Marriner and Marriner
[2013] FCCA 1765
•7 November 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MARRINER & MARRINER | [2013] FCCA 1765 |
| Catchwords: FAMILY LAW – Property settlement – marital relationship – undefended proceeding – costs. |
| Legislation: Family Law Act 1975, ss.72(1), 75(2), 79(2), 79(4), 117 Federal Circuit Court Rules 2001, r.16.05(2)(a) |
| Cases cited: Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116 Stanford v Stanford (2012) 247 CLR 108; (2012) 293 ALR 70; (2012) 47 Fam LR 481; [2012] HCA 52 |
| Applicant: | MR MARRINER |
| Respondent: | MS MARRINER |
| File Number: | MLC 5688 of 2012 |
| Judgment of: | Judge Riley |
| Hearing date: | 17 October 2013 |
| Date of Last Submission: | 17 October 2013 |
| Delivered at: | Melbourne |
| Delivered on: | 7 November 2013 |
REPRESENTATION
| Advocate for the Applicant: | Ms Holmes |
| Solicitors for the Applicant: | Macpherson + Kelley |
| Counsel for the Respondent: | The respondent did not appear |
| Solicitors for the Respondent: | The respondent was not represented |
ORDERS
The husband pay to the wife $113,925.50 (“the payment”) within 60 days of these orders being made (“the date”).
Contemporaneously with the payment:
(a)the wife vacate the property situate at Property W, (“Property W”) and transfer to the husband, at his expense, her interest in Property W; and
(b)the husband discharge the mortgage registered over Property W and indemnify the wife against any payments or liability pursuant to the mortgage and all rates, taxes and outgoings of or with respect to the property of whatever nature and kind.
If the husband cannot obtain finance or fails to make the payment by the date:
a)the husband and wife sign all documents and do all things necessary to place Property W on the market for sale; and
b)Property W be sold as soon as possible on such terms and conditions as may be agreed between the parties and failing agreement as determined by the President of the Victorian Division of the Australian Property Institute or his/her nominee (“the sale”) and the proceeds of the sale be applied:
i)firstly to pay all costs and commissions associated with the sale;
ii)secondly to discharge the mortgage and any other encumbrance affecting Property W;
iii)thirdly to pay to the husband $7,832.50 (being $8,560 less $727.50); and
iv)fourthly the balance to be divided equally between the husband and the wife.
The husband and wife each retain their respective superannuation entitlements.
The wife be responsible for the (omitted) Bank investment loan liability and indemnify the husband in relation to same and the parties do all things to transfer that loan into the wife’s sole name.
The husband and the wife be otherwise solely entitled to the exclusion of the other to all property including choses in action in the possession or name of that party as at this date.
The husband and wife be otherwise solely responsible for all liabilities in his or her sole name, including credit card liabilities.
Each party have liberty to apply in relation to the implementation of these orders.
NOTATION
Pursuant to rule 16.05(2)(a) of the Federal Circuit Court Rules 2001, the court may vary or set aside a judgment or order made in the absence of a party.
IT IS NOTED that publication of this judgment under the pseudonym Marriner & Marriner is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 5688 of 2012
| MR MARRINER |
Applicant
And
| MS MARRINER |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for property adjustment under s.79 of the Family Law Act 1975.
The parties were married on (omitted) 2003 and separated on 7 February 2010. They have one child who is now eight years old. He lives in a shared care arrangement pursuant to consent orders made in 2010.
The husband filed an initiating application on 26 June 2012. It was due to come before the court on 6 August 2012. However it was adjourned by consent in chambers until 3 September 2012.
On 3 September 2012, a solicitor represented the husband and the wife appeared in person. She had not at that stage filed any responding material. Orders were made by consent that provided for:
a)the wife to file and serve responding material within 30 days;
b)certain valuations to be undertaken;
c)the costs of the valuations to be paid by the husband and equalised between the parties at final settlement;
d)a conciliation conference on 29 November 2012;
e)until further order, the wife to have sole use and occupation of the former matrimonial home;
f)the wife to pay all outgoings on the property as they fell due;
g)no order as to costs; and
h)final hearing on 24 April 2013.
