Lennon & Sanil
[2021] FedCFamC1F 157
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Lennon & Sanil [2021] FedCFamC1F 157
File number(s): DNC 378 of 2014 Judgment of: REES J Date of judgment: 26 October 2021 Catchwords: FAMILY LAW – PROPERTY – Application for property adjustment – Where the parties were in a de facto relationship for less than two years – Where the Court isn’t satisfied the respondent made contributions regarded “substantial” in accordance with section 90SB(c)(i) of the Family Law Act 1975 (Cth) – Substantive application dismissed.
FAMILY LAW – COSTS – Application dismissed.
Legislation: Family Law Act 1975 (Cth) ss 90SB, 90SM, 117(2A) Division: Division 1 First Instance Number of paragraphs: 69 Date of hearing: 25 October 2021 Place: Sydney Applicant: Self-Represented Respondent: Self-Represented ORDERS
DNC 378 of 2014 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR SANIL
Applicant
AND: MS LENNON
Respondent
ORDER MADE BY:
REES J
DATE OF ORDER:
26 OCTOBER 2021
THE COURT ORDERS:
1.That the application for costs of the proceedings determined on 16 August 2019 is dismissed.
2.That the application for adjustment of property interests filed on 19 August 2014 and amended on 10 September 2015 is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Lennon & Sanil has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Rees J:
Mr Sanil ("the applicant") and Ms Lennon ("the respondent") lived in a de facto relationship between 13 October 2010 and 15 August 2012.
These proceedings were instituted by the respondent seeking an order for property settlement in relation to a de facto relationship which she asserted existed between January 2006 and April 2013. The applicant sought a declaration that no de facto relationship had existed.
That controversy ("the threshold issue") was heard and determined by reasons delivered and orders made on 16 August 2019.
The respondent unsuccessfully appealed against those orders.
There are now two further Applications in a Proceeding to be determined, both filed by the applicant.
By an Application in a Proceeding filed 13 September 2019, the applicant seeks an order that the respondent pay his costs of the determination of the threshold issue on an indemnity basis or, in the alternate, on a party and party basis.
By an Application in a Proceeding filed 4 October 2019, the applicant seeks orders in the following terms:
1.That in accordance with the Orders made by His Honour Justice McClelland on 16 August 2019 in respect of the threshold hearing, the Court declare that although the parties were in a de facto relationship as defined by Section 90RD of the Family Law Act 1975 they did not meet the requirements of s90SB.
2. Declare that by virtue of Order 1, the Court does not have jurisdiction to make an Order pursuant to Section 90SL or 90SM of the Family Law Act 1975.
3. That pursuant to Rule 10.12 of the Family Law Rules 2004 the Court determine that it does not have jurisdiction to make a property adjustment and the proceedings commenced by Initiating Application filed 19 August 2014 by [the respondent] and amended by Amended Initiating Application filed 10 September 2015 be dismissed.
4. That in accordance with Orders made 16 August 2019, the Respondent be determined to be out of time to commence proceedings pursuant to section 44(5)(a)(i) of the Family Law Act.
5. That in the alternative, pursuant to section 45A of the Family Law Act 1975 the Amended Initiating Application filed 10 September 2015 be determined to have no reasonable prospect of success and be summarily dismissed.
6. That the Respondent pay the Applicant's costs of and incidental to the Application commenced by Initiating Application filed 19 August 2014 on an indemnity basis.
7. The Respondent pay the Applicant’s costs of and incidental to this Application and the Application.
The matter was listed before the Chief Justice on 1 June 2020 and the following orders were made:
1.The Applications in a [Proceeding] (“the Applications”) filed by the Applicant on 4 October 2019 and 13 September 2019 be listed for hearing, with an estimated duration of 1 day in total, after 12 August 2020.
2.Within 21 days of these orders, the Applicant provide updated disclosure of itemised professional costs and proof of payments and bank statements.
3.Within 21 days of these orders, the Applicant file and serve any affidavit material in support of the Applications.
4.The Respondent to file any affidavit material in response to those applications on or by 4pm 12 August 2020.
Pursuant to those orders, the applicant filed an affidavit sworn on 22 June 2020 and the respondent filed a response and an affidavit sworn by her on 15 August 2020.
That application filed 4 October 2019, now before me, raises the following issues for determination:
·Does the application satisfy the jurisdictional threshold specified in the Family Law Act 1975 (Cth) s 90SB ("the Act")?
·Was the Initiating Application filed within the time specified by s 44(5) of the Act?
·Summary dismissal
·Costs
The respondent opposes all applications.
Neither party has filed a recent Financial Statement.
COSTS OF THE PROCEEDINGS DETERMINED ON 16 AUGUST 2019
This application falls to be determined in accordance with the provisions of s 117(2A) of the Act which are set out below:
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
a. the financial circumstances of each of the parties to the proceedings;
b.whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
c.the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
d.whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
e.whether any party to the proceedings has been wholly unsuccessful in the proceedings;
f.whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
g. such other matters as the court considers relevant.
The applicant, in his affidavit, deposes to owning net assets of some $4.7 million.
