirect contribution to it. Given the timing and the husband’s evidence about his intention it seems that, having regard to the necessity to do justice and equity as between the parties, it is more appropriate to exclude it from the items that constitute the pool of assets available for adjustment. I consider the fact that the husband has voluntarily declined to claim monies to which he may have been entitled must however be a factor to which I have regard pursuant to s 75(2)(o) of the Act.
The husband faintly argued that the property at E Street, Suburb F should not be included in the schedule of assets available for adjustment as between the parties. The basis of this submission was the husband’s contention that he held this property on trust for his nephews. The factual background is as follows: the property at E Street, Suburb F, was a property which previously belonged to the husband’s brother. In 1993 that property was transferred to the husband and he took on responsibility for the mortgage by re-financing. As I understand the evidence, the husband’s brother and his family continued to live in that property. However, from the date at which the husband became the registered proprietor of the property, he commenced to make mortgage payments and pay for all of the other outgoings.
There is scant evidence about the facts and circumstances which existed at the time at which the property was transferred into the name of the husband. Certainly there is no affidavit evidence from the husband which details any agreement, any declaration, any paperwork or any conversation with any of the persons who would be relevant parties should the Court be considering a trust arrangement. In his oral evidence the husband suggested that until approximately 18 months ago his two nephews remained living in the property.
In 2011, the husband’s brother died. It is plain from the husband’s evidence that, after his brother died, he felt morally obliged to support his brother’s children. I note that those children were young adults at the time of the death of their father. The nephews apparently do not currently reside in the property and the husband gave evidence that the property is in some disrepair and unoccupied and has been for a period of time. Whilst the husband asserted that the property is held in trust for his nephews, that is not consistent with the way in which it has been treated by the husband. That is, he has been responsible for meeting all of the expenses associated with that property in circumstances where he told the Court that his nephews are now 30 and 31 years old and are both in employment. The husband has not taken any action to transfer the property into their names and gave no explanation for why that may be the case. The husband owned the property for 18 years prior to his brother’s death.
Whilst I accept the husband’s evidence that he feels a moral obligation to his nephews and has acted in accordance with that moral obligation by providing them with accommodation, I cannot find on the evidence before me, that that conduct amounts to a trust with effect at law. I have concluded that there could not be an express trust since there is no evidence before the Court of a trust document which expresses the husband’s intention nor is there any admissible evidence of an oral expression of such trust. In the absence of evidence from the husband’s nephews it is similarly plain that no constructive trust has been made out. I therefore intend to include that property in the list of assets available for division between the parties but take into account, as I am entitled to do under the Act, an obligation which falls short of a legal obligation felt by the husband toward his, now adult, nephews.
One of the assets in the balance sheet is the husband’s life estate in the property located at G Street, Suburb F. The husband acquired this life estate during the currency of the marriage. The life estate has been valued by a single expert and is included in the balance sheet (exhibit 15) with an agreed value of $334,000. Whilst the asset is of value to the husband and a monetary value has been ascribed to it by the single expert, it is important to take into account the nature and characteristics of this particular asset when considering the justice and equity of the property adjustment orders sought by each of the parties. In taking into account the nature and characteristics of this particular asset, I note that it is not an asset which the husband can apply to satisfaction of the wife’s claim for property adjustment. It is not an asset which he can sell on the open market to raise funds with which he might satisfy an order for property settlement. Accordingly, I have taken these characteristics into account when determining what orders would be just and equitable.
Both parties have some paid and unpaid legal fees. The inclusion of the paid legal fees as a notional asset is a matter of discretion having regard to the principles in NHC & RCH (2004) FLC 93-204 and Trevi & Trevi (2018) FLC 93-858. Both parties seek the inclusion of paid legal fees as notional property in their joint balance sheet and I will do so accordingly.
The husband indicated that he was indebted to his sisters but did not submit that the debt should be included in the Joint Balance Sheet and accordingly it is not included.
