Hewitt and Corbett and Anor
[2016] FCCA 776
•12 April 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HEWITT & CORBETT & ANOR | [2016] FCCA 776 |
| Catchwords: FAMILY LAW – Property – inheritance – contributions – section 75(2) factors – non-disclosure – husband self-represented. |
| Legislation: Family Law Act 1975 (Cth), ss.75(2), 79, 81, 117, 177 Federal Circuit Court Act 1999 (Cth), s.86 |
| Cases cited: Stanford v Stanford [2012] HCA 52 Hickey v Hickey & Attorney-General of the Commonwealth (Intervener) (2003) FLC 93-143 G & G (1984) FLC 91-582 Mallett & Mallett (1984) FLC 91-507 Re Chemaisse; Federal Commissioner of Taxation (Intervener)(1990) FLC 92-133 Coghlan & Coghlan (2005) FLC 93-220 Meads v Meads (2012) ABQB 571 Bishop & Bishop (2013) FLC 93-553 Mistle & Mistle [2010] FamCA 29 Elgabri & Elgabri [2009] FamCA 227 White and Tulloch v White (1995) FLC 92-640 Kowaliw & Kowaliw (1981) FLC 91-092 Farmer & Bramley (2000) 27 FamLR 316 Bonnici v Bonnici (1992) FLC 92-272 Aleksovski & Aleksovski (1996) FLC 92-705 Sippel & Sippel [2004] FamCA 201 Norbis & Norbis (1986) 161 CLR 513 Parshen & Parshen (1996) FLC 92-720 Weir & Weir (1993) FLC 92-338 Luciano (2000) FamCA 401 Loude & Loude [2009] FamCAFC 52 Tomasetti & Tomasetti (2000) FLC 93-023 Russell & Russell (1999) FLC 92-877 Dickson & Dickson (1999) FLC 92-843 in Colgate-Palmolive Company and Colgate-Palmolive Pty Ltd v Cussons Pty Ltd; Cussons Pty Ltd v Colgate Palmolive Company and Colgate-Palmolive Pty Ltd [1993] FCA 536; Penfold v Penfold (1980) 144 CLR 311 Latoudis v Casey(1990) 170 CLR 534 Brown v Brown [1998] FamCA 115 Collins & Collins (1985) FLC 91-603 In the marriage of Briese (1986) FLC 91-713 Kohan & Kohan (1993) FLC 92-340 |
| Applicant: | MS HEWITT |
| First Respondent: | MR CORBETT |
| Second Respondent: | MR F CORBETT |
| File Number: | SYM 6993 of 2005 |
| Judgment of: | Judge Kemp |
| Hearing dates: | 2 & 3 November 2015 |
| Date of Last Submission: | 7 December 2015 |
| Delivered at: | Sydney |
| Delivered on: | 12 April 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Eadley |
| Solicitors for the Applicant: | Lighthouse Law Group |
| First Respondent: | Self-represented |
| Second Respondent: | No appearance - excused |
THE COURT ORDERS THAT:
The husband and the wife do all things reasonably necessary to have the funds held in the controlled moneys account or on trust with the wife’s solicitors to be released to her or at her direction.
The husband and Mr F Corbett (pursuant to orders made on 12 April 2013) do all acts and things and sign all documents reasonably necessary to transfer the husband’s interest in the property at Property F in the State of New South Wales, being the whole of the land contained in Folio Identifier (omitted) (“the former matrimonial home”) to the wife to be held by her on trust for sale in terms of the following orders.
The wife be empowered to offer the former matrimonial home for sale and to sell it by public auction with power to fix a reserve price, or alternatively, to sell it by private treaty at the best available price.
The Certificate of title for the former matrimonial home be released to the wife or her solicitors.
The Certificate of Title for the property at Property C be released to the husband.
The husband vacate the former matrimonial home within thirty (30) days of the date of these orders.
After sale of the former matrimonial home at auction or by private treaty, the wife be empowered to deduct from the proceeds of sale:
(a)payment of costs incurred, if any, in relation to determination of value or selling price by the President of the Australian Property Institute or his/her nominee;
(b)the commission and other expenses (including auction expenses if any) of any real estate agent employed by the wife;
(c)the legal expenses of transferring the former matrimonial home to any purchaser;
(d)any taxes including but not limited to Land Tax;
(e)all necessary adjustments of rates and taxes on settlement of the sale (including the payment of any moneys in respect of unpaid rates, if the husband’s obligation to effect payment has not been fulfilled); and
(f)insurance and any other reasonable expenses for the protection and maintenance of the former matrimonial home, pending sale.
The wife hold the proceeds of sale, after deduction of the expenses in order (7) above, on trust to:
(a)pay to the wife a sum equal to 34.1% of the net proceeds; and
(b)pay the balance (65.9%) to the husband.
The husband forthwith do all acts and things to remove Caveat no. (omitted) recorded on the title of the former matrimonial home.
From the date of these orders and pending sale of the former matrimonial home, the husband continue to pay, as they fall due, all regular instalments in respect of the mortgage, statutory rates and charges, utilities, house and contents insurance and the outgoings including water rates, council rates and the like in respect of the former matrimonial home and the husband hereby indemnify and keep indemnified the wife in respect of such payments.
That as between the husband and the wife and subject to the above orders, the husband and wife shall each respectively retain all interest in and entitlement to:
(a)all personal property now in his/her respective possession or control;
(b)all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively; and
(c)all interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these orders, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act 1975 (“the Act”) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
The husband pay the costs of the wife in a sum as agreed between the parties but failing agreement within 28 days, such costs are to be referred for taxation/assessment to the Costs Assessment Registrar of the Family Court of Australia in accordance with Chapter 19 Family Law Rules 2004 with the Registrar to make such directions as necessary to implement that process and to exclude from any such taxation/assessment the wife’s costs of the Supreme Court proceedings to obtain the replacement Certificates of Title wherein no order as to costs was made and the wife’s costs of the conduct of the hearing in this Court on 9 & 10 August 2010 in terms of the dismissal of her application as against Mr S with no order as to costs between her and Mr S and further taking into account any costs orders already made on an interim/interlocutory basis or costs paid out of moneys released to the wife’s solicitors on account of her costs for the preparation of the mediation. Any such costs if unpaid to the wife are to be paid out of the husband’s entitlement in terms of order (8) above, prior to the distribution of any moneys due to him from the sale of the former matrimonial home.
Leave to the parties on 7 days’ written notice to approach the Court with respect to the implementation of any of the above orders, including the release of any funds pending a determination of the wife’s cost entitlement as against the husband referred to in order (13) above.
The matter is, otherwise, removed from the active pending cases list.
IT IS NOTED that publication of this judgment under the pseudonym Hewitt & Corbett is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYM 6993 of 2005
| MS HEWITT |
Applicant
And
| MR CORBETT |
First Respondent
| MR F CORBETT |
Second Respondent
REASONS FOR JUDGMENT
Introduction
These are property proceedings commenced by the applicant wife in terms of her application for final orders filed in the Family Court of Australia on 29 June 2006 (dealing with parenting matters) and which, subsequently, sought property orders by virtue of an amended application filed on 17 May 2007. The proceedings had been transferred to this Court on 4 October 2006.
At the time of the hearing, the wife relied on her further further amended initiating application filed on 3 May 2012 which sought various orders and which she subsequently, further particularised in a written submission document, made Exhibit “A2” (as referred to in paragraphs 14, 15 and 17 below), to the following effect:
(1)An order that Mr B and Mr D both of (omitted), Sydney in the State of New South Wales, be appointed Trustees (“the Trustees”) for the sale of the land at:
(a)Property F in the said State, being the whole of the land contained in Folio Identifier (omitted) (“the former matrimonial home”); and
(b)Property C in the said State, being the whole of the land contained in Folio Identifier (omitted) (“Property C”)
(collectively referred to as “the Property”)
(2)An order that the Property vests in the Trustees, subject to any encumbrances affecting the entirety thereof and free of any encumbrances affecting any undivided shares therein be held upon the Statutory Trust for Sale created pursuant to Division 6 of Part IV of the Conveyancing Act, 1919.
(3)An order that the Trustees be empowered to offer the Property for sale and to sell the Property by public auction with power to fix a reserve price, or alternatively, to sell the Property by private treaty at the best available price.
(4)An order that the husband vacates the Property within thirty (30) days of these Orders.
(5)An order that the husband pay all taxes, insurance premiums and all rates of the Property and provide evidence of same to the Trustees.
(6)An order that after sale of the Property at auction or by private treaty, the Trustees be empowered to deduct from the proceeds of sale:
(a)Payment of costs incurred, if any, in relation to determination of value or selling price by the President of the Real Estate Institute of New South Wales or his/her nominee.
(b)the commission and other expenses of any real estate agent employed by the Trustees;
(c)the legal expenses of transferring the Property to the purchaser;
(d)any taxes including but not limited to Land Tax;
(e)to make all necessary adjustments of rates and taxes on settlement of the sale; and
(f)insurance and any other reasonable expenses for protection and maintenance of the Property.
(7)An order that the Trustees hold the proceeds of sale, after deduction of the expenses in paragraphs 5 and 6 above, on trust and:
(a)pay to the wife a sum equal to sixty percent (60%) of the net proceeds;
(b)pay the balance to the husband.
(8)An order that the Trustees be at liberty to seek the advice of the Court on any matter arising from their appointment or these Orders.
(9)An order that the Trustees be permitted to retire as statutory Trustee for Sale of the Property upon completion of the sale and distribution of the proceeds of sale as set out in paragraphs 6 and 7, without further order of the Court.
(10)An order removing the husband’s Caveat having dealing no (omitted).
(11)Such further or other order as the Court deems fit.
(12)That in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act 1975 (“the Act”) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
(13)That from the date of these orders and pending sale of the Property the husband continue to pay, as they fall due, all regular instalments in respect of the mortgage, statutory rates and charges, utilities, house and contents insurance, and the outgoings including water rates, council rates and the like in respect of the Property and the husband hereby indemnify and keep indemnified the wife in respect of such payments.
(14)That as between the husband and wife, and subject to the above orders, the husband and wife shall each respectively retain all interest in and entitlement to:
(a)All personal property now in his/her respective possession or control.
