Kleine & Kleine

Case [2021] FedCFamC1F 51

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Kleine & Kleine [2021] FedCFamC1F 51

File number(s): SYC 2944 of 2019
Judgment of: ALTOBELLI J
Date of judgment: 15 September 2021
Catchwords: FAMILY LAW – undefended property hearing – where ascertaining the asset pool rendered difficult because of the respondent’s non-disclosure – assessment of contribution and future needs- spousal maintenance- costs
Legislation:

Child Support (Assessment) Act 1989 (Cth) s 123

Family Law Act 1975 (Cth) ss 72, 74, 75, 77A, 90SF, 90SM, 117

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.33, 12.17
Cases cited:

Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40

Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116

Britt & Britt (2017) FLC 93-764; [2017] FamCAFC 27

Chorn & Hopkins [2004] FamCA 633

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248; [1993] FCA 801

In the Marriage of Hickey (2003) FLC 93-143; [2003] FamCA 395

Kennon v Kennon (1997) FLC 92-757; [1997] FamCA 27

Kowaliw & Kowaliw (1981) FLC 91-092

Parke & The Estate of the Late A Parke (2016) FLC 93-748

Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52

Taylor v Taylor (1979) 143 CLR 1; [1979] HCA 38

Thompson & Finch [2021] FamCAFC 3

Vass & Vass (2015) 53 Fam LR 373; [2015] FamCAFC 51

Vautin v Vautin (1998)  FLC 92-827; (1998)  FLC 92-827

Weir & Weir (1993) FLC 92-338; [1992] FamCA 69

Yunghanns v Yunghanns (2000) FLC 93-029; [2000] FamCA 681
Division: Division 1 First Instance
Number of paragraphs: 101
Date of last submission/s: 29 June 2021
Date of hearing: 29 June 2021
Place: Sydney (via videoconference)
Counsel for the Applicant: Mr O’Reilly
Solicitor for the Applicant: Solari & Stock Lawyers
The Respondent: Did not appear

ORDERS

SYC 2944 of 2019

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS KLEINE

Applicant
AND:

MR KLEINE

Respondent

ORDER MADE BY:

ALTOBELLI J

DATE OF ORDER:

15 SEPTEMBER 2021

THE COURT ORDERS:

DEFINITIONS:

For the purpose of these Orders

A.Applicant means Ms Kleine born 1971;

B.Respondent means Mr Kleine born 1973;

C.Parties means the Applicant and the Respondent;

D.1 C Street means the premises situated at and known as 1 C Street, Suburb B in the State of New South Wales, being properly described as Folio Identifier … and improvements thereon and registered in the Respondent's sole name;

E.2 C Street means the premises situated at and known as 2 C Street, Suburb B in the State of New South Wales, being properly described as Folio Identifier … and improvements thereon and registered in the name of D Company ACN …;

F.1 C Street Mortgage means the mortgage registered on the title to the 1 C Street, Suburb B in the State of New South Wales, being properly described as Folio Identifier … with the Respondent as Mortgagee and E Pty Limited as Mortgagor, pursuant to registered mortgage …, being the E…

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AGLC
Kleine & Kleine [2021] FedCFamC1F 51
Case
[2021] FedCFamC1F 51
Decision Date

CaseChat Overview and Summary

This case concerns an application by the Applicant, a woman, to alter the property interests of herself and the Respondent, a man, under section 90SM of the Family Law Act 1975 (Cth). The couple, who were in a de facto relationship for approximately 12 years and have one child together, separated in May 2017. The Applicant sought orders for the division of their property, specifically addressing the Respondent's equity in a property purchased before the relationship began and the proceeds from its sale. The court heard the matter on an undefended basis, accepting the Applicant's submission that the Respondent had not fully disclosed his income, assets, and resources, thus potentially rendering the balance sheet incomplete.

