Gilham & Gilham - [2005] FMCAfam 11

FEDERAL MAGISTRATES COURT OF AUSTRALIA

GILHAM & GILHAM

[2005] FMCAfam 11

FAMILY LAW – Property – undefended – husband in U.K.

Family Law Act 1975

In the Marriage of Clauson (1995) FLC 92-595
In the Marriage of Ferraro (1993) FLC 92-335
In the Marriage of Lee Steere (1985) FLC 91-626
Parshen’s case (1996) FLC 92-720
Russell v Russell (1999) FLC 92-877

Applicant:

LEE-ANNE GILHAM

Respondent:

ANTHONY RUSSELL GILHAM

File No:

PAM 4823 of 2004

Delivered on:

Monday 24 January 2005

Delivered at:

Parramatta

Hearing Date:

Thursday 20 January 2005

Judgment of:

Sexton FM

REPRESENTATION

Solicitors for the Applicant:

Markham Gieke Farrugia

Solicitors for the Respondent:

No appearance

ORDERS

That within 42 days of the date of Order the husband do all acts and things and sign all documents necessary to transfer to the wife the whole of his right title and interest in the property known as 15 Orchid Place, Macquarie Fields being the whole of the land described in Folio Identifier 9/864748 (“the former matrimonial home”), subject to a loan secured by way of mortgage to St George Bank.
That upon implementation of Order (1) herein the wife be responsible for:
(a)repayment of the loan secured on the former matrimonial home, being Loan Account Number S211 1227750 00 with St George Bank.
(b)payment of all other outgoings on the former matrimonial home.
and the wife thereafter indemnify and keep indemnified the husband in relation to the loan and all other outgoings on the former matrimonial home.
That the wife be entitled to the whole of her interest in her deceased mother’s estate.
That except as otherwise provided herein the husband and the wife each be declared the owner at law and in equity of:
(a)all shares, monies on deposit standing to the credit of the husband or the wife respectively in any bank, building society or other financial institution including any interest accrued on such deposits.
(b)All other items of property including but not limited to motor vehicles, furniture, household effects and personal effects presently in their respective possession and control.
(c)All superannuation entitlements held in their respective names.
That except as otherwise provided herein, the husband and the wife remain liable for any debts in their own name at the date of these Orders and in this respect shall indemnify, keep indemnified and hold harmless the other from any liability in relation thereto.
That the Registrar or Deputy Registrar of this Court at its Parramatta Registry be appointed pursuant to Section 106A of the Act to execute, in the name of the husband all deeds and instruments necessary to give effect to the orders herein, or any of them, and do all acts and things necessary to give validity and operation to the said deeds and instruments.
That within 7 days from the date of these Orders the applicant wife serve or cause to be served a copy of these Orders and Reasons on the Respondent husband by pre-paid post to his address at 64 Dorman Road, Ribbleton, Preston Lancs PR 26BE in the United Kingdom.
That the operation of Orders 1 to 5 inclusive be stayed for a period of 30 days.
That each party have liberty to apply at 7 days notice in relation to the implementation of these orders.
The all existing applications be otherwise dismissed and the matter be removed from the Pending Cases List.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PARRAMATTA