(b)All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively.
(c)All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
(15)That the husband pay the costs of the wife on an indemnity basis in the sum of $300,000.00.
The wife relied on her affidavit sworn on 19 October 2015 and filed on 21 October 2015, together with her financial statement sworn 6 October 2015 and filed on that day.
The respondent husband relied on his application in a case filed on 3 October 2014, his affidavit sworn on 21 August 2014 and filed on 3 October 2014 and his affidavit sworn 27 June 2007 and filed on that day.
Notwithstanding orders and directions for the husband to file a response, trial affidavit and financial statement documents, he has failed to do so.
A short time prior to the commencement of the hearing, the husband wrote to chambers on 18 October 2015, with a letter copied to the wife’s solicitors, seeking an adjournment of the hearing. The basis of his adjournment application was that his partner, Ms H (“Ms H”), had breast cancer and was to have an operation scheduled for 27 October 2015 and that he needed to spend all of his time with her to help her through that trying time. The husband also stated that he was very stressed as a result of those matters.
The adjournment application was opposed by the wife. When the matter came before the Court on 2 November 2015, being the allocated hearing date, the husband appeared and did not maintain his adjournment application.
The Court granted the husband leave to rely on his above identified affidavit material given that that was the material identified by him in support of his then application in a case. That application in a case sought orders for the return to him of “full funds with any interest held in trust for the Mr Corbett Trust/Estate by Lighthouse Law Group”, together with the dismissal of the matter and the dismissal of any “frivolous future claims by the wife or her agents against the husband”.
The orders sought by the husband, as referred to in paragraph 8 above, appeared to reflect the position maintained by him throughout the lengthy history of this matter. The Court notes, however, that at one point in time, being 15 November 2007, the husband had filed a notice of discontinuance in the proceedings.
During the course of the hearing, the wife was represented by Mr Eardley of Counsel. The husband was self-represented.
The wife was cross-examined, as was the husband, and the husband called his partner, Ms H, to give evidence about the production of various photographs and she was the subject of cross-examination.
Somewhat problematically, the husband’s evidence was that no matter what order was made by the Court, if he believed that it would, otherwise, negatively, affect his estate, he would not comply with it. He maintained that it would make no sense for him to damage, himself. That was the basis for his failure to comply with orders to provide financial disclosure.
The husband’s evidence was also that he saw a distinction between being a private and a public person. He had removed himself from the electoral role, as he said he was not a public person.
Given the husband’s evidence concerning his position, if the Court made orders, Counsel for the wife sought time to provide an amended minute of order to be served, together with an affidavit from “suitable” trustees to be appointed. The wife’s Counsel also sought time for written submissions.
In those circumstances, the Court made orders for the wife to file and serve such submissions, any amended minute of order, amended balance sheet and any affidavit by 17 November 2015, with the husband to provide his submissions 3 weeks thereafter. The Court reserved its position as to whether it would require the parties to make oral submissions. Initially, the husband wished to make oral submissions, but then having considered his position further, he sought to make written submissions, only.
On 17 November 2015, the wife forwarded her written submissions and the parties’ updated balance sheet.
On 25 November 2015, the wife sought the “additional” orders as set out in paragraph 2 above.
On 7 December 2015, the husband filed his written submissions. Those submissions sought further orders, “additional” to those set out in paragraph 8 above but were largely ancillary to the relief claimed by him and were to the following effect:
(1)To dismiss the wife’s claim.
(2)To have the wife remove any caveats on the Property (as defined in paragraph 2 above).
(3)To dismiss any future claims for property and/or inheritance by the wife and her agents against the husband or any member of the Corbett family.
(4)Lighthouse Law Group to return full funds, with interest held in trust for the husband trust/Estate and to be handed to the husband as a bank cheque within 10 business days, giving the husband 2 days notice of the date he can pick up the bank cheque from Lighthouse Law Group office.
(5)Release titles to the Property to the husband.
(6)No costs order.
The husband’s submissions included an affidavit referred to in paragraph 79 below. That affidavit will be treated by the Court as a submission document.
The wife did not seek to address the Court further on the orders or material set out in paragraph 18 above.
The following documents were tendered as exhibits in the proceedings:
Exhibit No
Document
Tendered by
A
Balance sheet
Wife
A1
Updated balance sheet
Wife
A2
Updated orders sought
Wife
B
(omitted) Bank account statement for the wife on account number (omitted)
Wife
C
Copy title search for Property C
Wife
D
Copy title search for the former matrimonial home
Wife
E
Deed of settlement and release between the wife and the husband’s brother, Mr F, Corbett undated.
Wife
F
An itemised legal bill on behalf of the wife
Wife
1
A notice of general appearance dated 2 November 2005 completed by the husband
Husband
2
Death certificate for Ms C dated 4 May 2002
Husband
3
A Christmas card
Husband
4
Three quotations in respect of certain building works at the former matrimonial home
Husband
5
Deed of trust of the (omitted) Trust
Husband
6
Promissory note issued 3 September 2014
Husband
7
A deed of gift dated 3 September 2014 by the husband and Ms H as donors and Mr G as donee in his capacity as trustee of the (omitted) Trust
Husband
8
Equitable mortgage dated 3 September 2014 between the husband, Ms H as borrowers and Mr G of the former matrimonial home, lender, in his capacity as trustee of the (omitted) Trust
Husband
9
A series of photographs taken of the former matrimonial home in late December 2004
Husband
10
A series of photographs taken of the former matrimonial home in early 2005
Husband
11
A photograph of the former matrimonial home in early 2005
Husband
12
Husband’s written submission (including an affidavit of the husband sworn 7 December 2015)
Husband
The following are the, substantially, agreed facts:
a)On (omitted) 1962, the wife was born and she is currently aged 53 years.
b)On (omitted) 1961, the husband was born and he is currently aged 55 years.
c)The parties commenced cohabitation at some point in the period 1986 to 1988 when they were travelling overseas.
d)The parties married on (omitted) 1989, in (country omitted).
e)On (omitted) 1992, the parties’ first child, Mr L was born and he is currently aged 23 years.
f)On (omitted) 1995, the parties’ second child, Ms A, was born and she is, currently, aged 20 years.
g)In November 1992, the parties commenced residing at the former matrimonial home.
h)In 1993, the husband registered a business name, (omitted).
i)On (omitted) 2002, the husband’s mother, Ms C, died at the age of 76 years. At the time of her death, she was residing at Property C. She was survived by her husband, Mr S, the husband’s father.
j)On 24 April 2004, the parties separated and that date was relied upon by them in a joint application for divorce filed on 5 July 2006.
k)On 5 October 2006, the parties were divorced by order of this Court.
l)In June 2008, the husband became a bankrupt and Mr R was appointed the trustee of his property.
m)On 9 & 10 August 2010, the wife’s application seeking orders as against Mr S was heard by this Court.
n)On 20 August 2010, the husband’s father, Mr S, died in (country omitted).
o)On 16 September 2010, the wife’s application seeking orders as against Mr S was dismissed as against him with no order as to costs. The balance of her application seeking property orders against the husband was stood over, as referred to in paragraph 23 below.
p)On 7 April 2011, probate of the will of Mr S dated 20 April 2004 was granted by the Supreme Court of New South Wales in Sydney to the husband and his brother, Mr F Corbett, as joint executors and trustees.
q)The last will of Mr S left 4 properties; one, being the former matrimonial home to the husband absolutely; one at Property T to the husband’s brother, Mr F Corbett; and the other 2 properties, being Property C and Property J to the executors and trustees of the will, namely the husband and his brother, Mr F Corbett, to be dealt with, in terms of that will.
r)On 22 February 2012, the property at Property J, New South Wales, was sold and one half of the sale proceeds ($379,123.65) were provided to the trustee of the bankrupt estate of the husband so as to enable the husband to be discharged from his bankruptcy. The balance of the sale proceeds was, ultimately, deposited to a controlled moneys account held with the wife’s solicitors, Lighthouse Law Group. The moneys, currently, held in that account total $41,878.00.
s)On 11 December 2012, the husband’s bankruptcy was annulled pursuant to section 152A of the Bankruptcy Act.
t)On about 15 March 2013, the Court noted that the bankruptcy of the husband had been annulled and the Trustee in Bankruptcy (being the then second respondent), was released from any further involvement in the proceedings. At about that time the Trustee in Bankruptcy paid moneys to the solicitors for the wife being the balance of funds held by the trustee after payment of creditors’ claims and trustee’s costs, including legal costs.
u)On 12 April 2013, following orders made for the execution of certain transmission documents, the third respondent, Mr F Corbett, was released from further involvement as a party in these proceedings, with no order as to costs. The Court has had regard to Exhibit “E”, being a deed of settlement and release (“the subject deed”) between the wife and Mr F Corbett and notes, in that regard, that Mr F Corbett has agreed to execute all such documents and do all such acts and things as may be required to give effect to any orders of this Court. In those circumstances, the Court has proceeded with the matter, notwithstanding that the form of orders proposed by the wife may affect Mr F Corbett’s interests as a joint executor, given the terms of the subject deed. The Court also notes that the title of the former matrimonial home is still held by the husband and Mr F Corbett, subject to their obligations under the terms of the will of Mr S to transmit the same to the husband. In terms of the subject deed, the Court proposes to order Mr F Corbett (and the husband) to do all acts and things and sign all documents reasonably necessary to transfer the interest of the husband in the former matrimonial home to the wife upon trust for sale, as referred to later in these reasons.
v)On 30 April 2014, the wife filed an application in a case which sought the release to her of the moneys held in the controlled moneys account and costs of that application. This application was withdrawn as it was subsumed within the final property hearing, itself.
w)On 11 July 2014, the Supreme Court of New South Wales (Stevenson J) made orders for the cancellation of various certificates of title and for the issuance of fresh certificates of title including for the former matrimonial home, with no order as to costs. During those proceedings, the husband had informed that Court that he had not signed a statutory declaration to obtain fresh certificates because he did not believe that the certificates of title were missing. The husband informed Stevenson J that he had a recollection of seeing the certificates of title in 2005 and thought that he had placed them into the custody of a solicitor in (omitted). The husband had made enquiries of that solicitor who had informed him that he did not have possession of the certificates. His Honour records the husband opining therefore: “that in all probability, the certificates of title are somewhere in [my] possession”.
x)The wife has a (qualifications omitted) and was employed for some time as an (occupation omitted) but is not a qualified (occupation omitted). She currently works as a (occupation omitted) for (employer omitted).
y)The husband, whilst being qualified as an (occupation omitted), appears not to currently receive any income either as an employee or through the conduct of any (employer omitted) business.
z)The parties have not obtained valuations for the various items of real estate including the Property as defined in paragraph 2 above but rely on the values disclosed for the purposes of the inventory of property for the estate of the late Mr S, in obtaining the grant of probate. That inventory valued the Property C property at $1,100,000.00 and the former matrimonial home at $890,000.00.
