JEANES & JEANES
[2015] FamCA 385
•14 May 2015
FAMILY COURT OF AUSTRALIA
| JEANES & JEANES | [2015] FamCA 385 |
| FAMILY LAW – PROPERTY – SPOUSAL MAINTENANCE– Undefended Hearing – Where the husband did not appear before the Court or file any evidence in respect of the wife’s application – Where the husband had confirmed receipt of and responded to correspondence from the wife’s solicitors – Where the husband proffered no explanation for his decision not to participate in proceedings – Where it is considered to be just and equitable to make the orders sought by the wife – Wife’s application proceeds as an undefended hearing – Orders made as sought by the wife. |
Bevan & Bevan (1995) FLC 92-600
Bevan & Bevan (2013) FLC 93-545
Black and Kellner (1992) 15 FamLR 343
Chapman & Chapman (2014) FLC 93-592
David & David [2007] FamCA 88
DJM v JLM (1998) FLC 92 - 816
Ferraro and Ferraro (1993) FLC 92-335
Herold & Herold (2015) FLC 93-628
Hickey and Hickey (2003) FLC 93-143
In the Marriage of S Wife and Wife Husband Weir (1992) 16 Family LR 154
McLay and McLay (1996) FLC 92-667
Rand & Rand (2010) FLC 93-444
Stanford & Stanford (2012) FLC 93-518
Taylor v Taylor (1979) FLC 90-674
Vautin v Vautin (1998) FLC 92-827
Zane & Allan (2008) FLC 93-378
Zhao & Xie [2008] FamCAFC 187
Family Law Act 1975 (Cth) ss 72, 74, 75, 79, 81
Family Law Rules 2004 (Cth), rules 11.01, 11.02, 11.04
| APPLICANT: | Ms Jeanes |
| RESPONDENT: | Mr Jeanes |
| FILE NUMBER: | SYC | 3625 | of | 2014 |
| DATE DELIVERED: | 14 May 2015 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Le Poer Trench J |
| HEARING DATE: | 23 February 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Othen |
| SOLICITOR FOR THE APPLICANT: | Gordon & Barry Lawyers |
| COUNSEL FOR THE RESPONDENT: | Not Present |
| SOLICITOR FOR THE RESPONDENT: | Not Present |
Orders
Delivered 23 February 2015:
I make orders as sought in the Initiating Application filed by the wife on 13 June 2014 with the exception of paragraphs 4, 8 10.3 and 26 as sought therein and no longer pressed in the hearing today.
I direct that the solicitor for the wife provide to my associate by email and in Word document form a typescript of the orders made today.
I accept the evidence filed by the wife that the husband has been served with the Initiating Application filed by her on 13 June 2014 as required by the Family Law Rules.
I find that the orders sought by the wife are appropriate to made pursuant to s 79 and s 72 of the Family Law Act.
Reasons for the making of these orders will be provided in the event of a request in writing being made to my associate by email (address).
It is noted that the application proceeded as an undefended hearing before the court today.
I accept that the husband has communicated with the wife’s solicitors by email following 13 June 2014.
I direct that the husband be served by email with a scanned copy of the orders made this day.
The orders made this day are to have effect as and from the expiration of 21 days from the date of service upon the husband of a sealed copy of the orders as required by these orders.
The proceedings are otherwise concluded in the court.
Orders sought in the Initiating Application
THE COURT NOTES:
The following definitions for the purpose of these Orders:
1.1.“Act” means the Family Law Act 1975;
1.2.“B Pty Ltd” means B Pty Ltd ACN …, a company registered in the state of New South Wales having its registered office at C Street, Sydney NSW… and in respect of which the Husband and Wife are the directors and shareholders as to 1 ordinary share each;
1.3.“husband” means Mr Jeanes born … 1943;
1.4.“ING account” means ING account no. … and in respect of which the Husband is the account holder;
1.5.“Jeanes Family Superannuation Fund” means the Jeanes Family Superannuation Fund Pty Ltd ABN … in respect of which B Pty Ltd is the trustee and is a self-managed superannuation fund listed by the Australian Taxation Office on the Super Fund Lookup website ( as a complying superannuation fund;
1.6.“PSS Superannuation” means Public Sector Superannuation Scheme, reference no. … in respect of which the Husband is the member;
1.7.“D Street” means the property at D Street, Suburb E and being the property described in Certificate of Title reference Folio … and in respect of which the Husband and Wife are the joint registered proprietors;
1.8.“D Street mortgage” means the mortgage to St George Bank Ltd, registered no. …, registered on the D Street property;
1.9.“F Street property” means the property located at F Street, Suburb E and being the property described in Certificate of Title reference Folio … and in respect of which the Husband is the sole registered proprietor;
1.10.“F Street mortgage” means the mortgage to St George Bank Ltd, registered no. …, registered on the F Street property;
1.11.“F Street caveat” means caveat no. … registered on the F Street property and in respect of which the Wife is the caveator;
1.12.“wife” means Ms Jeanes born … 1945;
THE COURT ORDERS:
Real Estate
Within 28 days of the date of these Orders, the Husband shall do all acts and things to transfer to the Wife all his right, title and interest in the D Street property.
Contemporaneous with the Husband’s compliance with Order 2, the Husband shall do all acts and things and sign all documents necessary to discharge the D Street mortgage.
Pending compliance with Order 2, the Husband make payment of all mortgage instalments and shall indemnify the Wife in respect of all payments and monies due pursuant to the D Street mortgage.Pending compliance with Order 2, the Husband make payment of all outgoings in relation to the D Street property.
Within 28 days of the date of these Orders, the Husband and Wife shall do all acts and things and sign all documents to list the F Street property for sale for the best price reasonably obtainable and:
6.1.the parties shall do all acts and things and sign all documents necessary to list the F Street property for sale with such agent as the parties may agree upon in writing but in the event no agreement is reached within 7 days the wife shall nominate 3 agents and the husband shall select from the agents so nominated 1 agent to list the property for sale (“the F Street agent”);
6.2.If the husband and wife cannot otherwise agree, the parties shall take the advice of the F Street agent in relation to the mechanism for sale including but not limited to the manner in which the property is to be sold, the listing and/or reserve price as well as any advertising or marketing campaigns to be undertaken.
6.3.The parties shall cooperate in every way with the F Street agent including (without limiting the generality of the foregoing):
6.3.1.Making the key available to the agent;
6.3.2.Allowing inspection of the F Street property at all reasonable times requested by the agent;
6.3.3.Doing or saying nothing to hinder or prevent a sale being effected;
6.3.4.Ensuring the F Street property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchaser; and
6.3.5.Signing all documents requested by the agent in relation to the listing for sale of the F Street property, except a contract or agreement for sale which has not been authorised by the parties' solicitors;
6.3.6.Shall instruct such solicitor as the parties agree upon in writing and, in the event of no agreement, the wife to nominate the name of 3 suitably qualified solicitors and the husband to select one of those names 7 days thereafter ("the F Street solicitor").
Upon the listing of the F Street property for sale the wife shall do all acts and things and sign all documents necessary to remove the F Street caveat.
Pending the sale of the F Street property the husband make payment of all mortgage instalments and shall indemnify the Wife in respect of all payments and monies due pursuant to the F Street mortgage.Pending the sale of the F Street property the husband make payment of all outgoings in relation to F Street property
Upon settlement of the sale of the F Street property the proceeds of sale shall be paid as follows:
10.1.In payment of sale costs including agent's commissions, advertising expenses and legal costs associated with the sale; and
10.2.The balance after payment of the costs referred to in Order 6.1 shall be divided as to 50 per cent to the wife and 50 per cent to the husband.
10.3.The husband shall pay any capital gains tax or land tax from his share of the sale proceeds.
Jeanes Family Superannuation Fund
That the requirements of procedural fairness in accordance with s.90MZD of the Family Law Act 1975 have been observed on the basis that the parties are the directors of B Pty Ltd the trustee corporation of the Jeanes Family Superannuation Fund.
That within 28 days after the date of the making of these Orders, the husband and wife do all acts and things and sign all documents necessary to cause B Pty Ltd as Trustee of the Jeanes Family Superannuation Fund to roll over into another superannuation fund nominated by the wife, the whole of the wife's member entitlements in the Jeanes Family Superannuation Fund.
