Miller and Stanley
[2018] FCCA 2265
•23 August 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MILLER & STANLEY | [2018] FCCA 2265 |
| Catchwords: FAMILY LAW – Property proceeding – adjustment of property interests – husband failed to engage properly in proceeding – husband failed to cooperate with respect to joint valuation of property – no property valuation completed –whether property was transferred to parties as gift or loan – gifts from both parties’ parents – husband failed to make full and frank disclosure of financial affairs – uncertainty as to precise value of asset pool – mortgage default – mortgagee secured judgment for debt and possession of property – sale of property – family violence – breaches of intervention order – just and equitable for a property adjustment to be made – parties’ financial and non-financial contributions given equal weighting – wife has primary care and major responsibility for welfare of young children including for their living expenses since separation – minimal child support payments – husband has clear capacity to engage in remunerative employment – determination of appropriate property adjustment. |
| Legislation: Family Law Act 1975, ss.79, 81 |
| Cases cited: Calvin & McTier [2017] FamCAFC 125 |
| Applicant: | MS MILLER |
| Respondent: | MR STANLEY |
| File Number: | MLC 10063 of 2017 |
| Judgment of: | Judge A Kelly |
| Hearing dates: | 16 & 17 July 2018 |
| Date of Last Submission: | 17 July 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 23 August 2018 |
REPRESENTATION
| Counsel for the Applicant: | Ms Mansfield |
| Solicitors for the Applicant: | VM Family Lawyers |
| The Respondent appearing in person |
ORDERS
The applicant have leave to withdraw the notice of discontinuance filed on 17 May 2018.
The applications in a case filed on 24 April 2018 and 23 May 2018 respectively be otherwise dismissed.
By 4.00pm on 6 September 2018, the applicant file and serve minutes of orders giving effect to these Reasons for Judgment.
By 4.00pm on 27 September 2018, the respondent file and serve a response to the applicant’s minutes of proposed orders indicating where he agrees or disagrees with each of those orders and why.
The parties have liberty to apply on reasonable notice for the proceeding be listed for mention for the making of final orders.
IT IS NOTED that publication of this judgment under the pseudonym Miller & Stanley is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 10063 of 2017
| MS MILLER |
Applicant
And
| MR STANLEY |
Respondent
REASONS FOR JUDGMENT
Introduction
The reasons for judgment explain why I have concluded that it is just and equitable for there to be an adjustment of the parties’ property interests pursuant to s 79 of the Family Law Act 1975 (Cth) (“Act”).
I have concluded that there should be an adjustment of the parties’ property interests reflecting an overall allocation of such interests as to 65% to the applicant wife and 35% to the respondent husband.
As will appear, resolution of the case has been problematic in large part because the husband has not engaged in the proceeding.
Procedural history
On 28 September 2017, the wife filed an Initiating Application seeking an adjustment of property rights pursuant to s 79 of the Act together with spousal maintenance. The wife sought by way of urgent interim relief that the husband forthwith pay and continue to pay mortgage instalments, arrears of instalments, rates, and insurance. An order was sought for the sale of the property and for financial disclosure.
On 6 November 2017, orders were made for the proceeding to be fixed for trial and that the husband file and serve a response, supporting affidavit and that he make financial disclosure. A further order was made fixing the matter for a conciliation conference on 17 January 2018.
On 15 January 2018, the husband filed a Response by which he proposed that he should discharge and refinance the mortgage whereupon the property should be transferred to him. In consideration for such transfer, the husband proposed that he should pay the wife $20,000 and she should otherwise be permitted to retain her savings, superannuation and a Motor Vehicle 1.
The parties attended a conciliation conference on 17 January 2018, however, the entire exercise was aborted including by reason of the late disclosure of documents by the husband and his failure to cooperate with respect to the provision of a valuation of their property. A registrar of the Court ordered that the wife’s costs of and incidental to the conference fixed in the sum of $2,200 be reserved for consideration by the trial judge.
The husband’s communications with the wife’s solicitors has been problematic. On occasion, the husband has engaged in florid email communications with the wife’s solicitors. His behaviour indicates a near complete failure to engage with the issues in the proceeding. It is difficult to ascertain whether the failure to so communicate is deliberate or the product of the husband’s personality or both.
There is no direct communication between the husband and the wife, largely by reason that the wife has a deep concern about the husband’s behaviour. On occasion the husband has declined to open emails attaching the wife’s affidavits, responding that he will not read them and that the email (and thus the attachment) has been deleted.
