Haimes & Maisel
[2024] FedCFamC2F 642
•24 May 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Haimes & Maisel [2024] FedCFamC2F 642
File number: CSC 767 of 2023 Judgment of: JUDGE BROWN Date of judgment: 24 May 2024 Catchwords: FAMILY LAW – Property settlement following undefended hearing – de facto relationship of 12 years – relationship produced two children now aged 19 & 14 – where the respondent is currently incarcerated – where the court is satisfied that the respondent is aware of the proceedings – leave to proceed out of time – parties separated in difficult and uncertain circumstances in 2016/2017 – application commenced in 2023 – explanation for delay – where the court is satisfied the applicant will suffer hardship if unable to proceed with application – waste – considerations of just and equity Legislation: Family Law Act 1975 (Cth) Pt VIIIAB, ss 4, 4AA, 39A, 44, 75(2), 79, 90RD, 90SF, 90SM
Federal Circuit and Family Court of Australia (Family Law) Rules2021 (Cth) Pt 10.6, rr 10.26, 10.27
Public Trustee Act 1978 (Qld) Pt 7
Cases cited: Bevan & Bevan [2013] FamCAFC 116
Brisbane South Regional Health Authority v Taylor [1996] 186 CLR 541
Clauson v Clauson (1995) FLC 92-595
Edmunds & Edmunds [2018] FamCAFC 121
Ferguson & Ferguson (1978) FLC 90-500
Gadzen & Simkin [2018] FamCAFC 218
Hall, K A and Hall, J C (1979) FLC 90-679
Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143
In the Marriage of Browne & Green (1999) 25 Fam LR 482
In the Marriage of DJM and JLM (1998) 23 Fam LR 396
In the Marriage of Kowaliw (1981) FLC 91-092
In the Marriage of Omacini (2005) 33 Fam LR 134
In the Marriage of Townsend (1994) 18 Fam LR 505
Jacenko & Jacenko (1986) FLC 91-776
Milas v GM Holden Limited [2015] FCCA 1311
Pierce & Pierce (1999) FLC 92-844
Sharp & Sharp [2011] FamCAFC 150
Slocomb & Hedgewood (2015) FLC 93-678
Stanford v Stanford (2012) 247 CLR 108
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Taylor v Taylor (1979) 143 CLR 1
Waters & Jurek (1995) FLC 92-635
Watson & Ling [2013] FamCA 57
Whitford & Whitford (1979) FLC 90-612
Division: Division 2 Family Law Number of paragraphs: 162 Date of hearing: 22 May 2024 Place: Cairns Counsel for the Applicant: Mr Williams Solicitor for the Applicant: Preston Law Respondent: No appearance ORDERS
CSC 767 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR HAIMES
Applicant
AND: MS MAISEL
Respondent
ORDER MADE BY:
JUDGE BROWN
DATE OF ORDER:
24 MAY 2024
THE COURT ORDERS THAT:
1.Pursuant to section 44(6) of the Family Law Act 1975 the applicant is granted leave to proceed with his application for de facto property settlement pursuant to Part VIIIAB of the Family Law Act 1975 (Cth) and such time is extended to 5 October 2023.
In full and final settlement of any claim that either party may have or hereafter have against the other for settlement of property
THE COURT FURTHER ORDERS THAT:
Transfer of Property
2.Subject to Order 6 below, that within one hundred and fifty (150) days of the date of this order the parties shall do all such acts and things and sign all such documents as may be required to transfer all of the Applicant de facto husband’s right, title and interest in the joint property situated at B Street, Town C in the State of Queensland, more particularly described as Lot 1 on Registered Plan … on Certificate Title …to the Respondent de facto wife at the expense of the Applicant de facto husband.
3.Within one hundred and fifty (150) days of the date of this order the parties shall do all such acts and things and sign all such documents as may be required to transfer all of the Respondent de facto wife’s right, title and interest in the joint property situated at B Street, Town C in the State of Queensland, more particularly described as Lot 2 on Registered Plan … on Certificate Title … to the Applicant de facto husband at the expense of the Applicant de facto husband.
4.Within one hundred and fifty (150) days of the date of this order and in consideration and exchange for the transfers referred to in Order 2 & 3 above, the Applicant de facto husband will do all acts and things necessary and sign all such documents as may be required to discharge Mortgage No. … to Commonwealth Bank of Australia, Mortgage No. … to D Company that encumbers the property situated B Street, Town C and forever indemnify and release the Respondent de facto wife in relation to Mortgage No. … and Mortgage No. ….
5.That within one hundred and fifty (150) days of the date of this order the parties shall do all such acts and things and sign all such documents as may be required to transfer all of the Respondent de facto wife’s right, title and interest in the financial resource on Crown Plan … on Certificate Title … to the Applicant de facto husband at the expense of the Applicant de facto husband.
Easement
6.Within thirty (30) days of the date of this Order, the parties will do all such acts and things and sign all documents as may be required (including but not limited to engaging a surveyor to provide a preliminary sketch of the proposed easement area and liaising with the Region E Council as required) to have an easement issued on Lot … for the purposes of accessing the water supply at the expense of the Applicant de facto husband
Other Orders
7.The Applicant de facto husband shall retain to the exclusion of the Respondent de facto wife and the Respondent de facto wife shall forfeit all right, title and interest in and to the following:
(a)His Motor Vehicle 1;
(b)His CBA bank accounts (**…74, **…06, **…63);
(c)Plant and equipment in his possession or control;
(d)His Super Fund 1 interest; and
(e)All furniture and effects in his possession or control.
8.The Respondent de facto wife shall retain to the exclusion of the Applicant de facto husband and the Applicant de facto husband shall forfeit all right, title and interest in and to the following:
(a)Her bank accounts;
(b)Her superannuation; and
(c)All furniture and effects in her possession and control.
Joint bank accounts
9.Within seven (7) days of the date of these orders the parties will do all such acts and things and sign all such documents as are necessary to close all joint bank accounts.
Other Orders
10.Unless otherwise specified and except for the purposes of enforcing the payment of any money due under these Orders:
(a)Each party be solely entitled to the exclusion of the other to all property not specified within the orders that are in the possession of such party;
(b)Each party shall be solely responsible for and shall indemnify the other in relation to all debts in their sole names, save and except where otherwise dealt with in these orders;
(c)Each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other;
(d)Any insurance policies held by the parties are to become the sole property of the owner named thereunder; and
(e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
11.Each party shall join in and do all acts, give all necessary consents and sign all necessary documents as shall be reasonably required to give full force and effect to the terms of these orders.
Execution of Documents by Registrar
12.Each of the parties shall do all acts and sign all necessary documentation to give effect to the terms of this order and in the event that either party refuses or neglects to sign (within fourteen (14) days of a written request to do so) any deed or instrument necessary to effect the terms of these orders, the Registrar of the Federal Circuit and Family Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act 1975 (Cth) to execute such deeds or instruments on behalf of such party.
13.The Applicant de facto husband is to serve a copy of these Reasons for Judgment (Haimes & Maisel [2024] FedCFamC2F 642) and a copy of the sealed orders dated 24 May 2024 on the Respondent de facto wife and the Public Trustee of Queensland.
14.All extant applications be dismissed as finalised.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BROWN:
INTRODUCTION
These reasons for judgment relate to undefended de facto property proceedings. As I will outline in greater detail in due course, the primary reason the proceedings are undefended is a sad and confronting one, relating to the corrosive influence of addictive illicit drugs.
