Jefferson and Manley

[2016] FCCA 3238

FEDERAL CIRCUIT COURT OF AUSTRALIA

JEFFERSON & MANLEY [2016] FCCA 3238

Catchwords:
FAMILY LAW – Undefended property proceedings.

Legislation:

Family Law Act 1975, ss.4(1); 75(2); 79(4); 90SF(3); 90SF(4)(1); 90SM(1); 90SM(3); 90SM(4)

Federal Circuit Court Rules 2001, rr.13.1A; 13.03A(2); 13.03B(2)(d)

Cases cited:
Taylor v Taylor (1979) 143 CLR 1
Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143
Bevan & Bevan [2013] FamCAFC 116
Russell v Russell (1999) FamCA 187
Stanford v Stanford (2012) 247 CLR 108
Kessey & Kessey (1994) FLC 92-495
Pellegrino & Pellegrino (1997) FLC 92-789

Applicant: MS JEFFERSON

Respondent: MR MANLEY

File Number: ADC 3730 of 2015

Judgment of: Judge Brown

Hearing date: 2 December 2016

Date of Last Submission: 2 December 2016

Delivered at: Adelaide

Delivered on: 16 December 2016

REPRESENTATION

Counsel for the Applicant: Ms Lewis

Solicitors for the Applicant: Jacqui Ion Lawyers

Counsel for the Respondent: In person

Solicitors for the Respondent: Not applicable

ORDERS

That in full and final settlement of any claim that either party may have against the other now or at any time in the future for settlement of property or alteration of interests in property:

1. That within thirty (30) days of the date of this Order, the respondent do all things necessary and sign all documents as may be required to transfer all of his interest, right, title and entitlement in the property located at Property F in the State of South Australia, being the whole of the land comprised and described in Certificate of Title Register Book (omitted) (hereinafter referred to as “the Property F property”), to the applicant at the applicant’s sole expense in all things;

2. That contemporaneously with the transfer of the Property F property referred to in paragraph 7(a) herein, the applicant shall do all things necessary and sign all documents as may be required to discharge Mortgage Registration Number (omitted) over the Property F property, at the applicant’s sole expense in all things, and she shall indemnify the respondent in all respects thereof;

3. The applicant shall have as her sole property free from any claim, right or entitlement of the respondent the following:

   (a)the Property F property;

   (b)the applicant’s Subaru (omitted) motor vehicle;

   (c)the applicant’s share portfolio;

   (d)the applicant’s separate savings and investments;

   (e)all items of furniture, household effects and personal effects presently in the applicant’s possession or under her control;

   (f)the applicant’s superannuation entitlements in her name;

   (g)any life insurance or assurance policies in the applicant’s name; and

   (h)all other items of personal property in the applicant’s possession or control not otherwise specified herein;

4. The respondent shall have as his sole property free from any claim, right or entitlement of the applicant the following:

   (a)the proceeds from the sale of the Mitsubishi (omitted) motor vehicle;

   (b)the respondent’s separate savings and investments;

   (c)all items of furniture, household effects and personal effects presently in the respondent’s possession or under his control;

   (d)the respondent’s superannuation entitlements in his name;

   (e)any life insurance or assurance policies in the respondent’s name; and

   (f)all other items of personal property in the respondent’s possession or control not otherwise specified herein;

5. That the applicant be solely liable and do indemnify the respondent and forever keep him indemnified with respect to:

   (a)all debts and liabilities of the applicant personally and in her name; and

   (b)any liability encumbering any item of property to which the applicant is entitled pursuant to this Order;

6. That the respondent be solely liable and do indemnify the applicant and forever keep her indemnified with respect to:

   (a)all debts and liabilities of the respondent personally and in his name; and

   (b)any liability encumbering any item of property to which the respondent is entitled pursuant to this Order;

7. That pending the transfer of the Property F property as referred to in paragraph 7(a) herein:

   (a)the applicant shall have the sole right to use and occupy the Property F property to the exclusion of the respondent; and

   (b)Neither party shall mortgage, encumber or otherwise offer the Property F property for security other than for the purposes of compliance with these Orders.

8. That in the event the respondent refuses or neglects to execute any document necessary to give effect to the terms of this Order within seven (7) days after the same shall be tendered to him for that purpose, then and in such a case the Registrar or Deputy Registrar of the Family Court of Australia upon proof by affidavit of such refusal or neglect is hereby appointed to execute the document, on behalf of the respondent, and if it is in his or her opinion it shall be necessary to give full force and effect hereto and shall execute and do the same accordingly.

