LAYTON & LAYTON
[2019] FCCA 3837
•8 March 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LAYTON & LAYTON | [2019] FCCA 3837 |
| Catchwords: FAMILY LAW – Property – failure of husband to participate in proceedings – procedural fairness – where the wife’s evidence is unchallenged – assessment of contributions – wife’s contribution to the husband’s business – where the wife is the primary caregiver – significant family violence – assessment of future needs – where the husband is 19 years older than the wife – capacity of husband to work – health of wife – wife is full time carer of children – premature distribution of funds by the husband – property adjustment of sixty-forty per cent ordered in favour of the wife. |
| Legislation: Family Law Act 1975 (Cth), ss.114, 75, 79 |
| Cases cited: Allesch & Maunz(2000) 203 CLR 172 |
| Applicant: | MS LAYTON |
| Respondent: | MR LAYTON |
| File Number: | PAC 2671 of 2018 |
| Judgment of: | Judge Harman |
| Hearing date: | 8 March 2019 |
| Date of Last Submission: | 8 March 2019 |
| Delivered at: | Parramatta |
| Delivered on: | 8 March 2019 |
REPRESENTATION
| Solicitors for the Applicant: | Mr Bishop of Smythe Wozniak Solicitors |
| No appearance by the Respondent: |
ORDERS
These Orders are made by way of alteration of property interests pursuant to Section 79 of the Family Law Act 1975 (Cth).
That within ninety (90) days of the date of these Orders (the Due Date), the Husband pay to the Wife the sum of four hundred and thirty eight thousand dollars ($438,000) (the Payment) and the amount of $20,149.50 together with the interest accrued thereupon pursuant to orders of this Court made 15 January 2019.
That simultaneously with the Payment pursuant to Order 2 (whether that payment is made by the husband within 90 days of today’s date as order 2 requires, or whether it is made following sale of the Suburb A property referred to hereafter):
(a)the Husband shall do all acts and things and sign all documents necessary to transfer to the Wife the whole of his right, title and interest in the property situate at and known as B Street, Suburb C NSW being folio identifier …76 (the Suburb C Property);
(b)The Wife shall do all acts and things and sign all documents necessary to transfer to the Husband the whole of her right, title and interest in the property situate at and known as D Street, Suburb A, NSW being folio identifier …37 (the Suburb A Property);
(c)The Husband shall refinance the mortgages secured by the Suburb A Property into his sole name.
(d)The Wife shall refinance the mortgage secured by the Suburb C Property into her sole name to the extent the current such mortgage is not discharged at the time of the Payment pursuant to Order 2.
That if the Husband does not make the Payment by the Due Date the Husband shall pay interest thereon calculated at the rate prescribed from time to time by the Family Law Rules until the Payment is made to the Wife.
That if the Husband does not make the Payment by the Due Date then within fourteen (14) days of the Due Date, the parties shall do all acts and things and sign all documents necessary to list the Suburb A Property for sale by private treaty the Suburb A Property with a real estate agent nominated by the Wife and to sell the Suburb A Property for the best price reasonably obtainable and the proceeds of such sale shall be distributed in the following manner and priority:
5.1in payment of real estate agent's commission and advertising expenses of the sale;
5.2in payment of proper legal costs and disbursements, in respect of and incidental to the sale of the Suburb A Property;
5.3in adjustment of rates, levies and taxes on the Suburb A Property in respect of the sale;
5.4discharge of the Commonwealth loans secured by the Suburb A Property, and
5.5the balance to be distributed as follows:
5.5.1$438,000 and interest payable together with costs and interest thereupon as ordered on 15 January 2019 pursuant to Order 4 to the Wife, and
5.5.2the balance to the Husband.
That if the parties are unable to agree as to the listing price or sale price of the Suburb A Property then the Wife shall appoint a valuer to determine the value of the Suburb A Property and:
6.1in the case of the listing price shall list the Suburb A Property for sale at a price not more than 10% higher than the value as so determined, and
6.2in the case of the sale price shall accept any offer to purchase the Suburb A Property at that price or higher.
That in the event that a valuer is appointed by the parties pursuant to Order 6 of these Orders, the parties shall pay the costs of such valuer in equal shares.
That in the event the Suburb A Property is listed by private treaty pursuant to Order 5 of these Orders and contracts have not been exchanged and the cooling off period expired within a period of five (5) calendar months from the date of these Orders, then the parties shall forthwith do all acts and things and sign all documents necessary to cause the Suburb A Property to be listed with a real estate agent nominated by the Wife upon the following terms and conditions:
8.1the auction shall take place within six (6) weeks of the listing for sale of the Suburb A Property by auction;
8.2the reserve price shall be as agreed between the parties and failing agreement as determined by the auctioneer;
8.3both parties shall attend at the auction and in the event that the Suburb A Property is passed in they shall negotiate with the highest bidder and the parties shall accept any offer to purchase the Suburb A Property at no less than 90% of the reserve price, and
8.4that in the event that the Suburb A Property does not sell at auction or does not sell by private treaty within two (2) weeks after the date of the auction then the parties shall relist the Suburb A Property for sale by auction at intervals of no more than six (6) weeks upon the same terms and conditions as set out herein until the Suburb A Property is sold.