The primary legal issue was whether the Court could proceed to determine the case as if it were undefended due to the Respondent's failure to participate. The Court referenced Rule 1.33 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) and considered the principles established in Taylor v Taylor and Allesch v Maunz. The Court concluded that the Respondent had been given a fair opportunity to participate in the proceedings and had chosen not to engage, thereby allowing the matter to proceed undefended.

The Court found that it was just and equitable to alter the property interests of the parties based on the evidence presented by the Applicant. It considered the financial contributions made by both parties to the relationship, the contributions to the welfare of the family, and the effect of the proposed order on the earning capacity of the parties. The Court also noted the incomplete disclosure by the Respondent regarding his assets and income. Ultimately, the Court decided in favor of the Applicant, ordering the alteration of property interests in a manner that it deemed fair and just, taking into account the relevant factors prescribed by the Family Law Act.

In conclusion, the Court ordered the division of the property interests in a manner that it found equitable, given the circumstances and the evidence presented. The Respondent's failure to fully disclose his financial situation and assets influenced the Court's decision, leading to a property settlement that the Court deemed just.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

These reasons for judgment explain the orders for alteration of property interests made by the Court in this matter.BACKGROUND Unless these reasons for judgment state to the contrary, the following represents findings of fact made by the Court having regard to the evidence before it. This matter proceeded to hearing on an undefended basis. The Court was satisfied from the evidence of the Applicant, including the evidence of the Applicant’s solicitor Ms Z, and the evidence of Ms AA, that the Respondent, and all other necessary parties, were provided with timely and complete notice of the orders sought by the Applicant, and of the date of the hearing. The Applicant is 50 years old, and the Respondent is 48 years old. They commenced a relationship in 2005, and commenced cohabitation later that year. They separated under the same roof in May 2017, and the Respondent physically vacated the family home in Suburb B in New South Wales in February 2018. The relationship thus lasted about 12 years. The Applicant and the Respondent were never married. They have one child together, X born in 2007, currently 14 years old. X lives with the Applicant and appears to have little contact or communication with his father, the Respondent. The impression formed from the evidence is that this is the Respondent’s choice, rather than the Applicant’s desire. The Applicant has two children from a previous marriage: Ms U who is 19 years old, and Ms V, who is 21 years old. The Applicant works in the transport industry. The Respondent describes himself as a professional. The impression created from the evidence is that he primarily works from Western Australia. Shortly before the Applicant and Respondent commenced cohabitation in 2005, the Respondent had purchased a property at Suburb W for $500,000. He contends, and the Applicant does not seem to dispute, that his equity in the property was $100,000 at that time. The Respondent contends in his Financial Questionnaire filed 20 August 2019 that at the time of cohabitation he also had “cash in bank” of $50,000. This assertion is not repeated in his Affidavit. The Court finds that the Respondent consistently earned a substantially greater income than the Applicant and thus it is possible that he did have some cash at cohabitation, though no finding can be made as to the amount. The onus was on him to prove what cash at bank he had at that time. He did not. Apart from that, his only other asset at the time of cohabitation appears to be superannuation which he contends was worth $75,000. The Applicant does not dispute this. The Respondent also asserts in the same Financial Questionnaire that the Suburb W property had a market value of $650,000 at the time of cohabitation. This assertion is not made in his Affidavit affirmed 19 July 2019. There is no expert evidence about the value of this property at the date of cohabitation. It is common ground, however, that the property was sold for $765,000 in December 2007. The Respondent contends that the net sale proceeds received by him amounted to $379,000. The Applicant contends that after sale costs the Respondent in fact received just over $369,000.