(P)PAM 4823 of 2004

LEE-ANNE GILHAM

Applicant

And

ANTHONY RUSSELL GILHAM

Respondent

REASONS FOR JUDGMENT

History of proceedings

These are proceedings for final property orders.
The proceedings were commenced by the wife who filed an Application on 23 September 2004. The wife filed an Amended Application on 10 January 2005 upon which she relied at hearing. The husband filed no documents in the proceedings.
The matter was first listed before me on 1 November 2004. As the respondent husband had not been served with the wife’s application, the matter was adjourned for further mention to 6 December 2004.
On 6 December 2004 an Acknowledgement of Service signed by the respondent husband dated 29 October 2004 was filed in court. At the same time I was provided with copies of correspondence between the applicant’s solicitor and a process server, Mr R Russell of TAS Legal in Regent Street London. This correspondence confirmed that service on the husband was effected at 64 Dorman Road, Ribbleton, Preston Lancs PR 26BE United Kingdom. The husband acknowledged service of sealed copies of the wife’s application and information sheet, her affidavit sworn 22 September 2004 and her financial statement sworn 22 September 2004. He also acknowledged service of the relevant brochures concerning available mediation services. The applicant’s solicitor filed in Court an affidavit sworn by herself annexing a bundle of correspondence between her firm Markham Geikie Farrugia and Forbes Solicitors and Forbes solicitors and the wife. On 19 February 2004 Forbes Solicitors sent a letter to the wife advising they acted for the husband and that the husband wanted to start proceedings, though the nature of proceedings was not specified. On 19 May 2004 the wife’s solicitor sent a letter to the husband’s solicitors enclosing a draft Application for Consent Orders in relation to property settlement and draft Orders. The only responses from the husband’s solicitors were brief acknowledgements of receipt of that letter and subsequent letters. On 1 and 18 November 2004 the applicant’s solicitor wrote to the husband directly in the United Kingdom about the proceedings. They received no response.
On 6 December 2004 I made orders that the husband file and serve his Response, Financial Statement and Affidavit in support by no later than 4 p.m. on 10 January 2005. I further ordered that if the husband failed to comply with the orders or failed to appear on the next court date, 20 January 2005, the matter would proceed on an undefended basis and orders may be made in terms of the wife’s application. I directed the applicant’s solicitor to notify the respondent husband of the orders made on 6 December 2004. The applicant’s solicitor filed an affidavit on 10 January 2005 annexing a copy of her letter sent to the respondent husband on 9 December 2004, enclosing a copy of the orders of 6 December 2004. In that letter, the applicant’s solicitor made very clear to the respondent the matter was expected to proceed on 20 January 2005. The husband did not respond.
The husband did not file any material and did not appear by himself, by an agent or by his legal representative on 20 January 2005.
As I was satisfied the husband was on notice of these proceedings and had been given the opportunity to be heard in the proceedings, I decided to proceed with the wife’s application on an undefended basis.
In the Amended Application the wife sought the whole of the net asset pool of the parties, with the exception of a superannuation entitlement of the husband’s, valued at $1,708.00.

Background facts

The wife was born on 20 September 1963. She is 41 years old.
The husband was born on 13 March 1959. He is 45 years old.
The parties married on 29 September 1990.
The parties separated on 23 November 2000. The husband left the matrimonial home on that day and flew to the United Kingdom where he has since remained.
There is one child of the marriage, JACQUELINE-LEE VIOLET GILHAM born 11 April 1993, aged 11 years. The husband has two children from a previous relationship.
Jacqueline-Lee is in Year 6 at Macquarie Fields Public School.
Since the date of the parties’ separation, Jacqueline-Lee has been living with the wife.
Since the parties separated, Jacqueline-Lee has had no contact with the husband, apart from minimal telephone contact for a few months in late 2003/early 2004.
Since separation, the husband has been living in the United Kingdom.
Since separation the husband has paid no child support.
There are no current orders.

Issues

The court was asked to decide the percentage entitlement of each party to their nett assets.

Evidence and findings

The wife relied on:
·Her Amended Application filed 10 January 2005.
·Her Affidavit filed 23 September 2004 and her oral testimony.
·Her Financial Statement filed 23 September 2004.
·The affidavit of Simon Azar filed 10 January 2005.
·The affidavits of her solicitor, Geovanna Baute filed 6 December 2004 and 10 January 2005.
The wife tendered additional documents that became exhibits in the proceedings.