8.5That upon the Suburb A Property being sold at auction the parties shall distribute the proceeds of sale in accordance with Order 5 of these Orders.
That if the Husband makes the Payment to the Wife but cannot otherwise refinance the mortgages secured by the Suburb A property into his sole name to enable the Suburb A Property to be transferred into his sole name as required in Order 3, then within seven (7) days of the Husband becoming aware of his inability to refinance he shall inform the Wife in writing and within a further fourteen (14) days the parties shall do all acts and things and sign all documents necessary to list the Suburb A Property for sale and sell it on the terms set out in Orders 5 (excluding Order 5.5), 6, 7 and 8 to 8.5 and the proceeds of sale shall be distributed in the following manner and priority:
9.1in payment of real estate agent's commission and advertising expenses of the sale;
9.2in payment of proper legal costs and disbursements, in respect of and incidental to the sale of the Suburb A Property;
9.3in adjustment of rates, levies and taxes on the Suburb A Property in respect of the sale;
9.4discharge of the Commonwealth loans secured by the Suburb A Property, and
9.5the balance to be paid to the Husband.
That if the Wife cannot refinance the mortgage secured by the Suburb C Property into her sole name to enable the Suburb C Property to be transferred into her sole name as required in Order 2, then within seven (7) days of the Wife becoming aware of her inability to refinance she shall inform the Husband in writing and within a further fourteen (14) days the parties shall do all acts and things and sign all documents necessary to list the Suburb C Property for sale by private treaty with a real estate agent nominated by the Wife and to sell the Suburb C Property for the best price reasonably obtainable and the proceeds of such sale shall be distributed in the following manner and priority:
10.1in payment of real estate agent's commission and advertising expenses of the sale;
10.2in payment of proper legal costs and disbursements, in respect of and incidental to the sale of the Suburb C Property;
10.3in adjustment of rates, levies and taxes on the Suburb C Property in respect of the sale;
10.4discharge of the Commonwealth loan secured by the Suburb C Property, and
10.5the balance to be paid to the Wife.
That if the parties are unable to agree as to the listing price or sale price of the Suburb C Property then the Wife shall appoint a valuer to determine the value of the Suburb C Property and:
11.1in the case of the listing price shall list the Suburb C Property for sale at a price not more than 10% higher than the value as so determined, and
11.2in the case of the sale price shall accept any offer to purchase the Suburb C Property at that price or higher.
That in the event that a valuer is appointed pursuant to Order 11 of these Orders, the parties shall pay the costs of such valuer in equal shares.
That in the event the Suburb C Property is listed by private treaty pursuant to Order 10 of these Orders and contracts have not been exchanged and the cooling off period expired within a period of five (5) calendar months from the date of these Orders, then the parties shall forthwith do all acts and things and sign all documents necessary to cause the Suburb C Property to be listed with a real estate agent nominated by the Wife upon the following terms and conditions:
13.1the auction shall take place within six (6) weeks of the listing for sale of the Suburb C Property by auction;
13.2the reserve price shall be as agreed between the parties and failing agreement as determined by the auctioneer;
13.3both parties shall attend at the auction and in the event that the Suburb C Property is passed in they shall negotiate with the highest bidder and the parties shall accept any offer to purchase the Suburb C Property at no less than 90% of the reserve price, and
13.4that in the event that the Suburb C Property does not sell at auction or does not sell by private treaty within two (2) weeks after the date of the auction then the parties shall relist the Suburb C Property for sale by auction at intervals of no more than six (6) weeks upon the same terms and conditions as set out herein until the Suburb C Property is sold.
13.5That upon the Suburb C Property being sold at auction the parties shall distribute the proceeds of sale in accordance with Order 10 of these Orders.
That in the event the Suburb A Property or Suburb C Property need to be sold pursuant to these Orders, Smythe Wozniak Lawyers shall act on the sale/s.
That the Husband do all acts and things to prepare the Suburb A Property for sale as recommended by the real estate agent appointed by the Wife pursuant to these Orders and the Husband shall do all acts and things to ensure the real estate agent has access to the property in a timely manner and as required by the real estate agent.
That within ninety days (90) days of the date of these Orders the Wife shall provide to the Husband all documents and instruments necessary for the Husband to transfer (including transfer document and other documents that may be required for stamp duty, capital gains tax or other charges and liabilities that need to be completed to effect the transfer in Country E) to the Wife the whole of his right, title and interest in the properties known as:
(a)Property F, Country E;
(b)Property G, Country E, and
(c)Property H, Country E, together being “the Country E Properties”.
For the purposes of Order 16, the transfer of documents for Country E properties includes the Deed of Absolute provided the developer vendor of the property at Property F, Country E, as may be required to ensure the Wife this property is transferred into her sole name.