Thereafter, the husband and wife shall, in their capacities as directors and shareholders of B Pty Ltd shall cause a meeting of B Pty Ltd to be held in accordance with the Rules of the relevant Trust Deed of the Jeanes Family Superannuation Fund, the purpose of that meeting being:
13.1.to note receipt of the request by the wife to transfer her benefit to another complying superannuation fund;
13.2.to note receipt of the election by the husband to hold the remaining benefits in the Jeanes Family Superannuation Fund in his sole name;
13.3.to authorise the transfer to the Trustees of the wife's nominated complying superannuation fund of her member benefit in the Jeanes Family Superannuation Fund.
Before the close of the meeting of B Pty Ltd, the wife shall do all acts and things and sign all documents as may be necessary to:
14.1.resign her membership from the Jeanes Family Superannuation Fund;
14.2.resign as a director of B Pty Ltd;
14.3.vote in favour of any resolution that the husband may propose prior to her resignation which may have the effect of appointing a new director of B Pty Ltd;
and
14.4.transfer to the husband her shareholding in B Pty Ltd.
Public Sector Superannuation Pension
That in accordance with paragraph 90MT(1)(b) of the Family Law Act 1975:
15.1.The Applicant (or such other person to whom a splittable payment is payable) is entitled to be paid the specified percentage of each splittable payment from the Respondent's interest in the Public Sector Superannuation Scheme (“PSS”);
15.2.The Respondent's entitlement (or the entitlement of such other person to whom a payment may be made out of the Respondent's interest) in the PSS is correspondingly reduced by force of this Order;
15.3.the specified percentage for the purposes of this Order is 50 per cent; and
15.4.That this Order has effect from the operative time and the operative time is the beginning of the day 4 days after service on the Trustee.
That the Commonwealth Superannuation Corporation (“the Trustee”) shall do all such acts and things and sign all such documents as may be necessary to:
16.1.calculate, in accordance with the requirements of the Family Law Act 1975 the entitlement awarded to the Applicant in the immediately preceding clause of this Order; and
16.2.pay the entitlement whenever the trustee makes a splittable payment from the Respondent's interest in the PSS.
That the Court notes:
17.1.That in accordance with section 90MZD of the Family Law Act 1975, the Trustee has been accorded procedural fairness in relation to the making of this Order and has been provided with a copy of the proposed Order;
17.2.The Trustee, after service upon it of a sealed copy of this Order, has obligations under Public Sector Superannuation Trust Deed to create an associate pension in the name of the Applicant;
17.3.Any payments from the Respondent's superannuation interest in the PSS made after the trustee has created an associate pension in the Applicant’s name in the PSS are not splittable payments in accordance with Division 2.2 of the Family Law (Superannuation) Regulations 2001;
and
17.4.The Trustee will be relieved of its obligations to calculate and split payments under this Order in the event that an associate pension is created in the name of the Applicant.
Other
Within 7 days of the date of these Orders, the Husband shall do all acts and things to assign to the Wife all right, title and interest in the ING account.
Except as specifically provided for by any paragraph comprising these Orders to the contrary, each of the husband and the wife release the other from all debts owing from one to the other and:
The husband hereby indemnifies the wife from and in respect of all actions, claims, suits and demands as may be made against the wife in relation to all liabilities in the name of the husband.
The Husband and Wife shall otherwise be entitled to sole possession and ownership of all other items of property in their respective names or possession as at the date of these Orders.
Other than as specifically provided for in these Orders, the Husband and Wife are solely entitled to the exclusion of the other to all property, superannuation and chattels of whatsoever nature and kind in their respective possession or ownership as at the date of the making of these Orders and shall be responsible for all debts attaching thereto and all debts for which they are personally responsible.
Spouse Maintenance
Within 28 days of the date of these Orders, the Husband shall pay to the Wife by way of lump sum spouse maintenance the sum of $125,000.
Miscellaneous
In default of the Husband or Wife doing any act or thing or executing any document necessary to give effect to these Orders, the Registrar of the Federal Circuit Court of Australia is by this Order appointed to execute all such documents in the name of the defaulting party and to do all acts necessary to give validity and operation to such documents.
In the event that a Registrar of the Federal Circuit Court of Australia is required to execute any documents for the purpose of giving effect to these Orders and which requirement has arisen as a consequence of the default or refusal of one of the parties (“the defaulting party”), the defaulting party shall pay the other party’s costs of and incidental to obtaining the signature of the Registrar and the Registrar shall be satisfied of the default by the non-defaulting party swearing an Affidavit as to default.
The Wife shall be granted leave to amend this Application upon the Husband providing disclosure of his financial position.The Husband shall pay the Wife’s costs of and incidental to this Application.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Jeanes & Jeanes has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 3625/2014
| Ms Jeanes |
Applicant
And
| Mr Jeanes |
Respondent
REASONS FOR JUDGMENT
Introduction
On 23 February 2015, I made orders as set out at the commencement of these reasons. I made those orders in circumstances where there was no appearance before the Court by or on behalf of Mr Jeanes, the respondent husband in the proceedings (“the husband”). Given that the husband was not present, there were two specific orders I made for his benefit. Those orders are as follows:
9. The orders made this day are to have effect as and from the expiration of 21 days from the date of service upon the husband of a sealed copy of the orders as required by these orders.
5. Reasons for the making of these orders will be provided in the event of a request in writing being made to my associate by email.
The making of final property orders by the Court on an undefended basis occurs, in my experience, relatively infrequently. In such circumstances the Court is careful to ensure that the party who is not present at such hearing has been given a proper opportunity to present themselves to the Court, file documentation and seek orders. For my part, in addition to being satisfied that the respondent has been provided with an adequate opportunity to participate in a proceeding, I provide for an opportunity to such a respondent to apply to set the orders aside should there be some circumstance, unknown to the Court at the time of the making of final order, which would constitute a basis for such orders being set aside (see Taylor v Taylor (1979) FLC 90-674).
Law as to Undefended hearings
Rule 11.01, Item 3(e) of the Family Law Rules 2004 (Cth) (“the Rules”) allows the Court to make orders in the absence of a party so long as it is in order to manage a case to achieve the main purpose of these Rules, being to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case (rule 11.04).
Rule 11.02(2)(c) also allows the Court to determine a case as if it were undefended if a party does not comply with the Rules, Regulations or a procedural order (bold emphasis added):
FAMILY LAW RULES 2004 - RULE 11.02
Failure to comply with a legislative provision or order
(1) If a step is taken after the time specified for taking the step by these Rules, the Regulations or a procedural order, the step is of no effect.
Note: A defaulter may apply to the court for relief from this rule (see rule 11.03).
(2) If a party does not comply with these Rules, the Regulations or a procedural order, the court may:
(a) dismiss all or part of the case;
(b) set aside a step taken or an order made;
(c) determine the case as if it were undefended;
(d) make any of the orders mentioned in rule 11.01;
(e) order costs;
(f)prohibit the party from taking a further step in the case until the occurrence of a specified event; or
(g)make any other order the court considers necessary, having regard to the main purpose of these Rules (see rule 1.04).
Note: This list does not limit the powers of the court. It is an expectation that a non-defaulting party will minimise any loss.
The importance of balancing the imperatives of case management with the overarching necessity of affording natural justice and procedural fairness to all parties in determining whether to proceed with a hearing on an undefended basis was outlined by the Full Court in Herold & Herold (2015) FLC 93-628:
32. …notwithstanding the extensive powers of case and trial management specified in the legislation and Rules of Court, there remains an obligation to ensure a fair trial and afford procedural fairness to all parties in such proceedings…
In Zane & Allan (2008) FLC 93-378, their Honours Finn J and Thackray J said, in relation to the definition of “undefended”:
8. The expression “undefended” is not defined, or otherwise explained, in the Rules. However the Explanatory Guide to the Rules (which is expressly stated not to be part of the Rules) explains the term “undefended basis” in the following way:
“... the court may order that a hearing or trial may proceed, because of the respondent’s failure to comply with a rule or order, as if a response has not been filed. The court may make orders set out in the application on being satisfied by evidence that the orders should be made”.
The Full Court found that in order to proceed with a hearing on an undefended basis pursuant to rule 11.02(2)(c), the Court must make a positive finding of non-compliance with Rules, Regulations or a procedural order.
With regard to the approach that may be followed by a trial judge when proceeding with an undefended application, her Honour Boland J outlined at paragraph 95 of Zhao & Xie [2008] FamCAFC 187:
… although reasons not need be lengthy, the relief sought and the relevant statutory basis for the relief should be identified. Material taken into account should also be identified, and some indication given of the weight attached to particular material. Some reasoning should be demonstrated to explain why, based on the evidence considered and applied to the relevant provisions of the statute, the orders ultimately made are seen to be appropriate.
