HARDING & NORTH

[2016] FCCA 1673

FEDERAL CIRCUIT COURT OF AUSTRALIA

HARDING & NORTH [2016] FCCA 1673

Catchwords:
FAMILY LAW – Property – Application for property settlement – just and equitable – contributions of the parties – whether adjustment should be made under Family Law Act 1975 (Cth), s.90SF(3) – de facto relationship – 12 year relationship – Respondent diagnosed with post-traumatic stress disorder and major depressive disorder – Respondent diagnosed as being unable to work again – Respondent aged 46 years – significant adjustment under s.90SF(3).

FAMILY LAW – Property – just and equitable – where final orders varied to avoid an unjust and inequitable outcome for the Applicant.

PRACTICE AND PROCEDURE – Application – Application defective – Application must precisely and briefly state the Orders sought – where Application did not comply with Rule 4.02.

PRACTICE AND PROCEDURE – Discovery – application for discovery – discovery not allowed unless the Court declares it appropriate to allow discovery in the interests of the administration of justice.

COSTS – Application for costs – parties to pay their own costs.

Legislation:

Family Law Act 1975 (Cth), ss.75, 79, 90SF, 90SM, 117

Federal Circuit Court of Australia Act (1999) (Cth) s. 45
Federal Circuit Court Rules 2001 r. 4.02

Cases cited:

Hickey & Hickey (2003) 30 Fam LR 35; FLC 93-143; [2003] FamCA 395

Levavasseur & Tait [2012] FMCAfam 614

Stanford v Stanford (2012) 47 Fam LR 481; FLC 93-518; [2012] HCA 52

Applicant: MR HARDING

Respondent: MR NORTH

File Number: SYC 1651 of 2014

Judgment of: Judge Scarlett

Hearing date: 12-13 November 2014

Date of Last Submission: 13 November 2014

Delivered at: Sydney

Delivered on: 6 July 2016

REPRESENTATION

Applicant: In person

Respondent: In person

ORDERS

1. The Applicant is to retain and stand entitled to the exclusion of any other person the following items of personal property standing in his own name or in his possession:

   (a)His Holden (omitted) motor car;

   (b)His household items in his possession; and

   (c)All cash in his bank account at the (omitted) Bank or any other bank.

2. The Applicant is to retain and stand entitled to the exclusion of any other person all his entitlement to superannuation with (omitted) superannuation.

3. The Applicant is to be solely responsible for and indemnify the Respondent and keep him indemnified against the following debts and liabilities in his name:

   (a)All amounts owing to (omitted) MasterCard;

   (b)All amounts owing by way of loan or other liability to the (omitted) Bank;

   (c)All amounts owing to (omitted) Visa;

   (d)All amounts owing to (omitted) Card;

   (e)All amounts owing by way of loan or other liability to the (omitted) Bank also known as the (omitted) Bank:

   (f)All amounts owing to the New South Wales State Debt Recovery Office; 

   (g)All amounts owing to the Australian Taxation Office;

   (h)All amounts owing to Michael Wayne Tiyce trading as Tiyce & Lawyers in respect of legal costs and fees and interest thereon.

4. The Respondent is to retain and stand entitled to the exclusion of any other person the following items of personal property standing in his own name or in his possession:

   (a)His Mercedes Benz motor car; 

   (b)His household items in his possession; and

   (c)All cash in his accounts at the (omitted) Bank and the (omitted) Bank or any other bank.

5. The Respondent is to retain and stand entitled to the exclusion of any other person all his entitlement to superannuation with (omitted) Super.

6. The Respondent is to be solely responsible for and indemnify the Applicant and keep him indemnified against the following debts and liabilities in his name:

   (a)All amounts owing to (omitted) MasterCard;

   (b)All amounts owing to (omitted) Visa Card;

   (c)All amounts owing to (omitted);

   (d)All amounts owing to Meyer Partners Family Lawyers in respect of legal costs and fees and interest thereon;

   (e)All amounts owing for arrears of rent, utility bills, mobile telephone bills and any other debts standing in the name of the Respondent.

7. The parties are to pay their own costs.

8. All other Applications are dismissed.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 1651 of 2014

MR HARDING

Applicant

And

MR NORTH

Respondent

REASONS FOR JUDGMENT

Application

1. This is an Application for settlement of the parties’ property arising out of their former de facto relationship.

Orders Sought

1. The Applicant, in his Initiating Application filed on 20^th March 2014, sought:

   1. That there be such payment to the Applicant from the Respondent by way of a property settlement pursuant to section 90SM of the Family Law Act 1975 as is considered just and equitable, and the Applicant be excused from stating with precision the amount of the payment that he seeks until the Respondent has filed and served his responding material, there has been discovery and the assets and liabilities of the relationship have been quantified.

2. It is clear that the proposed order is defective, as it does not comply with Rule 4.02, which says that an application “must precisely and briefly state the orders sought”. This is not the case here. The Application seeks to avoid complying with the Rule. It is not a final order at all (see Levavasseur & Tait[1].

   [1] [2012] FMCAfam  614

3. The proposed order also refers to discovery taking place before the Applicant will state with precision the payment that he seeks. This seems to ignore the fact that discovery is not allowed unless the Court specifically allows it. Section 45 of the Federal Circuit Court of Australia Act 1999 (Cth) provides at subsection (1):

   (1)Interrogatories and discovery are not allowed in relation to proceedings in the Federal Circuit Court of Australia unless the Federal Circuit of Australia or a Judge declares that it is appropriate, in the interests of the administration of justice, to allow the interrogatories or discovery.

