LACELLE & LACELLE

[2019] FCCA 3248

FEDERAL CIRCUIT COURT OF AUSTRALIA

LACELLE & LACELLE [2019] FCCA 3248

Catchwords:
FAMILY LAW – Property – Adjustment of property interests – 38 year relationship – family violence.

Legislation:

Family Law Act 1975 (Cth), ss.75, 79

Bankruptcy Act 1966 (Cth), ss.58, 116, 229

Cases cited:

Bevan & Bevan [2013] FamCAFC 19

Britt & Britt [2017] FamCAFC 27

Chapman & Chapman [2014] 2014 FamCAFC 91

Horrigan & Horrigan (No.2) [2018] FamCA 937

Jones & Dunkel (1959) 101 CLR 298

Kennon & Kennon (1997) FLC 92-757

Robb & Robb [1994] FamCA 136

Russell & Russell (1999) FLC 92-877

Scott & Danton [2014] FamCAFC 203

S & S [2003] FamCA 905

Stanford & Stanford [2012] HCA 52

Teal & Teal [2010] FamCAFC 120

Applicant: MS LACELLE

Respondent: MR LACELLE

File Number: PAC 4912 of 2016

Judgment of: Judge Obradovic

Hearing dates: 14-15 February 2019

Date of Last Submission: 15 March 2019

Delivered at: Parramatta

Delivered on: 13 November 2019

REPRESENTATION

Counsel for the Applicant: Mr Rosic

Solicitors for the Applicant: Rafton Family Lawyers

Counsel for the Respondent: Mr Bithrey

Solicitors for the Respondent: Gus Farland Pty Ltd

ORDERS

1. By 4pm on the 42^nd day after the making of these Orders, the husband shall:

   (a)Transfer to the wife his right title and interest in the property known as and situate at B Street, Suburb C (including lots ... inclusive) being that parcel contained in Certificates of Title Folio Identifier ...;

   (b)Transfer to the wife his right title and interest in the property known as and situate at D Street, Suburb C (being ... inclusive) being that parcel contained in Certificates of Title Folio Identifier ....

2. Within 7 days of the making of these Order and in the event the husband is not instructing solicitors at the time of the making of the Orders, for the purpose of Orders 1 and 2 herein, the wife shall cause to be sent to the husband by ordinary pre-paid post, care of F Correctional facility:

   (a)A transfer for the property known as B Street, Suburb C (including ... inclusive); and

   (b)A transfer for the property known as D Street, Suburb C (including lots ... inclusive).

3. Immediately upon the husband’s compliance with Orders 1 and 2, the wife shall transfer to the husband all her right title and interest in lots ... inclusive in Deposited Plan ... and the husband shall thereafter be declared solely entitled to the same.

4. The husband is declared the sole and beneficial owner of the property situate at and known as E Street, Suburb C.

5. The applicant shall, within 42 days of the date of these orders, pay to the respondent the amount of $7,667 by transferring such moneys into a bank account nominated by the respondent within 28 days.

6. The wife shall within six weeks from the date of these Orders transfer to the husband her right title and interest in the jointly owned G Shares.

7. Pursuant to section 78 of the Family Law Act 1975 each of the husband and wife shall be and are hereby declared to be the sole and absolute owners at law and in equity of all items of furniture, furnishings, personalty, chattels, jewellery and monies (whether held in cash o in deposit with any bank, building society, credit union or other financial institution) presently in each party’s possession, custody or control together with all contributions to o benefits or entitlements arising from membership of any fund of insurance or superannuation.

8. In the event that either party refuses or neglects to sign a document required pursuant to these Orders then pursuant to section 106A a Registrar shall sign such document on behalf of that party and otherwise give effect to it.

9. To give effect to Order 8 above the Registrar shall sign such document as is required by these Orders within 14 days of receipt of an affidavit containing a sealed copy of these Orders and particulars of the non-compliance.

10. Remove all outstanding issues from the list of cases awaiting finalisation.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 4912 of 2016

MS LACELLE

Applicant

And

MR LACELLE

Respondent

REASONS FOR JUDGMENT

Introduction

1. These are Reasons for Judgment with respect to property adjustment orders between the applicant wife, Ms Lacelle and the respondent husband Mr Lacelle.  