The applicant in the proceedings is Mr Haimes and the respondent is Ms Maisel (incorrectly referred to in the court record ). Mr Haimes is the applicant in the proceedings, which he began in the Cairns Registry of the court on 5 October 2023. Although Ms Maisel clearly is aware of the proceedings, having appeared in the Registry after one mention of the case, she has taken no formal part in the proceedings.
At the present time, Ms Maisel is subject to incarceration at the City F Corrections Centre. It is not necessary for me to outline her criminal history, in any great detail, other than it began in mid-2017 and all of it relates to illicit drug matters.
Most recently, in mid-2022, she received a sentence in respect of a number of counts of supplying illicit drugs. She was granted some form of conditional release, which was breached as a result of her reoffending. Her current sentence is not due to expire until 2025.
The evidence does not reveal one obvious date on which the relationship between the parties uncontrovertibly came to an end. Mr Haimes has deposed that he supported Ms Maisel in the early period of addiction and hoped she would recover. However, his hopes in this regard proved to be forlorn.
In these circumstances, it would seem the only conclusion which is logically available is that the relationship became obviously beyond any hope of redemption, when Ms Maisel’s criminal offending began, which was in 2017.
The relevant legal provisions applicable prescribe a period of two years, from the date on which it is considered a de facto relationship has ended, as the period during which an application for settlement of de facto property proceedings should be brought. On this basis, Mr Haimes’s application is out of time and he needs the leave of the court to proceed with it.
The case raises three major legal issues, which the court must resolve, which can be summarised as follows:
·Is it proper for the court to make an order altering the property interests of the parties, pursuant to the provisions of the Family Law Act 1975[1] in the absence of Ms Maisel;
·Should the statutory time limit for the bringing of such an application be extended. This issue primarily turns on whether Mr Haimes has provided a reasonable explanation for the delay and the extent of the hardship, which would befall him and indeed Ms Maisel, if leave is not granted;
·If such leave if granted, what is a just and fair division of the parties’ property, given the level of their respective contributions made during their relationship and an assessment of their current idiosyncratic circumstances and prospective needs.
[1] Hereinafter referred to as “the Act”.
BACKGROUND
Mr Haimes was born in 1977. Ms Maisel was born in 1978. The parties commenced a relationship in 2004 and separated in or around 2016/2017. The date is imprecise because at this time, it is apparent Ms Maisel was in the grip of drug addiction.
As a consequence of her addiction, Ms Maisel was frequently away from home and although Mr Haimes felt loyal to her, he did not know where she was. Clearly, in the longer term, this situation was untenable and it became clear to him that his relationship with Ms Maisel was over. The parties have never been married. It is clear to me that the parties were formally in a de facto relationship as defined by section 4AA(1) of the Act.
The parties are the parents of two children. They are X, who was born in 2004 and Y who was born in 2009. Ms Maisel has a child from an earlier relationship. She is Ms G who was born in 1999. Ms G was part of the parties’ blended family and Mr Haimes provided financial support for her.
Mr Haimes is a tradesperson. During the parties’ relationship, he was employed by H Company. As a result of his employment, prior to the parties beginning their relationship, Mr Haimes had been able to acquire a property at J Street, Suburb K. At this time, Ms Maisel was living, at home, with her parents.
In the early stages of the parties’ relationship, Mr Haimes sold the Suburb K property and utilised approximately $90,000.00 of the proceeds as a deposit to purchase what was to become the parties’ family home, at B Street, Town C[2] for the sum of $360,000.00. The remainder of the purchase price was provided by a mortgage secured against the property.
[2] Hereinafter referred to as “the Town C farm” or “the farm”.
The Town C farm consists of around 40 hectares, which are contained in two lots – a small lot (Lot 1) and a larger rectangular lot (Lot 2), on which is erected the dwelling, which was the parties’ home and where their children grew up. The two lots are divided by B Street, which provides access to each. It remains subject to a mortgage in favour of D Company.
Lot 2 benefits from an attached resource. Given Town C’s location, this is a valuable resource. It is also integral to the full utilisation of Lot 2, which was formerly a farm but now is primarily directed towards small crops, and livestock grazing.
However, at the present time, there is no formal ability for Lot 2 to utilise the financial resource. In technical terms, the financial resource is to be regarded as a separate asset, which is not attached to the land itself.
In the early years of the parties’ relationship, they commenced a partnership to utilise both blocks, whilst they lived in the house. They grew crops and made modest profits, depending on the season, which were allocated to joint purposes. Their best year resulted in a $100,000.00 profit and their poorest only one of $7,000.00.
X was born at an early stage of the parties’ relationship, with Y following five years later. Ms Maisel was the parent who was primarily engaged in household duties, whilst Mr Haimes was the family’s main breadwinner, continuing to work at H Company. Both parties seemed to have made contributions towards the operation of the farm.
Ms Maisel previously engaged in paid employment. She worked as an administrative officer with both D Company and L Company. Between 2004 and 2016/17 the parties shared responsibilities for their family and worked together as a team, pooling their financial and personal resources to secure its greater good. Things started to go wrong in 2015.
Ms G was diagnosed with a medical condition. She had to go to City M for intensive medical treatment. Her prognosis was poor and she was not expected to live. This sad news seems to have been the trigger for Ms Maisel beginning to use illicit drugs, which began in or around 2015, with catastrophic consequences for both her personally and the family generally.
Due to the wife’s employment in the finance sector, the parties held their savings in an account in Ms Maisel’s sole name. The parties had also acquired a modest portfolio of shares, which were held on a share platform.
It is Mr Haimes’s evidence that when Ms Maisel’s drug use became chronic, she withdrew the parties’ savings and sold their shares, utilising the proceeds to purchase illicit drugs for herself and gambling. He has calculated the sum involved to be approximately $150,000.00.
Needless to say, this state of affairs was not compatible with Ms Maisel continuing in the paid workforce, or her continuing to fulfil her previous role as a parent and homemaker. In 2017, she ceased employment and in 2018 the children went to live with the maternal grandparents, who also live in Town C.
When the parties separated, Mr Haimes went to live in City N, where he rented an apartment, whilst Ms Maisel continued to live at the farm. Mr Haimes attempted to support her financially and keep on top of the bills relating to the farm.
It is the effect of his evidence that Ms Maisel was out of control, stealing money and borrowing sums, which she could not repay and becoming involved in criminal and anti-social circles. In order to get around, Mr Haimes hired a car, which Ms Maisel stole from him. Later the car was discovered by police burnt out. In his affidavit, Mr Haimes deposes as follows:
I financially supported the de facto wife after separation occurred. She would say that she needed money to get better, I’d give her what she asked for but she would use it to buy drugs or gamble. I also paid her legal fees in relation to her various criminal charges. In 2016 and on two occasions in 2018, the former matrimonial [home] was completely ransacked and about $[60],000.00 of assets were taken.[3]
[3] See affidavit of Mr Haimes filed on 5 October 2023 at [29].
Although he cannot definitively prove it, Mr Haimes believes that the home was trashed by criminal associates of Ms Maisel. He reported the matters to police and has worked hard to make the home good again.
In this extremely difficult and stressful situation, Mr Haimes obtained a $30,000.00 loan and a credit card, with a $12,000.00 limit, in order to support the family and to stay on top of the bills. In early 2020, he took a voluntary redundancy package in an amount of $140,000.00, which he used again to support himself and pay the mortgage on the farm, which was in arrears, due to the respondent’s neglect.
