Hubnik & Rabinov
[2022] FedCFamC2F 1199
•5 September 2022
Federal Circuit and Family Court of Australia
(DIVISION 2)
Hubnik & Rabinov [2022] FedCFamC2F 1199
File number(s): PAC 6024 of 2020 Judgment of: JUDGE NEWBRUN Date of judgment: 5 September 2022 Catchwords: FAMILY LAW – de facto property adjustment proceedings - declaration that the parties were in a de facto relationship, within the meaning of s 4AA(1) of the Family Law Act 1975 (Cth), for a period of more than two years - property adjustment Orders made Legislation: Family Law Act 1975 (Cth), ss 90SM(3), 90SF(3) Cases cited: Lotta & Lotta [2017] FamCA 50 Division: Division 2 Family Law Number of paragraphs: 37 Date of hearing: 18 August 2022 Place: Parramatta Solicitor for the Applicant: Mr Stoganovic There was no appearance for the Respondent ORDERS
PAC 6024 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS HUBNIK
Applicant
AND: MR RABINOV
Respondent
order made by:
JUDGE NEWBRUN
DATE OF ORDER:
5 september 2022
THE COURT ORDERS THAT:
1.The Court declares, pursuant to section 90RD of the Family Law Act 1975 (Cth) (“the Act”), that the Applicant and the Respondent were in a de facto relationship, within the meaning of section 4AA(1) of the Act, from about 2008 to about 10 January 2019.
2.The Respondent shall forthwith pay to the Applicant the sum of $214,692.
3.Mr B, principal solicitor of B Law Firm at Suburb C, shall forthwith pay to the Applicant, from trust monies held for and on behalf of the Respondent, the sum of $102,475. Such payment to the Applicant shall be in part satisfaction of Order 2 above.
4.Except as provided above, each party shall be entitled, to the exclusion of the other party, to the sole legal and beneficial ownership of all other property, both real and personal, which is registered in each of their names or is in their current possession or control, including their superannuation entitlements, and they shall be solely liable for and indemnify the other against any personal liabilities.
5.In the event that neither party refuses or neglects to sign within 14 days after receipt of a written request to do so any documents necessary to put into effect the terms of these Orders, a Registrar of the Parramatta Registry of the Federal Circuit and Family Court of Australia, or such other person appointed by the Court, is hereby appointed pursuant to section 106A of the Act to execute all such deeds and documents in the name of the defaulting party and do all acts and things necessary to give validity an operation to these Orders and further that the defaulting party pay the costs of the other party in relation to the obtaining of the Registrar’s signature.
NOTATION:
A.Pursuant to Rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, the Court notes that the Court may vary or set aside Orders made by the Court after they have been entered if the Orders were made in the absence of a party. Any application by the Respondent to set aside the above Orders shall be made within 21 days of being notified of those Orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Hubnik & Rabinov has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE NEWBRUN:
Introduction
The Applicant seeks property adjustment orders against the Respondent under s 90SM of the Family Law Act 1975 (Cth) (“The Act”) on an undefended basis.
The Respondent failed to attend Court on 18 August 2022. This date had previously been appointed by the Court is a potential date for an undefended hearing if the Respondent failed to attend Court at that time. It will be in the interests of justice that the matter proceed on an undefended basis by reason of the Respondent’s disengagement from the proceedings and previous Orders relating to the holding of an undefended hearing should the Respondent fail to attend.
The parties were in a de facto relationship from about October 2008 to about 10 January 2019.
Material relied upon
The Applicant relied upon her:
(a)Case Outline dated 17 August 2022;
(b)Initiating Application, Affidavit of the Applicant, and Financial Statement, all filed 11 November 2020;
The Court has had regard to the Respondent’s Response to Initiating Application, his Affidavit, and his Financial Statement all filed 31 March 2021. However, because the Respondent failed to attend the undefended hearing, where there is any conflict in the evidence of the parties, the court shall prefer the evidence of the Applicant because the Applicant was effectively deprived of cross-examining the Respondent.
The following Exhibits became evidence in the proceedings:
(a)Exhibit A: The Respondent’s CBA bank records; consent judgement in the Supreme Court of NSW dated about 6 May 2020 relating to the Respondent’s work injury damages claim; deed of release in relation to that damages claim; and trust ledger record of the Respondent’s solicitor (Mr B) who acted for him in the work injury damages claim;
(b)Exhibit B: Minute of Orders sought by the Applicant dated 23 December 2020.
Evidence
The Court has considered the documentary material set out above.
The standard of proof applied by the Court in respect to the evidence is the balance of probabilities. The Court does not propose to set out the entirety of the evidence. Relevant evidence relating to the issues to be determined will be set out below.
Property adjustment
Legal principles: property adjustment
In Lotta & Lotta [2017] FamCA 50 Foster J stated:
281.The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford (2012) 247 CLR 108 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman (2014) FLC 93–592 and Scott & Danton [2014] FamCAFC 203.
282.The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
283. Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
284. There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.
285. In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by de facto Husband and Wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
286. In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here the de facto Wife seeks an order for adjustment of property and the de facto Husband contends that there should be no such adjustment.
287. It is thus important to ascertain the present property and resources of the parties so as to facilitate a consideration of the s 79(2) question.
288. In some circumstances it is not possible to determine whether it is just and equitable to make adjustment orders as to the parties’ present property rights without a consideration of s 79 (4) matters.
289. Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g) in particular the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).
290. The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92–877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
The above legal principles can be equally applied to property adjustment proceedings under s 90SM of the Act between former de facto couples.
Balance sheet
A Balance Sheet was set out in the Applicant’s solicitor’s case outline. The Court refers to that balance sheet as if it was set out herein.