The husband was concerned that the wife may have funds in a term deposit that she had not disclosed. The evidence did not support that conclusion.
The husband had a similar concern that the wife may have inherited funds from her mother which had not been disclosed. The wife’s evidence supported the conclusion that she did not inherit from her mother.
Initial Contributions
In closing submissions, counsel for the husband contended that the husband had made a greater initial contribution, while counsel for the wife submitted that the wife was ahead as regards initial contributions (albeit not in a way which he contended was likely to be material). In order to address the value of each parties’ initial financial contributions to the relationship it is necessary to review the evidence about the identity and value of the assets and any corresponding encumbrances.
At commencement of the marriage, the husband was the registered proprietor either in his sole name or with others of the following properties:
(a)H Street, Suburb F;
(c)50 per cent interest in 2 G Street, Suburb F;
(d)20 per cent interest in 3 G Street, Suburb F;
(b)20 per cent interest in 2 H Street, Suburb F;
(c)E Street, Suburb F; and
(e)50 per cent interest in R Street, Suburb S.
It is necessary to understand the evidence about the purchase and mortgages registered on title in respect of this real estate to evaluate the parties’ competing submissions concerning initial contributions. On 24 May 2019 the husband’s then lawyers wrote to the lawyers acting for the wife and gave estimated values of the properties in the husband’s name as at the date of marriage. The wife accepted those estimates for the purpose of the proceedings. The husband did not depart from his estimates in his evidence and neither party sought that the Court appoint an expert to prepare a retrospective valuation.
H Street, Suburb F (“the former matrimonial home”) was purchased by the husband in his sole name in 1983. The purchase price of $65,000 (according to the transfer) was funded in part by a mortgage in the sum of $47,000. I accept that at some point after that, and before marriage, the husband discharged the original loan. The important question concerns its value in mid-1997. The parties adopted a value of $115,000 for the purpose of the hearing. What is less clear is the extent to which the property was subject to encumbrance as at mid-1997. The evidence establishes that a mortgage securing borrowings in the sum of $544,000 was registered on the title in mid-1994. It is not clear whether all the funds secured were drawn down (or not). The advance by Westpac Banking Corporation (“Westpac”) of $544,000 secured against a property with an agreed value (three years later) of $115,000 does not seem logical on its face. I was not taken to any evidence to assist in resolving this issue. It is not clear whether there were repayments of principal or interest in the period between mid-1994 and mid-1997. The funds were said to be loaned to both the husband and his brother Mr L. The same property was used as security for further borrowings in mid-1999, two years after cohabitation. At that time the first mortgage was discharged and the new sum secured was $1,020,000. It can be relatively safely assumed that some of those funds were applied to discharge of the mid-1994 mortgage.
The husband says the Court should find that the assets owned by the husband globally must have exceeded the liabilities secured by way of mortgage because it does not make sense that the bank would lend money without appropriate security. As a matter of common sense this is right. However, it sits uneasily with the available evidence.
The husband’s half interest in 2 G Street, Suburb F was acquired by him, together with his brother Mr L, for a total purchase price of $241,000 in 1993. There was a mortgage secured against the title of this property at the time of purchase in the sum of $233,000. Neither the husband nor his brother had any significant equity in the property at the time of purchase. The husband estimates the value of his half interest at the commencement of the relationship as $132,500. It is not clear what the balance of the mortgage was as at mid-1997 but the documents do establish that the property was refinanced and a new mortgage obtained four days after the parties married. The mortgage secured against this property in mid-1997 (and also against R Street, Suburb S, discussed below) was in the sum of $736,000.
At cohabitation the husband owned a 20 per cent interest in 3 G Street, Suburb F. For the purpose of the proceedings the husband and wife agreed that the value of his interest at this time was $85,000. That property was security for a mortgage. In late 1996, about six months prior to marriage, a mortgage was secured against the property in the sum of $940,000. It is not plain from the evidence what repayments of principal and/or interest (if any) had been made as at mid-1997.