Within seven (7) days of receipt of the documents/instruments for the transfer of Country E Properties by the Husband, the Husband shall execute the documents/instruments and return them to the Wife.
That within (14) days of the date of settlement of the transfers of the Suburb A and Suburb C properties, or their sale if applicable, the parties shall do all acts and things and sign all documents necessary to close the parties’ joint accounts being:
(a)Commonwealth Bank account …48;
(b)Commonwealth Bank account …29;
(c)ANZ Progress Saver account …74, and
(d)the balance be paid to the Husband.
That from the date of these Orders until transfers of the Suburb A Property and Suburb C Property, or settlement of their sale if applicable, the Husband shall pay as and when they all mortgage repayments, rates and statutory charges and building and contents insurance in respect of the Suburb A Property and Suburb C Property.
That from the date of these Orders the Wife shall have exclusive occupation of the Suburb C Property.
That from the date of these Orders the Husband shall have exclusive occupation of the Suburb A Property.
That the Husband indemnify and keep indemnified the Wife from and against all actions, claims, suits or demands howsoever made by the Commonwealth Bank against the Wife in relation to or arising out of the mortgages secured over the Suburb A Property.
That the parties be and are hereby restrained from redrawing, increasing or causing to be increased the Commonwealth Bank mortgages secured over Suburb A Property and Suburb C Property.
That the Wife shall be responsible for Capital Gains Tax payable that may arise in relation to the Suburb C Property.
That the Husband shall be responsible for Capital Gains Tax payable that may arise in relation to the Suburb A Property.
That the Wife shall be responsible for all taxes, charges, loans and debts relating to Country E Properties as at and from the date of these Orders and shall indemnify and keep indemnified the Husband in relation to same.
That within ninety (90) days of the date of these Orders the Wife shall do all acts and things and sign all documents necessary to transfer to the Husband the Company I shares held in joint names of the parties and for this purpose the Wife shall provide to the Husband the transfer documents signed by her.
That within twenty-eight (28) days of the date of these Orders the parties do all acts and things and sign all documents necessary to close their joint account Company I account number …54 and any other joint accounts relating to their shareholdings and any balance shall be paid to the Husband.
That within fourteen 14 days of the date of these Orders the Husband shall deliver to the Wife at an address nominated by her the following items:
(a)sewing machine J;
(b)sewing machine K;
(c)her sewing table, and
(d)her books.
That subject to these Orders, the Wife shall be and is hereby declared to be the sole and absolute owner at law and in equity as against the Husband of:
(a)any motor vehicle in her possession or name;
(b)all items of furniture and contents in her possession or control;
(c)all savings or monies in her possession, custody or control;
(d)all of her contributions and accumulated entitlements with respect to or arising from her membership of any superannuation fund;
(e)her employment related entitlements including but not limited to annual leave, sick leave and long service leave, and
(f)existing or future interests in her family’s property in Country E.
That subject to these Orders, the Husband shall be and is hereby declared to be the sole and absolute owner at law and in equity as against the Wife of:
(a)his interest in the business known as Company L.
(b)any motor vehicle in his possession or name;
(c)all items of furniture and contents in his possession or control;
(d)all savings or monies in his possession, custody or control;
(e)his contributions and accumulated entitlements with respect to or arising from his membership of any superannuation fund, and
(f)his employment related entitlements including but not limited to annual leave, sick leave and long service leave.
That subject to these Orders, each party retain any liability in their name and indemnify and keep indemnified the other party with respect to such liability.
That each party hereby release the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
That the parties shall do all acts and things necessary and give all consents and execute all documents and writings to give effect to these Orders in the time periods prescribed.
That in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
That pursuant to Section 81 of the Family Law Act 1975 (Cth), these Orders are intended to operate so as to finally determine the financial relationship between the parties to the marriage and to avoid any further proceedings between them.
IT IS NOTED that these Orders are made in the absence of the Respondent and accordingly, the provisions of rule 16.05 of the Federal Circuit Court Rules 2001 apply, such that the Respondent is entitled to make Application to reopen the proceedings and be heard.
In the event that the Respondent should wish to make Application to reopen the proceedings and be heard, then the Respondent shall:
(a)No later than close of business 5 April 2019 make a request in writing, by email, direct to my Associate in accordance with Federal Circuit Court protocols regarding communication with Chambers seeking a relisting of the proceedings; and
Prior to or contemporaneous with the above request file and serve a Response, Affidavit sufficient to comply with Federal Circuit Court Rules 2001 and Notice of Risk/Financial Statement and failing the filing of such material any request for relisting by the Respondent shall not be acted upon.
All outstanding Applications and Responses are dismissed and all issues are removed from the list of matters awaiting hearing.
Upon the expiration of the Appeal period and in the event that no appeal is lodged that all exhibits then be returned to the party who tendered same and that all material produced on subpoena or pursuant to section 69ZW of the Family Law Act 1975 be returned to the person or organisation who produced same or securely destroyed.
