Kapoor & Kapoor
[2010] FamCAFC 113
•22 June 2010
FAMILY COURT OF AUSTRALIA
| KAPOOR & KAPOOR | [2010] FamCAFC 113 | |
| ||
| Family Law Act 1975 (Cth) Family Law (Superannuation) Regulations 2001(Cth) Family Law Rules 1984 Federal Proceedings (Costs) Act 1981 (Cth) Judiciary Act 1903 (Cth) | ||
| Dougherty & Dougherty (1987) 163 CLR 278; (1987) FLC 91-823 Fisher & Fisher (No 2) (1986) 161 CLR 438; (1986) FLC 91-767 Henry v Henry (1996) 185 CLR 571; (1996) FLC 92-685 Jennings v Jennings (1997) FLC 92-773 Russell v Russell (1976) 134 CLR 495 |
| APPELLANT: | Mrs Kapoor |
| RESPONDENT: | Mr Kapoor |
| FILE NUMBER: | CAM | 1065 | of | 2006 |
| APPEAL NUMBER: | EA | 14 | of | 2008 |
| DATE DELIVERED: | 22 June 2010 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Canberra |
| JUDGMENT OF: | Finn J |
| HEARING DATE: | 28 March 2008, 27 May 2008 and 22 October 2009 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 14 January 2008 |
| LOWER COURT MNC: | [2008] FMCAfam 8 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mrs Kapoor appeared on her own behalf |
| COUNSEL FOR THE RESPONDENT: | Mr Brzostowski SC |
| SOLICITOR FOR THE RESPONDENT: | Mazengarb Barralet Family Lawyers |
Orders
That the appeal against the orders made by the Federal Magistrates Court on 14 January 2008 be allowed.
That paragraph (d) of Order 8 of the orders made on 14 January 2008 be amended to read:
(d)Fourthly, 27 per cent of the balance to the husband’s solicitor and 73 per cent to the wife.
IT IS NOTED that publication of this judgment under the pseudonym Kapoor and Kapoor is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT CANBERRA |
Appeal Number: EA 14 of 2008
File Number: CAM 1065 of 2006
| Mrs Kapoor |
Appellant
And
| Mr Kapoor |
Respondent
REASONS FOR JUDGMENT
This appeal in its final form was an appeal by the wife against orders for property settlement made by Brewster FM on 14 January 2008 in proceedings between the husband and the wife which his Honour had heard on 1 and 2 May 2007, and which had been initiated by the husband (by an application filed on 26 July 2005).
The appeal against Brewster FM’s orders of 25 July 2007 (EA 97/07)
The reason why I referred to the appeal “in its final form” is because I have already determined an appeal against orders for property settlement made by Brewster FM on 25 July 2007 which were in the same terms as the orders of 14 January 2008 which are now appealed. This somewhat unusual situation has arisen in the following circumstances.
After hearing the husband’s application for property settlement on 1 and 2 May 2007, his Honour delivered his reasons for judgment on 22 June 2007. In those reasons he determined that the parties should share equally in the net value of the matrimonial home ($550,000) and that the wife’s superannuation interest (valued at $481,917) should be split between the parties with the husband receiving an amount using a base figure of $145,000.
However, his Honour did not at that time make orders to give effect to his reasons. Rather he gave the wife (who was at that time, and has remained, self-represented) a further seven days to consider whether she wished to retain the matrimonial home, and he provided a process which was then to be followed by the parties for the making of orders to give effect to his reasons. That process essentially involved the husband’s solicitors submitting a draft of the proposed orders to the wife before submitting them to his Honour.
In the event his Honour made orders in Chambers on 25 July 2007.
On 21 August 2007 the wife filed a notice of appeal against the orders made on 25 July 2007. The appeal was then listed before me on 28 November 2007 for hearing as a single judge pursuant to a direction given by the Chief Justice under s 94AAA(3) of the Family Law Act 1975 (Cth) (“the Act”).
At the hearing on 28 November 2007, it became apparent that the process provided by his Honour in his reasons for judgment of 22 June 2007 for the making of the orders to give effect to those reasons, had not been followed. The process had not been followed because the wife had not been provided by the husband’s solicitor with the opportunity which she was to have had under his Honour’s reasons for judgment, to be heard in relation to the form of the orders.
Because of this procedural irregularity, I considered that I had to allow the appeal and remit the matter to his Honour for the re-making of the orders after both parties had been given an opportunity to be heard in relation to the form of the orders. In addition to allowing the appeal and setting aside the orders of 25 July 2007, the orders made by me on 28 November 2007 provided:
3.That the matter be remitted to Federal Magistrate Brewster for the making of orders to give effect to his reasons for judgment delivered on 22 June 2007 on the basis that the orders made on 25 July 2007 be treated as draft orders and both parties have an opportunity to make brief submissions in relation to the form of those orders and the content of those orders but only in the sense that the orders give effect to the reasons for judgment delivered on 22 June 2007.
...
4.In the event the wife files a Notice of Appeal against any further orders made by Federal Magistrate Brewster to give effect to the reasons for judgment delivered on 22 June 2007, then no filing fee will be payable by the wife and the appeal will be listed for hearing before the Honourable Justice Finn at the first available date, with there being no necessity for the wife or the husband to file any further documents, or for there to be any procedural trial and to this end the Appeal Registrar will advise both parties of the hearing date for the appeal.
5.That transcript be prepared and provided to the parties of any further hearing of this matter before Federal Magistrate Brewster.
On the following day (29 November 2007) I published reasons for the orders which I had made on 28 November 2007. In those reasons I explained in greater detail (than I have done in these reasons) the circumstances which had, in my opinion, made it necessary for me to adopt the course which I had.
Brewster FM’s orders of 14 January 2008 (EA 14/08) and the course of the appeal against those orders
On 14 January 2008 Brewster FM made further orders which were in identical terms to the orders which he had originally made on 25 July 2007. His Honour also published reasons for judgment on 14 January 2008 in which he explained why he had rejected the submissions which the wife had by that time made in relation to the proposed orders. I will return to his Honour’s reasons published on 14 January 2008 later in these reasons.
On 22 January 2008 the wife filed a notice of appeal against the orders made on 14 January 2008. Again the Chief Justice directed pursuant to s 94AAA(3) of the Act that the appeal should be heard by a single judge.
The hearing of this appeal commenced before me on 28 March 2008. Unfortunately the hearing could not be completed that day, and it had to be adjourned until 24 April 2008.
However, on 4 April 2008 the wife filed an application seeking “leave for the Full Court hearing”. In an affidavit filed on the same day apparently in support of her application, the wife stated that she sought a Full Court hearing for the following reasons (original emphasis):
(a)Property settlement application entertained by Federal Magistrate Brewster of Canberra with NO APPLICATION IN COURT FOR DIVORCE is an error of law under the constitution.
This situation was explained in details [sic] in the principles set in the case of Russell v Russell (1976). My defended case challenges any amendments to those principles, allowing property split.
(b)In my defended case an Australian citizen has married an Indian citizen under Indian Hindu Marriage ACT 1955. The marriage is not registered in Australia and therefore Australia is not an appropriate venue for hearing for this case.
(c)Parties are not separated legally, socially and financially and no written or oral statement is given on financial split.
(d)Error of Law and misuse of power by Federal Magistrate Brewster of Canberra in applying section 75(2), where marriage has not ended.
(e)Violation of human rights in making court orders to end marriage by sale of family home.
Given this application by the wife the matter was listed for mention before me on 23 April 2008 in order to determine whether the adjourned hearing of the appeal could resume on 24 April 2008 as scheduled. At that mention Senior Counsel for the husband in seeking the dismissal of the wife’s application, contended that there was no provision in the Act or the Family Law Rules for an appeal from the Federal Magistrates Court which was part heard before a single judge of this Court to be removed to the Full Court.
It was my view that whether or not such an appeal which was already part heard before a single judge (pursuant to a direction by the Chief Justice under s 94AAA(3)) could be transferred or removed to a Full Court, that course should not be adopted in this case because of the time and cost which had already been expended on the hearing of the appeal by the parties (particularly the husband) and also by the Court.
However, I indicated that because one of the reasons why the wife wanted the appeal transferred to the Full Court was that she considered that the appeal raised a constitutional matter, I would be prepared to adjourn the further hearing of the appeal in order to give her the opportunity to give notices to the various Attorneys-General of the constitutional matter under s 78B of the Judiciary Act1903 (Cth). Senior Counsel for the husband did not oppose an adjournment for this purpose, and so that matter was further adjourned.
I acknowledge that such a course does not have to be adopted in every case in which a litigant claims that a constitutional matter arises. However, in this case as will later be seen, the wife was able to raise arguments relating to the question of whether there is jurisdiction under the Act to determine property settlement proceedings where the parties are not divorced. Her argument required some consideration, notwithstanding that the question has, in my view, been determined by legislation and case law. It seemed to me prudent for the wife’s case in this regard to be seen to have been given proper consideration by means of the s 78B notice procedure rather than by incurring the cost and uncertainty of an attempted transfer to the Full Court. As I have said, Senior Counsel for the husband did not oppose the former course.
