Mills & Mills
[2022] FedCFamC2F 348
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Mills & Mills [2022] FedCFamC2F 348
File number(s): SYC 2306 of 2021 Judgment of: JUDGE FIRTH Date of judgment: 18 February 2022 Catchwords: FAMILY LAW – Property – undefended – adjustment of parties’ property interests – lengthy relationship – 2 children – sale of marital home – costs. Legislation: Family Law Act 1975 (Cth) ss. 75, 75(2), 78, 79, 117(1), 117(2), 117(2A)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r. 1.33
Cases cited: Hickey & Hickey (2003) FLC 93-143
Stanford & Stanford [2012] 293 ALR 70
Division: Division 2 Family Law Number of paragraphs: 36 Date of last submission/s: 18 February 2022 Date of hearing: 18 February 2022 Place: Brisbane Counsel for the Applicant: Mr Jamieson Solicitor for the Applicant: Di Lizio & Associates The Respondent: Self-represented ORDERS
SYC 2306 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR MILLS
Applicant
AND: MS MILLS
Respondent
ORDER MADE BY:
JUDGE FIRTH
DATE OF ORDER:
18 FEBRUARY 2022
THE COURT ORDERS ON A FINAL BASIS THAT:
1.All other property orders are discharged.
2.The respondent be restrained and an injunction hereby issues restraining the respondent and her agents and servants from entering the property at B Street, Suburb C, New South Wales, and more particularly described in Certificate of Title Folio Identifier … (“the property”).
3.The applicant is authorised to do all acts and things and sign all necessary documents to effect the sale of the property to the exclusion of the respondent.
4.The property be sold by auction.
5.The sale of the property, pursuant to Order 4, is to be effected by the applicant at the earliest possible date as follows:
(a)the property is to be listed for sale with such real estate agent as the applicant chooses within 7 days of the date of these orders;
(b)the reserve price for the property shall be the price nominated by the real estate agent selected by the applicant;
(c)an independent solicitor or conveyancer, who is to have the conduct of the sale on behalf of the parties, is to be selected by the applicant; and
(d)the applicant is authorised to negotiate with the highest bidder, on behalf of the respondent, in the event the reserve price is not reached and is authorised to sell the property and enter into a contract of sale with the proposed purchaser even if the property does not reach the reserve price.
6.Upon sale of the property, the proceeds of sale shall be paid in the following manner and priority:
(a)to discharge the mortgage to Bank D;
(b)payment of the agent's commission and advertising or other expenses, if any, payable on the sale;
(c)payment of the legal costs relating to the sale; and
(d)the balance to be divided so there is an overall adjustment of the property interests with:
(i)47% of the total pool to the applicant; and
(ii)53% of the total pool to the respondent.
Personal property
7.Save for as otherwise specified in these Orders, the applicant shall retain for his sole and exclusive use, enjoyment and benefit all other items of property in his name, possession and/or control including but not limited to the following:
(a)Watch in his possession;
(b)the Motor Vehicle 1 with Registration No. …;
(c)funds in any bank account in his name; and
(d)his superannuation entitlements.
8.Save for as otherwise specified in these Orders, the respondent shall retain for her sole and exclusive use, enjoyment and benefit all other items of property in his name, possession and/or control including but not limited to the following:
(a)the three rings including a diamond engagement ring;
(b)any entitlement she may have under her trust fund;
(c)funds in any bank account in her name; and
(d)her superannuation entitlements.
9.Save for as otherwise specified in these Orders, the applicant shall be solely liable in relation to all debts and liabilities in his name or attaching to any item of property which he is to retain pursuant to these Orders.
10.Save for as otherwise specified in these Orders, the respondent shall be solely liable in relation to all debts and liabilities in her name or attaching to any item of property which she is to retain pursuant to these Orders.
11.The respondent pay the applicant’s costs fixed in the sum of $5,892.
12.If the costs of the applicant are not paid by the respondent prior to the sale of the property, the sum of $5,892 is to be paid to the applicant from the respondent’s property settlement entitlements.
13.All other property applications are otherwise dismissed.
THE COURT ORDERS UNTIL FURTHER ORDER THAT:
14.To facilitate the children X born in 2012 (“X”) and Y born in 2010 (“Y”) (collectively “the children”) spending time with the applicant, he is to collect X at the conclusion of school from C Public School and Y from D School at 3.30pm with this order to commence from on 11 March 2022 and every third week thereafter.