In David & David [2007] FamCA 88, her Honour Finn J also outlined the uncontroversial position that the requirements of s79(2) of the Act, namely that a court must be satisfied that, in all the circumstances, it is just and equitable to make the order, is applicable in undefended hearings:
44. There is, of course, no issue that when a court proceeds to make a property settlement order on an undefended basis that the court must adhere to the requirement in s 79(2) of the Act that it must not make an order under s 79 “unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”, and also that in making the order, the court must take into account the contributions of the parties to their property and to the welfare of their family, as well as the other matters mentioned in s 79(4). It is clear both from the transcript of the hearing on 29 April 2005 and from his ex-tempore reasons for judgment delivered that day that his Honour was well aware of these requirements.
With all the above matters in mind, I first considered whether it was appropriate to proceed with the hearing of the wife’s application for property orders in the absence of the husband. The evidence to support the wife’s case was contained on the court record, together with an affidavit of personal service, a form of acknowledgement of service and an affidavit by the wife’s solicitor, Merridy Gordon, sworn 20 February 2015.
History of the Proceedings
The proceedings were commenced by the wife when she filed an Initiating Application on 13 June 2014. In that application, she sought final property orders. At the time she filed that Initiating Application, she also filed her affidavit and Financial Statement both sworn by her on 13 June 2014.
The affidavit sworn by the wife 13 June 2014, although not relied upon in the hearing before me, is important to consider when determining whether it is appropriate to proceed with an undefended hearing. In broad terms, the affidavit is in its construction what the Court might expect to see to support the making of the orders sought by the applicant wife. The affidavit set out details of the parties’ relationship, when it commenced, when they were married, and when their children were born. It also set out the date of separation. The affidavit set out the wife’s evidence in relation to the parties’ assets at cohabitation, financial contributions made in the course of cohabitation, contributions made by the wife to the welfare of the family, the wife’s current financial circumstances and details of the wife’s health. Annexed to the affidavit are copies of letters sent by the wife’s solicitors to the husband on 1 May 2014, seeking financial disclosure and an authority to contact his superannuation fund for the purpose of obtaining details of his superannuation entitlements. The wife also enclosed her version of a balance sheet of current assets, liabilities, superannuation and financial resources.
The Financial Statement signed by the wife on 13 June 2014 and filed that same day appears in usual form and appears to have been completed by the wife to the extent she had knowledge of the matters required to be included in that document.
An affidavit of personal service was sworn by Mr G on 17 July 2014. He deposed that on 15 July 2014 he served the husband in the Northern Territory with the wife’s Initiating Application filed 13 June 2014, the wife’s Financial Statement filed 13 June 2014, her affidavit sworn and filed 13 June 2014 and a brochure titled “Marriage, Families and Separation”. At the time of effecting service, Mr G asked the husband “Are you [Mr Jeanes]?” to which he replied “Yes, I am [Mr Jeanes]”. In those circumstances I am satisfied that those documents were served upon the husband.
The court records show that the application was returnable for the first time before the Court on 9 September 2014. On that day, there was no attendance at the Court by or on behalf of the husband. The Registrar made directions (on 9 September 2014), which included the matter being listed for a telephone procedural hearing at 9.00 am on 26 November 2014. Details of how to join in the hearing were set out in the Orders. Interim Orders were made pursuant to exhibit 1, which was titled “wife’s minute of order”. The minute directed the husband within 28 days provide to the wife’s solicitors any market appraisals or valuations in his possession in relation to the properties D Street, Suburb E (“D Street property”), and F Street, Suburb E (“F Street property”). A copy of any agency agreement in relation to the F Street property, together with rental summary statements for the three most recent financial years, was also to be provided. The minute further provided that the husband was to produce statements in respect of accounts for the period 1 January 2013 to current date. A number of accounts in the St George Bank and two other banks, together with American Express were detailed. Details of the husband’s superannuation entitlements were also to be provided. Other personal financial income details, including tax returns, contracts of employment were also to be provided.
The Registrar made a direction that the husband must file and serve by 31 October 2014 a Response to the Initiating Application and a Financial Statement. The wife’s costs were reserved. The husband was also directed to file a Notice of Address for Service within 14 days.
The wife was ordered to forthwith notify the husband in writing at his last known address of the Orders made on that day and possible consequence of further non-attendance at the next court event. Notations made by the Court on 9 September 2014 included the following:
In the event the respondent husband does not comply with these directions and/or does not have an appearance by or on behalf of him at the telephone procedural hearing, the matter may be listed for an undefended hearing.
By her affidavit sworn 20 February 2015, the wife’s solicitor Ms Gordon deposes that on 9 September 2014, she caused a letter to be forwarded to the husband by email. The letter informed the husband that the matter had been listed for a case assessment conference on that day. No appearance was made by or on behalf of the husband at that conference. It advised that orders had been made in accordance with the attached document marked “PROCEEDINGS NAME: [Jeanes]. PROCEEDINGS NO: SYC3625/2014”. It further advised that the Registrar had made Orders pursuant to the wife’s minute of the order, which was also attached to the email. It advised the listing for telephone directions at 9.00 a.m. on 26 November 2014 and gave details of how to join that conference.
The letter attached to the email dated 9 September 2014 also provided the following information:
If you do not participate in the proceedings by filing a Response and Financial Statement, orders may be made on an undefended basis and in accordance with the orders sought by [the wife].
The court record shows that on 26 November 2014, the Registrar conducted a telephone procedural hearing. There was no attendance by or on behalf of the husband. The Registrar listed all applications before a duty judge in a judicial duty list at 9.30 am on 23 February 2015 for possible undefended hearing. The Registrar directed that the wife was to file an affidavit by 27 January 2015. The husband was to be notified in writing at his last known address of the Orders made on 26 November 2014 and possible consequences for further non-attendance at the next court event.
In the affidavit sworn by Ms Gordon on 20 February 2015, she deposes that on 26 November 2014, she caused to be forwarded to the husband an email advising of the outcome of the telephone directions on 26 November 2014. A copy of the letter/email sent to the husband is annexed to the affidavit. The letter confirms attendance at the conference by the wife on 26 November 2014. It set out the Orders which were made by the Registrar at that conference. It concludes with the following statement:
On 23 January 2015, [the wife] will proceed to ask the Court to make the Orders sought by her in her Application filed 13 June 2014.
The court record shows that the matter was next before the Court on 23 February 2015, and determined by me on that day in the absence of the husband.
The affidavit of Ms Gordon deposes to having received communication from the husband. Her evidence is that on 14 September 2014, she received an email, addressed to herself, with a copy to the wife, from the husband. It informs Ms Gordon, inter alia, of the name of the husband’s accountant and that the accountant is authorised to release details to her. It informs Ms Gordon of the husband’s mailing address and then the following is included: “Your requests for extreme levels of financial detail I find are vexatious, harrasive [sic], time consuming, and will not alter the outcome. You already have the essential data you need, and ways of assessing further detail are available to you should this be required.”
At the conclusion of that email is attached a copy of an earlier email, dated 8 September 2014, which had apparently been sent to the wrong email address for Ms Gordon. That email is in short compass and is as follows:
Dear Ms Gordon,
This is to let you know:
1. I am happy to have the property in [F Street St Suburb E] retained in both our names.
2. I am opposed to any break-up our partnership in the [Jeanes] Family [B Pty Ltd] SMSFThese are necessary for the long-term financial security of [the wife] and myself, should either become disabled and unable to earn outside income
Please come up with arrangements that don’t put our financial independence at risk.
Ms Gordon responded to that email on 31 October 2014. She attached a letter addressed to the husband that had been sent to his mailing address and also to his email address. She thanked him for his email dated 14 September 2014. She responded to the email. She informed him that the matter remained listed for telephone directions on 26 November 2014 at 9.00 am. She informed him that if there was no appearance by him, she proposed to seek an order setting the matter down for hearing on an undefended basis. She explained
This means that [the wife’s] application will proceed on the basis of her Application filed 13 June 2014 and the evidence filed in support of that Application. Absent the leave of the Court, you will not be permitted to file any evidence or be heard in an undefended Application.
