PASCAL & PASCAL
[2018] FCCA 2437
•28 September 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PASCAL & PASCAL | [2018] FCCA 2437 |
| Catchwords: FAMILY LAW – Alteration of property interests – undefended – assessment of contributions and future needs – a just and equitable order. |
| Legislation: Family Law Act 1975, ss.75, 79 Federal Circuit Court Rules 2001, sch.1 pt 1 |
| Cases cited: Bevan & Bevan [2013] FamCAFC 116 Stanford & Stanford [2012] HCA 52 Vass & Vass [2015] FamCAFC 51 |
| Applicant: | MS PASCAL |
| Respondent: | MR PASCAL |
| File Number: | SYC 8352 of 2016 |
| Judgment of: | Judge Altobelli |
| Hearing date: | 9 August 2019 |
| Date of Last Submission: | 9 August 2019 |
| Delivered at: | Wollongong |
| Delivered on: | 28 September 2018 |
REPRESENTATION
| Solicitors for the Applicant: | Sward Law |
| No appearance by or on behalf of the Respondent |
ORDERS
That within 28 days of the making of these orders, the Husband do all such acts and things and sign all necessary documents so as to transfer to the Wife all his right title and interest in the former matrimonial home situated at Property A, New South Wales (the “Property A property”) and being the whole of the land comprised in title reference.
That contemporaneously with the transfer as set out above, the parties do all such acts and things and sign all necessary documents so as to discharge the joint mortgage on the Property A property and replace it with a mortgage in the Wife’s name.
That contemporaneously with order 2, 3 and 5 the Husband be declared to have the sole right title and interest in the property situated at Property B, New South Wales, (“Property B property”) being the whole of the land comprised in title reference.
That contemporaneously with Order 3 above the parties do all such acts and things and sign all necessary documents so as to discharge joint the mortgage on the Property B property and replace it with a mortgage in the Husband’s name.
That contemporaneously with Orders 1, 2, 3, and 4 above the Husband pay to the Wife the sum of $61,832, being:
(a)$52,813 in full and final settlement;
(b)$580 for payment of costs orders in accordance with Order 14 of Orders dated 26 February 2018 and Order 3 of Orders dated 11 September 2017; and
(c)$8,439 for payment of the Wife’s costs in accordance with the Rules.
That in the event the Husband fails to make the payment to the Wife in accordance with Order 5 above then the Husband must take all necessary steps and execute all necessary documents to cause the Property B property to be placed on the market for sale within 7 days and sold by private treaty at the earliest possible date at a price not less than $450,000, and that the proceeds of the said sale be disbursed as follows:
(a)Payment of agent’s commission and advertising expenses and legal expenses of the sale;
(b)Payment of any money due and owing to the mortgagee;
(c)The net balance to be divided between the parties as follows:
(i)$52,813 plus any interest accumulated at a rate of 5% per day of the delay of payment to the applicant;
(ii)The sum of monies with respect to any costs Order made by the Court to the Wife; and
(iii)The residual balance to the Husband.
That in the event that the Property B property fails to be sold by private treaty within a period of 3 months hereof, then the Husband take all necessary steps and execute all necessary documents to cause the said property to be sold by public auction within 14 days at the earliest possible date at a reserve not less than $450,000, and that the proceeds of the said sale be disbursed as follows:
(a)Payment of agent’s commission and advertising expenses and legal expenses of the sale;
(b)Payment of any money due and owing to the mortgagee;
(c)The net balance to be divided between the parties as follows:
(i)$52,813 plus any interest accumulated at a rate of 5% per day of the delay of payment to the applicant;
(ii)The sum of monies with respect to any costs Order made by the Court to the Wife; and
(iii)The residual balance to the Husband.
That for the purposes of Orders 6 and 7, Sward Law be appointed to carry out the conveyance of the sale of the property at a cost of $1,700.00 inclusive of GST.
That the Husband continue to pay as they fall due all regular instalments in respect of the mortgage, council rates, water rates, strata levies and insurance payments in respect of the Property B property until such time that settlement of the sale of the property occurs and pay forthwith any arrears in respect of the said instalments.