I mention in passing that the other matters relied on by the wife in her affidavit in support of her application for a Full Court hearing of her appeal, would not in my view, have justified granting her application for removal or transfer to a Full Court (assuming, of course such an application could be granted). They are matters, or issues, of the type that do not necessarily require determination by a Full Court, particularly in a case where the appellate court will not have the benefit of argument presented by a legal practitioner for each party.
Notices under s 78B having apparently been sent by the wife to all Attorneys-General, and with no Attorney seeking to intervene in the case, the hearing of the appeal was able to resume before me on 27 May 2008.
The wife filed another affidavit prior to the resumed hearing on 27 May 2008 in which she had challenged the accuracy of the valuation of her superannuation interest upon which the husband had relied before his Honour and which his Honour had accepted. At the commencement of the hearing on 27 May 2008 Senior Counsel for the husband conceded that there had been an error in that valuation, and that new valuations had now been prepared on behalf of the husband (both as at the date of the hearing before his Honour and as at the then current time). Again, unfortunately, the wife had been given little or no notice of the new valuations. In these circumstances I considered that I had no option but to provide the wife with a reasonable period of time in which to obtain her own valuation if she wished and to file any further written submissions in relation to the various valuations obtained by the husband and to any obtained by her.
I will later explain the error in the valuation of the wife’s superannuation which the husband’s Senior Counsel was prepared to concede. It is sufficient here to say that the error was not insignificant, and that there would be an injustice to the wife if that valuation were to be permitted to remain as one of the principal bases of the property settlement between the parties.
I was also prepared to allow the wife to make further written submissions directed to the grounds of her appeal, which time had not permitted her to address at the resumed hearing on 27 May 2008.
It was also necessary to provide a period of time for the husband’s legal representatives to respond to any further valuations or submissions which the wife might file.
On 3 July 2008, the wife filed her further submissions in affidavit form. Somewhat surprisingly, in my view, given the material in the wife’s further submissions concerning the value of her superannuation interest, the husband chose not to file any responding material. Unfortunately, his position was not made clear to the Court until some communications between the Appeal Registrar and the husband’s solicitor in February 2009 resulted in a letter from the solicitor to the Registrar dated 16 March 2009 (again unfortunately apparently not copied to the wife) confirming that no responding submissions would be filed.
Before I was in a position to complete a judgment in relation to the appeal, the wife filed a further application (with supporting affidavit) on 30 June 2009 seeking that judgment not be delivered until she could provide the Court with further evidence concerning her employment situation. She filed a further application on 24 July 2009 which can be read as seeking that the appeal now be determined on the basis of the evidence in an affidavit also filed on 24 July 2009 annexing a termination of employment statement dated 21 July 2009 from her employer.
In view of those further applications from the wife, I considered that the appeal should be re-listed in order that I could ascertain the husband’s attitude to these further applications and affidavits from the wife, and also so that I could ascertain with certainty each party’s position in relation to the question of whether in the event that an appealable error existed in Brewster FM’s orders or reasons (as had been conceded on behalf of the husband in relation to the valuation of the wife’s superannuation), the matter should be remitted for a re-hearing or whether I should re-determine the matter myself.
Due to my other commitments, it was not possible to re-list the matter until 22 October 2009. On that occasion both parties sought that I should re-determine the matter rather than remit the matter for re-hearing, and that I should do so on the basis of a revised valuation of the wife’s superannuation interest and also of the evidence from her concerning her health and changed employment position, which I had permitted her to give and on which she was cross-examined at that hearing.
Scope of this appeal judgment
Given the error in the valuation of the wife’s superannuation on the basis of which the Federal Magistrate made his property settlement division, and the effective concession on behalf of the husband that the appeal has to be allowed on that account and the matter accordingly re-determined, it is probably unnecessary for me to address all of the wife’s grounds of appeal.
However, certain of her complaints are in the nature of threshold matters for the determination of the husband’s application for property settlement, and they therefore must be addressed. Certain other matters will also have to be addressed as they go to the Federal Magistrate’s findings of fact on which I largely have to rely in determining the matter, given that I have not had the advantage of a full oral hearing, although I have the documents which were before his Honour and the transcript of the hearing before him.
It is also necessary that I make some reference to the wife’s claims that Brewster FM was in some way “biased” against her. Neither the transcript of the hearing before his Honour or his reasons for judgment provide any support for such claims.
In a somewhat similar vein the wife levels some serious criticisms against the husband’s legal advisers. Save for the unfortunate instances which I have identified in these reasons in which they failed to provide draft orders to the wife following his Honour’s delivery of his reasons for judgment and when correspondence and other documents were not copied to the wife, I cannot identify any cause for criticism of them. However, as I endeavoured to explain to the wife when she was before me there are avenues available through the various legal professional bodies for valid complaints from litigants to be pursued.
I will now provide an outline of his Honour’s original reasons for judgment of 22 June 2007 which are directed to his property settlement orders, although it will be necessary in later contexts to refer in greater detail to certain passages in those reasons. It will also be necessary to provide an outline of his Honour’s reasons of 14 January 2008 since the present appeal is formally against the orders made that day. I will then set out the orders which his Honour made (originally on 25 July 2007 and then remade on 14 January 2008).
I also consider it necessary to set out the wife’s grounds of appeal against both sets of orders in order that her complaints are recorded, although as I have already indicated, given that the appeal has been conceded by the husband because of the superannuation valuation issue, it will not be necessary to address all of her complaints.
The reasons for judgment 22 June 2007 - in summary, including the factual background to this case.
His Honour commenced his reasons for judgment of 22 June 2007 by recording the following factual background:
·At the time of the trial the husband was aged 51 and the wife 46. (They would now be nearly three years older).
·They were married in India in December 1985. At the time the husband was a resident of and a citizen of Australia and the wife was living in India. They came to Australia after the marriage.
·There are two children of the marriage, [H] who was born in January 1987 (now 23) and [V] who was born in July 1994 (now almost 16).
Having briefly set out the factual background, his Honour explained that the husband’s application was for the sale of the matrimonial home and an equal division of its proceeds as well as an equal division of the parties’ superannuation interests.
His Honour then proceeded to explain that the wife sought that the husband’s application should be dismissed and that she did so on the following two bases. First, she maintained that the marriage had not broken down. Secondly, and as his Honour understood her case, that the husband’s application should not be entertained under Australian law because it would not be entertained under the laws of India.
His Honour then discussed and ultimately rejected each of these contentions by the wife. It will be necessary for me to return later to these two matters (including to his Honour’s reasoning in relation to them).
In relation to the property of the parties available for distribution, his Honour proceeded on the basis that he would deal separately with the parties’ superannuation and non-superannuation assets.
His Honour discussed various non-superannuation assets of the parties, but decided only to include in the so-called “pool”, the matrimonial home and some land in India owned by the husband and valued by him at $400 – a valuation which his Honour was prepared to accept, but which he did not ultimately include in the value of the pool. His Honour found that the matrimonial home in Canberra had been professionally valued at $600,000, and that after deducting the mortgage on it, it had a net value of $550,000. That figure thus became the net value of the non-superannuation assets.
As to the parties’ superannuation interests, his Honour found that the husband had an interest in an accumulation scheme with Zurich worth $42,415, and the wife had an interest in the defined benefits Commonwealth Superannuation Scheme worth $481,917.
His Honour can then be read as assessing the parties’ contributions first to the matrimonial home and then to their superannuation interests. In relation to the home his Honour concluded that up to the date of separation financial contributions favoured the husband, but that post separation and overall they favoured the wife. His Honour therefore determined to divide the matrimonial home as 60 per cent in favour of the wife and 40 per cent in favour of the husband.
As to the parties’ superannuation interests, his Honour determined that on the basis of his non-financial contributions, the husband should in addition to retaining his own superannuation, also receive a share of the wife’s superannuation using a base figure of $75,000, which was approximately 15 per cent of the value of the wife’s interest.
Then after an examination of the s 75(2) factors, his Honour determined that those factors favoured the husband. Accordingly, he determined that the proceeds of the matrimonial home should be divided equally between the parties, and that the husband’s share of the wife’ superannuation interest should be increased to about thirty per cent or $145,000.
The reasons for judgment of 14 January 2008
In his reasons for judgment delivered on 14 January 2008 his Honour explained that following my orders of 28 November 2007 (which allowed the appeal against the orders of 25 July 2007), he had caused his Associate to write to both parties seeking written submissions in relation to the orders in the form in which they had originally been made, but leaving open the possibility of a further oral hearing if his Honour should decide that was necessary.