In late 2020, Mr Haimes obtained a job at Town O, in the City P area on a week on/week off roster. He has held this position up to the present time, which provides him with an income of around $150,000.00 per annum. On the week he is away at work, Y continues to live with the maternal grandparents but returns to his care in the week he is in the City N/Town C area. Sadly, Ms Maisel has not maintained consistent contact with the children.
Of great significance in this matter is the fact that since mid-2016, Mr Haimes has made mortgage repayments in respect of the farm in an amount which he calculates to be at least $88,000.00 without any assistance whatsoever from Ms Maisel. On any view this must be regarded as a direct financial contribution directed to preserve the parties’ main asset, which is attributable to him alone. In this same period, with great assistance from the maternal grandparents, he has provided the homemaking and parenting required for both X and Y.
Mr Haimes has returned to live on the farm, but it is in a poor state of repair. He hopes to re‑build the farm, which has gone to wrack and ruin, and eventually re-stock it with livestock. At the present time, his major recurrent expenditure relates to paying the farm mortgage and a related line of mortgage attached to it, in favour of D Company, in an amount just under $450.00 per week. Needless to say, Ms Maisel has made no financial contributions towards the parties’ joint assets for many years and has not provided child support.
X is currently 19 years of age and is undertaking an apprenticeship in City P. However, due to his low apprenticeship wage, he is not completely financially independent, and Mr Haimes is helping by paying his rent in City P. Y is attending a private school in Town C. She undertakes extracurricular activities. Mr Haimes is financially responsible for these expenses.
The farm is the parties’ most significant asset, in both financial and emotional terms. It has been formally valued at a number of significant dates, which are referable to the evidence in these proceedings, namely early 2019 and more recently as at early 2024 by Ms Q, who is a certified practicing valuer. She has valued each of the lots separately and in combination.
At the earlier date, Ms Q valued Lot 1 at $230,000.00 and both together at $950,000.00. Currently, she values Lot 1 at $380,000.00 and in combination the farm to be worth $1,100,000.00. The value of the financial resource has been valued at $200,000.00.
Due to her non-involvement in the proceedings, it seems improbable that Ms Maisel has any assets of significant value in her possession. She may conceivably have superannuation but its extent is unknown to me. Mr Haimes has a modest amount of superannuation, in an industry fund, in an amount of $286,984.00. He owns two motor vehicles – Motor Vehicle 1 (worth $15,000.00) and Motor Vehicle 2 (worth $2,000.00). Due to his employment, he has been allocated a modest parcel of R Company shares ($7,000.00).
Otherwise, Mr Haimes has the equipment and machinery which he uses on the farm and a number of savings accounts. In broad terms, these add up to approximately $80,000.00. On his estimation, his recurrent weekly expenses are generally equivalent to his income.
The costs of running the farm are significant. It is not currently generating a profit. Mr Haimes estimates the annual costs, including rates, maintenance and fencing to be in the vicinity of $15,000.00 per annum and insurance to be just under $7,000.00.
It is the effect of Mr Haimes’s evidence that he did not bring his application sooner because he feared that given Ms Maisel’s level of addiction, it would not have been prudent for him to have embarked on any exercise which would have had the consequence of providing her with a significant sum of money, which she would have most probably wasted on drugs or gambling.
As a consequence of her status as a prisoner serving a sentence - although she is capable of giving instructions to a lawyer and of understanding the nature of these proceedings and so acting on her own behalf in them - Ms Maisel’s financial affairs are currently being managed by the Public Trustee pursuant to the provision of Part 7 of the Public Trustee Act 1978 (Qld).
In these circumstances, by way of explanation for the delay in instituting proceeding and to delineate the hardship arising if leave is not granted, Mr Haimes has deposed as follows:
I had not sought to finalise the property settlement because based on her behaviour and decisions during the relationship and post-separation, I say that the de facto wife would have wasted the money from the property settlement on illicit drugs and gambling. I also was unsure whether she would engage in these proceedings.
The de facto wife and I will suffer hardship if leave is not granted to proceed out of time. I am unable to refinance the current home loan as the de facto wife remains listed on the mortgage and property. Further, I am unable to make any significant decisions about the property – the nature of which is a rural property that runs [livestock] for the same reason.
The de facto wife is entitled to receive a portion of the asset pool. Now that her estate is being managed by the Public Trustee, I believe what the wife receives from the asset pool will be properly managed.
As the asset pool stands, the majority of the assets are held jointly. Neither the de facto wife nor I can deal with those assets without the consent of the other.
I am seeking leave of this Honourable Court to proceed with my Application out of time in the above circumstances.[4]
[4] See affidavit of the Mr Haimes filed 5 October 2023 at [13] – [17].
APPLICABLE LEGAL PROVISIONS
Pursuant to section 39A of the Act, this court has jurisdiction conferred upon it in respect of what are termed de facto financial causes. This expression is defined by section 4, to include proceedings in respect of the distribution, after the breakdown of the de facto relationship, of the property of the parties or either of them.
Part VIIIAB of the Act deals with financial matters relating to de facto relationships. In particular, pursuant to section 90RD, the court has authority to make a declaration about the existence of a de facto relationship, including when that relationship ended and pursuant to section 90SM, the authority to alter the proprietary interests of the parties to a de facto relationship, after the breakdown of that relationship.
However, time limits are imposed in respect of such applications. Pursuant to section 44(5) subject to subsection (6), a party to a de facto relationship may apply for an order under section 90SM only if:
…the application is made within the period (the standard application period) of…2 years after the end of the de facto relationship.
However, pursuant to section 44(6):
(6)The court may grant the party leave to apply after the end of the standard application period if the court is satisfied that:
(a)hardship would be caused to the party or a child if leave were not granted; or
(b)in the case of an application for an order for the maintenance of the party—the party’s circumstances were, at the end of the standard application period, such that he or she would have been unable to support himself or herself without an income tested pension, allowance or benefit.
The definition of de facto relationship is defined in section 4AA(1) of the Act as follows:
(1) A person is in a de facto relationship with another person if:
(a) the persons are not legally married to each other; and
(b) the persons are not related by family (see subsection (6)); and
(c)having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
Section 4AA(2) is prefaced by the heading working out if persons have a relationship as a couple. Thereafter the following circumstances are delineated, which may denote the existence of such a relationship. The list provided is not exhaustive and the factors in it are not specifically noted to be directive. They are as follows:
(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d)the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g)whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h) the care and support of children;
(i) the reputation and public aspects of the relationship.
Section 4AA(3) & (4) provide, in effect, that no particular finding is to be regarded as necessary or definitive before the court finds that a de facto relationship exists in the specific case with which it is concerned. Rather the court may have regard to the matters and attach weight to those matters as it considers appropriate to do so.
As such, the list of matters contained in section 4AA(2) is not to be regarded as some sort of checklist. Rather it is a guide. The court is required to apply individualised justice to the idiosyncratic circumstances of each particular case coming before it.
Given the evidence provided by Mr Haimes, in the context of the above criteria, I have little doubt in reaching the conclusion that the parties were in a de facto relationship from 2004 onwards. How could it be otherwise, given they had two children, jointly parented and supported Ms G and purchased the Town C farm together, which they operated in partnership.
