Maxwell and Maxwell and Anor

[2016] FCCA 1242

FEDERAL CIRCUIT COURT OF AUSTRALIA

MAXWELL & MAXWELL & ANOR [2016] FCCA 1242

Catchwords:
FAMILY LAW – Property – undefended.

Legislation:

Family Law Act 1975 (Cth)

Cases cited:
Bevan & Bevan [2013] FamCAFC 116
Stanford & Stanford [2012] HCA 52

Applicant: MS MAXWELL

First Respondent: MR MAXWELL

Second Respondent: MS N MAXWELL

File Number: DGC 3003 of 2014

Judgment of: Judge McGuire

Hearing date: 18 May 2016

Date of Last Submission: 18 May 2016

Delivered at: Melbourne

Delivered on: 18 May 2016

REPRESENTATION

Counsel for the Applicant: Mr Trim

Solicitors for the Applicant: Waters Lawyers

Counsel for the Respondent: N/A

Solicitors for the Respondent: Kelly & Frecklington Solicitors

ORDERS

1. That the application proceed undefended the first and second respondents;

2. That all previous orders made in these proceedings be discharged.

3. The Applicant Wife retain to the exclusion of the Respondent Husband and Second Respondent:

   (a)(a)     The $38,226.79 currently held in trust for the parties in the Waters Lawyers’ Solicitor's Trust Account and these Orders authorise the release of those monies to the Wife without the consent of either Respondent; and

   (b)Her Superannuation entitlements with (omitted) Superannuation.

4. (4)        The Second Respondent pay to the Applicant Wife the sum of $21,000.00 (“the Sum”) within 90 days of this Order.

5. (5)        In the event that the Sum is not paid in full to the Wife within 90 days of these Orders, the real property situate at Property T, Queensland (“the Real Property”), be forthwith placed on the market for sale (“the Sale”) and the Second Respondent sign all documents and do all things necessary to effect the Sale and the proceeds of the Sale be applied as follows:

   (a)Firstly, to pay all costs, commissions and expenses of the Sale.

   (b)Secondly, to any mortgage / line of credit secured against the   Real Property.

   (c)Thirdly, to pay the Wife the Sum in full, plus any applicable interest at 10% per annum from the date of default of payment of the Sum until the date that the Sum is paid to the Wife in full.

   (d)Fourthly, the balance to the Second Respondent.

6. Pending the potential Sale of the Real Property:

   (a)The parties hold their respective interests in the Real Property upon trust pursuant to these Orders.

   (b)No party shall encumber the Real Property without the consent in writing of the other party, save for the purpose of making the payment of the Sum to the Wife.

7. Paragraphs 6 to 9 (inclusive) of these Orders are binding upon the Trustee of one of the Husband’s superannuation funds, namely (omitted) ("the Fund").

8. That 100% be allocated to the Wife out of the interest of the Husband in the Fund.

9. Pursuant to s.90MT(1)(a) of the Family Law Act 1975 (“the Act”), when a splittable payment becomes payable in respect of the Husband’s interest in the Fund, the Wife shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base percentage and there shall be a corresponding reduction in the entitlement the Husband would have had but for these Orders.

10. These superannuation Orders have effect from the operative time.

11. The operative time for the purpose of these Orders is seven (7) business days after the date of service of these Orders upon the trustee of the Fund.

12. The Trustee of the Fund shall do all such things and sign all documents as may be necessary so that, in accordance with the obligations set out under the Act and the Family Law (Superannuation) Regulations2001, the Trustee can calculate the entitlement of and make payment to the Applicant in accordance with these Orders.

13. The Respondent Husband shall do all things necessary, including but not limited to, exercising his request pursuant to r. 7A.06 (1) of the Superannuation Industry (Supervision) Regulations1994 for the rollover or transfer of the transferable benefits out of the Respondent’s interest in the Fund to a fund of the Applicant’s choosing in accordance with r. 7A.12 of the Superannuation Industry (Supervision) Regulations1994.