The relevant law

Section 79 of the Family Law Act defines the Court’s powers in determining applications for property settlement. Section 79(2) provides that:
“The Court shall not make an Order under this Section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.”
Section 79(4) sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters include:
a)The financial and non-financial contributions made directly or indirectly by or on behalf of each party or by a child to the acquisition, conservation or improvement of any property of the parties;
b)The contribution made by a party to the welfare of the family including any contribution made in the capacity of homemaker or parent;
c)The effect of any proposed order upon the earning capacity of either party;
d)The matters referred to in sub-section 75(2) as far as they are relevant;
e)Any other order made under the Family Law Act affecting a party to the marriage or a child of the marriage; and
f)Any child support payable.
The approach to the determination of an application under Section 79 is well established by authority (In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-595). The process involves four steps. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in section 79(4)(a) to (c). This is essentially an exercise in looking back in time from the date of hearing, taking into account the effect of any proposed order upon the earning capacity of either party. Thirdly, evaluating the relevant matters contained in section 75(2), which is essentially an exercise in looking forward in time from the date of hearing. The court must also take into account any other orders already made under the Act and child support already provided or liable to be provided in the future for the children of the marriage. Fourthly, the court must be satisfied in all the circumstances that it is just and equitable to make the orders [Section 79(2)]. It is the justice and equity of the actual orders that the court must consider. Russell v Russell (1999) FLC 92-877.

In relation to Step 1: Identifying the assets and liabilities of the parties

At the commencement of the hearing, the wife submitted a list of the current assets and liabilities of the parties as known to her at the date of hearing. That list is set out at paragraph 27. The values of her motor vehicle, household contents and jewellery were the wife’s estimates. Mr Simon Azar, a registered real estate valuer and licensed builder prepared a valuation report in relation to the former matrimonial home on 14 December 2004. He valued the property at $310,000.00. The wife gave oral evidence in relation to the value of her superannuation fund, her bank account balances, the balance of her credit card debts and the loan account. She said and I accept the figures were based on information provided by the relevant institutions on the day of hearing. She said in oral evidence that her estimate of the value of her 25% share in her deceased mother’s estate was based on an estimate provided by a local real estate agent as to the value of her mother’s home, her only asset.
I set out the list of assets and liabilities as provided by the wife as follows:

Assets as at the date of hearing	$
Former matrimonial home at 15 Orchid Place, Macquarie Fields [joint tenancy]	310,000.00
Wife’s Commonwealth bank account	Nominal
Wife’s St George bank account	100.00
Wife’s Holden Commodore motor vehicle	E8,000.00
Wife’s household effects	E2,000.00
Wife’s jewellery	E2,500.00
Wife’s superannuation entitlement in Asgard as at 20 Jan 2005	9519.00
Value of wife’s 25% share in her deceased mother’s estate	E$100,000.00
Husband’s superannuation entitlement in Connelly Temple at 2 December 2004	6,292.00
Husband’s superannuation entitlement in Taxi Industry Super Fund at 11 November 2004	1,708.00
Husband’s superannuation entitlement in Equipsuper at 20 December 2004	8,825.00
Other assets held by the husband	Not known
Loan secured by mortgage to St George Bank [joint names]	(122,520.00)
Wife’s visa card	(200.00)
Wife’s Coles Myer Source Credit Card	(2,500.00)
TOTAL NET ASSETS	323,724.00

As the evidence of the wife as to the items and values set out in paragraph 27 is not contested, I find the nett asset pool of the parties to be $323,724.00. With the exception of the husband’s superannuation entitlements in three companies in Australia, there is no evidence before me as to the assets otherwise held by the husband. I am therefore unable to take those assets into account in any precise way. As I accept the wife’s evidence that the husband was employed full time in Australia when he left the marriage and the country in November 2000, I am satisfied it is likely the husband has continued to earn an income and has accumulated some assets since his separation from the wife over four years ago.