9. Unless otherwise specified in this Order:

   (a)each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party at the date of this Order;

   (b)each party forego any claims he or she may have to any superannuation benefits or employment entitlements belonging to or earned by the other; and

   (c)insurance policies remain the sole property of the beneficiary named therein.

10. That each party shall do all things necessary and sign all documents as may be required to give full effect to this Order.

11. That either party be granted liberty to apply for consequential orders.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADC 3730 of 2015

MS JEFFERSON

Applicant

And

MR MANLEY

Respondent

REASONS FOR JUDGMENT

Introduction

1. The parties to these proceedings are Ms Jefferson and Mr Manley.  Although they have never been married, it is convenient to refer to Ms Jefferson as “the wife” and to Mr Manley as “the husband” in these reasons for judgment. 

2. The proceedings relate to undefended de facto property settlement proceedings, which the wife commenced on 7 October 2015.  The husband filed a response to this application on 12 July 2015. 

3. In this response, he indicated that he sought the following in respect of the settlement of de facto property issues between him and the wife:

   “Just and equitable orders for property settlement as this honourable court deems fit.”

4. In the period since this response was filed, Mr Manley has no not filed any further application or provided more details in terms of specific orders sought by him notwithstanding that the court on the wife’s application, has made orders requiring particulars of his claim be provided.

5. Throughout the proceedings the wife has filed a number of extensive affidavits in which she has detailed her perspective on the parties’ history with one another both in a financial and emotional sense.  More recently on 19 July 2016, she has filed an amended application in which she sets out in detail the property orders which she seeks from the court. 

6. The wife was born on (omitted) 1979.  The husband was born on (omitted) 1978.  They are the parents of two children X born (omitted) 2007 and Y born (omitted) 2009.  As a consequence of an order made by the court on 14 September 2016, the two children live with the wife who has been conferred with sole parental responsibility for them. 

7. The parties met in Adelaide in (omitted) 2006 and began to live together shortly afterwards.  In November of 2007, they moved to Property F.  They separated, in difficult and unusual circumstances on 16 May 2015. 

8. A few days beforehand, the wife had travelled to Adelaide from Property F to attend her grandfather’s funeral.  She had left X and Y in the husband’s care.  On her return she was expecting the husband to collect her at the airport.  He did not arrive as expected. 

9. When the wife returned to the parties’ former family home, she discovered that the husband had abandoned it in a state of disarray leaving the children with a friend.  The husband left a brief note to explain his conduct. 

10. Apparently he went to Western Australia.  He acknowledges that he was not coping at the time.  The wife reported him as a missing person.  Mr Manley has not had any physical interaction with either X or Y since May of 2015. 

11. It is the wife’s case that during the parties’ relationship Mr Manley struggled with issues relating to alcohol and substance abuse as well as depression.  It is also her case that she was subjected to family violence during the parties’ relationship. 

12. In the only affidavit which he has filed, Mr Manley describes Ms Jefferson as a “spoilt little rich girl”.  It is his position that the relationship between the parties was a toxic one in which both parties drank to excess which led to frequent violent altercations between them.  In his summation, the parties were each as “bad as each other” in respect of issues to do with family violence and alcohol abuse. 

13. At present, Mr Manley lives in (omitted) in New South Wales with his grandmother who is dependent on him for her care.  He receives social security payments and has applied for a disability support pension because of injuries to his back.  In addition, he confirms that he suffers from depression and anxiety. 

14. The parties’ major asset is their former matrimonial home located at Property F.  This property was purchased in December of 2014, approximately five months before the husband left Property F. 

15. It is the wife’s position that this property came into the parties’ possession solely as a consequence of the financial generosity of her parents.  In addition, it is her case that all other items of property relevant to these proceedings are attributable either to her parents or a significant inheritance which she received from her grandmother. 

16. Ms Jefferson concedes that Mr Manley did have some employment during the parties’ relationship as a (occupation omitted).  However, it is her evidence that he was unreliable in his employment and as a consequence was often terminated from it.  It is also her position that the vast majority of home-making and parenting responsibilities fell onto her shoulders. 