The letter then informed the husband that Ms Gordon had not received any details from him as required by the Orders of 9 September 2014. It informed him that in Family Court Proceedings, parties have an obligation to give a full and frank disclosure of their financial positions. An explanation for why the wife was pressing for orders was provided. The letter concluded by reminding the husband that court orders required him to provide Ms Gordon with documents and also to file his response by 31 October 2014.
On 8 January 2015, Ms Gordon caused a letter to be sent to the husband which referred to the Orders made by the Registrar on 26 November 2014. It referred to the proceedings being listed for final hearing on 23 February 2015. It requested information from the husband as follows “Do you intend to participate in the proceedings? If so what orders do you ask the Court to make?” It advised that if a response was not received by the close of business the next day, the wife would prepare for the hearing.
The husband replied by email dated 11 January 2015. In that, he informed Ms Gordon:
I will be unable to attend as [sic] am contracted to work commitments on that date to a position out of the state. The Orders requested are summarised in the email you have received in response to the offer of settlement put forward recently by you on [the wife’s] behalf. I request that this correspondence be put before the court
Yours faithfully
[The husband]
Ms Gordon responded to that email on 12 January 2015. By that response in an attached letter, Ms Gordon confirmed an understanding that the husband did not intend to appear at court on 23 February 2015. It then informed as follows:
I will seek Orders on behalf of my client on that date. Unless advised otherwise those Orders will be in accordance with the Orders sought by my client in the Application filed by her or 13 June 2014 and personally served on you on 15 July 2014. You are welcome to attend Court on 23 February 2015 and make such submissions as you see fit. I cannot make submissions for you to the Court. However I will, of course, ensure that your email dated 3 January is in evidence before the Judge hearing the matter.
That email was responded to by the husband on 18 January 2015. It was responded to with the following words “Thank you. [The husband].”
On 3 February 2015 the wife’s solicitors forwarded to the husband a form of “Notice to admit facts and authenticity of documents”. The covering letter included the following “[The wife] will move for the Court to accept the values set out in the attached Notice and the authenticity of the documents attached to the said Notice when this matter is listed for the undefended hearing on 23 February 2015.” The Notice to Admit Facts included a balance sheet which identified items of assets, liabilities, superannuation and financial resources. Each of those items had a value attributed to them. It also included a letter dated 23 December 2014 under heading “Raine & Horne” attributing a probable achievable sale price for each of the properties at Suburb E were they to be listed for sale.
No response was received from the husband to those documents and on 17 February 2015, Ms Gordon sent an email to the husband again asking for him to acknowledge receipt of the “Notice to admit facts and authenticity of documents” document.
On 26 November 2014, the wife’s solicitors provided to the Trustee of the husband’s superannuation fund a copy of the orders sought by the wife in her application filed 13 June 2014. It drew the attention of the Trustee to the order sought by the wife in relation to the husband’s Public Sector Superannuation Scheme. The Trustee was asked to advise whether there would be any objection to the order sought by the wife. Receipt of that information was acknowledged by the Trustee on 1 December 2014. On 19 February 2015, the Trustee of the husband’s superannuation fund, the Public Sector Superannuation Scheme, advised it had no objection to the order being sought in relation to the husband’s superannuation.
A note in the affidavit of Ms Gordon refers to an email dated 3 January 2015 received from the husband and addressed to her. In her correspondence with the husband she assured the husband, in compliance with his request, that she would bring that email to the attention of the Court on the hearing. That email forms part of exhibit W3. Relevantly, it discloses (bold emphasis in original):
My position with the properties in question is that either both of us have joint ownership of both properties, or we separately own one each. If I become unable to work, where would I live?
Under these conditions I am happy to facilitate joint title of [F Street].
I agree to transferring 50 per cent of deemed balance of ING as of 18/12/2014 to [the wife].
I’m happy with joint ownership of Telstra shares, but if [the wife] insists on transferring them to my sole ownership I won’t oppose it.
[B Pty Ltd]: As a business entity it has had a growth rate of 15 per cent per annum since being started…
The letter then contains some submissions then continues:
We have taken on significant financial commitments in regard to private education of our 2 grandchildren, which are very important to both of us. About $20,00 [sic]/ a year over the next 5-6 years.
I beg and plead with you and the court to carefully consider the above and come to decisions which do not unnecessarily put at risk our future joint financial security, and that of our family.
There are further submissions set out in that email.
Consideration of the wife’s application for property orders
Property: general principles
Section 79 of the Family Law Act 1975 (“the Act”) enables the Court to make orders with respect to the property of the parties to the marriage. In considering what order, if any, should be made the Court is required to take into account the matters under s 79(4).
Prior to the decision of the High Court in Stanford & Stanford (2012) FLC ¶93-518 (“Stanford”), s 79 applications were determined through the application of a four step process (Ferraro and Ferraro (1993) FLC 92-335 (“Ferraro”); McLay and McLay (1996) FLC 92-667 (“McLay”); Hickey and Hickey (2003) FLC 93-143) (“Hickey”)). That process required the Court to:
a)firstly, identify and value the net property, liabilities and financial resources of the parties at the date of the hearing;
b)assess the contributions of the parties pursuant to s 79(4);
c)consider the relevant s 75(2) factors; and
d)lastly, consider whether such an order, in all the circumstances, is just and equitable.
The four step approach has now been the subject of comment by the Full Court in Bevan & Bevan (2013) FLC 93-545 (“Bevan”). Their Honours Bryant CJ and Thackray J outlined that the High Court in Stanford did not disapprove or approve of the four step process set out in authorities such as Ferraro, McLay and Hickey. In the majority judgment, Bryant CJ and Thackray J said at [65]:
65. Although the High Court did not disapprove the four step process, we accept it was not approved either. Given the way the matter was resolved, there was no requirement for a pronouncement either way. However, the High Court’s decision serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so.
Stanford: is it appropriate to make any property order
Section 79(2) of the Act is as follows:
(2) 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.
In Stanford the High Court warned against "conflating" the requirements of s 79(4) and s 79(2):
The operation of s 79
35. 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.
36. The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. And while the power given by s 79 is not "to be exercised in accordance with fixed rules", nevertheless, three fundamental propositions must not be obscured.
37. First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to "altering the interests of the parties to the marriage in the property" (emphasis added). The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
38. Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed that a power to make such order with respect to property and costs "as [the judge] thinks fit", in any question between father and mother as to the title to or possession of property, is a power which "rests upon the law and not upon judicial discretion". And as four members of this Court observed about proceedings for maintenance and property settlement orders in R v Watson; Ex parte Armstrong:
"The judge called upon to decide proceedings of that kind is not entitled to do what has been described as 'palm tree justice'. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down".
39 Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is "just and equitable" to make the order is not to be answered by assuming that the parties' rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that "[c]ommunity of ownership arising from marriage has no place in the common law". Questions between father and mother about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be "decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses". The question presented by s 79 is whether those rights and interests should be altered.
40. Third, 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". 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. (references removed)
Decisions of the Full Court following Stanford have made particular reference to [42] of the High Court judgment which gives a practical guide to the circumstances in which the Court may determine it is not appropriate to make a property order.
42. In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
In Bevan the Full Court after citing [42] of Stanford, warned, at [70] – [74], against the rigid application of the four step process in s 79 applications and outlined that the “ultimate requirement” of any order made is that it must be just and equitable to do so:
70. In our experience, the circumstances described in the paragraph above encapsulate the vast majority of cases. Hence, the reminder in Stanford of the pivotal role of s 79(2) is unlikely to have any impact in most cases, although it will serve as a reminder to trial judges that the precondition to making any order is a finding that it is just and equitable to do so.
71. Stanford will also serve as a reminder that the four step process ‘merely illuminates the path to the ultimate result’. Any future restatement of that process should incorporate acceptance of the fact that the power to make any order adjusting property interests is conditioned upon the court finding that it is just and equitable to make an order.
72. It follows that judges would be well advised to avoid what we consider to be arid discussion of the ‘stage in the process’ at which ‘adjustments’ are permissible. Such discussion tends to elevate the four step process to the status of a statutory edict, when in fact it is no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.
73. The High Court in Stanford has laid down three ‘fundamental propositions’ which will provide useful guidance to trial judges in approaching the task under s 79. These were recited above, and could be summarised thus:
1. Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2. The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;
3. A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.
With regard to the third “fundamental proposition” laid down by the High Court in Stanford, Bryant CJ and Thackray J in Bevan outlined (bold emphasis added):
81. The third “fundamental proposition” demands separate consideration of the preliminary question of whether it is just and equitable to make any order altering property interests before the need arises to consider the extent to which existing interests are to be altered and the manner in which that is to be done.
