Osferatu & Lawrenz
[2024] FedCFamC1F 696
•18 October 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Osferatu & Lawrenz [2024] FedCFamC1F 696
File number(s): SYC 5116 of 2024 Judgment of: BEHRENS J Date of judgment: 18 October 2024 Catchwords: FAMILY LAW – PROPERTY – Interim application – Where applicant in substantive proceedings seeks property adjustment orders pursuant to Family Law Act 1975 (Cth) s 90SM – Where respondent to substantive proceedings seeks declaration under Family Law Act 1975 (Cth) s 90RD that de facto relationship did not exist – Where respondent seeks order for separate threshold hearing to determine whether de facto relationship existed – Where applicant opposes threshold hearing – Where threshold hearing would likely be lengthy – Where significant overlap likely between evidence adduced at hearing on threshold issue and at any final hearing – Where evidence overlap and anticipated witness credibility issues create risk of inefficiency and inconsistency – Where threshold hearing could avoid cost and delay in circumstances where there is a large pool, multiple assets and entities – Where there are likely to be significant issues remaining in dispute unless threshold hearing is determined in favour of the respondent – Where the overarching purpose is best promoted by not ordering a threshold hearing on issue of existence of de facto relationship – Application for threshold hearing dismissed Legislation: Family Law Act 1975 (Cth) ss 4AA, 90RD, 90SM
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 67
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.04, 10.10, 10.11
Cases cited: Barone and Whittle [2019] FamCA 924
Southwell v Bennett [2010] NSWSC 1372
Zagoreos and Zagoreos (2018) 57 Fam LR 358; [2018] FamCA 4
Division: Division 1 First Instance Number of paragraphs: 27 Date of hearing: 15 October 2024 Place: Sydney Solicitor for the Applicant: Ms Ruggero, Vizzone Ruggero Twigg Lawyers Solicitor for the Respondent: Ms Sharpe, Marsdens Law Group ORDERS
SYC 5116 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS OSFERATU
Applicant
AND: MR LAWRENZ
Respondent
ORDER MADE BY:
BEHRENS J
DATE OF ORDER:
18 OCTOBER 2024
THE COURT ORDERS THAT:
1.The Respondent’s application for a separate hearing on the question of whether the parties were in a de facto relationship is dismissed.
2.Accordingly:
(a)The proceedings shall proceed on the basis that all issues of fact and law will be heard together; and
(b)The Respondent’s applications to be relieved of the obligation to provide full and frank disclosure of his financial circumstances and to be relieved of his obligation to file a Financial Statement are dismissed.
3.By no later than 4.00 pm on 15 November 2024, the Respondent is to file and serve a Financial Statement.
4.The parties are to confer for the purpose of producing an agreed Minute of Procedural Orders for the further progress of the proceedings, on the basis that the matter will be listed in a callover in the first half of 2025 and it is expected that the matter will be allocated a final hearing in the second half of 2025 and trial directions will be made.
5.The parties are to provide any agreed Minute to Chambers via email to ...@... on or before 4.00 pm on 29 November 2024.
6.In the event the parties are unable to reach agreement in accordance with Order 4, each party is to provide their proposed Minute of Procedural Orders to Chambers via email to …@... on or before 4.00 pm on 29 November 2024 and the matter will be listed for further Case Management Hearing.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 Osferatu & Lawrenz has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BEHRENS J
This matter was listed before me on 15 October 2024 for Case Management.
By her Initiating Application filed 4 July 2024, the applicant, Ms Osferatu, seeks property adjustment orders pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”). By his Response filed 18 September 2024, the respondent, Mr Lawrenz, seeks a declaration pursuant to s 90RD of the Act that the parties were not in a de facto relationship and that the Initiating Application therefore be dismissed. Mr Lawrenz also seeks interlocutory orders, “pursuant to Rules 10.10 and 10.11 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), [that the] proceedings are split and a threshold hearing is held to determine whether or not the parties were in a de facto relationship.”
On 25 September 2024, being the first return of this matter, Senior Judicial Registrar Turner ordered that that the parties file Points of Claim and Defences to Points of Claim and transferred the matter to the National Assessment Team for consideration of transfer to this Court. On 30 September 2024, the matter was transferred to this Court in circumstances where – subject to the determination of the threshold question – the property pool may be in the vicinity of $80 million. The matter was allocated to my docket and listed for Case Management on 15 October 2024, with a notation to the effect that the Court anticipated allocating the matter a hearing early in 2025.
At the Case Management Hearing, the Court was informed that Ms Osferatu was opposed to the determination, as a separate question, of whether the parties were in a de facto relationship, and sought that this issue be dealt with along with all the other issues in one hearing. The Court was informed that Mr Lawrenz pressed the interlocutory orders sought in his Response. I heard brief submissions on the question of whether I should order a separate hearing (“a threshold hearing”). For the reasons set out below I have determined not to make that order.
The only evidence in the proceedings is:
(1)Affidavit of the applicant filed 4 July 2024;
(2)Financial Statement of the applicant filed 4 July 2024; and
(3)Affidavit of the respondent filed 18 September 2024.
