Hobart and Hobart
[2013] FCCA 614
•25 June 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HOBART & HOBART | [2013] FCCA 614 |
| Catchwords: FAMILY LAW – Undefended property proceedings – respondent husband has failed to file responding material – whether proceedings should be determined on undefended basis – matters to be considered – justice and equity. |
| Legislation: Family Law Act 1975, ss.79(1), (2), (4) & (5) |
| Taylor v Taylor (1979) 143 CLR 1 Stanford v Stanford [2012] HCA 52 Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605 R v Watson; Ex parte Armstrong[1976] HCA 39; (1976) 136 CLR 248 |
| Applicant: | MS HOBART |
| Respondent: | MR HOBART |
| File Number: | ADC 3909 of 2011 |
| Judgment of: | Judge Brown |
| Hearing date: | 14 June 2013 |
| Date of Last Submission: | 14 June 2013 |
| Delivered at: | Adelaide |
| Delivered on: | 25 June 2013 |
REPRESENTATION
| Counsel for the Applicant: | Ms West |
| Solicitors for the Applicant: | Alice Devolle Family & Collaborative Lawyer |
| Counsel for the Respondent: | No appearance |
ORDERS
That in full and final satisfaction of either parties’ claims against each other for division of property pursuant to Part VIII of the Family Law Act 1975 (as amended): -
(a)That within sixty (60) days of the date of this order the former matrimonial home situated at Property [C] in the State of South Australia being the whole of the land property comprised and described in Certificate of Title Register Book [omitted] (hereinafter referred to as “the former matrimonial home”) be sold by auction and the net proceeds of sale be divided after payment out of : -
(i) Real Estate Agent’s commission, advertising and selling expenses; and
(ii) Conveyancing expenses, search fees, payment out of rates, taxes and outgoings and adjustments thereof
be divided between the parties in the following proportions, namely: -
(iii)As to 70% to the wife; and
(iv)As to 30% to the husband.
That [R] Real Estate Agents be hereby appointed as sole agents to undertake the sale of the former matrimonial home.
That in the event of the husband’s failure to comply with the terms of Order 1 and Order 2 hereof: -
(a)The wife shall be and is hereby appointed to act as sole attorney for the husband to do all things and sign all documents as may be necessary or incidental to enter in and put into good effect a good valid and binding Sales Agency Agreement for the sale of the former matrimonial home with [R] Real Estate Agents; and
(b)To enter into and execute as attorney for the husband a good valid and binding contract for the sale of the former matrimonial home with a bona fide purchaser thereof upon terms and conditions as the parties shall agree taking into account the advice and expertise in marketing of the said appointed Real Estate Agent.
That the wife do have sole use and occupation of the former matrimonial home one (1) month prior to the placement of the former matrimonial home for sale onto the public market for the purposes of her arranging for items of repairs and maintenance to be effected upon the former matrimonial home in preparation for sale taking into account the advice and expertise in marketing of the said Real Estate Agent and for that purpose the husband do provide the wife with keys to the former matrimonial home.
That within seven (7) days of the completion of all items of repairs and maintenance to the former matrimonial home as specified in Order 4 hereof, the wife do appoint [R] Real Estate Agents to market the former matrimonial home for sale by auction.
The reserve price of the property shall be such amount as is agreed between the parties and failing agreement being reached between the parties twenty one (21) days prior to the auction, then the reserve price shall be nominated by the said Auctioneer.
The sale price of the property shall be any amount in excess of the reserve price but in the event that the reserve price is not reached the sale price of the property shall be such amount as may be accepted by the wife.
In the event that the property is not sold at auction as specified in Order 5 hereof, or within fourteen (14) days after the date of the auction by further negotiation, then the wife shall cause a further auction of the property to be held within four (4) months after the date of the first auction and for that purpose the provisions of Order 4, Order 6 and Order 7 hereof shall continue to apply.
That following (21) days after of the making of this Order the husband shall have vacated the former matrimonial home and shall thereafter be restrained and forever be restrained and an injunction is hereby granted preventing the husband from occupying the former matrimonial home.
That the husband be solely liable and responsible for payment of all items of repairs and maintenance to the former matrimonial home.
That the costs of the items of repairs and maintenance in relation to the former matrimonial home specified in Order 10 hereof be deducted from the husband’s share of the sale proceeds specified in Order 1.1.4 hereof.