On 16 May 2018, the wife filed a notice of discontinuance. Shortly afterward on 21 May 2018 the wife filed an application in a case seeking leave to withdraw the notice of discontinuance together with reinstatement of an application in a case filed on 24 April 2018. The application for reinstatement was supported by an affidavit affirmed by the wife on 21 May 2018. The wife deposed that she had been in an extremely distressed and fragile state by reason of her having received notice from the mortgagee that it had commenced legal action “as to foreclosure on our former matrimonial home”. The wife deposed that she had been confused as to her options and unclear on how best to proceed. It was in those circumstances that she decided the easiest route would simply be to discontinue the proceeding. Upon further reflection the wife engaged new solicitors and determined that she should proceed with her application. She should be permitted to do so.
On 30 May 2018, application was made for interim orders as set out in the initiating application to require the husband to effect payments outstanding and future payments in respect of mortgage rates and utilities relating to the property. The application was pressed by reason that the mortgagee had threatened to institute legal proceedings for possession of the property.
The wife having left the property at the date of separation and the husband being having been unemployed since that date, the application was adjourned to the trial. Further orders were made affording each of the parties an opportunity to file an affidavit detailing each of their assets liabilities and financial resources, including as to their superannuation.
Other orders were made on that date affording the husband an opportunity to seek parenting orders. Those orders were made so that the husband might have an opportunity to re-establish contact with his children. The husband did not comply with those orders and no parenting application has been made.
As the husband did not comply properly with his obligations to make financial disclosure, it was necessary for the wife to issue a number of subpoenas so as to be able to adduce evidence sufficient to support the application for adjustment of property interests.
The hearing commenced on 16 July 2018. Although he has had lawyers acting for him, the husband was self-represented. Concerning the application for an adjustment of property interests, the Court explained to the husband the general structure of the hearing and the manner in which the parties would be permitted to provide an opening, call evidence, cross examine and make closing submissions.
By reason of the husband’s non-compliance with various orders made in relation to parenting orders, a further order was made to facilitate that the husband might have yet a further opportunity to address those issues. To this end, arrangements were made for the husband to consult a duty solicitor and to file an application seeking parenting orders. In anticipation of this occurring, arrangements were also put in place for an urgent consultation with a family report writer and for a s 11F report to be provided. In the event, the husband did not comply with those orders. The s 11F reporting arrangements were vacated.
Evidence was given by each of the wife and husband respectively.
The husband has persistently refused to cooperate in requests for a joint valuation of the property. The evidence discloses that the wife has had to take all initiatives that were required to ascertain property value.
Despite the ongoing failure to cooperate in relation to a valuation of the property during the interlocutory phases of the proceeding, the husband volunteered that he had no objection to the property being valued. I did not consider that the husband’s belated proposal was sincere.
On the second day of the hearing an interim order was made, by consent, for an immediate sale of the property, the payment of outstanding liabilities and for the net proceeds of sale to be held in trust pending the making of final orders. The catalyst for the consent order was that in the period between 30 May 2018 and the first day of trial, the mortgagee had secured a judgment for possession together with a money judgment for the arrears due under the mortgage, interest and costs (see below). I approved the making of that order as it appeared to me to be the best and most immediate means by which the parties might avoid a mortgagee’s sale of the property and undertake a private sale so as to maximise their equity in the property and minimise their mortgage liability.
When Ms Mansfield of Counsel made her opening submission, the husband was invited to consider the minute of proposed final orders sought on behalf the wife. The matter was stood down and the husband was afforded an opportunity to consider the minute and to indicate his response to it at 2.15pm. The hearing was adjourned until that time.
When the matter resumed at 2.15pm, the husband indicated his position in relation to each of the orders sought by the wife’s proposed minutes of final order. By way of overview, although the husband’s position evolved and modified throughout the trial, his essential stance was that the parties were themselves unable to agree upon final orders and it was in those circumstances necessary for the Court to determine their dispute.
I make the following findings on the balance of probabilities.
Background
The wife is 35 years of age, in good health and employed on a casual basis as a (occupation omitted) earning a modest salary of around $15,000 per annum, together with a single parent benefit.
The husband is 37 years of age, having held employment as a (occupation omitted), earning $72,000 per annum. The husband had held employment with the same employer, (employer omitted), for 10 years until being made redundant in 2016. He is in reasonable health.
