MABON & NOROS

[2015] FCCA 1697

FEDERAL CIRCUIT COURT OF AUSTRALIA

MABON & NOROS [2015] FCCA 1697

Catchwords:
FAMILY LAW – Property – application for property settlement – where Respondent failed to file any affidavit or Financial Statement – where Respondent failed to attend court on any occasion – orders made ex parte.

Legislation:

Family Law Act 1975 (Cth), ss.90SF, 90SM, 106A
Federal Circuit Court Rules 2001, rr.13.03C, 16.05

Cases cited:
Hickey & Hickey [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143
Stanford v Stanford [2012] HCA 52; (2012) 47 Fam LR 481; FLC 93-518

Applicant: MS MABON

Respondent: MR NOROS

File Number: SYC 352 of 2015

Judgment of: Judge Scarlett

Hearing date: 16 June 2015

Date of Last Submission: 16 June 2015

Delivered at: Sydney

Delivered on: 16 June 2015

REPRESENTATION

Solicitor for the Applicant: Mr Dwyer

Solicitors for the Applicant: Warren McKeon Dickson Lawyers

Respondent: No appearance

ORDERS

1. The Applicant is granted leave to proceed ex parte.

2. On settlement of the sale of the property situate at and known as Property L, in the State of New South Wales being the whole of the land comprised in folio identifier (omitted) (hereinafter referred to as “the Property”) the Respondent must cause the proceeds of sale to be applied in the following manner and order:

   (a)In payment of all costs and expenses of sale including legal costs and disbursements, agent’s commission, valuer’s fees and auction expenses;

   (b)In payment of the amount required to discharge the mortgage in favour of (omitted) Pty Ltd, registered dealing number (omitted) (hereinafter referred to as “the mortgage”) registered on the title of the Property;

   (c)In payment of the amount required to discharge the unregistered mortgage in favour of the Applicant as set out in the Deed of Loan between the parties signed in July 2013; and

   (d)In payment of the balance then remaining to be applied as to whichever of the following proportions provides for the greater sum to be paid to the applicant:

   (i)90% to the Applicant and 10% to the Respondent; OR

   (ii)Payment of all amounts owing to the applicant by the Respondent under the loan agreement between them dated July 2013 including but not limited to the principal sum, interest and enforcement costs and thereafter the balance split equally between the parties.

3. That pending the sale of the Property the Respondent must continue to pay, as they fall due, all regular instalments in respect of the mortgage, council rates, water rates, household insurance in respect of the said property and the Respondent must pay forthwith any arrears in respect of any of the said instalments and indemnify the Applicant in relation to the same.

4. Pending the sale of the Property the Respondent must keep the Property in a good state of repair.

5. Except as otherwise provided by these Orders the Respondent and the Applicant are declared to have the sole right, title and interest in:

   (a)Any chattels, goods, furnishings and other property including motor vehicles which are at the date of these Orders in their respective possession; and

   (b)Any moneys, shares, superannuation and debentures which stand in their sole name respectively at the date of these Orders.

6. In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to these Orders, the Registrar of the Court is appointed in accordance with Section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of such party and do all acts and things necessary to give validity and operation to the deed or instrument.

7. Either party is given liberty to apply on seven (7) days’ notice regarding the implementation of these Orders.

8. Written submissions in support of any application for costs and any affidavits setting out the way in which the costs sought are quantified are to be filed and served within 28 days of the date of these Orders.

   Any written submissions in opposition to any application for costs are to be filed and served within a further period of 14 days.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT SYDNEY

SYC 352 of 2015

MS MABON

Applicant

And

MR NOROS

Respondent

REASONS FOR JUDGMENT

1. This is an application by the de facto wife for orders for settlement of property against her former partner.  The principal asset under consideration is a property known as Property L, New South Wales, where a property is already on the market.  The Applicant has given evidence that, in her belief, the settlement of the property is scheduled to take place on or about 2 July.

