Low and Low

[2019] FamCA 740

FAMILY COURT OF AUSTRALIA

LOW & LOW [2019] FamCA 740

FAMILY LAW – PROPERTY – Failure by Respondent to engage in the proceedings – Respondent resides in Country F and has been accorded procedural fairness – Adjustment of assets – Consideration of contributions and future needs – Wife’s application for child maintenance.

Family Law Act 1975 (Cth) ss 75(2), 79, 66F, 66G, 66J, 66K.

Stanford v Stanford [2012] HCA 52
In the Marriage of Hickey [2003] FamCA 395

APPLICANT: Ms Low

RESPONDENT: Mr Low

FILE NUMBER: MLC 1458 of 2019

DATE DELIVERED: 18 October 2019

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Williams J

HEARING DATE: 7 October 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Mansfield, Solicitor

SOLICITOR FOR THE APPLICANT: Taussig Cherrie Fildes

THE RESPONDENT: No Appearance

Orders

1. Within 42 days of the date of these orders, the parties do all acts and things and sign all documents necessary to transfer the property situate at B Street, Suburb C, Australian Capital Territory being the land more particularly described in Certificate of Title Volume … Folio … (“the Suburb C property”) to the applicant’s sole name, at the applicant’s cost.

2. Contemporaneously with the transfer of the Suburb C property to the applicant, the applicant refinance the ANZ mortgage (dealing no …98) secured over the Suburb C property into her sole name.

3. The respondent retain his interests in:

   (a)       E Nominees Pty Ltd;

   (b)       E Pty Ltd;

   (c)       K Pty Ltd;

   (d)       L Pty Ltd;

   (e)       D Pty Ltd;

   (f)       M Pty Ltd;

   (g)       E2 Pty Ltd;

   (h)       E3 Pty Ltd;

   (i)        E4 Pty Ltd;

   (collectively “the Entities”)

   and indemnify the applicant and keep the applicant indemnified for any past, present or future liabilities arising from the Entities.

4. Save as otherwise provided in these orders, the applicant retain:

   (a)       her bank accounts;

   (b)       all furniture and personal possessions in her possession; and

   (c)       her superannuation entitlements. 

5. Save as otherwise provided in these orders:

   (a)       any joint tenancy is hereby expressly severed; and

   (b)       any bank accounts in joint names be closed and the funds in such account be paid to the applicant.

6. Pursuant to section 106A(1) of the Act, the Court appoint an officer of the Court to execute all such documents in the name of the respondent, to give validity and operation to these orders, including but not limited to:

   (a)       Transfer of Land for the Suburb C property, causing that property to be transferred to the applicant’s sole name;

   (b)       Australia and New Zealand Banking Group Limited Discharge Authority for the mortgage (dealing no …) secured against the Suburb C property; and

   (c)       Duties Form for the Suburb C property, causing that property to be transferred to the applicant’s sole name.

7. All extant applications are dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Low & Low has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 1458 of 2019

Ms Low

Applicant

And

Mr Low

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. This is an application for:

   a)Property adjustment pursuant to s.79 of the Family Law Act 1975 (“the Act”); and

   b)Child maintenance orders for the two children of the marriage.

BACKGROUND

Relationship History

1. The applicant wife is aged 37 years. The respondent husband is aged 38 years.  The parties commenced cohabitation in January 2002 and married in 2009.  There are two children of the marriage, X born in 2011 and Y born in 2014.

Issues in dispute

1. The following issues were in dispute in the proceedings:

   a)Whether an order for property settlement should be made in accordance with the wife’s proposals, as the husband has not engaged in the proceeding;

   b)Should an order be made for child maintenance, notwithstanding there is no evidence of the husband’s financial circumstances.

Synopsis

1. In relation to property, I have determined to make orders substantially in accordance with the proposal of the wife, except that that the husband should retain his superannuation entitlements.

2. In relation to child maintenance, I have determined that it is not appropriate to make orders in the absence of evidence of the husband’s financial circumstances.

3. The reasons for my determination follow.

Background

1. The parties commenced cohabitation in January 2002 in Canberra.

2. In 2005, they purchased a property situated at B Street, Suburb C, Australian Capital Territory.

3. In 2006, the parties purchased another investment property in Canberra which was tenanted until it was sold in 2010.  The proceeds of sale of approximately $100,000 were applied towards relocation costs and starting the husband’s new business in Melbourne.

