Keogh and Keogh and Anor

[2016] FCCA 2197

FEDERAL CIRCUIT COURT OF AUSTRALIA

KEOGH & KEOGH & ANOR [2016] FCCA 2197

Catchwords:
FAMILY LAW – Property settlement – undefended – costs.

Legislation:

Family Law Act 1975

Applicant: MS KEOGH

First Respondent: MR KEOGH

Second Respondent MR MARSH

File Number: LNC 318 of 2015

Judgment of: Judge McGuire

Hearing date: 2 August 2016

Date of Last Submission: 2 August 2016

Delivered at: Launceston

Delivered on: 2 August 2016

REPRESENTATION

Counsel for the Applicant: Ms Abercromby

Solicitors for the Applicant: Rae & Partners

No appearance by the 1^st Respondent

The 2^nd Respondent appeared in person

ORDERS

1. That within 28 days of the date of these Orders the husband shall

   (a)Transfer all his right title and interest in the following to the wife absolutely:

   (i)The property situated Property F1 in Tasmania;

   (ii)The property situated Property F2 in Tasmania;

   (iii)The Toyota Corolla motor vehicle in the possession of the wife;

   (iv)The wife’s superannuation policy and entitlement; and

   (v)All personalty chattels, balances of any bank accounts or similar in the possession of or under the control of the wife as at the date of these Orders.

2. That the husband be solely responsible for and indemnify the wife in respect of the following liabilities:

   (a)a.  Any and all liabilities attaching to any asset to be retained by the husband pursuant to these Orders; and

   (b)Any and all liabilities incurred by the husband since separation in either joint names or in his name alone subject to these Orders.

3. That the wife shall:

   (a)a.  Contemporaneously with the transfer invested in Orders referred to in paragraph 1 hereof:

   (i)Transfer to the husband her right title and interest in the following absolutely the 4 wheeled motorcycle, 2 wheeled motorcycle, camper trailer, caravan, all personalty and chattels and the balances of any bank accounts or like investments in the name of or to the benefit of the husband as at the date of these Orders;

   (ii)The husband’s superannuation policy and entitlement;

   (iii)That the wife be solely responsible for and indemnify the husband in respect to the following liabilities;

   1.Any liability attaching to any of the assets retained by the wife pursuant to these Orders with the wife to make reasonable efforts to refinance and obtain a discharge of the husband’s liability in respect of the mortgage held by the (omitted) bank and secured by the properties Property F1 & F2 in Tasmania; and

   2.Any and all liabilities incurred by the wife since separation in either joint names or her name alone but subject to these Orders.

4. That should the husband fail or refuse to sign any documents provided to him to effect the Orders herein then the Registrar of the Federal Circuit Court of Australia be entitled and enabled pursuant to s 106A of the Family Law Act1975 to execute such documents.

5. That pursuant to Section 81 of the Family Law Act 1975 the parties intend that these Orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.

6. That that within 28 days of the date of these Orders the husband pay the wife’s costs on a party/party basis set in a quantum of $11,120.

7. That the Reasons of the substantive matter and the costs application both be taken out, settled and placed on the Court file.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT LAUNCESTON

LNC 318 of 2015

MS KEOGH

Applicant

And

MR KEOGH

First Respondent

And

MR MARSH

Second Respondent

REASONS FOR JUDGMENT

1. I have before me an application listed for trial today in respect of the alteration of property interests between the husband and wife.  The matter was listed by my order of 4 July 2016 when both parties appeared in court, albeit the husband being unrepresented. It became clear that the remaining issues between the parties were discrete and that the matter would benefit by an early listing date.

2. In the intervening period, the husband has filed some affidavit material although, for reasons best known to him, he has not attended at court today and I am asked to proceed undefended the husband.  I do however take into account his affidavit material, both historical and recent. It is fair to say that in that material the husband seeks a cash adjustment from the wife of $20,000 and in all other respects the parties are fairly much in agreement as to what happens to their assets and liabilities.

3. There was a dispute between the parties when the matter was last mentioned before me in respect of a Ford (omitted) motor vehicle.  The wife then said and still does say that the vehicle no longer exists in any valuable form.  The husband appeared to be somewhat suspicious or speculative as to its existence and caused the wife’s father, Mr Marsh, to be joined as a party to these proceedings.  Mr Marsh, to his great credit, has come to court today. 

4. Suffice to say, on the material before me, I am satisfied that the Ford (omitted) motor vehicle, as they might say, is a former Ford (omitted) motor vehicle.  Certainly, it is not an asset of any current value. 