His honour then recorded that the wife had accordingly filed written submissions, but that the husband had not made any submissions. His Honour then set out in full the submissions from the wife which were as follows:
1.That this case is dismissed due to
(a)Judgment of 22 June 2007 being factually incorrect and bias in favour of husband, with Senior Counsel George Brzostowski, representing applicant husband having misled the Federal Magistrates Court (FMC) at the defended hearing of 1 and 2 May 2007.
(b)The orders of 25 July 2007, giving Independent Real Estate Agency (IREA) power to sale [sic] family home to ensure husband’s lawyer Geoff Mazengarb (who drafted those orders) gets husband’s share from the sale, so that the lawyer could recover his fees being bias in favour of lawyer.
(c)That from the documents of facts tendered by self represented respondent wife during the case and at the defended hearing of 1 and 2 May 2007 and with the husband’s application for property settlement to claim 50% share not being supported by evidence and husband having repeatedly lied on an oath this Court is satisfied that wife’s response orders of 21 Nov 2005 seeking case be dismissed should be honoured, with FMC having no grounds to entertain the application by husband made on 26 July 2005.
2.That FMC-Canberra pay respondent wife all legal expenses incurred by her.
3.That neither husband nor wife is liable to pay for any marketing expenses incurred by IREA due to marketing done by IREA without joint owner wife’s signature and knowledge.
4.That with no evidence tendered to Court or wife on contract signed and having falsely stated by husband for setting the price of the property in his response affidavit filed on 02 Oct 2007 to application in case that he has signed the contract and husband’s lawyer having misled the Court on 29 Oct 2007 on the same the husband is liable for any expenses thereto.
5.That based on these orders Senior Counsel George Brzostowski and family lawyer Geoff Mazengarb having misled the Court not be allowed to practise family law in Australia.
Having concluded that submissions 1(a), 1(c), 4 and 5 were outside the terms of Order 3 of my orders of 28 November 2007 – which is a conclusion with which I agree, his Honour went on to reach the following conclusions regarding the balance of the wife’s submissions:
7.I assume submission 1(b) opposes the appointment of the Independent Real Estate Agency as the selling agent of the former matrimonial home for the reasons set out in that submission. For my part I see no problem with the husband’s solicitor receiving the husband’s share of the sale and deducting his fees from those proceeds. Indeed I understand that this is common practice. I do not propose to change the selling agent.
8.I do not propose to make an order of the type referred to in submission 2. First it is not apparent what legal costs the wife has incurred. Secondly no reasons are advanced as to why the Court should pay such costs. Thirdly there is no provision in any legislation that I am aware of providing for a litigant to be reimbursed his or her legal costs by a court.
9.I do not believe I have the power to make an order of the type sought in submission 3, that is an order preventing the agent involved in the sale of the matrimonial home from charging and collecting any costs of advertising incurred to date. However I would not make such an order even if I had the power to do so. I appreciate that the wife had been denied the opportunity of making submissions in relation to the choice of real estate agency. Had she wished to nominate an agency which would not have charged such fees her submission may have had some merit. But it is apparent that this was not her intention.
Having then expressed the view that the written submissions of the wife did not justify a re-listing of the matter for oral argument, his Honour stated that he proposed to re-issue his orders in the same terms as the terms of the orders originally made on 25 July 2007.
The terms of the orders originally made on 25 July 2007 and re-issued on 14 January 2008
The terms of the property settlement orders made by his Honour on 25 July 2007, and then re-issued by him on 14 January 2008:
1.THAT the parties do all things and sign all documents to cause the property known … located at … Belconnen in the Australian Capital Territory (“the property”) to be listed on the market for sale by private treaty at a price to be agreed between the parties.
2.THAT in the first instance, the sale of the property is to be conducted by the Independent Property Group Real Estate Agency at Dickson in the Australian Capital Territory unless otherwise agreed by the parties.
3.THAT in the event that a listing price cannot be agreed upon by the parties, the property shall be listed at such price as determined by the President of the Real Estate Institute of the Australian Capital Territory or his nominee and the parties shall pay equally all costs incurred in the provision of this determination.
4.THAT the parties will keep the property in a clean and neat condition and facilitate inspection of the property by real estate agents and prospective buyers during the sale period.
5.THAT in the event that the property has not been sold on or before a date three months from the date of these Orders (“the deadline date for sale”), then the Husband and the Wife shall make all such arrangements and do all such acts and sign all such documents and pay all moneys equally necessary to procure a sale by public auction of the property upon the following terms:
a)The auctioneer shall be as agreed between the parties or in the absence of an agreement as nominated by the President of the Real Estate Institute of the Australian Capital Territory;
b)The auction shall take place within two months after the deadline date for sale by private treaty;
c)The reserve price shall be as agreed upon by the parties or as proposed by the auctioneer if there is no agreement;
d)The Husband and the Wife shall each pay and be responsible for payment of one-half of the auction expenses payable before the property is auctioned.
6.THAT in the event that the property is not sold by auction or by private negotiation within fourteen days after the auction, then the Husband and the Wife do all acts and sign all necessary documents and pay all moneys equally as required to procure a second auction within a further five weeks of that date otherwise upon the same terms and conditions as applied to the first auction.
7.THAT following the sale of the property, both parties vacate the property seven days prior to the due date of settlement of the sale and they shall leave the property in a clean and tidy condition.
8.THAT upon completion of the sale, the parties apply proceeds of the sale as follows:
a)Firstly to pay all costs, commissions and expenses of the sale and to pay any rates outstanding in respect of the property.
b)Secondly to discharge the mortgage and any other encumbrances affecting the property.
c)Thirdly to pay to either party any costs involved in preparing the property for sale as outlined in Order 5.
d)Fourthly, 50% of the balance to the Husband’s solicitors and 50% to the Wife.
9.THAT as against the Wife the Husband is declared to be the sole legal and beneficial owner of the block of land in India held in his name.
10.THAT in the event that the Husband in the future receives a sum of money from Mr [V] by way of repayment of a debt of $10,000 owing to the Husband he forthwith pay to the Wife half of the sum received by him.
11.THAT in relation to the furniture, furnishings and contents owned by the parties, within seven days of the date of these Orders, the Wife is to prepare two lists containing items of approximately equal value. The Husband is to choose one of the two lists and the Wife is to make the items on that list available to the Husband to be removed from the property by him when he vacates the property.
12.THAT subject to these Orders each party is entitled to retain his or her personal effects presently in that party’s possession and choses in action in that party’s name.
13.THAT in accordance with section 90MT(1)(a) of the of the Family Law Act 1975 (the Act), whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of the Wife from her interest in the Commonwealth Superannuation Scheme (the CSS), the Husband is entitled to be paid (by the Trustee of the CSS) the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $145,000 and there is a corresponding reduction in the entitlement the Wife would have had by for these Orders.
14.THAT the operative time for Order 13 is four business days after the service of a copy of these Orders on the Trustee.
15.THAT I direct that the solicitors for the Husband send a copy of these Orders to the Trustee of the CSS. If the Trustee has any objections to Orders 13 or 14 he or she is requested to notify the Court within twenty eight days of the date of the posting of the Orders.
16.THAT either party may re-list the matter to seek further orders with respect to any aspect of the sale of the property.
The grounds contained in the notice of appeal filed 22 January 2008 against the orders of 14 January 2008
The grounds of appeal contained in the wife’s notice of appeal filed on 22 January 2008 against the orders of 14 January 2008 are as follows:
1.Orders of Federal Magistrate (FM) Brewster are made on his factually incorrect judgment of 22 June 2007.
2.Orders made by Federal Magistrate Brewster, not allowing case to be re-opened are contrary to his own judgment of 22 June 2007 stating to re-open the case on its own motion.
3.Judgment of 22 June 2007 made by Federal Magistrate Brewster is bias in favour of husband.
4.Husband’s application for ‘financial only’ split, entertained by Federal Magistrate Brewster with no application in the court for divorce.
5.Federal Magistrate Brewster not having read all the documents filed in the court has relied on SC, George Brzostowski and family lawyer Geoff Mazengarb representing husband and has ignored appellant wife’s plea, of court being misled by SC and family lawyer representing husband.
6. Misuse of Judicial Power by Federal Magistrate Brewster.
7. Grounds stated in the original appeal of 21 August 2007.
It will be seen that in the last mentioned Ground 7, the wife incorporated by reference the grounds contained in her original notice of appeal filed 21 August 2007. Despite their length, I consider it necessary to set out those original grounds – I also include some explanatory material about each ground which appeared in emphasis in a pre-argument statement or written summary of argument filed by the wife 13 September 2007 as this material may assist in understanding some of the grounds and provide an insight into the nature of the wife’s complaints:
1.Orders of 25 July 2007 have been made to sell family home where marriage has not ended respondent is living with appellant wife and children as a family and is receiving centralink [sic] payments upon signing declaration that appellant wife is his partner.