4. The Application is clearly defective. However, it does not appear that anyone took that point at the time.

5. The Application was supported by an affidavit sworn on 20^th March 2014 and a Financial Statement.

6. The Application was returnable on 16^th June 2014.

7. The Applicant filed an Application in a Case on 7^th May 2014, seeking urgent orders restraining the Respondent from disposing of various assets and seeking a payment of $3,000.00 within 14 days, being his share of bond money in respect of a property at (omitted).

8. The Application in a Case was supported by an affidavit of the Applicant affirmed that same day.

9. The Application in a Case was returnable before Judge Kemp on 9^th May 2014. On that date, his Honour made the following Orders:

   1.Pending further order and by consent, orders be made in accordance with the document signed by the parties and initialled by me and placed on the papers.

   2.I DIRECT that the solicitor for the applicant file a clean certified typescript of the said document placed on the court file within 2 days.

   3.       The applicant’s costs of today’s application be reserved.

   4.The applicant be granted leave to join the respondent’s brother, Mr K[2], and sister in law, Ms J, by filing and serving an amended Initiating Application within 14 days of today’s date.

   5.Pending further order, the respondent is to forthwith notify the purchaser of the Mercedes Benz (omitted) that the proceeds of the sale are to be paid to his solicitors, Meyer Partners, and the respondent is restrained from revoking that direction. Upon receipt of the said proceeds of sale, those proceeds are to be retained in the respondent’s solicitor’s trust account with the respondent to notify the applicant in writing of any urgent expenses to be sought to be paid out of those monies and if the applicant consents, such payments can be made. If the applicant does not consent the respondent has leave to relist on 24 hours’ notice regarding the release of any such monies.

   6.By consent, order 1 be made in terms of Exhibit “A” to the following effect:

   a.  That any funds that were transferred out of respondent’s solicitor’s trust account in the last 30 days remaining in the possession, custody or control of the respondent be returned forthwith to the trust account and, thereafter, such funds be retained in trust, pending further order.

   7.Pending further order, all additional funds transferred henceforth to the respondent’s solicitors by or on behalf of the respondent, whether in payment of costs or otherwise, be retained in trust.

   8.Leave to the respondent to relist the matter on 24 hours’ notice.

   9.The respondent has leave to seek to vary, suspend or discharge these orders upon making the appropriate application, supported by an affidavit.

   10.The matter, otherwise, remains listed on 16 June 2014 at 10:00 am.

   [2] sic

   THE COURT NOTES THAT:

   11.The above injunctive orders were made upon the applicant’s usual undertaking as to damages being given to the Court.

10. The Consent Orders made on 9^th May 2014, in summary:

    a)restrained the Respondent from transferring or disposing of funds including his superannuation benefits;

    b)restrained the Respondent from leaving Australia and required him to surrender his passport to the Court Registry;

    c)required the Respondent to file an affidavit about his expenditure, his property and in particular, his expenditure of a sum of $100,000.00 held by his sister in law, Ms J;

    d)restrained the Respondent from disposing of any bond monies returned to him; and

    e)required him to make full and frank disclosure of three separate bank accounts from 1^st February 2012 onwards.

11. On 16^th May 2014 the Respondent filed a Response to the substantive Application, supported by an affidavit of that same date and a Financial Statement.

12. In his Response, which was returnable on 16^th June, the Respondent sought orders:

    a)dismissing the substantive Application;

    b)discharging the Orders made on 9^th May, a week earlier; and

    c)costs.

13. On 28^th May 2014 the Applicant filed another Application in a Case. Accompanied by an Affidavit. In this Application which was returnable the next day, the Applicant sought the following Orders:

14. In this Application, he sought orders requiring the Respondent to:

    a)transfer to the Applicant’s possession the Mercedes Benz motor car referred to in the Orders of 9^th May;

    b)appointing the Applicant as trustee for sale of the vehicle;

    c)setting a reserve price of $35,000.00 on the vehicle;

    d)requiring the proceeds of sale to be deposited into the trust account of the Respondent’s solicitors;

    e)requiring the Respondent to disclose the residential addresses of Mr K and Ms J; and

    f)costs.

15. On 29^th May 2014 Judge Kemp made Orders:

    a)requiring the Respondent to provide the addresses of Ms J and Mr K within 48 hours of becoming aware of those addresses;

    b)making orders by consent in accordance with a Minute of Consent Orders tendered that day; and

    c)adjourning the Application to 16^th June 2014 at 10:00 am.

16. The Consent Orders of 29^th May 2014 provided that:

    1.The Respondent shall deliver to the Applicant’s solicitor’s office the NSW roads and marine[3] vehicle registration papers for the Mercedes Benz motor vehicle (omitted)[4] with registration number (omitted) (“the vehicle”) by no later than 1 June 2014, such papers not to be released until further Order of the court or written agreement of the parties.

    2.The Applicant’s solicitors shall not disclose the address of the Respondent as recorded in the registration papers of the vehicle.

    3.The Respondent shall ensure that at all times comprehensive insurance is maintained in respect to the vehicle whilst the vehicle is in use, and provided that if the vehicle is no longer insured, the vehicle shall be kept in a secured, under-cover location, and the Respondent shall forthwith advise the Applicant if the vehicle is no longer insured.

    4.That on a without admissions basis, the Respondent be restrained from driving the vehicle whilst under the influence of illicit drugs or alcohol, or within 24 hours of consuming illicit drugs or alcohol.