…
84. Just as the expression “just and equitable” does not admit of exhaustive definition, it is not possible to catalogue the “range of potentially competing considerations” that may be taken into account in determining whether it is just and equitable to make an order altering property interests. However, in our view, it would be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in coming to that decision. Indeed, such a reading would ignore the plain words of s 79(4), which make clear that in considering “what order (if any)” to make, the court must take into account the matters referred to in that subsection (emphasis added).
85. This requirement to consider the s 79(4) matters in determining whether it is just and equitable to make any order provides fertile ground for potential conflation of the two different issues, which the High Court has warned against. However, this potential will not be realised in many cases because of what the plurality said at [42] about the “just and equitable” requirement being “readily satisfied”. But there will be a range of cases, of which arguably the present is a good example, where determining whether it is just and equitable to make any order altering property interests will not be so clear cut and will therefore require not only separate but very careful deliberation.
86. We do not consider it helpful, and indeed it is misleading, to describe this separate enquiry as a “threshold” issue. We say this for two reasons. First, as was emphasised in Stanford, the initial enquiry is to determine the existing legal and equitable interests of the parties. Secondly, although s 79(2) is cast in the negative and amounts to a prohibition against making any order unless it is just and equitable to do so, the corollary is that if the court does make an order, such order itself must be just and equitable: Woollams & Woollams (2004) FLC ¶93-195 per Thackray J at [53] and Teal v Teal [2010] FamCAFC 120 per Finn, Boland and Dawe JJ at [70]. The just and equitable requirement is therefore not a threshold issue, but rather one permeating the entire process.
87. It will be seen from this discussion that while the s 79(2) and s 79(4) issues must not be conflated, they are intertwined because the text of the Act links them….
89. In our view, it will be less likely that the separate issues arising under s 79(2) and s 79(4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until they have first determined that it would be just and equitable to make an order. Ultimately, however, appellate error will not be demonstrated if it is possible to ascertain, either by reference to an express finding or by necessary inference, that the trial judge has given separate consideration to the two issues.
In the subsequent decision of Chapman & Chapman (2014) FLC 93-592 (“Chapman”), their Honours Strickland and Murphy J stated, with regard to Bryant CJ and Thackray J’s interpretation of the High Court’s decision of Stanford in Bevan, that:
25. If the plurality intended that a consideration of the s 79(4) matters is mandatory in answering the s79(2) question, we respectfully disagree.
26. The judgment in Stanford points, in our view, to the opposite conclusion. In particular:
• The “…range of potentially competing considerations” and the consequent impossibility of charting the “metes and bounds” of what is just and equitable (at [36]);
• The ready satisfaction of the s 79(2) requirement in “many cases” by the fact of separation (at [42]);
• The statement that “it will be just and equitable” to make an order in “many cases” by reason of the “…choice made by one or both of the parties…” to end the marriage (at [42]);
• Equally, the statement that “it will be just and equitable” to make an order “in many cases” because “…there is not and will not thereafter be the common use of property by the husband and wife” (at [42], emphasis in original);
• The reiteration that: “…nothing in these reasons should be understood as attempting to chart the metes and bounds of what is ‘just and equitable’ (at [46]); and,
• The further reiteration that nothing in their Honours’ reasons is “…intended to deny the importance of considering any countervailing factors which may bear upon what, in all the circumstances of the particular case, is just and equitable” (at [46]).
27. Further, and crucially, in “applying s 79 in this case” the Justices of the High Court did not themselves take into account the matters in s 79(4). Indeed [51] of the judgment suggests they eschewed those s 79(4) matters relating to contribution. If, as the plurality held in Bevan, it is a “…requirement to consider the s 79(4) matters…” (emphasis added) in determining if, pursuant to s 79(2), it is just and equitable to make any order it is, respectfully, inconceivable that their Honours in Stanford would not have done so.
In Chapman, her Honour Bryant CJ agreed with Strickland and Murphy JJ’s interpretation of Stanford and posited at [4] that the reasons of the plurality in Bevan, despite some “infelicity of expression” at [84] and [85] of that judgement, did not lead to a conclusion that it is a mandatory requirement for the Court to consider s 79(4) matters when determining the s 79(2) question. Her Honour outlined, at [5] – [6], in relation to the intention of the plurality’s reasons in Bevan (bold emphasis in original) that:
5. The point being made by the plurality at [84] is that it would be inappropriate to limit the wide discretion conferred by s 79(2) by requiring the Court to ignore the matters referred to in s 79(4). This is so because the matters referred to in subparagraphs (a) to (c) of s 79(4) in particular, would be likely to embrace much of the factual substratum on which any exercise of discretion would be based.
6. The infelicity of expression to which I have referred appears in the opening words of [85], which I accept can be read as requiring the Court to consider, in every case, the matters in s 79(4) when determining whether the requirements of s X have been met. This was not the intention. Rather, the paragraph was designed to highlight the potential for conflation of the two separate issues as a result of the appearance of the words “(if any)” in the opening sentence of s 79(4).
Her Honour continued, at [9], that she agreed with the position of the majority that s 79(4) matters were not required to be considered when determining the s 79(2) question, although they may serve to inform the decision:
9. Whatever differences may exist as to the meaning of [84] and [85] of Bevan, I am in agreement with Strickland and Murphy JJ that it is not a requirement to take account of the matters in s 79(4) when considering the question of whether it is just and equitable to make any order under s 79(2). But as long as they are seen as separate and not conflated, the factors in s 79(4) have the potential to inform the decision under s 79(2), along with all other relevant considerations, as Murphy J held in Watson & Ling [2013] FamCA 57 at [12], citing Stanford at [40].
With respect to the Court’s consideration of s 75(2) matters, her Honour outlined:
39. The consideration of the relevant matters referred to in s 75(2) of the Act, pursuant to s 79(4), like the assessment of contributions, is holistic. Also, like the assessment of contributions, it is not an accounting exercise.
40. In addition, and important to the arguments in this appeal, a trial judge is obliged to “…consider the effect of the findings as to contribution on the respective positions of the parties, before proceeding to determine whether any adjustment was warranted pursuant to section 75(2)” (Willis & Willis [2007] FamCA 819, at [50]). In that respect, the nature and form of the property or superannuation interests comprising a party’s entitlement, and not just the dollar value of that entitlement are clearly central to achieving justice and equity as s 79 requires.
Assessment of the s 79(4) contributions
In considering the alteration of property interests I am required to consider the contributions made by the parties in accordance with the matters outlined under s 79(4). Section 79(4) provides:
(4) 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)
In making a decision in relation to property, s 79(4)(e) requires a consideration of relevant s 75(2) matters. I here incorporate the provisions of section 75(2).
Determination
I now move to identify the property of the parties or either of them available for division.
The Court at the commencement of the hearing was provided with the balance sheet prepared by the applicant wife and included in the “Notice to Admit Facts” served upon the husband under the Rules and not responded to by the husband within the prescribed time.