That other than as otherwise set out in these Orders the parties have the sole right title and interest in any other property which is at the date hereof in their possession title or name and they shall be solely liable for and indemnify the other against any personal liabilities.
That the Husband and the Wife do all acts and things and give all consents and execute all documents and writings necessary to give effect to the Orders made herein.
That in the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to section 106A of the Family Law Act 1975, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.
That an affidavit filed by the Wife explaining the Husband’s refusal or neglect to execute any deed or instrument is sufficient evidence for such appointment pursuant to Order 12 above.
That in the event that the Husband fails to comply with the Orders and the Registrar is required to sign on his behalf then the Wife is to be immediately appointed as the sole trustee for the Husband for the purpose of taking exclusive possession of the Property B property for the purpose of preparation of and sale of the property in accordance with the default sale Orders herein.
That unless otherwise specified in these Orders and except for the purposes of enforcing the payment of any money under these or any subsequent Orders:
(a)Each party be solely entitled to the exclusion of the other to all property, including choses-in-action, in the possession of such party as at the date of these orders;
(b)Any money standing to the credit of the parties in a bank account are to be retained by the party in whose name the account appears;
(c)Each party hereby foregoes any claim they may have to any superannuation benefit that is belonging to or owned by the other save as provided for in these orders;
(d)All insurance policies are to become the sole property of the owner named hereon;
(e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
NOTATIONS
(A)There was no appearance by or on behalf of the Respondent Husband when the matter was called at 9:00am on 9 August 2018.
(B)These orders are made in the absence of the Respondent Husband and he is at liberty to make such application as he may be advised pursuant to Rule 16.05 of the Federal Circuit Court Rules 2001.
IT IS NOTED that publication of this judgment under the pseudonym Pascal & Pascal is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA |
SYC 8352 of 2016
| MS PASCAL |
Applicant
And
| MR PASCAL |
Respondent
REASONS FOR JUDGMENT
Introduction
These Reasons for Judgment explain the Orders for alteration of property interests (property settlement) that the Court has made.
Background
The Wife is the Applicant in this case, the Husband the Respondent. They both live in the Region 1. The Husband works full-time and the Wife works almost full-time. They have three children who are aged 12, 8 and 6. The parties commenced cohabitation in 2004, married in 2009, and separated in 2016. They were together for about 12 years.
It is common ground that the Husband came into the relationship with more assets than the Wife. Indeed, whether one looks at her Affidavit, or his Affidavit, they both seem to agree that he came in with about $80,000 worth of assets, and she came in with about $18,000 worth of assets. The most significant asset appears to have been the Husband’s equity in a home unit which is located at Property B, NSW. Both parties seem to agree that his equity at the time was about $50,000 in the said unit. The other property that the parties had at cohabitation included motor vehicles, furniture, some savings and superannuation interests. In this regard, the Husband’s superannuation was about $20,000, the Wife’s $10,000.
The matter proceeded to an Undefended Hearing on 9 August 2018. The non-participation of the Husband in this case is rather surprising. Nonetheless, the Wife was entitled to proceed on an undefended basis. The Court was satisfied that the Husband had been given adequate notice of the proceedings and that they might move to a Final Hearing on an undefended basis if he chose to continue not to participate in the same.
Even though the matter proceeded on an Undefended Hearing, the Husband is still entitled to have the applicable law applied in the usual manner, based on the evidence before the Court, including his own evidence. Moreover, the Husband is entitled to the benefit of a notation under rule 16.05 of the Federal Circuit Court Rules. Indeed, a notation will be made to that effect.
Competing proposals
At the Undefended Hearing the competing proposals were as follows. The Wife’s case was set out in a Case Outline document filed on her behalf by her Solicitor, Ms Sward. The document was filed 2 August 2018. In effect, the Wife was seeking an adjustment of the assets in her favour as to 67 per cent which represented 52 per cent on contribution, and 15 per cent under s.75(2) of the Family Law Act 1975 (hereafter referred to as ‘the Act), based on her future needs. The Husband’s proposal can only be gleaned by the Response that was filed back on 20 November 2017. It, of course, does not express the effect of the orders that he seeks in terms of percentages, but as will be seen below, this can be inferred.