14. The Respondent Husband retain to the exclusion of the Applicant Wife:

    (a)The Ford (omitted) motor vehicle;

    (b)The (omitted) motorbike motor bike;

    (c)The (omitted) Motorbike / the $30,000.00 in funds he allegedly gambled;

    (d)The $15,000.00 he allegedly gave his new partner, Ms T;

    (e)The three shipping containers;

    (f)His Superannuation entitlements with (omitted), (omitted), (omitted) Super and (omitted);

    (g)The contents and fittings he took from the former matrimonial home; and

    (h)The approximate $10,000.00 sum of joint funds he took post separation and spent on living expenses. 

15. Unless otherwise specified in these Orders and save for the purposes of enforcing the payment of any monies due under these or any subsequent Orders:

    (a)Each party shall be solely entitled to the exclusion of the other to all other property (including choses-in action, interests in partnerships and financial resources) in their possession as at the date of these Orders;

    (b)Each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders;

    (c)The Husband shall indemnify the Wife against all debts in his sole name, including credit card and tax debts and the Wife shall indemnify the Husband against all debts in her sole name, including credit card and tax debts;

    (d)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed;

    (e)Monies standing to the credit of the parties in any bank account in their name alone are to become the property of that named party;

    (f)All insurance policies are to become the sole property of the owner / beneficiary named thereon / therein; and

    (g)Each party shall retain any interest they may have in any trust. 

16. In default of the parties or either of them doing all acts and things and executing all documents as are necessary to give effect to these Orders, a Registrar of the Federal Circuit Court of Australia at Melbourne may be appointed pursuant to s106A of the Act to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said Order(s).

17. This proceeding be removed from the pending list of cases. 

18. The first respondent Husband pay the applicant’s costs of these proceedings to be fixed in the sum of $9000.00 such payment to be made not later than 42 days from the date of these Orders.

THE COURT NOTES THAT:

1. Pursuant to section 81 of the Family Law Act 1975 (Cth), these Orders shall as far as practicable finally determine the financial and other relationships, including property and/or maintenance obligations, between the parties, and avoid any further such proceedings between them, and these Orders may be relied upon as a bar to any such further proceedings.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

DGC 3003 of 2014

MS MAXWELL

Applicant

And

MR MAXWELL

First Respondent

MS N MAXWELL

Second Respondent

REASONS FOR EX TEMPORE JUDGMENT

Application for Undefended Hearing

1. In the matter of Maxwell, the substantive applications before me involve matters of property settlement between the parties.  The matter has some history but firstly, I need to deal with an application that may or may not be unresolved, which has led to an application by counsel for the applicant wife to proceed undefended this day.  The background to that is that the matter has some lengthy history and there are two respondents.

2. The matter was called today. There has been no appearance by or on behalf of either respondent. This matter came into my docket around February of this year via my colleague Judge Jones, who I am told, having the matter listed for trial, was confronted with an application by the first respondent or both respondents requesting to appear by telephone from their residences in Queensland. That that application was specifically refused and that has some relevance to a matter that I will deal with in a moment.

3. It is clear that her Honour recused herself from hearing the matter, not for any reason to do with the telephone hearing application but because one of the respondent’s materials disclosed some privileged communications between the parties which came to her Honour’s notice and her Honour felt that she was compromised in continuing the hearing of the matter.

4. It eventuated that the matter was adjourned and eventually listed for hearing today on some considerable notice to the parties.  Two days ago, on 16 May 2016, my chambers received an application from the first respondent, silent as to the second respondent, seeking to appear at the trial of this matter by telephone today. 

5. It is proper to read into these Reasons that at 9.49am on 17 May 2016 my associate responded to that request in the following terms:

   Chambers are in receipt of your email with the request to appear by phone at the final hearing listed on 18 May 2016.  The Court cannot grant the request, as you are required to give seven days notice prior to the hearing and, further, you are required to obtain the approval from the applicant in this regard.

