HACKNEY & LEADINGHAM

[2020] FCCA 2666

FEDERAL CIRCUIT COURT OF AUSTRALIA

HACKNEY & LEADINGHAM [2020] FCCA 2666

Catchwords:
FAMILY LAW – Property – Final Orders – undefended hearing – apportionment of debt.

Legislation:

Family Law Act 1975 (Cth), ss.117,117 (2), (2A)

Applicant: MS HACKNEY

Respondent: MR LEADINGHAM

File Number: TVC 721 of 2019

Judgment of: Judge Demack

Hearing date: 21 July 2020

Date of Last Submission: 21 July 2020

Delivered at: Rockhampton

Delivered on: 6 August 2020

REPRESENTATION

Solicitors for the Applicant: J Hamilton & Associates

Respondent: No appearance

ORDERS

1. That the Applicant be granted leave pursuant to s.44(6) of the Family Law Act 1975 (Cth) to commence property proceedings against the Respondent pursuant to s.90SM of the Family Law Act 1975 (Cth).

2. That of the amount owing to B Mortgage Insurance arising from the shortfall of the sale of a Unit at C Street, Suburb D (...00) and associated costs and that separate loan accounts be created as follows:-

   (a)Ms Hackney in the sum of $9,450; and

   (b)Mr Leadingham be solely responsible for the balance (approximately $65,515).

1. That Mr Leadingham indemnify Ms Hackney for all amounts owed by him to B Mortgage Insurance and in accordance with Order 2 herein.

2. The following shall occur in relation to the Defacto Husband’s E Super Fund:-

   (a)Pursuant to section 90XT(4) of the Family Law Act 1975 (as amended) the base amount of SEVENTY-SIX THOUSAND DOLLARS ($76,000.00) (“the base amount”) be allocated to the Defacto Wife (MS HACKNEY) in respect of the Defacto Husband’s (MR LEADINGHAM) superannuation interest in the E Super Fund (“the interest”);

   (b)Pursuant to section 90XT(1)(a) of the Family Law Act 1975 (as amended) whenever a splittable payment becomes payable in respect of the interest the Defacto Wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 in respect of the base amount and there is a corresponding reduction in the entitlement the Defacto Husband would have had but for these Orders;

   (c)The Defacto Wife shall within seven (7) days of the date of these Orders request the Trustee to roll over/transfer the sum calculated by reference to the base amount of SEVENTY-SIX THOUSAND DOLLARS ($76,000.00) from the Defacto Husband’s interest in the E Super Fund;

   (d)The Trustee’s fees in respect of the payment split and the request for transfer herein shall be paid equally by the Defacto Husband and the Defacto Wife to the Trustee forthwith upon receipt of notification by the Trustee of the amount of such fees.

3. Order 4 has effect from the operative date:-

   (a)The operative date for these Orders is the fourth (4^th) business day after the Order is served on the Trustee of the E Super Fund;

   (b)This Order binds the Trustee of E Super Fund; and

   (c)The Defacto Husband, the Defacto Wife and the Trustee of E Super Fund have liberty to apply upon giving each of the other parties at least seven (7) days’ notice.

4. All other property and financial resources of whatsoever nature shall forthwith vest in the party having possession or control thereof and each party shall be solely liable for and indemnify the other against any liability owed in respect of or encumbering such property and/or financial resource.

5. That for the purposes of giving effect to these Orders herein both parties shall be at liberty to provide a copy of these Orders to their Financier and other Government Departments.

6. This Order is binding on the parties’ heirs, executors and assigns respectively.

7. Each party shall have liberty to apply back to the Court upon the giving of seven (7) days’ notice each to the other in relation to the carrying out of the terms of these Orders.

8. That the Respondent pay the Applicant’s costs of and incidental to the Application fixed in the sum of twelve thousand dollars ($12,000.00) within six (6) months of the date of these Orders, thereafter interest shall accrue on the outstanding amount pursuant to Rule 17.03 of the Family Law Rules.

