Morse & Duarte (No 3)
[2023] FedCFamC1F 35
Federal Circuit and Family Court of Australia
(DIVISION 1)
Morse & Duarte (No 3) [2023] FedCFamC1F 35
File number(s): SYC737 of 2014 Judgment of: HARPER J Date of judgment: 31 January 2023 Catchwords: FAMILY LAW – PROPERTY – Interim – Where wife purchased a property following her separation from the husband (“the Suburb C property”) – Where wife and second respondent are registered on the title of the Suburb C property as tenants in common – Second respondent made no contribution to the purchase price of the Suburb C property – Funds for purchase of the Suburb C property originated from sale proceeds of the former matrimonial home and the sale of shares held in the wife’s name – Husband and wife seek a declaration that second respondent holds no beneficial interest in the property – Declaration that second respondent holds no beneficial interest in the Suburb C property – Second respondent ordered to transfer his right, title and interest in Suburb C property to wife – Second respondent removed as party to the proceedings – Husband and wife referred to conciliation conference. Cases cited: Duarte & Morse (2019) FLC 93-902; [2019] FamCAFC 93 Division: Division 1 First Instance Number of paragraphs: 14 Date of hearing: 31 January 2023 Place: Sydney Counsel for the Applicant: Mr Alexander Solicitor for the Applicant: Lander & Rogers First Respondent: Litigant in person Second Respondent: No appearance ORDERS
SYC737 of 2014 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR MORSE
Applicant
AND: MS DUARTE
First Respondent
MR TOLMAN
Second Respondent
order made by:
HARPER J
DATE OF ORDER:
31 January 2023
THE COURT NOTES THAT:
A.There was no appearance by the Second Respondent when the matter was called at 10.10 am on 31 January 2023.
THE COURT ORDERS THAT:
1.Order 1 made on 30 September 2022 be varied to read:
There be determined separately and before any other issues the question of the beneficial ownership of the Second Respondent’s interest in the land contained in the Real Property Act 1900 (NSW) Folio Identified … situated and known as B Street, Suburb C (‘Suburb C property’).
THE COURT DECLARES THAT:
2.The Second Respondent, Mr Tolman, has no beneficial interest in the Suburb C property.
THE COURT FURTHER ORDERS THAT:
3.As between the Applicant and First Respondent and without prejudice to their respective rights at trial and without any admissions as between them, within 7 days of the making of this order, the Second Respondent do all acts and things and sign all documents necessary to transfer his right, title and interest in the Suburb C property to the First Respondent.
4.Upon the transfer contemplated by Order 3, the Second Respondent be removed as a party to the proceedings.
5.In the event any party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these orders a Registrar of the Court shall be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
6.These orders bind the Second Respondent.
Conciliation Conference
7.The parties be referred for a Conciliation Conference on 15 February 2023 at 9.00 am with a Registrar.
8.Each party make all reasonable requests for disclosure (“the requests”) to the other by no later than 7 days from the date of these orders.
9.The parties collaboratively prepare a joint balance sheet (“the Balance Sheet”):
(a)Setting out all assets, liabilities and financial resources which the parties assert are relevant to the determination of this matter;
(b)The balance sheet is:
(i)to be divided into clearly identified sections, specifying Assets, Liabilities, Superannuation and Add-backs (if claimed);
(ii)give totals for each category, and subtotals in each category for each party;
(iii)in the event, there is dispute about totals and subtotals, each party is to include the total or subtotal for which they contend; and
(iv)to have footnotes which explain the differences between the parties in relation to any disputed items.
(c)If a party contends any item should be included as an “add-back”, the footnotes to the balance sheet must contain a brief description of the basis for the claimed add-back.
10.For the purposes of preparing the Balance Sheet and unless otherwise agreed, no later than 4.00 pm on 6 February 2023, the Applicant provide to the First Respondent a draft Joint Balance Sheet, using the form available on the Federal Circuit and Family Court of Australia website, setting out the asset pool contended for by the applicant and by no later than 12.00 pm on 13 February 2023, the First Respondent return the Joint Balance Sheet to the Applicant having inserted the First Respondent’s contentions as to the asset pool, the Frist Respondent’s asserted values and footnotes to explain any disputed items.
11.Not less than 7 days before the Conciliation Conference the legal representatives for any party must give to their client a written notice setting out:
(a)The actual costs and disbursements incurred by the party up to and including the Conciliation Conference; and
(b)An estimate of future costs and disbursements of the party in the event the matter does not settle at the Conciliation Conference and should it proceed to final hearing.