2. The net value of the asset pool is $3,417,117.

3. During the period the Reasons for Judgment were reserved, the respondent became a bankrupt.

4. An order was made by this Court on 5 September 2019 in proceedings ... that:

   1.   The estate of Mr Lacelle be sequestrated under the Bankruptcy Act 1966.

   2.   The Applicant Creditor’s cost fixed in the sum of $7,018.30 be paid from the estate of the Respondent Debtor in accordance with the Bankruptcy Act 1966.

5. It was noted in those orders that the date of bankruptcy is 8 May 2019. The bankruptcy proceedings were brought by the respondent’s former solicitors, H Law Firm. These are all matters of public record.

6. Section 79 Family Law Act 1975 (Cth) (“FLA”) provides that the Court may make such order as it considers appropriate in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage, altering the interest of the bankruptcy trustee in the vested property.

7. Under the Bankruptcy Act 1966 (Cth) (“BA”) where a party becomes a bankrupt property owned by that party vests in a trustee for the benefit of that party’s creditors.[1] There are certain exceptions to such vesting and the vesting provisions have effect subject to an order under Pt VIII FLA[2]. Furthermore, property which the trustee is required to transfer to the spouse or former spouse of the bankrupt under an order of Pt VIII of the FLA is not property which is available or divisible among creditors of the bankrupt[3].

   [1] ss 58, 116 and 229 BA

   [2] s59A BA

   [3] s116(2)(q) BA

8. Under subs79(11) FLA a trustee in bankruptcy may make an application to be joined as a party to the proceedings where, inter alia, after an application is made for property adjustment orders but before its final determination, a party becomes a bankrupt. There were no applications made as a result of the sequestration order in respect of these proceedings.

Relevant Findings

1. The parties commenced living together in 1978 and were married in 1993.

2. The parties separated on 22 August 2016 after the respondent was charged with sexual assault. He was ultimately sentenced to 12 years’ imprisonment and at the time of hearing remained incarcerated.

3. Whilst the parties did not have any children together, they each had children from former relationships, who either lived with the parties or spent time with them during their childhoods. The applicant’s children were born in 1971, 1973 and 1977, whilst the respondent’s children were born in 1961, 1963 and 1967 respectively.

4. In or around 1977, and prior to the parties’ relationship, the respondent lost vision in one eye and thereafter ceased working in paid employment. The respondent ultimately lost sight in his other eye.

5. At the commencement of the parties’ cohabitation, the respondent was separated from his first wife and was in the process of dividing up property held during his first marriage:

   a)A property at D Street, Suburb C, where the respondent was living which was purchased for $4,000 on a date not known;

   b)A property at E Street, Suburb C, which was purchased for 500 pounds in 1964;

   c)His beneficial interest in a property at J Street, Suburb C, which was purchased for 900 pounds in 1969; and

   d)Three parcels of land which now form part of the property at B Street, Suburb C, purchased for $2,000 on an unknown date.

6. In 1979 there was a hearing between the respondent and his first wife in that respect, and judgment was ultimately delivered with orders being made in 1980. As a result of those orders, the respondent retained the following assets:

   a)D Street, Suburb C;

   b)E Street, Suburb C;

   c)His beneficial interest in a property at J Street, Suburb C; and

   d)The three parcels of land which now form part of the property at B Street, Suburb C.

7. Consequent to the property adjustment orders with his first wife, the respondent had to pay to her the sum of $32,000. Apart from a loan with the Commercial Banking Company of Sydney Ltd for $11,000, which with interest amounted to a total of $15,070[4] over 48 months, obtained in or around 1981 there is no evidence as to how the respondent paid his first wife the cash adjustment of $32,000. There is certainly no assertion by the respondent that at the time of the commencement of the parties’ relationship he had savings sufficient to pay that amount or any part thereof. As such, the Court finds that the entire $32,000 was paid from monies borrowed and paid off during the parties’ relationship or otherwise pooled together during the parties’ relationship.