15.Changeover of the children at the conclusion of the time with the applicant is to occur at the E Petrol Station opposite the C Public School.
16.Pursuant to r.9.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, these proceedings be listed for directions in the Federal Circuit and Family Court of Australia (Division 2) at Sydney on a date to be advised.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Mills & Mills has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE FIRTH:
This judgment was delivered orally and has been corrected for written comprehension.
This is a property application commenced by the husband on 31 March 2021. By way of history, the matter was first before the Court on 30 June 2021. The wife appeared on that date. Orders were made for her to file her material by 16 July 2021. On 13 October 2021 the matter was again before the Court. The wife had failed to file her material in accordance with the orders of 16 July 2021. Orders were made on that date for the parties to attend a conciliation conference on 17 December 2021. The wife then filed her material on 21 October 2021, however, has not engaged in the proceedings or filed any material since that date, other than her short appearance on the last occasion before me on 10 February 2022.
On 17 December 2021 the wife failed to engage in the conciliation conference, and, as such, it was unable to proceed. Costs were reserved due to the wife’s non-attendance. It is noted that her legal representatives appeared but did not have instructions to engage in the conciliation conference.
The matter came before me on 19 January 2022, at which time I made orders for the husband to file any application in a proceeding he wished to be heard by 27 January 2022, and for the wife to respond to such application by 3 February 2022. The wife did not respond. A notation was contained on those orders outlining that the Court may consider making orders on a final basis in the wife’s absence should she not appear on the next court date.
The wife appeared on that occasion, but no material had been filed. At the time, she advised the Court she wished to resist the application to sell the house as she wanted to move into it. As such, I gave the wife one final opportunity to place evidence before the Court before I dealt with the application. I again made it very clear in the orders that I made on that occasion that I would deal with the matter on an undefended basis should the wife not comply with the orders that I had made.
The matter now comes before me today with the wife again failing to file any material despite me giving her a further opportunity to do so. As a result of the wife’s non-compliance with orders and failing to engage in the proceedings, I intend to deal with the application for property orders on a final basis as an undefended matter. This is pursuant to r. 1.33 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, due to a failure to comply with orders made by this Court on several occasions as outlined in the background I have provided.
I am satisfied that service has occurred in terms of dealing with this matter on an undefended basis. I do not intend to go through the history of that because the wife is on the line today, she was on the line on the last occasion, and was involved in the process of hearing my orders on the last occasion and confirming she had the material at that time.
Dealing now with the property application. The husband seeks orders which sees him receive 40 per cent of the proceeds of sale, in addition to the assets he currently holds. On my calculations this equates to approximately 47 per cent of the pool, depending on sale costs and the price achieved for the B Street, Suburb C property. I will place on the record at this point in time, before I continue giving my reasons that the wife has now hung up from the call and is no longer listening on the line.
By way of background, the husband was born in 1977 and is currently 44 years of age, the wife was born in 1980 and is currently 42 years of age. The parties commenced their relationship in 2004, married in 2008, and separated on a final basis on 9 August 2019. As such, the length of the relationship totalled approximately 15 years. There are two children of that relationship: Y, born in 2010 and X, born in 2012.
In determining property matters, consideration must be had to Part VIII of the Family Law Act1975 (“the Act”), and in particular ss. 75, 78 and 79. However, the authorities such as Stanford & Stanford [2012] 293 ALR 70 make it clear that the Court’s task under s. 79 of the Family Law Act is to determine first of all whether it is just and equitable to make a property adjustment order at all to so require the Court to identify the parties’ property, both legal and equitable, available for distribution between them. If I am satisfied that it is just and equitable to make property orders, I can then proceed to making such orders, following the relevant legislative pathway as provided for in ss. 75, 78 and 79 of the Act.
To that end, the Full Court in Hickey & Hickey (2003) FLC 93-143 outline the four-step process to be applied in consideration of the relevant provisions, namely, identifying and valuing the assets at the date of the hearing, identify and assess the parties’ contributions pursuant to s. 79, identify and assess the parties’ ongoing needs, taking into account the relevant factors under ss. 79 and 75(2), and consider the effect of the above and resolve what order is just and equitable in all the circumstances of the case.