Whereas the Wife proposed that she keep what was the former matrimonial home at Property A, NSW, in return for a payment from the Husband of $158,876, he proposed that she keep the said property in return for a payment from him of $40,000. It was common ground between the parties that the Husband would retain his home unit at Property B, NSW (which he currently occupies). It was also common ground between the parties that each would retain their respective superannuation entitlements. The Wife also sought costs, indeed on an indemnity basis.
Evidence
The evidence before the Court consisted of the Wife’s Case Outline aforesaid, her Application filed 14 June 2017, her Affidavit of the same date, and the three Financial Statements she filed during the course of the proceedings, on 14 June 2017, 16 November 2017, and 19 July 2018. In addition, there was valuation evidence, to which the Court will refer. The only evidence in the Husband’s case was his Response filed 20 November 2017, his Affidavit filed 20 November 2017, and a Financial Statement likewise filed on that date. The Wife’s Case Outline also contained a chronology, which is contained in the Schedule to these Reasons.
Applicable law
The applicable law is contained in Part VIII of the Act. This is an application under s.79 which relevantly provides:
79 Alteration of property interests
(1) In property settlement proceedings, the court may make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
(b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c) an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the marriage; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Section 79(4) incorporates the provisions contained in s.75(2) of the Act, which states:
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party's role as a parent; and
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In Bevan & Bevan [2013] FamCAFC 116, the Full Court of the Family Court of Australia considered the High Court’s decision in Stanford & Stanford [2012] HCA 52, which provided guidance on how s.79 was to be interpreted and implemented. Bevan endorsed the continuing application of the four-step approach articulated by the Full Court in Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA395 (‘Hickey’), but on the basis that it is a shorthand distillation of the words of s.79, as opposed to being a statutory edict. The four steps articulated in Hickey at paragraph 39 are:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
The decisions in Stanford and Bevan also emphasise the importance of making findings that any order is just and equitable for the purposes of s.79(2), independent of the s.79(4) process. In most cases, such as the present one, it makes no difference to the outcome of the alteration of property interests exercise. Even if the just and equitable consideration were treated as a threshold issue in this case the parties have, by their actions (separation, and re-ordering of their financial lives since then), and claims (divergent claims about their property under s.79 of the Family Law Act (supra)), indicated that they themselves consider it just and equitable that some order be made under s.79 adjusting their property interests as presently held. It is clearly just and equitable in this case to make an order.
Both decisions also emphasise the importance of identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. This is not inconsistent with step one in Hickey.
A problem that commonly arises, and indeed does arise in this case, relates to property that once existed but no longer does. This disposed of property may still be significant, however. As the Full Court said in Bevan, such disposals must be dealt with carefully. In practical terms this means carefully assessing the evidence about the disposal, attempting to quantify it if this is at all possible, and then assessing its weight whilst neither placing too much, or too little, weight on it. It would seem that notionally adding back such property may still be appropriate in some cases. In Vass & Vass [2015] FamCAFC 51, the Full Court said at [138]:
There is no error committed per se in adjusting the parties’ actual property interests by a calculation involving notionally adding back into the pool sums which have been dissipated by the parties. We reject any suggestion that the decision of Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545 – or, more particularly, the decision of the High Court in Stanford & Stanford [2012] HCA 52; (2012) 247 CLR 108 – is authority for any necessary contrary solution.
Further evidence
The further evidence relied on in this case included Exhibit A1, a bundle of bank statements tendered on behalf of the Wife. In addition, there was the Court’s Exhibit 1 which was an email received from the National Enquiry Centre setting out a communication received from the Husband to the effect that he was unwell and would not be attending the Defended Hearing listed on 9 August 2018. The communication duly records that he was advised that Orders could be made in his absence, and that he would need to file an Affidavit providing information about his non-attendance. The Court treated this communication as being the Husband’s application for an adjournment, which was duly declined. There was no medical evidence that accompanied the implied application. There was nothing to indicate, for example, why he could not attend by telephone.