In late 1992 the husband together with his siblings acquired 2 H Street, Suburb F. The husband had a 20 per cent interest in the property. For the purpose of the proceedings the husband and wife agreed that the value of the husband’s interest as at mid-1997 was $120,000. A mortgage was registered against the title of that property. The mortgage secured borrowings of $750,000 as at late 1992. It is not plain what repayments of principal and/or interest (if any) were made in the period between late 1992 and mid-1997.
The husband’s brother Mr U transferred E Street, Suburb F to the husband in early 1993. At that time the husband obtained a mortgage from Westpac, as I understand the evidence, in order to discharge his brother’s indebtedness in respect of the property. From that time onwards the evidence establishes that the husband has met all mortgage payments for this property (together with any other outgoings). He has also used the property to obtain further loans during the parties’ marriage. For the purpose of the hearing the parties agreed that the value of the husband’s interest in this property at the time of cohabitation was $135,000. It is not plain what repayments of principal and/or interest were made in the period between early1993 and mid-1997.
The husband owned a 50 per cent interest in R Street, Suburb S with his brother Mr L. In mid-1997 the husband and Mr L obtained a mortgage from T Company in the sum of $736,000 secured over this property and 2 G Street, Suburb F. There is no evidence as to the value of R Street, Suburb S as at mid-1997 and it is not the subject of the letter from the husband’s lawyers dated 24 May 2019. The property was sold three years later in mid-2000 and the sale price was $172,000. If this is adopted as an approximate value at cohabitation then, doing the best I can, I find that the husband’s interest was worth about $86,000.
In mid-1996 (about a year prior to the parties’ marriage) the husband and his brother Mr L registered the company, K Pty Ltd. Both the husband and his brother are directors and have an equal shareholding in K Pty Ltd.
There is no evidence and no agreement about the value of the husband’s shares in K Pty Ltd at the commencement of the relationship. A document purporting to be a financial year report for the entity for the year ended 30 June 1999 was produced (for the first time) by the husband during his re-examination. Objection was taken to its tender. Rule 6.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) provides:
If a party does not disclose a document as required by these Rules:
(a) the party:
(i) must not offer the document, or present evidence of its contents, at a hearing or trial without the other party’s consent or the court’s permission; and
(ii) may be guilty of contempt for not disclosing the document; and
(iii) may be ordered to pay costs; and
(b) the court may stay or dismiss all or part of the party’s case.
The husband was directed to file an Undertaking as to Disclosure. He did not comply with that direction. In balancing the desirability of the Court being provided with relevant information against the prejudice to the wife and the husband’s failure to comply with the Court’s rules and procedures, I declined to admit the document. The wife’s counsel did not object to my noting as an agreed fact in the proceedings that the profit and loss statement of the entity for 30 June 1999 recorded the net equity of the company as at 30 June 1998 as $56,494.95. The husband’s interest at that date (one year after marriage) may have been about $28,248.
To summarise, the available evidence suggests that while the husband had an interest in six parcels of real estate and shares in a company, the level of borrowings secured against those properties was significant such that the Court could not be confident that there was net equity. I stress this conclusion is based on the evidence available to the Court. It is difficult to reconstruct a series of transactions which occurred 25 years ago and it may be that there is some explanation for the apparent high level of borrowings when compared to the low market values.
Notwithstanding the equity position that seems apparent, it is still necessary to consider the fact that the husband unquestionably owned the six properties and was, at the time of the marriage, actively involved in using K Pty Ltd to undertake construction work. The properties owned by the husband at the commencement of the parties’ relationship are substantially the same properties which form the pool of assets available for division at hearing, R Street, Suburb S being the only property which has been sold, the other five properties remain in the husband’s ownership and collectively are valued at $5,540,000 against which there are liabilities of only $291,689. Given the concerns raised above about the extent of the debts at the time of marriage it cannot be safely concluded that the husband had significant equity in these assets but nor can it be ignored that the assets in his name prior to marriage have been parlayed into the significant assets which now exist. I take into account that he would have been required to meet the mortgage payments for these properties throughout the parties’ relationship and given the current level of debt, plainly met those commitments.