Judgement error: Documents of evidence provided by appellant wife at the trial overlooked. And respondent husband’s lying on an oath in the witness box proved by appellant wife has been overlooked.
2.Orders of 25 July 2007 have been made to sell family home where no living arrangements have been made for a minor child of the marriage.
Judgment error: FMC-Canberra has ignored welfare of minor child of marriage while Australia promotes children first priority in family law case [sic].
3.Appellant wife has been denied opportunity to make submissions to orders due to respondent [Mr Kapoor’s] non-compliance to 22 June 2007 Federal Magistrate Court (FMC) judgment directions to send draft orders to appellant wife for putting her submissions.
Judgment error: Appellant wife at disadvantage with respondent husband’s lawyers being given directions to prepare draft orders with no follow up process to ensure the wife gets opportunity to put her submissions.
4.Orders of 25 July 2007 made to split superannuation and allow respondent to access appellant wife’s superannuation, where parties remain legally, financially and socially married.
Judgment error: Appellant wife’s evidence in affidavit and at the trial overlooked.
5.Error in superannuation split brought to FMC’s attention at the defended trial hearing of 1st and 2nd May 2007 and in appellant wife’s affidavit has been overlooked by FMC.
Judgment error: Judgment is based on assumption that marriage has ended in 1996 however appellant wife’s superannuation is taken until her retirement with interest component added from now till retirement and respondent husbands [sic] superannuation taken up to 2007.
6.Evidence and facts provided by appellant wife of respondent repeatedly lying on an oath in all the affidavits and financial statements and in witness box at the trial of 1st May 2007 overlooked by FMC.
Judgment error: Respondent husband’s lying on an oath has been overlooked by FMC - Canberra
7.No written statement given to the appellant wife by respondent that the parties are financially separated from 1996.
Judgment error: There is no evidence that parties are separated.
8.Jointly owned assets sold by respondent before and after applying for financial only split.
Judgment error: FMC – Canberra has made bias judgment in favour of respondent husband by ignoring his sale & giving away of jointly owned assets, before and after his application for financial split.
9.Respondent has not complied with the court orders to update appellant wife on his disability insurance claim and has not tendered in FMC the evidence of application being made and the same being rejected by his insurance firm, Zurich Insurance.
Judgment error: FMC – Canberra has overlooked respondent husband’s non compliance of court orders and misleading court by lying in affidavit that disability claim has been made and same has been rejected.
10.Respondent’s medical certificates by General Practitioner state that respondent is capable of working 20 hours per week these evidence of facts provided by respondent and appellant wife ignored by FMC.
Judgment error: Factual evidence of respondent husband capable of working has been overlooked by FMC – Canberra
11.Judgment based on assumption that applicant will not work for the rest of his life is not supported by evidence.
Judgment error: FMC – Canberra has ignored documental evidence to base financial split on the assumption that respondent husband will not work for the rest of his life.
12.FMC has overlooked that applicant has not filed the documents required for the trial hearing and those have been accepted by court at the trial despite of appellant wife’s objection.
Judgment error: Respondent husband’s non-compliance of orders to file documents on time overlooked by FMC – Canberra.
13.Orders with date 25 July 2007 have arrived to appellant [sic] wife on 01 August 2007.
Judgment error: Order made for appellant wife to DIVIDE HOME CONTENTS and prepare two lists and give respondent husband those lists within seven days of orders made, where orders were sent after seven days from the date of orders.
14.Orders are made in rush to fall within two years time limit of property settlement period and possibly back dated to comply with that date.
Judgment error: Orders sent seven days after date of orders are made, possibly back dated to fall in two year time frame of making orders on financial split application
15. Maintenance of minor child.
Judgment error: Respondent husband has been given 50 per cent share of assets but not been asked to contribute towards maintenance of minor child of the marriage.
16.Financial and non-financial contributions by appellant wife being above 90 per cent with evidence and facts provided is overlooked by FMC in making orders to give respondent 50 per cent share of assets.
Judgment error: Springboard impact mentioned in judgment factually incorrect and not supported by evidence.
17.Respondent’s application to claim 50 per cent share of assets is not supported by ANY evidence.
Judgment error: Orders made to give respondent husband 50 per cent share of assets where FMC – Canberra has no document that can support respondent husband’s claim to 50 per cent share.
18.Facts and evidence provided by appellant wife that the marriage has not ended in 1996 or at any other time has been overlooked by FMC.
Judgment error: Religious and cultural value of which parties arranged marriage is based have been ignored with outdated family law, while Australia promotes itself as a multicultural country.
19.FMC has overlooked appellant wife’s evidence and facts that respondent [Mr Kapoor] has mismanaged family assets while making directions in judgment of 22 June 2007 to allow respondent [Mr Kapoor] to sell family home.
Judgment error: Evidence of family assets mismanaged by respondent husband overlooked in giving respondent husband authority in selling family home.
20.Respondent [Mr Kapoor’s] [sic] has made misuse of judgment directions on sale of family home.
Judgment error: Judgment directions giving respondent husband authority to sell family home to have upper hand being used for [sic] bully wife, where appellant wife is a joint owner.
21.Independent Real Estate Company has been given power in orders of 25 July 2007 to sell family home.
Judgment error: Independent real estate given power to sell family home to ensure respondent husband’s share is given to his lawyer for the lawyer to recover his fees, without any consultation with appellant wife in making those orders.
22.Family home put on market for sale by Independent Real Estate Company prior to lapse of appeal period.
Judgment error: Orders made to give Independent Real Estate power to sell family home with no directions to ensure power is not misused.
23.Independent real estate agent’s invading appellant wife’s privacy on 19 August 2007, where real estate agent [Mr R] ignored appellant wife’s instructions to leave immediately and to provide in writing that he visited the family [sic] the family home in respondent [Mr Kapoor’s] absence on the time and that date.
Judgment error: Power given to Independent Real Estate to sell family home where appellant wife, the joint owner has been ignored in the sale of her family home where two dependent children are living with their parents.
24.Respondent [Mr Kapoor] has a lawyer to represent him, however he took direct approach and interfered on 17th & 18th August 2007 in relation to appellant wife’s dealings with independent real estate.
Judgment error: Court Orders imposed on appellant wife by Independent Real Estate and respondent husband before waiting for appeal period to lapse due to power given by FMC – Canberra
Ground 3 of those original grounds was found by me to have substance at the hearing on 28 November 2007 and in my reasons published on the following day. However, at the hearing on 28 March 2008, the wife informed me that it had been replaced by Ground [2] of her grounds contained in her second notice of appeal. That ground complains that his Honour did not allow the case “to be re-opened”, presumably following the first appeal being allowed. I can only assume that the wife’s complaint is that there was no further oral hearing before his Honour after the first appeal was allowed. There was no requirement for such a hearing, and thus, Ground 2 in the second notice of appeal has no merit.
I now turn to the two matters on the basis of which the wife claimed before his Honour, and continued to claim before me, that the husband’s application for property settlement should be dismissed; being that, because the parties are not divorced there cannot be property settlement proceedings under the Act, and that Indian law should govern any matrimonial proceedings between them. I will deal first with the issue of whether Indian law should apply to property settlement proceedings between the parties.
The Indian law issue
Brewster FM explained and determined the wife’s case for the dismissal of the husband’s application for a property settlement under Australian law in the following way:
5.There are two bases for the wife’s contention that the husband’s application should be dismissed. First she maintains that the marriage has not broken down. … Secondly she maintains that, as I understand her, under the laws of India the husband’s application would not be entertained and that therefore I should not entertain it.
…
7.Insofar as the second contention is concerned I ruled during the hearing that Indian law has no application in this case and I refused to admit into evidence a copy of Indian family law legislation tendered by the wife. It appears that the wife misunderstood the basis of my ruling. It appears that she was under the impression that I had rejected her statement that under Indian law the husband’s application would be dismissed. I made no such ruling. I simply ruled that the laws of India did not apply in this case. I infer that she misunderstood my ruling as she subsequently filed an affidavit annexing an opinion by an Indian lawyer [Mr P]. That opinion set out in some detail the law in India in relation to Hindu marriages. It made no serious attempt to demonstrate that under the principles of private international law applicable in Australia Hindu family law is to be applied in this case rather than the provisions of the Family Law Act. It contained a paragraph headed “Law that will apply to this marriage” but that paragraph did not actually address this issue. [Mr P] also stated that “[Mrs Kapoor’s] coming to Australia is a proof in itself that Australian Government has accepted [Mr Kapoor’s] marriage registered [sic] Hindu marriage Act 1955.” If this is simply intended to mean that the fact that the Australian Government permitted the wife to migrate to Australia on the basis of her being the spouse of the husband is illustrative of the fact that the parties’ marriage is recognised as a valid marriage in Australia under the rules of private international law I have no problem with it. If it is intended to be an opinion that under such rules Hindu family law is to be applied in this case then I reject that opinion.