   [4] Rounded up to the nearest dollar

8. Furthermore, there is no evidence as to the historical values of the properties the respondent brought into the relationship, such that it can be ascertained whether the respondent’s overall net position was positive or negative coming into the relationship. However, the properties were nonetheless an early contribution made by the respondent with such properties having to this date remained assets of the parties.

9. The applicant states that the parties purchased a number of blocks of land which all now form part of the property located at B Street, Suburb C in or around 1986. The respondent asserts the purchases were made in or around the 1990’s.  At or around the same time they also purchased property located at K Street, Suburb C and L Street, Suburb C. The property at B Street, Suburb C was purchased for $6,000. The L Street, Suburb C property was purchased for $10,000.  

10. The applicant states that the purchase price for the balance of the blocks at B Street, Suburb C and the L Street, Suburb C property came from moneys the parties ‘raked together’. She was cross-examined about this and it was put to her that the purchase was funded by a compensation payout received by the respondent. While the applicant initially agreed that some of the purchase price came from the compensation payment she later confirmed her belief that it all came from joint funds. Given the lack of independent evidence as to when the blocks were purchased it is difficult to come to any finding about when and how the properties were purchased. In any event, the applicant conceded that the respondent received two compensation payouts, one of $80,000 in the 1990s and one of $27,000 in or about 2000 and that the entire funds were utilised for the benefit of the parties.  

11. In or around 1990, the applicant received a $10,000 compensation payment. At or around this time, the parties purchased a relocated home which was installed at B Street, Suburb C. The price of the home is not known. The purchase was funded by use of the applicant’s compensation moneys.

12. The parties were married in 1993.

13. In 1999 the wife received an inheritance of $32,000 which was utilised towards paying for improvements to the parties’ home and for the benefit of the parties.

14. From the commencement of the parties’ relationship until 1987, the applicant was not in paid employment. Her income was derived from social security payments and moneys earnt from labouring work. In early 1987 she commenced employment at Employer M. Her income from labouring and paid employment has at all material times been utilised for the benefit of the parties.

15. The applicant resigned from her employment in 1995, at which point she became the full-time carer for the respondent. Consequently she commenced receiving a carer’s allowance, which was utilised for the benefit of the parties.

16. As noted earlier, the respondent ceased working in paid employment prior to the parties’ relationship commencing. His income derived from the leasing of the property at E Street, Suburb C, an invalid pension, and gaming.

17. In 2016 the respondent was arrested and charged with the aggravated sexual assault of two of the applicant’s granddaughters. He was refused bail. In 2018 the respondent plead guilty to the charges of aggravated sexual assault and received a custodial sentence of 12 years with a non-parole period of six years. At the time of final hearing he remained incarcerated.

Family Violence

1. The applicant alleges that throughout the relationship the respondent was physically and verbally violent towards her. She gave specific examples of such violence, including a sexual assault during a period of separation. The applicant asserts that since the parties commenced living together until 2009, he punched, slapped or hit her to a part of her body on no less than one occasion every four weeks. Her evidence is that he would always say “look what you made me do” after hitting her.

2. The applicant asserts that on three occasions, the respondent punched her in the face and she thereafter observed bruising on her cheek and eyes. She recalls one occasion when she was punched to both her eyes and the bruising was such that her eyes were both almost closed.

3. The respondent denies he was violent, and that such behaviour would have been against his character. The respondent asserts that when someone attacked him though that he would retaliate. The respondent alleges that it was the applicant who was violent towards him. He asserts that she belittled him, that she withheld funds from him and that she was physically abusive, including pushing him over. The Court accepts that from time to time the applicant was verbally abusive towards the respondent, and that sometimes she treated him with less than respect.   

4. The respondent was carefully cross-examined about the allegations of family violence. Part of the respondent’s case is that he suffers from memory loss, albeit he asserts it only relates to his short term memory. His evidence is that when he spends time “thinking and thinking” about things he is then able to recall them.

5. The respondent recalls getting “cranky” in or around 1979 and kicking a hole in wall, albeit it was “only a small one”.  The applicant described this incident as her “first encounter of violent behaviour”.