2. The history of this matter is that the applicant commenced these proceedings by filing an application on 22 January 2015.  The application was returnable on 20 April 2015.  There was no appearance by the Respondent at that stage, and the matter was put over until 4 May, where, again, the Respondent did not appear.  Orders were made that the Respondent was to file and serve a Financial Statement, an affidavit stating the facts upon which he sought to rely and a Response within 21 days.  He was also directed that he should attend Court on the next occasion, which was 16 June 2015.

3. The Respondent has not filed any documents. He has not attended Court on any occasion. In the circumstances, as I am satisfied as to service, I propose to proceed with the hearing under the provisions of rule 13.03(c) of the Federal Circuit Court Rules.

The proper approach to determination of a property application

1. The principles, by way of the proper approach to the determination of a property application under section 90SM of the Family Law Act 1975 (Cth), is, first of all, to follow the principles set out by the High Court of Australia in Stanford & Stanford[1].  First, the Court must consider the requirements in subsection 79(2) of the Act, in respect of people who are married, and subsection 90SM(3) of the Act, which prescribes that 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.

   [1] [2012] HCA 52; (2012) 47 Fam LR 481; FLC 93-518

2. The High Court held in Stanford at [37] that the Court must first identify the existing legal and equitable interest of the parties and the property. Second, although section 79, or 90SM, in this case, confers a broad power to the Court to make a property settlement order (at [38]):

   It is not a power that is to be exercised according to an unguided judicial discretion.

3. The third principle and perhaps the most important is:

   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 various matters, including financial contributions set out in subsection 79(4).

4. Thus, the decision in Stanford means that the Court must consider the requirements of subsection 90SM(3) before embarking on the four-step process set out by the Full Court of the Family Court of Australia in Hickey & Hickey[2]. 

   [2] [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143

5. In Hickey, the Full Court set out a process of four interrelated steps that must be taken by a Court when determining a property application:

   Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing.  Secondly, the Court should identify and assess the contributions of the parties within the meaning of subsection 79(4) paragraphs (a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties.  Thirdly, the Court should identify and assess the relevant matters (“the other factors”) including the matters referred to in subsection 75(2) so far as they are relevant …  Fourthly, the Court should … resolve what order is just and equitable in all the circumstances of the case.

6. It is neither contradictory nor redundant to consider again whether a proposed order is just and equitable under subsection 90SF(3), because the Court is considering the matter after having undertaken the three previous steps referred to in the Hickey decision.

Just and Equitable

1. First of all, I consider whether it is just and equitable for there to be property settlement proceedings at all. The Court does not have the benefit of any material filed by the Respondent. All of the material before the Court has been filed by the Applicant. From her material, it is apparent that the parties commenced to live together in (omitted) 2008 and finally separated on (omitted) 2014. The Applicant, in fact, gave evidence that the parties commenced a relationship approximately “seven years ago in 2007”.

2. There are no children of the relationship. The Applicant has two children from a previous relationship, both of whom are adults, and the Respondent has a 13 year old daughter from a previous relationship. None of the children lived with the parties during the time that they were together.

3. The parties separated on a final basis on about 16 October 2014 when the Applicant moved out of the former home. The parties are well and truly separated and there is no evidence of any likely resumption of co-habitation. A provisional apprehended domestic violence order was made on 11 October 2014. The matter came before the Court and final orders were made on 20 January 2015. I am satisfied that it is just and equitable in all the circumstances to make orders for the settlement of the parties’ property.

The parties’ assets and liabilities

1. When considering the property and liabilities of the parties, I again comment that the Court only has the benefit of material provided by the applicant.  I have the benefit of the applicant’s calculations of the asset pool as set out in her affidavit of 21 January 2015.  She deposes as to her belief in the asset pool as follows, assets being:

   (i)The property at Property L, with a value of $710,000.

   (ii)The respondent’s company called (omitted) Pty Ltd.  The applicant has no idea of its value.

   (iii)The respondent’s fishing boat with a value of $30,000.