On appeal the wife’s case in this regard although apparently contained in Ground 18, is conveniently summarised in her affidavit filed on 4 April 2008 (in support of her application that the appeal be heard by the Full Court):
(b) In my defended case an Australian citizen has married an Indian citizen under Indian Hindu Marriage ACT 1995. The marriage is not registered in Australia and therefore Australia is not an appropriate venue for hearing for this case.
There can be no doubt that under s 39(4)(b) of the Act there is jurisdiction under the Act to entertain the property settlement proceedings between the parties, on the basis of the husband’s citizenship (from at least 1985) and the fact that both parties are ordinarily resident in Australia. There is no suggestion in the evidence that these conditions were not fulfilled on the date when the husband filed his application for property settlement being 26 July 2005.
Rather the question (as is to some extent recognised in the passage from the wife’s affidavit of 4 April 2008, quoted in the last paragraph) is whether or not Australia is “an appropriate venue for hearing the case.” Expressed in correct legal terminology the question would be whether an Australian court is “a clearly inappropriate forum”, although for this question to arise there would need to be proceedings on foot in India, which there are not. Leaving aside that last mentioned consideration, it cannot be said that Australia is a clearly inappropriate forum given the parties’ past life in Australia and the fact that most of their assets are here. (See Henry v Henry (1996) 185 CLR 571, (1996) FLC 92-685.)
There is therefore no substance in the wife’s claims concerning the application of Indian law.
The jurisdiction to make a property settlement order where parties have not been divorced
A central part of the wife’s case before me (and which can be seen as being reflected principally in Grounds 1, 4 and 7 of the original notice of appeal) was, as it had been before Brewster FM, that because the parties have not been divorced and because there is no application for divorce pending between them, there is no jurisdiction in the court to make a property settlement order. I mention in this regard that it appears to be common ground that although the husband filed an application for divorce in August 2003, when the wife defended that application, it was withdrawn by the husband.
In support of her case in this regard, the wife relied on sub-paragraph (ii) of paragraph (ca) of the definition of “matrimonial cause” in s 4(1) of the Act. (The concept of a “matrimonial cause” is the device whereby jurisdiction in certain matters is conferred by Part V of the Act on courts exercising jurisdiction under the Act.)
As the wife correctly pointed out, paragraph (ca) of the definition of “matrimonial cause” was inserted into the Act by Act No 72 of 1983, and was at that time in the following form:
(ca) proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings -
(i) arising out of the marital relationship;
(ii)in relation to concurrent, pending or completed proceedings between those parties for principal relief; or
(iii)in relation to the dissolution of marriage or annulment of that marriage or the legal separation of the parties to that marriage, being a dissolution, annulment or legal separation effected in accordance with the law of an overseas country, where that dissolution, annulment or legal separation is recognised as valid in Australia under section 104 …
Subsequent to 1983, paragraph (ca) has been subject to some amendments, but they are of no consequence for present purposes. In its current form the paragraph provides:
(ca) proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings:
(i) arising out of the marital relationship;
(ii)in relation to concurrent, pending or completed divorce or validity of marriage proceedings between those parties; or
(iii)in relation to the divorce of the parties to that marriage, the annulment of that marriage or the legal separation of the parties to that marriage, being a divorce, annulment or legal separation effected in accordance with the law of an overseas jurisdiction, where that divorce, annulment or legal separation is recognised as valid in Australia under section 104 …
The wife relied on certain passages from the High Court judgments in Russell v Russell (1976) 134 CLR 495 such as the following passage from the judgment of Barwick CJ (at p 512), to assert that divorce proceedings must be complete, or at least on foot, before there is jurisdiction under the Act to entertain proceedings for property settlement:
Therefore, unless proceedings for … the settlement of property are ancillary to a proceeding for divorce or for nullity of marriage, the Parliament, in my opinion, has no power to create a jurisdiction to entertain them. …
As I endeavoured to explain to the wife when she was before me, the Act was amended by Act No 72 of 1983 in an attempt to overcome the problems created by the Russell decision for spouses who may not wish to be divorced, yet need to resolve a dispute which they may have about their property.
The following passage from the second reading speech of the Bill which became Act No 72 of 1983 makes this clear:
Property proceedings at present can only be brought in relation to concurrent, pending or completed proceedings for dissolution or annulment of marriage between the parties. The Bill in sub-clause 3(1) will enable proceedings to be brought by parties to a marriage in relation to property of the parties at any time where the proceedings arise out of the marital relationship. … This amendment would ensure that all married people are entitled to the benefit of the principles of the Family Law Act which are generally more just than under State law in that they permit a spouse, who has contributed to the acquisition of marital property in an indirect or non-financial way, to claim a share in the property without having to institute divorce proceedings. (Commonwealth of Australia, Parliamentary Debates, House of Representatives, 13 October 1983, 1703 (Mr Duffy, Minister for Communications)).
The following passage from the Explanatory Memorandum to that Bill also supports the proposition that Act No 72 of 1983 expanded the jurisdiction under the Act to allow a property settlement order to be made in circumstances where divorce proceedings have not been instituted:
Significant amendments to be made to the Principal Act by the Bill include-
·Expanding the exclusive jurisdiction of courts exercising jurisdiction under the Act to include –
(a) property proceedings between parties to a marriage at any time during the marriage; …
(Explanatory Memorandum, Family Law Amendment Bill 1983 (Cth) 1).
It is important to emphasize for the benefit of the wife that the test contained in sub-paragraph (i) of paragraph (ca), being “arising out of the marital relationship” is an entirely separate test to the tests contained in sub-paragraphs (ii) and (iii). The use of the word “or” at the end of sub-paragraph (ii) makes clear that these sub-paragraphs must be read disjunctively (that is, separately) and not conjunctively (that is, not together or cumulatively).
Since the passage of Act No 72 of 1983, there appears to have been no direct challenge to the constitutional validity of sub-paragraph (ca)(i), but the decisions of the High Court in Fisher & Fisher (No 2) (1986) 161 CLR 438; (1986) FLC 91-767; and Dougherty & Dougherty (1987) 163 CLR 278; (1987) FLC 91-823 can be read as assuming its validity.
I am thus satisfied that the wife’s submission that there is no jurisdiction under the Act to make a property settlement order where there are no pending or completed proceedings for divorce, is incorrect. Brewster FM had jurisdiction to determine the husband’s application for property settlement, as do I to re-determine it. The husband’s application for property settlement, could not be dismissed for want of jurisdiction.
However, in paragraph 6 of his reasons for judgment (which must be read in context with paragraph 5 of his reasons, which I again set out in part) Brewster FM suggested that there may be a discretion in the court not to determine property settlement proceedings where, in his Honour’s words, the marriage “had not broken down”:
5.There are two bases for the wife’s contention that the husband’s application should be dismissed. First she maintains that the marriage has not broken down. The husband for his part says that, whilst he and the wife continue to live in the same house, the marriage broke down in 1996 and they have lived separately and apart for all practical purposes since that time …
6.Insofar as the first of these contentions is concerned it appears to me that paragraph (ca)(i) of the definition of “matrimonial cause” in section 4 of the Family Law Act would give me jurisdiction to determine this matter although there is authority for the proposition that the fact that there has been no breakdown of the marriage may be reason to refuse to exercise that jurisdiction (see Jennings (1997) FLC 92-773.) Jennings however was, as the trial judge pointed out, attended by “particular and unusual circumstances” and is clearly distinguishable from the present case. In this case, had I accepted the evidence of the wife that the marriage had not broken down, I would nevertheless have allowed the matter to proceed. In the event however this is academic as I accept the evidence of the husband and I find that the marriage broke down in 1996. The irony is that, as will be seen, this is to the advantage of the wife.
Given that the wife was not legally represented before me, this is not the case in which it is appropriate to attempt to determine the question of whether there is a discretion available to the court not to proceed to determine an application for property settlement where the marriage has not “broken down” (whatever that expression may actually mean) or put more plainly, in circumstances where the parties continue to live in the same residence and one of them maintains that they have not separated.
Moreover, a determination of the question of whether or not such a discretion exists is not necessary for the purposes of determining whether or not Brewster FM erred in relation to this matter. This is for the reason that as will be seen from paragraph 6 of his Honour’s reasons, he effectively approached the matter both on the basis that the marriage had not “broken down” or on the basis that it had broken down in 1996, with the period post-1996 then being treated as the post-separation period (see paragraphs 30, 32, 33 and 36 of his reasons). On that second approach, no question of a discretion (if one exists) would arise.
In the context of my re-determination of the matter, I consider that the husband’s application for property settlement should not be dismissed on the basis (be it jurisdictional or discretionary) that the parties continue to live in the same house and that the wife continues to contend that the marriage has not broken down. As I endeavoured to explain to the wife during the hearings before me, the fact that the husband has applied for, and continues to press for, a property settlement is an indication that he, at least, considers that the marital relationship has broken down. He clearly wants his share of the parties’ property and then (presumably) to be able to go his own way, so to speak. Because of the exclusive jurisdiction to determine the proceedings arising out of the marital relationship with respect to property of parties to a marriage, conferred by the Act, there would be no other form of legal proceeding available to him to obtain his share of the parties’ property.