4. In 2009, the parties married prior to relocating to Melbourne in 2010.

5. Upon relocating to Melbourne the husband established a business, D Pty Ltd, which was a start-up business marketing small businesses.  The wife continued to work in the public service, having transferred her re-employment from Canberra. 

6. In 2011, the parties’ son, X was born.

7. In 2013, the husband purchased an interest in the E Business in Melbourne.  The wife asserts that the husband did not discuss with her the purchase of the E Business, prior to purchase.

8. On 1 January 2016, the parties separated under one roof, prior to physically separating on 1 May 2017.

9. In May 2017, the husband purchased motor vehicle 1, which was driven by the wife, but registered in the name of D Pty Ltd.  The vehicle has subsequently been repossessed by the financier.

10. In early 2018 the parties divorced.

11. The wife asserts that in 2018 there were two newspaper articles relating to the husband’s interest in the E Business, which infer that it was a successful business.  A copy of the articles are annexure Ms L-2 to the wife’s affidavit sworn 20 June 2019.  The wife does however acknowledge that the husband advised her in January 2019 that the E Business was running at a loss.

12. In October 2018, the husband relocated to Country F.

13. In December 2018, the husband ceased making payments to the wife for the benefit of the children.  He had previously deposited $2400 per month for the benefit of the children.

14. On 11 February 2019, the husband deposited $2000 into the wife’s account, which was the last occasion on which the husband provide financial support for the children.

15. The husband has spent limited time with the children since 2017.  In 2018 he spent two nights with the children and in 2019 he spent six nights with the children. 

Procedural History

1. As the wife seeks orders in the absence of the husband, I will address the procedural history.

2. On 13 February 2019, the wife commenced proceedings in this court.  The husband was served with the wife’s application on 14 February 2019.

3. On 9 and 10 March 2019, the husband acknowledged receipt of the wife’s application via text message.[1]

   [1] Paragraph 15 of the wife's affidavit sworn 20 June 2019.

4. On 8 April 2019, the wife’s solicitors wrote to the husband advising that a Case Assessment Conference had been listed for 10 April 2019.

5. On 10 April 2019 at 6:57 AM, the husband emailed the wife’s solicitors and provided a mobile telephone number to call during the Case Assessment Conference.

6. On the day of the Case Assessment Conference at 11:23 AM the wife forwarded a WhatsApp message to the husband advising that the court was unable to connect to his telephone.  At 11:32 AM the husband responded and advised “I’m about to take off, I can’t use my phone anymore, I waited sorry”.

7. On 30 April 2019, the wife’s solicitors wrote to the court seeking that the orders from the Case Assessment Conference be uploaded to the court’s portal.  The husband was included in the email.  The husband responded to the wife’s solicitors advising that he be contacted on his telephone number.

8. On 2 May 2019, the wife’s solicitors forwarded a letter to the husband enclosing the orders made 10 April 2019, including a link to the relevant forms the husband would be required to file in response.

9. On 15 May 2019, when the matter was listed before a registrar the husband did not attend the hearing.

10. On 5 June 2019, the wife’s solicitor wrote to the husband providing him with a copy of the orders made 15 May 2019 and a copy of the wife’s solicitors letter of 2 May 2019.

11. On 20 June 2019, the husband was served via email with a copy of the wife’s proposed trial material, however he failed to file any Response.

12. On 11 July 2019, the husband was served with the wife’s Amended Initiating Application and on 15 July 2019 he was served with a copy of the minute of orders sought by the wife.

13. On 16 July 2019, the matter was listed before me, where it was adjourned to 15 August 2019, with leave to the wife to proceed on an undefended basis, if the husband failed to appear.

14. On 2 October 2019, the wife’s solicitors filed an affidavit of service, deposing to the husband being served, via email, the following:

    a)On 20 June 2019 an affidavit of the wife and Financial Statement both filed 20 June 2019;

    b)On 11 July 2019 an Amended Initiating Application filed 11 July 2019;

    c)On 15 July 2019 a copy of proposed minute of orders sought;

    d)On 29 July 2019 a copy of the orders made 16 July 2019;

    e)On 31 July 2019 a copy of the Further Amended Initiating Application filed 31 July 2019 and Financial Statement of the wife filed 31 July 2019.

15. The husband has not filed any Response, Affidavit or Financial Statement.

16. At the commencement of the hearing before me on 16 July 2019 and on 7 October 2019, the husband was called.  There was no response to the call.