The following assets should be removed from the Balance Sheet because they were probably acquired by the Applicant after the parties’ separation and do not relate to the parties’ former relationship (and with the Court observing that there is no significant evidence by the Applicant or the Respondent that such assets were acquired by them during the parties’ relationship):
(a)Items 1, 2, and 3, being cash funds accumulated by the Applicant post separation and not arising out of the parties’ relationship, shall be removed from the Balance Sheet.
The final revised Balance Sheet is therefore as follows:
BALANCE SHEET Ownership Description Value Assets 1 Applicant Motor Vehicle 1 $35,000 2 Respondent B Law Firm Trust Account $102,475 Total $137,475 Addbacks 3
Net proceeds of sale of Suburb D property (after payment of Respondent’s tax debt of $100,000) $354,829 4 Respondent Respondent’s compensation $699,415 Total $1,054,244 Superannuation 5 Applicant $60,879 Total $60,879
Accordingly, the non-superannuation assets are $1,191,719 (with the Court noting that the above add backs total $1,054,244). The superannuation assets are $60,879. The total assets are therefore $1,252,598.
Section 90SM(3) of the Act
The Court is satisfied that it is just and equitable in this case to alter the property interests of the parties in light of the breakdown of their relationship, the fact that they will no longer have the joint use and enjoyment of their property, and the fact that the continuance of the current legal ownership of their property would not afford them justice and equity.
Contributions
The Court makes the following findings on the balance of probabilities.
The parties purchased a property at E Street, Suburb D (the property) shortly before cohabitation commenced in 2008 and the property was registered in the Respondent’s name. The Applicant contributed $30,000 towards the purchase of the property. The Respondent contributed $15,000 towards it. The purchase price for the property was about $420,000. A mortgage loan from Company F was taken in the name of the Respondent in the sum of $345,446.
Shortly after cohabitation, the Applicant commenced employment as an admin assistant working full-time. The Applicant’s wages were used by the parties to pay their household expenses.
The Respondent worked in full-time employment in the construction industry and his wages were used to pay the mortgage payments. However, the Respondent fell behind with the mortgage payments and in 2010 the Applicant obtained a personal loan from Bank G bank for $30,000 and used these funds to clear the arrears, and thereafter repaid the personal loan from her own funds. The Applicant made further lump sum payments in relation to the mortgage loan totalling the sum of $50,000.
The Applicant performed the majority of household chores during the parties’ relationship and after 2014 did those chores solely.
In October 2014 the Respondent suffered serious work injuries as a tradesman and thereafter ceased work. He began to receive workers compensation of about $1,200 per week which monies were likely used by the Respondent to assist him in meeting mortgage repayments and/or the living expenses of the parties.
The Applicant then worked part-time until 2016 to care for the Respondent. In 2016 the Applicant ceased work to care for the Respondent.
In March 2017, the property was sold for $770,000. Net proceeds of sale paid to the Respondent was $454,829. The Respondent paid about $100,000 from these net proceeds to pay a tax debt (with the Court seeing no persuasive reason not to treat as a matrimonial debt).
The Applicant informed the Court that she bought the Motor Vehicle 1 from funds in her bank account in 2018.
In July and August 2020 the Respondent received a total of $699,415 from his work injury damages claim. The Court infers that it is likely that a significant proportion of this sum represented future loss of earnings. There is a sum of $102,475 in the Respondent’s former solicitor’s trust account which the Court infers represents the balance of his work injury damages settlement. These sums represent a significant contribution by the Respondent.
The Applicant has a superannuation asset. It is likely that the Respondent indirectly contributed towards the accumulation of this asset throughout the parties’ relationship through his own work in employment and later through his worker’s compensation contributions.
Taking into account the above matters, and viewing the parties’ overall contributions holistically, the Court assesses the parties’ relevant contributions to be 22% to the Applicant and 78% to the Respondent. That results in a disparity of about $701,455 in favour of the Respondent.
Section 90SF(3)
The Applicant is aged 38 years. The Respondent is aged 41 years. There were no children of their relationship. The relationship lasted about 10 years.
The Respondent probably has no significant work capacity by reason of his work injury. However, he received net funds from his work injury damages claim of about $699,414 in about mid-2020 and earlier had received net $354,829 (after paying a tax debt of $100,000) from the sale of the property.
The Applicant works as an admin assistant in full-time employment and her average weekly gross income is $1,293.
There are no grounds for an adjustment under section 90SF(3).
Justice and equity
The Applicant should retain her superannuation of $60,879. She should retain her motor vehicle.
The Respondent should be ordered to pay to the Applicant the sum of $214,692 (represented by 22% of the net property pool of $1,252,598 = $275,571, but less her retained superannuation of $60,879 = $214,692). The Applicant should receive the full sum of $102,475 in part satisfaction of that sum of $214,692, payable from the trust account of B Law Firm being monies held for and on behalf of the Respondent; an Order should be made directing that Mr B of B Law Firm forthwith pay that sum of $102,475 sitting in that firm’s trust account to the Applicant.
The Applicant has cash assets of $209,908 which did not enter the balance sheet. She will receive at least the sum of $102,475 from the trust account of B Law Firm. She is 38 years of age, the court infers in good health, and she is in full-time employment.
The Respondent has previously personally received, without reference to the Applicant, the net proceeds of sale of the property, which, after payment of his tax debt, left him with $354,829, and later received the sum of $699,415 being part of the proceeds of his work injury damages claim.
The Court is of the view that its proposed property adjustment Orders will represent a just and equitable property settlement between the parties.
The Court makes Orders accordingly.
I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Newbrun. Associate:
Dated: 5 September 2022
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