There is an extraordinarily wide discretion to make findings in relation to proceedings pursuant to s. 79 of the Family Law Act, however, in exercising the discretion, I must have regard to the legal principles, which obviously I intend to do. I am satisfied that it is just and equitable to make property orders in relation to this matter as it clearly comes within the situation referred to in Stanford & Stanford where parties are separated and can no longer jointly enjoy the property they hold severally and jointly.
In terms of identification of the property pool, the parties’ property, liabilities, superannuation and financial resources are contained in the balance sheet filed by the husband on 9 February 2022. I note technically it is filed 10 February 2022 as it was filed at 5.26pm, and I note that out of an abundance of caution. They are the items that I have identified in the property pool, and I am satisfied that that contains the property, liabilities, superannuation and financial resources of the parties which is known at this point in time, given the matter is proceeding on an undefended basis.
At the commencement of the relationship, the husband had no significant assets. The wife was the beneficiary under a trust set up by her father, however, the amount of money she received under this trust is unknown. As to the contributions during the relationship, both parties were employed during the relationship. The husband earned an income that varied from approximately $70,000 per annum at the commencement of the relationship to approximately $190,000 per annum when the parties separated. Between 2003 and 2006 the wife was employed as a customer service officer. Her income during that time is unknown. Up until 2008 the wife was then employed by Employer F, earning approximately $50,000 per annum.
Upon the birth of the parties’ children, it appears that the wife was primarily responsible for the care of the children and undertook the homemaker duties. The husband has also assisted with matters around the house around his work commitments. The wife, as a result of trust distributions and gifts from her father, also contributed the following totals to parties’ purchase of properties:
(a)$135,000 to purchase the parties’ home in Suburb G;
(b)$33,000 for renovations on the Suburb G property;
(c)$33,290 to purchase the B Street, Suburb C property; and
(d)$79,000 to renovate the B Street, Suburb C property.
As such, these contributions totalled approximately $280,290.
The husband contributed to those properties as follows:
(a)$20,000 in renovations to the Suburb G property by a redundancy payment; and
(b)by assisting in significant renovations, which he outlines in his affidavit material relied on in this matter.
Overall, taking into account the significant financial contributions made by the wife, the parties’ respective incomes during the relationship, their non-financial contributions and homemaker contributions – including, on the husband’s part, the renovations undertaken by the husband personally – I am satisfied that the parties’ contributions were equal.
Post-separation I take into account that the parties’ B Street, Suburb C property has been rented, with it covering the mortgage payments in addition to payments to both the husband and wife. The wife, on average, has received $2,500 per month from income from the property, and the husband has received approximately $600 per month from the property.
Dealing then with future needs and the matters set out in s. 75 (2) of the Act, the parties are still in their 40s and appear to be in good health. The husband clearly has capacity to earn around $190,000 per annum, given that that is the amount he earned for a substantial amount of the relationship, however, it is noted he currently earns around $70,000 per annum. He gives no evidence in respect to that change of income. The wife is currently receiving Centrelink benefits in addition to child support payments paid by the husband.
In terms of care and control of the children, the parties do have two children, as outlined previously, who at present are living with the mother and under orders meant to be spending some weekend time with the father, although it is unclear whether this is actually happening. There is currently a parenting application on foot seeking a change in terms of parenting orders. As outlined, the wife has failed to engage and was unable to engage in these proceedings.
There is a significant income disparity between the parties. Even if the wife returns to being a cleaner or customer service officer, her income will be significantly less than the earning capacity of the husband. Further, she is at this time the main carer of the parties’ two young children, and this will obviously impact on her capacity to work. I do, however, take into account she may have a financial resource in terms of a trust. During the relationship she received at least $280,000 from the trust. I have no further evidence in respect of that trust that I can take into account.
In all of the circumstances, I am satisfied that an adjustment in favour of the wife would be made in determining future needs of the parties. I am satisfied that she should receive three per cent adjustment in this regard.
As such, overall, I am satisfied that it is just and equitable to make property adjustment orders which see the wife receiving 53 per cent of the pool and the husband receiving 47 per cent of the pool.
In order for such orders to be met between the parties, the parties’ B Street, Suburb C property will need to be sold. The husband seeks the sale of the property. Given the wife is only receiving Centrelink payments, I am not satisfied she has capacity to keep the property and make a required payment to the husband. The parties are to otherwise keep all of their possessions which they currently have.