17. In his sole affidavit, Mr Manley has conceded that Ms Jefferson’s parents are wealthy individuals.  In respect of what occurred, following his sudden departure from Property F, he deposes as follows:

    “The Applicant’s family are wealthy and very supportive of their daughter.  I knew they would look after the Applicant and the children.  At this time, I thought that staying away and not having contact with the children would be in their best interests.  I was worried they would be more confused and worried if I spoke to them in the state I was in.”[1]

    [1]  See husband’s affidavit filed 12 July 2016 at paragraph 26

18. This is a sad and perplexing case.  Mr Manley has acknowledged that, following separation, he was in a state.  He has apparently approached a number of solicitors but no one is currently acting on his behalf.  Nonetheless, Mr Manley has always personally attended before the court to seek the adjournment of proceedings. 

19. Thereafter, he has not complied with procedural directions requiring him to file specific details of the orders which he seeks together with affidavit evidence in support of such orders.  It is my impression that, for some reason, he is paralysed in the face of the proceedings and remains deeply affected by what occurred in May of 2015 and afterward when he left Property F precipitately.

20. From the wife’s perspective, it is unfair to her that the proceedings have not been finalised, particularly as it is her position that factors relating to contribution and her prospective needs greatly favour her given the generosity of her family and the fact that she is almost exclusively responsible for the financial support of X and Y. 

21. In all these circumstances, it is her positon that Mr Manley has been given an ample opportunity to take a meaningful part in these proceedings but for reasons, about which she can only conjecture, is not in a position to do so and it would be fruitless to further adjourn the proceedings in what is likely to be a forlorn hope that with more time he will be able to do so. 

History of the proceedings to date

1. As previously indicated, the wife commenced these proceedings on 7 October 2015 some five months after the parties had finally separated.  Her application sought both interim and final parenting orders in respect of X and Y. 

2. On an interim basis, she sought the sole occupation of the Property F, Property F property.  In addition, she sought standard procedural orders, in respect of the disposal of her application for de facto property settlement, chiefly that the parties attend a conciliation conference, after exchanging appropriate discovery of relevant financial documents. 

3. Ms Jefferson’s application was personally served on Mr Manley at (omitted) on 27 October 2015.  This was approximately a month prior to the first directions date which was scheduled for 25 November 2015.  

4. On 25 November 2015, the wife was represented by the barrister Ms Lewis, who has represented her throughout these proceedings.  Mr Manley had apparently approached a solicitor who in turn had briefed a barrister to appear on his behalf on 25 November 2015.  However, Mr Manley had not filed any formal documents in the proceedings. 

5. On 25 November 2015, Mr Manley was granted until 16 January 2016 to file his answering material.  The proceedings were adjourned until 26 February 2016.  Prior to this date a firm of solicitors in (omitted) filed an address for service but no other documents. 

6. In February of 2016, Mr Manley was granted a further period of 42 days in which to file his answering material.  The proceedings were adjourned to 5 May 2016. 

7. On 2 May 2016, the solicitors who had previously indicated that they were acting for Mr Manley formally withdrew from the court file.  On 5 May 2016, the following order was made:

   Further consideration of the matter is adjourned for an undefended hearing in respect of both property and children on 2 August 2016 at 9:30am however in the event the father files and serves a response and affidavit in support together with a statement of his financial circumstances on or before 8 July 2016 the father will be given leave to take part in the proceedings.

8. The proceedings returned to court on 2 August 2016.  On 12 July 2016 Mr Manley filed a response, an affidavit in support and a statement of his financial circumstances.  As previously indicated, he did not set out in any detail the property orders which he sought.  His affidavit material largely focussed on issues to do with the children and was reactive to the wife’s affidavit evidence. 

9. In these circumstances, on 2 August 2016, the following orders were made:

   The respondent father provide a minute setting out the full particulars of the orders he seeks in both financial matters and children’s matters to the mother’s solicitors within 28 days of today’s date.

   The respondent file and serve an affidavit to which is to be attached the minute referred to in order 1 together with details of his current state of psychiatric health including a report from his current psychiatrist or psychologist providing details of any diagnosis made, treatment received and the treaters opinion as to the respondent’s capacity to interact with children of the ages of the subject children, together with the father’s proposal as to how he can re-engage with the children with the affidavit to be filed within 28 days of today’s date.

   Further consideration of the matter is adjourned to 14 September 2016 at 9:30am for directions.

10. Mr Manley did not comply with this order.  The solicitor, who had prepared the earlier documents on his behalf had apparently withdrawn from the proceedings prior to the adjourned date.  As a consequence, on 25 August 2016, Mr Manley filed a notice of address for service which provided an address in (omitted). 