17. I am of the view that the husband:

    i)Has been served with all relevant documents filed by the wife;

    ii)Been advised of proposed hearing dates;

    iii)Failed to comply with procedural orders for filing of documents;

    iv)Had ample opportunity to participate in the proceeding.

18. I am therefore satisfied that the husband has been accorded procedural fairness, the wife’s application for leave to proceed on an undefended basis should be granted and I intend to make orders accordingly.

The proposals of the parties

The wife’s proposal

1. The orders which the wife sought from the court are set out in the minute of proposed orders dated 7 October 2019.

2. They are in summary as follows:

   a)The B Street property be transferred to the wife, at her expense;

   b)The wife refinance the mortgage encumbering the property, contemporaneously with the transfer to her;

   c)The husband retain his interest in his various businesses and indemnify the wife in relation to any liabilities past, present, or future arising from the businesses;

   d)The husband’s superannuation entitlements of $23,396 be paid to the wife;

   e)The wife retain her bank accounts, furniture, personal possessions and superannuation entitlements;

   f)The husband pay to the wife pursuant to s.66G of the Family Law Act 1975 (Cth)(“the Act”), the sum of $300 per week per child, maintenance until 1 January 2020, and thereafter $265 per week per child to be indexed annually;

   g)An order pursuant to s.106A of the Act.

Documents relied upon by the wife:

1. The applicant relied upon the following documents:

   a)Further Amended Initiating Application filed 31 July 2019;

   b)Affidavit of the wife filed 20 June 2019;

   c)Financial Statement of the wife filed 31 July 2019;

   d)Affidavit of service of Ms G filed 2 October 2019. 

The husband’s proposal

1. The husband did not participate in proceedings and did not file any documents.

Evidence

1. The standard of proof in this case is the balance of probabilities (s.140 Evidence Act 1995 (Cth)).

2. Section 140 of the Evidence Act 1995 (Cth) provides:

   (1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.

   (2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:

   (a) the nature of the cause of action or defence; and

   (b) the nature of the subject- matter of the proceeding; and

   (c) the gravity of the matters alleged.

RELEVANT LEGISLATION

1. Property proceedings between parties to the marriage are governed by the provisions of s.79 of the Family Law Act 1975.

2. Section 79(1) of the Act provides that the court may make such orders as it considers appropriate altering the interests of the parties in the property.

3. Section 79(2) provides as follows:

   The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

4. If the Court is satisfied that it is just and equitable to make an order altering the interests of the parties in property, s.79(4) of the Act sets out the matters which the court must take into account when considering what order (if any) should be made.

5. That section provides as follows:

   Section 79(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:

   Section 79(4)(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or 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 marriage or either of them; and

   Section 79(4)(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or 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 marriage or either of them; and

   Section 79(4)(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and

   Section 79(4)(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and

   Section 79(4)(e) the matters referred to in subsection 75(2) so far as they are relevant; and

   Section 79(4)(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and

   Section 79(4)(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.

6. Prior to the decision of the High Court in Stanford v Stanford [2012] HCA 52, the preferred approach to determine property matters was set out by the Full Court in the matter of In the Marriage of Hickey [2003] FamCA 395.

7. The approach, as set out in Hickey (supra) may be summarised as follows. Firstly, the court should make findings as to the identity and value of the property pool. Secondly, the court should determine the contributions of the parties both direct and indirect, including financial and non-financial contributions and then determine the contribution based entitlements of each of the parties; as a percentage of the value of the property of the parties. Thirdly, the court should determine whether any further adjustment should be made to the contribution based entitlements of the parties, after giving consideration to the relevant matters referred to in s.75(2) of the Act. Fourthly, the court should consider the effect of those findings and decide what order for division of property is just and equitable.

8. In Stanford (supra) the High Court noted that s.79(1) enables the court to make such orders as it considers appropriate. However, prior to making any orders for the adjustment of parties interests in property, the court must first determine whether it is just and equitable to make any property orders, or to alter the parties interests in property.

9. The High Court stated in Stanford at [37]:

   [37] First, it is necessary to begin consideration of whether it is just and equitable to make 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.

10. The High Court further stated at [42] that in most cases:

    [42] In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).

11. In summary, in the majority of matters the decision as to whether or not it is just and equitable for the Court to make property orders is resolved by the breakdown of the marital relationship and  the mutual applications of the parties to the court for orders altering their respective property interests.

Is it just and equitable to alter the parties’ property interests?