The parties commenced cohabitation on 2009. Although there were a number of separations, the parties finally separated on 1 June 2016. Their total period of cohabitation was for a period of about seven years and four months.
There are two children of the relationship born in 2011 and 2014 respectively. The children are in apparently good health.
There is some evidence that the husband’s father has also come to meet with the wife for the apparent purpose of discussing the possibility of the parties effecting a further reconciliation.
Contributions & assets
At the commencement of the relationship the wife had savings of $24,000 and a Motor Vehicle 1.
Shortly prior to the commencement of the relationship, or in its early phases, the husband purchased a Motor Vehicle 2.
Otherwise, the parties had no assets of significant value.
The parties were in dispute that the husband was wasteful of his income on alcohol and gambling. There is some evidence to support the conclusion that he is at least wasteful of available resources. There is also some evidence that the husband has had alcohol related issues.
Following being made redundant from his employment, on 2016, the husband received a redundancy payment of $30,706 which was deposited to a bank account held in his name. Somewhat remarkably, in the ensuing five week period the husband made a series of some 30 debit transfers amounting in aggregate to over $34,000 thereby eradicating the whole of that redundancy payment.
The husband also disclosed that he had made an application for payment of pro rata entitlement to long service leave from his employer from which he estimated he would receive the sum of $5,000 – $6,000.
The wife’s trial affidavit identifies nominal savings in bank accounts.
During the parties’ seven year relationship, both parties held gainful employment.
For the most part the husband was employed as a (occupation omitted) and the wife worked, until the birth of the children, on a full-time basis as a (occupation omitted). Following the birth of the children the wife returned to work in casual employment.
The parties applied their joint income towards the acquisition, conservation and improvement of the property described below.
The parties were agreed that they had a ‘traditional’ marriage in that the wife was the primary homemaker and caregiver of the children and attended to all of their needs. The husband said that he had involvement with the children in their bedtime activities and on weekends.
Despite continued request the husband has failed to make full and frank financial disclosure.
Property A property
The husband’s parents owned a property in Property A.
Following the parties’ marriage in 2009, the husband’s parents subdivided their land. The land was subdivided into two lots. Unit Two is occupied by the husband’s parents when they are not living overseas.
On 2010, the parties were registered as joint proprietors of the whole of the land situate at Property A1 in the State of Victoria being the whole of the land more particularly described in Certificate of Title, Volume (“Property”).
The parties were in dispute as to the basis on which this transfer occurred. The wife’s case was that the husband’s parents had gifted the Property to them. She estimated the land was valued at approximately $120,000. Contrastingly, the husband estimated that the value of the land was $150,000. In the course of the trial, evidence was given in vague terms that the assigned value of the land had been “fixed, for stamp duty reasons.” The husband contended that the transfer was made so that the parties could build a house on and “repay them the value of the land which was to be transferred to us sometime in the future”.
The husband also said, however, that his parents had transferred the Property to them to help them “get into the property market.”
He agreed that whatever arrangement had been made it had not been reduced to writing or recorded in any formal way.
Following subdivision of the land, the husband’s parents demolished the existing dwelling. The husband’s parents also paid to effect improvements to the two properties comprised in the subdivision, including the costs of plans, permits, conveyancing, demolition and the laying of a foundation for a new dwelling. The husband contended that the total value of his parents’ contributions amounted to $200,000.
Although the husband’s father made an affidavit deposing to his version of these events, he was not called as a witness and was not able to be cross-examined. The husband said that it would be necessary for the Court to subpoena his father who had filed an affidavit, disclosing that his father was presently overseas and would not be returning until 2018. It seemed to be suggested that the hearing would then be deferred until the father returned to give evidence. I note that the husband had been present in Court on 6 November 2017 when the proceeding had been set down for hearing. At no stage in the intervening period had the husband intimated that there may be any difficulty in securing the attendance of his father to give evidence at the trial.
Following the subdivision, dwellings were constructed on the adjoining blocks. The husband’s parents assumed liability for the construction of their own dwelling, while the parties assumed the liability to subcontractors they engaged to construct a dwelling on their Property. To this end, the parties secured a loan from the Bank A in order to pay the progress payments due to their subcontractors which was secured by registered first mortgage. I note that on 2010, the Bank A was registered as proprietor of the interest of first mortgagee over the Property.