11. The husband failed to comply with the orders of 2 August 2016.  Mr Manley did not present well in court.  It was hard not to feel some sympathy for him but he presented as being paralysed in respect of engaging with these proceedings. 

12. He indicated that he did not agree with much of what was asserted on Ms Jefferson’s behalf but when it was pointed out to him that he needed to do so in a more formal way he has demonstrated an incapacity to do so or to engage with the court’s processes in a useful rather than reactive manner. 

13. It is Ms Jefferson’s evidence that her parents have expended approximately $28,000.00 in legal fees in bringing the proceedings to this point.  As previously indicated, it is the wife’s position that it would be unfair to her to allow the proceedings to be adjourned further in circumstances in which Mr Manley has frequently failed to comply with court orders and has presented no current proposals as to how he will actively engage in the proceedings in future if they are again adjourned. 

The nature of undefended property proceedings

1. It is a significant thing for proceedings to be determined without the input of one of the parties.  The court had an obligation to ensure that the parties to proceedings before it have an opportunity to participate in those proceedings. 

2. The irony of this case is that Mr Manley has participated in these proceedings to some degree.  He has regularly attended at court.  However, although I accept he is interested in their outcome, he has done little of a practical nature to advance his cause.  This is the same in respect of the proceedings relating both to X and Y, as well as to the division of property. 

3. Before a person can be adversely affected by judicial order, he or she must be afforded an adequate opportunity to be heard.[2]  I am satisfied that Mr Manley has been given an adequate opportunity to appear in these proceedings and put his position before the court through the filing of appropriate documents. 

   [2]  See Taylor v Taylor (1979) 143 CLR 1

4. On the other hand, Ms Jefferson is also entitled to have her application for settlement of de facto property matters, determined within a reasonable period of time, pursuant to applicable principles of law, notwithstanding the fact that Mr Manley has not availed himself of the opportunity to put his position in a formal manner. 

5. Order 13.1A of the Federal Circuit Court Rules 2001 deals with the court’s authority to enter judgment against a respondent if that respondent defaults in complying with a court order or fails to prosecute any proceedings with due diligence. 

6. Pursuant to Rule 13.03A(2) a respondent is in default if, amongst other things, he or she has failed to:

   ·Comply with an order of the court in the proceedings;

   ·Produce a document as required; or

   ·Defend the proceedings with due diligence.

7. I am satisfied that Mr Manley has failed to comply with relevant orders of the court.  As such, he has not defended the proceedings with due diligence.  In these circumstances, pursuant to the provisions of Rule 13.03B(2)(d), Ms Jefferson is entitled to judgment in default.

The legal principles applicable

1. The applicant is not entitled, as of right, to the orders which she seeks.  Rather, the onus remains on her to establish to the court that the orders which she seeks, are just and equitable, according to law. 

2. In this context, the wife must lead sufficient evidence to establish to the court, that the orders which she seeks are just and equitable ones.  Otherwise, the court must impose the result in the case which it considers fair, according to the law and the evidence available to it.

1. The wife seeks the following orders:

   That in full and final settlement of any claim that either party may have against the other now or at any time in the future for settlement of property or alteration of interests in property:

   a) that within thirty (30) days of the date of this Order, the respondent do all things necessary and sign all documents as may be required to transfer all of his interest, right, title and entitlement in the property located at Property F in the State of South Australia, being the whole of the land comprised and described in Certificate of Title Register Book Volume (omitted) (hereinafter referred to as “the Property F property”), to the applicant, at the applicant’s sole expense in all things;

   b) that contemporaneously with the transfer of the Property F property referred to in paragraph 7(a) herein, the applicant shall do all things necessary and sign all documents as may be required to discharge Mortgage Registration Number (omitted) over the Property F property, at the applicant’s sole expense in all things, and she shall indemnify the respondent in all respects thereof;

   c)  the applicant shall have as her sole property free from any claim, right or entitlement of the respondent the following:

   (i)     the Property F property;

   (ii)     the applicant’s Subaru (omitted) motor vehicle;

   (iii)    the applicant’s share portfolio;

   (iv)    the applicant’s separate savings and investments;

   (v)all items of furniture, household effects and personal effects presently in the applicant’s possession or under her control;

   (vi)the applicant’s superannuation entitlements in her name;

   (vii)any life insurance or assurance policies in the applicant’s name; and

   (viii)all other items of personal property in the applicant’s possession or control not otherwise specified herein;

   d) the respondent shall have as his sole property free from any claim, right or entitlement of the applicant the following:

   (i)the proceeds from the sale of the Mitsubishi (omitted) motor vehicle;

   (ii)     the respondent’s separate savings and investments;

   (iii)all items of furniture, household effects and personal effects presently in the respondent’s possession or under his control;

   (iv)the respondent’s superannuation entitlements in his name;

   (v)any life insurance or assurance policies in the respondent’s name; and

   (vi)all other items of personal property in the respondent’s possession or control not otherwise specified herein;

   e)  that the applicant be solely liable and do indemnify the respondent and forever keep him indemnified with respect to:

   (i)all debts and liabilities of the applicant personally and in her name; and

   (ii)any liability encumbering any item of property to which the applicant is entitled pursuant to this Order;

   f)  that the respondent be solely liable and do indemnify the applicant and forever keep her indemnified with respect to:

   (i)all debts and liabilities of the respondent personally and in his name; and

   (ii)any liability encumbering any item of property to which the respondent is entitled pursuant to this Order;

   That pending the transfer of the Property F property as referred to in paragraph 7(a) herein:

   a) the applicant shall have the sole right to use and occupy the Property F property to the exclusion of the respondent; and

   b) Neither party shall mortgage, encumber or otherwise offer the Property F property for security other than for the purposes of compliance with these Orders.

   That in the event the respondent refuses or neglects to execute any document necessary to give effect to the terms of this Order within seven (7) days after the same shall be tendered to him for that purpose, then and in such a case the Registrar or Deputy Registrar of the Family Court of Australia upon proof by affidavit of such refusal or neglect is hereby appointed to execute the document, on behalf of the respondent, and if it is in his or her opinion it shall be necessary to give full force and effect hereto and shall execute and do the same accordingly.

   Unless otherwise specified in this Order:

   a) each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party at the date of this Order;

   b) each party forego any claims he or she may have to any superannuation benefits or employment entitlements belonging to or earned by the other; and

   c)  insurance policies remain the sole property of the beneficiary named therein.

   That each party shall do all things necessary and sign all documents as may be required to give full effect to this Order.

   That either party be granted liberty to apply for consequential orders.

   That within thirty (30) days of the date of this Order, the respondent do pay the applicant’s costs of and incidental to these proceedings.

2. Part VIIIAB of the Family Law Act 1975 is the part of the Act dealing with financial matters relating to de facto relationships.  The major provisions relating to de facto property division are contained in sections 90SM(1); 90SM(3); 90SM(4); & 90SF(3) of the Act.

3. These provisions are analogous to the provisions applicable to matters relating to the division of property and spousal maintenance of married individuals contained in Part VIII of the Act.  Accordingly, the same jurisprudence is applicable to be both sets of provisions.

4. Pursuant to section 90SM(1) the court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a de facto relationship in relevant property. 

5. The expression “property” is defined in section 4(1) in relation to the parties to a marriage or either of them as meaning “…property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.”

6. Pursuant to section 90SM(3) the court is actively prevented from making an order altering proprietorial interests, unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing.  This follows from the use of the prohibitive words “shall not” in the relevant section.

7. Section 90SM(4) provides the mechanics of how a court is to make an order altering de facto property interests.  It provides seven matters [in paragraphs (a) – (g)] to be considered, as relevant.

8. Paragraphs (a); (b); and (c); categorise contributions made by de facto partners, which are relevant.  Paragraph (d) directs the court to take into account the effect of any order upon the earning capacity of either party to the de facto relationship concerned. 

9. Paragraph (e) directs the court to consider a list of matters contained in section 90SF(3), which are germane to maintenance or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs.

10. Finally, Paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant.  There is some overlap between these various provisions and not all will be applicable in every case. 

11. The preferred approach, in respect of the resolution of both de facto and matrimonial property cases entails a four step process, which has been described by the Full Court of the Family Court, in a number of cases, as follows:

    ·       identification and valuation of the property of the parties;

    ·       identification and evaluation of contributions to the property (including property no longer owned by the parties) – the contribution phase – section 90SM(4) (a) to (c) or section 79(4) (a) to (c);

    · identification and assessment of the various matters in section 90SM(4) (d) to (g) or 79(4)(d) to (g) including to the extent they are relevant, the matters in either section 90SF(3) or 75(2), as applicable – the prospective needs phase;

    ·       considerations of justice and equity.[3]

    [3]  See Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39] and Bevan & Bevan [2013] FamCAFC 116 at [60]

