LEWIN & KIERNAN
[2017] FCCA 1391
•23 June 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LEWIN & KIERNAN | [2017] FCCA 1391 |
| Catchwords: FAMILY LAW – Property – Undefended Final Hearing - applicant sought an order adjusting parties’ interests significantly in her favour – whether just and equitable. |
| Legislation: Family Law Act 1975, ss.75, 79 |
| Cases cited: Bevan & Bevan [2014] FamCAFC 19 Black & Kellner (1992) FLC 92 - 287 Chapman & Chapman [2014] FamCAFC 91 Russell & Russell (1999) FLC 92 – 877 Scott & Danton [2014] FamCAFC 203 Stanford v Stanford (2012) 247 CLR 108 Teal & Teal [2010] FamCAFC 120 |
| Applicant: | MS LEWIN |
| Respondent: | MR KIERNAN |
| File Number: | PAC 213 of 2016 |
| Judgment of: | Judge Obradovic |
| Hearing date: | 26 May 2017 |
| Date of Last Submission: | 26 May 2017 |
| Delivered at: | Parramatta |
| Delivered on: | 23 June 2017 |
REPRESENTATION
| Counsel for the Applicant: | Ms Mahony |
| Solicitors for the Applicant: | Jordan’s Law Practice |
| Appearing for the Respondent: | No appearance |
ORDERS
The child X born (omitted) 2015 shall live with the mother.
The child shall spend time with the Respondent as agreed between the parties.
The Applicant shall within 42 days do all acts and things necessary to discharge the mortgage encumbering the former matrimonial home at Property C in the State of New South Wales (Folio Identifier (omitted) of Deposited Plan (omitted)) (“property”) and the Applicant shall indemnify and keep indemnified the Respondent with respect to such mortgage.
Simultaneously with order (3) the Respondent shall do all acts and things necessary to transfer to the Applicant his right, title and interest in the property.
The Respondent shall indemnify and keep indemnified the Applicant in respect of personal loans to (omitted) Bank and (omitted) Credit.
The Respondent shall retain the Subaru (omitted) motor vehicle currently in his possession.
The Applicant shall retain all of the household furniture and contents contained within the former matrimonial home.
The Respondent shall retain the sole right, title and interest in any superannuation fund in his name.
Pursuant to section 90MT(1)(a) of the Family Law Act1975 the base amount of $55,000 is allocated to the Respondent out of the interest held by the Applicant in (omitted) Super.
Whenever the Trustee of (omitted) Super makes a splittable payment out of the interest of the Applicant, the Trustee shall pay the Respondent the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations2001, and make a corresponding reduction in the entitlement the Applicant would have had but for these Orders.
Order 9 above has effect from the operative date.
The operative date is twenty-eight days from the date of these Orders.
Order 9 binds the Trustee of (omitted) Super.
Each party shall be solely responsible for all liabilities held in their name and shall indemnify the other with respect to any such liability.
In the event either the Applicant or Respondent refuses or neglects to execute any deed or instrument necessary to give effect to these Orders, then a Registrar of the Federal Circuit Court of Australia shall be authorised pursuant to section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the said deed or instrument provided that such Registrar is satisfied upon Affidavit evidence of the party lodging the application that the other party is in default of these Orders.
Remove all outstanding issues from the list of cases awaiting finalisation.
IT IS NOTED that publication of this judgment under the pseudonym Lewin & Kiernan is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC213 of 2016
| MR LEWIN |
Applicant
And
| MS KIERNAN |
Respondent
REASONS FOR JUDGMENT
Introduction
These are final parenting and property proceedings.
The matter proceeded on an undefended basis as against the Respondent, who despite a number of procedural orders, had failed to appear at final hearing or file any documents as directed.
The Court is satisfied, having regard to the evidence upon which the Applicant relied and the matters outlined in the Outline of Case Document, that the Respondent was aware of the proceedings and that the matter was listed for final hearing but chose not to participate.
Relevant Factual Findings
The Applicant was born on (omitted) 1978 in (country omitted).
The Respondent was born on (omitted) 1981.
In (omitted) 2003 the parties became engaged to marry, and on (omitted) 2005 the parties were married.
In March 2005 the parties purchased, as joint tenants, the former matrimonial home at Property C for $315,000 (“the home”). At the time, the Applicant had savings of over $10,000 which were used as a deposit for the purchase, with the balance being borrowed by way of a mortgage from the (omitted) Bank.
Following the purchase of the home, the Applicant made all of the mortgage repayments from her income.
On (omitted) 2005, the only child of the parties, X was born. After the child’s birth, the Applicant took one month parental leave and then returned to full-time employment. The child commenced attending day-care.
In 2009 the Respondent took out two personal loans, one with (omitted) for $14,000 and one with (omitted) Credit for $9,000, both of which he retained for his sole use.