During the period of the subdivisional works between 2010 and 2012, the parties lived with the wife’s parents rent-free.
The parties moved into their home in about 2012.
To the extent that the parties have effected repayments in reduction of the mortgage it was due to the application of their joint endeavours.
The wife has been unable to secure a valuation of the Property by reason of the husband’s lack of cooperation. They variously assigned their own estimates of value of the Property at between $500,000 – 700,000.
Other gifts & assets
The husband contended that the wife had purchased a new motor vehicle, a Motor Vehicle 1, using a $10,000 advance by way of interest free loan made by his parents. The loan was made in February 2011. The $10,000 payment made by the husband’s parents was a gift made, according to the wife, for the purchase of the vehicle. The current value of this vehicle was estimated to be $17,000. I infer that the parties employed their own savings or borrowings to secure the purchase of this vehicle.
The parties were agreed that the wife’s parents also made various gifts. Their evidence did not condescend to any specificity on this topic.
The parties had nominal savings and asserted that each had a motor vehicle with comparative values of $15,000 – $20,000.
In addition, the husband has entitlements to long service leave and other entitlements with ‘Coinvest’ and ‘Incolink’ respectively but has not made disclosure of these entitlements.
Neither party ascribed any value to their furniture chattels and personal effects, the majority of which appear to remain on the Property.
Liabilities
Aside from the mortgage, title to the Property is unencumbered.
However, there is sufficient evidence to indicate that the parties are in default of their obligations to pay statutory outgoings on the Property. The quantum of the liability for those outgoings is unknown.
Beyond the parties’ mortgage liability, the wife has no other liabilities whilst the husband has various credit card debts. The precise quantum of those debts was not proved.
The husband asserts that the parties also have liabilities to repay the loan to his parents of $200,000 respecting the transfer of the Property and a loan of $10,000 respecting the purchase of the Motor Vehicle 1.
There was also a finance liability of the husband respecting his motor-vehicle estimated to be $13,000. There is no evidence as to whether or how the husband is servicing his obligations on this finance facility. However, the wife’s trial affidavit of 12 June 2018 accepts that the husband has a liability of $13,000 on his Motor Vehicle 3.
Superannuation
In addition, the husband has accumulated superannuation entitlement with Super Fund A which was estimated at $90,046 in January 2018.
The wife has accumulated superannuation with Super Fund B of $58,631.
Concerning superannuation, the wife adduced evidence that Super Fund A had been afforded procedural fairness, that no difficulty was envisaged in giving effect to the orders sought and that the trustee did not wish to be heard in respect of such orders as may be made on the application.
Family Violence
The wife contended, and husband denied, family violence, however, the husband admitted that there were “disagreements”. From the wife’s perspective, the following were said to be illustrative of the husband’s conduct, particularly after he had engaged in excessive drinking:
(a)the husband would speak to the wife in pejorative terms variously describing her as “cunt”, “dickhead”, “dumb bitch”, “you’re a dickhead”;
(b)the husband’s exchanges with the wife such as: “you need a good root”, “just leave go to your mum and dad’s”, and “I’m going to the pro’s” (prostitutes);
(c)when the wife became upset, he would taunt her with statements such as “call the police”;
(d)the husband involved the children in their disagreements saying to the wife, in the presence of the children, “mum’s going to find a new husband, she is going to leave”;
(e)the husband had threatened to murder the wife and to abduct the children including, on one occasion, where, having made a sign of the cross, he had said solemnly to the wife in a (nationality omitted) dialect “I will kill you out of spite”;
(f)the husband also threatened to harm the wife’s family members;
(g)the husband was accustomed to throwing objects such as laptops, mobile phones, ashtrays and bottles. Once, when the wife telephoned the police and attempted to remove the husband from the Property, their attempt to do so was unsuccessful as the husband had barricaded himself inside the house.
The husband denied that these events occurred.
The wife left the home after a serious escalation in the husband’s violence. The catalyst for the wife’s decision to leave the Property on this occasion was that the husband had said he wanted a separation and that he would incinerate the wife and her family. Again, the husband denied those allegations.
When the wife and children left on this occasion, the wife’s parents obtained an intervention order on her behalf against the husband.