12.The parties attend a Conciliation Conference with a Registrar at the Sydney Registry on 15 February 2023 as referred to above AND:
(a)In the event of any applicable fee not having been reduced on the basis of financial hardship, the Applicant and Respondent pay any such fee equally at least 5 days prior to the Conciliation Conference;
(b)The solicitors for each party, or if unrepresented, each party, send to the Registrar at …@... (and to each other with the exception of sub-paragraph (b)(v) herein) by not later than 4.00 pm on 14 February 2023 copies of:
(i)The Balance Sheet;
(ii)A document to be headed “Conciliation Conference Document” setting out:
A.The party’s contention as to contribution based entitlements in terms of s 79(4) the significant factors relied on (including the percentage adjustment sought);
B.The party’s contention as to any s 75(2) adjustment sought and the factors in s 75(2) relied on (including the percentage adjustment sought); and
C.A draft of the order sought to give effect to the entitlement asserted.
(iii)Evidence that the Trustee of any relevant superannuation fund(s) intended to be the subject of a proposed superannuation splitting order has been accorded procedural fairness and any response received from the Trustee; and
(iv)If applicable, a copy of any apprehended violence order or restraining order that is currently in force; and
(v)Copies of the cost notices referred to in Order 11 herein.
13.In the event that there has been non-compliance with these orders, the Registrar may determine that the Conciliation Conference is not to proceed and the Court may consider submissions with respect to costs at the next Court date.
14.Parties are to attend Court one hour prior to the Conciliation Conference in order to have negotiations.
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 the pseudonym Morse & Duarte has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
HARPER J:
In proceedings SYC737/2014, there was listed before the Court today the determination of a separate issue concerning the beneficial interest or otherwise held by the second respondent, Mr Tolman, in B Street, Suburb C (“Suburb C property”).
These proceedings have a long and convoluted history in the Court. They have been to the Full Court several times and there has been the determination of both parenting and property issues.
As a result of the decision of the Full Court on appeal, the first respondent wife’s (“the wife”) appeal against parenting orders was dismissed, but her appeal against property orders was allowed in part on the basis that there had been an error disclosed in the primary judge’s reasons concerning his conclusion that the Suburb C property was held on trust in part for the applicant husband (“the husband”): Duarte & Morse (2019) FLC 93-902 at [532]–[540] (“Duarte & Morse”).
The matter was listed for the determination of the separate issue on the basis that the husband and the wife told the Court that upon the determination of the interests held in the Suburb C property as between the second respondent and them, it would be highly likely they could resolve the proceedings either at a conciliation conference or by private negotiation.
The second respondent has not participated in the proceedings for some time. When the matter was called on the morning of 31 January 2023, there was no appearance by him. He has filed no evidence in relation to any claim for an interest in the Suburb C property or any case outline making submissions as to why it could be concluded that he did.
The evidence provided by the husband and the wife makes clear that the purchase of the Suburb C property was funded from two separate sources. The first was a share of the former matrimonial home released to the wife in the amount of $388,931.25, and the balance of the purchase price of the Suburb C property was funded from proceeds of the sale of Company BD shares which had been held in the wife’s name.
As between the husband and the wife, the debate appears to be limited to the question of whether the husband held some interest in either or both of those funds such that his interest was converted to a proprietary interest in the Suburb C property in some fashion. The wife denies any beneficial interest of any sort enjoyed by the husband in the Suburb C property, whilst the husband contends that he may have such an interest. Ultimately, it does not appear to the Court that it will make much difference because the Suburb C property will be an asset on the balance sheet.
In discussions between the bench and the bar table on 31 January 2023, the Court encouraged the parties to engage in negotiations to finalise the proceedings on the basis that it proposed to make an order removing the second respondent from the proceedings.
Both the wife and the husband provided proposed minutes of orders. For reasons which the wife purported to advance in some detail, it appeared that she would not engage in negotiation until a declaration was made that the Suburb C property was held legally and beneficially entirely by her.
In broad terms, the proposal of the husband was that orders should be made removing the second respondent from the proceedings but preserving the possibility of the parties making competing contentions about the legal and beneficial ownership of the Suburb C property at a future time.
It is clear on the evidence that the second respondent made no contribution to the acquisition of the Suburb C property. He conceded as much in open court during case management hearings, and that factual position is clearly consistent with the facts underlying in part the determination of the Full Court as reported in Duarte & Morse at [512]–[561].
The submissions of the wife concerning the appropriate order to be made ranged quite widely and embraced allegations that unless orders were made in the terms that she proposed, that the Court was demonstrating either bias in favour of the husband or, indeed, some form of corrupt conduct.
Putting those allegations to one side as having no evident basis in anything that has been put before the Court, it seems to me that in circumstances where the attitude of the parties towards further negotiations seems to be lacking the necessary will toward consensus, it is appropriate to make orders which will have the result of removing the second respondent from the proceedings and making a clear determination that he holds no interest in the Suburb C property. Unfortunately, going beyond that today is not something the Court can assist the parties with, although they are, of course, at liberty to negotiate at any time.
Accordingly, I make the orders and notations set out at the commencement of these reasons and will refer the parties to a conciliation conference.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Harper delivered on 31 January 2023. Associate:
Dated: 7 February 2023
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