6. Mr Trim of counsel for the applicant alerts me to the circumstances that occurred prior to the listing of the matter before her Honour in February of this year and specifically email communication of 16 February 2016 between the first respondent and the applicant’s solicitors firstly in the following terms from the first respondent, an email that says:

   Good afternoon.  Please be advised that I am applying to attend for the above hearing via telelink –

   and a response of the same day in the following terms:

   Mr Maxwell, I acknowledge receipt of your email.  The request is objected to.

7. As I have said to counsel, whilst I may have some concerns as to the grammatical correctness of that response, it remains unambiguous in its terms.  The upshot is that I think the implied, if not explicit, submission of counsel for the wife is that the lack of consent for the respondents to appear by telephone was indicated to the respondents by the applicant as long ago as February of this year. 

8. This application comes outside of the time limits delineated by the Rules of this Court.  There has been no request made by the second respondent.  The first respondent is on specific notice from my Chambers to be in attendance at Court today and is not in attendance and that is significant given the history of this matter. To put it bluntly, this is not the first time that the matter has been listed for trial. It is not the first time that issues of telephone attendance have been dealt with and any claims of ignorance or naiveté by the respondent would not sit well against that background.

9. I have raised with counsel the possibility of the matter proceeding to a hearing by telephone on the basis that any further delay or adjournment would inevitably be of some prejudice to the applicant wife.  Counsel responded with some pertinent factors and it is clear from the outline of case material that issues of credit sit heavily in this matter as, for example, a claim by the husband that he gambled some $30,000 of joint funds, such claim being disputed by the wife.  It would as is commonly put, be of the utmost assistance to counsel appearing for the wife and for the Court to view the demeanour of a witness in cross-examination when issues of credit are alive. 

10. Secondly, counsel tells the Court, not surprisingly, that he has a number of documents which he intends to put to the respondent or respondents as a part of his case and that would for all practical purposes, be impossible by way of a telephone hearing.  In all of those circumstances and particularly given the background of this matter given the nature of the issues before the Court, the delays that have already been forthcoming and the late application for a telephone hearing, I am inclined to proceed with the matter undefended the respondents.  Any recourse that they might take after that is a matter for them.

PROPERTY Application – Undefended

1. The substantive application before me is one by the wife for property settlement.  For reasons that have been given this morning separately, I have acceded to this matter proceeding undefended the two respondents.  Those reasons are now part of the Court record. 

2. The applicant relies on the following documents:  her affidavit sworn 18 September 2014; a sworn financial statement of 18 September 2014; an affidavit of Mr S of Sydney sworn 4 March 2015; an affidavit of the applicant sworn 12 March 2015 and an affidavit of the applicant sworn 29 January 2016.  The contents of each of those documents are read into evidence.

3. The relevant background to this matter is that the parties were in a relationship for some 24 or 25 years.  There are no dependent children of the relationship.  The children of the relationship are now are all adults.

4. The relevant law is provided for in section 79 of the Family Law Act 1975 (as amended).  The role of this Court, taking into account a long line of authorities, including the most recent significant decision of the High Court in Stanford & Stanford[1] and followed by Bevan & Bevan,[2] but a long line of previous authorities, is that I am to follow a process along the following terms. I am firstly, to determine the property of the parties, as at the date of the hearing, being today; and to allocate where I can, value to the items of property.  Property includes assets, liabilities, financial resources, and, for these purposes, superannuation policies and entitlements are to be treated as property.

   [1] [2012] HCA 52

   [2] [2013] FamCAFC 116

5. I should then determine, pursuant to section 79(2) of the Act, whether it is just and equitable to alter the property interests of these parties. This is a lengthy relationship. The facts are that the parties’ finances have been not only intermingled but seriously disturbed post-separation upon the actions of the husband. The parties were the joint registered proprietors of real estate since sold and there is an assertion by the applicant wife that the second respondent, who is the first respondent’s mother, holds property of the parties in substantial cash resources. In all of those circumstances, it is irresistible that there be an alteration of the parties’ property interests.