In the context of my re-determination of the matter, and unlike his Honour, I do not consider it necessary to consider the parties’ contributions from the perspective of whether they were made in a pre-separation or post-separation context. Approaching the matter on this basis, disposes of the need to consider whether or not Brewster FM was in error concerning the date which he identified as the date of separation. It also disposes of the need to consider the wife’s contentions concerning a family holiday in India subsequent to that date, as well as other events and matters which might indicate about the state of the parties’ personal (as opposed to financial) relationship.
Finally, in relationship to this issue of the institution and determination of property settlement proceedings where there is a dispute between the parties about the state or circumstances of their relationship, I would suggest that any attempt to rely on matters which might be relied on for purposes of establishing “a separation under one roof” in the context of an application, and proceedings, for divorce, is unnecessary and may well be unhelpful.
It is sufficient at least in the circumstances of this case that the husband has applied for, and continues to press for a property settlement, notwithstanding the wife’s objections. In determining a property settlement in such a case, it is the history of the financial or economic relationship between the parties which is important.
The property of the parties available for distribution between them (other than superannuation)
I will next consider his Honour’s findings and conclusions in relation to the parties’ assets (other than superannuation interests) and liabilities. I do so not only for the purpose of considering relevant complaints by the wife but also for the purpose of my re-determination of the matter. The parties’ assets and liabilities are most conveniently considered not in the usual schedule form, but rather in the following paragraphs from his Honour’s reasons in which he explains how he proposed to treat each asset or liability, and in which I have emphasised the item being considered:
9.… The [matrimonial] home was valued by a [Mr L], a qualified valuer, in January 2007. He assessed its value at $600,000. The wife disputed this, maintaining that the home was worth substantially less. She cross-examined [Mr L] as to his valuation but nothing in that cross-examination caused me to believe that his valuation was inaccurate. Accordingly I find that the home is worth $600,000. It is subject to a mortgage on which some $50,000 remains owing. The equity in the property is therefore $550,000.
…
11.The husband’s counsel, in a list of assets and liabilities handed up at the commencement of the trial, included a Barina motor vehicle valued at $1,500. In the end however I understood both parties to agree that this should be treated as belonging to their son.
12.In that list of assets and liabilities there was an item for furniture which was said to be worth $10,000. As the parties will be physically separating consequent on the Orders I propose to make I also propose to make an order for the division of furniture on a “pick a pile” basis.
13.The list also included jewellery. It had an amount of $2,000 in the husband’s column and $15,000 in the wife’s. The wife agreed that her jewellery was worth $15,000 and that of the husband $2,000 but maintained that the husband had given away jewellery worth $7,000 to his brother. The husband denied this. There is no valuation of either party’s jewellery.
14.Whilst I would not wish this to be seen as an inflexible precedent in all future cases I have decided to disregard the parties’ jewellery. In my opinion jewellery is in a different category to other assets. If for example parties take from a marriage motor vehicles of different values this can have a real impact on their finances. For example if a husband had a vehicle worth $20,000 and the wife a vehicle worth $10,000 he would have to spend less in upgrading that vehicle in due course than would the wife. This is not the case with jewellery. Whilst it might perhaps be considered a financial resource which could be sold in times of need this is almost always theoretical. In the great majority of cases the possession of jewellery has no economic consequences.
15.The husband is the owner of a block of land in India. He says this is worth $400. The wife disputes this but has provided no valuation of her own. Whilst I find it somewhat surprising that one could buy a block of land anywhere for $400 I am not prepared to take judicial notice of the fact, if it be a fact, that no block of land in India could be purchased for as little as $400. I therefore I accept the husband’s valuation.
16.The wife maintains that the husband has an interest in a business run by his brother in India. The husband denies this. The wife produced no evidence to support her contention and I accept the husband’s evidence.
17.The husband drives a Toyota Camry motor vehicle. He maintains that this is owned by a friend [Mr T]. He says that [Mr T] lets him have the use of this vehicle. The wife on the other hand maintains that the vehicle is the husband’s. In the end I accept the husband’s evidence in this respect and do not include that vehicle in the pool.
18.The wife maintains that the husband has given equipment from a restaurant previously owned by him to [Mr T]. The husband agrees with this but says that it was a quid pro-quo for the use of the Camry motor vehicle. I accept his evidence.
19.The wife maintains that the husband has the right to make a claim for a disability payout from Zurich. The husband is partially disabled. However whilst the actual insurance policy was not in evidence documents produced by the husband lead to the inference that the policy covers only total disability. I indicated to the wife at the hearing that I would not hand down judgment for at least 28 days after the conclusion of the case and that, if within that time she were to obtain a copy of the policy showing that a payout for partial disability was available, she could apply to have the case re-opened. This has not occurred.
20.There is a theoretical asset in the form of a debt owed to the husband by a [Mr V]. The husband lent this gentleman $10,000 for the purposes of his buying a business. The business was never bought, the $10,000 was never re-paid and [Mr V] has disappeared. I am satisfied that the debt is unlikely to be recovered and should not be included in the pool. However I propose to order that if the husband is repaid this debt or any part of it he pay one half of the amount repaid to the wife.
21.The pool therefore comprises the home plus the land in India. Given that the land in India is of such minor value I propose to ignore it. Valuation of property is not a precise science and all that can be said is that the home is worth about $600,000 and therefore has a net value of about $550,000. It could in fact be worth some thousands of dollars more or less than [Mr L’s] valuation. In these circumstances it seems to me to be absurd to fix the pool at $550,400 rather than a rounded off $550,000.
…
23.The husband would seek to have deducted from the pool his credit card debts in the sum of $22,737. I do not propose to do this. It is now some eleven years since the marriage broke down and in almost all respects the parties have led separate economic lives since that time. I see no reason why the wife should be disadvantaged in this litigation by my taking account of debts that the husband has incurred since that time. This is particularly the case in circumstances where, without the wife’s approval, he lent $10,000 to [Mr V].
I would say at this point that I agree with his Honour’s conclusions in relation to each of the items discussed in each of the above paragraphs, and with his final conclusion that the assets (other than superannuation) should be valued at $550,000. No issue raised by the wife would cause me to take a different view. It should, however, be explained that one of the wife’s principal complaints about these matters and others was that the husband had not told the truth about many matters before his Honour. His Honour made no adverse credit finding against the husband and I am not in a position to do so given that (apart from the wife’s evidence concerning her health and employment situation) I have not seen and heard the parties give oral evidence.
So far as the Barina car is concerned while I understand the wife to concede that it had been given to the parties’ son, she also wanted it included as some form of “family property”. But as I endeavoured to explain to her, Australian law does not recognise a concept of “family property”, and in any event, such a categorisation would not assist in the determination in these proceedings of the entitlements of the husband and of the wife.
The wife also raised issues regarding the husband’s Indian inheritances (apparently both received and expected). Ultimately she appeared to concede that her concerns in this regard were directed to her children’s rights and entitlements, and not to her rights and entitlements in the property settlement proceedings.
It should also be mentioned that in hearings before Brewster FM subsequent to the making of his orders on 25 July 2007, the wife produced some material in relation to the husband’s disability policy with Zurich. But I am satisfied that material did not assist the wife’s case.
I turn then to the important issue of the valuation of the wife’s superannuation interest.
The wife’s superannuation interest
When determining the value of the parties’ assets, all that his Honour said in relation to the value of their superannuation interests was:
22.Each party has superannuation. The husband has superannuation in an accumulation scheme with Zurich worth $42,415. The wife for her part has defined benefits superannuation with the CSS valued at $481,917.
He later said in paragraph 24 that in “making a division in this case” he proposed to adopt “an asset by asset position”, and to separate the non-superannuation assets from the parties’ superannuation. Later in his reasons he discussed the parties’ contributions to their superannuation interests.
Although his Honour did not say so in his reasons, it is clear from the documents which were before him that the value of the wife’s interest in the Commonwealth Superannuation Scheme (CSS) at $481,917, which he adopted, was the valuation as at 27 April 2007 contained in a valuation report prepared by a superannuation consultant Mr S, and annexed to an affidavit by Mr S sworn 30 April 2007.
It emerges from Mr S’s report that his valuation was, in effect, an update of a valuation of $321,481 as at 1 April 2005 which solicitors then acting for the wife at that time had obtained. That earlier valuation was based on factors or “inputs” contained in a Family Law Information Statement obtained from the CSS. In his report of 27 April 2007, Mr S confirmed the accuracy of the valuation of $321,481.82 as at 1 April 2005. It appears, however, that Mr S did not have an up-to-date statement from CSS of the factors or “inputs” when he prepared his valuation of $481,916.78 as at 27 April 2007, but apparently simply made some adjustments in those factors as they had appeared in the 2005 statement from the CSS.