The wife, originally, sought orders which provided for child support and spousal maintenance to be paid to her. Counsel for the wife indicated that those orders were now no longer sought by the wife given that both children had reached their majority and that spousal maintenance was subsumed, in terms of the property orders which the wife now sought.
The wife further, originally, sought relief against Mr S on the basis of a claim for constructive trust. That claim was dismissed by the Court on 16 September 2010. The Court repeats the matters set out in its then reasons for judgment as if fully incorporated herein. The proceedings at the time of the dismissal as against Mr S were then adjourned pursuant to s.79(5) of the Act until after the death of Mr S. The Court accepted the wife’s evidence at that time that the husband would, in all likelihood, benefit from the estate of Mr S upon his death. Mr S at that time was approximately 80 years of age with advanced dementia and residing in a nursing home in (country omitted). At the time there was no evidence of any will in existence and the Court was unaware that Mr S had passed away on (omitted) 2010.
Mr F Corbett had been previously appointed as the litigation guardian for Mr S and that appointment had been discharged subject to an order that he notify in writing, the wife and her solicitors of the death of Mr S, within 14 days of becoming aware of that fact.
As set out above, shortly after hearing the wife’s application on 9 & 10 August 2010, Mr S died on (omitted) 2010.
The wife says that during the course of the parties’ marriage and from about 1992 when they moved into the former matrimonial home, that she had always considered that property to be the parties’ home. The property at that time was owned by Mr S (or registered in his name and that of his then deceased wife Ms C) and the parties appear to have occupied it in terms of an agreement reached between the husband and his father. The husband says that Mr S was reluctant to allow them to reside in that property as he was otherwise forgoing rent. The husband agreed that his occupation of the property was on the basis that he and the wife would be allowed to live there rent free but that they had to fix it up and renovate it and that it would be their home. The wife conceded that she did not have any conversation with Mr S over the ultimate ownership of the former matrimonial home.
Some of the evidence in the wife’s affidavit material relates to conversations that she had with Ms C, the wife of Mr S. Those conversations were to the effect that Ms C believed that the former matrimonial home was, in fact, owned by her. It would appear that both Mr S and Ms C were described as joint tenants of the former matrimonial home on 12 July 2010, notwithstanding that Ms C had died some 7 years earlier. No notice of death appears to have been registered on the title to record the ownership in the name of Mr S only. The will of Mr S dated 28 April 2004 (some three months prior to the parties separating) left the former matrimonial home to the husband for his own use and benefit, absolutely. There was a proviso that if the husband died before Mr S leaving a child or children then such children should take that property and, if more than one, in equal shares. The expression in the terms of that will is inconsistent with the wife’s assertion that Mr S was to leave the property to both the husband and her. However, the Court accepts that, more likely than not, the husband would have informed the wife that he believed that the former matrimonial home would be so left to him and on the basis that the marriage was then ongoing, both the husband and the wife would benefit from that.
The Court accepts, notwithstanding the husband’s denial, that he did say to the wife that if they remained at the former matrimonial home and carried out renovations and repairs thereto, they would be able to live there rent‑free and that, ultimately, the former matrimonial home would be theirs.
To an extent, the wife’s position was that if she had realised that the former matrimonial home would not be coming to the parties themselves, she would have acted so as to ensure that the parties acquired a property in their own names, potentially subjected to a mortgage and the like, so that the parties could acquire the same.
The husband asserted that the wife had lied in her affidavit and oral evidence. The Court does not accept that. The Court accepts the wife was in error about the date of the death of Ms C, when she said that Ms C died in June 2003, noting that she actually died on (omitted) 2002. The husband cross-examined the wife on a number of paragraphs of her trial affidavit but, relevantly, failed to cross-examine her on critical paragraphs in relation to her contribution to the improvement and maintenance of the former matrimonial home. Those matters are as set out at paragraph 76 of her trial affidavit and include the wife cleaning hundreds of bricks; laying brickwork and pavers; designing, re-establishing planting and maintaining the gardens; sanding and painting fencing; cleaning and painting ceilings, columns on veranda, windows, cupboards, wardrobes; washing walls; sanding and painting skirting boards, doors, architraves, windowsills and restoring the kitchen. Much of these works could be described as general restoration and maintenance.
The husband gained a concession from the wife that she would, on average, work about 5 hours per week in his business doing paperwork. The husband, in his own affidavit, deposes to the wife working approximately 20 hours a week on the business administration together with looking after the children, taking care of the house duties, cooking and cleaning. That was in the period between 1992 and 1997. The husband says that, in around 1997, the wife started to complain that she did not want to work anymore doing the business’ administration but, thereafter, she continued to work but at a reduced rate of about 10 hours a week. Notwithstanding this divergence, the Court accepts that the wife did, during the course of the parties’ relationship, carry out work in the husband’s business to assist him.
The wife was cross-examined as to a number of conversations with the husband. In particular, a conversation in 2003 wherein the wife deposes to the husband saying: “I can’t support you anymore. You have to get a full-time job,” and her response being: “If I get a full-time job you will have to help me with the domestic duties around the house as I won’t have as much time to do it all, if I’m working full-time,” and his response of: “No, I’m not going to do any domestic chores. That is not my job. It’s yours.” It was put to her that she could not recall that conversation in those terms, given the length of time that had passed. The wife’s evidence was that she had not forgotten that conversation. She recalled it and said it was very hurtful at the time. The Court accepts the wife’s evidence, in that regard.
Obviously, the events concerning the breakup of the parties’ relationship were hurtful to both. The husband provided a Christmas card which stated: “There’s not enough love in the world.” The wife responded:
Where was the love for your partner and wife of 21 years? Where was the love for your two children when you evicted them from their home? But you have love for a 50 year old ... Do not write any communications to me. I will never be your friend or forgive you for what you have done to me and my children. I disconnect from you. Got it?
The husband maintained that the wife in writing that, had asserted that there was little likelihood of the parties reaching an agreement concerning parenting matters at the time and that this was inconsistent with the wife’s assertion that she was attempting to alleviate the tension between the parties. The wife’s position was that she was attempting to do exactly that in October 2006, but that the card indicated her position some 2 months later in December 2006. She said, “I still go by what I said in my affidavit, and that that was true.”
The level of antagonism between the parties has been heightened by the husband’s belief that the wife had, in some way, discredited him and his partner, Ms H, in the eyes of his local community, his church, being the (religion omitted) and the children’s school.
The parties appear to have attempted to resolve parenting and other matters before some church-related body, but that was, ultimately, unsuccessful. Further, the husband believed that he had been alienated from the children as a result of the wife’s behaviour. Most of that is, however, irrelevant for the property proceedings currently before the Court.
While the husband appeared to deny the conversations concerning the parties’ occupation of the former matrimonial home on the basis that they could stay in there, so long as it was renovated and repaired, he put exactly that same proposition to the wife who agreed that that was her understanding, but that as a result of her being asked to leave the property, in terms of the parties’ separation, she was no longer able to continue to repair and renovate the property and contribute in that regard. The wife maintained that, at one point, the husband had agreed, himself, to vacate the property but had then informed her that it was she, who would need to vacate it. She said she complied with this request and vacated the former matrimonial home.
The wife gave evidence as to the state of the former matrimonial home at the time of separation and said that it was in good condition with some of the extension work completed, the kitchen partly done and with the flooring complete. She said the bathroom was near completion and was usable. She disputed that the continued occupation of the property was then dangerous for the children, due to the ongoing building works.
The wife believed that the husband had attempted to frustrate her property entitlements by declaring himself bankrupt in 2008. As it became apparent, the husband was made bankrupt on a creditor’s petition lodged by his then solicitor seeking recovery of unpaid legal fees. The husband believed he had been made bankrupt against his own will, but agreed that he had substantial debts at the time as referred to by his Trustee in Bankruptcy.
At the time of the husband’s bankruptcy, he owed the Australian Taxation Office (“ATO”) some $128,052.00. The husband’s evidence was unclear as to how this debt had arisen but it appears that he had made various investments which were effected for the purposes of obtaining tax benefits, which were subsequently disallowed and he was then assessed for back payments of tax. The husband regarded the ATO as a criminal organisation which had defrauded him of money. The husband owed some $1,965.00 to the Child Support Agency (“CSA”). He also owed some $11,669.00 to his lawyers in unpaid legal fees.
The wife conceded that while she asserted that Ms H resided with the husband in the former matrimonial home, she had no evidence to support an assertion that Ms H paid rent. The husband, however, agreed that he had received at times rent from persons occupying the former matrimonial home.
The wife’s evidence was that she was a full-time mother. While she at some point commenced volunteering at school for a few years, this did not impact on her seeing herself as a full-time homemaker. The husband appeared to have some difficulties in accepting that proposition as he maintained that if she was carrying out any volunteer work then she could not then be a “full-time” homemaker. The Court does not accept that position and further accepts that as between the husband and the wife it was she who provided substantially the homemaker contribution.
The parties’ adult child, Mr L, was apparently living in Melbourne, undergoing some drug rehabilitation. The mother’s evidence was that she believed that upon his completion of that he would return to Sydney to live with her. The husband had sought to have the wife release or pay moneys currently standing to the credit of the controlled moneys account for the costs of Mr L’s rehabilitation program, being then in the order of some $28,000.00. The wife said that she had, initially, agreed to that but had changed her mind as a result of certain advices and also on the basis that she believed that it was the husband’s decision to have Mr L in that program and that he had taken Mr L down there (to Melbourne) that he should be responsible for those fees and that he should “step up to the mark” in that regard. The wife conceded that the husband had paid those fees and had, indeed, stepped up. The wife also conceded that she had received some financial assistance from both Mr L and Ms A. Mr L in terms of paying about $2,400.00 for her rental bond and from Ms A by way of payments, at times, for half of her rent when the wife had gone away from her rented accommodation. The wife said that this had occurred on approximately 3 times in 2 years at her current address.