Thereafter the wife shall retain as her sole and absolute property free from any claim from the husband all personal property in her possession including:
(a)The payment specified in Order 1.1.3 hereof;
(b)The wife’s furniture and personal effects including the following household items furniture and effects:
(i) Clifton Pugh Lithograph;
(ii) Cobalt Vase;
(iii) Dining room cupboard including all contents therein;
(iv) Painting of ships in lounge room;
(v) Small table with marble top in lounge;
(vi) Grandfather and Grandmother matching chairs; and
(vii) Outdoor gas fired four (4) burner BBQ with lid.
(c)The wife’s motor vehicle;
(d)All cash, bank accounts, savings, insurances and other investments in the wife’s possession;
(e)All payments or benefits which have accrued or which may accrue to the benefit of the wife pursuant to any policy of superannuation that the wife is entitled; and
(f)All other items of personal property not specifically referred to hereof.
Thereafter the husband shall retain as his sole and absolute property free from any claim from the wife all personal property in his possession including:
(a)The payment specified in Order 1.1.4 hereof subject to Order 11 hereof;
(b)The husband’s furniture and personal effects save and except those specified in Order 12.2 hereof;
(c)The husband’s motor vehicle;
(d)All cash, bank accounts, savings, insurances and other investments in the husband’s possession;
(e)All payments or benefits which have accrued or which may accrue to the benefit of the husband pursuant to any policy of superannuation that the husband is entitled; and
(f)All other items of personal property not specifically referred to hereof.
That the husband is restrained and an injunction is hereby granted restraining him from disposing of the item specified in Order 12.2.1 hereof other than for the purpose of giving effect to this Order.
That hereafter the wife shall meet payment of all of her personal debts and liabilities incurred in her own name to the complete exoneration of the husband who shall have no liability with respect thereto and the wife does hereby indemnity the husband against all claims, expenses, losses or demands incurred by him as a result of the wife’s refusal, failure or neglect to so pay.
Hereafter the husband shall meet payment of all of his personal debts and liabilities incurred in his own name to the complete exoneration of the wife who shall have no liability with respect thereto and the husband does hereby indemnity the wife against all claims, expenses, losses or demands incurred by her as a result of the husband’s refusal, failure or neglect to so pay.
Each of them, the husband and the wife, is restrained and an injunction is hereby granted restraining them and each of them from pledging the credit of the other.
That each of the them, the husband and the wife, shall do all such things and sign all such documents as may be necessary or desirable to give a good valid and binding effect to the terms of the within Order and in particular if either party shall refuse or neglect to execute a Memorandum of Transfer in the form properly registrable under the provisions of the Real Property Act 1886 as amended of his or her estate and interest in the said land within seven (7) days after the same shall have been tendered to him or her, by or on behalf of the other party for that purpose then and in such case pursuant to s.106A of the Family Law Act 1975, a Registrar or upon proof by Affidavit of such refusal or neglect or that the whereabouts of one of the parties is unknown to the other, is hereby appointed to execute and if in his or her opinion it shall be necessary so to do, to settle the same and to do all other acts and things and to execute such other documents as shall be necessary to give full force and effect thereto and shall execute and do the same accordingly.
That the husband do pay the wife’s costs to be fixed or agreed with liberty to the parties to apply as to the quantum of those costs.
That the wife’s Initiating Application filed on 3 December 2012 be hereby dismissed.
Liberty to the parties to apply as to consequential orders.
A copy of the orders made today and these reasons for judgment are to be personally served on the respondent as soon as is practicable.
IT IS NOTED that publication of this judgment under the pseudonym Hobart & Hobart is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 3909 of 2011
| MS HOBART |
Applicant
And
| MR HOBART |
Respondent
REASONS FOR JUDGMENT
Introduction
This is a sad and perplexing case. Ms Hobart “the wife” and Mr Hobart “the husband” married [in] 1960. They were divorced on 29 November 2011.
The wife is now approaching her seventy-second birthday. She is in indifferent health, suffering from chronic obstructive pulmonary disease. She finds it difficult to breath and is on anti-depressant medication.
The husband is seventy-five years of age. He has not provided any evidence regarding his health. However, it is the position of the wife that he suffers from alcoholism.
The wife currently lives in rented accommodation. Her sole source of income is an aged pension of $415.00 per week. Her major expense is her rent of $265.00 per week. She has $1,825.00 in the bank.
The wife hopes to live independently for as long as possible. She is currently eligible to receive care in the community. However, it is likely that she will have to move to an aged care facility at some stage in the future. The financial implications of such a move are uncertain.
The wife commenced these proceedings on 3 December 2012. She seeks that the parties’ marital assets be divided 70/30 percent in her favour. Her husband was personally served with this application on 8 December 2012. He was served at the parties’ former matrimonial home, which is located at Property [C].