6. In early 1987, the applicant was hanging clothes on the clothesline. She observed the respondent approaching her and without any provocation, he grabbed her by the arm, swung her and threw her to the ground. Later that night the applicant attended N Hospital where she was diagnosed with a broken collar bone.

7. For a period of approximately 8 months from 1987 the applicant and the respondent were separated. During that period of time, the applicant had moved with her sons to a rental house.

8. One night, the respondent entered the applicant’s home without her permission and waited in the house for her. She came home at about 11.30pm. The respondent was standing near the front door. He held the applicant in a bear hug, and pushed her to the bedroom from behind where he told her to take her clothes off. He then had non-consensual sexual intercourse with the applicant.  The respondent said to this “Maybe because I loved her that much, but I can’t remember. I told her I wanted her back.”

9. At one point in cross-examination the respondent conceded “if Ms Lacelle says I did it I must have done it”. This was in answer to a specific question in respect of the sexual abuse allegation.

10. The parties reconciled shortly after this incident in 1987/1988.

11. In 1998, the respondent punched the applicant in the face and body. She made a complaint to the police and the respondent was charged with assault. The parties separated for a short period, however, by the time the proceedings were heard the parties had reconciled and the applicant did not attend court to give evidence. The charges were ultimately dismissed.

12. The applicant gives other evidence of verbal abuse, and specific incidents of such abuse. The Court accepts her evidence in this regard.

Finding of Violence

1. On the balance of probabilities, the Court finds that the respondent perpetrated family violence on the applicant, including but not limited to:

   a)Punching the applicant in the face causing her bruising on at least three occasions during the parties’ relationship;

   b)Throwing the applicant to the ground in early 1987;

   c)Sexually assaulting the applicant on one occasion in the period 1987 to 1988; and

   d)Being verbally abusive to the applicant including calling her names such as “fucking idiot”.

The relevant legal principles to property adjustment orders

1. The overall approach to the determination of an application for property adjustment orders pursuant to s.79 Family Law Act 1975 (Cth) was set out by the High Court in Stanford v Stanford.[5] Such approach was subsequently considered by the Full Court of the Family Court in Bevan & Bevan[6], Chapman & Chapman[7] and Scott & Danton[8].

   [5] [2012] HCA 52; (2012) 247 CLR 108

   [6] [2014] FamCAFC 19

   [7] [2014] FamCAFC 91

   [8] [2014] FamCAFC 203

2. In many matters which come before this Court, the requirement of whether it is just and equitable to make any orders is readily satisfied by the fact of the parties’ separation; as there is not and will not thereafter be the joint use of property by the parties. The requirement is so satisfied in this instance.

3. Once the issue of whether it is just and equitable to make any order is resolved, the Court is to then consider the contributions made by the parties as defined in s.79(4)(a) to (c), the matters set out in s.79(4)(d) to (g) and in particular the subjective considerations as to the parties by having regard to the provisions of s.75(2) in so far as they are relevant.

4. The Court is then to consider the justice and equity of the actual orders to be made, in the context of the Court’s obligations to make appropriate orders as provided for in s.79(1) of the Act.[9]

   [9] see generally Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120

5. The just and equitable requirement is “one permeating the entire process”[10].

   [10] Bevan supra at [86]

Assessment of Contributions and s75(2) Factors

1. In order to assess the contribution to the parties it is appropriate to consider the totality of the contributions of each of them, not only during cohabitation, but also before and after cohabitation.

2. The parties’ relationship was a very long one, and their accumulated wealth mostly occurred as a result of changes to real estate values over the duration of their relationship. Neither of the parties is particularly skilled or has contributed to the accumulation of their wealth through the application of a profession, trade or any other skill. They have simply purchased and held onto real estate for over a few decades.

3. While the respondent did bring properties into the relationship, there was also a debt brought into the relationship. Further real estate was acquired during the relationship. Both parties contributed lump sums, the respondent’s being $80,000 and $27,000 respectively while the applicant’s being $10,000 and $32,000 respectively.