A more difficult issue arises in respect of the application of the time limit and when the standard application period commenced to run. Clearly, there was no obvious point at which the relationship ended. As noted earlier, most likely the point at which it irrevocably came to an end was when Ms Maisel’s offending began and Mr Haimes came to the sad conclusion that there was nothing left in the relationship which could lead to the prospect of it being restored.
Accordingly, in my finding there can be no level of doubt that Mr Haimes is well out of time with his application and needs an extension. In this context, it is necessary to outline briefly the legal processes which the court is required to engage. This is necessary in order to enable the court to determine whether Mr Haimes has suffered any hardship as envisaged by section 44(6)(a).
Pursuant to section 90SM(1) the court is authorised to make such orders as it considers appropriate in order to alter the interest of the parties to a de facto relationship in relevant property.
The expression property is defined in section 4(1) in relation to the parties to a de facto or either of them as meaning …property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.
Pursuant to section 90SM(3) the court is actively prevented from making an order altering proprietorial interests, unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitive words “must not” in the relevant section.
Section 90SM(4) provides the mechanics of how a court is to make an order altering de facto property interests. It provides seven matters [in paragraphs (a) – (g)] to be considered, as relevant.
Paragraphs (a); (b); and (c) categorise contributions made by de facto partners, which are relevant. Paragraph (d) directs the court to take into account the effect of any order upon the earning capacity of either party to the de facto relationship concerned.
Paragraph (e) directs the court to consider a list of matters contained in section 90SF(3), which are germane to maintenance or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs.
Finally, paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.
Until recently, the position in respect of the process to be applied to the resolution of both de facto and matrimonial property cases was said to be well-settled, as it required the application of a preferred approach. This approach entailed a four step process, described by the Full Court as follows:
·identification and valuation of the property of the parties;
·identification and evaluation of contributions to the property (including property no longer owned by the parties) – the contribution phase – section 90SM(4) (a) to (c) or section 79(4) (a) to (c);
·identification and assessment of the various matters in section 90SM(4) (d) to (g) or 79(4)(d) to (g) including to the extent they are relevant, the matters in either section 90SF(3) or 75(2), as applicable – the prospective needs phase; and
·considerations of justice and equity.[5]
[5] See Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39] and Bevan & Bevan [2013] FamCAFC 116 at [60].
Contributions arising pursuant to section 90SM(4)(a)(b) & (c) (the so-called second step) can be broadly categorised under two headings. The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the de facto relationship to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent.[6]
[6] See Family Law Act (Cth) s 90SM(4)(c).
Section 90SM(4)(e) mandates the court to have reference to the matters listed in section 90SF(3)(e) of the Family Law Act 1975. In the main the factors there listed deal with each of the parties’ prospective needs (the so-called third step).
Pursuant to section 90SF(3)(r), the court is entitled to take into account any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account. A number of Full Court authorities have utilised this provision to ensure that proper regard is had to a variety of considerations in order to ensure a just and equitable outcome in property proceedings.
The overriding requirement of section 90SM is that considerations of justice and equity should inform the process envisaged therein. The exercise I must undertake is not a process of social engineering[7] or of equalisation of assets or financial resources.
[7] See Waters & Jurek (1995) FLC 92-635.
Considerations of this type inform the so-called fourth step, as well as providing the determination as to how the court should approach issues such as notional property or property, as in this case, which has wasted by the actions of one party. The court must make the orders it considers just and equitable. In this context, I am aware of the principles outlined by the High Court in the case of Stanford in which the following was said:
The expression ‘just and equitable’ is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.[8]
[8] Stanford v Stanford (2012) 247 CLR 108, 120 [36] (French CJ, Hayne, Kiefel and Bell JJ).
Accordingly, considerations of what is just and equitable flavour all applications pertaining to property settlement. What is fair is impossible to define with certitude and must depend on the prevailing circumstances.
The court’s discretion is a wide one but must be exercised judicially. The task conferred is to weigh and assess contributions, which are necessarily disparate in nature. In summary, contributions, within the framework of a de facto relationship, which are different in quality and nature must be compared, in order to achieve a just and equitable division of property. It has been referred to as a holistic exercise.[9] Certainly, it is not to be approached as a simple accounting or arithmetical exercise.
[9] See Watson & Ling [2013] FamCA 57 at [13] (Murphy J).
In general terms, it is Mr Haimes’s position that, apart from the original significant financial contributions made by him, in the form of the proceeds of sale of the Suburb K property, the parties’ contributions, during the period in which their relationship was functioning efficiently, must be regarded as being essentially equal in nature.
In such cases as Pierce & Pierce,[10] it has been said that the task of the court in assessing the contribution represented by an early injection of capital into a relationship is to be performed within the matrix of a consideration of the other relevant contributions made by each partner to determine whether such initial contribution should be given some form of special recognition.
[10] See Pierce & Pierce (1999) FLC 92-844 at page 85,881 (Ellis, Baker & O’Ryan JJ).
In the context of this matter, it seems apparent to me that the $90,000.00 arising from the sale of the property must be regarded as highly significant. Without it, the parties would not have been able to acquire the farm, which remains to this day their major asset and the bedrock of their current level of modest wealth.
In addition, in the period post separation, Mr Haimes asserts that his contributions must be assessed as being significantly greater than those of Ms Maisel because she, in effect, dissipated assets and made their joint financial position worse. He contends that this is matter which can be taken into account, in his favour pursuant to the provisions of section 90SF(3)(r).
Clearly, the joint monies utilised by Ms Maisel, in the form of the parties’ joint savings and share portfolio, to fund her various addictions, no-longer exist and must be approached on a notional basis.
The Full Court of the Family Court has identified three areas where it is appropriate to notionally add back, into a pool of matrimonial/de facto property, assets which do not exist or cannot be proved to be still existing.[11] The circumstances are as follows:
·where assets have been used to pay the parties’ legal fees, thus diminishing the pool of assets available to be distributed between them and so creating a situation where the normal rule whereby each party should bear his or her own costs is defeated;[12]
·where there has been a premature distribution of assets;[13] or
·where one of the parties has embarked on a course of conduct, either recklessly or with the direct intent to reduce or minimise the effective value of some item of matrimonial/de facto property.[14]
[11] See In the Marriage of Omacini (2005) 33 Fam LR 134 at 144 (Holden, Warnick and Le Poer Trench JJ).
[12] See In the Marriage of DJM and JLM (1998) 23 Fam LR 396.
[13] See In the Marriage of Townsend (1994) 18 Fam LR 505.
[14] See In the Marriage of Kowaliw (1981) FLC 91-092 at 76,644 (Baker J).
In respect of the third of these categories, it has been pointed out by the Full Court that this principle represents a guideline for the court rather than a fixed code, bearing in mind the discretionary nature of the jurisdiction created by sections 90SM/79 of the Act.[15]
[15] See In the Marriage of Browne & Green (1999) 25 Fam LR 482.
It has also been pointed out, by Murphy J in Watson & Ling, that the court generally eschews the notion of negative contributions. As such, the direct dollar for dollar adjustment for alleged dissipation of funds, should be the exception rather than the rule.[16]
[16] See Watson & Ling [2013] FamCA 57 at [33]-[34] (Murphy J).
That is not to say that, in cases involving dissipation of funds, considerations relating to the assessed superior contributions of the non-dissipating party cannot be engaged at the second stage of the process or more generally as an applicable section 90SF(3)(r)/75(2)(o) factor.