The wife’s application was made returnable on the 11th February 2013, approximately two months after the date on which the husband was served.
Mr Hobart did not attend court on 11 February 2013. Although he had not requested that the court contact him by telephone, so he could take part in the proceedings, nonetheless, at its own instigation, the court telephoned him in order to ascertain what his attitude was to the wife’s application.
The husband was not amenable to this procedure. He indicated that he was not able to come to court and would not be instructing a solicitor to appear on his behalf. He refuted any suggestion that his former wife had any claim for property settlement.
In these circumstances, the following orders were made:
“The respondent file and serve a Response and Affidavit and a statement of his financial circumstances in support within 28 days of today’s date.
Further consideration of the matter is adjourned to 25 March 2013 at 2:15pm and if necessary to appoint a hearing date for an undefended hearing.”
The intention of the order was to impress upon Mr Hobart that, if he did not formally take part in the proceedings, they would be adjudicated without further input from him.
Mr Hobart did not comply with the orders of 11 February 2013. On the adjourned date, the following orders were made:
“The wife’s application be fixed for an undefended final hearing before Federal Magistrate Brown on 14 June 2013 at 2:15pm.
The wife file and serve by pre-paid post on the respondent husband at his last known address a minute of the final orders which she seeks in these proceedings together with any additional affidavit material on which she wishes to rely at final hearing no later than 4:00pm on 17 May 2013.”
Mr Hobart has not filed any documents, in the court, since 25 March 2013. In those circumstances, the wife presses for her application to be dealt with on an undefended basis. It is her case that she has a pressing need for capital to provide for her latter years.
Mr Hobart was provided with a copy of the order made on 25 March 2013. It was delivered to him, by way of registered post. The wife, on oath, identified his signature on a delivery confirmation-advice receipt, issued by Australia Post.[1] In all these circumstances, I am satisfied that Mr Hobart is aware of these proceedings.
[1] See Exhibit “A”
Should the proceedings be dealt with on an undefended basis
It is a significant thing for proceedings to be determined in the absence of one of the parties. The court has an obligation to ensure that the parties to proceedings before it have an opportunity to participate in those proceedings.
Accordingly, before a person can be adversely affected by judicial order, he or she must be afforded an adequate opportunity to be heard.[2] I am satisfied that Mr Hobart has been given an adequate opportunity to appear in these proceedings and put his position before the court.
[2] See Taylor v Taylor (1979) 143 CLR 1
I reach this conclusion because he was personally served with the wife’s application. Thereafter, he was put on notice that, in the event that he did not file formal responding documents, the wife would be given leave to proceed on a final basis. Finally, he has been given formal notice of the date and time allocated for the final hearing.
Ms Hobart needs neither Mr Hobart’s formal imprimatur nor his cooperation to have her application determined. Rather, there is an obligation, on Mr Hobart’s part, if he wishes to be involved in the proceedings, for him to attend at court as required and pursue any application put by him or on his behalf with due diligence.
The Federal Circuit Court is a court of private law. It determines disputes between parties according to law. In this case, according to the provisions of the Family Law Act 1975, which relate to the division of property following martial breakdown.
However, a respondent, whether by intransigence, disinterest or manipulation, cannot succeed in denying an applicant a just resolution, according to law, to his or her application, by choosing not to take part in proceedings because they do not proceed in the manner of his or her preference.
I am uncertain as to why Mr Hobart has elected not to take part in these proceedings because no documents have been filed on his behalf. On the other hand, Ms Hobart has clearly put her position and provided evidence in support of it.
In these circumstances, I have concluded that the interests of justice dictate that Ms Hobart should have her case finally determined. In my view, no useful purpose will be served by adjourning the proceedings, in the vain expectation that Mr Hobart will choose to involve himself in them.
The evidence
The wife is the only person who has provided evidence in the proceedings. She relies on the following documents, which have been earlier provided to Mr Hobart:
i)An affidavit of herself filed 3 December 2012;
ii)A statement of her financial circumstances filed 3 December 2012.
In addition, she provided some brief oral evidence identified her husband’s signature on the Australia Post receipt and regarding her current circumstances.
Obviously, none of the wife’s evidence has been subject to any scrutiny through a process of cross-examination. In addition, Mr Hobart has produced no evidence in rebuttal of any of the wife’s various assertions regarding his conduct during and after the parties’ marriage, particularly in respect of the acquisition and disposal of items of property.
The standard of proof to be applied in these proceedings is the balance of probabilities. In the circumstances of this case, the court is obliged to accept the wife’s evidence unless it appears to be inherently unreliable or implausible.