Following the making of an intervention order the parties made an attempt at reconciliation and the wife returned to the Property. The parties’ relationship continued to deteriorate and the wife finally left the Property on the last occasion after an incident which she described as the husband becoming “so enraged that he pulled out a knife and was physically forcing me to stab him”. After the final separation the wife applied for an intervention order which expired in June 2017.
Later, on 21 June 2017, an Interim Intervention Order was made against the husband naming the wife and two children as affected family members. The order was made ex parte and recorded that the husband had not been served with a copy of the application or summons, had not appeared at the hearing or agreed in the orders which were made.
The husband entered a plea of guilty to 3 charges arising from breaches of the intervention order and was placed on a 12 month bond and completed a men’s behavioural change program. The husband denied having ever been in trouble with the police beforehand or having had any further trouble with police since the charges were laid.
The wife contends that husband continually breaches the intervention order by telephone calls, stalking and approaching her in public.
The husband contended that it was the wife and her mother who perpetrated family violence upon him. He recounted controlling and difficult behaviour by the wife’s mother including her intervention and attempt to effect a significant and late change to the parties’ wedding plans, their honeymoon and her opposition to the couple residing on the Property (by reason that it was not approximate to her own home). The husband also recounted the abusive conduct meted out by the wife towards him including in the presence of the children and that she would physically attack and spit on him.
On other occasions, the husband has said to the wife, including in the presence of the children, “everyone goes down on a sinking ship” and that if the wife ever left, he would “manipulate the fuck out of [X]”.
On 15 November 2017, a further interim intervention order was made against husband. This order names the wife and each of the children as affected family members.
The husband has outstanding charges for further contraventions which he described vaguely but appeared to relate to stalking and conduct endangering life arising from the use of a motor vehicle. Whilst the circumstances giving rise to those charges were not investigated in particular detail, the husband described in general terms that the charges arose from a motor vehicle incident on a highway shortly after a Court hearing which itself related to apprehended violence. The husband has spent substantial sums on legal fees associated with his defence to these and earlier proceedings.
Both before me and in communications with the wife’s solicitors, the husband has employed the pending criminal charges as being material to the resolution of the “property settlement, future earning capacity and most of all children interaction”. At some points in the giving of his evidence the husband appeared to move perilously close toward suggesting that it was because of the wife’s having laid a complaint to the police that his future income earning capacity would be affected.
Post-separation
Since separation the wife and children have lived with her parents at their home in Suburb K as they cannot presently afford rental accommodation.
Since separation the husband has continued to live at the Property.
Although these reasons for judgment entail the determination of an application for an adjustment of property interests, it is useful to address their evidence in relation to their difficulties respecting parenting issues as they inform the circumstances giving rise to the present application. The parties have been unable to agree on the husband having contact with his children. The wife contends, and the husband denies, that the husband did not request any contact with the children until October 2016 when he invited her to attend mediation at a Family Relationships Centre in Suburb L. At a mediation conducted on about 22 December 2016, attempts were made by a family counsellor to facilitate resolution of the basis on which the father might spend time or have contact with the children. The counsellor prepared an agenda recording proposed parenting arrangements which included that the husband would: (1) have a psychiatric assessment before child contact; (2) see the children with supervision either at a contact centre or with a private child supervisor; (3) join and attend Alcoholics Anonymous; (4) undertake a parenting course with Relationships Australia.
Following this mediation, the husband attended a psychiatrist, Dr A who prepared a report. The husband exhibited a copy of Dr A’s report to his affidavit. The psychiatrist’s report recorded the history which was obtained from the husband and included the following notes: separated with partner in July ‘16 after a big argument; no access to his children; intervention order against him; issue of alcohol in the past; living alone with poor social support; not coping with his life; unemployed for a few months. Dr A recorded that the husband had had issues with alcohol and that he had stopped drinking after separation and attended Alcohol Anonymous. Dr A recorded the husband as having had a quite difficult childhood but noted a long working history and that he was now looking for employment and studying. Dr A observed the husband to be well dressed and well groomed, quite emotional and mildly depressed with an associated sense of occasional hopelessness but otherwise having no negative thoughts. Dr A considered that the husband should have ongoing counselling with a psychologist and that he should be allowed to get access to his children.
The wife contends that since attending the mediation the husband had not discussed spending time with the children again. The wife said that the parties were supposed to attend a further mediation in February 2016, however she was never contacted again by the Family Relationships Centre and agreed that the children have not spent time with their father since separation. The wife also says that she does not wish to prevent the husband from seeing the children but considers such time should be supervised so that they are safe in his care.