In Watson & Ling, Murphy J said as follows:
Where the Court has determined that it is just and equitable to make an order pursuant to section 79(2) or section 90SM(3) and there is clear evidence that one party has engaged in conduct and, but for that conduct, the legal and equitable interests of a party or the parties (or the value of those interests) would have be significantly greater, justice and equity may require recognition of the unfairness inherent in those circumstances in the terms of the orders to be made.
How might that be recognised? First, consistent with existing authority, it can be recognised pursuant to section 75(2)(o) (cf section 90SF(3)(r)). Secondly, it might be contended that it might be recognised within the assessment of contributions. This Court has long eschewed the notion of “negative contributions”. Nevertheless, it might be argued that the “non-dissipating party” can be seen to have made a disproportionally greater indirect contribution to the existing legal and equitable interests (for example to their preservation) if it is established that, but for the other party’s unilateral dissipation, those existing legal and equitable interests would have been greater or had a greater value.
The assessment of the circumstance under discussion is, ultimately, a matter of discretion. Equally, however, authority dictates that it will be “the exception rather than the rule” that a direct dollar adjustment equivalent to the amount of the alleged dissipation of the pool is made to the otherwise entitlement of a party. It may be that aspects of the erstwhile treatment of legal fees pre-Stanford will require further consideration in an appropriate case.
Importantly, of course, as has been emphasised in many authorities including those cited above, not every dissipation by a party can be seen to involve an affront to justice and equity; again the circumstances of the individual relationship must be assessed. (citations removed)[17]
[17] See Watson & Ling [2013] FamCA 57 at [32]-[35].
I am satisfied that if leave is granted, it is open to the court to consider the assets lost through Ms Maisel’s conduct within the principles contained within section 90SF(3)(r), which is the approach advocated by Mr Williams, counsel for Mr Haimes.
It is also Mr Haimes’s case that although he enjoys a good and secure wage and axiomatically Ms Maisel does not and may, if she does rehabilitate herself, face problems in re-joining the workforce because of her criminal record, his responsibility to support Y, and to a less extent X, also calls for a greater weighting of property being made in his favour.
In these circumstances, Mr Haimes contends that the parties’ asset base should be divided to achieve an outcome that, in percentage terms, reflect a division of assets 70/30 in his favour, largely to reflect special recognition of his initial contributions and the waste which is solely attributable to Ms Maisel.
ISSUES RELATING TO TIME LIMITS
Prior to the court considering these matters definitively, it is necessary to determine whether it should give leave to Mr Haimes to proceed with his application, given the time limit provided by section 44(5), in the circumstances of the current matter, which has seen the parties living distinct lives since at least 2017.
If their relationship is taken to have ended on this date, it is clear that the standard application period of two years began to run from some inchoate date in 2017. In this context, I recognise clearly that both a marriage and a de facto relationship can continue to subsist although the parties to such relationships are not living together due to matters of personal choice or outside agency.
In the context of this matter, it seems to me to be likely that there was something of a grey zone, during which Mr Haimes was living in City N and Ms Maisel was living at the farm, and Mr Haimes was continuing to provide financial support in the hope Ms Maisel would get better.
In these circumstances, I can well understand why Mr Haimes was in no hurry to commence proceedings. Over time, he came to the conclusion that the relationship was beyond salvage. Necessarily, this must have taken him sometime. It must have been both a momentous and sad conclusion for him to reach and having reached it, he must have been in a quandary as to what he would do in response to it.
I accept his evidence that, for both the sake of Ms Maisel and the children concerned, he did not want to embark on a process that would have been potentially destructive for her. In addition, from his perspective, there was much for him to come to terms with emotionally. The effect of his evidence is that Mr Haimes had a great deal on his plate in this difficult period.
In practical terms, Ms Maisel was in a form of practical limbo, in which she was in no position to make any proper decisions about financial issues or more importantly act on such decisions in a constructive way. In these circumstances, I can well understand why the difficult issues arising from this case were deferred. At the end of the day, this deferral has caused no prejudice to Ms Maisel and indeed has most likely been protective of her interests in both the short and the longer term.
The authorities are clear that limitation periods, imposed by the legislature, are not empty shibboleths. Their rationale is that it is in the interests of society, as a whole, that litigation between individuals be commenced within fixed and well understood temporal parameters so that once those parameters have been reached, all concerned can carry on with their lives in the certitude that they will not be subject to litigation in respect of events which occurred in their past.
In Brisbane South Regional Health Authority v Taylor McHugh J (with whom Dawson J agreed) pointed out that:
The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years, the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that ‘[w]here there is delay the whole quality of justice deteriorates’. [18]
[18] Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551.
Later in the case, his Honour said as follows:
A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated. ... A limitation provision is the general rule; an extension provision is the exception to it. The extension provision is a legislative recognition that general conceptions of what justice requires in particular categories of cases may sometimes be overridden by the facts of an individual case.[19]
[19] Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 553.
In the same case, Toohey and Gummow JJ said as follows:
The discretion ... is to order an extension of the limitation period. It is a discretion to grant, not a discretion to refuse, and on well established principles an applicant must satisfy the court that grounds exist for exercising the discretion in his or her favour. There is an evidentiary onus on the prospective defendant to raise any consideration telling against the exercise of the discretion. But the ultimate onus of satisfying the court that time should be extended remains on the applicant.[20]
[20] Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 547.
The Family Court has enumerated the individual considerations which inform the discretion to ameliorate the limitation period, in appropriate circumstances, where the interests of justice require that it be extended. Essentially, it is a discretion to be exercised judicially by identifying matters relevant to the discretion, in the particular case and weighing those matters against one another.[21] The discretion is to be exercised primarily within considerations of the hardship which would be occasioned to the relevant applicant.
[21] See Milas v GM Holden Limited [2015] FCCA 1311 per Judge O’Sullivan.
In Whitford & Whitford (‘Whitford’) the Full Court of the Family Court, in a case concerned with the twelve month limitation period arising as a consequence of section 44(3) and the granting of a divorce order, stipulated that this power should be exercised liberally in order to avoid hardship, but nevertheless in a manner which would not render nugatory the requirement that proceedings should be instituted within a year from the decree nisi.[22]
[22] See Whitford & Whitford (1979) FLC 90-612 at 78,146.
Accordingly, this court is not in a position to overlook the legislature’s intention that, ordinarily, property proceedings arising in respect of a de facto relationship should be commenced within two years of the breakdown of the de facto relationship in question.
The chief rationale informing this intention being that former parties to a de facto relationship are entitled to a sense of finality in respect of issues arising from their previous relationships and that delay, of itself, has the potential to lead to injustice.
However, in order to temper any potential hardship, the legislature has also provided a discretion to the court to extend time. This discretion must be exercised judiciously and advisedly. In Whitford the Full Court determined that the manner in which this discretion is to be exercised must depend on the facts of the particular case. It is an idiosyncratic decision.
Relevant matters for consideration include the length of the delay; the reasons for the delay; any prejudice occasioned to the respondent by reason of the delay; the strengths, on the merits, of the applicant’s case; and the degree of the hardship, which would be suffered unless leave was granted. These are all matters relevant to the exercise of the discretion, but not necessarily the only ones.[23]
[23] Whitford & Whitford (1979) FLC 90-612 at 78,146.