In my assessment, the wife presented as an honest person, who was distressed at her difficult financial circumstances. She was accompanied to court by her daughter. I did not find any aspects of the wife’s case to be implausible or inherently unreliable.
The final orders sought
The wife has provided a minute of the final orders, which she seeks. I am satisfied that this minute has been served upon the husband. The minute is in the following terms:
“1. That in full and final satisfaction of either parties’ claims against each other for division of property pursuant to Part VIII of the Family Law Act 1975 (as amended): -
1.1That within sixty (60) days of the date of this order the former matrimonial home situated at Property [C] in the State of South Australia being the whole of the land property comprised and described in Certificate of Title Register Book [omitted] (hereinafter referred to as “the former matrimonial home”) be sold by auction and the net proceeds of sale be divided after payment out of : -
1.1.1 Real Estate Agent’s commission, advertising and selling expenses; and
1.1.2 Conveyancing expenses, search fees, payment out of rates, taxes and outgoings and adjustments thereof
be divided between the parties in the following proportions, namely: -
1.1.3 As to 70% to the wife; and
1.1.4 As to 30% to the husband.
2. That [R] Real Estate Agents be hereby appointed as sole agents to undertake the sale of the former matrimonial home.
3. That in the event of the husband’s failure to comply with the terms of Order 1 and Order 2 hereof: -
3.1The wife shall be and is hereby appointed to act as sole attorney for the husband to do all things and sign all documents as may be necessary or incidental to enter in and put into good effect a good valid and binding Sales Agency Agreement for the sale of the former matrimonial home with [R] Real Estate Agents; and
3.2To enter into and execute as attorney for the husband a good valid and binding contract for the sale of the former matrimonial home with a bona fide purchaser thereof upon terms and conditions as the parties shall agree taking into account the advice and expertise in marketing of the said appointed Real Estate Agent.
4. That the wife do have sole use and occupation of the former matrimonial home one (1) month prior to the placement of the former matrimonial home for sale onto the public market for the purposes of her arranging for items of repairs and maintenance to be effected upon the former matrimonial home in preparation for sale taking into account the advice and expertise in marketing of the said Real Estate Agent and for that purpose the husband do provide the wife with keys to the former matrimonial home.
5. That within seven (7) days of the completion of all items of repairs and maintenance to the former matrimonial home as specified in Order 4 hereof, the wife do appoint [R] Real Estate Agents to market the former matrimonial home for sale by auction.
6. The reserve price of the property shall be such amount as is agreed between the parties and failing agreement being reached between the parties twenty one (21) days prior to the auction, then the reserve price shall be nominated by the said Auctioneer.
7. The sale price of the property shall be any amount in excess of the reserve price but in the event that the reserve price is not reached the sale price of the property shall be such amount as may be accepted by the wife.
8. In the event that the property is not sold at auction as specified in Order 5 hereof, or within fourteen (14) days after the date of the auction by further negotiation, then the wife shall cause a further auction of the property to be held within four (4) months after the date of the first auction and for that purpose the provisions of Order 4, Order 6 and Order 7 hereof shall continue to apply.
9. That following (21) days after of the making of this Order the husband shall have vacated the former matrimonial home and shall thereafter be restrained and forever be restrained and an injunction is hereby granted preventing the husband from occupying the former matrimonial home.
10. That the husband be solely liable and responsible for payment of all items of repairs and maintenance to the former matrimonial home.
11. That the costs of the items of repairs and maintenance in relation to the former matrimonial home specified in Order 10 hereof be deducted from the husband’s share of the sale proceeds specified in Order 1.1.4 hereof.
12. Thereafter the wife shall retain as her sole and absolute property free from any claim from the husband all personal property in her possession including:
12.1The payment specified in Order 1.1.3 hereof;
12.2The wife’s furniture and personal effects including the following household items furniture and effects: -
12.2.1Clifton Pugh Lithograph;
12.2.2Cobalt Vase;
12.2.3Dining room cupboard including all contents therein;
12.2.4Painting of ships in lounge room;
12.2.5Small table with marble top in lounge;
12.2.6Grandfather and Grandmother matching chairs; and
12.2.7Outdoor gas fired four (4) burner BBQ with lid.
12.3The wife’s motor vehicle;
12.4All cash, bank accounts, savings, insurances and other investments in the wife’s possession;
12.5All payments or benefits which have accrued or which may accrue to the benefit of the wife pursuant to any policy of superannuation that the wife is entitled; and
12.6All other items of personal property not specifically referred to hereof.