9. That all outstanding applications be dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Hackney & Leadingham is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ROCKHAMPTON

TVC 721 of 2019

MS HACKNEY

Applicant

And

MR LEADINGHAM

Respondent

REASONS FOR JUDGMENT

1. This is an application with respect to a final property adjustment Order.  The applicant is the applicant de facto wife and the respondent is the de facto husband. 

2. The parties commenced cohabitation in 2010 and separated on a final basis in early March 2015.  They have had a child together, X, who was born in 2014, so she was only a couple of months when her parents separated on a final basis.  These proceedings are with respect to property matters only.  Mr Leadingham, when he filed some documents, seemed to tick on his response document that there was parenting matters as well, but no Orders are sought with respect to parenting matters. 

3. Mr Leadingham participated in the proceedings very much on an on and off basis.  He filed documents in mid-2019, but he has not otherwise participated properly in the case, and he has failed to attend to things that needed to be attended to, and has thereby made it even more difficult for Ms Hackney to proceed with the necessary financial matters between them. 

4. The parties had purchased a unit to live in in 2012.  Subsequent to its purchase, it became worth less than what they had paid for it because of a downturn in the market, and when the property was eventually sold after Orders were made for the applicant to be the trustee for the sale of the property because of Mr Leadingham’s non-engagement in the process, and after works were done to try and rectify some of the things which needed to be rectified, there is an outstanding debt. 

5. The mortgage insurer, B Insurance, has responded to a request from the Solicitor for the applicant with respect to the Orders which they seek, which would apportion debt as between the applicant and the respondent.  That email chain needs to become an exhibit, and I mark it thus. 

6. This, therefore, is a default hearing; Mr Leadingham has not been participating in proceedings and Orders have long been made that if he does not participate, default Orders will be made. 

7. The applicant, relies upon all the documents that she has filed;  she is legally represented.  The most recent affidavit was filed on 10 July 2020, and it sets out all of the expenses that the wife has been incurring with respect to trying to get this unit sold and the parties’ current financial circumstances.  

8. The first thing that needs to be done is I need to give leave to proceed out of time.  The parties separated on a final basis in March 2015, and the proceedings were not brought within the two year range, but when the respondent filed his response documents, he likewise sought that there be given leave be given to proceed out of time.  Both parties seek leave, there are plainly final property adjustments which need to be made because of this joint debt, and because it would cause hardship to the applicant if Orders were not made, particularly in the superannuation split, which I will speak of later.  So I am satisfied that leave should be given to proceed out of time and that needs to be the first Order.  I may only have made that Order in earlier Orders, but I could not find it as I looked through just before. 

9. The response by the husband, if I may call him that with no disrespect intended, was that there should be an overall adjustment between the parties for something in the Order of 50 percent each.  The wife’s position is something akin to a 60/40 split. 

10. I am certainly satisfied that there should be an adjustment to the wife for two predominant reasons, and they both arise from future needs.  One is to do with the difference in income between the parties.  The husband is employed in primary industry, and the wife is employed as an allied health worker.  Their respective incomes are hugely disparate; he makes much more money than she does. 

11. The other very important reason is that X, who was five last year, lives with the mother and spends very limited time with the father, it being supervised at the contact centre.  So the mother is otherwise taking the burden, no doubt lovingly, but taking the burden of parenting the parties’ child, who is still young. 

12. The other factor within all of this is the contributions that the parties made, and it is the contribution of the wife post-separation in trying to actually attend to this issue of the C Street, Suburb D unit, and getting things sorted, which is quite an extraordinary contribution by her in the face of much difficulty from Mr Leadingham simply doing little. 

13. So I accept the pool as is explained in the applicant’s most recent documents, and I also accept her submissions with respect to what the property adjustment should be. 