Mortgage default
While the husband sought to explain his apparent inability to make any payments in discharge of the parties’ obligations under the mortgage, I have also made findings at [33] above concerning his dissipation of a not insubstantial redundancy payment in a very brief period.
The husband appears to have been quite prepared to take no steps to deal with the mortgagee, leaving entirely to the wife the resolution of difficulties with the mortgagee. The wife took the initiative in September 2017 to seek a moratorium from the mortgagee. She was successful in her endeavour and the mortgagee granted a period of grace until 13 December 2017. The mortgagee also agreed to postpone any further action during the period of the moratorium.
On 29 January 2018, the mortgagee’s solicitors served a notice of default. I find that the wife has had to take all initiatives in attempting to deal with the mortgagee and its solicitors so as to address the issue of default under, and enforcement of rights arising from, the mortgage. The mortgagee allowed the parties a period of nearly two months in which to remedy the default, failing which it would recover possession of the land. The extended opportunity to remedy such default is to be seen in the context of the moratorium that was granted in late 2017.
Upon being served with a notice of default the wife took further steps to secure the husband’s agreement to sell the Property privately. The manner of the husband’s refusal is notable.
On 5 March 2018, the husband telephoned the wife’s solicitors stating that: (1) he would not pay the mortgage; (2) would not agree to the sale of the Property; and (3) he was going to let the “bank foreclose on the Property”. This conduct may be compared to the evidence that the husband said he was prepared to let the entire matter “go down with the sinking ship” (see above at [75]).
The husband’s communications acknowledged that the mortgage was seriously in arrears but suggested that if “regular payments be made as per mortgage, this will resolve the foreclosure issue”. On 30 May 2018 and again on 25 July 2018, the husband suggested that the problem with the mortgagee could be solved by simply paying the arrears. He seemed to indicate he had a capacity to do so. Yet he insisted that he had made no “promise” that he would pay the mortgage arrears.
As at 28 May 2018, the husband’s stated position in relation to his communications with the wife’s solicitors was that he had no interest in what they were sending him, that he had not read, but instead deleted, their email and accordingly deleted the attached affidavit.
On 21 June 2018, the husband sent an email to the wife’s solicitors including a suggestion that the pursuit of the proceeding was a fruitless endeavour.
In an email communication sent on 23 June 2018, the husband stated to the wife’s solicitors that “like I said in court she spent $30,000 she might have to spend another $70,000 so she can get a payout. Maybe the bank might take the house maybe they won’t, we’ll have to wait and see.”
In an email sent on 28 June 2018 the husband stated to the wife’s solicitors:
. . . you better hurry up because the property market is forecast to decline potentially 10%. That would mean that, judging what valued the property, (refer to previous financial disclosure), $700,000 the property will be potentially worth $630,000. That’s looking at the glass half empty.
I conclude that the husband was prepared to allow the parties’ equity in the Property to waste or erode significantly.
On 12 July 2018, the mortgagee secured a judgement for debt and possession of the Property in default of appearance by the defendants. The mortgagee’s judgment is that the defendants pay it the sum of $250,237.60 together with interest (which continues to accrue) and costs.
In the absence of any valuation, it may be noted that the parties have given evidence of their respective estimates of the value of the Property ranging from $500,000 to $700,000. In the context of this proceeding, in my opinion, the differential in the estimated value is significant.
Consideration
The four stage process that is required to be undertaken in relation to a claim for an adjustment of property interests is well-settled: Hickey & Hickey; the Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 (Nicholson CJ, Ellis and O’Ryan JJ). I consider each in turn.