The situation in respect of the wife’s initial contributions is less complicated. The wife gave evidence that she had a term deposit which held approximately $85,000. While the husband’s evidence was that he was of the view that she had $300,000 (and not $85,000), his counsel conceded in closing submissions that the more likely scenario is that the wife had $85,000 and I have proceeded on the basis of that evidence and that concession.
The husband also contended he had savings in the sum of $200,000 at the commencement of the parties’ relationship. He was challenged about this on the basis that it was seemingly inconsistent with the need for borrowings taken out at about the same time. There is no documentary evidence one way or the other. I have taken into account that the husband may have had savings as well as superannuation at the time of the marriage.
Ultimately I formed the view that the husband’s ownership of the real estate and interest in K Pty Ltd together with savings and superannuation are matters which require recognition as an initial contribution by the husband. As the Full Court said in Pierce at [28]:
In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home.
The husband’s initial assets have been preserved and their value has increased as both the market has increased and rents have been applied to the payment of the various loans.
As against that it cannot be ignored that this was a long relationship in which each of the parties worked both inside and outside the home and the fact that since 2015, the husband was not in receipt of personal exertion income on his own evidence. In a relationship the length of this one it is necessary to have regard to the matters discussed by the Full Court in Money and Money (1994) FLC 92 - 485 (as quoted in Pierce at [27]):
…the respective contributions of the parties over a long period of marriage “offset” the significance which might otherwise be attached to a greater initial contribution by one party. This is, in my view, made clear by the Full Court in White and White (1982) FLC 91-246 where that court pointed out that the principal in Crawford and Crawford (1979) FLC 90 - 647 is that the original contribution should not be carried forward as a mathematical proportion; ultimately, when it comes to the trial such a contribution is one of a number of factors to be considered. The longer the marriage the more likely it is that there will be later factors of significance and in the ultimate the exercise is to weigh the original contribution with all other, later, factors and those later factors, whether equal or not, may in the circumstances of the individual case reduce the significance of the original contribution.
Contributions more generally
Counsel who appeared on behalf of the husband contended that the husband’s contributions during the parties’ relationship were greater than those of the wife. The wife tacitly accepted that no party would be found to have made a greater contribution during the parties’ relationship. The basis upon which the husband submitted his contributions were greater was identified as the fact of his having been in full time paid employment from time to time as well as having undertaken financial work for the two companies in which he was a director. In oral evidence he indicated that he was not paid for the work undertaken on behalf of the companies.
In the early years of the parties’ marriage they had the benefit of some rent free accommodation which was provided by the husband’s family.
It is necessary to consider the contributions of the husband and wife during their relationship not by weighing and measuring each individual task undertaken, be it paid or unpaid, over decades of marriage but to approach the assessment of contribution with a knowledge that all contributions over the course of the relationship must be assessed holistically: Dickons & Dickons (2012) 50 Fam LR 244 at [26].
In that light, while the husband is to be given credit for his paid and unpaid work, so too the wife should be given credit for her paid and unpaid work both inside and outside the home. When the evidence about direct and indirect financial contributions is taken together with the evidence about each parties’ unpaid work, it could not be concluded that the contributions of either party during the marriage were anything other than equivalent. The husband’s affidavit material was critical of the wife’s non-financial contributions but I did not understand the submission made on his behalf to suggest that this should be represented in assessment of her contributions. While there were some questions put to the wife in cross-examination about the extent to which she spent time away from the parties’ home, in the home of her family, her answers were consistent with her having spent time with relatives when their health required same. I find the wife undertook household tasks and care for the husband, as she deposed, as well as undertaking paid work.