   (iv)The applicant’s Honda (omitted) motor vehicle with an estimated value of $5000.

   (v)The applicant’s (omitted) Bank account with a balance of $277 and

   (vi)The wife’s (omitted) Bank account with a balance of approximately $10.

2. The Respondent’s bank accounts are not known to the Applicant. There are also items of furniture and household contents. As to superannuation, the Applicant does not know the value of the Respondent’s superannuation, but her superannuation has a value of $60,254.

3. The Applicant deposes to two liabilities:

   (i)A loan from her to the Respondent with no value given; and

   (ii)a loan from (omitted) Pty Ltd, which is secured by a mortgage encumbering the property of $375,000.

4. As best as I can do, that then sets out the parties’ assets and liabilities. 

Contributions

1. I look at the contributions of the parties.  The Applicant deposed at paragraph 54 of her affidavit that she estimated that she had spent well in excess of $30,000 towards renovations of the property.  The Applicant’s contribution appears to have been significantly hampered by domestic violence inflicted upon her by her former partner.

2. She also deposed to her concern about the Respondent’s use of illicit drugs and deposes as to how, in about October 2013, she went to the bathroom and found a singlet of the Respondent’s within which was wrapped a little green bag with needles and a spoon.  She said that was the beginning of the end of the relationship.  The Applicant deposed that the Respondent’s drug use over the next couple of months got steadily worse and that he would often hallucinate and become paranoid.

3. The Applicant deposed that from late 2013 through well into 2014 over a period of about nine months, due to the Respondent’s drug use, very little work got done on the house and, again, the police became involved, and the Applicant informed the Respondent that, if he continued to use the garage of the property to use drugs, then she would no longer come and look for him, so that, if he overdosed, she would not find him until the next morning.

4. The Applicant deposed as to an incident of violence by the Respondent accompanied by abusive language on about 10 October 2014.  I am satisfied that the contributions of the applicant during the course of the relationship were significantly greater than those of the respondent. 

5. The Court is also required to consider the effect of any proposed property order upon the earning capacity of either party.  I am not of the view that the orders which I have proposed to make will have any effect upon either party’s earning capacity. 

Relevant matters under subsection 90SF(3)

1. I look at the relevant matters contained in subsection 90SF(3) and note that the Applicant was born on (omitted) 1952.  She is currently in good health.  The Respondent is significantly younger.  He was born on (omitted) 1974.  He is 40 years of age about to turn 41. 

2. The Applicant is retired.  The Respondent is working but his work is significantly affected by his drug use.  In my view these circumstances allow the Court to place a significant amount of weight by way of an adjustment in favour of the Applicant under the provisions of subsection 90SF(3) of the act. 

Just and Equitable

1. Again, the Court must consider whether the proposed orders are just and equitable.  The Applicant proposes that she receives 90 per cent of the value of the proceeds of sale and that the parties otherwise keep the items that are in their name or possession.  She is certainly aware of the Respondent having a utility vehicle worth approximately $1000 and has superannuation of a value of which she is not aware. 

2. I am satisfied that the proposed orders are just and equitable.  The Applicant will be entitled to receive 90 per cent of the proceeds of the sale after payment out of all amounts owing in respect of the property.  Parties will otherwise retain the personal items which they have in their own possession. 

Costs

1. In my view this is a matter where the Court should consider an order for costs. The Respondent’s approach to these proceedings has been singularly unhelpful. One of the matters that the Court should consider under the provisions of section 117 of the Family Law Act 1975 is the conduct of the parties to the proceedings generally.  The Applicant has done what is required of her at all times by means of preparing and filing documents and attending Court with her solicitor whenever required.  The Respondent has not done so and this has hampered the operation of the proceedings. 

2. In my view the Court will give favourable consideration to the question of an order for costs but clearly the court should see a submission from the Applicant and an affidavit setting out the amount of costs which are sought and the way that that amount is quantified.  The Respondent will be given an opportunity to file a submission in reply should he choose to do so. 

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Associate:

Date:  22 June 2015