PALLESEN & NIVEN

[2018] FCCA 2592

FEDERAL CIRCUIT COURT OF AUSTRALIA

PALLESEN & NIVEN [2018] FCCA 2592

Catchwords:
FAMILY LAW – Property – undefended final hearing – orders adjusting parties’ interests made.

Legislation:

Family Law Act 1975, ss.75, 79

Cases cited:

Bevan & Bevan [2014] FamCAFC 19
Chapman & Chapman [2014] FamCAFC 91
Kennon & Kennon (1997) FLC 92-757
Russell & Russell (1999) FLC 92-877
Scott & Danton [2014] FamCAFC 203
Stanford & Standford [2012] HCA 52
Teal & Teal [2010] FamCAFC 120

Applicant: MS PALLESEN

Respondent: MR NIVEN

File Number: PAC 1344 of 2018

Judgment of: Judge Obradovic

Hearing date: 2 August 2018

Date of Last Submission: 2 August 2018

Delivered at: Parramatta

Delivered on: 20 September 2018

REPRESENTATION

Appearing for the Applicant: Mr Kalouche

Solicitors for the Applicant: CK Lawyers

Appearing for the Respondent: No appearance

ORDERS

1. That within 42 days, pursuant to section 74 of the Family Law Act 1975, the husband shall pay to the wife lump sum spousal maintenance in the sum of $35,000.

2. That within 42 days the husband shall pay to the wife the sum of $340,534.

3. Simultaneously with Order 2 the husband shall do all acts and things and sign all documents necessary so as to transfer to the wife all of his right, title and interest in the property situated at Property A and being the whole of the land comprised in title reference (omitted) and upon transfer, the husband is to vacate the property.

4. If the husband fails to comply with orders 1 or 2 herein then the wife is appointed trustee for the sale of Propety B being the whole of the land more particularly described in Folio Identifier (omitted) and the wife has authority to:

   (a)Conduct the sale;

   (b)Appoint a real estate agent to sell the property;

   (c)Appoint a solicitor to act in relation to the sale; and

   (d)Determine whether the sale is to be by way of private treaty and/or public auction.

5. The wife shall then take all necessary steps and execute all necessary documents to cause the property at Property B being the whole of the land more particularly described in Folio Identifier (omitted) to be sold at the earliest possible date at a price to be agreed upon between the parties and failing such agreement to be determined by the proper officer of the Real Estate Institute or their nominee and that the proceeds of the said sale be disbursed as follows:

   (a)Pursuant to section 74 of the Family Law Act 1975, in payment to the wife in the amount of $35,000 (unless order 1 has been complied with);

   (b)Payment of agent’s commission and advertising expenses and legal expenses of the sale;

   (c)Payment of costs incurred, if any in relation to determination of value of selling price by the President of the Law Society of New South Wales or his/her nominee;

   (d)The balance then remaining to be divided so as to achieve the overall property distribution pursuant to section 79 of the Family Law Act as follows:

   (i)$340,534 to the wife (unless order 2 has been complied with); and

   (ii)The balance to the husband.

6. The wife is declared the sole legal and beneficial owner of the following:

   (a)Property A

   (b)Household contents;

   (c)Wife’s car; and

   (d)Wife’s jewellery.

7. The husband is declared the sole legal and beneficial owner of the following:

   (a)Property B.

8. Apart from as provided otherwise herein the husband and wife shall have the sole right, title and interest in:

   (a)Any chattels, goods, furnishings and other property which is, at the date hereof, in their possession respectively;

   (b)Any moneys, shares, debentures, investments and superannuation entitlements which stand in their sole name or to their credit respectively at the date hereof.  

9. Remove all outstanding issues from the list of cases awaiting finalisation.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 1344 of 2018

MS PALLESEN

Applicant

And

MR NIVEN

Respondent

REASONS FOR JUDGMENT

1. On 2 August 2018, the Court heard the Applicant wife’s application for final property orders. The Respondent husband has not participated in the proceedings and the final hearing proceeded on an undefended basis.

2. The husband was born 1958 and the wife was born 1972. They were married 1996, and commenced living together in (country omitted). The wife moved to Australia 1997.

3. The parties separated at the end of 2017. They had lived together for 21 years.

4. The parties have three children together:

   a)[X] born 1998;

   b)[Y] born 1999; and

   c)[Z] born 2002.