Whilst the respondent filed a Financial Statement on 18 September 2024, this document was left blank in circumstances where he does not concede the jurisdiction of the Court, and I was informed during submissions that it was only filed so that he could file his Response.
The applicant’s Financial Statement discloses that she has assets with a net value of $14,095,072, including three real properties, superannuation and a 50 per cent share as a partner in a business.
The applicant’s Initiating Application seeks, among other orders, an order that the respondent retain what she says is his interest in some 21 entities.
Points of Claim and Defences to Points of Claim had not been filed at the time of the hearing.
During brief submissions I was told that:
(1)the applicant intends to rely on the evidence of 17-21 witnesses in any threshold hearing, and that a number of those witnesses would also give evidence in relation to matters relevant to contributions;
(2)the respondent “has” 17 lay witnesses on affidavit, and is likely to “call” seven;
(3)although, as recorded in Notation G to the orders made on 25 September 2024, the Court had been advised that any threshold hearing would take approximately four days, it is now anticipated that seven days would be required;
(4)the solicitor for the applicant estimated that between seven to nine days would be required were all issues to be determined in one hearing;
(5)the solicitor for the respondent estimated that 14 days would be required were all issues to be determined in one hearing;
(6)the parties’ combined assets may be valued in the order of $80 million;
(7)the respondent has not agreed to participate in a mediation.
RELEVANT LAW
The relevant Rules are as follows:
10.10 Application for separate decision
(1) A party may apply for a decision on any issue, if the decision may:
(a) dispose of all or part of the proceeding; or
(b) make a trial unnecessary; or
(c) make a trial substantially shorter; or
(d) save substantial costs.
(2) An application under this rule must be made by filing an application in accordance with the approved form.
10.11Orders that may be made under this Part
(1) On an application under this Part, the court may:
(a) dismiss any part of the proceeding; or
(b) decide an issue; or
(c) make a final order on any issue; or
(d) order a hearing about an issue or fact; or
(e) with the consent of the parties, order arbitration about the proceeding or a part of the proceeding.
(2) If the court makes orders against a party who is claiming relief against the party who obtains the orders, the court may stay execution on, or other enforcement of, the orders until determination of that claim.
Rule 1.04 makes clear that decisions made in accordance with these Rules are guided by s 67 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), which provides
67 Overarching purpose of civil practice and procedure provisions
(1) The overarching purpose of the civil practice and procedure provisions, in relation to the Federal Circuit and Family Court of Australia (Division 1), is to facilitate the just resolution of disputes:
(a) according to law; and
(b) as quickly, inexpensively and efficiently as possible.
(2) Without limiting subsection (1), the overarching purpose includes the following objectives:
(a) the just determination of all proceedings before the Federal Circuit and Family Court of Australia (Division 1);
(b) the efficient use of the judicial and administrative resources available for the purposes of the Court;
(c) the efficient disposal of the Court’s overall caseload;
(d) the disposal of all proceedings in a timely manner;
(e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
(3) The civil practice and procedure provisions, in relation to the Federal Circuit and Family Court of Australia (Division 1), must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose.
Rule 10.10 does not do a lot of relevant work because a decision on the question of whether the parties were in a de facto relationship will inevitably “dispose of all or part of the case.” Hence the application may be made. Rule 10.11(1)(d) then grants the discretion to “order a hearing about an issue or fact”. The Court must exercise that discretion in the way that best promotes the overarching purpose.
I was handed the Reasons for Judgment of Harper J in Barone and Whittle [2019] FamCA 924 (“Barone and Whittle”). As in this matter, the respondent in Barone and Whittle contended that no de facto relationship ever existed between him and the applicant. Justice Harper reviewed the authorities and principles on the question of whether an order for a separate determination should be made and decided that there should not be a separate threshold hearing in that case.
The case law referred to in Barone and Whittle includes the authority of Southwell v Bennett [2010] NSWSC 1372 (“Southwell v Bennett”), which was applied to decision-making in this Court in both Barone and Whittle and Zagoreos and Zagoreos (2018) 57 Fam LR 358.
In relation to the general question of whether an order for a separate determination should be made, I synthesise the following key principles from Southwell v Bennett:
(1)Whether to make an order for the separate determination of a question is a matter for the Court’s discretion;
(2)As a general rule, the power to make such an order should be approached with caution;
(3)The Court, in exercising its discretion, must give effect to the relevant statutory overriding purpose (in this case, s 67 of the Federal Circuit and Family Court of Australia Act 2021 (Cth));
(4)Generally, all questions of fact and law should be determined at the same time and accordingly, the party seeking a separate determination bears the onus of persuading the Court that it would be just and convenient for that order to be made;
(5)Factors relevant to the question of whether it is just and convenient to make the order include:
(a)Whether findings of credit may be involved in consideration of the separate question (if they will, that will tell against the making of the order);
(b)Whether there is a narrow point to be determined and whether a hearing of the separate question is able to be conducted within a short time or a short time relative to what would otherwise be the length of the hearing (if so, that will tell in favour of the making of the order);
(c)Whether “there is a strong prospect that the parties will agree upon the result when the separate question has been decided” (Southwell v Bennett at [15]) and other ways in which a hearing on a separate question may contribute to the settlement of the litigation (such contribution will tell in favour of the making of the order);
(d)Whether there is likely to be a significant overlap between the evidence adduced on the hearing of the separate question and at trial (if there is, that will tell against the making of the order).