    5.The Respondent is not to take any steps to sell, encumber or otherwise dispose of the vehicle pending further of this Court or as agreed between the parties in writing.

    [3] sic

    [4] sic

17. On 16^th June 2014, when the Application came back before the Court, the parties were directed to attend a Conciliation Conference before a Registrar of the Court on 20^th August 2014.

18. That same day, 16^th June, the Respondent filed an Application in a Case, accompanied by an affidavit affirmed that same day. In that Application, the Respondent sought Orders that:

    a)“That paragraph 7 of the Orders made by His Honour Judge Kemp on 9 May 2014 be discharged”; and

    b)Costs.

19. The Application was returnable on 14^th July 2014. By that stage, the Applicant’s solicitors had filed a Notice of Intention to Withdraw as Lawyer on 1^st July 2014. They took no further part in the proceedings after that date and the Applicant appeared unrepresented on 14^th July 2014 and subsequently.

20. On 14^th July 2014 I made the following Order:

    Order 7 made on 9 May 2014 is varied so as to read as follows:

    Pending further order, all additional funds transferred henceforth to the respondent’s solicitors on behalf of the respondent, whether in payment of costs or otherwise be retained in trust PROVIDED THAT the respondent is permitted to pay to his solicitors an amount of up to but not exceeding $150.00 per week to be applied towards a reduction of his outstanding legal costs, the first payment to be made within seven (7) days and weekly thereafter.

21. I then adjourned the matter to 26^th August 2014, a date previously listed to await the outcome of the Conciliation Conference on 20^th August.

22. On 30^th July 2014 the Respondent’s solicitors filed a Notice of Withdrawal as Lawyer. The Respondent appeared without legal representation from then on.

23. The matter did not settle at the Conciliation Conference. On 26^th August 2014 I listed the Application for final hearing on 12^th and 13^th November 2014.

24. The Respondent filed an Application in a Case on 26^th September 2014, supported by an affidavit of that same date. In that Application, he sought a variation of Order 1.b made by consent on 9^th May 2014.

25. Order 1.b provided that:

    1.  The Respondent be restrained by injunction from:

    b.  disposing of, transferring or making subject to a splittable payment all superannuation benefits held on his behalf; 

26. The Application came before the Court on 10^th October 2014. There was no appearance by the Respondent to the Application in a Case, the Applicant in the substantive proceedings, nor was any Response to an Application in a Case filed. I granted leave to proceed ex parte and ordered that:

    Order 1 b) made by consent on 9 May 2014 is varied so as to provide that the following words be added “save and except for the sum of $10,000.00 which may be released to the Mr North forthwith. 

27. The parties attended Court on 12^th and 13^th November. The Applicant gave oral evidence and was cross-examined by the Respondent. The Respondent, in turn, was cross-examined by the Applicant. They each made oral submissions.              

The Proper Approach to Determination of a Property Application

1. The proper approach to determination of a property application under, in this case, section 90SM of the Family Law Act 1975 (Cth), is, first of all, to follow the principles set out by the High Court of Australia in Stanford v Stanford.[5]

   [5] (2012) 47 Fam LR 481; FLC 93-518; [2012] HCA 52

2. First, the Court must consider the requirements in subsection 90SM(3) of the Act which are in similar terms to those in subsection 79(2), which apply in respect of people who are married. Subsection 90SM(3) provides that:

   The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

3. The High Court held in Stanford that the Court must first identify:

   …the existing legal and equitable interests of the parties in the property.

4. Second, their Honours held (at [38])that although section 79, which is the equivalent to s.90SM:

   …confers a broad power on a court to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion.

5. The third principle, and perhaps the most important, is:

   Whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial contributions) set out in subsection 79(4).[6][7]

   [6] In this case, subsection 90SM(4)

6. Thus, the decision in Stanford means that the Court must consider the requirements of subsection 79(2) or 90SM(3), as the case may be, before embarking on the four step process set out by the Full Court of the Family Court in Hickey & Hickey.[8] In Hickey, the Full Court set out a process of four interrelated steps that must be taken by a court when determining a property application:

   Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of subsection 79(4)(a), (b) and (c)[9] and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in subsection 79(4)(d),(e), (f) and (g),[10](“the other factors”) including the matters referred to in subsection 75(2)[11] so far as they are relevant. Fourthly, the Court should resolve what order is just and equitable in all the circumstances of the case.[12]

   [8] (2003) 30 Fam LR 35; FLC 93-143; [2003] FamCA 395

   [9] Subsection 90SM(4)(a),(b) and (c)

   [10] Subsection 90SM(4)(d), (e),(f) and (g)

   [11] In this case, the matters referred to in subsection 90SF(3)

   [12] [2003] FamCA 395 at [39] per Nicholson CJ, Ellis & O’Ryan JJ

7. It is neither contradictory nor redundant to consider again whether a proposed order is just and equitable under subsection 90SM(3) because the Court is considering the matter after having undertaken the three previous steps referred to in the Hickey decision.

Just and equitable

1. It appears to be just and equitable to make property settlement orders to resolve the issues between the parties. There is no issue between them that they were in a de facto relationship[13] and that the relationship lasted for approximately 12 years.[14] It would be just and equitable to finalise matters so that the parties may move on with their lives.