The wife did not file responding material within 30 days or at all. On 27 November 2012, orders were made by consent in chambers adjourning the conciliation conference to 18 March 2013.
The wife failed to attend the conciliation conference on 18 March 2013. The registrar ordered the wife to pay the husband’s costs thrown away of the conciliation conference fixed in the sum of $1,750.
The wife did not appear on 24 April 2013 when the matter was listed for final hearing. The husband sought and orders were made:
a)
requiring the husband to file and serve an amended application and any affidavits on which he intended to rely by 4pm on
15 May 2013;
b)requiring the wife to file responding material by 4pm on 29 May 2013;
c)reserving the costs of 24 April 2013; and
d)adjourning the matter to 7 June 2013 for mention.
There was also a notation that the husband would seek leave to proceed on an undefended basis on 7 June 2013 if the wife failed to file material within the time ordered or failed to pay the costs ordered on 18 March 2013.
On 7 June 2013, the husband appeared by a solicitor and the wife appeared in person. She told court that she was afraid to file material because the husband would be violent towards her. She said that she had been admitted to a psychiatric institution in the past.
Upon the undertaking of the husband’s solicitor not to disclose anything in the wife’s documents to the husband without further order of the court, the wife was ordered to file a response, any affidavit in support and financial statement within 14 days. The husband’s costs of that day were reserved. The matter was adjourned to 26 June 2013 for interim hearing.
On 26 June 2013, the husband was represented by a solicitor and the wife appeared in person. She had not filed any material. It was ordered that the matter be listed for final hearing on a date to be advised. It was also ordered that, if the wife did file any material, the matter would be listed for urgent hearing to determine whether that material should be disclosed to the husband. The husband’s costs of 26 June 2013 were reserved.
On 16 August 2013, a notice of listing was sent to both parties specifying the final hearing date as 17 October 2013.
Shortly before that date, the husband’s solicitor provided an outline of submissions to both the court and the wife at her email address. That outline included the precise final orders sought by the husband. The proposed orders in the outline differed from the orders sought in the husband’s most recent amended application in that the outline provided details of the dates of hearings for which the husband sought costs and included an order for the sale of the former matrimonial home in the event that the husband was not able to pay the required sum to the wife within 60 days.
On 17 October 2013, the husband appeared by a solicitor who sought leave to withdraw. The wife did not appear. The hearing proceeded in the absence of the wife. The husband’s solicitor remained on the record and provided submissions and conducted a brief oral examination of the husband. The hearing concluded at 11:21am at which time judgment was reserved.
Later on 17 October 2013, a facsimile was sent to the court from (omitted) Hospital. It was apparently signed by a doctor and said that the wife was unable to attend court that morning because the wife had been admitted to the hospital and was currently an inpatient. The fax header indicates that the facsimile was sent at 5:13pm on 17 October 2013. It was delivered to my chambers the following day.
Since that time, there has been no communication with the court by the wife. There is not, in fact, an application for an adjournment before the court. There is no evidence before the court in an admissible form that the wife was in fact in hospital on 17 October 2013.
In these circumstances, I consider that it is appropriate to deal with the matter on a final basis. Of course, under rule 16.05(2)(a) of the Federal Circuit Court Rules 2001, an order made in the absence of a party may be set aside. Among other things, the wife would need to show with appropriate evidence that she had a good reason for not attending court on 17 October 2013 and that she had reasonable prospects of achieving a better outcome if the orders were set aside.
The legislation
Section 79 of the Family Law Act1975 (“the Act”) gives the court power to alter the interests of the parties to a marriage in the property of the parties to that marriage. Sub-section 79(2) of the Act provides 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.
Section 79(4) of the Act sets out the matters the court must take into account when considering what orders, if any, should be made for the alteration of the interests of the parties in property. Those matters are:
(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
(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
(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
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(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.
The matters to be taken into account under s.75(2) of the Act are as follows:
(a)the age and state of health of each of the parties; and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party’s role as a parent; and
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i)a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) 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; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
The approach to applications under s.79
In Stanford v Stanford (2012) 247 CLR 108; (2012) 87 ALRJ 74; (2012) FLC 93-518; (2012) 47 Fam LR 481; (2012) 293 ALR 70; [2012] HCA 52, the High Court explained the proper approach to an application under s.79 of the Act as follows:
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.