In an affidavit filed on 22 April 2008 (that is, during the time when the appeal before me was part-heard) the wife pointed out in considerable detail errors in Mr S’s valuation at $481,916.78 as at 27 April 2007. Essentially those errors arose from, or related to the fact, that Mr S had not used the correct up-to-date “inputs” in preparing his valuation. The wife maintained that had the correct “inputs” been used, the valuation at 27 April 2007 should have been $363,195.38.
At the commencement of the hearing before me on 27 May 2008, Senior Counsel for the husband conceded that the wife was correct in her assertion in her affidavit of 22 April 2008, that Mr S had not used the correct factors or “inputs” in his original valuation, although Senior Counsel also asserted the wife’s actual calculation of the value of her interest was wrong.
Apparently against this background, the legal representatives of the husband had requested and obtained from the CSS Family Law Information statements containing the factors, or “inputs”, as at 27 April 2007 and at 27 April 2008, which would be needed to value her interest according to the Family Law (Superannuation) Regulations2001 (Cth) (“the Superannuation Regulations”), as at those dates. Those statements from CSS were Exhibits One and Two before me at the hearing on 27 May 2008.
The legal representatives of the husband had then obtained from Mr S further valuations of the wife’s interest as at 27 April 2007, being a valuation of $456,158.80, and as at 27 April 2008, being a valuation of $480,885.50. Those valuations were before me on 27 May 2008 as Exhibit Three. The factors or “inputs” used in those valuations accord with the factors provided in the CSS statements (Exhibits One and Two). Importantly for present purposes, it will be seen that the difference between the revised valuation of $456,158 as at 27 April 2007 and the valuation used by his Honour of $481,917 as at that date, is $25,759, a not insignificant figure in the context of this case.
This difference constitutes an error (certainly of fact, indeed it might be said of law given the provisions of the relevant regulations – although his Honour could not be criticised for this error) of sufficient magnitude to warrant the appeal being allowed. So much was effectively conceded on behalf of the husband. Once this concession was made, the matter proceeded before me at least from the perspective of the husband’s legal representatives, on the basis that I would re-determine the matter on the basis, at least, of the new evidence from Mr S.
As mentioned much earlier in these reasons, the new CSS statements had only apparently been received by the husband’s solicitor on the day before the hearing on 27 May 2008, and the new valuations prepared the night before the hearing. The wife had therefore had no chance to consider the new material, and had to be given time to do so.
In her affidavit then filed on 3 July 2008 the wife asserted that only a valuation of April 2007 and not a valuation of April 2008 should be used. She also asserted that the 2007 valuation should be $196,258.44 and she set out her calculation of that amount.
Unfortunately, the figures used by the wife, are taken from her CSS Contributing Member Statement for the period of 1 July 2006 and 30 June 2007, which was annexed to her affidavit. They are not taken from a “Family Law Information” statement provided by CSS pursuant to the Superannuation Regulations.
The Contributing Member Statement, on which the wife relied, is a document which essentially shows what a member’s entitlements in the scheme are, particularly on leaving the scheme. The Family Law Information statements serve an entirely different purpose, that purpose being, the valuation of superannuation interest for the purposes of Part VIIIB of the Act, that is, for the purpose of property settlement proceedings under the Act. Moreover, such statements are accorded an evidentiary status under Regulation 68B(2) of the Superannuation Regulations. It may be that a Contributing Member Statement might be used for the purpose of preparing a valuation of a superannuation interest for family law proceedings, but in circumstances where a valuation is available which is based on a Family Law Information statement, that latter valuation must be preferred.
I therefore propose for the purpose of my re-determination of this matter to accept the valuation prepared by Mr S as at 27 April 2007 on the basis of the Family Law Information statement to that date provided by the CSS. I propose to use the valuation as at 27 April 2007 rather than at 27 April 2008 for the reason that the other major asset of the parties, being the matrimonial home, has been valued at approximately that time, as also was the husband’s Zurich superannuation interest. It would be unfair to the wife to use a valuation at a much later point in time only for her superannuation interest.
For the purpose of my re-determination of the matter, the pool or pools (it matters little given that there are only two assets) comprises the matrimonial home at $550,000 and the parties’ superannuation interests (being $456,158 for the wife and $42,415 for the husband).
The contributions of the parties
The next issue to be considered is the assessment by his Honour of the contributions of the parties and also my assessment of those contributions for the purpose of a re-determination of the matter.
As mentioned in my earlier summary of his Honour’s reasons, his Honour can be read as assessing the parties’ various forms of contributions, first to the matrimonial home and then to their superannuation interests.
In his assessment of the parties’ contributions to the matrimonial home (or perhaps more accurately, his assessment of how their various contributions should be recognised in the home), his Honour found (in paragraph 31) that “initial” contributions favoured the husband. This was because of the husband’s introduction into the marriage of property in the suburb of Latham, which he had acquired in 1985 before the marriage (and in which he had an initial equity of $27,000), and which his Honour found provided “a springboard for the acquisition of the [matrimonial home]” (which was acquired in 1991 as the family home).
His Honour also found (in paragraph 31) that “[o]therwise … financial contributions during the marriage favoured the wife.” This was clearly because he had earlier found (in paragraph 28) that the wife’s earnings as a public servant exceeded those of the husband from his restaurant business, although his Honour was prepared to infer that there would have been some benefits from the restaurant for the family. Exactly what period of time his Honour had in mind when he referred to the wife’s greater financial contributions “during the marriage” is not clear to me. But it matters little because it is clear that the wife’s contribution of income has at all relevant times been greater than that of the husband.
In relation to non-financial contributions prior to 1996, his Honour found (in paragraph 29) that there was nothing in the evidence to indicate that the non-financial contributions made by one party up to 1996 should be given greater weight than the non-financial contributions of the other.
As to the period after 1996, and up to the time of the hearing before him, his Honour made the following findings:
30.I infer that the husband’s income from the date of separation until his heart attack in 2004 remained less than that of the wife. After his heart attack he was dependant on social security. It would appear from his evidence that he used his income to support himself and that the wife paid the mortgage and utilities on the house. I infer that she also provided most of the financial support for the children.
…
32.Post-separation, as I have indicated, the husband applied his income in maintaining himself and the wife paid the mortgage instalments and other outgoings on the home. As I have indicated I infer that she also provided most of the financial support for the parties’ children. I add that I only have regard to this insofar as [H] is concerned during the period prior to his turning 18. The husband’s contribution to raising the children seems, on his evidence, to be confined to picking them up from school, preparing the occasional meal and helping his son with his motor vehicle and his computer. I infer that the bulk of parenting duties fell on the wife. His contribution to the home appears to have been confined to keeping the part of the house occupied by him tidy and undertaking maintenance tasks, including painting a wall of the house after its repair following damage from a motor vehicle.
His Honour’s overall conclusion in relation to the home was as follows:
33.I find that up to the date of separation contributions favour the husband. I find that post separation contributions favour the wife. Overall I find that contributions favour the wife. I propose to make division in relation to the [matrimonial home] of forty per cent in favour of the husband and sixty per cent in favour of the wife.
Then turning to the superannuation interests his Honour said:
35.The husband commenced his Zurich superannuation in 1987. He ceased to contribute payments to this fund in 2004. The wife joined her superannuation scheme in 1986 and is still a member of that scheme.
36.It cannot be suggested that the husband has made any indirect contribution to the wife’s superannuation since separation. In this case the same could be said for the period up until separation. In many cases a spouse can be deemed to have indirectly contributed to the other spouse’s superannuation if he or she, by undertaking child caring duties, enables the other spouse to pursue paid employment and, as a consequence, to accumulate superannuation. This is not the case here. However the husband does not have to make an indirect contribution to the wife’s superannuation in order to obtain an order altering her interests in that superannuation in his favour. Such contributions can be contributions either financial or non-financial to the acquisition or preservation of other property or to the welfare of the family comprising the parties and their children. In this case I have found that the husband’s non-financial contributions during the marriage should not be given either greater or less weight than those of the wife. I have given more weight to his financial contributions in this time than those of the wife. However this was in relation to the acquisition of the [matrimonial home] and has been recognised in the contribution based division of that property. Post-separation he made no financial contribution to the welfare of the family or to the [matrimonial home] and his non-financial contributions were limited.
37.I make a contribution based split in the wife’s superannuation whereby the husband is to receive an amount using a base figure of $75,000. In making this split I am taking into account the superannuation he has with Zurich.
Although perhaps not entirely clear, it appears that his Honour determined that even though the husband had not made any indirect contribution to the wife’s superannuation interest, nevertheless his non-financial contributions, which up to the date of separation were equal to those of the wife, and his limited non-financial contributions after that time should be recognised by his receiving a share of the wife’s superannuation (then valued at $418,917) using a base amount of $75,000 (or about 15 per cent). This was in addition to his retaining his own superannuation of $42,415 (to which, it can be assumed, he made a far greater contribution than did the wife).