12. In respect of the first step, Ms Jefferson has identified the relevant pool of assets and liabilities as follows:

Assets	$
Property F	$395,000
Mitsubishi (omitted)	$28,000
Holden station wagon	$5,000.00
Wife’s shares	$206,759
Wife’s savings	$166,000
Furniture and effects	$10,000
Total	$810,759
Liabilities
Mortgage to wife’s parents	$198,200
Wife’s Centrelink debt	$780
Wife’s HECS debt	$24,054
Total	$223,034
Net Assets	$608,733

1. It is common ground between the parties that the husband left Property F in the Mitsubishi (omitted) motor vehicle and has subsequently sold it and retained the proceeds.  Otherwise, the wife is in possession of all the other assets which as previously indicated, she asserts that either her parents provided the funds required to acquire the property in question or it was inherited from her grandmother’s estate.

2. It is the wife’s position that the husband accumulated some superannuation during the course of the parties' relationship.  In his financial statement, Mr Manley has valued this superannuation in an amount of $18,000.00.  Otherwise, he has not disclosed any property owned by him other than what he asserts is his fifty percent interest in the Property F property. 

3. The wife has previously worked as a (occupation omitted).  As a consequence of this employment she estimates that she holds superannuation valued at $2,348.00.  She has a HECS debt in an amount of just over $24,000.00.

4. The second step involves the court ascertaining the contributions which each party has made towards the assets identified following the first step.  Contributions fall into two broad categories. 

5. The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.  

6. The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage, including any contribution made in the capacity of home maker or parent.”[4] 

   [4] See Family Law Act 1975 s79(4)(c)

7. It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.

8. The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 90SF(3) of the Family Law Act 1975. Pursuant to section 90SF(3)(r), the court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”. 

9. Finally in determining what order the court should make under section 90SM, the court must be satisfied that in all the circumstances, it is just and equitable to make the relevant orders.  Overall, it is the justice and equity of the actual orders that the court must consider.[5] 

   [5]  See Russell v Russell (1999) FamCA 187

The evidence

1. When the parties commenced their relationship, the husband had no assets of any significant value.  The wife had a portfolio of shares in (omitted) Shares which she values at $55,479.60.  Mr Manley does not dispute that the wife had these shares prior to the relationship and he made no contribution towards their acquisition.

2. In 2012, Ms Jefferson’s grandmother died.  As a consequence, Ms Jefferson inherited $120,000.00 in cash and a share portfolio, which she estimated was worth approximately $205,000.00 at the time.  It is Ms Jefferson’s evidence that the bequest and shares inherited from her late grandmother were kept in her name and were not intermingled with the parties’ joint funds.

3. It is further Ms Jefferson’s evidence that, during the parties’ relationship, her parents provided the parties with significant funds.  These include the following:

   ·1 July 2007 to 30 June 2010  $20,000.00;

   ·1 July 2010 to 30 June 2012   $6,500.00;

   ·1 July 2012 to 2 December 2013                  $15,700.00;

   ·2 May 2013 to 19 May 2015   $29,670.00.

4. In addition, it is Ms Jefferson’s evidence that her parents frequently provided other sums of money and purchased other items of property in order to keep her, Mr Manley and their family afloat financially.  These advances included the purchase of household items, such as a refrigerator, lawn mower and furniture, as well as paying for Mr Manley to undertake a (omitted) course.  In addition, the wife’s parents would purchase items of clothing and furniture for X and Y.

5. It is Ms Jefferson’s position that her parents were never particularly well disposed towards Mr Manley but wished to benefit the family as a whole, particularly given that Mr Manley was not regularly employed.  Ms Jefferson’s evidence is that her parents funded holidays for the family and provided spending money.

6. In all these circumstances, it is the submission of Ms Lewis, counsel for Ms Jefferson, that without the generosity of her client’s parents and the bequest from her grandmother, the parties would have no de facto property assets whatsoever and, as a consequence, there would be no necessity for these proceedings.

7. The parties purchased the Property F property in December 2014.  The purchase price was $416,478.00, including purchasing costs.  Of this sum, the wife’s parents gifted the parties the sum of $216,470.08.  The remaining $200,000.00 was also advanced by the wife’s parents but was secured by way of a mortgage on the property. 