13. Thereafter the husband shall retain as his sole and absolute property free from any claim from the wife all personal property in his possession including: -
13.1 The payment specified in Order 1.1.4 hereof subject to Order 11 hereof;
13.2 The husband’s furniture and personal effects save and except those specified in Order 12.2 hereof;
13.3 The husband’s motor vehicle;
13.4 All cash, bank accounts, savings, insurances and other investments in the husband’s possession;
13.5 All payments or benefits which have accrued or which may accrue to the benefit of the husband pursuant to any policy of superannuation that the husband is entitled; and
13.6 All other items of personal property not specifically referred to hereof.
14. That the husband is restrained and an injunction is hereby granted restraining him from disposing of the item specified in Order 12.2.1 hereof other than for the purpose of giving effect to this Order.
15. That hereafter the wife shall meet payment of all of her personal debts and liabilities incurred in her own name to the complete exoneration of the husband who shall have no liability with respect thereto and the wife does hereby indemnity the husband against all claims, expenses, losses or demands incurred by him as a result of the wife’s refusal, failure or neglect to so pay.
16. Hereafter the husband shall meet payment of all of his personal debts and liabilities incurred in his own name to the complete exoneration of the wife who shall have no liability with respect thereto and the husband does hereby indemnity the wife against all claims, expenses, losses or demands incurred by her as a result of the husband’s refusal, failure or neglect to so pay.
17. Each of them, the husband and the wife, is restrained and an injunction is hereby granted restraining them and each of them from pledging the credit of the other.
18. That each of the them, the husband and the wife, shall do all such things and sign all such documents as may be necessary or desirable to give a good valid and binding effect to the terms of the within Order and in particular if either party shall refuse or neglect to execute a Memorandum of Transfer in the form properly registrable under the provisions of the Real Property Act 1886 as amended of his or her estate and interest in the said land within seven (7) days after the same shall have been tendered to him or her, by or on behalf of the other party for that purpose then and in such case pursuant to s.106A of the Family Law Act 1975, a Registrar or upon proof by Affidavit of such refusal or neglect or that the whereabouts of one of the parties is unknown to the other, is hereby appointed to execute and if in his or her opinion it shall be necessary so to do, to settle the same and to do all other acts and things and to execute such other documents as shall be necessary to give full force and effect thereto and shall execute and do the same accordingly.
19. That the husband do pay the wife’s costs to be fixed or agreed with liberty to the parties to apply as to the quantum of those costs.
20. That the wife’s Initiating Application filed on 3 December 2012 be hereby dismissed.
21. Liberty to the parties to apply as to consequential orders.”
The most significant aspect of the orders sought by the wife is that she requires the former matrimonial home to be sold. The husband is in occupation of this property. Again, it is a significant action for a court to evict a person from the premises, which he or she is legally entitled to occupy. For obvious reasons, it is an action of last resort.
However, for reasons already provided, I am satisfied that Mr Hobart has been formally put on notice that this is the outcome, which
Ms Hobart seeks.
In my view, if the only mechanism by which the wife can receive her proper entitlements is through the sale of the property concerned. She is not disentitled to such a remedy merely because it is open to being characterised as an extreme one.
In these circumstances, the husband is unwise to assume that the court will not proceed with the wife’s application because of the potential serious implications of the case, from his perspective.
The legal principles applicable
Part VIII of the Family Law Act is the part of the Act dealing with property, spousal maintenance and maintenance agreement. The major provisions relating to marital property division are contained in sections 79(1); 79(2); 79(4); & 75(2) of the Act. These provisions apply both at the interim and final stage.
Pursuant to section 79(1) the court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a marriage in relevant property.
Pursuant to section 79(2) the court is actively prevented from making such an order unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing.
Section 79(4) provides the mechanics of how a court is to make an order altering marital property interests. It provides seven matters to be considered, as relevant.
Paragraphs (a); (b); and (c); categorise contributions made by marital partners, which are relevant. Paragraph (d) directs the court to take into effect of any order upon the earning capacity of either party to the marriage concerned.
Paragraph (e) directs the court to consider a list of matters contained in section 75(2), which are germane to spousal maintenance. Finally, Paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.
In general terms, the provisions have been held to provide a process to be followed by the court, in each case, for the division of martial property. Firstly and self explicitly, it is necessary for the court to identify the extent of the property to which any order made pursuant to section 79 will apply.
Secondly, pursuant to section 79(4)(a) – (c), the court must ascertain the varying contributions, which each party has made towards the assets identified following the first step. Contributions fall into two broad categories.