The Balance Sheet
The wife tendered her version of the balance sheet supported by documentation evidencing the amounts submitted by her. The balance sheet proffered by the wife is as follows:
| Ownership | Description | Wife | Source. | ||
| ASSETS | |||||
| 1 | Joint | D Street Suburb E | $1,000,000 | R&H 23/12/14 | |
| 2 | Husband | F Street, Suburb E | $950,000 | R&H 23/12/14 | |
| 3 | Wife | ANZ Account No. … | $19,304 | Statement 17/02/15 | |
| 4 | Wife | ANZ Account No. … | $39,304 | Statement 17/02/15 | |
| 5 | Wife | National Australia Bank Account … | $4,198 | Statement 13/11/14 | |
| 6 | Husband | ING Business Optimiser Account … | $105,357 | Statement 31/12/14 | |
| 7 | Husband | St George Portfolio Loan in Credit … | $19,084 | Statement 19/02/15 | |
| 8 | Husband | St George Portfolio Loan … | $72,857 | Statement 19/02/15 | |
| 9 | Husband | St George Power Saver Account No. … | $7,012 | ||
| 10 | Wife | 720 Commonwealth Bank of Australia shares @ $75.00 each | $66,406 | ||
| 11 | Wife | 455 Newcrest Shares @ $110.25 each | $6,113 | ||
| 12 | Joint | St George … | $459 | Statement 19/2/15 | |
| 13 | Joint | 600 Telstra Shares @$6.38 | $1,914 | ||
| 14 | Wife | Motor vehicle 1, registration … | $5,000 | ||
| 15 | Joint | Household Contents | $5,000 | ||
| 16 | |||||
| 17 | |||||
| 18 | Total | $2,301, 738 | $0 | ||
| 19 | ADDBACKS | ||||
| 20 | Ownership | Description | Wife | Husband | |
| 21 | |||||
| 22 | |||||
| 23 | Total | $0 | $0 | ||
| 24 | LIABILITIES | ||||
| 25 | Ownership | Description | Wife | Husband | |
| 26 | Wife | AMEX … | -$2,771 | Statement 1/2/15 | |
| 27 | Wife | St George Visa … | $0 | ||
| 28 | Husband | AMEX … | -$3,870 | Statement 5/1/15 | |
| 29 | Husband | Mastercard CBA … | -$3,101 | Statement 7/12/14 | |
| 30 | Husband | St George Portfolio Loan … refer item 7 above currently in credit | $0 | ||
| 31 | Husband | St George Portfolio Loan …refer item 8 above currently in credit | $0 | ||
| 32 | |||||
| 33 | |||||
| 34 | Total | $9,742 | $0 | ||
| 35 | SUPERANNUATION | ||||
| 36 | Member | Name of Fund | Wife | Husband | |
| 37 | Wife | Jeanes Family Superannuation Fund (Self managed) | $167,597 | 2013 Financials | |
| 38 | Husband | Jeanes Family Superannuation Fund (Self managed) | $307, 232 | 2013 Financials | |
| 39 | Husband | Australian Super Member No. … | $511 | 31/12/13 | |
| 40 | Husband | Hesta – Member No. … (Accumulation) | $11,908 | 31/12/13 | |
| 41 | |||||
| 42 | Total | $487,248 | |||
| 43 | FINANCIAL RESOURCES | ||||
| 44 | Ownership | Description | Wife | Husband | |
| 45 | Husband | Public Sector Super Scheme – Member No … (Defined Benefit) | $ | NK | |
| 46 | |||||
| 47 | Total | $0 | $0 | ||
| 48 | SUMMARY | ||||
| 49 | Total property | $2,301,738 | $0 | ||
| 50 | Total addbacks | $0 | $0 | ||
| 51 | Total liabilities | -$9,742 | $0 | ||
| 52 | Total Superannuation | $487,248 | $0 | ||
| 53 | Total financial resources | $0 | $0 | ||
| 54 | TOTAL | $2,779,244 | $0 | ||
Is it appropriate to make any order: 79(2)
The requirement that the Court must be satisfied, that in all the circumstances, it is just and equitable to make a property settlement order is readily satisfied in these proceedings.
The husband and wife are no longer living together in a marital relationship. The former matrimonial home at D Street is exclusively occupied by the wife and the husband lives with his partner, Ms H. There are no children of the marriage who have not reached their majority.
In these circumstances, the arrangements made between the parties as to their property interests and financial relations during the marriage must be brought to an end. The parties have been unable to come to a consensual decision regarding these matters.
I find that it is just and equitable to move to consider making a property order.
Section 79(4) contributions to date of separation
The evidence to support the wife’s application is contained in her affidavit sworn 27 January 2015. This affidavit is an expansion of the affidavit filed by the wife and sworn 13 June 2014, the difference being largely the annexure of documents necessary to establish the assertions of fact made by her in her affidavit and evidence of the communication between her and the husband via her attorney since the commencement of the proceedings. The affidavit has also been expanded in relation to aspects of the separation, (which in my opinion is largely irrelevant) and in other areas relating to s 75(2).
The facts which are pertinent to the determination to be made by me
The wife was born in 1945 and turned 70 years of age this year. The husband was born in 1943 and is 71 years of age. He is currently employed as a health professional.
The parties were married in 1968, and on that day, commenced their cohabitation. There are two children of the marriage, Mr I, now aged 44 and Ms J, aged 42. Ms J has two children, K, now aged 15, and L, aged 11. The wife and the husband assist with the payment of private school fees at M School for each of those grandchildren.
Prior to the date of separation, the parties were cohabitating in a property at O Street, M Town, in the Northern Territory. Following separation, the wife moved to Sydney, where she has resided since that time.
At the date of commencement of cohabitation, the husband was employed as a health professional. The wife was employed as a retail assistant. Neither party had any assets of significance. As part of his employment at the P Hospital, the husband became a contributor to, or member of, a Government Public Sector Superannuation scheme.
Approximately 12 months after the marriage, the parties travelled to Country Q, where the husband obtained employment. The wife was unable to work in the Country Q. The parties’ first child was born in 1970 and their second child was born in 1971. Both children were born in Country Q. Thereafter the wife was a homemaker and parent to the family, and has not had employment since.
In 1973, the parties returned to Australia and the husband worked as a health professional in Sydney and conducted an after-hours practice from the parties’ home at Suburb R. The wife assisted the husband with the after-hours practice including answering the telephone, making patient appointments, creating files and greeting patients. She issued receipts and spoke to patients while they waited to see the husband.
When the children had commenced attending school, the wife obtained employment in various fields including a wooden toy shop, which she established with her cousins at Gordon. She also worked at S Pty Ltd coffee shop as a retail assistant for several years. In the 1990s, she studied at Suburb T TAFE and became qualified as a health professional. She worked at the U Centre at Suburb V and W Hospital as part of the rehabilitation team. All income received by the wife was applied to household expenses and mortgage payments. There were occasions when the wife had to cease her employment in Sydney and she then accompanied the husband when he travelled for his work. In 1976, they travelled to Country X for six months. In 1999, they travelled again to Country X, and both the husband and wife worked on that occasion for nominal income. They returned to Australia in about 2001. At that time the husband was unemployed for about six months. The husband became despondent at the difficulty he was experiencing obtaining employment. The wife used her endeavours to motivate the husband. She provided emotional support for him. She read medical journals looking for possible suitable employment advertisements. The husband eventually obtained employment as a health professional in a government funded clinic.
In 2006, the husband was again unemployed for some months. Again during that period, the wife assisted by seeking job vacancy advertisements. She encouraged the husband to apply for a position as a health professional with Y Corporation in the Northern Territory. He was ultimately employed as a medical officer at Z Town, a remote community 300 kilometres north-west of AA Town. The husband and wife moved to that location in about 2006, so the husband could take up his position. The living conditions were difficult. The wife worked in the clinic in Z Town and travelled with the husband to communities and assisted with the completion and lodging of claim forms to Medicare. After a time, the husband obtained employment with BB Health and the parties lived in various remote communities in the Northern Territory.
The wife obtained employment with BB Health and worked in the office five days a week. At a later time, the husband obtained employment with a health service in O Town. The wife accompanied the husband to O Town. On occasions she accompanied the husband as he travelled to remote communities. She facilitated the indigenous children attending at medical examinations and played with them while they waited to see the doctor. As part of his employment in the Northern Territory, the husband was provided with subsidised rental accommodation, a motor vehicle and allowances for travel. During the period when the parties lived and worked together in the Northern Territory the wife continued her role as home maker.
The parties acquired their first real estate in Suburb R in the early years of their marriage. The property was purchased from the husband’s mother. Joint savings and a mortgage were used to acquire the property. That property was sold in 1988 and the D Street property was purchased. Savings and a mortgage were used to obtain the D Street property.
In about 1975, the wife’s mother died and left her estate to the wife and her two brothers. The wife and her brothers agreed to allow one of their brothers remain in the family home until his death. The wife received a small amount of cash which she used to acquire a motor vehicle. In 1992, the wife received an inheritance from her aunt of about $30,000. She applied that fund to acquire a new car and discharge the mortgage on the D Street property.
In the early 1990s the husband received an inheritance from his mother. The wife does not recall the amount, however, it was applied to purchase the F Street property. The property was purchased in 1993 for approximately $220,000 with a mortgage of $150,000.
In 2006, upon the demise of her brother John, the wife received her inheritance from her mother in the sum of approximately $200,000. She applied the funds to family expenses.
Following the purchase of the F Street property, the wife organised an agent to manage the property. She liaised with the agent on a regular basis.
During the marriage, the wife performed tasks associated with the homes the parties lived in. She mowed the lawns (occasionally with the husband’s assistance), designed, planted and maintained the gardens and organised trade people when necessary.