In Jacenko & Jacenko (‘Jacenko’)[24] Nygh J referred to the relevant principles applicable to an application pursuant to section 44(3) [the equivalent of section 44(6) applicable to divorce orders] and said as follows:
The applicant must establish three principal matters: first, a reasonable prima facie case for relief, had she instituted proceedings in time; secondly, that denial of the wife’s claim would cause her hardship; and thirdly, an adequate explanation as to her delay.
…
If those three elements are satisfied, the Court should further, in determining whether to exercise its discretion to grant relief, consider the question of prejudice which the respondent would suffer by reason of the delay in bringing the application.
[24] See Jacenko & Jacenko (1986) FLC 91-776 at 75,644.
Justice Nygh also considered that relevant binding authority also provided that, in appropriate cases the degree of hardship to be suffered by the applicant may well outweigh an inadequate explanation of delay. Accordingly, it seems apparent that one of these factors is not to be regarded as preeminent over the other nor must all be satisfied. Rather it is a question of them each being weighed and considered so that the interests of justice are served in the individual case concerned.
In Jacenko the court considered the matters in determining whether an applicant for leave to proceed out of time had or had not established a prima facie case for relief in respect of matrimonial property settlement orders.
These considerations are relevant given the leave issue must most usually be determined as a preliminary matter, as in the current case, at an interlocutory stage, prior to a more detailed examination of all relevant evidence by the court. The court held as follows:
… the general principle is that on the issue of the establishment of a prima facie case the Court proceeds on the basis that the evidence of the applicant, unless it is inherently unbelievable or contradictory, should be accepted, and the Court should therefore decide whether or not on that basis a prima facie case has been made out. If leave is granted, then it is for the Court conducting the ultimate hearing to determine whether the prima facie case can be established.[25]
[25] Jacenko & Jacenko (1986) FLC 91-776 at 75,643.
In Hall and Hall[26] the Full Court of the Family Court reviewed a number of earlier cases which had addressed the issue of the required strength of the prima facie case in section 44(3) applications. The Full Court said:
These varying phrases may tend to suggest different shades of meaning whereas in reality they are directed to the same fundamental enquiry which basically is in the context whether on the applicant’s material he or she has a reasonable claim to be heard by the Court.
[26] See Hall, K A and Hall, J C (1979) FLC 90-679 at 78,627.
In Sharp & Sharp (‘Sharp’)[27] the Full Court considered that, in the context of section 44(4), hardship involved more than the loss of a right to commence proceedings. It was what followed from the loss of that right, which was central. This was the basis of the test that an applicant must have a prima facie claim worth pursuing or a real probability of success.
[27] See Sharp & Sharp [2011] FamCAFC 150.
In Sharp the Full Court summarised the relevant test in the following terms:
[T]he well-established test is that the applicant must have a prima facie claim worth pursuing or a ‘real’ probability of success. Further, leave will not be granted if to do so would not, in the substantive result, alleviate that hardship.[28]
[28] Sharp & Sharp [2011] FamCAFC 150 at [18].
In Edmunds & Edmunds[29] the Full Court indicated that the assessment of such a prima facie case involved:
… a consideration, but not a final determination, of the nature of the applicant’s claim. In doing so, the Court must weigh the applicant’s case against that of the respondent’s and form a view as to whether there is in fact a prima facie case, or a real probability of success, that would, if leave were granted, alleviate hardship.
[29] Edmunds & Edmunds [2018] FamCAFC 121 at [48].
A further gloss was placed on this statement of principle, by the Full Court in Gadzen & Simkin[30] which indicated that the assessment of prospective costs was a part of the exercise of assessing a prima facie case. The Full Court said as follows:
…the starting point in determining an application for leave is to consider the question of hardship which requires for its existence a conclusion that an applicant has a prima facie or arguable case of substance having regard to all of the circumstances of the case. That must take into account the costs or likely costs to be incurred in pursuing the claim.
…
An analysis of the potential claim of the de facto wife was necessary to determine whether or not hardship would be occasioned to the de facto wife if she were not granted leave to pursue that claim. Further, as the authorities to which reference has been made demonstrate, an essential element is to consider the prospective legal costs of pursuing the identified or identifiable claim. Obviously, the prospective costs may render the conclusion that no hardship would be occasioned to an applicant to pursue an uncommercial claim.
[30] Gadzen & Simkin [2018] FamCAFC 218 at [37] – [42].
For obvious reasons, the conduct of the parties in a section 44(6) application is relevant to the exercise of the discretion to extend time. The normal rule is that de facto property proceedings be brought within two years. An extension of time is exceptional. It is essentially an equitable decision.
Also highly relevant is any prejudice, which may be caused to the respondent to such an application, if leave is granted. This in turn is very often related to the length of the delay in question. All these various factors must be balanced against one another to achieve a proper outcome.
In this context, consideration must be given as to the reasons why there has been a delay in the institution of proceedings. In Slocomb & Hedgewood (‘Slocomb’)[31] the Full Court was dealing with an application for leave to proceed which was eighteen years out of time.
[31] Slocomb & Hedgewood (2015) FLC 93-678.
Slocomb involved a married couple, who had been divorced in 1995. At first instance, the trial judge refused leave to proceed and noted that attention was drawn to the applicable time limits in the Decree Nisi document which was forwarded to each party following divorce.
In the current case, as noted above, in my view, it should be noted that in distinction to the parties to a marriage, the parties in a de facto relationship are not always provided with clear points of demarcation as to when their relationship begins and ends as a matter of legal technicality.
In the case, the Full Court approved the passage of Nygh J from Jacenko to which I have already referred above and said as follows:
In appropriate cases the interests of justice might overcome long delay and on occasions an inadequate explanation for the delay, which is only one factor to be considered in determining an application for leave pursuant to s 44(3) of the Act.[32]
[32] Slocomb & Hedgewood (2015) FLC 93-678 at 80,548 [42].
From these various authorities, in my view, the following principles may be distilled in respect of the exercise of the discretion to extend time:
·limitation periods are significant as they are created by the legislature to safeguard legitimate public interests. As such, they should not be arbitrarily over-ruled;
·however, the discretion to extend time is to be liberally exercised in order to avoid hardship;
·hardship is more than the loss of an entitlement to bring proceedings. Rather the court must look at what are the consequences, for the applicant concerned, of not being able to institute proceedings;
·the applicant must establish a reasonable prima facie case for the relief sought, if the proceedings had been brought in time. What this means is whether, on the material available, the applicant has a reasonable claim;
·this process of assessment must involve the likely strengths and merits of the claim sought to be advanced, including prospective costs;
·there must be a real possibility of success. Hardship will not arise if leave is not granted to pursue a claim which is assessed as being uncommercial;
·in assessing what is a reasonable prima facie case, the court should accept the evidence of the applicant concerned, at its highest, unless it is patently absurd or contradictory;
·the applicant must establish that he or she would suffer hardship if an extension is not granted;
·the discretion to extend time must be exercised judicially;
·as such, a reasonable explanation for the delay must be provided;
·also relevant, in this context, are the following:
·the length of the delay;
·the prejudice to the respondent if leave is granted;
·any other relevant consideration;
·However, an explanation for delay is but one factor amongst several and the overall interests of justice may overcome what is to be regarded as an inadequate explanation.