The wife also conceded in terms of paragraph 72 of her affidavit that on occasions she received money from Ms C to go towards the parties’ renovations and repair expenses. The wife also gave evidence that she too had contributed to the purchase of paint and the like from her earnings. The Court accepts that she did.
The wife had received an inheritance from her own mother. Although it appears that her mother’s property was sold during her lifetime for approximately $180,000.00, and a substantial proportion of that, namely $160,000.00 was used to fund the wife’s mother’s living arrangements. The wife says that she received approximately $20,000.00 upon her mother’s death. While the $160,000.00 appears to have been used up in living expenses, it also appears that a sum of some $30,000.00 was donated to the Church as a result of the wife’s mother’s direct request. The husband was somewhat critical of this because the plaque recording that donation appears to record the wife as the donor. The wife’s evidence was that that was done in accordance with her mother’s wishes but that the donation had come directly from her mother’s own funds.
The husband took issue with a number of the items asserted by the wife in terms of paragraph 76 of her affidavit, although he did not cross-examine her about any of those matters. In particular, he said that she did not carry out landscaping to the garden but that rather she directed and he did the work. He disputed that she had painted the path and veranda on 3 separate occasions, although he said he could not deny the possibility that she had done so. He adopted a similar position in relation to the cleaning and painting of the skirting boards, the cleaning and painting of the door architraves and the sanding and painting of windows. He was a little more strident in his opposition to her allegation concerning the sanding and painting of the roof architrave, as he believed it was too high for her to do so. He did not believe that she had painted walls and ceilings on 3 separate occasions but could not discount that she had done so. The husband had obtained some evidence as to the cost of providing some of the work items specified by the wife in her affidavit material. The 3 quotations identified some of the work items in Exhibit “H” as between $3,700.00 and $6,160.00.
The husband conceded that the renovations to the former matrimonial home had taken “forever” and had taken away much of his energy and created stress for him. The husband now saw it as a mistake in asking his father to live at the former matrimonial home and to renovate and maintain it.
The husband called his partner, Ms H, who gave evidence as to a series of photographs taken in late December 2004 and early 2005. The Court accepts Ms H’s evidence as to when those photographs were taken, given that she had taken them. They do show substantial renovation works carried out at the former matrimonial home. The photographs, however, do not show that the property was unliveable and, indeed, Ms H’s evidence was that with some effort, painting and the like, the bedrooms were decorated for the children in early 2005. It is difficult to determine from the photographs tendered the status of any of the building works. The Court accepts, however, that from about November 1992 when the parties occupied the former matrimonial home that they entered into a process of repair and renovation to it as that was what was expected of them to be able to stay there. It was this expectation which also grounds the unusual circumstances for the former matrimonial home to be included in the parties’ property pool for division, following its inheritance from the husband’s father.
The husband was cross-examined. The husband appeared to see himself in both a “physical” and a “spiritual light”. He had difficulties in conceding even where he lived as he said that he did not understand what living meant. He was cross-examined as to why he referred in his own affidavit to being “currently domiciled near Property F”. His evidence was that he did not now understand what “domiciled” meant but that he may have understood it when he swore to the document in August 2014. He was reluctant to concede that he lived at the former matrimonial home. The husband was also reluctant to agree to anything which saw him in a position where, as he said, the estate of “Mr Corbett” may be affected. Exhibit “1” was a document handed up on the first morning of the hearing which was a notice of general appearance. In that document the husband stated:
I, Mr Corbett, appear with respect to true justice, law, and equity. I, Mr Corbett, am here to settle disputes and create remedy, I, Mr Corbett, with power to create and terminate trusts. Mr Corbett of Property F, appears.
The husband appears to be involved as a (omitted) in the Church (religion omitted), as well as an (occupation omitted) performing some (omitted) services. He appears to be involved in bartering, in other words, receiving in lieu of money, services/goods for the provision of his services. He does not appear on his own evidence, to receive any regular source of income, although he conceded that he requires about $300.00 to $400.00 per week to meet his outgoing expenses.
The husband also agreed that he had adopted an oppositional stance with respect to the conduct of these proceedings. He conceded that he had not filed trial affidavits or statements of financial circumstance to enable his financial position to be, appropriately, disclosed to the Court and to the wife. The husband’s evidence was that he had rejected the authority of the Court to require him to file documents and, indeed, his evidence was that he had returned the form of the order dated 23 March 2015 to the Court because he was not going to comply with it. That order directed the parties to file their trial affidavits and to provide financial disclosure. Further, the order sought to set up a mediation and the release of moneys ($2,490.00) from the controlled moneys account to enable that to occur, being $990.00 to the Law Society of New South Wales and $1,500.00 to the wife’s solicitors for professional fees in preparation for the mediation. The Court reserved determination of the incidence of those payments to the final hearing. The husband conceded that he had elected not to attend the mediation because he thought it would be further expense and unlikely to resolve the matter. The husband argued that he had concerns about the Court’s jurisdiction, particularly as a result of a number of previous dealings with the Court system which he did not explain further.
The husband’s evidence was that he no longer conducted an (omitted) business as it had ceased before he became bankrupt and that his ownership of various (omitted) was not a business but a hobby. He was asked how he survived and met his living expenses and his response was that he did so by way of donations and bargaining. He said: “I live day by day.” The husband said that the wife never put any moneys that she earned during the course of the marriage towards the matrimonial pot or the parties’ living expense. The Court simply does not accept that assertion. The Court accepts that she did so.
In 2004, when the parties separated, the wife left the former matrimonial home and moved into a “garage”. The husband maintained that the garage was, in fact, a converted bedroom and that it was not simply a vacant garage.
The husband maintained that he had no credit cards or bank accounts. His wallet was called for and he identified that he held a debit card in the name of the (omitted) with (omitted) Bank under his name.
The husband agreed that he held some $3,000.00 in cash and had $2,000.00 worth of contents, totalling $5,000.00, that he owed rates of some $20,000.00 on the former matrimonial home, that he had a painting, referred to in the deed of trust worth approximately $20,000.00, a (omitted) motorcycle worth $2,000.00, a (omitted vehicle) worth $3,000.00 and a (omitted) Corolla worth approximately $3,000.00, the last three vehicles being registered in his name. He assessed the (omitted) at $2,000.00 each, totalling $4,000.00, and said that there was a property in (country omitted). He said he had no idea as to its value. It was put to him that it could be worth a couple of hundred thousand dollars and his response was: “No idea, possibly $20,000.00”.
The husband had no superannuation, shares or other moneys. He did acknowledge tools of trade as an (occupation omitted) worth he said, approximately $1,000.00.
The husband indicated that he wished to travel to (country omitted) but had not made any booking arrangements in that regard. The Court notes it would be difficult to see how the husband could fund such a trip from his current disclosed income sources.
Of particular concern to the Court is the entity described as the (omitted) and the documents which the husband acknowledged he had entered into for the purposes of protecting “his property”. Whilst those documents were tendered, there was no evidence that stamp duty had been paid. The husband agreed that whilst he had no “boarders” at the former matrimonial home, that there was a person living there, who was paying him $170.00 per week. He did not disclose that income in any of his filed documents.
The husband agreed that, at times, he had not accepted service of documents and indeed had informed process servers that he was not, in fact, Mr Corbett. The husband saw that as appropriate in that he saw a distinction between Mr Corbett, the person and Mr Corbett, the corporate entity. He said that as he was not a corporate entity, therefore, he could not be served in that form.
It was put to the husband that he had adopted a stance which had increased the costs of the wife, including a refusal to sign statutory declarations in relation to lost title deeds. Again, his position was that if he did not understand what a document was and there was a risk that his property could be affected, he would refuse to comply with any such written request or otherwise.
The husband’s evidence that whilst he had signed the documents, being Exhibits “5”, “6”, “7” and “8” to protect his property, that he had done so not to frustrate the wife’s claim itself. The Court does not accept that evidence. Similarly, his lodgement of a Caveat against the former matrimonial home that he and his brother were entitled to be registered as the executors of, appeared to be simply a further step to delay and cause further expense to the wife. There should be an order directed to the husband to do all acts and things to remove that caveat.
The wife has incurred, from Exhibit “F”, approximately $227,985.60 in legal expenses, although she claims somewhere between $300,000.00 and $450,000.00 in costs.
The Law
The decision of the High Court of Australia in Stanford v Stanford [2012] HCA 52 (“Stanford”) makes it clear that the starting point for the exercise of the Court’s jurisdiction under s.79 of the Family Law Act 1975 (“the Act”) to alter the property interests of parties to the marriage is the identification of the existing legal and equitable interests of each of the parties in their property.
The Court accepts that, in all the circumstances, it is just and equitable that there should be a property adjustment order in terms of the principles set out in Stanford.
The preferred approach to the determination of an application under s.79 of the Act is as set out by the Full Court of the Family Court of Australia in the case of Hickey v Hickey & Attorney-General of the Commonwealth (Intervener) (2003) FLC 93-143 at p 39, which sets out the following four inter-related steps:
1. Identify and value, as at the date of hearing, the parties’ property, liabilities and financial resources;
2. Identify and assess the contributions under s.79(4)(a),(b) & (c) (“the first limb – the contribution factors”) of the parties and express them as a percentage of the net value of the property (examined on either a global approach or an asset by asset approach, depending on the circumstances of the case);
3. Identify and assess the other factors relevant under s.79(4)(d)(e),(f) & (g), (“the second limb – ongoing needs and effect of orders”) including, because of s.79(4)(e), the matters referred to in s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
4. Consider the effect of the above and resolve what order is just and equitable in all the circumstances of the case.
In undertaking the first step outlined above, the Court must act with reasonable precision in both identifying and valuing the property pool. However, in the subsequent steps, the Court is not required to assess contributions with mathematical precision. See Nygh J in G & G (1984) FLC 91-582.