The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage, including any contribution made in the capacity of home maker or parent.”[3]
[3] See Family Law Act s79(4)(c)
It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 75(2) of the Family Law Act 1975. Pursuant to section 75(2)(o), the court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
The High Court has recently considered the operation of section 79 in Stanford v Stanford.[4] It said as follows:
“It will be recalled that s 79(2) provides that "[t]he 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". Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition[5]. It is not possible to chart its metes and bounds.”[6]
[4] See Stanford v Stanford [2012] HCA 52
[5] Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605 at 608 per Gibbs CJ
[6] Ibid at paragraphs 35-36
Accordingly, the High Court has directed that the overriding responsibility imposed on the court by section 79, is to consider whether it is just and equitable to make any order whatsoever altering the proprietary interests of marital partners. In this context, the High Court said as follows:
“…whether making a property settlement order is "just and equitable" is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised "in accordance with legal principles, including the principles which the Act itself lays down"[7]. To conclude that making an order is "just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.”[8]
[7] R v Watson; Ex parte Armstrong[1976] HCA 39; (1976) 136 CLR 248 at 257
[8] Ibid at paragraph 40
The wife’s evidence
The wife was born in Germany [in] 1941. She immigrated to this country in 1956 and has lived in Australia ever since. The husband was born in Australia [in] 1938. The parties married [in] 1960. They have three children, who are now all adults and self-supporting.
The parties separated in July 2001. Accordingly, they lived together for a period of around forty years. The wife applied for divorce on 19 October 2011. Her application for a divorce order was granted on 29 November 2011.
The wife commenced the current proceedings because she was aware that it was necessary for her to institute proceedings, for the settlement of matrimonial property issues, within a period of twelve months from her divorce order becoming final.
It is her evidence, which I accept, that she had attempted to negotiate a mutually acceptable settlement, of these issues, with the husband, but he was not amenable to such a process.
The wife has been living in rented accommodation since 2002. It is her position that, since this date, she has almost exhausted her financial resources.
On the other hand, the husband has been able to live in the former family home which, because it is un-mortgaged, is essentially rent free. The wife explains the delay in her commencing these proceedings in the following terms:
“Whilst [Mr Hobart] and I have been separated for some good years now, I have been unable to legally address the matter of property settlement because of the significant costs involved and a reluctance and fear of the emotional impact of issuing proceedings. I have a number of health problems which are described further below and I am concerned about the potential effects that this process may have on my general health. I do however remain hopeful that the proceedings will resolve fairly and expeditiously.”[9]
[9] See wife’s affidavit filed 3 December 2012
The wife asserts that neither party had any assets, of significant value, at the commencement of their marital relationship. It is her case that, during their lengthy marriage, the parties accumulated a modest pool of assets. However, it is her position that her efforts, in terms of both the accumulation and preservation of assets, have been markedly superior to those of the husband.
Between 1961 and 1968, the wife’s evidence is that she was engaged primarily in homemaking responsibilities and parenting of the parties’ three children, during the period of their early infancy. It is her case that her parenting and homemaking contributions, during this period, were significant and markedly greater than those of the husband.
In 1968, the wife joined the paid workforce, on a full-time basis. Thereafter, she remained in the paid workforce until 1997. She retired at age fifty-five, due to ill health. She contributed the entirety of her wages, during this twenty-nine year period, to family purposes. The wife was variously employed as a factory worker; a cleaner; and in the field of airline catering.
The husband was also employed, in various roles, during the marriage. Between 1960 and 1966, he was an [omitted]. Between 1966 and 1969, he was employed as a [omitted].
After 1969, the husband acquired qualifications in [omitted]. He was employed, in an [omitted] capacity, by various employers including [omitted]. Between 1976 and 1988, he was employed as [omitted].
When the wife retired from the paid workforce, she had accumulated approximately $68,000.00 in entitlements to superannuation. She also had accumulated savings in the sum of approximately $20,000.00.
When the husband left the employ of [omitted], he had approximately $112,000.00 in accumulated superannuation benefits. The wife’s evidence is that Mr Hobart utilised this sum, for his own benefit, without reference to her. She asserts that he bought a motor vehicle and a houseboat.
It is the wife’s case that the husband is a poor manager of money. It is also her case that Mr Hobart has had, from time to time, a severe gambling addiction and problems with alcohol. She asserts that these difficulties have led to a marked wastage of matrimonial assets, which is solely attributable to the husband’s conduct.
The parties have owned several pieces of real property, during their marriage. Their first home was purchased in 1963 but sold four years later because of difficulties meeting mortgage payments.