In or around early 2010, the Respondent took out a personal loan from the (omitted) Bank for $20,000 as he wanted to purchase a car, improve it and then sell it. The loan was in the parties’ joint names. The Respondent purchased a Subaru (omitted) with the funds, and spent money in improving the car. However, he did not make any of the loan repayments, the Applicant did, the total of which was close to $30,000.
The Respondent did not work regularly during the parties’ relationship. Indeed, he was only in paid employment for no more than 18 months during that relationship. His income during this period was approximately $40,000 gross per annum.
Even while he was employed, the Respondent did not contribute financially towards household expenses and relied on the Applicant to support him. He did not assist with any housework or with looking after the parties’ child. He was often absent from the home. The Respondent spent money on gambling, going out and towards the end of the relationship, on drugs.
The Applicant worked not only during the parties’ relationship, but also prior to it and continues to work post the relationship. All of the Applicant’s income was applied towards various household expenses, such as rent and later the mortgage, groceries, household bills, child-care expenses and later school expenses for the child. The Applicant purchased all household contents and furniture.
In 2007, the parties were in financial difficulties. The Respondent was not in paid employment and the mortgage was in arrears. The Applicant applied for an early release of her superannuation benefits with (omitted) Superannuation Fund through APRA on the grounds of financial hardship.
In 2011, the parties were in arrears for council and water rates attached to the home. The Respondent was not contributing towards these payments. (omitted) Council ultimately obtained judgment and the Applicant entered into an instalment arrangement to pay off that judgment debt. She was solely responsible for meeting those payments.
The Applicant, throughout the parties’ relationship, has been primarily, if not solely, responsible for the maintenance and upkeep of the former matrimonial home. She was responsible for the gardening, lawn mowing, cleaning the yard as well as arranging various repairs and maintenance to be carried out to the property, which she paid for from her income.
In relation to the care of the child, the Applicant was the person who took on the majority, if not all, of the child-rearing responsibilities. The Respondent had very little, if any, involvement with the hands-on care of the child. After the Applicant’s parental leave, the child attended day-care notwithstanding the fact that the Respondent was not in paid employment for much of the child’s pre-school life. At times, the Applicant worked on weekends and when she did so, she arranged and paid for private out of hours child care.
In early 2012, the Respondent undertook a number of medical tests which reflected that the Respondent had been using the drug “Ice” and marijuana.
On 12 September 2012, the parties separated with the Respondent vacating the former matrimonial home. Since leaving, the Respondent has not provided any financial support for the child nor has he made any contributions towards the payment of the mortgage or any other household expenses such as council and water rates, or building insurance.
Since separation, the Applicant been solely responsible for reducing the balance of the mortgage from approximately $273,000 to $235,000. The Applicant seeks an order that she retain the former matrimonial home. Her evidence contains a conditional loan approval for $432,550.
From a young age, the child was diagnosed with Attention Deficit Disorder for which he is prescribed regular medication. The child is currently enrolled in Year 7 at (omitted) High School. At times when the Applicant is not able to be at home soon after the child finishes school, she arranges and pays for private out of hours child care to assist the child.
Since separation, the child has only spent limited time with the Respondent, despite the Applicant encouraging the relationship. Due to the Applicant’s concerns for the child’s welfare arising out of the Respondent’s lifestyle (including the taking of illicit substances) the Applicant has only permitted time between the Respondent and child in her presence. The Respondent at times indicates to the child that he will be visiting or spending time with him, but then does not follow through. At these times, the child becomes visibly upset, and enquires of the Applicant why the Respondent does not want to spend time with him.
The Applicant is solely responsible for making all decisions relating to the child, including his schooling, religious upbringing and medical needs.
On 16 March 2016 the parties divorced.
On 27 June 2016 the Applicant commenced these proceedings. The Respondent has not filed any documents, despite a number of orders directing him to do so. The matter ultimately proceeded on an undefended basis on 26 May 2017.
Parenting
The child, who is 12 years old, is well cared for and looked after by the Applicant, who has been his primary carer since birth. The relationship between the child and the Applicant is positive and loving.
The child’s relationship with the Respondent is fractured, at least to the extent that the Respondent has not availed himself of the opportunities which have been available to him since separation of spending time with and communicating with the child. He is an inconsistent and irregular part of the child’s life.
The Applicant has indicated a willingness and ability to foster and encourage a relationship between the child and the Respondent, and will continue to do so.
There are no allegations of family violence or other significant risks to the children.
The Respondent has not participated in these proceedings. He has failed to engage. The Court is completely unaware of what, if any orders, the Respondent might consider to be in the children’s best interest. Despite the Respondent’s refusal to engage in the proceedings, the Applicant still submits that it is in the child’s best interest to spend time with the Respondent as agreed to between the parties. Such application shows not only significant insight into the child’s best interests by the Applicant but also a responsible attitude to parenthood and to the child.
The Applicant has actively supported the child’s physical and emotional needs after separation. She is responsible for meeting his day to day needs, even without the financial support of the Respondent who has not paid any child support.