Balance sheet
At the Hearing the Solicitor for the Applicant Wife relied on the list of assets and liabilities that was contained within her Case Outline. This document is reproduced below:
Assets
Value ($)
Property A $550,000 Property B $475,000 Wife’s Bank 1 account Negligible Wife’s Bank 2 account Negligible Wife’s Bank 1 account– ITF [X] Nil Wife’s Bank 1 account - ITF [Y] Negligible Wife’s Bank 1 account– ITF [Z] Negligible Wife’s Bank 1 account Nil Wife’s Motor Vehicle K $10,000 Husband’s Motor Vehicle L $5,000 Wife’s Furniture $2,000 Husband’s Furniture $8,000 Bank Accounts not disclosed by the Husband NK Total Assets: $1,050,000
Add Back
Value ($)
Joint Savings Retained by husband $35,000 Total Add Backs: $35,000
Liabilities
Value ($)
Joint Home Loan – Property A $242,717 Joint Loan– Property B $167,532 Wife’s Credit Card $9,585 Wife’s Credit Card ending $586 Wife’s– Credit Card $8,700 Wife’s Bank 2 Personal Loan $18,694 Husband’s Mastercard $NK Rates outstanding for Property A Property E$2,250 Outstanding Rates for Property B Unit E$3,000 Outstanding Strata Levies for Property B Unit in arears E$13,400 Total Liabilities: $E 466,464
Superannuation
Value ($)
Wife – Super Fund H $15,788 Wife – Super Fund I $13,410 Husband – Super Fund J E$18,000 Husband – Super Fund K E$26,000 Husband – Super Fund L E$3,000 Total Superannuation: $76,198
TOTAL NET ASSETS (incl of Super & add back):
$694,732
A number of issues arise from this balance sheet.
The Court is satisfied that the two pieces of real estate are valued in accordance with the available valuation evidence before the Court. The Property A property is jointly owned, the unit at Property B is owned in the Husband’s name only. There was no valuation about the Wife’s Motor Vehicle K, but she asserts in her balance sheet that it has a value of $10,000, and the Court will accept this as an admission against interest, in circumstances where there is no other evidence. The Wife asserted that the Husband’s Motor Vehicle L had a value of $5,000, but there was no valuation evidence in this regard. The Court finds that it has a value of $2,500, which is the value that the Husband attributes to it in his Financial Statement of 20 November 2017. In this regard, his admission against interest is the best available evidence. The items of furniture, and the values attributed thereto, will be accepted by the Court. In both financial statements the Wife and the Husband refer to their furniture as having this value. Indeed, the Husband attributes a value of $8,000 to his furniture in his Affidavit of 20 November 2017. The Court will find that the total value of assets is, therefore, $1,047,500.
In the balance sheet, the Wife sought an addback for joint savings retained by the Husband in the sum of $35,000. The Wife could adduce no evidence in support of this contention. Accordingly, the said amount cannot be included in the balance sheet.
The Court accepts the values of the liabilities attributed in the balance sheet by the Wife. Most of these figures are broadly consistent with the Husband’s own estimates in his Financial Statement. The Court thus finds that the total liabilities amount to $466,465.
The Court also accepts the balance sheet as it refers to superannuation. Insofar as it relates to the Husband the figures here are those set out in his Financial Statement. Thus, total superannuation assets amount to $76,198.