The wife gave evidence about her direct financial contributions (made from her savings – both those she brought to the marriage and those accumulated from her earnings during the marriage). The parties were at odds about how the wife had applied those funds. The wife’s evidence was that she had applied the funds in her term deposit to the construction of the former matrimonial home.
The husband says demolition of the existing building commenced in early 2007 and in his oral evidence he said the dwelling was complete by early 2008. This accords with the wife’s evidence.
In early 2006 the Commonwealth Bank of Australia (“CBA”) provided the sum of $181,000 and took mortgage security over the former matrimonial home. That mortgage was in the name of the husband as registered proprietor of the land.
In mid-2007 the parties signed a Consumer Credit Contract Schedule which set out details of their assets and liabilities in aid of a loan in the sum of $120,000. The bank documentation records the purpose of the loan as:
…Re-finance of existing CBA/Colonial debt (for Housing Investment housing purposes) $55,791
…Alterations and additions to dwelling – Owner occupied $64,209
That same document notes that the security for this loan was E Street, Suburb F.
The wife said her savings were contributed to construction costs. The husband denied this was the case. I formed the view that the wife was truthful in her written and oral evidence. She gave direct answers to questions asked and made concessions. She conceded that there were times the parties were not obliged to pay rent. She conceded she had little involvement and took little interest in the husband’s company affairs. Her evidence was consistent with the objective documentation.
The wife had $245,046 in her term deposit as at mid-2005, prior to the husband applying for development approval for work at the former matrimonial home. The following withdrawals were made from that account between 4 April 2007 and 4 April 2008 being a period which coincides with the construction of the former matrimonial home:
(a)On 4 April 2007 $30,000 was withdrawn;
(b)On 6 June 2007 $50,000 was withdrawn;
(c)On 5 July 2007 $20,000 was withdrawn;
(d)On 26 September 2007 $15,000 was withdrawn;
(e)On 6 December 2007 $34,623.71 was withdrawn;
(f)On 6 March 2008 $20,000 was withdrawn; and
(g)On 4 April 2008 $30,000 was withdrawn.
I find that, on balance, the wife’s evidence about her direct financial contributions to the construction of the former matrimonial home should be accepted and I accept them. In reaching that conclusion I have taken into account my assessment as to the reliability of her evidence as a whole and in respect of this topic and the manner in which her account fits with the other evidence (such as loan applications) about the method in which the construction was funded. There is no other logical explanation for her withdrawals during this period.
Even if I had been unable to reach the above conclusion I am satisfied that the wife does not (as the husband appeared to suggest) retain those funds now. I am also comforted by the fact that the authorities make clear that the wife is not required to demonstrate a nexus between a contribution and a particular item of property: Farmer and Bramley (2000) FLC 93-060.
I accept the submission of the wife that I should take into account the fact that the husband has had occupation of the former matrimonial home while the wife has lived with her family in the period between separation and hearing. As the Full Court observed in Meadows & Meadows (No 3) [2020] FamCAFC 124 such a contribution, here for a period of four years and nine months, is an indirect contribution to the husband by the wife.
Before recording a final conclusion about how the parties contributions over the course of the relationship should be assessed, I note that that wife contended that the contribution based entitlement should be assessed to favour the husband 55/45 whilst counsel who appeared on behalf of the husband said that the contribution should be assessed to favour the husband 75/25. Having regard to the significant initial contributions of the husband and to the fact that I have included the life estate of the husband as an asset of the parties in circumstances where that interest came to him by way of an inheritance and, having concluded that I will not include as an asset monies which the husband may have been entitled to if he had taken up his rights under the Succession Act, I assess the overall contributions of the parties at 60/40 in favour of the husband.