5. While [X] is an adult, she has (omitted disability) and is substantially dependent on the wife for her care and welfare. [Y] has recently turned 18, but she is studying at university and remains dependent on the wife financially. [Z] is 16 years old. All three children live with the wife in the former matrimonial home.

6. The husband and wife own Property A, as joint tenants, and the husband is the legal owner of Property B.

   a)Property A is the former matrimonial home, where the parties continue to reside separated under the one roof and which has been valued at $1,300,000.

   b)Property B consists of a duplex which is subject to a mortgage to (Bank A). The property has been valued at $1,100,000.

7. Since migrating to Australia, the wife has not been in paid employment. She was however, the person responsible for the vast majority of all household and child rearing duties during the parties’ relationship, and continues to remain so responsible. The husband has maintained and repaired the properties as and when required.

8. The husband was in paid employment until 2011, when he stopped working due to a work injury. The husband has been responsible for meeting the mortgage repayments, council rates and water rates on the former matrimonial home.

9. The wife has been in receipt of Centrelink benefits of various sorts since [X] was born. She continues to be in receipt of such benefits.  From these government benefits, the wife has paid for the household groceries, children’s schooling, children’s clothing, telephone bills, electricity bills and all other living expenses for the family.

10. The husband exercised financial control over his income and also over the rental income received from the Property B. The husband’s income, including the rental income, was not utilised for the purpose of paying any of the family expenses except for the mortgage associated with the former matrimonial home. The husband expected the wife to deal with all such expenses from the government benefits.

11. For the duration of the parties’ relationship the wife has only been on a family holiday 2-3 times, while the husband has made annual, if not biannual trips to (country omitted), for 4 weeks at a time.

12. At the commencement of the parties’ cohabitation in Australia, the husband was the owner of Property B, which is a block of land with a duplex which has not been subdivided. At the commencement of the parties’ cohabitation in Australia they lived in one of the duplexes until they moved to the former matrimonial home.

13. In or about the year 2000, the husband purchased Property C for $140,000, which was sold in 2010 for $340,000. The net sale proceeds were utilised towards the purchase of the former matrimonial home. The purchase was subject to a mortgage, but at the time of final hearing the property appears to be unencumbered.

14. The wife alleges that the husband is a gambler and that his gambling habits have substantially increased since he stopped working in 2011. The wife estimates that the husband spends at least $3000 to $4000 per week, based on the husband’s home loan statement annexed to the wife’s affidavit.

15. The husband, as already noted, has not participated in the proceedings at all nor has he complied with his obligations of full and frank disclosure.

16. The husband has not complied with any of the Court orders made to date, and importantly he has not complied with the orders for spousal maintenance.

17. The property pool for adjustment purposes consists of the following:

Asset	Value
Property A	$1,300,000
Property B	$1,100,000
Household contents	$4,000
Wife’s car	$7,000
Wife’s jewellery	$2,000
(Bank A) Loan Account	-$208,288
Total	$2,204,712

1. The wife seeks an adjustment of 70% in her favour.

2. The overall approach to the determination of an application for property adjustment orders pursuant to s.79 Family Law Act1975 (Cth) was set out by the High Court in Stanford v Stanford[1]. Such approach was subsequently considered by the Full Court of the Family Court in Bevan & Bevan[2], Chapman & Chapman[3] and Scott & Danton[4].

   [1] [2012] HCA 52; (2012) 247 CLR 108 at [37] – [42]

   [2] [2014] FamCAFC 19

   [3] [2014] FamCAFC 91

   [4] [2014] FamCAFC 203

3. In many matters which come before this Court, the requirement of whether it is just and equitable to make any orders is readily satisfied by the fact of the parties’ separation; as there is not and will not thereafter be the joint use of property by the parties. It is so in the present case.

4. Once the issue of whether it is just and equitable to make any order is resolved, the Court is to then consider the contributions made by the parties as defined in s.79(4)(a) to (c), the matters set out in s.79(4)(d) to (g) and in particular the subjective considerations as to the parties by having regard to the provisions of s.75(2) in so far as they are relevant.

5. The Court is then to consider the justice and equity of the actual orders to be made, in the context of the Court’s obligations to make appropriate orders as provided for in s.79(1) of the Act.[5] The just and equitable requirement is “one permeating the entire process”[6].