Accordingly, the net non-superannuation assets are found by the Court to be $581,036, representing $1,047,500 less liabilities of $466,464. Superannuation assets are found to be $76,198. The total net asset pool, consisting of both superannuation, and non-superannuation assets, is found by the Court to have a value of $657,234. The balance sheet, therefore, will be as follows:
Assets
Value ($)
Property A $550,000 Property B $475,000 Wife’s Motor Vehicle K $10,000 Husband’s Motor Vehicle L $2,500 Wife’s Furniture $2,000 Husband’s Furniture $8,000 Total Assets: $1,047,500
Liabilities
Value ($)
Joint Home Loan – Property A $242,717 Joint Loan – Property B $167,532 Wife’s Credit Card $9,585 Wife’s Bank 1 – Credit Card ending $586 Wife’s– Credit Card $8,700 Wife’s Bank 2 Personal Loan $18,694 Rates outstanding for Property A Property E$2,250 Outstanding Rates for Property B Unit E$3,000 Outstanding Strata Levies for Property B Unit in arears E$13,400 Total Liabilities: $E 466,464
Superannuation
Value ($)
Wife – Super Fund H $15,788 Wife – Super Fund I $13,410 Husband – Super Fund J E$18,000 Husband – Super Fund K E$26,000 Husband – Super Fund L E$3,000 Total Superannuation: $76,198
Total net non-superannuation assets:
$581,036
Superannuation:
$76,198
TOTAL NET ASSETS:
$657,234
Assessment of contribution
The Court must assess contribution commencing from the date of cohabitation. It is common ground in the evidence before the Court that the Husband had assets totalling about $80,000, most of it represented in equity in his home unit, and his superannuation, compared to the Wife’s assets of just under $20,000, most of which was represented in her superannuation. It must be remembered that the Husband’s equity in the home unit at Property B remains as a matrimonial asset. It was only recently that he has moved, in the post-separation period, back into this property. Throughout the entire period of cohabitation, therefore, the evidence suggests it was rented out and the rental was applied to paying the mortgage. Moreover, it was the Property A, property that provided the equity towards the purchase of the former matrimonial home at Property A. The contribution that the Husband bought in at the date of cohabitation was, therefore, a substantial one, and it continued throughout the course of the relationship.
During the course of the relationship what is apparent from the evidence of both parties is that they both worked, and were both involved in parenting and the home-making duties. It is possible, indeed likely, that the Wife bore the greater responsibility for home-making and parenting, even though she worked during the course of their relationship. There were periods when the Husband was not working on a full-time basis, but he appears to have been involved in caring for the young children at the time. However, when he was working, he seemed to be earning more than the Wife. If there was a period when she was the sole income earner, it was certainly no more than two years, and this must have corresponded with a time when the Husband was assuming more of the home-making and parenting duties.
It was the Wife’s Solicitor’s contention that as at the date of the Hearing the Court would assess contribution, even taking into account the Husband’s greater contribution at cohabitation, as being 52 per cent in the Wife’s favour. It is hard to see how this outcome can be derived from the evidence before the Court. The Court is inclined to find that in the ebb and flow of the contribution that was made after cohabitation and before separation both the Husband and the Wife assumed different roles in the course of what was, in effect, a partnership. It is possible that the Wife spent more time in the workplace than the Husband, but when the Husband was working he was earning more than her. It is possible that the Wife did in fact make a greater contribution to home-making and parenting, but there were periods when, in effect, the Husband had to step up because the Wife was working full-time. The Court is prepared to accept that the Wife was likely ahead on contribution if measured strictly during the period of cohabitation but that does not, with respect to the Wife’s Solicitor, make up for the substantial initial contribution that the Husband made at the time of cohabitation. In the circumstances, the Court finds that the Husband did make a greater contribution when measured as at the date of separation and the Court finds in this regard the contribution should be assessed as to 60 per cent in his favour, and 40 per cent in the Wife’s favour.
Future needs
The Wife seeks an adjustment in her favour as to 15 per cent under s.75(2) of the Act. The Court accepts, in the circumstances, that this is a reasonable claim. She has primary care for the three young children of the marriage. Her income is not as great as his. His Financial Statement discloses a substantial surplus between income and expenditure. It is probably likely that he has a greater earning capacity than the Wife, even though his income is relatively modest. The Court does not accept, however, that there should be an adjustment in the Husband’s favour attributable to non-disclosure on his part. This is, with respect, a house and garden property settlement. It is hard to imagine what non-disclosure could be asserted. Even though, for example, the Wife contended for an add-back of $35,000 for joint savings retained by the Husband on separation, she leads no evidence about this in her Affidavit, or otherwise. In her Affidavit she complains about the Father having transferred money from their children’s savings account in the sum of $5,000, into his own name, but again produces no evidence about this. It must be recognised that the mere assertion of non-disclosure does not create a situation where an adverse inference is to be drawn against a party.