8. The principle was to be repaid in fortnightly instalments of $300.00, commencing on 1 February 2015.  No interest attached to principle.  Between 1 February 2015 and the date of separation, the parties made approximately six repayments.  Since separation, the wife’s parents have not sought any payments from the wife.  Apart from the repayments in question, the parties made no direct financial contributions towards the acquisition of this property apart from these modest repayments. 

9. In June 2010, the wife’s parents purchased a Holden station wagon for the wife which was valued at $18,100.00.  The wife retains this vehicle which she believes is worth around $5,000.00. 

10. In June of 2014, the wife’s parents purchased a Mitsubishi (omitted) motor vehicle for the sum of $30,876.00.  As previously indicated, the husband used this vehicle to leave Property F.  He has subsequently sold this vehicle for the sum of $14,500.00, which he has retained. 

11. It is the wife’s evidence that the parties lived on Centrelink benefits for the majority of their relationship.  She also asserts that her parents directed that she should keep the cash funds and shares separate from the parties’ general financial resources.  No doubt the intention was to ensure that the husband did not utilise these funds in a manner which led to their dissipation.

12. It is the wife’s evidence that the parties moved several times during their relationship.  As a consequence, when it was necessary to pay a security deposit and rent in advance, it was invariably the case that the wife’s parents would provide these sums to the parties and they did so in order to ensure that X and Y had a roof over their heads. 

13. It is Ms Jefferson’s assertion that because Mr & Mrs Jefferson Senior wished to provide assured security of accommodation for X and Y, in particular, they agreed to provide funds to the parties to purchase the Property F property. 

14. They also wished to inculcate a sense of financial responsibility into the parties themselves by requiring them to pay a regular sum in repayment, which was generously calculated not to include interest and so to be manageable in terms of their financial circumstances.  I accept that this was the case. 

15. It is the submission of Ms Lewis that the wife’s inheritance should be excluded from the pool of assets on the basis that the husband has demonstratively made no contributions whatsoever towards its acquisition and the assets represented by it have been held separately and apart from other matrimonial assets.  In this regard, she relies on what was said by the High Court in the case of Stanford v Stanford.[6] 

    [6]  Stanford v Stanford (2012) 247 CLR 108

16. In the case, the High Court rejected any presumption of common ownership of property as a consequence of marriage.  Rather, in applying the relevant provisions of the Family Law Act 1975 it was the fundamental obligation of the court to consider whether it was just and equitable to make an order altering existing interests in the property concerned. 

17. In this case, it is Ms Lewis’ submission that it would not be just and equitable to make any orders in respect of the wife’s shareholdings or the moneys inherited from her grandmother given the circumstances of this particular matter.  I agree with this submission.  In my view, it would not be just and equitable to make any such order in respect of these items of property. 

Step One – the pool of assets

1. Accordingly, in general terms, I find that the relevant pool of assets consists of the two motor vehicles concerned – the Mitsubishi (omitted) and the Holden station wagon; the wife’s furniture and effects; and most significantly, the Property F home.  This pool is valued at $428,000.00. 

2. I accept that the mortgage in favour of Mr & Mrs Jefferson Senior is a genuine one which the parties were expected to repay in modest instalments of capital.  The parties repaid six of these instalments amounting to $1,800.00.   I also accept that the wife’s HECS debt and the parties’ debt to Centrelink need to be calibrated into the calculation of the relevant asset pool.

3. Accordingly, in net terms, the parties’ pool of de facto property is valued at around $215,000.00.  The vast majority, if not all of this sum, was contributed by the wife’s parents in the initial gift which was needed to purchase the Property F property in the first place.  This gift was made towards the end of the parties’ nine year relationship.  The Mitsubishi (omitted) represents around 13% of this sum.

Step Two – assessment of contributions

1. The Property F property was registered in the parties’ joint names and they are both noted on the mortgage concerned as joint mortgagors.  It is the implication of the husband’s financial statement that he regards the advance of moneys concerned by Mr & Mrs Jefferson to have been a gift to him and Ms Jefferson jointly.  

2. It is very often difficult, in hindsight, to glean what was the actual intention of the donor of a gift made in the context of a marriage or de facto relationship, where the donor has blood ties to one of the parties to the relationship concerned.  The usual rule is that where the intention is unclear, the court should look to any special relationship between the donor concerned and one of the spouses and regard the gift as having been contributed by that party.[7]

   [7]  See Kessey & Kessey (1994) FLC 92-495 at 81,149

3. However, as Chisholm J remarked in Pellegrino & Pellegrino,[8] it is frequently the case that, when parents make a provision involving one of their married children, they do not specifically formulate whether they intend to benefit their own child or both of the parties to the marriage concerned.  In addition, it is invariably the case that a gift, in any event, results in some benefit to both of the parties to the marriage concerned.