In Mallett & Mallett (1984) FLC 91-507, the High Court of Australia held that there is no rule or principle that the property built up by the parties’ joint efforts should be assumed as being equally contributed to.
Section 79(4) of the Act [Matters to be taken into account]
In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
e)the matters referred to in subsection 75(2) so far as they are relevant; and
f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Section 75(2) of the Act [Matters]
The matters to be so taken into account are:
a)the age and state of health of each of the parties;
b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
d)commitments of each of the parties that are necessary to enable the party to support:
i)himself or herself; and
ii)a child or another person that the party has a duty to maintain;
e)the responsibilities of either party to support any other person;
f)subject to subsection (3) the eligibility of either party for a pension, allowance or benefit under:
i)any law of the Commonwealth, of a State or Territory or of another country; or
ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia, and the rate of any such pension, allowance or benefit being paid to either party;
g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
l)the need to protect a party who wishes to continue that party's role as a parent;
m)if either party is cohabiting with another person, the financial circumstances relating to the cohabitation;
n)the terms of any order made or proposed to be made under section 79 in relation to:
i)the property of the parties; or
ii)vested bankruptcy property in relation to a bankrupt party;
naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
i)a party to the marriage; or
ii)a person who is a party to a de facto relationship with a party to the marriage; or
iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
p)the terms of any financial agreement that is binding on the parties.
q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
General
It must be noted that an entitlement to make an application pursuant to s.79 of the Act does not create any legal or equitable right in property. Property rights come into existence only upon the making of an order. See Re Chemaisse; Federal Commissioner of Taxation(Intervener) (1990) FLC 92-133.
Superannuation
The Full Court of the Family Court of Australia’s decision in Coghlan & Coghlan (2005) FLC 93-220 requires the Court to consider the parties’ superannuation interests as a separate species of property.
Where the parties have superannuation, the preferred approach for the Court to adopt as discussed in Coghlan & Coghlan (2005) FLC 93-220, is to prepare as a separate pool, a list of the superannuation interest/s and where a splitting order is sought under Part VIIB of the Act (or if no such order is sought it being prudent to do so), carry out the following exercise:
a)Value the superannuation interest/s (according to the Regulations, if a splitting order is sought, or if no such order is sought, then according to the Regulations or otherwise).
b)Identify and assess the contributions under s.79(4)(a),(b) & (c), (“the first limb – the contribution factors”) of the parties and express them as a percentage of the superannuation interest/s (examined on either a global approach or an interest by interest approach, depending on the circumstances of the case);
c)Identify and assess the other factors relevant under s.79(4)(d)(e),(f) & (g), (“the second limb – ongoing needs and effect of orders”) including, because of s.79(4)(e), the matters referred to in s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable (in relation to the parties’ property and superannuation interests) in all the circumstances of the case.
Notwithstanding the preferred approach, the Full Court of the Family Court of Australia in Coghlan & Coghlan (2005) FLC 93-220 also stated that the Court has a discretion to include a superannuation interest as an item of property (whether or not a splitting order is sought) and not consider it as part of a separate pool. The Court indicated that such an approach could be adopted, where:
a)the parties agreed; or
b)the superannuation interest itself fell within the definition of property contained in s.4(1) of the Act; or
c)if the interest did not fall within the definition of property, it was of small value when compared to the value of the items of property; or
d)there are features about the superannuation interest which make this appropriate.
The quantum of the wife’s superannuation at $29,022.00 over 3 superannuation schemes is small compared to the value attributed to the parties’ property. The husband does not seek any order in respect of that superannuation amount. In the circumstances, the Court will treat the wife’s superannuation as part of the parties’ property pool.
What were the parties’ property, liabilities and financial resources at the time of hearing?
The following schedule contains all items which the parties have each identified as their property, liabilities and financial resources:
| PROPERTY | H/J/W | VALUE $ |
| Non-superannuation | ||
| (omitted) Bank Account | W | 45.00 |
| Money held in controlled moneys account with the wife’s solicitor Lighthouse Law Group | J | 41,878.00 |
| Money held in trust account with the wife’s solicitor Lighthouse Law Group | J | 412.00 |
| Cash | H | 3,000.00 |
| (omitted) contracting business | H | Unknown |
| (omitted) business | H | Unknown |
| (omitted) plant (2 units at $2,000.00 each) | H | 4,000.00 |
| Tools of trade | H | 1,000.00 |
| (omitted) motor bike | H | 2,000.00 |
| Motor vehicle (Corolla (omitted)) | H | 3,000.00 |
| Van ((omitted)) business purposes | H | 3,000.00 |
| Subaru (omitted) | W | 2,000.00 |
| Oil painting | H | 20,000.00 |
| Household contents | W | 2,000.00 |
| Household contents | H | 2,000.00 |
| Property C (half interest in the husband) | H | 550,000.00 |
| Property F (former matrimonial home) | H | 890,000.00 |
| Property in (country omitted) | H | Unknown |
| Superannuation | ||
| (omitted) Superannuation | W | 8,294.00 |
| (omitted) Super | W | 14,455.00 |
| (omitted) Super | W | 6,273.00 |
| LIABILITIES | ||
| (omitted) Credit Card | W | 16,000.00 |
| Legal fees | W | 450,000.00 |
| Rates on former matrimonial home | H | 20,000.00 |
The husband has failed to provide any proper valuation evidence as to his (omitted) business, his (omitted) business or the property in (country omitted) to which he may have some entitlement.
The values of each of the various items of property and liabilities referred to in the above schedule, unless described as unknown, are not in contention. The husband also, relevantly, agreed that the wife had an entitlement jointly to the moneys described as joint funds held by her solicitors either in trust or on controlled moneys, notwithstanding the source of those moneys, which appear to have been paid by his Trustee in Bankruptcy upon discharge of the husband’s bankruptcy.
During the course of the hearing and the conduct of the proceedings, generally, the husband’s behaviour and understanding of the Court process were somewhat problematic. He raised matters which did have some legal basis. The difficulty for the Court, in that regard, was to determine what was a genuine argument and what was not. The Court accepts that it is not its job to “engage in an archaeological survey, piecing together fragments of potential issues” (see the decision of Associate Chief Justice J D Rooke in Meads v Meads 2012 ABQB 571), in a case where a litigant is self-represented and the Court has an obligation to ensure that that litigant’s right to a fair proceeding is preserved. The husband raised other matters which gave the Court some concern as to his capacity and as to his understanding of those other matters. There is no evidence before the Court as to any lack of capacity in the husband. No application was made for the appointment of a litigation guardian. The Court is uncertain whether the husband really understands and accepts some of the submissions that he has made or whether they have been made in circumstances that the husband simply seeks to avoid these proceedings and to form a basis for continuing delay. In those circumstances, the Court sets out the husband’s written submissions as follows and will deal with them accordingly:
a)Lighthouse law Group sent their submissions after the allowed time that was set by the Court without requesting for leave. The Court, however, received the written submissions on 17 November 2015, as provided for in the Court’s directions and, accordingly, this submission is not accepted.
b)The husband comes under the higher jurisdiction of the “UCADIA BYLAWS” (Ucadia is a foreign (charitable and religious) corporation limited by guarantee under Corporations Act 2001, Commonwealth of Australia), with all registrations of property and records (birth certificate etc). Any orders made against him will need to be established under treaty before he is able to co-operate. The Court does not accept that submission.
c)Property settlement between the wife and the husband was conducted under the higher jurisdiction of Ecclesiastical Ruling by the Church as evident by Chaplain’s Court Civil Hearing document dated 1 June 2006. The Court does not accept the husband’s claim of a higher jurisdiction or that there had been some form of property settlement which ousts the jurisdiction of this Court.
d)All the husband’s real property has been gifted to the (omitted) (a (omitted) Trust), submitted to the Court as evidence (see Exhibits “7” & “8”). The Court does not accept that there has been any valid Deed of Gift entered into between the husband and any other person affecting the property of the parties set out in paragraph 75 above. To the extent that the husband claims that position, he has not sought to have any other person, including his partner, Ms H, joined as a party to ventilate such a position. The Court is of the view that the documents referred to by the husband as creating such a gift have been prepared by him simply as a mechanism to blur the reality of his position as being one of the registered proprietors of the property left to him under his father’s will. The husband, initially, claiming that he or his father had lost the title deeds to the relevant real estate properties. That required a specific application by the wife to the Supreme Court of New South Wales so that fresh certificates of title could be issued. The husband refused to sign documents whereby those titles could have been issued by the Department of Land and Property Information. When the title deeds were produced, the Registrar of this Court was required to sign documents on the husband’s behalf (his brother, Mr F Corbett being a joint executor and trustee agreeing to and signing such documents) to enable those properties to be registered in the names of the husband and his brother. The title deeds being then delivered to the Court to be held by it, pending further order.
e)Mr Corbett is not part of the Law Society.
i)Lighthouse Law Group and the Court are both part of the Law Society so any decision by the Court may not be seen as impartial. The Court does not accept that it is part of the Law Society.
ii)Magistrate Kemp allowed Lighthouse Law Group access to moneys held in Trust for the husband to pay for the wife’s half of mediation in the Law Society without the husband’s consent. This violated the agreement to have a mediation per the mediation contract that both parties pay for their own share of the mediation cost. The Court notes it allowed both parties access to such trust fund monies for the purposes of obtaining legal advice and to seek to resolve the matter by way of mediation. Further, the husband then refused to attend the mediation.
f)The wife has been and still is employed and receiving income to take care of her needs. This is a matter which the Court will consider under s.75(2) of the Act, referred to below.
g)The husband withdraws any and all consent to any contract that the wife or the Court relies on, including but not limited to the marriage certificate etc.
i)All the conditions to the marriage certificate contracts were not disclosed to the husband before he signed the marriage certificate and or any Court document, so he cannot be bound by them. The Court does not understand this submission. The parties were married and, subsequently, were divorced.
ii)The maxim of law that fraud voids a contract ab initio (from the beginning) and any other forms of claimed evidence applies. The Court has absolutely no idea what the husband alludes to by reference to this maxim.