38.Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed23 that a power24[1] to make such order with respect to property and costs “as [the judge] thinks fit”, in any question between husband and wife as to the title to or possession of property, is a power which “rests upon the law and not upon judicial discretion”. …
39.Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is "just and equitable" to make the order is not to be answered by assuming that the parties' rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that “[c]ommunity of ownership arising from marriage has no place in the common law”.26[2] Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be “decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses”.27 The question presented by s 79 is whether those rights and interests should be altered.
40.Third, 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). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”.28[3] To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
23 (1956) 98 CLR 228 at 231–2; [1956] HCA 71 (Wirth).
26 Hepworth v Hepworth (1963) 110 CLR 309 at 317; [1964] ALR 259 at 264; [1963] HCA 49
28 Watson at CLR 257; ALR 560; Fam LR 11,305.
…
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). (emphases added)
In Stanford, the critical fact was that the parties had not separated. The wife had suffered a stroke and had moved into a nursing home, but the parties’ marriage was intact. It was the wife’s case guardian, a daughter from an earlier marriage, who sought the alteration of property interests.
The wife died while the judgment of the Full Court of the Family Court was reserved. Consequently, when the Full Court of the Family Court came to re-exercise the discretion, the wife had no future needs, but the husband did. The High Court noted at [47] that the courts below had not adequately considered the consequences for the husband of the orders made, namely, that his home would have to be sold.
Against that backdrop, the High Court emphasised that the just and equitable requirement of s.79(2) of the Act is not necessarily satisfied merely by a consideration of the contributions of the parties as described in s.79(4) of the Act. However, in the usual case before this court, where the parties have separated, the High Court acknowledged at [42] that the just and equitable requirement would be “readily satisfied”.
Following Stanford, it is no longer appropriate to think of “contribution based entitlements” or the “adjustment” based on future factors. Rather, the court is required to take into account all the relevant matters and then determine what order, if any, is just and equitable. It is also no longer appropriate to think of a pool of assets.[4]
[4] Parkinson, Patrick Family Property Law and the Three Fundamental Propositions in Stanford v Stanford (2013) 3 Fam L Rev 80 at 88.
Additionally, and significantly for this case, the High Court emphasised that marriage, at common law, does not create a community of ownership: [39]. The rights a person might have in his or her partner’s property and income arise from the Act, notably s.79(4) and s.72(1) respectively.
In relation to income, s.72(1) of the Act provides that:
(1) A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
In other words, there is not an absolute right to share equally in the income of a partner. Rather, such a right only arises where a person is not able to adequately support himself or herself and the other party is reasonably able to support the first-mentioned party. Consequently, there is no obligation to contribute all of one’s earnings to the matrimonial endeavour. However, if one party to a marriage spends a substantial part of his or her income on extraneous pursuits, it will obviously have an effect on that person’s contributions to the parties’ assets.
Stanford requires the following matters to be determined in applications brought under s.79 of the Act:
a)whether the parties have separated;
b)the assets and liabilities of each party;
c)the contributions of each party;
d)the future needs of each party;
e)bearing in mind all of the foregoing matters, whether it is just and equitable to make any orders altering the interests of the parties in their property; and
f)what orders, if any, are just and equitable in all the circumstances of the case.
Stanford does not require these matters to be addressed in any particular order. In most cases, it would seem rational to consider them in the order set out above. It does not seem to me to possible to determine whether it is just and equitable to make an order altering the parties’ interests in their property without the other matters mentioned above having been previously determined. That seems to be clear from the opening words of s.79(4) of the Act, which are that:
In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account [the various matters set out in s.79(4)] … .
The approach outlined above is consistent with the decision of the Full Court of the Family Court in Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116. I note that in that case, the Full Court said at [89]:
In our view, it will be less likely that the separate issues arising under s 79(2) and s79(4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until they have first determined that it would be just and equitable to make an order.
I also note that, in Bevan, at [79] the Full Court said, in relation to addbacks:
We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them”, and thus is not amendable to alteration under s79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s79(4) and in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.