Lastly, it should be said that the Court finds that the Respondent’s failure to engage in these proceedings demonstrates that it is unlikely that further proceedings between the parties will be instituted, particularly noting that the orders as sought by the Applicant do not propose any significant change from the status quo regarding the parenting arrangements.
For all of these reasons, the Court finds that the orders as set out at the forefront of these Reasons are in the child’s best interest.
Property
At hearing the pool of assets was as follows:
Assets:
Ownership
Item
Value
Joint
Property C
$700,000
Wife
Corolla Sedan.
$1,000
Wife
Household Contents
$3,000
Joint
Subaru (omitted)
$15,000
Wife
(omitted) Superannuation
$76,356
Husband
(omitted) Super
$12,383
Husband
Super Safe Guard
$806
TOTAL
$807,945
Liabilities:
Ownership
Item
Value
Joint
Mortgage for Property C
$235,000
Wife
(omitted) Credit Card
$12,000
TOTAL
$247,000
NET VALUE:
$560,945
The overall approach to the determination of an application for property adjustment orders pursuant to s.79 Family Law Act1975 (Cth) was set out by the High Court in Stanford v Stanford,[1] where their Honours stated:
[1] [2012] HCA 52; (2012) 247 CLR 108
[37] … first, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property… the question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
…
[40]… whether making a property settlement order is ‘just and equitable’ is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4) …
Such approach was subsequently considered by the Full Court of the Family Court in Bevan & Bevan[2], Chapman & Chapman[3] and Scott & Danton[4].
[2] [2014] FamCAFC 19
[3] [2014] FamCAFC 91
[4] [2014] FamCAFC 203
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 common use of property by the parties.
In this matter, the parties’ major asset is the former matrimonial home, where the Applicant and the child of the parties have lived since separation. That property remains jointly owned by the parties, notwithstanding the significant sole contributions made by the Applicant towards that property. In all of the circumstances it is just and equitable to make an order adjusting the property interests of the parties.
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.
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.[5]
[5] see generally Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120
The just and equitable requirement is “one permeating the entire process”[6].
[6] Bevan supra at [86]
The relevant facts have been referred to earlier in these Reasons.
Neither party had any significant assets at the commencement of their relationship.
During the period of the parties’ relationship, the Applicant was employed and contributed her entire earnings towards mortgage repayments and meeting all other household expenses. It is the Applicant who made the majority, if not all, of the financial contributions within the meaning of s.79(4)(a). The Applicant also made significant non-financial contributions within the meaning of s.79(4)(b).
It was the Applicant who was the primary carer for the child during the relationship and also post separation. During the relationship, the Applicant was responsible for most of the day to day tasks associated with the care of the child.
The Respondent made small, if not negligible, contributions both of a financial and non-financial nature within the meaning of s.79(4). The extent of those contributions is apparent only from the evidence of the Applicant due to the Respondent’s non-engagement in these proceedings.
The Applicant is in good health. She remains in full-time employment.
The Applicant will pursuant to these orders, remain the primary carer of the parties’ child who is 12 years old. The child will remain spending time with the Respondent in accordance with any agreement reached between the parties. It is therefore the Applicant who will have the primary burden of supporting the child, particularly noting that the Respondent is currently not paying child support.
The Applicant has been living with the child in the former matrimonial home, where she wishes to remain. She has the capacity to refinance the mortgage currently encumbering the home.
The Court finds that the overall contributions by the Applicant were significantly greater than those by the Respondent, and assesses them at 75% in the Applicant’s favour. Furthermore, the Court finds that a further adjustment of 10% pursuant to s.75(2) factors is warranted on all of the evidence.
The authorities have long recognised that it is the duty of a party involved in property proceedings in this jurisdiction to make full and frank disclosure of their financial affairs.[7]
[7] Black & Kellner (1992) FLC 92-287
In Weir & Weir[8] the Full Court held that where there is clear evidence of non-disclosure, the Court should not be unduly cautious about making orders in favour of the other party:
…failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the Court is unable to identify the property of the parties, to properly assess contributions or to properly assess s75(2) factors.”
[8] (1993) FLC 92-338 at [45]
The orders which the Applicant presses, and which the Court makes, will see the Respondent receiving not only his superannuation but also a large portion of the Applicant’s pursuant to the splitting order which is made. It also sees the Respondent retaining the motor vehicle which is in his possession and has some value. The orders see the Applicant and the child remaining in the home where the child has lived all of his life, and which the Applicant has been solely responsible for post separation.
For all of these reasons, the Court is not overly cautious about making orders in favour of the Applicant. The result in all the circumstances is appropriate and just and equitable. Orders will thus be made accordingly as set out at the forefront of these Reasons for Judgment.
I certify that the preceding fifty-five (55) paragraphs are a true copy of the reasons for judgment of Judge Obradovic
Date: 23 June 2017
Key Legal Topics
Areas of Law
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Family Law
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Property Law
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Statutory Interpretation
Legal Concepts
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Jurisdiction
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Remedies
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Statutory Construction
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Procedural Fairness
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