The respondent, in her affidavit deposes to equity in a property in City W of $100,000 and equity in a property in Sydney of $400,000. She has a small amount of savings. The respondent is employed as a solicitor but there is no evidence of her earnings from employment.
The respondent was ordered to pay the applicant costs in the sum of $15,000 upon the dismissal of her appeal and that sum has been paid.
The applicant's financial circumstances are superior to those of the respondent.
Neither party is in receipt of legal aid.
The applicant asserts that aspects of the respondent's conduct in the proceedings justify the making of an order for costs. He relies on her having filed material late and upon adverse findings made by the trial judge about her demeanour and credit.
I do not accept that the fact that the respondent may have failed to file an amended application within the time she was directed to do so and that she failed to file a Response to the Application in a Proceeding until shortly before the commencement of the hearing of the threshold issue constitutes conduct of the nature envisaged by s 117(2A)(c) of the Act.
Neither do I accept that the fact that the trial judge did not accept aspects of the respondent's evidence and made adverse findings about her credit are matters within the ambit of the sub section.
Neither party was either wholly successful or solely unsuccessful. The applicant did not succeed in securing a declaration that there was no de facto relationship. The trial judge found that a relationship had existed but for a much shorter time that the respondent asserted.
It is not asserted that the proceedings were necessitated by the failure of either party to comply with a previous order.
The applicant relies on offers of settlement made by him.
On 11 August 2015, he offered to settle on the basis that the proceedings be dismissed and each party pay his or her own costs.
On 27 November 2018, the applicant offered to settle on the basis that he pay her $32,500, that offer remaining open for 14 days.
On 27 November 2018, the respondent made an offer to settle for $168,000.
Neither offer was accepted.
The offers to which I have referred were offers to settle the substantive proceedings, rather than offers to settle the threshold issue.
There is no evidence that the applicant offered to concede that the parties had ever lived together in a de facto relationship, which was the issue to be determined.
Having regard to all of those matters, I am not satisfied that any order for costs is just and equitable.
DOES THE EVIDENCE SATISFY THE REQUIREMENTS OF SECTION 90SB OF THE ACT?
Section 90SB of the Act provides:
A court may make an order under section 90SE, 90SG or 90SM, or a declaration under section 90SL, in relation to a de facto relationship only if the court is satisfied:
(a)that the period, or the total of the periods, of the de facto relationship is at least 2 years; or
(b) that there is a child of the de facto relationship; or
(c) that:
(i)the party to the de facto relationship who applies for the order or declaration made substantial contributions of a kind mentioned in paragraph 90SM(4)(a), (b) or (c); and
(ii)a failure to make the order or declaration would result in serious injustice to the applicant; or
(d)that the relationship is or was registered under a prescribed law of a State or Territory.
It is necessary that the applicant demonstrate both contributions of a kind referred to in s 90SM(4)(a), (b) and (c) and that a failure to make an order would result in a serious injustice.
In the present case, the de facto relationship lasted for a period less than two years. There was no child of the relationship and the relationship was not registered pursuant to any state or territory law.
The respondent asserts substantial contributions.
Those contributions must be of the type referred to in s 90SM(4)(a), (b) or (c) of the Act, the provisions set out below:
(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.
The respondent conceded that there was no evidence in her affidavit about her asserted significant contributions. However, she relied upon her Financial Questionnaire, dated 28 July 2015, and specifically to the pages contained in a tender bundle at page 82 and pages 84 to 89 inclusive.
Those were the assertions which the respondent maintained before McClelland J who was obliged to consider them in the context of his determining whether a de facto relationship existed and, if so, for what period.
In the Financial Questionnaire, the respondent records that, at the date she asserts co-habitation commenced, that is January 2006, she owned a half interest in a unit at C Street, Suburb B ("the C Street unit") with a net value of $160,000, a car and savings of $22,000. The applicant was the sole registered proprietor of the C street unit. The respondent had no legal interest.
That document does not assist in demonstrating the respondent's financial contribution in October 2010 when the de facto relationship commenced.
At page 84 of the tender bundle, the respondent asserts that she contributed "almost 100% of her employment income, workers compensation payments, other compensation and savings to the de facto relationship" but she provides no evidence to found that assertion. The evidence does not establish what the respondent's income was at the relevant time or what other funds she may have had available to her.
Further, the respondent asserts that all the income she derived from properties at J Street, Suburb A; C Street, Suburb B; S Street, Suburb T; D Street, Suburb B; two properties in L Street, Suburb M and O Street, Suburb P were paid to service the outgoings on those properties.
In order to understand that assertion, it is necessary to know how each of those properties was purchased. That information is found in the reasons for judgment of McClelland J dated 16 August 2019.
J Street, Suburb A was purchased in the name of the respondent in late 2008 using her own funds. At [180] McClelland J found:
180. Comparatively, when it came to purchasing the J Street property,
[the respondent] was at pains to emphasise that the property was purchased in her name rather than with any intention on the part of the parties for
[the applicant] to have an interest in that property. [The applicant] acknowledges that to be the case. There is, with respect, a fundamental inconsistency in [the respondent’s] contention that it was intended by the parties that she would have an interest in properties purchased by
[the applicant] on his own behalf or through his business or superannuation fund yet, when it came to the purchase of a property in her name, it was intended by the parties that she alone would have an interest in that property.