Whether the parties have separated
The husband’s evidence was not challenged and except where otherwise stated, I accept it.
The husband said and that the parties separated on 7 February 2010.
The assets and liabilities
a. Joint assets and liabilities
The husband said that the only joint asset of the parties at the time of trial was as follows:
Property W
$440,000
The property at Property W is the former matrimonial home. The husband tendered a valuation report in respect of that property prepared by Mr D, a certified practising valuer. The valuation was prepared on the instructions of both the husband and the wife. The valuation is dated 7 November 2012. That is almost 12 months ago. However, there was no evidence or submissions to the effect that the value of the property had changed in that time. Therefore, I accept the valuation given by Mr D, which is $440,000.
The husband said that the joint liabilities of the parties at the time of trial were as follows:
mortgage on Property W $196,484
(omitted) Bank investment loan $59,913
Total $256,397
The husband tendered a bank statement in relation to the mortgage on the former matrimonial home dated 14 August 2013. It shows a closing balance of $196,484.60. In the absence of any evidence or submissions to the contrary, I accept that that is the current figure for the mortgage.
In relation to the (omitted) Bank investment loan, the most recent bank statement provided by the husband dates from 14 February 2012 and shows a balance of $59,913.33. That evidence is about 18 months out of date. However, in the absence of any evidence or submissions to the contrary, I accept that that is the current figure for the investment loan.
The husband said that the (omitted) Bank investment loan was $46,000 at separation. He said that following separation he had reduced the balance of that loan to $9,000. He said that, subsequently, the wife had increased the loan to approximately $60,000.
b. The wife’s individual assets
The husband said that the wife’s individual assets at the time of trial were as follows:
Motor vehicle
$12,000
Home contents
$10,000
Total
$22,000
The husband did not offer any evidence regarding the values he attributed to the wife’s car and house contents. However, as there was no evidence or submissions to the contrary, and the amounts do not appear to be unreasonable, I accept the husband’s estimates of the values of the wife’s house contents and car.
The husband said that the wife’s individual liabilities at the time of trial may have consisted of credit card debts. However, he said he did not know how the extent of any such debts. As the wife did not put forward any evidence about her credit card debts, it is not possible to attribute any figure to them.
The wife has certain liabilities arising from orders previously made in this proceeding. She is required to pay the costs of the conciliation conference she did not attend, fixed in the sum of $1,750, and half of the house valuation, which the husband said amounts to $385, and half of the business valuation, which the husband said amounts to $1,925. Therefore, at this point, the wife has debts arising from this proceeding of $4,060. In accordance with usual practice, those debts are noted but treated as the wife’s post-separation liabilities.
c. The husband’s individual assets and liabilities
The husband said that his individual assets at the time of trial were as follows:
(omitted) Pty Ltd
$1,455
(omitted) Pty Ltd
$0
Home contents
$5,000
Total
$6,455
The husband relied on an affidavit sworn by Mr F, a valuer, on 10 October 2013. The affidavit exhibited a valuation report which indicated that:
a)the value of (omitted) Pty Ltd was $1,455 and that it was the sole property of the husband; and
b)(omitted) Pty Ltd was of no value.
As there was no evidence or submissions to the contrary, I accept those conclusions.
I note that the valuer’s report indicated that he had been provided with company searches of both companies. However, the company searches were not provided to the court. There is some suggestion in the material that (omitted) Pty Ltd might be solely or partly owned by the wife. However, as it is of no value, and as the wife did not put any material before the court substantiating her claim, if any, to (omitted) Pty Ltd, the ownership of (omitted) Pty Ltd is immaterial.
The husband said that his individual liabilities at the time of trial were as follows:
Personal loan from Mr Marriner
$17,800
Credit cards with (omitted) Bank and (omitted) Bank
$14,255
Legal fees
$3,927
50. Total
$36,182
The husband said that the personal loan to him from Mr Marriner was a loan from his father for the purpose of the payment of legal fees associated with the previously concluded parenting proceedings. The husband acknowledged that it, and the legal fees of $3,927 incurred in the present proceeding, were debts incurred post-separation and were his sole responsibility. He did not seek any order in relation to them, but asked that they be noted as background. I note them for that purpose.