NOTATION:
These orders have been amended pursuant to rule 16.05(2)(e) of the Federal Circuit Court Rules to show in order (13.5) (Order 10) in lieu of (Order …)
IT IS NOTED that publication of this judgment under the pseudonym Layton & Layton is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 2671 of 2018
| MS LAYTON |
Applicant
And
| MR LAYTON |
Respondent
REASONS FOR JUDGMENT
These proceedings relate to issues of property adjustment as between Ms Layton, the Applicant and wife to the marriage that founds the Court’s jurisdiction and Mr Layton, the Respondent husband.
The proceedings are listed before the Court today of the Court’s own motion and with the principal purpose of seeking to amend the trial date fixed for the matter.
The husband has been notified of today’s listing in accordance with the notice of address for service that he has previously filed. Notice of today’s listing was forwarded on 4 March. Whilst I appreciate that is not a significant amount of notice, it is, I am satisfied, by reference to the High Court’s decision in Allesch & Maunz(2000) 203 CLR 172, a sufficient and reasonable period in all of the circumstances. That is all the more so in light of the history of the proceedings and the manner in which the hearing date had been allocated.
History of proceedings
This matter was commenced by an Initiating Application filed by the wife on the 14th of June 2018. That application was filed with the Family Court of Australia.
The proceedings came before a Registrar by way of case assessment conference on the 27th of July, 2018. At that time there was no appearance by or on behalf of the husband, notwithstanding that he had been served and an affidavit of service had been filed evidencing that fact. A number of orders and directions were made by the good Registrar, together with certain notations.
It was noted by the registrar that the husband had telephoned the wife’s lawyers on the Wednesday prior to the conference and, during that telephone conversation, the husband had been reminded of the listing.
It is suggested that the husband had informed the wife’s lawyers that he had been the victim of a recent assault and had attended hospital. Thus, there may be some explanation for why he was not present. It would appear that he had also telephoned the wife’s lawyers on the morning of the conference to indicate that he would not be attending.
The directions made included a direction for the husband to file and serve a Response and Financial Statement by 24 August. That did not occur.
The matter came before a Registrar in Chambers on 14 September, 2018. At that time the husband did not appear. He was telephoned by the good Registrar, apparently answered the phone, and claimed to be unaware of the court date. The wife’s solicitors produced correspondence that had been forwarded to the husband by email together with an email from the husband predating that correspondence requesting that all correspondence be sent to him via that method. The proceedings were then adjourned and transferred to this Court.
When the matter came before this Court on 24 October, 2018 there was no appearance by or on behalf of the husband. It was noted that he had failed to appear on the last two occasions, as well as on that occasion, his third non-appearance. The matter was accordingly adjourned for undefended hearing. The wife’s costs were reserved and a direction made for the wife to file and serve material in anticipation of the undefended hearing. A further direction for the husband to file material was not made on the basis that it appeared pointless in light of his previous contumelious disregard of directions.
When the matter came before the Court on 15 January 2019, it proceeded by way of undefended hearing. During the delivery of judgment, the husband appeared with legal representatives. Judgment was ceased and the matter dealt with by way of mention and directions. Ultimately, directions were made listing the matter for a defended hearing on 17 May, 2019. That was done notwithstanding that the husband had failed to file material. It was done in circumstances whereby the wife was entitled to some expedition of her plea and in circumstances where it was suggested that the husband had made a number of withdrawals from mortgages or obtained extensions or advances with respect to other debts of the parties. As a consequence of those issues, an injunction was issued, pursuant to section 114 of the Family Law Act 1975 (Cth), restraining the husband from drawing upon, redrawing from or increasing any mortgage encumbering any of the parcels of real estate owned by these parties.
The husband was also subject to a mandatory injunction requiring that he pay the mortgages by way of principal and interest payments, and attend to payment of insurances, council and water rates and other liabilities and encumbrances with respect to, at least, the property he was occupying. Earlier reserved costs and the wife’s costs thrown away in preparation for the undefended hearing were determined. Preparation has been extensive although at least today will add some value to the advance of the matter.
Costs of $20,149.50 were ordered to be paid within 28 days. The husband has not attended to payment.
Also included within the Orders of 15 January, 2019 was the following Order:
The husband shall, no later than close of business 22 February 2019, advise the wife’s legal representatives in writing of any dispute that he proposes to raise regarding the present legal and equitable interests in property, liabilities or superannuation of the parties and, in the event that such dispute is raised, that the parties must then obtain valuation evidence.
Further, an Order was made that the husband, by 22 February, 2019, provide full and complete disclosure to the wife and file and serve a response and financial statement. The requirement for the husband to file an Affidavit was dispensed with on the basis that trial directions were made, which required the filing of a more substantial document, setting out all evidence relied upon at hearing, and to be filed at a later date.
The husband has failed to comply with any of the above orders and is, thus, is in default by reference to Rule 15.03B of the Federal Circuit Court Rules 2001 (Cth). On that basis alone, the Court would be entitled to proceed to deal with the matter on a final and undefended basis and enter judgment, as it were, for the wife.