   [13] Affidavit of Mr North 30.10.2014 at paragraph [2]

   [14] Affidavit of Mr Harding 3.11.2014 at paragraph  [1]

The Parties’ Assets and Liabilities

1. The Applicant relied on his affidavit of 3^rd November 2014 and his Financial Statement filed on 20^th March 2014. He had also filed earlier affidavits as follows:

   a)20^th March 2014;

   b)7^th May 2014 (in support of an Application in a Case); and

   c)27^th May 2014 (in support of his second Application in a Case).

2. The Applicant’s affidavit of 3^rd November 2014 appears to be his trial affidavit prepared for the final hearing on 12^th and 13^th November.

1. At paragraph [17] of his affidavit the Applicant set out that the parties had acquired personal property during their relationship, being:

   a)A BMW motor vehicle which he valued at $17,000.00; and

   b)Household furniture, to which he ascribed a total value of $32,456.00;

2. The Applicant also set out that he had purchased clothes to a total value of $5,000.00. From the Applicant’s affidavit, the Respondent appears to have retained the Applicant’s clothes and later given them to the Salvation Army.

3. The Applicant annexed to his affidavit a copy of a Statement of Claim brought against him in the Local Court at Sydney by his former solicitor, Michael Tiyce. The Statement of Claim seeks the amount of $25,449.40 for solicitor’s costs and interest.

4. The Applicant also annexed to his affidavit:

   a)A copy of a letter of demand dated 21^st October 2014 seeking payment of a sum of $3,120.90 owing to (omitted) Finance;

   b)A copy of a letter of demand dated 23^rd June 2014 addressed to one Ms A[15] at the same address as the Applicant seeking payment of a sum of $15,989.14 owing to the (omitted) Bank; and

   c)A Time to Pay Order dated 24^th October 2014 from the State Debt Recovery Office ordering the Applicant to pay a balance of $500.00 at the rate of $500.00 per week.

   [15] No explanation appears as to who Ms A might be

5. The Financial Statement filed by the Applicant on 20^th March 2014 shows the applicant as having a weekly income of $300.00 per week, total personal expenditure of $447.00 per week, non-super4annuation property worth $8,087.00, superannuation of $28,286.00, total liabilities of $62,713.00 and no financial resources.

6. The Respondent prepared a Balance Sheet for the purpose of the Conciliation Conference on 20^th August 2014. It is not a joint balance sheet, as it gives no details of any assets or liabilities for the Applicant, only the Respondent.

7. The Respondent’s Financial Statement filed on 1^st August 2014 shows him to have:

   a)A total average weekly income of $432.40[16];

   b)Total weekly personal expenditure of $383.00;

   c)Non-superannuation property valued at $49,000.00;

   d)Superannuation of $307,404.00;

   e)Liabilities of $41,262.00; and

   f)No financial resources.

   [16] The Respondent deposed in his affidavit of 30 October 2014 at paragraph [73] that he received $436.30 per week in WorkCover payments. This is a more up to date figure.

8. The financial information is somewhat sketchy, but the parties’ Financial Statements and the Respondent’s balance sheet were all prepared within months of the hearing dates, so they have been taken as reliable. The Respondent set out an account of his current financial circumstances at paragraphs [73] and [74] of his trial affidavit of 30^th October 2014, and reliance has been placed on that document as being the most accurate information of the Respondent’s financial situation at the time of the hearing.

Non-superannuation Asset Pool

1. I find the value of the non-superannuation asset pool to be:

   a)Applicant's (omitted) Bank account  $87.00

   b)Applicant's Holden (omitted) motor car                       $6,000.00

   c)Applicant’s household contents  $2,000.00

   d)Respondent’s bank account(s)[17]  $348.74

   e)Respondent's Mercedes Benz (omitted) car           $39,000.00

f)Respondent’s household contents  $5,000.00

g)Respondent's (omitted) Credit Line balance                $189.00

Total            $52,624.74

[17] unspecified

Liabilities

1. I find the parties’ liabilities to be:

   a)Applicant's (omitted) MasterCard                           $13,887.00

   b)Applicant's (omitted) Bank loan  $5,280.00

   c)Applicant's (omitted) Visa            $3,120.00

   d)Applicant's (omitted) Card   $3,000.00

   e)Applicant's (omitted) Bank  $15,989.14

   f)Applicant’s State Debt Recovery Office debt      $500.00

   g)Applicant’s Business Taxation Debt to ATO            $37,546.00

   h)Applicant’s legal fees and interest owing                $25,449.40

   i)Respondent's (omitted) MasterCard debt               $5,241.76

   j)Respondent's (omitted) Visa card debt  $3,485.31

   k)Respondent's (omitted) Card debt  $5,202.27

   l)Respondent’s legal fees owing                           $24,382.70

   m)Respondent’s rent arrears            $2,164.00

   n)Respondent’s utility bills outstanding                      $888.00

o)Respondent’s mobile phone bill        $1,310.87

Total liabilities    $147,446.45

1. The liabilities exceed the assets. By deducting the liabilities of $147,446.45 from the assets of $52,624.74 I arrive at a negative figure of $94,821.71.

2. I find the net total of the non-superannuation asset pool to be $94,821.71 DR.

Superannuation

1. I find the parties’ superannuation to be:

   a)Applicant's (omitted)  superannuation  $4,434.00

   b)Applicant's (omitted)  superannuation  $7,728.00

   c)Applicant's (omitted)  superannuation  $16,124.00[18]

d)Respondent's (omitted) superannuation                       $310,576.27[19]

[18] All three of these figures are taken from the Applicant’s Financial Statement filed on 20 March 2014

[19] From Respondent’s affidavit of 30.10.2014 at paragraph [74]

Total  $338,862.27

1. The total of the parties’ superannuation stands at $338,576.27.

2. By deducting the net total of the non-superannuation asset pool, $94,821.71 DR from the total of the parties’ superannuation of $338,862.27 I arrive at a total of $240,040.56.