DISCUSSION
In the current matter, in my view, the circumstances pertaining obviously justify a liberal exercise of the court’s discretion in Mr Haimes’s favour, given he has provided what I regard as a reasonable explanation for the delay in proceedings. More significantly, if the time limit is not extended Mr Haimes will suffer great hardship. It is clear that he has a reasonable claim for a settlement of de facto property on any view.
In addition, in my assessment, it is in the interest of both parties that the financial relationship between them be brought to an end in order to allow Mr Haimes to get on with making good of the Town C farm, without fear of any involvement from Ms Maisel. As indicated above, there can be no prejudice to her in this application.
In these circumstances I will grant Mr Haimes leave to proceed with his application pursuant to the provision of section 44(6) of the Act.
ORDERS SOUGHT BY MR HAIMES
Mr Haimes’s application has been assiduously prepared by his solicitor, Ms Robert and he has been represented by skilled counsel, in the form of Mr Williams. In this context, a comprehensive minute of the orders sought by Mr Haimes has been submitted to the court.
In general terms, what is proposed is that Ms Maisel will retain the smaller portion of the Town C farm in the form of Lot 1. In theoretical terms, she would be able to construct a dwelling on it or more realistically sell it to achieve a reasonable sum of money. Mr Haimes is not in a position to direct her what to do with the land but submits that this is the safest way in which she should receive her just entitlements.
Necessarily, it would take some time for her to liquidate her entitlement and this is in itself a prophylactic consideration, particularly while the Public Trustee is involved in her financial affairs. However, he has no standing to protect her, potentially from herself, for an indefinite period of time, given the obvious imperative to end the parties’ financial involvement with one another.
In tandem with the transfer of Lot 1, Mr Haimes seeks that the parties do everything necessary to transfer the financial resource from Lot 1 to Lot 2. This allocation has been valued at the significant sum of $200,000.00 and thus diminish the theoretical value of Lot 1 but still allow it to have a significant re-sale value for Ms Maisel.
Given the value of Lot 1, this would amount to around 30% of the asset pool as he has calculated it, less the financial resource. As the financial resource issue directly effects the agricultural viability of Lot 2, Mr Haimes seeks a period of 150 days in which to approach the relevant authorities (the Shire of Town C and possibly the Registrar of Titles) to grant an easement, at his expense, to enable him to access water for Lot 2, which he will retain.
Otherwise, he proposes that he re-finance and discharge the relevant mortgage and each party keep the items of property and any superannuation currently in their possession or standing in their respective names.
PROCEDURAL HISTORY
As noted above, the proceedings were commenced on 5 October 2023. Ms Robert has deposed that she mailed the relevant documents to the General Manager of the City F Correctional Centre the following day. At the same time, she provided them to the Public Trustee of Queensland.
A signed acknowledgment of service dated 10 October 2023 was received by Ms Robert’s office a few days later. Subsequent inquiries made by Ms Robert indicate that the signature in question was that of Ms Maisel. Accordingly, I am satisfied that the respondent has been personally served with the relevant application.
It is apparent that Ms Maisel was released from prison prior to the first mention of the matter, which was on 27 November 2023. On this day she attended court but after the matter had been dealt with. On the next day, Ms Robert and she had a telephone conversation, in which Ms Maisel indicated that she would be seeking legal advice.
In the early period of 2024, it became apparent that Ms Maisel had been re-incarcerated. Further documents relevant to these proceedings have been mailed to the correctional centre. The Public Trustee has indicated that it will not involve itself in the proceedings but is aware of them. A copy of the current orders sought by Mr Haimes has also been forwarded to Ms Maisel.
THE NATURE OF AN UNDEFENDED HEARING
It is a significant thing for proceedings to be determined in the absence of evidence from one of the parties concerned. The court has an obligation to ensure that the parties to proceedings before it have an opportunity to participate in those proceedings. However, there must be limits on such an obligation, which cannot be indefinitely prolonged.
Before a person can be adversely affected by a judicial order, they must be afforded an adequate opportunity to be heard.[33] I am satisfied that Ms Maisel has been given an adequate opportunity to appear in these proceedings and put her position before the court.
[33] See Taylor v Taylor (1979) 143 CLR 1, 20 (Murphy J).
In addition, and of significant weight in the current matter, Mr Haimes is entitled to have his application, for settlement of property matters, determined within a reasonable period of time, pursuant to the applicable principles of law.
As such, he needs neither Ms Maisel’s formal imprimatur nor her cooperation to have his application determined. Rather, there is an obligation, on Ms Maisel’s part, if she wishes to be involved in the proceedings, for her to attend to pursue any application put by her or on her behalf with due diligence.
The Federal Circuit Court and Family Court is a court of private law. It determines disputes, between parties, according to law. In this case, according to the provisions of Part VIIIAB of the Family Law Act 1975 (Cth), which relate to the division of property following the breakdown of a de facto relationship.
The court cannot compel a party to engage with litigation. It is however obliged to give each party the opportunity to put evidence before the court and, if he or she wishes to do so, contest any evidence relied upon by the opposing party.
However, a party, whether by intransigence, disinterest or manipulation cannot succeed in denying an applicant a just resolution, according to law, to his or her application, by choosing not to take part in proceedings because they do not proceed in the manner of his or her preference. That would be fundamentally unfair to the opposing party and an affront to the proper administration of justice, which requires that a properly instituted application be finalised within a reasonable period of time relative to the complexity and issues raised in such an application.
I appreciate that Ms Maisel is currently subject to a significant level of physical limitation. She is incarcerated. However, that does not prevent her compiling documents, corresponding with Mr Haimes’s lawyers, or ultimately applying to the court to appear before it by electronic means. The reality is that many individual litigants take part in equally complex litigation to this view either by video link or by telephone. Indeed the sentencing remarks supplied in respect of Ms Maisel herself indicate that she was sentenced via a video link.
Part 10.6 of the Federal Circuit and Family Court of Australia (Family Law) Rules2021 (Cth) deals with the court’s authority to enter judgment against a respondent if that respondent defaults in complying with a court order, or fails to prosecute any proceedings with due diligence.
Pursuant to rule 10.26 a party is in default if, among other things, he or she has failed to:
·Comply with an order of the court in the proceedings; or
·Produce a document as required; or
·Do any act required to be done by these Rules; or
·Prosecute the proceedings with due diligence.
I am satisfied that Ms Maisel has not prosecuted the proceedings with due diligence. In these circumstances, pursuant to the provisions of rule 10.27(2), the court may, if it considers it just, enter judgment and make orders in favour of Mr Haimes against Ms Maisel on an undefended basis.
In my assessment, Ms Maisel has been given adequate notice of these proceedings; has failed to prosecute any application diligently and given the idiosyncratic circumstances of the case, it is just that the case be finalised at this juncture.
However, Mr Haimes is not entitled, as of right, to the orders which he seeks only on account of the omissions in the prosecution of any case by Ms Maisel. Rather, the onus remains on him to establish to the court that the orders which he seeks, are just and equitable, according to law.
Essentially, Mr Haimes must lead sufficient evidence to establish his case to the court and persuade it that the result he proposes is a just and equitable one. Otherwise, the court should impose the result, in the case, it considers fair according to the law and the evidence available to it.
The court’s pre-eminent responsibility is to ensure a just result between the parties, notwithstanding the failure of Ms Maisel to participate properly in the proceedings. However, in the absence of satisfactory rebutting evidence, Mr Haimes’s affidavit material is to be accepted by the court, unless it appears inherently unreliable or otherwise unsatisfactory.