That, however, is not the end of the matter. The husband has failed to participate in these proceedings in any regard. He has not done anything required of him by the Rules, basic principles with respect to the conduct of litigation or any order that has been made by this Court or by the Family Court.
I am satisfied that the husband is likely aware of today’s listing. I am satisfied on the basis that the Court has forwarded notification to him in accordance with his notice of address for service.
The wife appears today and is legally represented. The wife’s case is prepared and before the Court.
In all of those circumstances, I am satisfied that, rather than allocating a fresh Final Hearing date, that the matter can and should be determined and concluded on a final and undefended basis.
There is no purpose in listing the matter for a defended trial at a later date when the husband has been given not less than three opportunities to participate in the proceedings and has failed to do so.
The husband will have remedies available to him should he feel aggrieved by such orders, although his preference to date has been to simply ignore the orders or act in disregard of them, such as redrawing on the mortgage, notwithstanding that he was personally present when injunctive relief was granted precluding that action.
To impugn the Orders made today, the husband need not be involved in the expense of an Appeal, and, more importantly, nor need the wife thus be subjected to that further expense. The husband has a right, if it might be so described, pursuant to Rule 16.05 of the Federal Circuit Court Rules 2001, to apply to relist and reopen the proceedings. That is a limitless right that can be exercised at any time. I propose to include, within these Orders. a curtailing of that right, such that the husband must make any such request within 28 days of today’s date and, contemporaneous with or prior to the request, comply with the orders that have already been made, that being payment of costs, provision of disclosure and the filing of a Response and Financial Statement.
In relation to the substance of the proceedings, I have the benefit of an extensive case outline document provided by the wife’s counsel, together with the evidence referred to therein being:
a)The wife’s Affidavit filed on 14 January;
b)An Affidavit of a business valuer;
c)The Affidavit of Service;
d)The Financial Statement of the wife and her Further Amended Initiating Application.
A Minute of Orders sought is set out within the case outline. Those orders do not vary in any significant respect from that which is sought in the amended application served upon the husband, and, in any event, the husband has been served with the case outline document.
As the wife’s evidence is unchallenged, I accept her evidence as more probably correct than not. The husband has had an abundant opportunity to cavil with the wife’s evidence, should he so wish. Indeed, specific directions have been made in that regard. Absent any dispute raised by the husband, there is no basis upon which to disbelieve the wife’s evidence. It is extensive, plausible and internally consistent. Accordingly, findings of fact are made in accordance with the wife’s evidence.
I adopt and incorporate herein the chronology of events set out in the case outline document provided by the wife’s counsel. It conveniently summarises the relevant transactions regarding these proceedings.
Date Event … 1955 Husband born in Australia … 1974 Wife born in Country E July 2000 Wife migrates to Australia Prior to cohabitation Husband operates sole trader business and purchases Vehicle M and Vehicle N June 2001 Parties commence living together November 2001 Wife purchases O Street, Suburb P, with her work colleague Mr Q as joint tenants 2002 Wife and Mr Q purchase B Street, Suburb C as tenants in common in equal shares Early 2002 Parties move into Suburb C property to live … 2002 Birth of daughter, [Y] Mid 2003 Wife commences working in Husband’s business 2003 Parties purchase Vehicle R in Wife’s name 2003-4 Wife purchases quarter share of family property inherited by her father in Country E February 2004 Parties purchased two blocks of land in Location S, Country E 2004 Parties purchase Vehicle T in Country E 2004 Parties purchase Vehicle U 2.8.2005 Husband and Wife purchase D Street, Suburb A; parties move into live in this property 28.7.2005 Parties marry October 2005 Wife transfers her interest in the Suburb C and Suburb P properties to Mr Q 8.12.2007 Husband purchases convertible Vehicle JJ 2009 – 2010 Parties trade shares through Company I 2013 Parties purchased land with farm in Town V, Country E February 2013 Parties purchase Property F, Country E – development off the plan 29.10.2013 Parties purchase Suburb C property (back from) Mr Q 29.10.2013 – 13.8.2017 Suburb C property rented 2014 (TBC) Parties purchase an apartment with a farm in Country E 2014 Parties purchase Vehicle W in Country E 2015 Condominium ready for occupation (final transfer from developer to parties not occurred pending payment of instalments) 2016 Parties sell farm in Country E January 2016 – January 2017 Wife and children live in Country E by agreement with Husband, in Condominium. Husband visits. [Y] returns