4. The applicant did not work during the early part of the relationship, was then engaged in paid employment, and then became the respondent’s full-time carer. She was the recipient of social security payments and also earnt some income through labouring type work.

5. The respondent did not work at all during the parties relationship but one of the properties he brought into the relationship was and remains an income earning property, he also earnt an income through gaming and social security payments.

6. Both parties contributed to maintaining the family home, however the applicant did the bulk if not all of the housework and yard work. The respondent’s contributions were minimal. She also contributed by providing care to the respondent to assist him with his everyday needs which he had difficulty in performing as a result of his sight impairment. The respondent made some contributions of the Robb & Robb[11] kind, albeit they are difficult to assess.

   [11] Robb & Robb (1995) FLC 92-555

1. Post separation the applicant has remained living in the former matrimonial home and she has also been in receipt of the rental income(s) from the various properties. That income has for the most part been utilised for the benefit of the parties by being applied to the costs associated with those properties and the former matrimonial home. The applicant has been solely responsible for maintaining all of the properties post separation. While the Court accepts the submission that the applicant has resided in the former matrimonial home to the ‘exclusion’ of the respondent, this is not because he has somehow been excluded, it is because he is incarcerated for crimes he has committed.

2. The allegations of family violence and sexual abuse were raised by the applicant in the context of a Kennon & Kennon[12] claim.  The applicant urges the Court to make a finding that her contributions were made more onerous by the family violence which was visited upon her at the hands of the respondent.

   [12] (1997) FLC 92-757

3. In order to establish that an adjustment ought to be made for these reasons, the applicant has the onus to not only establish facts to the requisite standard of the course of conduct which is alleged and required to make such a case, but also to demonstrate that such conduct has had a significant adverse impact upon her contributions or made her contributions more arduous than they ought to have been.[13]

   [13] See Kennon & Kennon (1997) FLC 92-757;

4. In S & S[14] the Full Court referred to Kennon and emphasised that:

   The question is whether a trial judge may infer from the evidence that the result must be that a party’s contributions have been affected.

   [14] [2003] FamCA 905

5. Furthermore, the Full Court in Britt & Britt[15] considered whether the evidence was capable of establishing a claim that the appellant’s contributions were made more onerous by the conduct of the respondent and said:

   The respondent submitted that the appellant’s evidence was not relevant to an issue because even if it was evidence of family violence, the appellant had called no evidence to suggest that the violence had made her contributions more onerous.  This submission overlooks the obvious point that the court can infer from appropriate evidence that there was a nexus between the conduct and the relevant contributions.

   [15] [2017] FamCAFC 27 at [74] cited in Horrigan & Horrigan (No.2) [2018] FamCA 937

6. It was submitted on behalf of the respondent that “the authorities from the Full Court do not permit – and nor have they ever – the drawing of a simple inference of an impact on the affected party’s contributions”. 

7. Findings of family violence have been made herein. There is no direct evidence in the applicant’s case going to the nexus between such violence and the applicant’s contributions being more arduous or that there has been a significant adverse impact upon her contributions. Indeed her evidence is silent as to the impact of the violence she alleges and which has been found.

8. As the Full Court held, it is necessary to provide evidence to establish the incidence of domestic violence and the effect of domestic violence. It is also necessary for the applicant to establish evidence sufficient to enable the court to quantify the effect of that violence upon the parties’ capacity to "contribute" as defined by section 79(4).[16]

   [16] S & S at [47]-[48]

9. In the present case, given the findings of abhorrent family violence, it is tempting to infer that the applicant’s non-financial contributions were clearly more arduous as a result of the family violence perpetrated by the respondent on her. While it is clearly permissible to infer such matters from appropriate evidence, the evidence in this case is simply insufficient to properly lead to any adjustment pursuant to section 79.

10. Such an inference might have been available if there was at least some evidence of the impact on the applicant of such family violence, including in the applicant’s two affidavits. Her evidence is that she attends a counsellor, it appears because she has suffered significant stress as a result of the sexual assault proceedings concerning her granddaughters and the respondent. The applicant did not suggest through her evidence that there may be other issues for which she is seeking assistance. The counsellor was not called in her case. The applicant was ably legally represented throughout the proceedings. Indeed, the absence of such evidence in the applicant’s case leaves open the path for the Court to draw a Jones & Dunkel[17] inference.  It is however, not necessary to do so.