1. In this matter the parties have separated and the wife has made an application to the court seeking orders altering their respective property interests.

2. The parties are no longer living in a marital relationship, and as stated at paragraph [42] of Stanford (supra), there will not “thereafter be the common use of property by the husband and the wife”.

3. I am satisfied that it is just and equitable to alter the parties’ property interests.

4. Having satisfied myself that it is just and equitable to make an order altering the interests of the parties in the property, the approach and considerations I must make are as follows:

   a)Attribute value to the assets comprising the property pool;

   b)Identify and give weight to the various contributions of each of the parties as set out in s.79(4) (a) – (c) and make an assessment as to the entitlements of the parties based on their respective contribution;

   c)Identify the relevant considerations as set out in s.79(4)(d) – (g), including the matters set out in s.75(2) so far as they are relevant, and then decide whether any further adjustment is appropriate;

   d)Consider whether the proposed orders are equitable.

THE PARTIES’ EXISTING INTERESTS IN PROPERTY

1. The wife’s Outline of Case document filed 3 October 2019 lists the assets and liabilities she asserts comprise the asset pool.

2. Those assets and liabilities are as follows:

Asset	Valuation
B Street, Suburb C, ACT	$370,000
Wife’s savings (CBA)	$1,911
Husband savings	Not known
Proceeds of sale of motor vehicle 1 retained by husband	Not known
33% interest in H Pty Ltd (330 of 1000 shares)	$135,000
Sub – total	$506,911
Liabilities
Mortgage encumbering the B Street property	$272,000
Sub–total	$272,000
Nett assets	$234,911
Superannuation
Wife	$214,641
Husband	$23,396
Nett Assets including superannuation	$472,948

1. In relation to the valuation of the B Street property, the wife annexed to her Financial Statement dated 31 July 2019, a copy appraisal of the property dated 6 February 2019 and a further email from one of the agents who signed the initial appraisal, to the effect that the property, as at 31 July 2019, would be worth within the range of $360,000 - $380,000.

2. In relation to the value of the husband’s interest in H Pty Ltd, the wife’s solicitor submitted that amount had been adopted by the parties in late 2018, as an appropriate valuation of the shareholding.

3. During the course of the proceedings the wife issued six subpoenae seeking financial information pertaining to the husband, with limited degrees of success. She issued a subpoena to husband’s accountant J Pty Ltd, seeking financial information in relation to the husband’s business interests.

4. That ultimately resulted in an order made by consent, whereby the wife agreed to pay the costs of $4,000 claimed by the J Pty Ltd, pursuant to an Application in a Case filed 16 July 2019.

5. As a result of the husband’s complete lack of engagement in the proceedings, it is almost impossible for the wife to attribute an accurate valuation of the shareholding.

6. Although there is no independent valuation evidence about the husband’s business interests, in my view, the wife has made more than reasonable efforts to obtain financial information from the husband about his various interests, despite a distinct lack of disclosure by him. However, because the husband’s business interest have not been able to be valued, I do not intend to make an order splitting the husband’s very modest superannuation entitlements, as sought by the wife.

CONTRIBUTIONS

Initial contributions and contributions during the marriage

1. According to the wife:

   a)Neither party had assets of any significant value as at the date of cohabitation;

   b)The assets and resources of the parties were accumulated throughout the marriage as a result of the joint endeavours of the parties;

   c)Neither party received any gifts or inheritances during the marriage;

   d)The wife worked throughout the marriage except for periods of maternity leave. Since 2006, the wife has been employed in the public service;

   e)The husband was employed throughout the marriage;

   f)The wife was the primary parent and homemaker during the marriage.

Contributions post-separation

1. The wife asserts that she has made greater contribution since separation including:

   a)Since May 2017, wife has been the sole carer for the children.  In 2018 the children spent two nights with the husband, and in 2019 the children spent six nights with the husband.

   b)In September 2017, the parties agreed that the husband would make monthly payments for the benefit of the children of $2,400, which he did until 1 December 2018;

   c)Since 1 December 2018, the husband has paid $2,000 for the benefit of the children;

   d)The husband has not paid any other child support or made any contribution towards the children’s upkeep;

   e)The wife has maintained the Suburb C property without any assistance from the husband.

2. After considering the evidence as to contributions, I consider the wife has made some contributions in excess of those of the husband, and in particular post-separation care of the children, and that contributions should be determined as 52% in favour of the wife and 48% in favour of the husband.