Present and future circumstances
I turn now to consider the evidence about the parties’ present and future financial circumstances and consider the relevant matters in ss 79(4)(d)-(e) and 75(2) of the Act. The evidence about the husband’s current income was not clear. As set out above, this was due in part to his failure to file a Financial Statement for trial. The most recent evidence was contained in a Financial Statement of 28 February 2019.
The husband produced a Notice of Assessment for year ended 30 June 2021 (exhibit 6). The husband’s taxable income was $26,161. The tax referrable to that income was $1,512 but offset by low and middle income tax offsets and a franking credit offset such that the husband received a refund in that year of $4,419.
The husband produced a document (not a tax return or Notice of Assessment) but a typed calculation recording rental income and expenses for the year ended 30 June 2022 (exhibit 7). That document suggests a total taxable income of the husband in the year 30 June 2022 of $17,714.
The husband has said he continues to work for the companies without pay. He estimated that he would have been entitled to charge for his hitherto unpaid work about $15,000 per annum. He said he has not done so. He indicated he may recover some monies for his labours if he and his brother reach an agreement.
The husband indicated a moral obligation to his deceased brother’s children. They are adults and working so it is not plain that they require financial support. I understand from his evidence that he would provide support if they required it.
The husband is older than the wife and, apart from work undertaken without pay on behalf of the companies of which he is a director, he has not worked in the paid workforce since 2014 or 2015. It is unlikely, having regard to his age, that he will find a job for which he earns personal exertion income and he has given no evidence that he intends to re-join the workforce in this capacity. This position is not unreasonable having regard to his age and the assets and income available to him. On the other hand the wife is younger and indicated an intention to work for the next 12 years. That is consistent with the fact that she has some time to go until she would be considered of retirement age.
The Act directs the Court to consider the health of each party. The wife is in good health. The husband has had a number of health challenges both physical and mental arising, it would appear from an accident in late 2021 and compounded by the death of his sister. The evidence does not indicate whether he has incurred any significant expense in respect of these matters. Since the husband is not in paid employment (in any event) I cannot conclude that his health has had an impact on his income or earning capacity.
As against that I need to take into account the fact that the husband is in, and will be in, a more stable financial position than the wife as a consequence of the contribution findings I have made above and he has chosen to forgo income producing assets (or interests in income producing assets) in favour of his sisters. The husband is entitled to forgo entitlements at law but the consequences of that are that those funds which might otherwise have been part of the asset pool are not part of the asset pool. Having regard to the fact that these would have been an inheritance significantly after the parties separated, I am further confirmed in my view that it is appropriate to exclude the forgone inheritance from the pool of assets available for division. That does not mean that I do not intend to make an adjustment in the wife’s favour to take into account the fact that the husband’s stronger financial position has allowed him to gift or forgo these funds. In the same vein, it was submitted that the husband’s family are a significant financial resource to him. Whilst I am unable to make any findings about the extent of this financial resource to the husband in circumstances where he failed to file a trial affidavit and filed no affidavits by any of his other family members with whom he has significant financial relationships. I am able to find on the available evidence that the husband and his family have always acted in a way such as to provide financial support one to the other and one would anticipate that this would continue into the future.
Accordingly, having regard to the above, I say that the contribution based entitlements of the parties should, having regard to the matters set out in ss 79(4)(d)-(e) and 75(2)(e) of the Act, be adjusted by 5 per cent to the wife. After a long marriage each of the parties should have a standard of living that in all the circumstances is reasonable. The adjustment means that the overall division of assets as between them should be 55/45 in the husband’s favour.