The evidence about the credit card debts was somewhat confused. Ultimately, the husband said that, at separation, there were two credit cards in the wife’s name, one with the (omitted) Bank and one with (omitted) Bank, and one joint credit card with (omitted) Bank. The husband said that, at separation on 7 February 2010, the wife’s (omitted) Bank credit card had a liability of $7,000, the wife’s (omitted) Bank credit card had a liability of $3,000 and the joint (omitted) Bank credit card had a liability of $12,916.
Further, the husband said that, at separation, he became responsible for the (omitted) Bank credit card liability. He said that, since separation, he has reduced the (omitted) Bank credit card liability to $4,000 and transferred that liability into his sole name with (omitted) Bank. I understand that the balance of the husband’s present $14,255 credit card debt (being $10,255) is owed to (omitted) Bank. In any event, the husband’s present individual credit card liabilities include about $13,000 of joint matrimonial debt.
It is not known what the wife has done in relation to the credit card liability in her name at separation, which amounted to $10,000.
Superannuation
The husband said that his superannuation amounted to $114,015. He said that he did not know how much superannuation the wife had, but believed it to be a similar amount. He said that the basis of his belief was that they had both always earned roughly the same amount, and they had both taken about the same amount of time off work when their son was young.
I accept the husband’s evidence about these matters. Neither party has sought a super split. Consequently, I will treat each party as having about the same amount of superannuation, and I will proceed on the basis that they will each retain the amount they have in superannuation.
d. Summary of assets and liabilities
In summary, the known assets and liabilities of the parties, at the time of trial, excluding superannuation and individual debts accrued post separation, were as follows:
Joint assets
Property W
$440,000
Total joint assets
$440,000
Joint liabilities
mortgage on Property W
$196,484
(omitted) Bank investment loan
$59,913
Total joint liabilities
$256,397
Net joint assets
$183,603
The wife’s individual assets
Motor vehicle
$12,000
Home contents
$10,000
Total of the wife’s individual assets
$22,000
The wife’s individual liabilities
None known
$0
The wife’s net individual assets
$22,000
The husband’s individual assets
(omitted) Pty Ltd
$1,455
(omitted) Pty Ltd
$0
Home contents
$5,000
Total of the husband’s individual assets
$6,455
The husband’s individual liabilities
Credit cards (former matrimonial debt)
$13,000
Total
$13,000
The husband’s net individual assets
-$6,545
The husband’s superannuation
$114,015
The wife’s superannuation (estimated)
$114,015
If the husband and wife are each treated as having half of their known joint assets and liabilities, and if superannuation and post-separation debts are excluded, the wife presently has net assets with a value of $113,801 and the husband presently has net assets with a value of $85,256. The combined total of their assets, excluding superannuation, is therefore $199,057. Consequently, the wife presently holds about 57% of the parties’ combined assets.
Contributions
a. Initial contributions
The husband said that, at the commencement of the relationship, he had an investment property worth $15,000 and a motor bike worth $12,000. He said those assets were sold to pay the deposit on the former matrimonial home. He said that the wife did not bring any assets of value to the relationship.
b. Contributions during the marriage
The husband said that the contributions of the parties during the relationship were equal. He said that both parties worked, earning similar amounts, and both parties cared for their son.
c. Contributions post separation
The husband said that, post separation:
a)both parents contributed equally to their care of their child;
b)the wife remained in the former matrimonial home but allowed the mortgage to go into arrears;
c)the husband has paid rent since separation;
d)the husband paid a lump sum of $4,000 to prevent the bank repossessing the former matrimonial home; and
e)the joint (omitted) Bank investment loan was $46,000 at separation, the husband reduced it to $9,000 post separation, and the wife has increased it to $60,000.
The s.79(4)(d), (e), (f) and (g) and the s.75(2) factors
Both parties are 44 years old. The husband is in good health. The wife is in good physical health but suffers from mental health issues. The husband said that the CAT team had been called recently and the wife was admitted to a psychiatric hospital. Nevertheless, the wife continues to work as a (omitted), earning about $67,000 per year. The husband is self-employed, earning about $68,000 per year.
