Gibbs & Gibbs (No 2)

Case [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…

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AGLC
Gibbs & Gibbs (No 2) [2022] FedCFamC1F 831
Case
[2022] FedCFamC1F 831
Decision Date

CaseChat Overview and Summary

In Gibbs & Gibbs (No 2), the wife sought property adjustment orders against the husband. The wife worked as a coordinator in the hospitality industry, while the husband worked for companies of which he was a director and received rental income. The wife filed an Initiating Application seeking property adjustment on 24 August 2018, which was amended on 20 June 2019. The husband responded on 16 October 2018 and amended his response on 2 October 2019. The matter was listed for final hearing on 16 May 2022, but the hearing was vacated due to the husband's failure to file trial material and unresolved valuation issues. The husband was granted extensions of time to file his trial material, but he failed to comply with the court's orders. On the first day of trial, the husband sought leave to rely on an Outline of Case document containing an affidavit filed on 18 December 2018, a Financial Statement filed on 28 February 2019, and an affidavit filed on 9 May 2022. The wife did not oppose leave, and it was granted. The husband was at a disadvantage due to his failure to file evidence of his current financial circumstances, but 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 legal issues that the court was required to decide included the value of the parties' assets at the commencement of cohabitation, whether the husband's work in the company should be recognised as a greater contribution than the wife's, whether the wife contributed funds from her income and savings to the acquisition or improvement of assets, and how the court should treat the husband's rights under the Succession Act 2006 (NSW) as they relate to the estate of his late sister, Ms B. The court also had to consider whether the husband's ownership of E Street, Suburb F was subject to a trust in favour of his nephews and whether the financial circumstances of one or other of the parties warranted an adjustment to their contribution-based entitlements.

The court's reasoning and outcome were based on the evidence and submissions presented by the parties. The court examined the parties' respective contributions, including their initial contributions and all other relevant contributions. The court found that the husband's interest in E Street, Suburb F was not affected by any legal or moral claim and that the nature and character of his interest in G Street, Suburb F (a life estate) was not a relevant consideration. The court also found that the husband's evidence that he would forgo any entitlements to his sister's estate was not sufficient to establish that he would be entitled to a share of that estate. The court made orders for property adjustment based on the evidence and submissions presented by the parties.

The final orders of the court included that the husband and wife each pay their own legal costs of the proceedings up to and including the final hearing and that the husband pay the wife $400,000 by 15 December 2022. The court also made orders for the division of the parties' assets, including their home and other properties, and ordered that the husband's interest in E Street, Suburb F be transferred to the wife.

Orders

Orders of the court

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Background

Background to the litigation

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.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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. 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.