The Court accepts that her financial needs are much greater than his and an adjustment of 15 per cent, is, in the circumstances, considered by the Court to be appropriate.
Just and equitable
This means that the final assessment, subject to issues of just and equity, would provide for an adjustment in the Wife’s favour as to 55 per cent, and the Husband 45 per cent. This brings about a 10 per cent differential in their respective entitlements, within a relatively modest asset pool.
If the Wife receives 55 percent of the net pool of assets, retains the Property A property as seems to be her preference, and motor vehicle and furniture, this means she receives total assets of $562,000. However, she would need to assume responsibility for the joint home loan secured over the Property A property, all of her credit card debts, her personal loan, and the rates over the Property A property. These debts amount to $282,532. Of course, the Wife retains her superannuation of $15,788 and $13,410. This means that the total net assets available to the Wife would be $308,666, but this would result in a windfall compared to her entitlement of $52,813.
For the Husband to take 45 percent of the net pool of assets, he would need to receive $295,755. He has the Property B property at $475,000, his motor vehicle at $250,000 and furniture at $8000, meaning he presently has total assets of $485,500. Of course, he has the joint home loan which is secured over Property B, in the sum of $167,532, there are rates owing on that property of $3000, and levies owing of $13,400. This means that when these liabilities are deducted from the assets he has, he would be left with $301,568. Of course, he also has superannuation accounts in the sum of $18,000, $26,000, and $3000. This means his total assets, including superannuation, amount to $348,568. He thus has a surplus of $52,813 which needs to be paid to the Wife.
The Orders that the Wife seeks require the Husband to transfer his interest in the former matrimonial home at Property A to her on the basis that the mortgage over the property is discharged, and replaced with a mortgage in her own name. Likewise, she proposes that the Husband be declared the sole owner of the property at Property B, but he too is required to discharge what is the joint mortgage into his own name.
The Wife initially proposed a payment to her of $156,876, which is significantly in excess of that which the Court has ordered. Indeed, the Court wonders whether she will be able to afford refinancing the various home loans, together with the credit card debts, on the amount that she will receive from the Husband, and having regard to her own income.
The Wife also sought to be incorporated in the property settlement, $580 being Costs Orders that were made against the Husband on previous occasions. The Court accepts that it is appropriate, in the circumstances, that this amount be deducted from his entitlement, and added to hers.
Costs
The Wife sought indemnity costs. The outcome of these proceedings is far less than what the Wife contended for. Nonetheless, this is a case that should have settled. The Wife should not have been put to the expense and inconvenience of preparing for, and conducting an Undefended Hearing as she has. This does not, however, make for an indemnity costs order. The Court believes that she is entitled to costs, but these should be quite properly calculated in accordance with the Federal Circuit Court Rules 2001 (hereafter referred to as ‘the Rules’), rather than on an indemnity basis.
The Court finds that the Wife is entitled to her costs in accordance with the Rules, Schedule 1, Part 1, as follows. She should have the full benefit of item 1(a) initiating the application, $2,162. She should have the full benefit of item 6, preparing for the Final Hearing as if it were a one day matter, in the sum of $4,608. The Wife should have the full benefit of item 13(b), treating the Undefended Hearing as if it were a half day matter, thus $1,081. It will be necessary for the Wife’s Solicitor to take judgment and explain the Orders and so the Court applies item 9A $294, together with item 13A being a further $294.