Notwithstanding some possible ambiguity in his Honour’s explanation of his assessment of the parties’ contributions to their superannuation interests, nothing put to me by the wife in support of her appeal persuades me that I should depart from his Honour’s assessment that the home should be divided 60 per cent to 40 per cent in favour of the wife, and that in addition to the husband retaining his own superannuation (valued at $42,415), he should receive a share of the wife’s superannuation (albeit now valued at $456,158) in the approximate order of 15 per cent (which as, already mentioned, is what the base figure of $75,000 used by his Honour represents in relation to the value of the wife’s superannuation used by his Honour, being $481,917). The wife, it must be remembered, retains the balance of approximately 85 per cent of her superannuation.
In broad summary, such an assessment is based on the husband’s initial contributions, the wife’s far greater financial contribution of her public service salary (including her superannuation) throughout the entire relevant time, the effective equality of non-financial contributions up to 1996, and the limited non-financial contributions made thereafter by the husband, with a corresponding greater non-financial contribution by the wife.
The s 75(2) matters
As to the s 75(2) matters, his Honour determined that those matters favoured the husband and that on account of them there should be a further 10 per cent adjustment in his share of the home, taking that share to 50 per cent, and that his share of the wife’s superannuation should be increased to a base amount of $145,000, which according to his Honour in paragraph 47 of his reasons, was about 30 per cent.
His Honour’s reasons for these adjustments in favour of the husband were that the wife had public service employment at a salary of at least $53,000 and thus had the prospect of accumulating further superannuation (paragraphs 38 and 43), although she would have the continuing care of the parties’ daughter without any expectation of receiving child support from the husband. So far as the husband was concerned, his Honour was prepared to accept the medical evidence that his capacity for future employment was limited to 20 hours a week, although his Honour can be seen as going further when he expressed the view that given the husband’s disabilities and age, there must be considerable doubt whether he would ever obtain any type of employment.
His Honour also explained that the state of the evidence was such that he could not determine the wife’s claim that the husband in fact works in a friend’s restaurant. This was a matter that the wife continued to agitate before me. But the state of the evidence would not, for the reasons explained by his Honour, allow me to determine that claim.
Again as explained earlier, while judgment in relation to this appeal was reserved, the wife was permitted to put further evidence before me concerning her employment position and health. That evidence (on which she was cross-examined) was that her public service employment has now been terminated, due unfortunately to poor performance of her duties. The medical evidence (in the form of a letter from a psychiatrists provided to me and apparently to the husband’s solicitor after the hearing on 22 October 2009) suggests that she is suffering from stress. It is of course possible that once these protracted proceedings are concluded that such stress will be reduced and she will be able to resume gainful employment. But given her age and her recent employment history, her prospects for future employment (and hence her capacity to increase her superannuation entitlements) must be very limited. There may well be some substance in the submissions made on behalf of the husband that the correspondence leading to the termination of the wife’s employment indicated that she was to a large extent the author of her own problems. But be that as it may, the fact is that her prospects of further employment must be extremely limited.
Notwithstanding what I have just said, when the wife’s position in relation to health and employment is compared with that of the husband, as found by his Honour, the wife is in a marginally better position. However, it has to be remembered that the wife has the care of the parties’ daughter who will not turn 18 for another two years, whom she will have to re-house, and for whom she receives no child support. In my opinion, these considerations must cancel out, so to speak, any suggestion that some adjustment would be warranted in favour of the husband because of his health and limited employment prospects as found by his Honour.
On a re-exercise of the discretion, I would therefore make no adjustment in favour of either party on account of the s 75(2) matters. Rather the parties’ entitlements should be as determined on the basis of the contribution assessment.
Conclusion in relation to the re-determination of the husband’s application for property settlement
The difficulty which arises as a result of my determination that there should be no adjustment to the contribution assessment, is that there is in existence the splitting order made by his Honour in relation to the wife’s superannuation interest in favour of the husband using the base amount of $145,000. Although his Honour made an order on 17 September 2007 restraining the husband “from exercising his rights” under the splitting order (Order 13), it is unclear to me what the practical effects of that restraining order have actually been, particularly so far as the trustees of the CSS are concerned. But even if no action has yet been taken by the husband, or by the trustees in relation to that splitting order, I am concerned about the notice requirements to the trustee in the event that I was to vary the order.
In these uncertain circumstances, I consider that the safest course is to leave in place the splitting order made in favour of the husband using the base amount of $145,000 and to make a consequent adjustment to the parties’ entitlements to share in the value of the home in order to take into account the greater amount that the husband is to receive under the splitting order.
As part of his contribution entitlement the husband received $75,000, being approximately 15 per cent of the wife’s superannuation at the value accepted by his Honour. If the husband was to receive 15 per cent of the revised value of the wife’s superannuation interest (being $456,158.90, say $456,160), it would translate into a base amount of $73,424 (15 per cent of $456,160). The husband however, received $145,000 under the splitting order, which is an additional $71,576 ($145,000 - $73,424) more than his re-determined entitlement. That figure of $71,576 represents approximately 13 per cent of the value of the matrimonial home (being $550,000).
An adjustment could therefore be made out of the entitlements to that property. Under Brewster FM’s orders, the parties were to receive 50 per cent each of the proceeds of the sale of that property. Under my re-determination the wife would receive 60 per cent and the husband 40 per cent of those proceeds. In order to adjust for the splitting order difficulty, there should be a further adjustment in the wife’s favour of 13 per cent resulting in the husband receiving 27 per cent of the proceeds of the home.
I appreciate that this is a significant reduction in the husband’s entitlement to share in the proceeds of the home. However, it must be remembered that the effect of the base amount of $145,000 in the splitting order is that he receives approximately 32 per cent of the wife’s superannuation at its revised value of $456,158, in addition to retaining his own superannuation, valued at some $42,000. Having regard to the parties’ contributions as found by his Honour and accepted by me, and to the wife’s significantly changed financial circumstances, I consider this a just and equitable result in the very difficult circumstances of this unfortunate case.
The only variation which will therefore be required to his Honour’s orders is to paragraph (d) of Order 8 which specifies the proportions in which the balance of the proceeds of the matrimonial home are to be divided between the parties.
Certain of his Honour’s other orders (notably, Order 3, 6 and 10) require certain financial obligations to be borne equally by the parties or entitle the parties to share equally in possible future benefits. Despite my proposed variation of the proportions in which the parties are to share their property, I see no reason to change the provisions for equal sharing of benefits or obligations in the orders in question.
The wife has also complained about the arrangements contained in the orders for the sale of the home. In my view those arrangements are not unusual in property settlement orders particularly where one party is unrepresented. I see no good reason to alter them.
Costs of the appeal
At none of the hearings before me were submissions made in relation to the legal costs incurred by the parties in relation to the appeal. Given that the appeal succeeded on the basis of an error in the valuation of the wife’s superannuation interest, which as I indicated earlier could be said to amount to an error of law, I consider that the appropriate outcome in relation to the costs of the appeal would be that there be no order for costs, but rather than each party receive a certificate under the Federal Proceedings (Costs) Act 1981 (Cth). In the benefit of the wife I now set out the terms of such certificates:
·That the Court grants to the appellant wife a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant wife in respect of the costs incurred by her in relation to the appeals.
·That the Court grants to each of the respondent husband a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each respondent husband in respect of the costs incurred by him in relation to the appeals.
If either party seeks such a certificate they should apply in a brief letter addressed to the Appeal Registrar. They are of course at liberty to apply for a costs order under the relevant provisions of the Family Law Rules 2004 should they so wish.
Delivery of judgment
This judgment was ready to be delivered on 31 March 2010. On that day the Appeal Registrar endeavoured to telephone the wife to give her the usual 24 hours notice of delivery of the judgment. The husband’s solicitors were also advised. Unfortunately the Registrar found that the telephone number previously given by the wife to the Court had been disconnected. In these circumstances, and given also the unfortunate history of the wife not being aware of certain events in the course of the proceedings, it was necessary for the Registrar to attempt to notify the wife of the delivery of the judgment by registered mail at her address for service on the court file. This necessitated postponing delivery of the judgment until I would next be available in the Canberra Registry of the Court which was to have been in the week commencing Monday 10 May 2010. I understand that as a result of the Registrar’s letter, the wife made contact with the Registrar, and was advised of a delivery date of 12 May 2010. Unfortunately I was unexpectedly admitted to hospital on 11 May 2010. For reasons associated with my availability and the need to contact both the wife and the husband’s solicitors to give appropriate notice of the delivery of the judgment, it could not be listed for delivery until Tuesday 22 June 2010.
I certify that the preceding one hundred and twenty four (124) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Finn.
Associate:
Date: 22 June 2010
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