3. I find the net value of the parties’ superannuation and non-superannuation assets and liabilities to be $240,040.56.

The Contributions of the Parties

1. The Applicant’s evidence in respect of his contributions during the relationship comes from his original affidavit of 20^th March 2014 and his later affidavit of 3^rd November 2014.

2. The Respondent’s evidence comes from the following:

   a)his affidavit of 16^th May 2014;

   b)his affidavit of 30^th October 2014; and

   c)the affidavit of the Applicant’s sister, Ms F, of 20^th October 2014.

3. It is the Applicant’s case that he and the Respondent commenced their relationship in July 2000 and separated on 18^th April 2012.[20]

   [20] Affidavit of Mr Harding 20.3.2014 at paragraphs [6] and [7]; affidavit of Mr Harding 3.11.2014 at [2]

4. The Applicant deposed that he originally lived with the Respondent in a granny flat on the Respondent’s parents’ property for about two years.

5. The Respondent was in full time employment with the (employer omitted), holding the rank of (position omitted). The Applicant was working casually as a (occupation omitted) earning about $35,000.00 per annum. Shortly after the parties commenced their relationship the Applicant started his own business operating an (omitted business) for about three years. He sold the business for $30,000.00 in 2003 but incurred a taxation debt of $37,546.00.

6. The Applicant then obtained casual work as a (omitted) and (omitted) and also in a (employer omitted). This employment lasted until about 2010. The Applicant estimated that he earned about $35,000.00 per annum during those years. The Applicant deposed:

   Mr North and I shared the rent, groceries and bills. Mr North paid for the majority of entertainment.[21]

   [21] Affidavit of Mr Harding 20.3.2014 at paragraph [15]

7. The Applicant stated that he and the Respondent took overseas holidays to (country omitted) in 2005 and 2008. He said “Mr North paid for the holiday”[22]  in 2005 and “We shared the expense of this holiday”[23] in 2008.

   [22] Ibid at [16]

   [23] Ibid at [17]

8. The Applicant went on to depose that in 2011 he obtained a job as the (occupation omitted) of a (employer omitted) but only worked for a short period before he suffered a nervous breakdown. One of the causes of the breakdown was the need to read and respond to emails which was very difficult because he is illiterate.

9. After taking some months off work, the Applicant obtained casual employment as a (occupation omitted) at an (employer omitted), a (occupation omitted) at another (employer omitted) and as a (occupation omitted) at a (employer omitted).

10. The Applicant deposed that during that time the Respondent was promoted to the rank of (position omitted) in the (employer omitted), saying:

    By the end of our relationship, I estimate Mr North to have been earning between $130,000 to $150,000 per annum plus employee benefits and superannuation.[24]

    [24] Affidavit of Mr Harding 20.3.2014 at [21]

11. The Applicant deposed that his contribution to the relationship was to provide support to the Respondent:

    Throughout the relationship, I provided Mr North with ongoing emotional and moral support, and encouragement. He suffers from depression, and would experience significant mood swings.[25]

    [25] Ibid at [22]

12. It is the Applicant’s evidence that the Respondent would be very difficult to live with and would either question him about his activities or “would not talk to me for days, sometimes weeks and on a few occasions up to a month”[26].

    [26] Ibid at [25]

13. It was the Applicant’s evidence that on the majority of occasions he would either prepare meals or buy them, as the Respondent often worked shift work.

14. The Applicant deposed that the Respondent became ill (presumably with depression) about 2010 and finished his employment with the (employer omitted) in 2012. He put in a claim for incapacity due to mental health reasons. The Applicant stated at paragraph [34] of his affidavit:

    In 2011, Mr North started to speak to me about the compensation payout that he expected to receive from the (employer omitted). He told me that we would be receiving about $1,200,000 by way of a payout as his disability meant that he was no longer able to work.[27]

    [27] Ibid at [34]

15. The Applicant deposed that the Respondent abruptly terminated the relationship on 18^th April 2012.

16. The Respondent disputes the date of separation, stating at paragraph [17] of his affidavit of 30^th October 2014 that he “ended the relationship on 22 March 2012”.[28] 

    [28] Affidavit of Mr North 30.10.2014 at [17]

17. The Respondent deposed that he joined the (employer omitted) in April 1989 and ceased working on 7^th January 2011, saying:

    I was on sick leave (Hurt on Duty) until I was discharged from the (employer omitted) on 1 March 2012, after being diagnosed with Chronic Post Traumatic Stress Disorder (PTSD), Severe Anxiety and Depression.

    35.Due to these medical conditions, I have been unemployed since my discharge from the (employer omitted).[29]

    [29] Affidavit of Mr North 30.10.2014 at [34]-[35]

18. It is the Respondent’s case that he assisted the Applicant on various occasions with his (business omitted) until it was sold in 2004 or 2005. He never received any payment for this assistance.

19. It is also his case that he made the bulk of the financial contributions to the relationship, as he deposed at [75]-[78]:

    75.During the entire course of the relationship, Mr Harding and I kept our finances separate.

    76.Throughout the duration of the relationship I consistently contributed the majority of financial expenses for things such as several overseas holidays – including airfares, hotel accommodation, care hire and concert tickets for Mr Harding and I.