Thus the Wife is entitled to a further sum of $8,439 in respect of costs, and this too should come out of the Husband’s share and be treated as part of the Wife’s entitlement.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Judge Altobelli
Date: 28 September 2018
Schedule
Date Event 5 October 2016 Initial letter to Husband requesting full and frank disclosure. 15 November 2016 Follow up letter to Husband requesting full and frank disclosure. 24 January 2018 Further letter to Husband following up full and frank disclosure. 31 January 2018 Email from Husband confirming Quirk Lawyers as legal representation. Letter forwarded to Quirk Lawyers requesting Husband’s full and frank disclosure and notifying of delay since 5 October 2017. 21 March 2018 Letter to Quirk Lawyers following up full and frank disclosure. 3 April 2018 Letter to Quirk Lawyers following up full and frank disclosure and note of seeking full indemnity costs against Husband in vicinity of $4,000 to $5,500 plus GST. 14 June 2017 Wife commences proceedings and files Initiating Application, Financial Statement and Affidavit. 16 June 2017 Letter to Quirk Lawyers serving Wife’s pleadings. 22 August 2017 Letter and Email to Quirk Lawyers again serving Wife’s pleadings on assumption that he has instructions to accept service. Notice that if no instructions held, then personal service will be affected. 11 September 2017 Orders made for Husband to file and serve responding documents within 28 days, matter to be adjourned for further mention on 20 November 2018 and Husband to pay Wife’s costs of $250.00 within 6 weeks. Notation in Orders that should Husband fail to comply or appear when this matter is next listed it is likely that it will be listed for an undefended hearing. 9 October 2017 Husband fails to file and serve responding documents. 10 October 2017 Letter to Quirk Lawyers noting Husband’s failure to file and serve pleadings and reminder for payment of costs Order. 18 October 2017 Letter to Husband directing noting Husband’s failure to file and serve pleadings and reminder for payment of costs Order noting no response from Quirk Lawyers and no Notice of Address for service filed by Quirk Lawyers. 23 October 2017 Husband fails to pay Wife’s costs as per Order 3 of Orders dated 11 September 2017 26 October 2017 Letter to Quirk Lawyers noting no response from him or Husband and requesting update on matter. 15 November 2017 Letter to Husband, by email and post, noting matter may be listed for undefended hearing, outlining delays by Husband and enclosing Minute of Orders Sought
Letter to Quirk Lawyers enclosing letter to Husband, Minute of Order Sought and requesting payment of September 2017 costs order and response to whether instructions are held to act on Husband’s behalf.
16 November 2017 Wife engages process server to affect personal service on Husband.
Wife files and served on Husband and Quirk Lawyers updated Financial Statement.
17 November 2017 Wife’s solicitor serves Wife’s full and frank disclosure on Quirk Lawyers 17 November 2017 Quirk Lawyers serve Husband’s unsealed Response, Affidavit and Financial Statement and sealed Notice of Address for Service on Wife’s solicitor at 5:02pm by way of email. 19 November 2017 Process server attempts to serve Husband at place of employment with letter from Wife’s solicitors noting matter may be listed for undefended hearing, outlining delays by Husband and enclosing Minute of Orders Sought. Husband refuses service on basis that “his solicitor already had it” and tears up documents and puts in rubbish bin. 20 November 2017 No appearance by Husband. Mr Quirk appears on behalf of Husband. Orders made for Conciliation Conference to occur on 1 March 2018, parties to provide full and frank by 1 February 2018, Balance sheet and Conciliation Conference to be filed by 21 February 2018 and the matter relisted for mention on 7 March 2018.
Parties agree to engage (Valuer) to complete valuations on Property A and Property B properties. Mr Quirk executes joint letter on Husband’s behalf to engage (Valuer).
Wife’s solicitor forwards joint letter to (Valuer).
20 November 2017 (Valuer) receives joint instructions and places Property B job on hold as Husband’s mobile number is incorrect and requests correct telephone number. 21 November 2017 (Valuer) again puts job on hold and makes further request for Husband’s correct mobile number.
Quirk Lawyers provides Husband’s correct mobile number.
22 November 2017 (Valuer) again puts job on hold and makes further request for Husband’s correct mobile number.
No response is received from Quirk Lawyers.
24 November 2017 Inspection completed on Property B Unit. 29 November 2017 Inspection completed on Property A Property. 16 January 2018 Wife makes payment to (Valuer) for amount of $880.00 being her half share of both valuations.
Both parties receive valuation report for Property B Unit.17 January 2017 Wife’s solicitor requests report for Property A Property and receives notification from (Valuer) that Husband has failed to make payment for his share of the Property A Property Invoice. 1 February 2018 Husband fails to provide full and frank disclosure 1 February 2018 (Valuer) emails both parties requesting approval for reinspection of Property A Property as previous valuer no longer with business.