   [5] see generally Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120

   [6] Bevan supra at [86]

6. The husband’s initial contributions were significant. He brought into the relationship property where the parties resided for a period after they commenced living together in Australia. That property was the springboard for their life together and as such his initial contribution ought to be given significant weight. However, it was a contribution which has been eroded over time by virtue of the parties’ joint contributions during their life together, and by the passage of time. It has also been eroded by the wife’s overwhelming non-financial contributions, which are ongoing. But it is a significant initial contribution nonetheless, and must be recognised.

7. The husband has also made significant financial contributions throughout the parties’ relationship, indeed on the uncontested evidence he met all of the mortgage repayments and outgoings associated with the former matrimonial home. He also enabled the purchase of the former matrimonial home through his purchase and sale of Property C. These contributions cannot be overlooked. 

8. There is also evidence which supports a finding that the husband has engaged in dissipation of assets through his gambling post 2011.

9. There is no evidence of the husband’s superannuation interest although the wife nonetheless seeks an order adjusting the husband’s interest in his superannuation fund.

10. In circumstances where the Court is not aware of how large or small the husband’s interest in superannuation is and there is no valuation evidence in respect of same, the superannuation will form a second pool, in respect of which there will be no adjustment.

11. Where the Court finds that a party has not complied with their obligations for full and frank disclosure, the Court should then not be unduly cautious about making findings in favour of the innocent party. [7] This is the approach which is adopted in these proceedings.  

12. The wife has significant 75(2) factors in her favour, warranting a significant adjustment of property interests. Not only are her employment prospects extremely limited, indeed likely to be non-existent, given her age, experience and training, but more importantly her ongoing care of the parties’ children and most particularly [X], mean that the wife’s future earning capacity is severely curtailed and that her ongoing expenses will remain significant.

13. In all of the circumstances, and in the exercise of the Court’s discretion, having regard to the matters set out briefly above, the Court finds that a just and equitable outcome in the proceedings is for there to be an overall adjustment in the wife’s favour of 75% and of 25% in favour of the husband in respect of the non-superannuation assets.

14. While the wife has sought a 70% adjustment including adjusting the husband’s superannuation, the Court finds that where there is no evidence as to the value of that interest there is little utility in adjusting any interest in respect thereof. Instead, there will be a greater adjustment than sought in respect of the non-superannuation assets.

15. Based on the pool of assets[8], the wife is to receive $1,653,534 and the husband is to receive $551,178 as follows:

    [8] Non-superannuation

    a)To the wife:

Item	Owner	Value
Property A	Wife	$1,300,000
Household contents	Wife	$4,000
Wife’s car	Wife	$7,000
Wife’s jewellery	Wife	$2,000
Payment by husband	Wife	$340,534
Total	Wife	$1,653,534

b)To the husband:

Item	Owner	Value
Property B	Husband	$1,100,000
(Bank A) Loan Account	Husband	$208,288
Payment to wife	Husband	$340,534
Total	Husband	$551,178

Superannuation Husband Unknown

1. The husband will be given a limited period of time to pay the wife a cash amount so as to achieve the adjustment ordered by the Court. If he does not do so Property B will be sold and the proceeds of sale divided accordingly.

2. In circumstances where orders for property adjustment will be made, the application for spousal maintenance needs to be considered in light of that outcome and vice versa.

3. The wife makes an application for spousal maintenance for a period of five years. The husband’s ongoing financial circumstances are also not the subject of any evidence. The wife seeks an order for Property B to be sold. If this is sold, there will be no rental income received by the husband. The wife is not able to point to any other source of income for the husband which would render any spousal maintenance order as sought by the wife capable of being met.

4. In the circumstances, it is appropriate that an order for lump sum periodic spousal maintenance be made rather than an order for periodic maintenance. As there will be a lump sum payment made, the lump sum payment ought to be less than the period payment would have been over the period of five years as the wife will receive the benefit of a lump sum. The wife’s financial statement discloses a financial need for $195 per week. Over five years this is $50,700. In the circumstances and given the lump sum payment to be made, it is appropriate that this amount be reduced to $35,000. 

5. An application for costs is contained in the Initiating Application. No submissions were made in that respect and the Court is not satisfied that overall there are circumstances justifying a costs order. Therefore, no order as to costs will be made.

6. For reasons outlined above, orders as set out at the forefront of these reasons will be made.

I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Judge Obradovic

Date: 20 September 2018