    77.I also paid for the overwhelming majority of household items during our relationship. This included hi-fi and electrical equipment, furniture and white goods.

    78.I also paid for the majority of meals at restaurants, entertainment expenses such as movies and local concerts.[30]

    [30] Ibid at [75]-[78]

20. In his affidavit of 16^th May 2014 the Respondent stated that at the commencement of the relationship the Applicant moved in with him and they lived in a granny flat on a property belonging to his parents from July 2000 to February 2004. He paid rent to his parents but the Applicant did not contribute to the rent, nor did he contribute to the telephone, internet, Foxtel or electricity expenses, which were paid solely by the Respondent.

21. The Respondent deposed that:

    Mr Harding did not have any assets of significance at the commencement of the relationship. I had superannuation of approximately $26,000, and a Holden (omitted) motor vehicle.[31]

    [31] Affidavit of Mr North 16.5.2014 at [8]

22. The Respondent further stated that on 1^st February 2004 he and the Applicant moved out of the granny flat and lived in rental accommodation for the remainder of the relationship. He deposed:

    We each contributed equally to the rental payments, although for each property we rented I paid the bond. I also arranged for the connection of various utilities, and met the vast majority of the bills. Mr Harding’s mobile telephone was connected to my plan, and as Mr Harding often did not pay the bills, I paid the bills for both phones in order to avoid my phone being disconnected.[32]

    [32] Ibid at [9]

23. Contrary to the Applicant’s contention that he prepared or bought most of the meals, the Respondent deposed at [10]:

    Throughout the relationship I undertook most of the cleaning, cooking washing and house maintenance. Mr Harding only cooked approximately once or twice a month. If I did not cook, Mr Harding and I usually went out for dinner and I would pay.[33]

    [33] Ibid at [10]

24. After considering the evidence of both parties, I am satisfied that the Respondent’s account of contributions by the parties during the relationship is more reliable. The Respondent brought some assets into the relationship and he earned four to five times as much as the Applicant did.

25. Whilst both parties made some contribution to the running of the household, I am of the view that contributions favour the Respondent over the Applicant by 75% to 25%.

Other factors taken into account under subsection 90SM(4)(d) to (g) of the Family Law Act

1. Paragraph (d) of subsection 90SM(4) requires the Court to take into account the effect of any proposed order on the earning capacity of either party to the relationship. It does not appear that the earning capacity of either party will be affected to any great degree. There is evidence that the Respondent is unable to work anymore.

2. Paragraph (e) of subsection 90SM(4) requires the Court to take into account the matters referred to in subsection 90SF(3) so far as they are relevant.

3. The Applicant was born on (omitted) 1972. He is 43 years of age and apparently in good health.

4. The Respondent was born on (omitted) 1970, so he has recently attained the age of 46 years. He deposes to being in poor health and has been declared by his former employer, the (employer omitted), to be medically unfit to work.[34]

   [34] Affidavit of Mr North 16.5.2014 at [3]

5. It is the Respondent’s evidence that he has been diagnosed with Chronic Post Traumatic Stress Disorder, severe anxiety, Major Depressive Disorder and Obsessive Compulsive Disorder as a result of his employment as a (occupation omitted) with the (employer omitted). He states that as a result of his current health condition he is unable to work.[35]

   [35] Affidavit of Mr North 30.10.2014 at [64]-[65]

6. The Respondent annexed to his affidavit of 30^th October 2014 copies of reports from:

   a)Dr M dated 2^nd May 2011;

   b)Dr K dated 17^th November 2011;

   c)Dr S dated 29^th January 2014; and

   d)Ms E dated 27^th June and 19^th September 2011.

7. Dr M is a Consultant Psychiatrist to whom the Respondent was referred by (omitted) for assessment. In his report of 2^nd May 2011 Dr M gave this diagnosis:

   Based on this assessment, I am of the opinion that Mr North is suffering from chronic Post-Traumatic Stress Disorder and has likely had periods of Major Depressive disorder. This appears to accord with the assessment by Dr S.[36]

   I take the view, similar to Dr S, that the primary issue relating to Mr North’s mental health problems is the cumulative exposure to traumatic stressors in the course of his employment as a (occupation omitted).[37]

   [36] Dr S was the Respondent’s treating psychiatrist

   [37] Dr M, report 2.5.2011 at Annexure “N 27” to affidavit of Mr North 30.10.2014

8. Dr M went on to state that:

   Any employment with the (employer omitted) is likely to occasion ongoing exacerbation of his mental ill health.[38]

   [38] ibid

9. Dr M further said that:

   Mr North has a poor prognosis. He has responded poorly to treatment and continues to have significant symptoms and associated disability. There is a likelihood of chronic mental ill health.[39]

   [39] ibid

10. Dr M expressed the opinion that there was a poor prognosis for the Respondent’s return to suitable duties with the (employer omitted) and concluded:

    Mr North is currently unfit for employment and will be unlikely to work with the (employer omitted) in any capacity.[40]

    [40] ibid

11. Dr K, a Consultant Psychiatrist, who examined the Respondent on behalf of the (employer omitted) on 16^th November 2011, reported the following day that:

    a)The Respondent had a diagnosis of Post-Traumatic Stress Disorder and Major Depression;

    b)He was unfit for either operational or non-operational duties with the (employer omitted);

    c)He could not work outside the (employer omitted);

    d)He had a total and permanent disablement; and

    e)“The condition is of such an extent as to render the member unlikely to ever engage in any gainful profession, trade or occupation in the future”.[41]

    [41] Report of Dr K 17.11.2011 at Annexure N 27 to affidavit of Mr North 30.10.2014

12. The Respondent annexed to his affidavit a letter dated 29^th January 2014 from Dr S, the Respondent’s treating psychiatrist since 2011.