    [17] (1959) 101 CLR 298

11. The Court accepts the applicant’s evidence that the crimes which the respondent has committed, the criminal proceedings and the effect of those crimes on her extended family, have had a negative impact upon her and that these are relevant matters for the purposes of assessing post separation contributions and the overall justice and equity.

12. The applicant is 69 years of age, she suffers from stress.

13. The respondent is presently incarcerated and will not be released before he is 80 years of age. Until his release he will not be incurring any costs whatsoever to house himself or for his daily needs. As long as he remains incarcerated his immediate and basic needs will be met by the State.

14. The respondent is also a bankrupt, which has particular implications for him in terms of his assets and liabilities. There is no evidence before the Court as to the impact of any property adjustment orders on the creditors of the respondent. There is no evidence before the Court as to what, if any, residue might remain for the respondent once his creditors are paid from his bankrupt estate and he is discharged from bankruptcy.

15. The respondent is 76 years of age and has poor health. He is blind and hearing impaired and will no doubt require significant assistance once he is released from prison.

16. Both parties have been out of the workforce for a number of years, and neither has a capacity to earn any income.

17. Taking into consideration the relevant matters as found earlier in these reasons, an overall adjustment of 60% to the applicant and 40% to the respondent is in all of the circumstances appropriate, just and equitable.

Conclusion

1. At the time of final hearing, the property pool consisted of the following assets:

Ownership	Description	Agreed Value
Joint	B Street, Suburb C	$1,400,000
Joint	L Street, Suburb C	$300,000
Respondent	E Street, Suburb C	$800,000
Respondent	D Street, Suburb C	$650,000
Ms O (As Trustee for the Respondent)	J Street, Suburb C	$250,000
Applicant	Motor Vehicle	$2,000
Applicant	Horse Float	$1,000
Joint	G Shares	$1,608
Applicant	G Shares	$2,937
Respondent	G Shares	$7,572
Joint	Household Contents	$2,000
Total	$3,417,117

1. The applicant seeks an order which would see her retain the former matrimonial home where she presently resides as well as the property at D Street, Suburb C where her son and his family have resided for the last 20 years. There is no objective reason as to why an order adjusting the parties’ interests in this manner is not just and equitable.

2. The respondent submits that the orders which the applicant seeks appear to be “reverse engineered”. The respondent submits that the split should be such that he retain the former matrimonial home because he knows the area and can walk around unassisted. This may have been the case at the time of his incarceration (although it has not been so established on the balance of probabilities), given the length of his prison sentence and the state of his health, there is no evidence that this will be the case at the time of the respondent’s release. In the meantime, the applicant will be forced to move out of the home where she has lived for many years with no immediate benefit to the respondent. This is not an order which is just and equitable.

3. In order to achieve an overall 60/40 adjustment in the applicant’s favour, the applicant will retain:

Ownership	Description	Agreed Value
Joint	B Street, Suburb C	$1,400,000
Respondent	D Street, Suburb C	$650,000
Applicant	Motor Vehicle	$2,000
Applicant	Horse Float	$1,000
Applicant	G Shares	$2,937
Joint	Household Contents	$2,000
Less payment to respondent	($7,667)
Total	$2,050,270

1. In light of the above, the respondent will retain:

Ownership	Description	Agreed Value
Joint	L Street, Suburb C	$300,000
Respondent	E Street, Suburb C	$800,000
Ms O (As Trustee for the Respondent)	J Street, Suburb C	$250,000
Joint	G Shares	$1,608
Respondent	G Shares	$7,572
Payment from applicant	$7,667
Total	$1,366,847

1. In all of the circumstances and for all of the reasons set out above orders will be made as set out in the forefront of these reasons.

I certify that the preceding seventy-two (72) paragraphs are a true copy of the reasons for judgment of Judge Obradovic

Associate: 

Date: 13 November 2019