with Husband to Sydney in August 2016 August 2016 – January 2017 [Y] lives with Husband 30.4.2017 Husband purchases Vehicle X 26.4.2017 – 24.7.2017 Husband redraws $60,000 from CBA loan secured by Suburb A property 13 August 2017 Parties separate. Wife and children move into Suburb C property to live 13 August 2017 to October 2017 Wife does not work in the business 27.8.2017 – 12.12.2017 Husband redraws $273,000 from the parties three joint CBA loans secured by the Suburb A property without Wife’s consent or knowledge 9.9.2017 Husband purchases Vehicle Y 14.9.2017 Husband redraws $245,000 (part of the $273,000 above) from the parties joint CBA accounts secured by the Suburb A property without the wife’s consent or knowledge 14.9.2018 Husband opens new personal CBA account in his sole name 24.9.2017 Husband purchases Vehicle Z 5.10.2017 Husband transfers $15,000 from parties CBA joint savings account to his CBA business account October 2017 – 23 April 2018 Wife resumes working in the Business October 2017 – February 2018 Husband purchased demountable house 10.2.2018 Husband purchases Vehicle AA February 2018 Wife redrew $10,000 from one of the CBA loans secured by Suburb A property 21.2.2018 Husband sells Vehicle Y 27.2.2018 Husband purchases Trailer BB 28.2.2018 Husband tells Wife he is buying another property in Suburb A 1.3.2018 Husband transfers $4,750 from parties CBA joint savings account to his CBA business account 12.4.2018 Husband again tells Wife he is buying another property in Suburb A End April 2018 Husband tells Wife again he is buying another property in Suburb A Mid May 2018 Husband tells Wife again he has bought another property in Suburb A 20.5.2018 Interim ADVO made for protection of Wife from Husband; Husband charged with assault 14.7.2018 Husband purchases Trailer CC 21.6.2018 Wife receives motor vehicle accident compensation payment August 2018 Mr Q passes away. Leaves Wife his Vehicle DD 18.9.2018 Husband purchases Vehicle EE 27.9.2018 Final ADVO for 2 years made for protection of Wife 10.10.2018 Husband purchases Vehicle FF 1.11.2018 [Y] commences to live with Husband November 2018 Wife sells Vehicle R 3.1.2019 Husband tells wife he has made a deposit of $75,000 for the purchase of another property in Suburb A 3.1.2019 Husband tells wife he withdrew his Superannuation GG February 2019 (sic) Parties pay off instalments to developer for purchase of Condominium.
I do not, thus, propose to canvass the evidence in more detail. It is set out fully and completely in the wife’s material and the above chronology.
In turning to the relevant legislative provisions and determination of the proceedings, I must commence, as the High Court has been clear in Stanford & Stanford (2012) 247 CLR 108, by ascertaining the present legal and equitable interests in property of these parties. Those interests are also conveniently set out in a table at paragraph 18, commencing page 3, of the wife’s Affidavit. I incorporate that table herein also.
Assets
Ownership
Description
Value
1
H
B Street, Suburb C
$571,666
2
H
D Street, Suburb A Property
$956,310
3
H
Property F Country E
$657,982
4
H
Property G, Country E
$69,220
5
H
Company I Shares
$1,680
6
H
Property H, Country E
$44,848
7
H
CBA Netbank Saver Account #...29
$57
8
H
CBA Complete Access Account #...48
$ NIL
9
H
ANZ Progress Saver Account #...74
$5
10
H
CBA Direct Investment Account #...27
$3
11
W
Vehicle DD
E$5,300
12
W
CBA Direct Investment account #...03
$4
13
W
ANZ Pensioner Advantage Account #...17
$2,772
14
W
ANZ Progress Saver Account #...68
$26
15
W
Bank HH Account …15
$698
16
W
Bank HH Account …54
$291
17
H
Company L business valuation @30.6.2016 $120,000. See paragraphs 19 – 34 below for basis of estimated current value
E$500,000
18
H
ANZ Progress Saver Account …54
$4
19
H
II Bank Business Access Saver in the Husband’s name t/as Company L Account ending #...15
$2,163
20
H
CBA Business Transaction account in Husband’s name t/as Company L #...29
$162
21
H
CBA Business Transaction account in Husband’s name t/as Company L #...37
$14
22
H
CBA Business Transaction account in Husband’s name t/as Company L #...71
$22,539
23
H
Vehicle AA (purchased 10.2.2018)
$500
24
H
Vehicle JJ (purchased 8.12.2007 $1,000)
$1,000
25
H
Vehicle Z (purchased 24.9.2017)
$14,500
26
H
Vehicle X (purchased 30.4.2017 $1,000)
$1,000
27
H
Vehicle M
$1,000
28
H
Vehicle EE (purchased 18.9.2018)
$4,500
29
H
Motorbike in Country E – unregistered – poor condition
$NIL
30
H
Vehicle T in Country E – unregistered – poor condition
$NIL
31
H
Trailer BB (purchased 27.2.2018 $1,500)
$1,500
32
H
Trailer CC (purchased 14.7.2018)
$300
33
H
Vehicle FF (purchased 10.10.2018)
$2,000
34
H
Balance of unaccounted funds by H from redraw from mortgages secured by Suburb A property post separation (see paragraph 203)
$69,100
35
H
Vehicle Y (purchased 9.9.2017 for $3,000 and sold 21.2.2018 for $1,000)
$3,000
36
H
Demountable/s
Unknown
37
H
Deposit paid to purchase property in KK Street Suburb A
$75,000
Total
$3,009,144
Superannuation
Member
Name of fund
Type of interest
Value
38
H
Superannuation GG (II Bank) @25.9.17
Accumulation
$73,315
Liabilities
39
H
CBA Home Loan ending #...18 (Suburb C)
$341,684
40
H
CBA Home Loan ending #...02 as at 14 April 2018 (secured Suburb A.)