In relation to Step 2: assessing the contributions of each party

The parties lived together for 10 years. The wife set out in detail in her affidavit the financial history of the parties’ marriage.
At the date of marriage the wife was working full time as a computer operator at Coopers and Lybrand. The husband was working full time as a radio manager. The wife had a car but no other assets of significance. The husband had no assets of significance but had debts of over $40,000.00, a substantial proportion of which was owed in arrears of child support to his previous partner. The wife said she and the husband repaid his debts equally, with the exception of the child support debt which was only paid in part as a result of a garnishee order on the husband’s employer.
The wife said she worked until the birth of the parties’ only child Jacqueline-Lee in April 1993 and then returned to part-time work in March 1994. She stopped working for about 2 months to care for her elderly mother in 1995. She continued her part-time work, while caring for Jacqueline-Lee until November 2001 when she was diagnosed with breast cancer and had surgery to remove her left breast. As a result of the seriousness of her condition and the ongoing difficulties caused to her by the nature of the surgery, the wife has not worked since. She did however receive insurance salary until March 2003 when her employment was terminated. She has received insurance monies of $500 per month from MLC Limited since then, and expects that payment to continue.
The wife said the husband had various jobs until his employment was terminated with Timezone in about 1996 [because his employer suspected he was stealing money]. The wife said the husband used to gamble and deposed to two occasions in 1994 and 1995 when the husband told her he had taken money from his workplace and needed to replace it before being caught. The wife said that to assist the husband, on one occasion she borrowed $3,000.00 from a friend, which she later repaid, and on another, she applied $5,000 to the husband’s debt from her non-preserved superannuation entitlement.
The husband moved to Repco where he worked until he left Australia in November 2000. The wife said the parties lived next door to the husband’s employer, who, when the husband left without warning, arranged an audit of the accounts at the Repco store where the husband had been working. According to the wife, Repco found large sums of money were missing and a warrant has since been issued for the husband’s arrest. It is the wife’s view that the husband left the country to escape detection at Repco. The wife did not provide any corroborative evidence of the allegations concerning Repco and as her evidence is hearsay, I do not take these allegations into account in reaching my decision as to the parties’ contributions.
I do take into account the wife’s evidence concerning the $8,000.00 she contributed to assist the husband with what appeared to be gambling debts as a negative contribution by him. The money was simply wasted. The wife said her income was applied to household and family expenses. In addition, the repayments on the mortgage were deducted from her account. In accordance with Parshen’s Case (1996) FLC 92-720, in the absence of evidence to the contrary, I find that the wife did apply her income for the benefit of the family.
The wife said she purchased her current motor vehicle using $15,000 from her non-preserved superannuation fund.
In 1996 the parties purchased the former matrimonial home at Macquarie Fields as joint tenants for $148,900.00. The wife used more of her superannuation already referred to, to pay the deposit of $3,500 and the balance was borrowed from the Bank of South Australia and secured by way of mortgage over the home. That loan is now held with St George Bank. The parties both contributed to expenses in relation to the home. By the time of separation in 2000 the wife estimated the home to have a value of approximately $280,000. There was no evidence before me as to the balance of the loan account at that time. I am satisfied the husband made a contribution to the nett capital gain on the home in the 4 years the parties lived there together.
I have decided the wife made the greater direct financial contribution to the acquisition of the assets of the parties during the course of the marriage, though not significantly greater.
The wife remained in the former matrimonial home for about 6 months after separation before moving to her mother’s home to live with her child. The wife was unable to meet the mortgage payments without any financial support from the husband for other expenses. She therefore rented the former matrimonial home from that time. Since November 2001 the wife and the child have lived on the rent from the former matrimonial home of approximately $200 per week, her insurance income of $500 per month and Centrelink entitlements. Her income is less than her fixed expenses.
The wife said she was responsible for the household chores during the marriage, although the husband gave some assistance. The wife said she was the main carer for Jacqueline-Lee and also cared for the husband’s child from his first relationship for 2 years from 1995 until 1997.
Since separation the husband has made no financial contribution of any kind. In fact, the wife said that in the early weeks after separation, the husband used to telephone from England asking her to send him money. The husband has paid no child support and not assisted the wife in any way, even when she was forced to abandon her employment as a result of ill health. The wife said she has paid all the loan repayments on the home, offset to some extent by the rental received since approximately mid-2002, and the debts which existed at separation. She has estimated meeting a total of $55,558 in debt repayment since separation, on behalf of the parties, including the mortgage payments. She was forced to withdraw $8,000 from her superannuation entitlement with Coopers and Lybrand to meet some of these debts.