During the marriage, the parties established a self-managed superannuation fund called “The [Jeanes] Family Superannuation Fund”. It was established on 11 March 2010, the trustee being B Pty Ltd. The wife is a director and secretary and shareholder of the Trustee company. The husband is a director and shareholder of that company also.
The husband provided contributions on behalf of both the parties in respect of their individual accounts in the Jeanes Family Superannuation Fund. As at 30 June 2011, the husband’s account stood at $234,004 and the wife’s at $155,919. At 30 June 2013, the husband’s entitlement in the fund had risen to $307,232 and the wife’s to $167,597.
During the cohabitation, the wife made contributions to the welfare of the family. She identified those contributions in detail in her affidavit material. She provided the majority of the day-to-day care for both Mr I and Ms J from the time of each birth throughout their lives until such time as they ceased being under her care. The wife details extensively her contribution in relation this area and also refers to some of the contribution made by the husband in this same category.
During the marriage there were times when the husband travelled without the wife. She was unaware of where he travelled to, or the funds he expended on such trips. The trips varied between a number of days to a number of weeks.
During the marriage, the husband was a devotee of transcendental meditation. He practised meditation on a daily basis since approximately 1969. He meditated an hour in the morning and an hour in the evening. He attended meditation retreats. After the parties returned from the Country Q, he travelled to meditation retreats between one and three times per year. He also attended weekend meditation retreats several times a year, the other retreats he attended lasted for up to two weeks at a time, and that occurred two to three times a year. During his absence, the wife cared for the children without his assistance.
Section 75(2) considerations
In relation to matters to be considered by the Court under s 79(4)(e) (s 75(2)) the wife set out her evidence as follows. For many months following the separation, she was anxious, tearful and distressed. She was unable to sleep and would wake during the night.
The wife has had her thyroid removed, which requires that she has blood tests approximately every six months. She continues to take prescribed medication subsequent to the thyroid removal. She suffers fatigue, weakness, sweating, increased appetite, weight gain and difficulty thinking clearly. She suffers from asthma and still experiences anxiety. She has a stomach complaint. Annexure SJ8 to her affidavit is a letter from Dr CC in relation to the wife’s medical condition and history. The letter recites the history of her medical condition and procedures she has undertaken, in particular between June 2012 and June 2014. It lists her current medications, which are eight in total.
The wife has no income other than that provided by the husband. She is not in gainful employment and does not consider she has the capacity to undertake same. She does assist her children with the payment of grandchildren’s school fees at M School. In 2014, she provided her son with a motor vehicle.
The husband lives in a relationship with his partner, Ms H. She is in full-time employment.
The wife asserts the parties lived a comfortable standard of living during their cohabitation. They travelled overseas at least once a year. The wife was able to visit family interstate two or three times a year. The wife accompanied the husband to medical conferences two or three times a year.
The wife does not know the husband’s current financial circumstances other than those disclosed by her in her evidence. The F Street property is rented for approximately $2,400 per month and the rent is paid into a St George Portfolio Loan account. The wife is living in the D Street property. It has three bedrooms. This enables her children and grandchildren to stay with her from time to time, and that has been occurring approximately three to four times a year. The house is located near her General Practitioner’s Practice and DD Hospital. It has a small garden which she enjoys working in. The locality is familiar to her with easy access to train, park and shops. She has a dog. The property is located close to another relative who she visits regularly. The husband has told the wife that he enjoys his work in the Northern Territory with remote communities and he is wishing to work as long as he is permitted to do so.
The wife set out the history of the proceedings, including details of correspondence provided by the husband to her solicitor.
The wife swore an updated Financial Statement on 27 January 2015. This discloses relevantly that her income is $147 per week from share dividends and payment from the Jeanes Family Superannuation fund. The husband pays her health insurance of $35 per week and that sum is not included in the wife’s expenses as set out in her Financial Statement. He also pays her $1,019 per week on average. Her expenses are $1,166 per week to which $35 must be added making her total expenses $1,201. She sets out details of her assets, superannuation and liabilities although her liabilities are nil.
On 3 February 2015, a Notice to Admit Facts was served upon the husband. This Notice put him on notice that unless he disputed any of the facts or the authenticity of documents specified in the Notice within 14 days of service of same, he will have been deemed to admit them. The Notice contained a balance sheet setting out the wife’s estimation of the value of each of the parties’ known assets. It also set out, to the best of her knowledge, each of the parties’ known liabilities and superannuation entitlements. It attached the market appraisals obtained by the wife in December 2014 in respect of each of the parties’ pieces of real estate. No response was received by the wife or her solicitor to the Notice to Admit Facts. The Rules of Court prescribe that failure to respond to a Notice to Admit Facts within 14 days is deemed to amount to an admission as to the contents of same.
In written submissions in support of the orders sought by the wife, the following matters were drawn to the attention of the Court. The cohabitation was for a period of about 45 years. During that period, it is submitted, the contributions, with the exception of one matter, of each of the parties should be assessed as equal. Seven years prior to the conclusion of the marriage, the wife received an inheritance of $200,000. It is submitted by the wife that such a significant contribution in an assessment of the parties’ overall contributions to the date of hearing should cause the Court to conclude 55 per cent to the wife and 45 per cent to the husband.
It is further submitted that having regard to the s 75(2) matters, there should be a significant adjustment in favour of the wife. The matters which, it is submitted, would lead the Court to that conclusion are as follows. The husband earns in excess of $220,000 per annum, as revealed in his taxation return for 30 June 2014. The evidence to support that submission was contained in exhibit W1, being a copy of the husband’s 2014 income tax return. That disclosed the husband receives a wage from the EE Corporation of $194,523 per annum. In addition, he received a Medicare Remote Rural payment of $27,000. His taxable income was $249,300. The wife’s taxable income for the year ended 30 June 2014, as disclosed in exhibit W2, was $8,070. She received a small payment in that year from the Australian Electoral Commission. The income included some interest on bank accounts and share dividends. The husband is now in receipt of a payment from the Commonwealth Superannuation Corporation and a sum of $12,342 was included in his income for the year ended 30 June 2014. Exhibit W3 is a copy of a letter dated 18 December 2014 from the Commonwealth Superannuation Corporation to the husband. This letter advised that as from that date there had been an increase in his fortnightly pension which would henceforth be $1,084.58.
It is submitted that the husband resides with his partner who is in full-time employment. No details have been provided about her income or other financial circumstances.
It is submitted that the parties lived a comfortable lifestyle which should be taken into account in an adjustment in favour of the wife at this time. Each of the parties is entitled to the superannuation in the Jeanes Family Superannuation Fund. The most recent available evidence in relation to that fund shows that the husband’s entitlement would be $307,232 and the wife’s entitlement would be $167,597. Those figures were as at 30 June 2013 and the fund is almost entirely comprised of cash.
The wife has had to pay legal costs to complete the proceedings.
The orders sought by the wife see her retain the former matrimonial home at D Street, cause the sale of the F Street property with the proceeds to be divided equally, divide the husband’s pension income from the Public Sector Superannuation Scheme equally (that is a splitting order of 50 per cent), leave the parties’ superannuation entitlements at their current level in the Jeanes Family Superannuation Fund, but of course allowing for the wife to roll her entitlement into a separate fund, and apportion the husband’s savings account with ING 100 per cent to the wife.
It is submitted on behalf of the wife that this would effect a division 68 per cent to the wife and 32 per cent to the husband.
Exercise of court’s discretion
The husband has proffered no explanation for his decision not to participate in the proceedings. His difficulty in leaving the area he now lives and works in does not excuse his failure to engage a lawyer to act on his behalf. He is a highly educated person and clearly has the capability to understand that without representation or proper participation in these proceedings his interests will not be adequately protected. He has had due notice of the orders the wife seeks and he has not opposed those orders by filing appropriate documentation in this court. Such failure carries consequences which must be readily understood by a person in the husband’s position.
The Initiating application served upon the husband has on its’ final page in bold type the words “IMPORTANT NOTICE TO RESPONDENT(S)” (bold emphasis in original). Thereunder are contained information and a warning. The notice specifies the action the husband must take, “If you do not want the court to make the orders sought in this application”.
