FAMILY LAW – PROPERTY – De facto relationship of less than two years – Where wife would suffer injustice if property adjustment not made – Where husband is bankrupt and trustee in bankruptcy is a party – Where wife loaned monies to the husband during the relationship which partially remain unpaid – Adjustment of 20 percent in the wife’s favour – Where wife seeks orders for indemnity costs against the trustee and the husband – Costs for self-represented litigants – No basis to order costs.
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Gilliam & Barre (No 3) [2022] FedCFamC1F 1001
Case
[2022] FedCFamC1F 1001
Decision Date
CaseChat Overview and Summary
In the matter of Gilliam & Barre (No 3), the primary dispute involves the determination of property adjustment in the context of the husband's bankruptcy. The wife had sought a significant property adjustment in her favour, while the husband declined to seek leave to submit on the matter. The court was required to assess whether the proposed orders for property adjustment were just and equitable, considering the wife's claim for a debt that was declared provable in the husband's bankruptcy but which could not be enforced due to statutory provisions.
The legal issues before the court involved determining the wife's entitlement to a property adjustment under section 90SM of the Family Law Act, given the husband's bankruptcy and the specific circumstances of the case. The court had to consider the implications of the wife's claim on the available assets in the husband's bankrupt estate, the potential impact of the outstanding debt on unsecured creditors, and the seriousness of the injustice that might result from the failure to make a property adjustment order.
The court reasoned that the husband's bankrupt estate was relatively modest, and the wife had a provable debt of $108,000. Given the limited asset pool and the wife's outstanding debt, the court found that the failure to make a property adjustment order would result in a serious injustice to the wife. The court concluded that an order for property adjustment should be made, discharging the wife's debt and providing a payment from the husband's estate equivalent to 20 percent of its value, amounting to $154,527. This order also accounted for the balance of the loan owed by the husband.
The final orders made by the court were that there should be a payment to the wife by way of property adjustment in the amount of $154,527 from the husband's bankrupt estate, and that this payment should discharge the remaining balance of the loan owed by the husband to the wife.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
The husband is still engaged in parenting proceedings with Ms Haynes over their two children. However, he has not spent any formal time with them since January 2020. There was no indication that he was providing any financial support to these children. Conclusion I am not satisfied there should be any additional adjustment for s 90SF(3) factors.WHETHER THE PROPOSED ORDERS ARE JUST AND EQUITABLE As pointed out, the wife claimed property adjustment in her favour of about $400,000, while the husband declined to seek leave pursuant to s 90SM(15) to make any submissions about property adjustment. As explained in Gilliam (No 2) at [4], it has been declared that the wife has the sum of $108,000 owing to her. Prima facie, this debt would have been provable in the husband’s bankruptcy. The trustee did not contend otherwise. But, by reason of s 58(3) of the Bankruptcy Act, the wife was prohibited from enforcing any remedy in respect of this debt, or taking any step in proceedings in respect of it. In Gilliam (No 2), I held that:4. 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.…7. 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.…9. It is clear that neither party has any assets of any significance, although the husband enjoys some superannuation which is not vested bankruptcy property.10. 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). Taking account of these matters, and my conclusions concerning contributions, I propose to order that there be paid to the wife by way of property adjustment pursuant to s 90SM from the bankrupt estate of the husband, the amount of $154,527, being 20 percent of that estate. Although this amount will be ordered by way of property adjustment and by reason of s 59A of the Bankruptcy Act will therefore take priority, together with all the other matters discussed above concerning contributions, it also takes account of balance of the loan owed by the husband. For this reason, there should be an order discharging this remaining loan balance.