The wife’s mother died in June 2004. The wife expects to receive approximately $100,000.00 from her estate when probate has been granted and her mother’s home is sold. That will be a contribution made solely by the wife over four years after the marriage has terminated. I am satisfied the husband has made no contribution to that inheritance. The inheritance the wife will soon receive is almost 30% of the current nett asset pool of the parties.
The orders that I propose making in this matter will not affect the earning capacity of either party to these proceedings.
Taking all these matters into consideration leads me to the view that, as a result of their respective contributions, the assets of the parties should be apportioned 75% to the wife and 25% to the husband.

In relation to Step 3: A consideration of ‘future factors’

I have considered each of the factors listed in Section 75(2) of the Act.
·The husband is 45 years of age and there is no evidence before me in relation to his current health. He was in good health at the time of the parties’ separation. The wife is 41 years of age and in poor health. The wife has had major surgery for breast cancer. The wife has endured radiation and chemotherapy treatment. She is now unable to lift her arm above her head. She is unable to carry anything heavy. She suffers from excessive tiredness. Her arm aches and she suffers considerable discomfort day to day. She has been told there are two further lesions on her spine which as yet have not been diagnosed. She has met and continues to meet the expenses associated with her medication. She has been unable to afford reconstructive surgery and does not anticipate being in a financial position to do so. The wife is diabetic and insulin dependent. I accept the wife’s evidence that she is very unlikely to be well enough to work again in the future.
·The wife has the continuing and sole responsibility for the care of Jacqueline-Lee. Since November 2000, apart from a few small gifts the husband has given Jacqueline-Lee nothing. From November 2003 until February 2004 the husband telephoned his daughter fortnightly. Since then he has made no contact. The wife said Jacqueline-Lee has had learning difficulties and requires remedial assistance at school. She continues to attend speech therapy and counselling at school. The wife said the impact of her father’s sudden disappearance from her life has left her without confidence. The wife said her academic work has deteriorated. The wife expects Jacqueline-Lee to have special needs into adulthood.
·On the evidence before me I have concluded the husband has a superior earning capacity to the wife.
·The wife said the husband is cohabiting with another person but has no knowledge of her financial position.
The wife received her first child support assessment in September 2002 of $137 per month. The current assessment until February 2005 is $106 per month [Ex A2]. The husband is in arrears in the sum of approximately $10,000.00. I have concluded the wife is unlikely to receive any child support for Jacqueline-Lee in the future.
I have taken into account as a further factor under Section 75(2) that the wife is unlikely to receive any assistance with Jacqueline-Lee’s care into the future. It is likely the wife will bear the total responsibility for every aspect of parenting. This is a significant factor in this case.
It is my view that a just and equitable result requires the wife to receive by way of adjustment in her favour a further twenty per cent (20%) of the matrimonial assets.
The wife is to receive 95% of the known nett assets of the parties, which equals $307,537.00. The husband is to receive 5% or $16,186.00 The husband already has a total of $16,825.00 in superannuation entitlements. As this is almost equal to the amount I have decided he is entitled to, the husband will retain his superannuation entitlements and any other assets currently held by him in the United Kingdom, of which I have no evidence.
I am satisfied that in all the circumstances of this case, the Orders set out at the commencement of these Reasons are just and equitable.

I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of Sexton FM.

Associate: Collette McFawn

Date: 24 January 2005