Upon the wife’s entering the workforce, in 1968, the parties purchased a second home, which was located at [H]. The parties lived in this property between 1970 and 1997.
The wife’s evidence is that her mother gifted the parties the sum of $1,900.00 to enable the [H] to be purchased. The remainder of the purchase was financed by way of mortgage. The wife’s evidence is that she utilised her income, to a significant degree, to make the necessary mortgage repayments on the property, particularly after 1988, when she asserts Mr Hobart was at the height of his poker machine addiction.
The property, which is the subject of these proceedings, located at [C], was purchased in 1997, the year in which the wife retired from the paid workforce.
The purchase price was $170,000.00. This sum was realised by the sale of the [H] property, for $140,000.00, with the balance coming from the wife’s retirement entitlements.
Initially, the [C] property was registered in the wife’s sole name. It is the wife’s evidence that this reflected her greatly superior financial contributions towards the acquisition of the property. However, in December 2008, she agreed to transfer the property into the parties’ joint names for no consideration.
The wife deposes that she agreed to this arrangement, which self apparently was contrary to her interests, because she was advised that otherwise she would not be entitled to receive an aged pension. It seems to be the case that, at the time, she was in straitened financial circumstances.
In 1993, the husband commenced and completed a [omitted] course. Thereafter, he was employed as a [omitted] for a number of firms, until he purchased his own [business], in [omitted], a suburb of Adelaide.
It is the wife’s evidence that she was not informed as to the success or otherwise of the husband’s business and he did not provide any income from it to her. Mr Hobart sold his [business], to a colleague, in 2001, for the sum of $25,000.00. Of this sum, he gifted $10,000.00 to the parties’ daughter and retained the balance for his own use. Mr Hobart has not been employed since 2001.
As previously indicated, the wife retired, in 1997, due to ill health. In respect of this period following her retirement, during the initial period of which the husband was employed, the wife deposes as follows:
“Following my retirement in 1997, I was in receipt of unemployment benefits for a period of six (6) months before I became eligible to receive a disability pension. For that six (6) month period, Mr Hobart made no financial contribution towards our household but rather insisted on utilising my hard earned savings to pay for our day to day living expenses including utilities and the like. I believe that Mr Hobart took every financial advantage of my savings and income at each and every available opportunity. We were then living in a mortgage free home which was largely made possible as a result of my direct financial contributions towards the acquisition of the home and assets.”[10]
[10] Supra at paragraph 35
As previously indicated, it is the wife’s case that the husband is an alcoholic. In addition, she asserts that she was the victim of serious family violence, at the husband’s instigation, during the parties’ marriage. In this regard, the wife deposes as follows:
“Over the years I have been a victim of many serious bouts of domestic violence including physical beatings as a result of
Mr Hobart’s alcoholism. As a result of Mr Hobart’s violence against me, of the more serious injuries, I have been hospitalised after suffering a broken wrist which required a plaster cast; I have suffered black eyes and bruising; Mr Hobart has over the years locked me out of our family home on numerous occasions and as a result I had no choice other than to sleep in the car. Our neighbours were very much aware of the violence and would also offer me refuge in their homes from time to time. It is the wife’s case that the husband’s violence and alcoholism have had significant implications for her self esteem and psychological wellbeing. It is the underpinning of her case that Mr Hobart is a coercive and controlling person and this has been a major factor deterring her from instigating proceedings for matrimonial property settlement.”[11]
[11] Supra at paragraph 38
It is the wife’s case that she finally determined to leave the marriage, in 2001, following a violent altercation with the husband. She asserts that the husband assaulted her, on this occasion, with an ashtray, causing her bruising and concussion. The police were called to the incident and the husband was gaoled overnight.
Following the parties’ separation, after a short period of time living with one of her children, the wife has lived in rented accommodation, in [omitted]. She left the relationship with her motor vehicle, which was twelve years old at the time and valued at approximately $1,200.00 but no other items of significant value. The husband has retained all other contents of the [C] property.
The husband has continued in sole occupation of the former matrimonial home since 2001. As the property is unencumbered, he has been able to live effectively rent free, whilst the wife has had to pay rent. In addition, the wife has paid the recurrent household insurance, in respect of the [C] property, from 2002 until February of 2012.
The wife estimates that she has paid in excess of $5,000.00 towards these insurance costs. The rationale of her decision to pay the necessary insurance policies arises because the husband threatened to burn the [C] property “to the ground” in order to ensure that she would have no claim on it.
In 2004, the husband received an inheritance from the estate of his late mother in a sum of around $85,000.00. The husband has retained these moneys for his sole benefit. In addition, the husband has failed to disclose, either to the wife or her solicitor, information regarding his current financial position.