C Street, Suburb B was purchased by the applicant in October 2005.
D Street, Suburb B was purchased by the applicant in December 2005.
L Street, Suburb M was purchased by the applicant through a corporate vehicle in 2007.
The property at BC Street, Suburb M is not referred to in the judgment of McClelland J. However, the respondent deposed that the applicant sold that property in November 2018. I infer that the applicant was the registered proprietor.
O Street, Suburb P was purchased by the applicant's self-managed superannuation fund in November 2007.
1S Street, Suburb T was purchased by the applicant's self-managed superannuation fund in May 2010.
2 S Street, Suburb T was purchased by the applicant in 2011.
Thus, of the properties to which the respondent refers at page 84, only the J Street property was her property. All the others were owned by the applicant either legally or beneficially. At [178] McClelland J found:
178.Properties acquired by [the applicant] during the period between the period 2006 until 2013 were purchased in his name or in the name of K Pty Ltd or Sanil Superannuation Fund. Funds used to purchase those properties were his own funds or borrowings in his name or in the name of that company or that superannuation fund.
…
181.I find that it was never the intention of either party that the other would have a proprietary or equitable interest in any property that they purchased in their own name or, in the case of [the applicant], through his business and superannuation company.
At page 85, the respondent claims that gifts which she received totalling some $44,500 were used towards the purchase of the J Street, Suburb A property. That property was her property and is still owned by her.
Further she asserts that she conducted the conveyancing in relation to three of those properties and that she looked for and found properties.
At page 86 the respondent makes further assertions about her efforts in locating properties and further asserts that she provided valuable legal advice and work for which she was not paid.
Further details of the asserted legal work are found at page 87.
At page 88 the respondent asserts contributions by way of legal advice and work to the applicant's corporate entity.
As to the assertions in relation to legal services provided to the respondent, McClelland J found:
195.[The applicant] acknowledges that [the respondent] provided some legal services in respect to the acquisition of some of the properties that he acquired but that he paid her for those services. For reasons which I have previously stated I prefer the evidence of [the applicant] in that respect, which is that while [the respondent] provided services in respect to the purchase of properties acquired by [the applicant] and the subsequent leasing of those properties, those services were provided on a commercial basis.
She further asserts contributions by way of home-making which were disputed before McClelland J.
At page 89 of the Financial Questionnaire, the respondent asserts that she continued to contribute income from the properties referred to in paragraph 42 after separation. Since those properties, with the exception of the J Street property, were the applicant's properties, those assertions cannot be accepted.
In the reasons for judgment of McClelland J, his Honour made findings about the "Ownership, use and acquisition" of the parties' property which are set out in full below:
192.As previously noted, [the respondent] claimed that prior to the settlement of the C Street, Suburb B property, the parties agreed the property would become their family home in which they would raise any future children of the relationship. [The respondent] states she has an “equitable interest” in this property. For reasons that I have previously set out I reject that to be the case.
193.Similarly, [the respondent], in her Financial Questionnaire, claims 50 per cent of the rental income from various properties and she also claims that
50 per cent of the properties acquired during the relationship belong to her. There has been no evidence presented in this case that satisfies me that this is the case.
194.[The respondent] contended that she made the following contributions towards [the applicant’s] purchase of properties in his name or in the name of his business or superannuation company:
•that she assisted in "doing the paperwork and scouting for them"
•"doing checks" presumably in respect to undertaking searches associated with the conveyancing
•"helping to get the tenants, doing the tenancy agreements"
•obtaining "upgrades to the buildings and drafting strata laws to get changes to improve the properties"
•[The respondent] also said that she went with [the applicant] to purchase different things for the properties including in one instance a fireplace.
With the possible exception of her contentions in relation to home-making, the respondent's assertions of contribution have been dealt with and rejected by McClelland J.
None of the findings to which I have referred was the subject of specific complaint in the appeal. In so far as the findings might have been generally included in a ground of appeal, none of the grounds was successful.
Even if it were accepted that the respondent provided the sole home-making contribution for the 22 month period of the de facto relationship, that is not a contribution which could be regarded as "substantial" within the terms of s 90SB(c)(i).
Therefore, I find that the respondent has not demonstrated that she made substantial contributions of the relevant kind and thus the Court cannot entertain the respondent's substantive application which will be dismissed.
It is not necessary to deal with the respondent's submission that, because she suffers ill health, she would suffer a serious injustice if her application were dismissed, because she must demonstrate that both requirements of s 90SB(c) are satisfied.
WAS THE INITIATING APPLICATION FILED WITHIN TIME?
Similarly, because the application will be dismissed, it is not necessary to determine whether it was filed within time.
CONCLUSION
The respondent has not demonstrated that she made significant contributions of the type referred to in s 90SM(4)(a) to (c) of the Act.
The respondent has not satisfied the criteria permitting her to bring an application, notwithstanding that the relationship lasted for a period of less than two years and her substantive application will be dismissed.
I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees. Associate:
Dated: 26 October 2021
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