   [8]  Pellegrino & Pellegrino (1997) FLC 92-789

4. Clearly, in this case, the moneys received by the parties from Mr & Mrs Jefferson Senior were of benefit to them both and also to X & Y.  On balance, although Mr Manley received some not insignificant benefit from the gift, it seems more likely than not that Mr & Mrs Jefferson Senior wished to benefit their daughter and grandchildren, with any positive results accruing to Mr Manley being regarded as an unavoidable incident of the gift concerned. 

1. In these circumstances, in my view, the evidence indicates that the vast majority, if not all of the financial contributions required to acquire the parties’ pool of assets, are attributable to the wife as a consequence of the actions of her parents in advancing funds or the direct bequest of her grandmother.

2. In this context, it is highly relevant that the Property F property was acquired toward the end of the period of the parties’ cohabitation.  All the funds required to purchase it, including the deposit and the acquisition costs, originated with Mr & Mrs Jefferson Senior.  Thereafter, the parties made only very modest mortgage payments over the period of a few weeks.

3. It is the wife’s case that she performed more of the parenting and homemaking responsibilities during the parties’ relationship.  It is also her case that the husband was, from time to time, significantly compromised in his capacity to be involved in the family because of mental health and substance abuse issues. 

4. The husband concedes that the parties’ relationship was frequently chaotic and both he and Ms Jefferson had issues to do with alcohol abuse.  On balance, I accept that it is more likely than not that the wife discharged more of the household and parenting tasks but Mr Manley was engaged from time to time. 

5. In addition, both parties worked from time to time, but it is also clear that their employment activities did not result in the direct acquisition of any items of property.  As such, there is much substance to Ms Lewis’s submission that, without the generosity of the wife’s family, there would be no necessity whatsoever for these proceedings as there would be no property available for division between the parties.

6. In all these circumstances, in my assessment, issues of contribution overwhelmingly fall in favour of the wife.  The husband retained the Mitsubishi (omitted) motor vehicle – itself the result of a gift by Mr & Mrs Jefferson Senior.  The wife retains all other items of property particularly she continues to occupy the Property F property.

7. If the court adopts the formulation of the asset pool, propounded by the wife, it is the submission of Ms Lewis, that the retention of this vehicle by the husband, at its proper separation value, would represent a division of assets in wife’s favour of approximately 90/10%, which she would characterise as being a just and equitable outcome in all the circumstances.  I accept this submission.

Step 3 – section 90SF(3) – the prospective needs of the parties

1. I accept that Mr Manley faces an uncertain financial future.  It seems clear that he has no particular skills and qualifications and, at best, is likely to be able to obtain work in an unskilled field.  In addition, he suffers from a back injury and mental health issues.

2. Ms Jefferson has qualification and experience in (omitted) which is likely to provide her with, at best, a modest income in future.  She also has the support of her parents who have come to her financial assistance in the past. 

3. Significantly, Ms Jefferson owns a portfolio of shares which will provide her with some form of income stream.  Accordingly, her situation provides her with a modicum of financial security which Mr Manley does not enjoy.

4. The wife will have the ongoing responsibility for providing financial support for X and Y with limited assistance from Mr Manley.  During their relationship both parties were dependent on social security from time to time. 

5. Mr Manley is likely to remain on social security for the foreseeable future.  He has recently applied for a disability support pension.  Accordingly, Mr Manley will most probably only provide the statutorily prescribed minimum payment of child support for the children.

Conclusions

1. In this case, where it not for the husband’s legal interest in the Property F property, in my view, it would be neither necessary nor just and equitable for the court to make any order altering the parties’ respective property interests arising in the case.

2. However, the fact of the husband’s interests in the property requires that a property order be made.  The overall nature of this order depends on what is just and equitable in all the circumstances of the case concerned.  As the High Court indicated in Stanford:

   “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.” [9]

   [9] Ibid at [35] – [36]

3. In my view, given the overwhelming financial contributions made by Mr & Mrs Jefferson Senior in this case which resulted in the acquisition of all the relevant assets the only just and equitable outcome in the case is the one proposed by the wife.

4. For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.

I certify that the preceding one hundred and four (104) paragraphs are a true copy of the reasons for judgment of Judge Brown

Date:       16 December 2016