13. In his report Dr S stated that:

    Mr North has clearly deteriorated from a psychiatric point of view since his initial presentation. His Post-traumatic Stress Disorder symptomatologies and Major Depressive Disorder have significantly deteriorated.

    I have noted that against a background of his emotional decline Mr North has resorted to polysubstance utilisation…He has resorted to utilising ecstasy, crystal meth and “G”. He has found such illicit substances elevate his mood and provide a numbing response to his PTSD and depressive symptoms. He has become dependent on these medications. As a result his anxiety and depressive symptoms, and PTSD symptoms have deteriorated. Of concern also is Mr North’s increasing alcohol consumption that is also compromising his psychiatric condition.

    Mr North has also developed obsessive routines to the point that he is now displaying an Obsessive Compulsive Disorder. This is also compounded by his overt anxiety.[42]

    [42] Report of Dr S 29.1.2014 at Annexure N 29 to affidavit of Mr North 30.10.2014

14. Dr S went to express a firm opinion about the unlikelihood of the Respondent being able to engage in employment in the future, saying:

    10.I have previously expressed my opinion in my report of 13 August 2012 that I was most doubtful whether Mr North would have the capacity to engage in work and stated the only way to determine this would be for him to undertake a trial of one of the work options considered in several years’ time when hopefully his psychiatric condition has improved.

    I would modify my opinion in this regard and state that Mr North’s psychological condition has clearly deteriorated since my opinion of 13 August 2012 was made. It is my opinion that he would not have the capacity to engage in a work trial and his vocational suitability to undertake a work trial would be inappropriate in the light of his marked disability.

    11.Mr North has no capacity to work, either casually, part time or in fulltime employment.

    12.It is further my opinion that even if Mr North’s drug addiction could be overcome it would remain highly unlikely that he would have the capacity to engage in any gainful profession, trade or occupation for which he, as a member, would be reasonably qualified by reason of education, training or experience.

    13.I remain of the view that Mr North runs a high risk of self-harm in the light of the significant psychiatric disability he is currently displaying.[43]

    [43] Report of Dr S 29.1.2014 at Annexure N 29 to affidavit of Mr North 30.10.2014

1. Ms E is a psychologist who worked in the Adult Trauma Program at (omitted) Centre. She provided two reports dated 27^th June and 19^th September 2011. In the earlier of her two reports she stated:

   On the basis of Mr North’s presentation during the assessment interview he would appear to be suffering from Post-Traumatic Stress Disorder.[44]

   [44] Annexure N 30 to Affidavit of Mr North 30.10.2014

2. In her later report, Ms E came to these conclusions:

   Mr North has made good progress in treatment; however his treatment has been complicated by the breakdown of his long term relationship and the presence of comorbid symptoms of Obsessive Compulsive Disorder and Major Depressive Disorder which in many ways have undermined his willingness to implement what he is learning in the program between sessions… The results of Mr North’s psychometric tests suggest a clinical picture of limited change and indeed some worsening of his PTSD and anxiety symptoms which given the factors identified above and the recency of his relationship breakdown is not particularly surprising.[45]

   [45] Report of (omitted) 19.9.2011 at Annexure “N 31” to affidavit of Mr North 30.10.2014

3. The Applicant stated in his Financial Statement filed on 20^th March 2014 that he received an income of approximately $300.00 per week as a (occupation omitted). He did not file an updated Financial Statement and his affidavit of 3^rd November 2014 makes no mention of his income.

4. The Respondent deposed in his affidavit of 30^th October 2014 at paragraph [73] that his only source of income is $436.30 per week in WorkCover payments.

5. Neither party has the care or control of a child of their relationship or any other commitment to maintain a child or another person.

6. The only s.90SF(3) factor of any relevance is the Respondent’s mental health condition and his inability to work in the foreseeable future. He has provided uncontradicted evidence of the nature and extent of his mental health state.

7. The Respondent has been diagnosed with Post-Traumatic Stress Disorder, a Major Depressive Disorder, Obsessive-Compulsive Disorder and a resultant addiction to drugs and an abuse alcohol. There is clear and unequivocal psychiatric evidence that he cannot work and will be unable to work in gainful employment.

8. In my view, this calls for a significant adjustment in favour of the Respondent, which I would assess at no less than 15%.

9. Thus, I assess the parties’ entitlements at 10% to the Applicant and 90% to the Respondent. However, the Court must still consider whether the orders proposed to be made, if any, are just and equitable.

Conclusions

1. The net asset pool amounts to $240,040.56.

2. The Applicant is entitled to 10% of the value of the net asset pool, which amounts to $24,004.00, to the nearest dollar.