It does not appear that either party has any income, property or financial resources other than those mentioned elsewhere in these reasons.
Both of the parties share the care of their child pursuant to orders of the Family Court made by consent on 25 May 2010.
Each of the parties seems to have the only usual commitments to support themselves and their child.
It does not appear that either party is eligible for a pension, allowance or benefit.
The standard of living that in all the circumstances would be reasonable could be described as in the modest to good range.
Neither party is seeking maintenance to enable that party to undertake a course of education and training or establish himself or herself in business.
The orders sought by the husband would not adversely affect the ability of a creditor to recover that creditor’s debt.
It does not appear that the duration of the marriage has affected the earning capacity of either party.
This does not appear to be a case where it is necessary to protect the party who wishes to continue that party’s role as a parent.
The husband has re-partnered. He said that his wife works full time and earns a modest income. They live in rented accommodation. The husband understands that the wife in this proceeding has not re-partnered.
The orders to be made under s.79 are to be determined in this proceeding.
No orders to be made under Part VIIIAB.
Neither party pays child support to the other.
It has not been suggested that there is any financial agreement that is binding on the parties to the marriage.
There are no other facts or circumstances that I consider to be relevant.
Whether it is just and equitable to alter the parties’ property interests
In view of paragraph 42 of Stanford, the fact that the parties are no longer living in a marital relationship and the various findings made above in relation to contributions and future needs, I consider that it would be just and equitable to alter the parties’ property interests in this case.
What order is just and equitable
The husband seeks orders as follows:
1.That the husband be granted liberty to proceed on an undefended basis.
2.That the husband pay to the wife $120,000 (“the Payment”) being an amount equal to one half of the equity in the property situate at Property W (“Property W”) within 60 days of these orders being made (“the Date”).
3. That contemporaneously with the payment:
a.The wife vacate Property W and transfer to the husband, at his expense other (her) interest in Property W; and
b.The husband discharge the mortgage registered over Property W and indemnify the wife against any payments or liability pursuant to the mortgage and all rates, taxes and outgoings of or with respect to the property of whatever nature and kind.
4.That the payment be reduced by the amount of $8,560 comprising the wife’s half share of the house valuation ($385) and business valuation ($1,925) obtained for the purpose of these proceedings; mortgage repayments ($4,000), investment loan payment ($500) and costs ordered on 18 March 2013 and any further costs ordered by this Honourable court.
5.The (sic) if the husband cannot obtain finance or fails to make the Payment by the Date, the husband and wife will sign all documents and do all things necessary to place Property W on the market for sale. If either fails to sign any document or do any act required to place Property W on the market within 14 days of any request, they hereby appoint the other as their attorney to sign on their behalf. Property W is to be sold as soon as possible on such terms and conditions as may be agreed between the parties and failing agreement as determined by the President of the Victorian Division of the Australian Property Institute or his/her nominee (“the Sale”) and the proceeds of the sale be applied:
a.firstly to pay all costs, commissions associated with the sale;
b.secondly to discharge the mortgage and any other encumbrance affecting Property W;
c.thirdly the amount of $8,560 comprising the wife’s half share of the house valuation ($385) and business valuation ($1,925) obtained for the purpose of these proceedings; mortgage repayments ($4,000), investment loan payment ($500) and costs ordered by this Honourable Court on 18 March 2013 to the husband; and
d.fourthly the balance be divided equally between the husband and the wife.
6.That the husband pay to the wife $727.50 being an amount equal to one half of the value of the husband’s business (omitted) Pty Ltd by the Date.
7.That the husband and wife each retain their respective superannuation entitlements.
8.That the husband and the wife be otherwise solely entitled to the exclusion of the other to all property including choses inaction in the possession of the party as at this date.
9.The wife be responsible for the (omitted) Bank Loan Liability and indemnify the husband in relation to same and the parties do all things to transfer that loan into the wife’s sole name.
10.That the husband and wife otherwise be responsible for all liabilities in his or her sole name, including credit card liabilities.
11.That the wife pay the husband’s costs of and incidental to the hearings on 24 April 2013, 7 June 2013 and 26 June 2013.
12.That the wife pay the husband’s costs of and incidental to these proceedings.