DISCUSSION
Step One – The pool of property
I accept the pool of property as identified by Mr Haimes, which is as follows:
Asset $ B Street, Town C – Lot 2 (with house) 520,000.00 B Street, Town C – Lot 1 (vacant land) 380,000.00 Motor Vehicle 1 15,000.00 Savings 20,000.00 Machinery 30,000.00 CBA Smart Access (**…63) 472.00 CBA Net Saver (**…06) 41,246.00 CBA Smart Access (**…74) 9,616.00 Financial resource 200,000.00 R Company Shares 7,000.00 Motor Vehicle 2 2,000.00 Total assets: 1,225,334.00 Liabilities D Company Home loan (**…17) (130,913.00) D Company Asset line (**…90) (69,952.00) Total liabilities (200,865.00) Total net assets (assets – liabilities) 1,024,469.00 Superannuation Mr Haimes’ Super Fund 1 286,984.00 Total superannuation: 286,984.00 Step Two – Assessment of contributions
The period, during which the parties’ relationship was functional, is a lengthy one of approximately 12 to 13 years. During this time, the parties raised a family and each made many and varied contributions towards their family’s welfare both as parents and income earners. Clearly, they were a team who worked together.
In addition, it was in this period that their most significant asset, in both financial and emotional terms, was acquired, in the form of the Town C farm. This was operated as a joint enterprise and produced income, which also went to family purposes.
Were it not for the fact that Mr Haimes brought into the relationship a significant initial contribution, in the form of the proceeds of the Suburb K property, the only fair assessment of the parties’ various contributions, in this period, would be that they must be assessed as essentially equal. However, as noted above, Mr Haimes’s initial contribution of a significant sum of capital is one which does warrant some form of special recognition in the court’s deliberations.
One of the significant features of this case is that it is now around 7 or 8 years since the parties’ relationship fell into catastrophic dysfunction due to Ms Maisel’s substance abuse. In this period, all of the contributions required to maintain the family’s financial security and parenting/homemaking equilibrium have come from Mr Haimes.
Whilst on the other hand, Ms Maisel’s actions have led to the destabilisation of the family and the erosion of its financial base. In my view, these post separation contributions must also be a significant amount of weight.
Step Three – The prospective needs of the parties (Section 90SF(3))
The evidence indicates that Mr Haimes, by dint of his secure and well-paid employment with R Company, currently enjoys a level of financial security, which Ms Maisel is unlikely to share, upon her release from prison in 2025. It has been said that the most valuable asset a party can take out of a failed relationship is a reliable income earning capacity.[34] Mr Haimes has such an asset; Ms Maisel does not.
[34] See Clauson v Clauson (1995) FLC 92-595.
However, at the same time, Mr Haimes is financially responsible for the parties’ child Y, who is still at school and has educational needs, which need to be paid for. Ms Maisel is not in a position to provide child support for her. Mr Haimes is also providing some financial support for X, notwithstanding he is now over eighteen years of age.
However, the major factor arising at this point of the court’s deliberations turn on what should be the consequences of Ms Maisel’s obvious waste of joint relationship assets in the period following separation. In my view, it is not an understatement to say that, in the context of the parties’ economic situation, this waste has been catastrophic.
Section 90SF(3)(r) authorises the court to consider any other fact or circumstances which in its opinion the justice of the case requires to be taken into account. The Full Court whilst considered the equivalent to the section in the context of matrimonial property proceedings said it was to be read ejusdem generis with the other matters listed in the section in order to enable the court to bring into account conduct which has an economic significance in the parties’ dealing with each other or the property in dispute.[35]
[35] Ferguson & Ferguson (1978) FLC 90-500 at 77,607.
As outlined above, it is axiomatic that Ms Maisel’s conduct has had economic significance for Mr Haimes and so must be taken into account in these proceedings. In my view, it is not appropriate for the court to attempt some calculation of what is the extent of the wastage in dollar terms. Rather it must be approached in a more generic or holistic manner by allowing Mr Haimes a greater overall percent of the parties’ assets.
In these circumstances, I have come to the conclusion that the overall position, as advocated by Mr Haimes, namely that a 70/30% division of the parties’ property, in his favour, is a proper one. In my view, this is a just and equitable outcome.
CONCLUSIONS – JUSTICE AND EQUITY
I have reached the point of the judgment in which I must make the metaphorical leap from words to figures or from abstractions to what is concrete. After all, it is all well and good talking percentages, so far as orders and outcomes are concerned, but what matters to the parties is what the orders mean to them in dollars and cents and what effect they have on their long-term plans and aspirations.[36]
[36] See Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234] (Coleman J).
This leap from abstraction to the concrete must be undertaken in terms of what is just and equitable to each of the parties concerned. This in turn must be influenced by the idiosyncratic circumstances of the parties, including the nature and form of their property interests.
It is fair the Mr Haimes retain the former family home, which he needs to accommodate not only himself but also Y. In my view, in the circumstances of this case, it would be unfair to deprive him of the farm, given the efforts he has gone to preserve it and his aspirations to turn it around.
However, notwithstanding the criticisms that must be levelled at Ms Maisel, it cannot be considered fair that her prior contributions to the relationship should be entirely negated. She is entitled to some form of recognition of the value of the myriad contributions made by her during the lengthy period of time during which the relationship between the parties remained viable.
A fair balance must be struck. Given Mr Haimes’s age, I have concerns at the implications of requiring him to go into further debt to ensure that Ms Maisel receives her just entitlements. I also have concerns at the implications of Ms Maisel receiving a significant sum of money at this stage of what I hope will be her path to recovery. As a consequence of happenstance, the configuration of the farm, on its two lots, enables an outcome which will mollify both such concerns.
If Ms Maisel retains Lot 1 and the financial resource is transferred, she will have an asset worth a significant amount of money, which she can convert at some appropriate time to provide her with either the deposit for some form of accommodation for herself or a sizeable nest egg to protect her from any unseen exigencies of life.
The fact that this disposition takes the form of a piece of real property adds a level of protection against any imprudent or unduly expeditious use of the property. In practical terms, in order to allow Mr Haimes to utilise the financial resource, it will be necessary for the parties to create an easement on Lot 1 in favour of Lot 2. Mr Haimes calculates it will take him around 150 days to obtain the necessary approvals and he will bear the expense arising.
It is not my role to be protective or paternalistic so far as Ms Maisel is concerned. In addition. it is important that the financial relationship between the parties be brought to an end, although to a certain extent they will be neighbours, at least for some time.
However, upon her release, I would hope that Ms Maisel’s focus will be on her rehabilitation and recovery, during which time Lot 1 can remain safe and she can consider what she will do with it. I will direct that a copy of these reasons for judgment be provided to both Ms Maisel and the Public Trustee.
If the asset pool is approached on the basis of including both net assets and Mr Haimes’s superannuation, if Ms Maisel retains Lot 1 on my calculations this is fairly close to 30% of such an asset pool. True it is that such an outcome leaves Ms Maisel very unprepared for retirement, as no superannuation for her is identified. However, in my view, that negative feature of the matter is a reflection of the highly unusual and challenging circumstances of this case.
In conclusion, I am satisfied that the orders proposed represent a just and equitable outcome in the sad circumstances of this case. For all these reasons the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and sixty-two (162) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Brown. Associate:
Dated: 24 May 2024
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