The only indication of what orders the husband might have sought, had he chosen to participate in the proceedings, is contained in an email dated 3 January 2015 from the husband to the wife’s solicitor. The wife’s solicitor undertook to provide that email to the Court at the time of the hearing of the wife’s application on an undefended basis. What can be reasonably discerned from the email dated 3 January 2015 as the husband’s proposed division of assets is as follows:
a)The parties continue to retain joint ownership of both properties, or alternatively, they each retain one of the properties in their sole name;
b)The husband said 50 per cent of the ING account should be transferred to the wife;
c)Joint ownership of Telstra shares should remain;
d)The superannuation fund should remain intact as it is a good investment;
e)The superannuation from the Public Sector Superannuation Scheme should be divided equally and;
f)The husband intends that the wife continue to enjoy overseas travel and lifestyle “within the boundaries of reasonable affordability”.
There is no evidence to show how long the husband may be permitted by relevant authorities to practice as a health professional. There is no evidence to show what the impact upon his earning capacity might be if he was prevented from practicing medicine by the relevant authorities. Would he be able to obtain employment in the medical education field, for example? It is clear that the husband wishes to work as long as he is able to do so, and by those words it might reasonably be inferred that it is subject to his health permitting him to work and relevant authorities allowing him to work as a health professional. For so long as he works as a health professional, it is clear that he will earn a substantial income.
The husband has the benefit of his relationship with his new partner and has failed to disclose any details in relation to same. Indeed, the husband has failed to disclose any relevant financial detail as he has failed to participate in the proceeding. It should be noted, however, that he did, early in the commencement of the proceedings, authorise his accountant to provide whatever detail was requested by the wife. It should also be noted that he confirmed the D Street property occupied by the wife was the mailing address for financial institutions and other entities which provided detail of his financial interests, and that detail was readily available to the wife as she was responsible for opening his mail.
The orders sought by the wife in the scheme of this relationship are not, in my view, outside the scope of available range for the Court exercising an appropriate discretion. I conclude that a significant adjustment under s 75(2) in favour of the wife is warranted. I am also entitled to take into account, and do so, that the husband, who is a highly educated and clearly articulate person, chooses not to engage in the court proceedings, having received proper and acknowledged notice of the orders sought by the wife in this proceeding. There is no evidence which might reasonably inform the Court of any impediment to the husband participating in the proceeding either personally or through representation.
Having regard to all those matters, I conclude it is just an equitable to make the property orders sought by the wife.
In the oral submissions provided in the hearing of this matter by the wife, the Court was informed that the wife did not press for orders 4, 8, 10.3, 26 as sought in her Initiating Application under the heading “Final orders sought”. Accordingly those particular orders will not be made.
SPOUSE MAINTENANCE APPLICATION
The wife seeks a spouse maintenance order. She seeks that order be in a lump sum. Such application requires the Court to be satisfied she has made out her case under s 72 of the Act.
Whilst s 81 of the Act provides that the Court must, as far as practicable, make orders that will finally determine the financial relationship between the parties, this duty does not override the requirement to consider the matters referred to in s 72, including those in s 75(2), or the powers of the Court pursuant to s 74 to make such order as it considers proper for the provision of maintenance (see Bevan & Bevan (1995) FLC 92-600, DJM v JLM (1998) FLC 92 - 816.)
I do not consider that, in the circumstances of this case, my findings in respect of the wife’s property settlement disentitle her to an order for spouse maintenance (see Mitchell and Mitchell (1995) FLC 92-601). However, the wife’s application will not be considered in isolation from the property orders made in these proceedings (see Bevan & Bevan (1995) FLC 92-600)
The order sought is contained in paragraph 23 of the Initiating Application and in short seeks a lump sum payment of $125,000. That order is not opposed by the husband.
In Bevan & Bevan (1995) FLC 92-600, the Full Court determined the maintenance needs of the wife by calculating the income she would receive if received a 5 per cent per annum return on her capital asset base received from the property settlement. It is this approach I will adopt in respect to the wife’s application for spouse maintenance in these proceedings.
The wife has a limited income she earns from personal exertion and receipt of interest on savings and dividends from share holdings. She receives a substantial payment for the husband in the form of voluntary spouse maintenance. That payment will be expected to cease upon the making of the property orders she seeks in this case.
The wife will receive the benefit of the splitting order in relation to the husband’s Public Sector Superannuation Scheme. The evidence discloses the husband is entitled to a pension of $28,199 per annum. That represents a weekly payment for the wife’s half share pursuant to the splitting order of $271.15. She has other income of $147 which is not derived from the husband. Her income after the property and superannuation splitting orders are made therefore can be expected to be $271.15 from superannuation splitting, $147 from the sources identified in her Financial Statement (total of $418.15), together with any interest or income which she can derive from the investment of the other cash sums she will receive from the property orders or will retain as her property already standing in her name.
Pursuant to the property orders the wife will receive cash from the sale of the F Street property (half share) about $475,000. She will also receive the ING account of $105,357. She will retain her interest in bank accounts totalling about $62,806. Those sums total $643,163. If that sum was invested by the wife and she obtained a net return of 5 per cent per annum that would realise an income of $618.43 per week. The wife’s available income would therefore be $1,037 from all those sources.
As stated earlier the wife has a need for $1,201 per week as shown in her Financial Statement.
The figures for the wife’s assets in the balance sheet make no allowance for the payment of her legal costs and those costs have not been disclosed. However, considering the legal work carried out on behalf of the wife as evidenced by the documents relied upon in the hearing, her legal costs must be not inconsequential. Further the costs that each of the husband and the wife propose to contribute towards the education costs of their grandchildren have not been included as an expense in the wife’s Financial Statement.
The investment of $125,000 at 5 per cent per annum would provide a weekly income of $120.20. That sum when added to the figure above calculated would realise for the wife a total weekly income of $1,157.
The above calculations are calculated with generosity to the anticipated return. If the parties had put before the Court proper evidence of a realistic anticipated return from the investment of cash on interest bearing deposit with an Australian based registered financial institution anecdotal evidence would suggest as at the date of these orders a lesser return.
The wife seeks a lump sum payment of spouse maintenance. An ongoing order is an alternative. There is the possibility of the Court imposing a concluding date to an ongoing order. An ongoing order may be varied according to the changing need of the wife and the capacity to pay of the husband.
In Vautin v Vautin (1998) FLC 92-827 the Full Court said, in relation to the making of a lump sum maintenance order, at 85,423-85,424:
42. Maintenance is a term of wide meaning directed to various forms of provision for the support of a spouse or child. It is not confined to a subsistence level of support but to that which is reasonable in the circumstances of the particular case: see Mitchell and Mitchell (1995) FLC 92-601, Gamble, supra, Bevan, supra, Wilson, supra, and Best, supra. In making the order which is appropriate in that context, the Court may make a periodic order or lump sum order or a combination of both and/or make any other orders of the kind referred to in s 80(1).
43. It has been pointed out on a number of occasions in this Court that in the exercise of the power to order lump sum maintenance caution is usually appropriate because of the apparent finality of lump sum orders and the difficulties in making predictions into the future. However, it is a power, the exercise of which may be appropriate in particular cases. It may be ordered, amongst other reasons, to meet non-periodic expenditure for the maintenance of that person where there is an established need and a capacity to pay. It is not confined to cases of the capitalisation of periodic maintenance and/or where periodic maintenance is unlikely to be paid because of concerns about the capacity or willingness of the liable parent to pay (as passages in the judgment in Clauson and Clauson (1995) FLC 92-595 at pp. 81,907 and 81,908 may suggest) or to cases where the need for or the capacity to pay periodic maintenance is demonstrated.
The husband has not put before the Court all of the relevant evidence of his financial circumstances (see Rules 13.04 and 13.14 of the Rules). To that extent the Court could not be satisfied the husband has made a full and frank disclosure of his financial circumstances as required in a property and spouse maintenance case. Such a conclusion provides a degree of latitude to the Court in reaching conclusions about the capacity to meet spouse maintenance and property orders.(see Black and Kellner (1992) 15 FamLR 343 and In the Marriage of S Wife and Wife Husband Weir (1992) 16 Family LR 154, Rand & Rand (2010) FLC 93-444.)
The Court is required by s 81 of the Act to make a determination which will finally determine the financial relationships between parties to a concluded marriage. The making of the type of lump sum order sought by the wife would satisfy that requirement.
In the circumstance where the husband does not oppose the order sought by the wife, and armed with the information as set out above as to the income which might be available to the wife from the property and splitting orders proposed to be made, I consider it is appropriate to make the lump sum order sought by the wife.
I certify that the preceding one hundred and seventeen (117) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench delivered on 14 May 2015
Associate:
Date: 14 May 2015
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