In all the circumstances of this case, it is clearly just and equitable that the parties’ joint tenancy of the former matrimonial home comes to an end. It is also clearly just and equitable that one party be given the opportunity to buy out the other. As the wife has not sought orders permitting her to buy out the husband, it is just and equitable that the husband be given that opportunity. It is just and equitable that the husband should have 60 days to refinance the property into his sole name and the wife at the same time should vacate the property.
In all the circumstances of this case, it is just and equitable that:
a)each party have 50% of the equity in the former matrimonial home;
b)each party have half of the value of the company (omitted) Pty Ltd;
c)each party bear his or her own post-separation debts;
d)the wife be solely responsible for the (omitted) Bank investment loan;
e)each party retain his or her own superannuation; and
f)each party retain the other assets in his or her own name.
This seems to me to be a just and equitable outcome, notwithstanding that the husband has contributed more at the commencement of the relationship and more post-separation. I consider that outcome to be just and equitable because the greater contributions of the husband are offset to some extent by the wife’s mental health issues, which may have an ongoing impact upon her financial circumstances. Otherwise, the positions of the parties are roughly equal, given that they are both about the same age, both earn about the same amounts of money, both care for their child to about the same extent and both have about the same amount of superannuation.
The wife should be solely responsible for the (omitted) Bank investment loan which presently has an outstanding balance of about $60,000. That loan was $46,000 at separation but the husband subsequently reduced it by $35,000 to $9,000. The increase of $51,000 has been solely for the wife’s benefit. The husband’s $35,000 reduction was more than his fair share of the matrimonial debt and forms part of his greater post-separation contribution.
In addition, there needs to be an adjustment for costs that have already been ordered. The registrar, on 18 March 2013, ordered the wife to pay the husband’s costs of the conciliation conference fixed in the sum of $1,750. In addition there have already been orders for the wife to pay half of the valuations, being $385 for the house valuation and $1,925 for the business valuations. Those figures total $4,060.
In addition, the husband seeks recompense for $4,000 that he paid for the arrears owing on the mortgage of the former matrimonial home. It seems to me to be just and equitable that the husband should be repaid that amount, given that he was not living in the house post-separation.
The husband also seeks repayment of an additional $500 that he contributed to the (omitted) Bank investment loan. The evidence about this matter was not entirely satisfactory. However, it was not disputed, for obvious reasons, and I accept the husband’s claim. It is just and equitable that the additional $500 also be repaid to the husband.
Finally the husband seeks costs for the hearings on 24 April 2013,
7 June 2013 and 26 June 2013 and costs for the proceedings generally.
Costs applications in family law matters are governed by s.117 of the Family Law Act 1975. Subsections (1), (2) and (2A) of that section provide as follows:
(1)Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(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.
As can be seen, costs do not ordinarily follow the event in family law matters. Rather costs will only be ordered if the particular circumstances of the case justify such an order.
In relation to the matters specified in s.117(2A) of the Act, the financial circumstances of each of the parties are discussed elsewhere in these reasons. Neither party is in receipt of legal aid. The wife has prolonged the proceedings by not filing material at an appropriate time or at all. The proceedings were not necessitated by the failure of the party to comply with previous orders of the court. It cannot be said that either party has been wholly unsuccessful in the proceedings. It is not known whether either party has made an offer to settle the proceedings.
I do not consider that the circumstances of this case justify the court in making a general cost order against the wife in respect of the entire proceeding. Nor do I consider that the wife should pay the husband’s costs for the hearings on 24 April 2013, 7 June 2013 or 26 June 2013. The matter was listed for final hearing on 24 April 2013. The wife did not appear on that date. The husband should have been in a position to proceed on an undefended basis on that date. There would then have been no need for the subsequent hearings on 7 June 2013 and 26 June 2013 and the hearing date on 24 April 2013 would not have been wasted.
Consequently, the figures work out as follows:
a)half of the equity in the former matrimonial home is $121,758;
b)to that should be added $727.50, which is half of the value of (omitted) Pty Ltd;
c)from the total should be deducted the $4,060 previously ordered and $4,500 for the husband’s additional mortgage and investment loan repayments;
d)that results in $113,925.50 that the husband should pay to the wife.