h)The wife and agents failed in their first attempt in the Court in 2010 to get the Court to order the sale of the former matrimonial home:
i)The Court determined in 2010 that no constructive trust was established, so the former matrimonial home was not part of the family finances or a gift to the husband and the wife. The Court accepts that submission as to the circumstances in 2010.
ii)The wife and her agents are attempting yet again to establish grounds for a claim on the basis of a constructive trust in order get access to the husband’s birthright inheritance, an inheritance that occurred many years after separation and divorce despite being reminded by Magistrate Kemp that a ruling was laid down by him in 2010 that there were no grounds for a constructive trust. The Court notes that the effect of the wife’s application is to seek to deal on a just and equitable basis with the parties’ property, liabilities and superannuation at the time of the hearing. The former matrimonial home was not the property of the husband when his father was alive in 2010. The property proceedings of the wife were stood over at the time given the age and health issues of the husband’s father. Following the husband’s father’s death, the husband became entitled to certain property (including the former matrimonial home) in terms of the will of his father.
i)There are many precedents in the Family Court that state inheritance to be excluded from family financial recourse. Bishop & Bishop (2013) FLC 93-553 Full Court excluded inheritance, Mistle & Mistle [2010] FamCA 29 excluded inheritance after separation, Elgabri & Elgabri [2009] FamCA 227 excluded inheritance, and White and Tulloch v White (1995) FLC 92-640 (Full Court) rejected the proposition that a prospective inheritance is a financial recourse. These are submissions which the husband can validly make and will be dealt with by the Court.
j)The wife has not provided any witnesses to back up any of her allegations. She relies only on her own hearsay. The Court deals with the wife’s evidence as direct evidence from her.
k)The wife has shown contempt for any oath she made in her affidavit or on the witness stand as there is evidence twice over that she made false statements, known as perjury in legal terms, which is viewed by the Court as a serious offence. This violation of the truth invalidates anything and everything the wife has stated or written under oath to be true.
i)The wife stated in her affidavit under oath that the husband’s mother, Ms C's death date was in June 2003 but if she would have cared to see it was stated clearly on the Court record that her death was (omitted) 2002. The Court notes that the wife conceded that she had made a mistake and nothing, relevantly, turns on that.
ii)The wife said that the house was in good condition and the floor was fully down in the back section of the house whereby photographs submitted by Ms H as evidence and sworn under oath shows a large and deep gaping hole due to the lack of flooring and the house in an obvious incomplete state of renovation. The Court notes that the wife vacated the former matrimonial in about April 2004 and photographs tendered in Exhibits “9” & “10” as to the state of the flooring are not determinative. The Court accepts, however, that building works were carried out post the parties’ separation and that the wife’s recollection as to the state of completion of the former matrimonial home must be considered in terms of it being some 11 years ago. In any event, little turns on that.
l)The wife has never tried to communicate directly to the husband to resolve any issues but has only threatened the husband with punitive measures. The Court notes that notwithstanding orders for the parties to attend mediation, the husband refused to attend.
m)The wife’s claim for property that she has no claim to is unjust and unfair. The Court must deal with any claim pursuant to s.79 of the Act to determine a just and equitable property outcome.
n)The husband has many times tried to resolve the issue with the wife by offering her a place to stay and more than fair monetary settlement to her agents all of which were ignored. The Court notes that, as at the date of the hearing, the parties had not reached any agreement.
o)The husband did formerly put in a Notice of Discontinuance filed into the Court 15 November 2007 so is not a defendant in this matter. The Court notes that while he did file such a Notice of Discontinuance, he has continued to appear and has sought his own orders on the final hearing.
p)The husband entered the matter as a plaintiff via Application in a Case filed 17 December 2014. The Court does not understand the nature of this submission, save that it repeats the matters in (o) above.
q)The wife and the husband both agreed to discontinue in the matter per the signed document dated 21 November 2006 and faxed it to the Court on 21 November 2008 9:51 as evidenced submitted as part of the husband’s affidavit 25 August 2014; Annexure “A”. Clearly, these proceedings were never discontinued by the wife.
r)The wife stated on the witness stand under oath that she gets financial support from son Mr L, 22 years of age and daughter Ms A who is 20 years of age. This is a matter which the Court will consider under s.75(2) of the Act, referred to below
s)The Corbett family has suffered damage from the wife’s action in the Courts.
i)Mr F Corbett and his family defended the husband and their father, Mr S against the wife’s claim for money by the sale of Mr S's property which cost Mr F Corbett and his family emotional stress and $30,000.00 in legal fees. The wife’s claim was dismissed.
ii)Mr S was very sick and threatened with legal action in his last years of his life.
iii)The husband experienced over 10 years of harassment caused by vexatious claims, denial of access to his son and daughter, ostracised by church members and school groups due to the wife’s continual lies about their marriage, about the husband and about Ms H.
iv)Causing stress to Ms H over the last 10 years of harassment and stresses, ostracised by church members and school groups due to the wife’s lies about Ms H being the cause of the break-up of our supposed “happy” marriage and eventual separation.
The Court notes no claim has been made by Mr F Corbett or Ms H in respect of these proceedings. Mr F Corbett was a party and was given leave to be removed as such. Ms H is the husband’s present partner and was a witness in the proceedings. None of the conduct referred to above could relevantly fall within any waste argument in terms of the decision in Kowaliw & Kowaliw (1981) FLC 91-092.
t)The wife never expected to be entitled to the former matrimonial home as evidenced by her first Court action which had nothing to do with property, only child access so when she states “that she would not have done any work on the property if she wasn't entitled to the property” it is false. This is a matter of submission flowing from the evidence which will be dealt with.
u)The wife stated in her affidavit a list of work she did on the former matrimonial home. The husband got 3 independent quotes for the work that the wife outlined in her affidavit. These quotes were submitted as evidence to the Court (see Exhibit “4”). The husband offered 20 times the average of the quotes which was about $5,000.00. The husband’s offer was ignored. That submission may go to the question of costs dealt with further below.
v)Ms H has been my partner for over 11 years and no orders can be made against the husband without her involvement and consent. The Court repeats the matters set out in paragraph (s) above.
w)Per Lighthouse Law Group “matter transaction report” that came to $179,329.00, at least half of that amount to page 65 concerned the Court case against Mr S which failed and was dismissed order 1, on 16 September 2010. This shows a fraud being attempted by Lighthouse Law Group to make profit from their error. The first maxim on fraud Nullus commondum capere protest de injuria sua propria = “no one (in law) is able to profit by his own wrong”. This submission raises an issue to be considered under the costs claim made by the wife and its assessment.
x)The wife stated in the witness stand under oath that her mother, who had dementia made a donation of over $30,000.00 to the church. On the donation plaque hung on the wall in the church the wife is acknowledged for having made the $30,000.00 donation. The wife’s mother's name is not written on the plaque. This donation occurred at the time the wife says she was having financial difficulties. The wife also stated she received only $20,000.00 for her inheritance of a property in (omitted), near (omitted) on the (omitted) which sold, the wife states, for $180,000.00, 5 years earlier. The Court will deal with this matter on the evidence.
y)The Federal Circuit Court Sydney Registry operates under an ABN. Therefore is it under a sacred oath to protect the people and their property or is it operating as a business? This submission appears to have no relevance to the Court’s jurisdiction to do that which is required of it under the Act.
z)The above question then gives rise to the following three considerations:
i)The maxims on fraud in law are Fraus est celare fraudem namely “it is a fraud to conceal a fraud”.
ii)Fraus omnia vitiat meaning “fraud vitiates (invalidates) everything”.
iii)Ex dolo malo non oritur actio means “an action (in law) does not arise from fraud”.
The Court repeats the matters set out in (y) above.
aa)If just one of these immutable pillars are missing, then surely there is no proper operating system of law.
i)If it is Illogical it cannot be Law
ii)If it is Dishonest (Fraudulent) it cannot be Law
iii)If it is Repugnant it cannot be Law
iv)If it is Unequal it cannot be Law
v)If it is Unknowable it cannot be Law
vi)If it is Incomprehensible it cannot be Law
vii)If it is Unreasonable it cannot be Law
bb)All the above points in question, unless clearly answered, brings forth the need for the Court to establish a contract with the husband with his consent otherwise the husband may be unwittingly contributing to the Court acting outside of its jurisdiction. The Court notes that there is no need for it to establish a contract with anyone for the proper exercise of its jurisdiction in this matter.
cc)The husband states there is no consent with the Court or if there was an appearance of consent established by some action or words by the husband it is now withdrawn and only through written treaty can any agreement be established between any parties with the husband as a member of UCADIA. The Court notes that there is no need for it to establish a contract with anyone for the proper exercise of its jurisdiction in this matter.
The Court takes the husband’s failure to fully disclose his financial position into account as a s.75(2)(o) factor later in these reasons. The husband’s failure created a significant impediment for the Court and the wife insofar as the joint balance sheet was concerned and in any full understanding of the husband’s financial position. The Court was also very concerned by the husband’s attempt to settle a trust and to vest assets into that trust as a mechanism of defeating the wife’s claim. The Court accepts that this was done with a clear intent to make more difficult the wife’s claim and to present to the Court and the wife some form of alienation of those assets of the husband in respect of both his inheritance and otherwise.
What is the effect, if any, of any proposed order upon the parties’ earning capacity?
The proposed orders do not impact on the earning capacity of either the husband or the wife.
Any adjustment under s.75(2) of the Act?
The husband and wife submit that adjustment should be made referable to the following factors in the percentages submitted.
a) the age and state of health of each of the parties;
The husband is 55 years of age and there is no admissible evidence that he is not, otherwise, in good health.
The wife is 53 years of age. The wife says that she has not been in good health and has experienced a number of health problems. There is no admissible evidence as to the effect of that upon her capacity for employment.
b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The husband does not currently work in remunerative employment. He has failed to fully disclose his financial circumstances.
The husband has inherited property from his father’s estate including the former matrimonial home and an interest in Property C, He also appears to have an interest in the property in (country omitted) referred to in paragraph 55 above. These inheritances weigh in favour of an adjustment to the wife see Elgabri & Elgabri where Justice Coleman provided for a 7.5% adjustment in favour of the wife with respect to the husband’s “windfall” inheritance received very late in the marriage, together with his minimally greater capacity for employment.