Evidence

Evidence Before The Court

An important submission made in the Applicant’s case is that the Court cannot be confident that the Respondent has made disclosure as to his true income, assets and resources and thus the balance sheet is likely to be incomplete insofar as it purports to reflect the Respondent’s assets. The Court accepts this submission.THE EVIDENCE BEFORE THE COURT In support of her case, the Applicant sought to rely on the following documents:(a)Her Further Amended Initiating Application filed 24 June 2021;(b)Her Affidavit filed 8 June 2021;(c)Her Financial Statement filed 8 June 2021;(d)An Affidavit of Mr O filed 8 June 2021;(e)An Affidavit of Ms Z filed 25 June 2021;(f)An Affidavit of Ms AA filed 29 June 2021; (g)A Case Outline document filed on 29 June 2021; and (h)Documents tendered as exhibits A1 to A3. The Respondent has filed the following documents in the matter, each of which has been referred to and relied upon by the Court:(a)His Response filed 22 July 2019;(b)His Financial Statement filed 22 July 2019;(c)His Affidavit filed 22 July 2019; and(d)A Financial Questionnaire filed by him on 20 August 2019.THE APPLICABLE LAW Rule 1.33 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Rules’) provides that if a party does not comply with the rules, regulations or a procedural order, the Court may proceed to determine the case as if it were undefended. An undefended hearing is one in which the Respondent does not participate. Before a matter can proceed on an undefended basis, the Court must be satisfied that all parties to the proceeding have had an opportunity to be heard: Taylor v Taylor (1979) 143 CLR 1. In Allesch v Maunz (2000) 203 CLR 172, the High Court stated as follows in relation to undefended hearings:[38] … Sometimes, through stubbornness, confusion, misunderstanding, fear or other emotions, a party may not take advantage of the opportunity to be heard, although such opportunity is provided. Affording the opportunity is all that the law and principle require.[39] Decision-makers, including the courts, cannot generally force people to protect their own rights, to adduce evidence or other materials, to present submissions or to act rationally in their own best interests. This consideration may be especially relevant in relation to the Family Court where emotions, often engendered by the highly personal issues involved, can sometimes cloud rational thought.[40] Nor are courts obliged to delay proceedings indefinitely because one party, although proved to be on notice of the proceedings, refuses or fails to appear in person or to be represented by a lawyer or some other individual permitted to speak for them who can explain the need for an adjournment. The rights of other parties are commonly involved. In the Family Court, the rights of non-parties (especially children) may be affected. Additionally (as this Court has itself accepted), the rights of the public in the efficient discharge by courts of their functions must be weighed against unreasonable delay in concluding litigation. In the present case, I am satisfied that the husband has been given an adequate opportunity to appear in these proceedings and has failed to engage as a matter of choice. The wife is duly entitled to have her application for property settlement determined by the Court within a reasonable period of time and in accordance with the applicable principles of law.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

This is otherwise an application under s 90SM of the Family Law Act 1975 (Cth) (hereafter referred to as ‘the Act’) which relevantly provides:Alteration of property interests(1)In property settlement proceedings after the breakdown of a de facto relationship, the court may make such order as it considers appropriate:(a)in the case of proceedings with respect to the property of the parties to the de facto relationship or either of them--altering the interests of the parties to the de facto relationship in the property; or(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the de facto relationship--altering the interests of the bankruptcy trustee in the vested bankruptcy property;including:(c)an order for a settlement of property in substitution for any interest in the property; and(d)an order requiring:(i) either or both of the parties to the de facto relationship; or(ii) the relevant bankruptcy trustee (if any);to make, for the benefit of either or both of the parties to the de facto relationship or a child of the de facto relationship, such settlement or transfer of property as the court determines.Note 1: The geographical requirement in section 90SK must be satisfied.Note 2: The court must be satisfied of at least one of the matters in section 90SB.Note 3: For child of a de facto relationship , see section 90RB.(2)If a party to the de facto relationship dies after the breakdown of the de facto relationship, an order made under subsection (1) in property settlement proceedings may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.(3)The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account:(a)the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or(ii) otherwise in relation to any of that last-mentioned property;whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or(ii) otherwise in relation to any of that last-mentioned property;whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and(c)the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and(d)the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and(e) the matters referred to in subsection 90SF(3) so far as they are relevant; and(f)any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and(g)any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.