The s.79 (4)(d),(e),(f) and (g) and s.75(2) factors

Section 79(4)(d): the effect of any proposed order upon the earning capacity of either party to the marriage.

1. The orders which are proposed to make will not have any effect on the earning capacity of either parent.

Section 79(4)(e): the matters referred to in s 75(2) so far as they are relevant

1. The wife is aged 37 and enjoys good health.  The husband is aged 38, and to the wife’s knowledge also enjoys good health.

2. The wife works part-time hours five days a week and earns $91,700 per annum together with superannuation.  The wife is not aware of the husband’s current income.

3. The wife is the primary carer of the children and since separation they have spent little time with the husband.

4. The wife is solely responsible for the costs of the children and the husband has not contributed to their financial needs since 1 December 2018.

5. The wife’s costs have increased as a result of the husband’s refusal to participate in the proceedings, including the necessity to issue subpoenae, the costs incurred as a result of the subpoenae to the husband’s accountant and her legal costs which have been increased as a result of multiple attendances when the husband has failed to appear at court.

Section 79(4)(f) and (g) and the Wife’s Application for child maintenance

1. There are no orders pertaining to the children of the marriage and they remain in the wife’s care.

2. There is no child support assessment in place. As the husband resides in Japan, which is a non-reciprocating jurisdiction in terms of the child support legislative framework, the wife is precluded from making any such application.

3. The wife can make an application for child maintenance pursuant to s.66F(1)(a) of the Act. Indeed her application seeks child maintenance orders pursuant to s.66G of the Act.

4. The wife’s evidence in relation to the expenses she incurs to the benefit of the children are set out in parts N and O of her Financial Statement filed 31 July 2019.

5. Whilst the wife addresses the needs of the children pursuant to s.66J of the Act, she is unable to address, through no fault of her own, the matters referred to in s.66K, insofar as the husband’s capacity to make payments is concerned.

6. That is a fundamental matter in determining whether or not an order for child maintenance should be made. Absent the relevant evidence it is not possible to make any just and equitable decision about the extent of the husband’s purported contributions. There were no submissions made in that regard on behalf of the wife.

7. I am satisfied that in the context of this case having regard to all relevant s.75(2) factors, s.79(4)(g) considerations, the husband’s failure to make full and frank disclosure, and the matters referred to in s.66K(5), there should be an adjustment in favour of the wife of 15%, which includes an appropriate adjustment for the wife’s future maintenance of the children absent an order for child maintenance.

Adjustment of interests

1. As a result of the findings made relating to contributions and future needs, I’m satisfied it is just and equitable to make orders adjusting the property between the parties, so that the wife is entitled to 67% of the asset pool and the husband should receive 33%.

2. The adjustment of property which I propose to make must be just and equitable both in terms of percentage adjustment, in real terms and the orders implementing the adjustment must also be just and equitable.

3. On the wife’s asset pool, which I have accepted, the division I have determined will result in the wife receiving assets of $337,948 and the husband receiving assets of $135,000, together with any other assets which he may have which have not been disclosed during the course of the proceeding. The reality may be that the husband’s business interests may be worth substantially more or substantially less than the valuation attributed to them. There is no way to ascertain the true value in the absence of the husband’s engagement in the proceeding.

4. Even if the valuation attributed to the husband’s business interests is not accurate, and is less than asserted by the wife, I am satisfied that the proposed division is just and equitable because of :

   a)The very limited asset pool;

   b)The young ages of the two children;

   c)The wife’s future responsibility for the support of the children;

   d)The difficulties the wife has and may well continue to encounter to obtain any meaningful financial support of the children from the father.

5. Accepting the wife’s asset pool, the division of assets I have determined is summarised as follows:

Wife’s Assets

B Street, Suburb C, ACT	$370,000
Wife’s savings	$1,911
Wife’s superannuation	$214,641
Sub total	$586,552
Less Liabilities
Mortgage on B Street	$272,000
Nett Assets	$316,525

Husband’s Assets

Interest in H Pty Ltd (330 of 1000 shares)	$135,000
Husband’s superannuation	$23,396
Nett Assets	$158,396

1. I intend to make orders as sought by the wife and will make a further order that a copy of the orders and these reasons be served on the husband via email and the wife advise the husband via WhatsApp of the orders and reasons.

I certify that the preceding ninety (90) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Williams delivered on 18 October 2019.

Associate:

Date:  18 October 2019