The Court accepts that the wife has negligible savings and superannuation of approximately $29,000.00.
The wife works full time as a (occupation omitted), earning $34,580.00 per annum. She has, however, limited earning capacity outside that employment.
The Court must have regard to any disparity in the parties’ capital positions as a result of the contribution based assessment. See Loude & Loude [2009] FamCAFC 52.
In considering this disparity, it is not only the question of the “property and financial resources of the parties” that must be taken into account, but the composition of those. The husband has, at the very least, the interest valued at $550,000.00 in Property C.
c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
This factor does not relevantly apply to the facts of this matter.
d) commitments of each of the parties that are necessary to enable the party to support:
i) himself or herself; and
ii) a child or another person that the party has a duty to maintain;
No relevant matter was put to the Court concerning this factor.
e) the responsibilities of either party to support any other person;
No relevant matter was put to the Court concerning this factor.
f) subject to subsection (3) the eligibility of either party for a pension, allowance or benefit under:
i) any law of the Commonwealth, of a State or Territory or of another country; or
ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia, and the rate of any such pension, allowance or benefit being paid to either party;
No relevant matter was put to the Court concerning this factor.
g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
No relevant matter was put to the Court concerning this factor.
h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
No relevant matter was put to the Court concerning this factor.
ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
No relevant matter was put to the Court concerning this factor.
j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
No relevant matter was put to the Court concerning this factor.
k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
No relevant matter was put to the Court concerning this factor.
l) the need to protect a party who wishes to continue that party's role as a parent;
No relevant matter was put to the Court concerning this factor.
m) if either party is cohabiting with another person, the financial circumstances relating to the cohabitation;
The husband is cohabitating with Ms H but has put nothing before the Court concerning her financial circumstances. This weighs against him.
The husband also agreed that he had received moneys from a person residing in the former matrimonial home paying some $170.00 per week. This was not previously disclosed and weighs against him.
The wife agreed that she had received some payments from the parties’ adult children. The Court accepts that those payments were minimal.
n) the terms of any order made or proposed to be made under section 79 in relation to:
i)the property of the parties; or
ii)vested bankruptcy property in relation to a bankrupt party;
No relevant matter was put to the Court concerning this factor.
naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
i)a party to the marriage; or
ii)a person who is a party to a de facto relationship with a party to the marriage; or
iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
No relevant matter was put to the Court concerning this factor.
na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
While no matter was put to the Court concerning this factor by the parties, the Court notes that its order of 23 March 2015 provided that the sum of $10,412.71 standing to the credit of the wife’s solicitors trust account could be released and paid to the Registrar of the Child Support Agency given that, at that time, the husband was indebted to the Agency in that sum and had refused to pay his then outstanding child support obligations. This weighs in favour of an adjustment to the wife.
o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
The Court has considered the husband’s failure to disclose as an element to which weight has been afforded to in an adjustment under this factor.
The wife has an outstanding obligation to pay legal fees in the order of $227,985.60 as set out in Exhibit “F” and $450,000.00, as claimed by the wife in terms of the parties’ submitted balance sheet which is unlikely to be full compensated from an assessment in terms of that contemplated in paragraph 173 below.
p) the terms of any financial agreement that is binding on the parties.
No relevant matter was put to the Court concerning this factor.
q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
No relevant matter was put to the Court concerning this factor.
The wife submits that an adjustment of a further 10% (albeit applied to a larger pool as claimed by her) should be made in her favour so that the final adjustment to the matrimonial pot should be assessed at 60% to her and 40% to the husband.
The husband submits that there should be no adjustment made.
Considering then all of the above s.75(2) factors, the Court is of the view that there should be an adjustment of 12.5% made in favour of the wife equating to approximately $120,919.62. This, the Court regards, as a proper adjustment given the above factors and the parties’ ages and current earning positions and the inheritances received by the husband in respect of the former matrimonial home and the half interest in Property C. This outcome reflects the cumulative outcome of the findings made pursuant to s.75(2). See Tomasetti & Tomasetti (2000) FLC 93-023.
Accordingly, the wife would be entitled to receive 37.5% and the husband 62.5% being $362,758.87 and $604,598.13 respectively.
Are the proposed orders just and equitable?
Section 79(2) of the Act provides that:
“The Court shall 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.”
It is the justice and equity of the actual orders that the Court must consider. Russell & Russell (1999) FLC 92-877.
As the Full Court of the Family Court of Australia said in Dickson & Dickson (1999) FLC 92-843:
“Whilst it may, as a matter of individual circumstance, be correct to say that the mere existence of disparity of wealth ought not of itself justify a settlement of property to one party at the expense of the other, it may often, in the overall circumstances of a case, call for further adjustment beyond that assessed on contributions alone, so that the final order is just and equitable…”
Section 81 of the Act requires the Court, as far as practicable, to finalise the financial relationship between parties when making orders for property settlement.
The wife and husband will, therefore, receive the property and superannuation and be liable for the debts as set out in the following table:
| Property to be retained by wife | $ |
| (omitted) Bank Account | 45.00 |
| Money held in controlled moneys account with the wife’s solicitor | 41,878.00 |
| Money held in trust account with the wife’s solicitor | 412.00 |
| Subaru (omitted) | 2,000.00 |
| Household contents | 2,000.00 |
| Total wife’s superannuation | 29,022.00 |
| Less Liabilities (wife’s credit card) | 16,000.00 |
| Balance | 59,357.00 |
| Plus payment out of the former matrimonial home | 303,401.87 |
| BALANCE | 362,758.87 |
| Property to be retained by husband | $ |
| Husband’s (omitted) business | Unknown |
| Husband’s (omitted) business | Unknown |
| Property in (country omitted) | Unknown |
| Cash | 3,000.00 |
| (omitted) Plants | 4,000.00 |
| Tools of trade | 1,000.00 |
| (omitted) motor bike | 2,000.00 |
| Corolla (omitted) | 3,000.00 |
| (omitted) Van | 3,000.00 |
| Oil painting | 20,000.00 |
| Household contents | 2,000.00 |
| Less Rates on former matrimonial home | 20,000.00 |
| Balance | 18,000.00 |
| Plus payment out of the former matrimonial home | 586,598.13 |
| BALANCE | 604,598.13 |
| TOTAL NET PROPERTY | 967,357.00 |
Accordingly, the wife would be entitled to $303,401.87 and the husband to $586,598.13 out of the sale of the former matrimonial home (noting that some $20,000.00 of unpaid rates owed by the husband will need to be paid by him) with an agreed value of $890,000.00. This represents 34.1% to the wife and 65.9% to the husband in that specific property.
The husband retains the ability to earn any income from his businesses in (omitted) business, plus his half interest in Property C of $550,000.00, as a separate pool.
The Court is satisfied that in all the circumstances of this case, the orders proposed are just and equitable. The Court will further order the release of the Certificates of Title held by the Court pending further order, with the wife entitled to receive the Certificate of Title for the former matrimonial home and the husband entitled to receive the Certificate of Title for Property C.
Form of orders
The Court notes that it was put to the husband that: “If the Court was to make an order to sell the matrimonial home will you do that?” and the husband replied: “No.” On the basis of that, the Court accepts that if it was to make an order for the sale of the former matrimonial home, it is likely that the husband will not comply. Accordingly, the Court accepts the wife’s submission that there should be an order appointing a trustee for the sale of the former matrimonial home, given the husband’s disregard for the jurisdiction of this Court and his expressed willingness not to comply with its orders. This is clearly borne out by the husband’s failure to comply with Court orders and directions in relation to the filing of material or to comply with his obligations for disclosure under the Act and his failure to pay his outstanding child support obligations as referred to in paragraph 136 above. However, there is no jurisdiction in this Court to appoint trustees for sale in terms of that sought by the wife pursuant to the Conveyancing Act. That jurisdiction rests in the Supreme Court of New South Wales. Nevertheless, the Court is of the view that the wife herself should be appointed such a trustee for sale and orders made to have the title to the former matrimonial home transferred to her for that purpose. While the Court provides for the wife to fix any reserve price or to sell the former matrimonial home at the best available price, it notes that there is provision sought for the wife to seek a determination or selling price from the President of the Real Estate Institute of New South Wales or his/her nominee in her ability to deduct the costs of obtaining this from the proceeds of sale. The Court will amend the description of that entity for such a task is in fact the Australian Property Institute and not the Real Estate Institute of New South Wales. Further, the Court is of the view that there is little or no utility in examining an order to buy out the wife’s interest in the former matrimonial home by the payment of a lump sum as it is likely that the husband will not comply with that. The husband did not propose to do so and provided no evidence of any ability to borrow moneys to enable him to do so. The husband’s lack of remunerative employment and previous bankruptcy would potentially indicate a diminished prospect in being able to raise borrowings in any event.
Costs
The Wife seeks to displace s.117(1) of the Act and seeks to rely on s.177(2) and 117(2A) as a basis for her costs. The basis for the costs application is deposed to at paragraphs 119-120 in the wife’s trial affidavit. The wife, in that regard, says that the husband has appeared in this Court and the Supreme Court without filing a response or affidavit and at great cost to her in an attempt to frustrate her entitlements including his attempting to bankrupt himself, not providing full and frank disclosure of his assets and liabilities, not filing and serving a financial statement, refusing service generally, agreeing to initially take part in mediation and then refusing to do so, refusing to execute Statutory Declarations to obtain replacement certificates of title, delaying in the performance of his role as an executor of his father’s estate, attempting to file a caveat on the former matrimonial home and not complying with orders including orders to execute an application for replacement certificates of title. The wife submits that the Court would not only make a costs order in favour of her but that such an order would be made on an indemnity basis.
The principles as to when a Court would award costs on an indemnity basis can be found in Colgate-Palmolive Company and Colgate-Palmolive Pty Ltd v Cussons Pty Ltd; Cussons Pty Ltd v Colgate Palmolive Company and Colgate-Palmolive Pty Ltd [1993] FCA 536; (1993) 46 FCR 225 at 232-234 where Sheppard J summarised the authorities and the relevant principles that are to be applied to an order for indemnity costs.