Existing property interests – the property pool
Based upon the foregoing I find that the property pool is comprised of:
Assets
Owner
Value
The Property
Joint
Unknown
Motor Vehicle 1
Joint
$17,000
Motor Vehicle 3
Husband
$17,000
Chattels
Joint
Unknown
Bank accounts
Joint
$371
Bank accounts
Wife
$1,153
Bank account – undisclosed
Husband
Unknown
Bank account –
Husband
$100
Personal effects
Nominal
‘Coinvest’ and ‘Incolink’
Husband
$ 6,000
Liabilities
Mortgage, interest and costs
E$259,000
Statutory outgoings
Unknown
Motor vehicle lease (H)
Husband
$13,000
Credit cards
Husband
$12,500
Superannuation
Super Fund A
Husband
E$90,000
Super Fund B
Wife
$58,632
It is readily apparent that the trial and determination of this application has been impeded by the husband’s failure to make full and frank disclosure of his financial affairs, including as to his current superannuation, or to cooperate in the valuation of what is self-evidently their most valuable asset, the Property. In particular, the present uncertainty concerning the precise value of the property pool introduces additional considerations as to how the matter ought to be resolved and what orders are appropriate to secure a result that is just and equitable. Those matters notwithstanding the Court must make findings as to the property in which the parties have an interest even if it is able to do so only in the most general terms: Giunti & Giunti (1986) FLC 91-759 at 75,555 (Fogarty, Murray and Nygh JJ). The assets and liabilities set out in table above comprises the parties’ existing property interests.
However, the husband’s continuing failure to cooperate in the making of financial disclosure does entitle the Court to be more confident when drawing inferences as to underlying primary facts relevant to the adjustment of property interests and to be more robust in the exercise of the discretion conferred by s 79 in the making of orders respecting the adjustment of property interests: McDermott & McDermott [2017] FamCA 376, [301] (Foster J).
Having first identified the parties’ existing property interests, I consider that it is just and equitable that there should be a property adjustment: Stanford v Stanford (2012) 247 CLR 108, [31], [44]. It is just and equitable because one or both of the parties have chosen that they should no longer continue to live in their relationship. For that reason the parties no longer have the common use of their property, towards the acquisition of which they each made contributions over the period of their relationship. The express or implicit assumptions which underpinned their relationship, including that they would be able to consensually adjust their interests in such property, are at an end: Stanford, [41]-[42]. A just and equitable adjustment of their interests is therefore appropriate.
Contributions – financial & non-financial
I have set out the primary facts bearing upon the parties’ financial and non-financial contributions towards their existing property interests.
I find that the wife had $24,000 in accumulated savings and a motor vehicle. I further find that the husband had minimal assets at that time. Such property as the parties have acquired and increased in value over time was so acquired during the period of their relationship.
Although the husband’s parents subdivided their land and transferred the Property to the parties, the precise value of that gift was not quantified. I decline to act on the estimates provided by either party. The present value of the Property is unknown. A variety of factors may have an impact upon quantification of the net proceeds of sale of the Property.
Both the husband’s and wife’s parents made gifts to the parties. I reject the husband’s assertions that the Property had been transferred subject to an agreement that his parents would be repaid the unimproved value of the land at the date of subdivision. Apart from the lack of proof of any such agreement, the value of the land was also not proved. I do not pause to examine the question whether any such agreement would have been void for uncertainty. Such gifts as have been made by the parents of the parties have been treated as contributions made to their property.
Apart from the cash assistance that was provided, I also note that the parties lived rent-free at the home of the wife’s parents during the period that a dwelling was being constructed upon the Property.
There have been virtually no post separation financial contributions.
An assessment of the parties’ contributions necessarily requires consideration of the parties’ non-financial contributions. I accept that in their traditional marriage, the wife was the primary homemaker and care giver to the children and that she continues to do so. I accept that the parties’ marriage was marred by family violence and that it is appropriate, to some extent, to take this into account.
I act upon the well-settled principle that a party’s non-financial contributions are no less valuable than are the financial contributions: Ferraro & Ferraro (1993) FLC 92-335 (Fogarty, Murray and Baker JJ); In the marriage of Rolfe (1979) FLC 90-629 (Evatt CJ).
In the present case, I consider that the parties’ financial and non-financial contribution based entitlements to their existing property should be given an equal weighting.
Section 75(2) factors
The parties are in modest financial circumstances.
The wife received a standard family tax benefit of $15,676 for the financial year ended 30 June 2018. The children are still young and will require her ongoing care. She has struggled to meet their expenses and is impeded in her ability to work full time while they remain young.
The husband has been unemployed since 2017. He has been engaged in a number of courses. Since 23 January 2018, the husband has been in receipt of a Centrelink New Start Allowance. Presently his allowance is $505.49 per week.
In the period 2016 –2017, the husband has undertaken a series of courses including training in relation to: (courses omitted).
Since being retrenched in 2016, the husband has had no employment save for a period of two months with a former employer.
For the period that the husband has been employed he has paid no child support. He now pays minimal child support only because it is automatically deducted from his Commonwealth benefit. The husband’s affidavit in this respect was revealing. He deposed:
[O]nce the matter of me spending time with the children is resolved I intend to find another job in my industry.