$51,469
41
H
CBA Home Loan ending #...18 (secured Suburb A)
$227,320
42
H
CBA Home Loan ending #...06 as at 14 April 2018 (secured Suburb A)
$79,181
43
H
Taxes, insurance & association dues for Property F
$8,838
44
H
[X]’s school fees – arrears for 2018
$1,200
45
H
II Bank Vertigo credit card account #...69
$5,783
46
H
Land tax for Property G land
$E25,000
47
H
Land tax for Property H
$6,727
48
H
Other liabilities
Unknown
49
W
Centrelink Debt
$780
50
J
Taxes payable for Deed of Absolute transfer for Property F Country E to parties from developer
$14,085
Total
$762,067
What is clear is that the parties own assets with a value of $3,900,144 and have liabilities of $762,067, thus leaving a net pool, if it might be so described, of approximately $2.2 million.
The parties also have superannuation funds, although all in the husband’s name, with a value, as best as the wife can ascertain, of $73,315. A superannuation-splitting order is not sought because the wife seeks to address superannuation in a one-pool approach and/or by reference to section 75(2)(o) of the Family Law Act (supra).
There are two children of the relationship, as would be apparent from the above chronology. One of those children, most unfortunately, has severe difficulties. She suffers depression, anxiety and agoraphobia. She has been involved in self-harm. She requires constant care from the wife, which is provided at a high standard, as well as medical, educational and other support assistances. That is a significant factor by reference to section 75(2) of the Family Law Act (supra).
I must also, as the High Court has been clear in Stanford & Stanford, be satisfied that it is just and equitable for the matter to be addressed and dealt with by the Court and orders for property adjustment made, not as a precondition or threshold but on the basis that the circumstances of the case, as presented to the Court, would warrant and justify this court’s intervention. As was made clear by their Honours in Stanford & Stanford, commencing at paragraph 41 and onwards, that test is readily demonstrated in most circumstances by the separation of the parties, the joint ownership of property and thus the need for the Court to intervene to properly and effectively separate their financial affairs. That applies in this case.
In relation to contribution and the factors which must be addressed by reference to section 79(4) of the Family Law Act (supra), I accept the submissions on behalf of the wife. The parties have had a long relationship together. The husband made an initial contribution beyond that of the wife by introducing the business, which he continues to operate. The business, however, was in a fledgling state and encumbered by significant debt. Accordingly, its value, whilst not specifically known, might be considered significantly less than at present, as the wife has been clear in her evidence she and other employees of the business (who were perhaps friends, in addition to their role as employees), have assisted greatly in building the business, addressing its affairs and restructuring it to be more efficient both in its production and for tax purposes. On that basis, the initial contribution of the husband is not as weighty as it might otherwise appear.
During the marriage, the wife has worked for excessive hours and on a very full-time basis within the business, attending to the company’s affairs, as well as parenting the children of this relationship. The wife continues with the care of those children and thus makes an ongoing contribution.
The wife also leads evidence of significant family violence. Whilst specific reference is not made, within the wife’s case, to a claim pursuant to the principles established by the Full Court in Kennon & Kennon (1997) FLC 92-757, one might well be ascertained as available and it is certainly inferred. The wife would not have raised that evidence had she not desired for the Court to take it into account. It would certainly appear that the violence that the wife has experienced, as well as the children, through their exposure to it, has had significant impact. It has led to or contributed to the wife’s present diagnoses of depression and anxiety and may well have had a similar effect in relation to the young lass as referred to above. The wife’s depression and anxiety was, for a period of years from 2009 to 2012, so significant and debilitating that it precluded her from participation in paid employment. I am satisfied that this would also require some address by reference to section 79(4).
Overall, the wife submits the contributions should be assessed in her favour in a range of 55 to 60 per cent. The wife concedes that some amelioration of that adjustment should occur by reference to the husband’s initial contribution. I am not satisfied, ultimately, that the assessment of contribution is as high as the wife assesses, nor that the ameliorating factors of the husband’s initial contribution should be weighted as heavily as the wife concedes.
However, the wife’s contribution could not be assessed as less than equal. And, indeed, in light of the matters that the wife raises as to the difficult and particularly onerous burden of parenting the children – not intended to be in any way pejorative of these children, but simply reflecting the work that is involved, particularly in meeting [Y]’s needs – her contributions would, in all probability, be assessed and should be assessed as 50 to 55 per cent. That is the same range that the wife ultimately agitates to the court, but perhaps on a different formulation.