The husband sought an order that each party be permitted to sign on behalf of the other in the event the other refused to sign in a timely manner. No particular submissions were advanced in support of that proposal. I do not consider that course to be appropriate. Rather, I will give liberty to apply.
There will be orders giving effect to these reasons, including the usual notation under rule 16.05(2)(a) of the Federal Circuit Court Rules 2001.
Additional matters
After preparing the above reasons, the parties were given seven days notice in writing that judgment was scheduled to be handed down on Thursday 7 November 2013. By email at 6.27pm on Monday
4 November 2013, the wife told my associate that she had learned that there is a court date on 7 November 2013. The wife said that she would send a response and an unsworn affidavit and financial statement by email later on 4 November 2013. She did not do so. Later in the email, the wife said that she would send the documents by courier on Wednesday 6 November 2013, the Tuesday being a public holiday. No such documents have arrived.
The wife also said in her email that she had cognitive impairment and the husband had reconfigured accounts, hidden assets from the court and abused her. Except for saying, possibly inconsistently, that she would send the documents by email and courier, the wife’s email appears cogent and does not appear to be the work of a person who needs a litigation guardian.
The wife said that she was still in a psychiatric institution and she had asked her doctor to fax a letter to the court. A letter was faxed to the court at 11.03am on 6 November 2013, apparently from a psychiatrist, saying that the wife had been transferred to a particular place and was not able to attend court on 7 November 2013.
Finally, the wife sent an affidavit sworn by a valuer. It gave the value of a property apparently owned by the husband’s self-managed superannuation fund. The value of that property put forward by the wife is the same as the value put forward by the husband. Consequently, the only sworn evidence put forward by the wife would make no difference to the outcome of this proceeding.
I appreciate that the wife is not legally represented and that there is some material (albeit not admissible material) before the court suggesting that she has been in a psychiatric institution from the day of the trial onwards. If the wife had, at any time in the past, filed sworn material, there may have been some proper grounds to refrain from handing down the judgment in this matter on 7 November 2013.
However, as the matter stands, the wife has never filed material and she has not sought to reopen the case. Judgment can be handed down, whether or not the wife is in attendance.
As previously stated, orders made in the absence of a party can be set aside under rule 16.05(2)(a) of the Federal Circuit Court Rules 2001. Whether the orders will be set aside depends on:
a)whether the wife applies to have the orders set aside;
b)whether the wife adduces admissible evidence explaining her absence from the hearing;
c)whether the wife adduces admissible evidence indicating that she might be able to achieve more favourable orders if the existing orders were set aside; and
d)whether there would be any incurable prejudice to the husband if the orders were set aside.
In all the circumstances, I consider that it is proper to hand down the judgment in this matter. If the wife is not satisfied with the orders, and she has a proper basis for doing so, she may file the appropriate application, supported by appropriate evidence, to have the orders set aside.
Further additional matters
The wife sent some further emails to the court at 9.48pm on 6 November 2013 and at 2.09am, 2.27am and 3.40am on 7 November 2013. The emails attached a response but the wife has not paid the filing fee or sent an fee exemption form. In the response, the wife said among other things that she wants 100% of the house. The emails also attached about a ream of documents. They included a draft affidavit and numerous proposed attachments. The emails asked for further time, until Monday 11 November 2013, to finalise the documents and have them sworn and filed.
As the wife has not yet filed any documents, or provided any sworn evidence (other than the valuer’s affidavit mentioned above), the wife’s latest emails do not alter the position. Judgment will be handed down today. If the wife wishes to obtain different orders, it is open to her to file the appropriate application supported by the appropriate evidence.
I certify that the preceding one hundred and three (103) paragraphs are a true copy of the reasons for judgment of Judge Riley
Date: 7 November 2013
24Given by s 21 of the The Married Women’s Property Acts 1890–1952 (Qld), a provision which
corresponded with s 17 of the Married Women’s Property Act 1882 (Imp).(Hepworth) per Windeyer J.
27 Hepworth at CLR 317; ALR 264 per Windeyer J. See also Wirth at 231–2 per Dixon CJ.
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Remedies
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Costs
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Injunction
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