Gilliam & Barre (No 2)
[2022] FedCFamC1F 677
Federal Circuit and Family Court of Australia
(DIVISION 1)
Gilliam & Barre (No 2) [2022] FedCFamC1F 677
File number(s): SYC 342 of 2019 Judgment of: HARPER J Date of judgment: 7 September 2022 Catchwords: FAMILY LAW – PROPERTY – De facto relationship of less than two years – Wife seeks declaration under s 90RD of the Family Law Act 1975 (Cth) and orders for property adjustment under s 90SM – Where property pool is modest – Where husband is bankrupt – Where husband has some superannuation – Where both parties have made contributions – Where wife would suffer a serious injustice if an order for property adjustment under s 90SM is not made. Legislation: Family Law Act 1975 (Cth) ss 90SB(1)(c), 90SM Cases cited: Lee & Hutton (2013) 50 Fam LR 322; [2013] FamCA 745 Division: Division 1 First Instance Number of paragraphs: 14 Date of hearing: 24 August 2022 Place: Sydney The Applicant: Litigant in Person The Respondent: Litigant in Person ORDERS
SYC 342 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GILLIAM
Applicant
AND: MR BARRE
Respondent
order made by:
HARPER J
DATE OF ORDER:
7 september 2022
THE COURT NOTES THAT:
A.The Court finds that a failure to make an order under s 90SM of the Family Law Act1975 (Cth) would result in serious injustice to the Applicant Wife.
THE COURT ORDERS THAT:
1.The proceedings be stood over to 28 September 2022 at 9.30 am for mention.
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 Gilliam & Barre has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
In these proceedings, I delivered judgment on 4 July 2022 on the question of the existence of a de facto relationship between the wife and the husband: Gilliam & Barre [2022] FedCFamC1F 465 (“the substantive judgment”). These reasons follow from the substantive judgment, and should be read with it.
I found a de facto relationship existed for a period of less than two years. I also found that the Applicant Wife (“the wife”) made substantial contributions of the kind mentioned in ss 90SM(4)(a), (b), and (c) of the Family Law Act 1975 (Cth) (“the Act”), during the period of the said de facto relationship. However, for the reasons explained in the substantive judgment, I required further submissions on the question of whether the wife would suffer serious injustice within s 90SB(1)(c)(ii) of the Act if the Court failed to make an order for property adjustment pursuant to s 90SM.
Submissions were received on this question from the wife on 5 August 2022, and from the Respondent Husband (“the husband”) on 22 August 2022.
The husband is bankrupt. The evidence of the husband’s trustee in bankruptcy is that he holds $772,633.36 in the husband’s bankrupt estate, as vested bankruptcy property. He anticipates a further $35,000 will be incurred in fees and other outlays. He presently has $1,192,318 in claims on the estate under consideration. As found in an earlier judgment in associated proceedings, the wife’s outstanding debt is $108,000. There will be a return to unsecured creditors of $0.566 per dollar, which will see the wife receive $61,128 on a debt of $108,000 as her dividend in the bankruptcy.
The wife argued that there has not been a fulsome examination of all contributions during the relationship. But as Watts J pointed out in Lee & Hutton (2013) 50 Fam LR 322 at [203], the gateway test in s 90SB(c)(ii) necessitates a broad brush approach. It was necessary for the purposes of the substantive judgment to conduct an extensive consideration of the parties’ contributions during the relationship. This provided the basis for the finding that the wife had made substantial contributions of the kind mentioned in ss 90SM(4)(a), (b), and (c).
The wife argues that she would suffer serious injustice if no order was made for property adjustment for a number of reasons. Although the husband conceded the existence of the loan, it has not been repaid, in full at least, for three and a half years. The wife will receive no interest to compensate her, nor repayment in full, because of the husband’s bankruptcy. She put “everything into the relationship” and has lost it all. The wife made financial contributions in the form of loans which enabled the husband’s businesses to continue, she worked in an unpaid capacity for a time, helped look after the husband’s father, and cared for the husband after the collapse of his mental and physical health. The wife claimed that she became totally financially dependent on the husband by the end of the relationship. I accept these submissions.
If an order is not made for property adjustment pursuant to s 90SM, the wife will get significantly less than if an order was made which had, for example, the broad effect of the wife receiving an amount equivalent to the outstanding loan amount plus some interest.
I take account of my conclusions in the substantive judgment that both parties made contributions.
It is clear that neither party has any assets of any significance, although the husband enjoys some superannuation which is not vested bankruptcy property.
The seriousness of an injustice in this context is assessed by reference to the circumstances of the case. Where there is available only a relatively modest asset pool, a failure to make a relatively modest property adjustment order may result in serious injustice, where it would not in other circumstances. In the circumstances of this matter, I am satisfied that if an order is not made pursuant to s 90SM in favour of the wife, she will suffer an injustice which falls into the category of “serious” within s 90SB(1)(c)(ii).
I note that the wife appears to be intent upon moving next to a further hearing for property adjustment orders, possibly involving an application for a superannuation split. As she rightly argued, any property adjustment order should, to the extent that is appropriate, address the nature of the serious injustice. However, the Court must achieve a just and equitable outcome as between the wife and the trustee in respect of vested bankruptcy property: ss 90SM(1)(b) and (3). By reason of s 90SM(15), since the trustee is a party, the husband is not entitled to make any submissions about this property without the leave of the Court. The husband is entitled, on the other hand, to make submissions about superannuation which has not been vested in the trustee.
In submissions, the wife indicated a desire for a property adjustment of about $400,000. She gave no clear reasons, even of a preliminary nature, for such an outcome, apart from a desire to be paid that amount. While I have formed no concluded view, on the evidence already given about contributions, it is difficult to see how she could achieve an outcome of that magnitude, when for example she agrees the husband also made a significant contribution by the end of the relationship because she became financially dependent upon him, not to mention the discussion of contributions already undertaken for the purposes of the substantive judgment.
While it is open to the wife to press for a further hearing, it is also plainly open to question whether this would be in the interests of either party. The parties should give serious consideration to resolving the balance of their dispute. The fact that the husband is bankrupt and plainly insolvent cannot be escaped. This will inevitably have a material impact on the size of any property adjustment order in the wife’s favour. The desirability of another hearing is questionable in circumstances where the husband is bankrupt, his bankrupt estate is worth only $772,633.36, his creditors exceed the available funds, even if he may have some superannuation, and the de facto relationship lasted less than two years.
I will note that finding concerning serious injustice to the wife, and stand the proceedings over to 28 September 2022, on which occasion the parties can inform the Court how the proceedings can be finalised.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 7 September 2022