Contributions

1. I am then to consider the contributions of the parties being both direct and indirect financial contributions and also non-financial contributions in the forms of homemaker and parent. After consideration and attributing of weight to the contributions, I turn to the question of whether there be a further adjustment usually on a percentage basis on account of the considerations under section 75(2) of the Act.

2. There are some unusual antecedents to this matter coming to Court, most of which on the wife’s case, rest with the behaviour of the husband post-separation.  This was a lengthy relationship and not unusually so for such a young couple, there were no significant initial contributions by either of the parties although the husband in some material referred to by the wife asserts that he was the holder of some assets at the commencement of cohabitation but essentially I am satisfied that, given the length of the relationship and the nature of the relationship, the parties’ contributions were at least equal but perhaps insignificant at the date of commencement of cohabitation.

3. This was a traditional relationship in many ways.  The husband was the primary breadwinner.  He worked mainly as a (occupation omitted), although he appeared to suffer some injuries and had periods off work financed by WorkCover. The wife was the primary homemaker and parent, although she also contributed substantially by her employment on both a full and part-time basis.  There is no evidence before me of any other unusual or significant contributions by or on behalf of either party during the course of the relationship and I am satisfied that the contributions of the parties during that time were equal.

4. Post-separation the matters of interest relate to the property pool, which I will come back to in a moment, rather than essentially post-separation contributions.  As I have already said, the children of the parties are no longer dependent.  Following the parties’ separation in Victoria there have been attempts, mostly on the part of the wife, to dispose of the parties’ primary asset being the former matrimonial home. I am told and I accept that the estimated value of that property was in excess of $500,000 and that the wife was able to secure a contract for $520,000, but unfortunately the husband did not execute the contract.  Instead, for reasons best known to him, he set on a course of diminishing the property pool for both of these parties, including himself.  I am told, and I accept, that he caused damage to the property.  He removed fittings and eventually, given his lack of interest in maintaining the property and unfortunately for both of these parties, the property was disposed of pursuant to a mortgagee sale.

5. I am told and I accept that the sale price was closer to $480,000 than the non-executed contract of around $520,000 and a valuation of around that amount.  On that scenario, I would be satisfied that the husband’s behaviour post-separation caused a diminishing of the property pool and is something that I would take into account.

6. The husband after separation removed himself to Queensland, where his mother, the second respondent apparently lives.  He, on the limited evidence before me, seems to live between the homes of his mother and a transient partner or girlfriend with whom he now has a young child.  The best information before the Court is that the husband is no longer gainfully employed and obtains support from unemployment benefits subsidised by his mother.  Significantly, I have no material before me to cause me to be satisfied that the husband does not have a capacity for employment and as I have just said, he was gainfully employed significantly during the relationship as a (occupation omitted).

7. The wife is employed as a (occupation omitted).  She has an income of approximately forty or forty-two thousand dollars per year. I am told, and I accept, that post‑separation intervention orders were obtained by Victoria Police and the State Courts on behalf of the wife with the husband as the respondent.  Those orders remain on foot. 

8. The husband’s mother, Ms N Maxwell, was joined as a second respondent in these matters.  I repeat that Ms N Maxwell has neither appeared at Court this day nor made any request to appear by any alternative medium. There is some background material from Ms Maxwell but not essentially a trial affidavit or no recent material.  It appears that the second respondent was joined as a party given that following the sale of the parties’ home, referred to earlier in those reasons, balance proceeds of sale of about $105,000 were for reasons that escape me but perhaps inadvertently paid to the husband to the exclusion of the wife. The upshot of that is that they have been disposed of according to the husband save and except of a sum of about $3500 which was preserved in a trust account being some three per cent of the funds he received. 