3. The Respondent is entitled to 90% of the value of the net asset pool, which amounts to $216, 036.50.  

4. The Applicant will retain the following assets:

   a)His (omitted) Bank account  $87.00

   b)His Holden (omitted) motor car  $6,000.00

   c)His household contents  $2,000.00; and

d)His superannuation, totalling  $28,286.00

TOTAL  $36,373.00

1. At the same time, the Applicant’s liabilities are as follows:

   a)(omitted) MasterCard debt  $13,887.00

   b)(omitted) Bank loan  $5,280.00

   c)(omitted) Visa Card debt  $3,120.00

   d)(omitted) Card  $3,000.00

   e)(omitted) Bank debt  $15,989.14

   f)NSW State Debt Recovery Office  $500.00

   g)Australian Taxation Office  $37,546.00

h)Legal fees owing to Michael Tiyce  $25,449.00

Total  $104,771.00

1. I am not convinced that all of these liabilities can properly be ascribed to the parties’ relationship.

2. The debt for legal fees owing is similar in amount to the debt of $24,382.70 that the Respondent owes to his former solicitors. The parties’ lawyers both filed their Notices of Withdrawal in July 2014, so it would appear that the lawyers did a similar amount of work for each client and charged at about the same rate.

3. In my view the parties’ legal costs should be set off one against the other.

4. The amount of $37,546.00 that the Applicant owes to the Australian Taxation Office arises from a business that the Applicant ran from 2000 to 2003.

5. The amount owing to the State Debt Recovery Office appears to be for the enforcement of payment of a fine and should clearly be the Applicant’s sole responsibility.

6. It is unclear what the other debts were for or when they were incurred. The Respondent’s evidence was that the parties kept their finances separate.

7. The Respondent’s liabilities, including the sum of $$24,382.70 owing to his former solicitors, amount to $42,674.91.

8. I am satisfied that the parties should each be responsible for their own debts.

Whether the proposed orders under s.90SM(4) are just and equitable

1. Subsection 90SM(3) requires the Court to consider whether, in all the circumstances, it is just and equitable to make the proposed Orders under s.90SM(4).

2. In this case, I have found that the Respondent’s contributions greatly outweighed those of the Applicant throughout the parties’ relationship. I have also found that the Respondent has established that there is a significant factor under s.90SF(3), being his mental health issues and his consequent inability to engage in gainful employment at any time in the foreseeable future, which would lead to an adjustment of no less than 15% in his favour.

3. If, as I propose to do, I order that the parties should each be responsible for their own debts, the parties would find themselves in the situation where the Respondent’s entitlement of 90% would see him with a figure of $216,036.50. 

4. The Applicant, on the other hand, has been found to have a percentage entitlement of 10%, being $24,004.00. As I have found at [109] above that he has assets, including his superannuation entitlement, amounting to $36,373.00. This would put him in the unfortunate position of having to pay the Respondent the sum of 12,369.00.

5. The Applicant does not have that amount of money available, other than in his superannuation. The superannuation is a modest amount in any case. It would not be just and equitable, therefore, to make an order requiring the Applicant to pay to the Respondent the sum of $12,369.00, or any similar figure.

6. It is fair to say that the Respondent has never put to the Court that the Applicant should be required to pay him any money by way of a property adjustment. What he has always asked for is a dismissal with costs.

7. Accordingly, I am satisfied that it would be just and equitable to order that the Applicant should retain his personal property, including his motor car and that he should retain his superannuation intact.

8. Similarly, I will order that the Respondent shall retain his personal property, including his car and that he too should retain his superannuation intact.

9. The parties should each be responsible for the debts incurred in their own names.

10. I am satisfied that, I all the circumstances, those proposed orders are just and equitable.

COSTS

1. The Respondent seeks an order that the Applicant should pay his legal costs. In the final paragraph of his Trial affidavit of 30 October 2014, the Respondent deposes:

   84.I further respectfully request that this Honourable award Costs against Mr Harding.[46]

   [46] Affidavit of Mr North 30.10.2014 at [84]

2. Whilst costs are discretionary, the Court’s discretion to make an order for costs is guided by the provisions of s.117 of the Family Law Act.

3. Subsection 117(1) sets out the general principle that, subject to subsection (2), each party to proceedings under the Act should bear his or her own costs.

4. Subsection (2) of s.117 provides that if the Court is of opinion that there are circumstances that justify it in doing so, the Court may make such order as to costs as the Court considers just.

5. Subsection 117(2A) provides that in considering what order (if any) should be made under subsection (2), the Court shall have regard to the matters set out in paragraphs (a) to (g) of the subsection.

6. I have already considered the financial circumstances of each of the parties to the proceedings, noting that the Applicant has no funds which would enable him to meet a costs order. I also note that the Applicant’s costs, on a solicitor-client basis, up to the date his solicitors ceased to act for him and withdrew from the Court record, amounted to $25,449.00. The Respondent’s solicitor-client costs, up to the date only a couple of weeks later when they ceased to act and withdrew from the Court record, came to $24,382.70.

7. The similarity between the two amounts is striking.

8. Neither party was in receipt of assistance by way of a grant of legal aid.

9. There was nothing particularly exceptionable in the conduct of the parties to the proceedings in relation to the proceedings. This decision shows, however, that the parties would have been well advised to have settled their litigation at the Conciliation Conference in 2014.

10. The proceedings were not necessitated by the failure of a party to the proceedings to comply with previous orders of the Court. These are not enforcement proceedings.

11. It is fair to say that the Applicant has been, in effect, wholly unsuccessful in the proceedings.

12. There is no evidence that either party made an offer in writing to the other party to settle the matter.

13. The parties took the matter to a final hearing without legal representation because they were no longer able to afford their lawyers any further. I consider it a significant matter that the Applicant does not have the funds to meet any costs order if I were to make one and I consider that this outweighs the fact that the Applicant has, in effect, been unsuccessful in these proceedings.

14. The parties should pay their own costs.     

I certify that the preceding one hundred and thirty-nine  (139) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Date: 6 July 2016

[7] [2012] HCA 52 at [40]