(6)Also relevant is the availability of hearing dates both on the separate question and if an order for a separate determination is not made.
In relation to the more specific issue of whether an order should be made for a so-called “threshold hearing” on the question of whether there was a de facto relationship, the following key principles were identified by Harper J in Barone and Whittle:
(1)“The existence of a de facto relationship is a jurisdictional fact necessary for the application of…” s 90SM (at [9]), such that the Court cannot make any determination about the application of that section until jurisdiction is established;
(2)However, the “interplay” of ss 4AA (the definition of de facto relationship) and 90SM “shows there is clear potential for overlap between the factual issues necessary to found jurisdiction and those which may be necessary to establish an asset pool between the parties or for assessment and evaluation of contributions…”: at [14].
A decision will not be able to be made about whether it is just and equitable to adjust the parties’ property interests and, if so, in what way, until the jurisdictional fact has been determined – but that does not of course preclude evidence being taken as to all relevant issues at the one hearing.
EVALUATION
On both parties’ evidence, there was a relationship between them over the period 2013-2022. On Ms Osferatu’s evidence, this was a de facto relationship. Mr Lawrenz’s evidence is to the effect that it was an “on and off” dating relationship (affidavit of the respondent filed 18 September 2024, paragraph 11). The length of the relationship and the number of witnesses proposed to be relied upon means any “threshold hearing” would itself be lengthy. I agree with the legal representatives that any threshold hearing would likely take up to seven days.
There is inevitable overlap in the evidence relevant to the question of whether the parties were in a de facto relationship and to the questions of whether a property adjustment is just and equitable and, if so, what that property adjustment should be. This includes evidence as to the extent (if any) to which the parties intermingled their finances, the extent of their care and support for each other in various ways and contexts (if any), and Mr Lawrenz’s care and support (if any) for Ms Osferatu’s children.
Ms Osferatu’s evidence is that, throughout the relationship, the parties jointly engaged in attempts to conceive a child via various medically assisted means. The evidence about that matter will be significant both as to the question of whether the parties were in a de facto relationship and to the assessment and evaluation of contributions and potentially to the consideration of “future needs” factors.
The likelihood of significant overlap between the evidence adduced at a threshold hearing and at any further trial also tells against the making of an order for a threshold hearing, because at least some of the same witnesses are likely to be called in both stages. This creates additional cost and inefficiency and there is the risk of inconsistent findings.
This overlap also means that the difference between the likely length of a threshold hearing and the likely length of a hearing on all the issues is not as substantial as might first be thought. I find it difficult to see that this is likely to be a 14-day hearing, as was posited by the legal representative for the respondent, if all the issues are dealt with together. It may be more in the order of nine days, and potentially less if there are no valuation issues.
Given the parties’ very different accounts of their relationship, there are certain to be credibility issues, which would almost inevitably mean that the judge determining the threshold question could not deal with the matter at any subsequent trial. The likely need for two different judges to deal with the matter creates inefficiency in the use of judicial resources and gives rise to the risk of inconsistency.
Unless an order is made that the parties were not in a de facto relationship, there will likely remain significant issues in dispute between the parties after any threshold hearing. There will still be significant questions about whether a property adjustment is just and equitable and, if so, what that adjustment should be. It is therefore not clear that the resolution of the threshold issue will assist in the prospects of settlement– although it may of course dispose of the dispute altogether.
In as large a pool as I am told this is, there is an increased prospect of appeal, and, as Harper J identified at [21] in Barone and Whittle:
“[t]here is substantial risk that the delay to ultimate proceedings could be enormous if proceedings are bifurcated and result in an appeal process that then has the Family Law proceedings sit behind, potentially to confront appeals again”
The matter apparently involves multiple assets and multiple entities. The processes of disclosure and valuation, and otherwise preparing the matter for a final hearing on all issues, will be costly, take time and will inevitably delay the hearing of the matter well beyond the date on which I am able to allocate a threshold hearing. Such cost and delay will be able to be avoided if a decision is made at a threshold hearing that the parties were not in a de facto relationship. That tells in favour of the order sought by the respondent. In relation to delay, it is likely that I will be able to accommodate a final hearing in which all issues are considered as soon as the matter is ready – or at least in the second half of 2025. In relation at least to the respondent’s additional costs, if he is ultimately successful in his application for a declaration that there was no de facto relationship, then he has a remedy in an application for Ms Osferatu to pay his costs.
For the reasons set out above, I am not persuaded that it would be just and convenient for me to make the order for a threshold hearing sought by the respondent. The overarching purpose would best be promoted by not doing so. I will dismiss the respondent’s application for interlocutory orders.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Behrens. Associate:
Dated: 18 October 2024
0
2
3