The result of these findings is that the assets of the parties against which the adjustment will be made is as follows:
Property Ownership Wife’s Value Husband’s Value ASSETS H Street, Suburb F H $2,590,000 $2,590,000 2 G Street, Suburb F 50% H $1,000,000 $1,000,000 3 G Street, Suburb F 20% H $390,000 $390,000 2 H Street Suburb F 20% H $560,000 $560,000 E Street, Suburb F H $1,000,000 $1,000,000 G Street, Suburb F (life estate) H $334,000 $334,000 Husband’s interest in the estate of his late sisterH$666,413NKCBA account ending in …56 W $29,833 $29,833 CBA account ending in …60 W $2,005 $2,005 CBA account ending in …29 W $8,007 $8,007 Motor Vehicle 1 W $7,000 $7,000 Personal effects W $1,000 $1,000 N shares H $1,617 $1,617 N shares W $3,873 $3,873 D Pty Ltd 25% H $483,000 $483,000 K Pty Ltd 50% H $1,412,000 $1,412,000 Furniture and home contents H $10,000 $10,000 CD collection H $1,000 $1,000 Total: $7,833,335 $7,833,335 SUPERANNUATION Superannuation Fund 1 W $203,935 $203,935 Superannuation Fund 2 H $239,035 $239,035 Total: $442,970 $442,970 Total Assets: $8,276,305 $8,276,305 LIABILITIES NAB Investment loan (2 H Street) H $107,600 $107,600 Viridian Line of credit H $119,350 $119,350 CBA Gold credit card H $19,340 $19,340 CBA home loan ( H Street) H $184,089 $184,089 Total: $430,379 $430,379 Net Assets: $7,845,926 $7,845,926 ADDBACKS Money paid by the husband on legal fees H $197,000 $197,000 Money paid by the wife on legal fees W $109,000 $109,000 Total add backs: $306,000 $306,000 Net property and notional property $8,151,926 $8,151,926
Since the wife has assets, superannuation and notional assets which total $364,653, the settlement sum payable to the wife by the husband is $3,303,714.
costs application
On 10 May 2022 I reserved the wife’s costs of the vacated hearing. At trial the wife made an application for those costs and the costs of having relisted the matter to address the husband’s failure to comply with the directions to ready the matter for trial.
The husband resists this application for costs.
At the case management hearing on 2 November 2021 I made orders and directions to prepare this matter for final hearing. Those orders read (in part):
1.Pursuant to s 68 of the Federal Circuit Family Court of Australia Act 2021 (“the Act”) the parties are to note and comply with the overarching purpose as identified in s 67 of the Act and Rule 1.04 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”).
2.The proceedings be listed for hearing for 4 days commencing on 16 May 2022.
...
4.On the date which is 10 weeks before the trial, the Wife forward her proposals for values of each item of real estate and within a further 14 days the Husband shall send to the Wife his proposed values for each item of real estate and, where there is no agreement, the parties will as soon as practicable or thereafter forward a joint letter of instruction to [Mr C] of [J Valuers] requesting that [J Valuers] update the valuations in relation to any piece of real estate where the values are not agreed. The parties shall be equally responsible for the costs of the valuations however the following conditions shall apply:
a. The Applicant shall pay up to $8,000 towards half the costs of the valuations; and
b. The Husband shall pay the balance of the costs of the valuations up-front on the basis that he shall be reimbursed for any costs paid over and above half the costs of the valuation reports from the Wife’s share of the property settlement.
5.The Husband will, as soon as practicable after receipt of any updated real estate valuations, obtain an opinion as to the latent tax impost on all properties and forward that to the Wife within 28 days and the Wife has a further 14 days to respond and, in the event there is no agreement reached in relation to any particular part of that opinion, the parties are to forthwith forward a joint letter of instruction to [Mr C] or such other accountant as the parties agree upon to provide an opinion about latent tax on any property and the parties shall meet the cost of [Mr C’s] report or the agreed expert equally on the basis that the Husband pay for the costs of the valuation reports at first instance and he shall be reimbursed for the Wife's half share of the report from her share of the property settlement.