9. It is significant that this matter is proceeding undefended without the opportunity for the husband or the second respondent to be tested on any assertions or claims made by him as to the disbursement of those moneys. However what I am told is that a sum of $56,000 was paid to his mother on a claim not accepted by the wife which was the repayment of some loans made by the second respondent to the first respondent both during and post the relationship. I emphasise that the applicant wife disputes that assertion.

1. Similarly, the husband also claims to have used those joint funds to repay an alleged loan disputed by the wife in the sum of $15,000 to his current girlfriend and in any event being post-separation. He apparently also asserts that he “gambled” a sum of about $30,000, amounting to the alleged disbursement of the $105,000.  It appears from the chronology of this matter that some prompt action on behalf of the wife’s solicitors resulted in a sum of $38,500 being retained in a trust account pursuant to injunctive orders.

2. The property of the parties as far as I can determine comprises of the following: The husband either has a (omitted) motorcycle, or the $30,000 that he allegedly gambled. He says it was $30,000 gambled.  The wife asserts that he owns a (omitted) motorcycle to that value and on her case there should be an entry of $30,000 to the property pool accordingly. There is a sum of $15,000 which he candidly says that he paid to his girlfriend but is not agreed by the wife that this was in repayment of any loan or any relevant loan.

3. The husband has superannuation entitlements in four or five separate policies some of which are of minimal balance but the superannuation entitlements total some $38,500.  The wife asserts and I accept that the husband retained a sum of $10,000 post-separation and I am asked to return or add that back to the property pool.  The husband retains a Ford utility motor vehicle which the wife asserts has a value of $10,000.  The husband has a (omitted) motorcycle which the wife asserts has a value of $8000 and the husband has three shipping containers which the wife asserts have a total value of $6000, giving a total of $121,500.  There is also $38,226 held in trust.  There is a remainder of $21,000 on the wife’s case held by the second respondent.

Conclusion

The orders sought by the wife are that she retains the following: the $38,226 retained in trust; an award of the $21,000 held by the second respondent which she says is the property of the applicant and the first respondent.  She seeks to retain her own superannuation entitlements of $48,436. She also seeks a splitting order in respect of the husband’s Cbus superannuation entitlement with a base amount of $20,000. I have before me a letter from Cbus dated 1 March 2016, providing evidence of procedural fairness being afforded the superannuation fund and their consent to such an order.  On my calculations this would give the wife approximately 50 per cent of the property pool.

1. In all of the circumstances I am satisfied that such orders would be just and equitable and particularly given the fact that I am persuaded on the wife’s evidence unchallenged as it is from the husband of the husband’s negative impact on the property pool following separation; the length of the marriage; the issues of contributions; the relevant section 75(2) factors; and being that I am essentially satisfied that the contributions of the parties were equal; that the wife works but not with a significant income I am also satisfied on the evidence that the husband has a capacity for employment.

2. In all of those circumstances, I am prepared to make the orders sought by the wife. 

APPLICATION FOR COSTS

1. In the matter of Maxwell, I now have before me an application on behalf of the applicant for cost after the court proceeding to hearing undefended the respondent where the issue was alteration of property interests.  On the face of it, it appears that the application is in respect of both the first and second respondents but in my view they should be treated differently.  The quantum sought for costs is $9000. The short history of this matter is that it has been prepared for trial twice and counsel has appeared twice and that the trial date was vacated on the last occasion, in no way due to the fault of the wife or her legal advisers. It was as a result of the husband disclosing privileged communications.  There have been numerous interlocutory hearings. The matter proceeding to final orders today undefended the respondents.

2. There have been a number of interlocutory proceedings, including that the applicant had to make an application to join the second respondent in a factual situation where it was alleged that the first respondent had disbursed joint funds to the second respondent.  The applicant had to seek orders to preserve at least a part of the property pool against a background where she was asserting with some evidentiary basis that the husband was diminishing and/or disbursing joint funds. 