14. The applicant had sought costs. Costs are governed by section 117 of the Family Law Act. It relevantly provides that, subject to either subsections, each party to proceedings under this Act shall bear their own costs. Subsection (2) relevantly provides if in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may make a costs Order as it considers just, and in considering those sections, there is then the list of factors in section 117, sub (2A).

15. In terms of their financial circumstances, the husband is in a superior financial circumstance to the wife by way of his income earning capacity and the reality of that.  He has made proceedings so much harder by his neglecting to attend to his lawful duties with respect to this litigation, neglecting to attend to his lawful duties with compliance with court orders with the payment of monies and the like, and he has been wholly unsuccessful in proceedings, in so much as I am making the orders that are sought by the wife.  She has long sought to have this matter resolved, and he has just made it more and more difficult. 

16. The costs which are sought on behalf of the applicant are scale costs, and I am satisfied that that is proper.  In her affidavit of 10 July 2020, the costs amount is specified at being $11,953.  I will round that up to $12,000, and I will be making a costs order that the respondent pay the applicant’s costs on and incidental to these proceedings fixed at $12,000, such amount to be paid within six months of today’s date or thereafter interest shall accrue at the applicable Family Law rate, as it varies from time to time. 

17. Ms Hackney had sought that that costs order be subsumed into the property adjustment order; I find I do not have power to do that.  The costs order power is quite separate to the property adjustment power.  I also could not subsume it into a superannuation split because the superannuation split powers are, again, quite distinctive from the adjustment powers. 

18. There are two parts where there needs to be the adjustment made between the parties, and that is with respect to the apportionment of the debt, and secondly, with respect to a superannuation split.  I am satisfied that the superannuation trustee has been appointed with procedural fairness.  Ms Sawtell, the Solicitor for the applicant, I am sure, has pointed that out to me, and she might otherwise remind me when I get to the conclusion of these reasons. 

19. I am satisfied that in terms of the apportionment of debt, that the amounts which are specified as between the applicant and the respondent, in paragraph 1 of the Orders sought, would have the applicant be responsible for something in the Order of $9450, and the respondent being responsible for $65,515. 

20. Notwithstanding the fact that the calculations within the affidavit take into account the costs amount, I am satisfied that that apportionment of debt is just and equitable and appropriate in the circumstances of this case, where Mr Leadingham has a much greater capacity to be attending to the debt on an ongoing basis than Ms Hackney does, in circumstances where she has the primary care of the child of the parties, and where her earning capacity is so much less than what his is in his industry. 

21. As a result, though, because her calculations had factored in the costs, which I have said are not to be part of the property adjustment Order, I will change the amount of the superannuation split, which is otherwise ordered, and I will make it an amount of $76,000.  The property adjustment is not a mathematical calculation.  The fact that that maths might not end up to be the 60 per cent and a 40 per cent adjustment precisely does not trouble me;  I am satisfied that it is within range, and that it is proper that there still be a substantial superannuation split to Ms Hackney.  Superannuation splits are very much part of the government policy as superannuation is overall.  The parties are both still within the early parts of their working lives;  they both the capacity to be contributing to their superannuation’s into the future, but Ms Hackney’s superannuation currently is very low, whereas Mr Leadingham’s was a substantial part of the assets which were available between the parties.  So although that maths might not work out within the percentage, I am still satisfied that that is wholly within range.  So the superannuation split will be $76,000 as the base amount.  The procedural fairness to E Super Fund would have covered a higher amount than that, so I am satisfied that that procedural fairness rule is satisfied for these purposes. 

22. So I have been satisfied that it is just and equitable to adjust the parties’ property between them; they both asked for a property adjustment Order.  I am satisfied that the Orders which I have just made are not only just and equitable but appropriate in the circumstances of these parties circumstances.  I make those Orders on a final basis. 

23. I dismiss all outstanding applications. 

I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of Judge Demack

Associate:

Date: 23 October 2020