6.Within 21 days of receipt of the valuation or agreement as to the value of [W Street], [Suburb X], title reference … the Husband shall provide to the Wife his estimate of the value of his interest in [D Pty Ltd] and, if the parties fail to reach agreement within 14 days thereafter, the parties shall instruct [Mr C] to provide a report as to the value of the Husband’s interest in this entity. The parties shall be equally responsible for the costs of that report on the basis that the husband will pay for the costs at first instance and the Wife shall reimburse the husband for one half share of the cost of that report from her share of the property settlement.
7.By a date 21 days prior to the first date of the allocated hearing dates, the parties are to electronically file and serve a consolidated Trial Affidavit and one Affidavit from any witness setting out the evidence upon which they seek to rely.
8.By a date 21 days prior to the first date of the allocated hearing dates, each party is to have electronically filed and served an updated Financial Statement and, in terms of the value of real estate, the Financial Statement will be subject to values on the joint working Balance Sheet.
9.By a date 21 days prior to the first date of the allocated hearing dates, each party is to have electronically filed and served Exhibits to Affidavits and provisional Tender Bundles of all documents that might be tendered or relied upon in cross-examination.
…
19.Except as already provided by these orders, the parties will not be permitted to file any further affidavits and may not rely on any past affidavits at the final hearing without the leave of the Court.
20.At the same time that the parties comply with the direction to file their trial affidavit and Financial Statement, they file an undertaking as to disclosure in accordance with Rule 6.06 of the Rules.
…
22.I grant liberty to either party, to re-list the matter on 48 hours notice to the court and the other party, in the event that they become aware of some matter which could prevent the proceedings commencing on the first date allocated or continuing to conclusion on the last date allocated.
The husband did not comply with the obligations created by the orders to file trial material and engage with the single expert issues.
Consistently with the obligations created by Order 22, the wife relisted the matter and further orders were made on 12 April 2022 (as amended on 21 April 2022 pursuant to r 10.13(1)(h) of the Rules). The May 2022 hearing dates were confirmed.
The husband had not filed material and expert evidence was not available so when the matter was again before the Court on 10 May 2022, at the request of the wife, I reluctantly vacated the hearing dates. This necessitated a further appearance in September 2022.
In support of her application the wife pointed to the husband’s failure to file documents or provide instructions to the single experts as productive of the additional expense of a vacated hearing and court directions hearings in 2022. The husband does not substantially dispute the factual matters. He accepts that he failed to comply. His counsel argued that the husband can explain his non-compliance by reason of grief and ill health and the usual rule should apply, that is, each party should bear his or her own costs: s 117(1) of the Act.
An explanation for failure to comply is relevant but, in the circumstances of this case, where the husband’s evidence was that in the same period he has attended to the accounting affairs of the companies, attended to his own taxation affairs (albeit he did not provide his tax return or Notice of Assessment for the year ended 30 June 2022 to the wife or the Court) and continued to engage from time to time in his hobby of punting, his failure to engage with the tasks which would have preserved the May 2022 hearing dates or obviated the necessity for the later relistings is a matter which should result in the making of a costs order.
I take into account when considering this application the parties’ respective financial positions as detailed above. However, the primary basis upon which I have formed the opinion that the circumstances warrant departure from the position in s 117(1) of the Act are those factors set out in s 117(2A)(c) and (d) of the Act.
The wife provided a schedule of her costs incurred as a consequence of the husband’s failure to comply with the original trial directions and her costs thrown away in respect of the vacated hearing. That schedule was prepared in reliance upon the Rules which apply in the Federal Circuit and Family Court of Australia (Division 2) but is relied upon by the wife pursuant to r 12.17 of the Rules which permits the Federal Circuit and Family Court of Australia (Division 1) to calculate costs in accordance with a stated method.
The wife’s proposed method of calculating costs is suitable having regard to the overarching purpose of the family law practice and procedure provisions: s 67 of the Federal Circuit Family Court of Australia Act 2021.
The husband’s counsel was not heard against the quantum and I propose to make the order as sought.
I certify that the preceding one hundred and ten (110) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie. Associate:
Dated: 31 October 2022