3. The wife had to seek particular injunctive orders and it is a situation where the wife has clearly been put to cost and expense on the basis of the husband having failed to comply with Court orders and directions and it is of no little significance that this matter eventually proceeded on an undefended basis. 

4. This all comes within a background of a letter dated 26 May 2014 from the wife’s solicitors to the husband which gives some indication of how long these proceedings have been drawn out most likely because of the behaviour of the husband. This letter was without prejudice save as to costs, but given to me in support of the costs where an offer of settlement was made to the husband which on even a cursory reading would have given him a greater award from the property pool than I made to him some half-hour ago. It seems from the very nature of that letter that the wife has been put to some significant costs unnecessarily in the light of my orders post 26 May 2014 and that is of some significant consideration. 

5. Matters of costs are dealt with under section 117 of the Family Law Act 1975 (The “Act”). The general rule pursuant to subsection (1) is that each party bear his or her own legal costs in family law proceedings, but that general rule is subject to a discretion being enlivened in the Court to make an award for costs in favour of one or other of the parties if there are justifying circumstances for such an award. If there are such circumstances then the Court is to reference the mandatory considerations set out in subsection (2A) of section 117.

6. In this matter it is quite clear that there are circumstances justifying an order for costs.  There was a letter of offer made two years ago which was declined or not responded to which would have resolved this matter without substantial cost to both parties but particularly to the wife. 

7. I have found that the wife has been put to cost and expense to preserve the property pool against a background of the husband acting on the wife’s evidence which I accept, blatantly, deliberately and probably maliciously and for self-interest to diminish or destroy that property pool.  There is evidence before me that the husband has attempted to disburse cash proceeds or part of the property pool to a third person, namely, the second respondent. They all, separately and certainly together, would justify an order for costs in my view. 

8. The wife is in employment but her income is approximately $42,000 per year and it would not be offensive to the wife to say that she is not a person of any great wealth.  The husband is unemployed but I have found in my reasons that he has historically had a capacity for gainful employment and there is no evidence before me of any probative nature to suggest that he does not retain that capacity.  Neither party is in receipt of a grant of Legal Aid. 

9. The conduct of the proceedings in my view have caused costs to the parties and particularly to the wife on the destructive behaviour of the husband and the wife has been obliged to come to Court to seek both injunctive and prescriptive orders to preserve the property pool.  There has been an offer of settlement that was not taken up by the husband.  It is a matter for him how he considers my orders now but he would have achieved a greater net result if he had taken up this offer some two years ago.  His failure to do so has clearly, if a line is drawn as of 26 May 2014, caused the wife unnecessary legal costs.  There are no other circumstances which are relevant in this matter. 

10. The costs sought by the wife are $9000.  In my view that is a conservative sum given the litigious history of this matter. 

11. There is some argument that the costs order should be awarded in a sense jointly or severally against each of the respondents.  I am not persuaded that that is the case.  The matters that I have alluded to that tend towards both the justification of a costs order and the making of a costs order are in my view directed to the first respondent. 

12. The second respondent was joined not voluntarily as a party to these proceedings.  Her participation has been minimal.  She has not attended at Court.  She did not request to attend by any other medium.  It appears she has taken a completely passive approach to these proceedings and her non-attendance has acted to save costs for the parties.  The award should be in respect of the first respondent.

Exhibits

1. Added to those reasons will be two exhibits, one being an exhibit marked A, being the email communications of 16 February 2016, referred to in these reasons; and secondly, a document marked B, which is an email of 18 February 2016 from her Honour’s Chambers to the respondent confirming that her Honour did not grant leave to the respondents to appear by telephone which as I have said earlier in these reasons, put the respondents on notice as to their position in respect of telephone applications.

I certify that the preceding ten (42) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date: 8 July 2016