However, the husband has had extensive experience as a (occupation omitted). An available inference, which I draw, is that the husband will not seriously pursue endeavours to obtain employment and unless and until “the matter of me spending time with the children is resolved” only then does he “intend to find another job in my industry”. Those circumstances reinforced the importance of the early determination of these proceedings. I am satisfied that the husband has the capacity to engage in gainful employment and has chosen not to do so: cf Kedis & Kedis [2013] FCCA 1959, [48] (Hartnett J).
I find that the husband has, and has had, a clear capacity to engage in remunerative employment generating in the order of $80,000 per annum. That he has not done so since separation does not mean that he cannot and will not do so in the future.
The wife has been the primary care giver of the children at all times and they are still comparatively young and remain dependent upon her.
Whilst the wife and children have continued to live with her parents since separation this is not a viable long-term arrangement.
As the husband is making minimal contributions towards the children’s upkeep, the wife has had the major responsibility for their living expenses.
I have made findings respecting the husband’s attitude toward the determination of this proceeding and his communications and attitude in relation to the issues arising since the mortgage has been in default. At the same time the husband has lived in the Property since separation.
I consider that it is appropriate to make an adjustment of 15% in favour of the wife in respect of these matters.
Overall effect of findings
I have reflected upon my findings and remain satisfied that it is just and equitable for the parties’ existing property interests to be adjusted so as to divide that property as to 65% to the wife and 35% to the husband.
Relief
As the authorities make clear, the question posed by s 79(2) whether it is just and equitable for there to be an adjustment of property interests is not to be conflated with the separate question of what relief should go: see, s 79(4), Whent & Marbrand [2018] FamCAFC 95, [21].
The circumstance that the husband has not made full or frank disclosure in relation to his financial affairs and that he has not co-operated in relation to the valuation of the Property has impeded the Court in its ability to make a present finding of fact as to the value of the Property and the precise quantum of the asset pool. Neither of those matters should operate to deny the determination of what orders are just and equitable in the adjustment of their property interests: Elkhouri & Amatullah [2017] FamCA 688, [121] (Gill J); cf Chang & Su (2002) FLC 93-117 (Kaye and Dawe JJ, Finn J agreeing).
The relief sought by the wife was set out in her amended application dated 28 June 2018. In substance the wife sought an order for the sale of the Property, an adjustment of property interests from the net proceeds of sale together with their personal effects and superannuation.
At the close of his case and in the course of making submissions as to the appropriate modifications to be made to the interim consent order for the sale of the Property, the husband variously contended that: (1) the wife should simply retain the whole of the house contents (and the attendant responsibility for their removal); (2) he would vacate the Property immediately; (3) he did not wish to be at risk of being held responsible for the Property or for any damage that may be inflicted or suffered to the Property in the period between trial and settlement of any sale; (4) the Property was not insured; (5) the house had been constructed on the Property by himself with his parents as owner builders; (6) the meters for one or more of gas, water and/or electricity were all located on his parents adjoining Property; (7) it would be necessary to relocate the meters to the Property in order for it to be saleable; (8) there may be an issue with builder’s warranty insurance.
Viewed collectively, those considerations militate in favour of a conclusion that it is appropriate for the parties to be afforded an opportunity to make submissions as to what final property orders are appropriate based upon the findings that I have made: cf Calvin & McTier [2017] FamCAFC 125, [62]. The orders that will be made should operate upon the broad principle that orders adjusting property interests should as far as is practicable, finally determine the parties’ financial relations: see s 81; JEL & DDF (2001) FLC 93-075, [152(i)]. The application of that principle is particularly engaged in the present case by reason of the matters which may affect the orderly sale of the Property including those in [128] above.
Accordingly, orders will be made directing the wife to file a minute of proposed order and then allowing the husband an opportunity to respond to that proposal, indicating whether he agrees or disagrees with each order (providing reasons why) and any further orders that he submits may be appropriate in all the circumstances.
I certify that the preceding one hundred and thirty (130) paragraphs are a true copy of the reasons for judgment of Judge A Kelly
Date: 23 August 2018
Key Legal Topics
Areas of Law
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Civil Procedure
Legal Concepts
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Appeal
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Costs
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Procedural Fairness
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Remedies
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Stay of Proceedings
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