5. The wife relies on an affidavit and sworn financial statement.  And I have read into evidence the husband’s recent affidavit materials

6. The relationship was of some 16 years duration.  The parties were married but separated as long ago as 26 July 2014.  There are two children of the relationship.  They live solely with the applicant wife and have no direct contact or any real relationship with the husband.  

7. These are property proceedings and they are governed by section 79 of the Family Law Act 1975.  Following a long line of authority, I am to follow a course of consideration in determining and altering the property interests of the parties.  Firstly, I am to establish the legal and equitable interests of the parties in property as at the date of this hearing.  “Property” includes assets, financial resources and liabilities.  For these purposes, superannuation entitlements are to be treated as property.

8. The pool of property is quite evident and very much in agreement save and except for the aforementioned Ford (omitted) motor vehicle.  That property comprises of real estate at Property F2 in Tasmania, with a value of $130,000; an adjacent property at Property F1 that being in the joint names of the parties at $115,000;  a (omitted) Toyota Corolla motor vehicle valued at $8150;  the wife’s chattels and contents at $5000;  a caravan in the possession of the husband agreed at $3000;  the husband’s contents which, according to his financial statement, have a value of $1000;  a camper-trailer in the possession of the husband, again taken from his financial statement at $3000;  a (omitted) Ford (omitted) motor vehicle which the husband says was sold for $4000. 

9. The wife’s evidence, undisputed and unchallenged as it is, is that the husband still has possession of the Ford (omitted).  She attributes a value of $16,000 to the vehicle and I am inclined to accept that value. 

10. The wife says that the husband has possession of a (omitted) motorcycle.  He says it has been repossessed.  She gives evidence in her affidavit as to viewing the motorcycle still being registered in the name of the husband, I accept that evidence as unchallenged.  She attributes a value of $7000.  She also deposes to a (omitted) motorcycle in the possession of the husband at $6000.

11. I accept the wife’s evidence as to the contents of the tangible property pool and the values that she asserts.  Her evidence is unchallenged.  I calculate the gross value of those assets at $291,150. 

12. The liabilities are fairly much agreed on the face of the documents.  There is a mortgage secured by the two Property F properties at $151,000.  There is a personal loan of $3470; a solar hot water account outstanding at $5500; children’s school fees outstanding at $3000; and a Centrelink debt incurred by way of an overpayment to the husband of $968.  The wife also has a HECS debt of $30,000.  That debt is not currently payable but obviously will be if a threshold is reached in her income in the future.  Leaving that issue aside, I calculate the liabilities at $163,938 and the net tangible property at $127,212. 

13. The wife has a superannuation entitlement of $16,081.  The husband has a superannuation entitlement of $72,235.  I propose to include the superannuation as assets or to treat it as property into one pool, given that they are not substantial benefits and given that the husband is currently not employed due to some workplace accident in May and may well have an arguable entitlement to an early claim on his superannuation.  Taking all of those matters into account, the net property, inclusive of superannuation I calculate at $215,528.

14. The wife proposes orders whereby she retains the two Property F properties, the Corolla motor vehicle, her furniture and contents and her superannuation which would give her net property, inclusive of superannuation, of $274,231.  She would retain the totality of the liabilities which I calculate at $163,938.  That would give her net property, inclusive of superannuation of $110,293. 

15. It follows that the husband would retain the remaining assets but not be responsible for any of the liabilities.  And that would give him an entitlement, inclusive of his superannuation, of $108,225. 

16. This relationship was a relatively long one of some 16 years duration.  There were no outstanding or significant initial contributions by the parties.  There were two children of the marriage.  The wife worked part-time but was also primarily responsible for the parenting and homemaking duties.  The husband was substantially employed during the relationship and, in that sense, their contributions to the date of separation can be seen as being equal. 

17. Post-separation, the wife has made substantial contributions to the welfare of the family.  She has been the sole carer of the children.  They do not spend time with their father.  And he contributes a statutory minimum of child support of $8 per week.  Therefore, the primary, if not the sole, financial responsibility falls on the wife for the support of the children.

18. The wife is not working.  To her great credit she has obtained qualifications for herself which will have a dubious but dual result.  One is that she might be able to obtain work, although that’s not certain, in her chosen field and therefore, be able to support her children.  Against that, if she obtains employment, she will almost inevitably be responsible for the outstanding HECS debt of $30,000 and I take all those matters into account.

19. I calculate that the distribution of property on a net basis and a percentage basis is 50.5 per cent to the wife and 49.5 per cent to the husband taking into account my treatment of the superannuation entitlements.  To my mind, in all of the circumstances that is a conservative loading in favour of the wife. 