The Court’s general power to award costs is found in s.86 of the Federal Circuit Court Act 1999 and, in particular, pursuant to Rule 21.02 of the Federal Circuit Court Rules2001.
Pursuant to Rule 21.02(1) of the said Rules, an application for an order for costs may be made:
a)At any stage in a proceeding; or
b)Within 28 days after a final decree or order is made; or
c)Within any further time allowed by the Court
Pursuant to Rule 21.02 (2) of the said Rules, in the making an order for costs in a proceeding, the Court may:
a)Set the amount of the costs; or
b)Set the method by which the costs are to be calculated; or
c)Refer the costs for taxation under part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
d)Set a time for payment of the costs, which may be before the proceeding is concluded.
In relation to costs, s.117 of the Act states:
(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
(3) To avoid doubt, in proceedings in which an independent children's lawyer for a child has been appointed, the court may make an order under subsection (2) as to costs or security for costs, whether by way of interlocutory order or otherwise, to the effect that each party to the proceedings bears, in such proportion as the court considers just, the costs of the independent children's lawyer in respect of the proceedings.
(4) However, in proceedings in which an independent children's lawyer for a child has been appointed, if:
(a) a party to the proceedings has received legal aid in respect of the proceedings; or
(b) the court considers that a party to the proceedings would suffer financial hardship if the party had to bear a proportion of the costs of the independent children's lawyer;
the court must not make an order under subsection (2) against that party in relation to the costs of the independent children's lawyer.
(4A) If:
(a) under section 91B, an officer intervenes in proceedings; and
(b) the officer acts in good faith in relation to the proceedings;
the court must not, because of the intervention, make an order under subsection (2) of this section against the officer, or against an entity (including the Commonwealth or a State or Territory) by or on behalf of whom the officer was engaged or employed.
(5) In considering what order (if any) should be made under subsection (2) in proceedings in which an independent children's lawyer has been appointed, the court must disregard the fact that the independent children's lawyer is funded under a legal aid scheme or service established under a Commonwealth, State or Territory law or approved by the Attorney-General.
Section 117 of the Act was considered by the High Court of Australia in Penfold v Penfold (1980) 144 CLR 311, where it was said:
“Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions, which imposes any additional or special onus on an applicant for an order for costs”.
In Latoudis v Casey(1990) 170 CLR 534, the High Court of Australia stated as follows:
“…in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant. To do so conforms to fundamental principle. If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.”
Section 117 of the Act, provides for a discretionary power in the Court. The Court must examine each of the factors, set out in the section, in turn, in relation to justifying a costs order. A costs order can be made on the basis of one or a combination of those factors Brown v Brown [1998] FamCA 115. The discretion to award costs is a broad discretion: see for example Collins & Collins (1985) FLC 91-603.
Application of the Law
Section 117(2A)(a) The financial circumstances of the party
The Court sets out the parties’ financial circumstances as referred to above.
Section 117(2A)(b) If any party in receipt of legal aid
The parties submit and the Court accepts that this factor is not applicable.
Section 117(2A)(c) The conduct of the parties in relation to the proceedings
The wife submits that the husband’s failure to disclose, as he was required to do, has not assisted the Court, nor her and in those circumstances grounds her costs claim. The Court accepts that submission. The Court has also had regard to the fact that the husband’s non-disclosure has already been considered in terms of an adjustment within the terms of s.75(2) (o) of the Act referred to in paragraphs 106 and 137 above.
The Court also adopts the finding of Smithers J In the marriage of Briese (1986) FLC 91-713 where he stated that the husband “failed significantly to co-operate in a manner calculated to bring the proceedings to an early conclusion at a minimum of cost” as supportive of a costs order being made against the husband. As Smithers J also said, “there is an obligation on each party to act so as to provide a basis upon which the two of them are in a position to resolve the case by agreement, or proceed to a hearing, as expeditiously as may reasonably be done.” The Court is satisfied that the husband has acted in a manner which has not led to the speedy resolution of these proceedings.
Section 117(2A)(d) Proceedings necessitated by the failure of a party to comply with previous orders
The Court accepts that this factor is not relevantly applicable.
Section 117(2A)(e) Whether any party wholly unsuccessful in the proceedings
The Court accepts that the wife has been successful in obtaining a property order albeit not as large as she would, otherwise, contend for. The Court accepts that the husband has been wholly unsuccessful given that his position was that the wife was entitled to nothing.
Section 117(2A)(f) Any offers in writing
Apart from the offer maintained by the husband, referred to in paragraph 78(u) above, which the Court accepts was far below that which the Court has now ordered, the parties submit and the Court accepts that this factor is not, relevantly, applicable.
Section 117(2A)(g) Such matters as the Court considers relevant
The wife submits and the Court accepts that without an order for costs in her favour, she will suffer financial hardship given the quantum of fees and expenses, as claimed by her lawyers.
Indemnity Costs
Having considered the above factors the Court is of the view that there should be an order that the husband pay the wife’s costs. As to the quantum of those costs the wife seeks indemnity. In the matter Kohan & Kohan (1993) FLC 92-340, the Full Court of the Family Court of Australia (Strauss, Lindenmayer and Bulley JJ) held:
“The power to order costs on an indemnity basis…
…that in an appropriate case, the Court has a discretion to order costs on an indemnity basis and that such costs may be ordered where they have been incurred under a costs agreement which departs from the usual scale of costs. However, it is fundamental to the exercise of that discretion in the Family Court that the Judge should not only understand that such an order is a very great departure from the normal standard, but also that the Judge should know what the terms of the agreement are, to what extent it exceeds the parameters set by the scale and what its likely impact will be on the financial position of each of the parties.
This impact is a relevant matter to which the trial Judge should have had regard, when considering the financial circumstances of each of the parties to the proceedings under sec 117(2A)(a), or perhaps even more as a relevant matter under paragraph (g). The degree to which a costs agreement departs from the established norm and the actual financial significance of such a departure may itself be a reason for not ordering costs on an indemnity basis.
The proper exercise of the discretion
The intent of sec 117(1) and 117(2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the Court may make such order as the Court considers just. As we have pointed out, the Court may depart from the scale of costs prescribed under the rules… The Court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind…
Indemnity costs orders are still an exception in this and other jurisdictions… Insofar as an unaccepted offer of compromise which exceeds a judgment may justify an order for costs, the general practice in this jurisdiction so far has been to order no more than costs on a party and party basis. Even in cases where there has been dishonest concealment of assets or income… no more than party and party costs have been awarded.
When considering what is just in this case, one must bear in mind that a party who enters into a costs agreement should be warned and must anticipate in this jurisdiction that each party might well have to bear his or her own costs, and that even if an order for party and party costs is made, the difference between party and party costs and costs payable under a costs agreement may consume all, or a substantial part, of the property order. In this particular case the wife changed her solicitors in August 1990. It must then have been apparent to her, or at least to her new solicitors that this might become drawn out litigation and that a rate of costs which amounted to three times the scale, exposed the wife to great risks. If she was willing to assume these risks, it does not seem just to saddle the husband with them.
The Court is of the opinion that costs should not be paid on an indemnity basis here, given its view that that would be exceptional.
Costs in a fixed sum
While the Court has the ability to fix costs in a specific sum, in an appropriate case, the Court is of the view given the quantum of the costs sought by the wife and the complexity of the proceedings that unless costs can be agreed between the parties they should be assessed/taxed. The Court is of the view that the application of Schedule 1 of the Federal Circuit Court Rules 2001 would not, adequately, compensate the wife in her exposure to such costs.
The wife seeks a costs order for the sum of $300,000.00 - $450,000.00 as referred to in paragraph 2 above and as supported by Exhibit “F” being her Bill of Costs. Nevertheless, given the complexity of Exhibit “F” and noting:
a)on its face, it includes costs associated with proceedings between the wife, the husband and the husband’s father where pursuant to order 3 of the orders made on 16 September 2010 there was no order as to costs between the wife and husband’s father;
b)on its face, it includes costs associated with the proceedings between the parties in the Supreme Court of New South Wales which included an order made by His Honour Justice Stevenson to the effect that there be no order as to costs;
c)that such costs as set out in the said Exhibit appear to have been prepared on a solicitor-client basis without detailed particularisation of the basis for costs;
d)that earlier costs orders in assessed amounts made in these proceedings which covered events at interim/interlocutory level may include costs now being sought in Exhibit “F”. In that regard, the Court is of the view that the wife should be entitled to the sum of $1,500.00 released to her solicitors in terms of paragraph 51 above, given that the husband had failed to attend the mediation arranged, in any event;
e)that Exhibit “F”, in any event, did not quantify the wife’s costs up until the completion of the trial; and
f)that Exhibit “F” refers to the wife having incurred legal expenses of $227,985.60 and the difference between that and the sum of $450,000.00 needs to be determined and assessed.
The Court is of the view that justice requires the costs to be paid by the husband to be determined on a party-party basis, by assessment/taxation at the higher basis as provided in Chapter 19 of the Family Law Rules, with an appropriate direction to the Registrar (if costs cannot be agreed within 28 days) for the exclusion from such taxation/assessment of the matters identified in (a), (b) and (d) above and indeed for directions as to how the material relating to the wife’s costs can be properly assembled for that process to take place.
Time to pay
The Court is of the view that if the parties cannot reach agreement as to costs or payment of costs, then given the attitude of the husband as expressed in these proceedings and his asserted financial position to avoid the further cost and expense to the wife of enforcement proceedings, any assessed/taxed obligation to pay costs to the wife should be met out of the husband’s entitlement to the balance of the sale proceeds prior to any payment to him of his share. Exhibit “F” refers to the wife having incurred legal expenses in the order of $227,985.60. The husband’s entitlement in the proceeds of sale of the former matrimonial home would be in the order of $586,598.13 which would appear to provide a fund out of which the husband’s obligation to meet the wife’s costs could be met. The Court will, however, grant leave to the parties on written notice to restore the matter with respect to the implementation of any of the property orders, including the release of any funds to the parties pending the determination of the wife’s cost entitlement referred to above.
I certify that the preceding one hundred and seventy-four (174) paragraphs are a true copy of the reasons for judgment of Judge Kemp
Date: 12 April 2016
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