The monies received from the sale of the B Street, Suburb C property is then to be paid in the following manner:
(a)first, to discharge the mortgage to Bank D;
(b)second, payment of agent’s commission and advertising or other expenses;
(c)third, payment of legal costs relating to sale; and
(d)fourth, the balance is to be paid so that the wife receives 53 per cent of the overall pool, and the husband receives 47 per cent of the overall pool.
I also make orders as sought by the husband at orders 7(a) to (e) in the Application in a Proceeding filed 27 January 2022 to allow the sale to occur in an appropriate manner.
Given the value of the house, it should see, on the current estimates – depending on legal fees, capital gain tax and other expenses – the wife receiving approximately $880,000 from the sale of the home. The husband should receive in the vicinity – depending again on legal fees, capital gains tax and other expenses, and the price the house ultimately goes for – around $585,000 from the sale of the home.
Overall, it would see the wife getting a total, taking into account all the liabilities, around $855,000 net, depending again on costs, and the husband receiving approximately $758,000, again depending on costs. This would be a differential of around $100,000 between the two parties in those circumstances. I am satisfied, in stepping back and considering the division of property in such a way, that the division is just and equitable in the circumstances and taking into account all relevant factors.
In considering that the parties will receive a distribution of funds as outlined above, I am satisfied as a whole that the property orders are just and equitable, and are a just and equitable division of the property, and I intend to make orders accordingly that I will publish on to the portal once they are finalised.
RECORDED : NOT TRANSCRIBED
It is the general rule that in matters to which the Family Law Act applies each party bear their costs, pursuant to s. 117(1) of the Family Law Act, however, this general rule is subject to the provisions of s. 117(2), which provides that the Court may make such order for costs it considers just. Subsections 117(2A)(a) to (g) of the Act set out the matters that must be taken into account in determining whether to exercise the Court’s discretion and make a costs order.
It is noted that no one factor must be present, and no particular factor has more or less weight than the others. Those factors include the financial circumstances of each of the parties. I note that the wife is receiving only Centrelink payments at present, however, it is also further noted that impecuniosity is no bar to an order being made. The husband currently earns approximately $70,000 per annum. I also note that in the property settlement there will be significant funds paid to the wife.
The conduct of the parties to the proceedings in relation to this matter is another factor that is relevant in terms of my determination. The wife, since October 2021, has failed to properly engage in the proceedings, save for brief appearances before this Court, but no compliance with orders. Her significant non-compliance has been dealt with in terms of my reasons I have provided as to the property matter. Safe to say that despite there being several orders made over a period of time for the wife to file material, she has not done so.
Further to that, she failed to attend the conciliation conference, which not only means that the parties did not have an opportunity to try and resolve the matter without the need for the parties incurring further legal costs, but the husband had to incur legal costs unnecessarily. By failing to prosecute her claim after being given a further opportunity, she has also incurred unnecessary costs of the husband’s attendance today, as well as when I intended on last occasion to deal with the matter on an undefended basis and gave the wife a further opportunity to file material to ensure that she had procedural fairness.
As such, I am satisfied that there are reasons that justify making an order for costs on this occasion. However, given the wife is in receipt of Centrelink benefits and currently has care of the children, I am not persuaded that an order for indemnity costs should be made on this occasion. As such, I intend to fix the amount of costs at $5,892. This includes $1,964 as per schedule 1, item 5 of the scale of costs in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, $1,964 as per schedule 1, item 4 of those Rules, and $1,964 as per schedule 1, item 4. In relation to those Rules, those amounts are for the attendance last week and for the attendance today.
I further intend to make an order that if such monies are not paid by the wife to the husband prior to the sale of the B Street, Suburb C property, that the total of $5,892 be paid from the wife’s monies to the husband prior to her receiving the monies from the sale.
RECORDED : NOT TRANSCRIBED
Otherwise, the only order I intend to make today is that I will formally transfer this matter to Sydney, given that the mother has now moved back to Sydney, and the father also remains living in New South Wales. It is appropriate in those circumstances, particularly if an independent children’s lawyer is to be appointed, for the parenting matters to be dealt with in Sydney.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Firth. Associate:
Dated: 24 March 2022
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