The stance of the husband, throughout these proceedings, has been one of passive obstruction. Accordingly, the wife is not in a position to outline to the court, with any degree of precision, what is the current financial position of the husband. I accept that it is likely to be superior to that of the wife, chiefly because he has been able to remain living in the parties’ most significant asset, the [C] property.
The wife summarises her case, in the following paragraphs of her affidavit, as follows:
“I believe that was it not for my direct and indirect financial and non-financial contributions made throughout our marriage to the welfare and well-being of our family and to the acquisition, improvement and conservation of our modest pool of assets, I say that neither Mr Hobart nor I would have or could have acquired that which forms the current asset pool.
Over and above my direct and in-direct financial contributions throughout the marriage, I was the primary care giver of the children throughout the years; I was responsible for all housekeeping chores and tasks including the preparation of family meals, cleaning, laundering and shopping; gardening and general garden maintenance.
…
Having now utilised the majority of my superannuation and personal savings, I now seek a division and an alteration of property interests pursuant to sections 72, 75(2) and 79 of the Family Law Act 1975 (as amended) (hereinafter referred to as “the Act”).”
It is the wife’s case that she has now utilised the majority of her superannuation and personal savings, leaving her in a situation of extreme need. In these circumstances, she seeks orders pursuant to section 79 of the Family Law Act 1975.
Rule 13.1A of the Federal Circuit Court Rules deals with the court’s authority to enter judgment against a respondent if that respondent defaults in complying with a court order or fails to prosecute any proceedings with due diligence. I am satisfied that Mr Hobart has failed to comply with an order of the court to file answering documents.
The wife is not entitled, as of right, to the orders, which she seeks, merely because the husband has failed to take part in the proceedings. Rather, the onus remains on her to establish to the court that the orders which she seeks are just and equitable according to law.
In this case, I am satisfied that it is just and equitable to make a property settlement order in respect of the [C] property. It is clear that the husband and wife are no longer living in a marital relationship. Accordingly, there is now no longer any common use of the property in question.
In these circumstances, given the length of the marriage between the parties and the wife’s undoubted contributions during it, it is fundamentally unfair that the husband should continue to occupy the property in question without any form of recompense being made to the wife.[12]
[12] See Stanford v Stanford (supra) at paragraph [42]
The wife’s evidence is that the [C] property is worth $460,000.00. The reality is that this is the only item of property to which application made pursuant to section 79(4) can apply.
Otherwise, save for some specified items, set out in her proposed final orders and which presumably remain in the former matrimonial home, the wife proposes that the parties otherwise retain items of property in their respective possession and control.
I accept the wife’s evidence that her various contributions, during the marriage, were superior to those of the husband. More importantly, I accept that her contributions, in the period since the parties separated, a period now in excess of ten years, are also markedly superior.
I also accept that the wife’s prospective financial needs are significant. She is in poor health. She has no savings. She is currently reliant on social security, as her sole means of financial support. It is likely that she will have to move into supported accommodation in the foreseeable future.
Accordingly, after considering the various matters specified in section 79(4) I have come to the conclusion that it would represent a just and equitable outcome if the wife retains seventy percent of the net value of the former matrimonial home, after it is sold on the open market. In these circumstances, I propose to make orders in the terms sought by the wife.
As I indicated at the outset of these reasons for judgment, this is a sad and perplexing case. Although I am satisfied that the husband is fully aware of these proceedings, he has chosen to take no part in them. As a consequence, it is impossible for the parties themselves to work towards a managed and consensual outcome, which will minimise dislocation for them both.
Necessarily, the husband’s lack of involvement must lead to a difficult outcome. However, regrettable as it may be for the court to compel the sale of the parties’ former family home, in my view, it would be more unpalatable and fundamentally unjust, if the court was not to appropriately deal with Ms Hobart’s properly instituted proceedings because of potential difficulties arising from it, which are attributable to the husband’s non involvement.
It is open to the husband to apply to the court, pursuant to the provisions of section 16.05 of the Federal Circuit Court Rules, to set aside the court’s orders on the basis that they were made in his absence. However, it will also be necessary for him to provide a reasonable explanation as to why he declined to take part in the proceedings.
Ultimately, in the event that no application to set aside the orders is made and Mr Hobart declines to vacate the property as ordered, the court has statutory authority to enforce its orders.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding ninety-one (91) paragraphs are a true copy of the reasons for judgment of Judge Brown
Associate:
Date: 25 June 2013
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Injunction
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Costs
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Remedies
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