In relation to section 75(2), there are a number of factors that favour the wife. There is only one that could favour the husband. The husband is somewhat older than the wife, by some 19 years. He is, accordingly, at a latter point of his working career, although there is nothing to suggest that either his age or health in any way impact upon his ability to work and earn income.
The wife, while somewhat younger, has health issues relating particularly to her emotional and psychological health for which she continues to receive treatment. The wife receives Newstart allowance. That is her only source of income. It is reduced on the basis of the children’s ages. The wife’s employment skills have been a devotion for 16 years to employment within the business that the husband retains and will retain pursuant to the orders that the wife seeks. The wife’s income-earning prospects are low as a consequence.
It is trite to observe that a woman in her 40s, with no relevant work experience beyond that which she has engaged in in the husband’s business and which is unlikely to be available to her within that business or the industry at large, faces real difficulties obtaining employment.
The wife has the full-time care of the two children. Whilst they are both now in their teens, [X] is in year 7 and has quite some years of parenting left. [Y], whilst she is 16, also has many years of parenting left. As observed by Kay J, whilst the legal obligation to provide support, financially or otherwise, to children may end upon children attaining their majority, there remains a moral obligation and thus moral duty to do so. No doubt the wife will fulfil that duty abundantly as she has to date, as [Y] is going to require assistance well into her adult years in light of her mental health issues.
The wife has commitments to support herself and the children. Neither party would appear to have commitments to support anybody else. The wife does not have any significant assistance available to her and she also has the need to support her aged mother, who remains resident in Country E. The wife has no real income. Her standard of living has reduced substantially since the separation of the parties, the husband maintaining control of the majority of assets and doing with them as he wishes, including in contravention of injunctive relief granted by this court.
The wife does not receive any significant child support or child support at all from the husband. That is so notwithstanding his holding onto and retaining control of a number of income-producing assets, including but not limited to the business.
All of those factors and circumstances alone would justify an adjustment in favour of the wife of not less than 5 and certainly as high as the wife seeks of 10 per cent.
In addition, there are the factors relating to the husband’s behaviour prior to and following the granting of injunctive relief. The husband has engaged in behaviours through withdrawal of funds from the party’s assets and re-drawing of funds from the parties’ mortgages that have reduced the equity in those properties available to the parties and which certainly fall within the category of premature distribution referred to by Baker J in Kowaliw & Kowaliw (1981) FLC 91-092.
In those circumstances, a further adjustment would occur by reference to section 75(2)(o), and accordingly, I am satisfied that the overall adjustment of 10 per cent that the wife seeks is made out.
On that basis, the overall distribution of property that the wife seeks and the net effect of the orders that she proposes, a sixty-forty per cent adjustment in her favour is appropriate. I am satisfied those orders can and should be made.
The only issue that arises with regard to the orders that are sought by the wife – and it is no criticism at all of the drafting or framing of the extensive orders proposed – is the need to obtain funds from the husband as is necessary and set out within those orders before the wife can refinance the mortgage encumbering the property at Suburb C that she seeks to retain.
The wife proposes that an order be made that the husband pay a sum certain and that in default that the property in which he resides is sold. Based on past compliance with orders it is unlikely that the husband will make any payment to the wife. But as it is proposed by her and it is the order that the husband has notice of, I propose to make the order in those terms. However, I will vary the balance of the orders to some slight extent so as to make clear that the wife’s obligation to refinance the mortgage encumbering the home that she will retain does not arise until such time as the wife receives funds from the husband so that the husband is not in a position to invoke the default enforcement provision for sale of her property if she does not refinance.
As presently drafted, it would be open to interpretation to suggest that the wife must, within 90 days and irrespective of whether she receives payment, refinance the mortgage. That is not a burden I propose to inflict upon the wife.
However, on that basis, I make orders in accordance with paragraphs 1 and 2 of the orders proposed in the case outline document.
I will make order 3, but I will add in that the obligation arises whether that payment is made by the husband within 90 days of today’s date as order 2 requires or whether it is made following sale of the Suburb A property referred to hereafter. I will also make the balance of the orders sought 4-37.
An order will be made pursuant to Rule 16.05 for the husband to apply to relist, should he wish to do, within 28 days of today’s date and the requirement that contemporaneous with or prior to, he is to file a Response, Financial Statement and Affidavit explaining his non-attendance, failing which the matter won’t be re-listed. Standard orders will otherwise be made removing the matter from the list of cases waiting hearing and an order for return or secure destruction of material produced on subpoena at the expiration of the appeal period in the absence of the appeal having been filed.
I will also amend order 2 as sought so as to provide for the payment by the husband of $438,000 and the amount of costs previously ordered, $20,149.50 together with interest accrued. So that order will capture and enforce the costs order to be paid as well, whether paid voluntarily or from sale.
I certify that the preceding fifty-five (55) paragraphs are a true copy of the reasons for judgment of Judge Harman
Associate:
Date: 3 February 2020
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Procedural Fairness
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Costs
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Remedies
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Jurisdiction
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Natural Justice
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Statutory Construction
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