20. I note that the husband sought an adjustment in his favour of $20,000.  Such would have amounted to the wife receiving somewhere around 45 per cent of the net pool and the husband 55 per cent.  On the material before me such an alteration could not be seen as just and equitable. 

21. The wife seeks an order pursuant to section 106A of the Family Law Act that the Registrar of this court be enabled to sign any transfer documents in respect of the orders I am about to make should the husband not cooperate. By his non-attendance at court today, I anticipate there may be some difficulties with his cooperation. And, in any event, there needs to be a request for him to sign the documents and a refusal before section 106A would be activated.

Costs

1. Having made orders on an undefended basis for a final property settlement, the matter being listed for trial today, I am now confronted with an application for costs by the wife seeking costs against the husband on a party/party basis and with reference to the guidelines and the scale in the Federal Circuit Court Rules of 2001. The quantum of costs sought is $11,120.

2. Issues of costs are dealt with by section 117 of the Family Law Act. Subsection (1) provides a general rule that each party to family law proceedings be responsible for his or her own legal costs. That provision is, however, subject to subsection (2) of section 117 which provides that if there are justifying circumstances then the court may exercise a discretion to make an award of costs in favour of one party or the other. If such justifying circumstances exist then the court is mandated to reference each and every one of the considerations or factors under subsection (2A) of section 117.

3. The proceedings before me are for property settlement.  They have reached their logical conclusion by the matter being listed for a trial.  The husband did not attend at the trial, thereby obliging the wife to proceed undefended.  In doing so, he cooperated only minimally with the process towards bringing this matter to a conclusion.  I am told and I accept that the parties attended a conciliation conference or a mediation and that there were negotiations throughout the proceedings as well as Calderbank offers of settlement. In all of the circumstances where one of the parties has been required to enter into an expensive, lengthy and often I expect, traumatic procedure to obtain an entitlement which this court encourages through its mediation processes to be reached by consensus or conciliation then, in my view, that represents a justifying circumstance pursuant to subsection (2) of section 117 of the Act.

4. Turning to the factors for consideration under subsection (2A), the wife’s financial circumstances are perhaps almost precarious.  She is the sole provider for two young children.  She does not work albeit to her great credit she is obtaining qualifications to enter the workforce and support her children.  She relies on a Centrelink benefit and, importantly, has the sole financial as well as actual responsibilities for the two young children of this relationship.  The husband provides the grand sum of $8 per week or month which would go little to contributing to these children’s support.  To put it bluntly, the financial onus on this applicant is substantial. 

5. The husband’s financial position is also not strong.  He is unemployed following a workplace accident.  He does, however, retain assets of value pursuant to the orders that I have made although not so much as to put him in the category of claiming any great wealth.  He also has a superannuation entitlement of some $70,000 that he may be able to look to in his personal circumstances for vesting at an early date. 

6. Secondly, the wife is not in receipt of Legal Aid and has been responsible for her own legal costs. 

7. Thirdly, I turn to the conduct of the proceedings.  I am told and I accept that substantial agreement was reached as to some interim arrangements which involved the attending in the interim to mutual financial liabilities such agreed at a mediation but then reneged upon by the husband.  Secondly, I am told that the husband has not cooperated in accordance with his obligations as to the important disclosure process in these proceedings.  The court file shows a reluctance to adhere to court timetables and his affidavits were filed only very late in the proceedings.  As I have said, he did not attend at court thereby obligating the wife and her counsel to go through the onerous process of an undefended hearing. 

8. It is clear that the wife has been wholly successful in her application.  I am told and I accept that as long ago as 26 June 2015 the husband, who might then have been represented by solicitors, was provided with a Calderbank offer.  That offer was refused.  The terms of that offer were uncannily similar to the orders that I made at the conclusion of the undefended hearing.  The logic is obvious; the matter could have been settled at that date by acceptance of the offer which would have relieved each of these parties of the onerous responsibility and financial impost of these proceedings.  In all of those circumstances, I am satisfied that it is just and equitable and appropriate to make an award for costs in favour of the wife. 

9. The quantum of the costs sought is $11,120. It is submitted in accordance with the scale of costs provided as a guideline in the Federal Circuit Court Rules. I am satisfied that such a quantum is reasonable.

10. There will be an order that within 28 days of the date of these orders the husband pay the wife’s costs on a party/party basis set in a quantum of $11,120. 

11. There will be a further order that my reasons in respect of the substantive matter and the costs application both be taken out, settled and placed on the court file.

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date: 29 August 2016