Wife’s solicitor confirms agreement by return email. No response by Mr Quirk.
6 February 2018 Wife’s solicitor forwards letter to Quirk Lawyers noting Husband’s failure to provide disclosure, pay the Wife as per costs order, failure to make a payment for his share of Property A Property valuation and notice that if no payment is made, leave will be sought in chambers to vacate the Conciliation Conference and seek costs against the Husband. 8 February 2018 (Valuer) emails both parties seeking Mr Quirk’s instructions as per reinspection email of 1 February 2018. 15 February 2018 Wife’s solicitor forwards letter to Quirk Lawyers seeking response to letter of 6 February 2018.
(Valuer) email both parties seeking Mr Quirk’s instructions as per reinspection email of 1 February 2018.
19 February 2018 Wife’s solicitor seeks leave in chambers to vacate Conciliation Conference on 1 March 2018 and relist matter as Husband has not provided any disclosure, communicated with our office since November 2017 and failed to make a payment for his share of Property A Property Valuation. 21 February 2018 Orders made in chambers for Conciliation Conference of 1 March 2018 and mention of 7 March 2018 to be vacated and matter relisted for Mention on 26 February 2018. 2 February 2018 (Valuer) email both parties seeking Mr Quirk’s instructions as per reinspection email of 1 February 2018. 26 February 2018 Orders made for parties to provide full and frank disclosure by 9 April 2018, Joint Balance sheet and Conciliation Conference Document to be filed by 23 April 2018, further Conciliation Conference to occur on 30 April 2018 and Husband to pay Wife’s costs in the amount of $330.00 by 26 March 2018 and comply with 11 September 2017 costs order by 26 March 2018. 26 March 2018 Husband fails to pay Wife’s costs as per Order 14 of Orders dated 26 February 2018 and Order 3 of Orders dated 11 September 2017. 9 April 2018 Husband fails to provide full and frank disclosure. 16 April 2018 Letter to Quirk Lawyers enclosing balance sheet, requesting disclosure documents, requesting update on instructions for valuation and payment of half share of valuation fees, payment of costs orders and notice of seeking adjournment of conciliation conference and full indemnity costs against Husband. 23 April 2018 Husband fails to provide Conciliation Conference Document or Response to Joint Balance Sheet 24 April 2018 Email to Quirk Lawyers noting no response to Letter of 16 April 2018 and notice that should no response be provided by 26 April 2018, then leave will be sought in chambers to vacate Conciliation Conference. 26 April 2018 Wife’s solicitor forwards Balance Sheet and Conciliation Conference Document to Registrar. 26 April 2018 Wife’s solicitor seeks leave in chambers to vacate Conciliation Conference on 30 April 2018 and relist matter for possible undefended hearing as Husband has not provided any disclosure or Conciliation Conference Document or response to Joint Balance Sheet. He has also failed to make a payment for his share of Property A Property Valuation or pay the Wife’s costs as per Order 14 or Orders dated 26 February 2018 and Order 3 or Orders dated 11 September 2017. 30 April 2018 Orders made in chambers for Conciliation Conference of 30 April 2018 to be vacated and matter relisted for Mention on 11 May 2018. 1 May 2018 Letter to Quirk Lawyers noting Conciliation Conference and Mention date of 5 May 2018 have been vacated and matter is relisted for Mention on 11 May 2018. 1 May 2018 Letter to Husband noting Conciliation Conference and Mention date of 5 May 2018 have been vacated and matter is relisted for Mention on 11 May 2018. Further putting Husband on notice that Orders will be sought for the matter to be listed for an undefended hearing and full indemnity costs against the Husband. 11 May 2018 Orders made for matter to be listed on 9 August 2018 for Undefended Hearing, Applicant to file and serve evidence and Minute of Order by 19 July 2018 and Applicant to file and serve Case Outline Document by 2 August 2018. 16 July 2018 Letter to (Valuer) with instructions to proceed with reinspection of the Property A Property and that the Wife will be responsible for the entire fee on the basis that the report is no longer a joint request. 18 July 2018 Inspection of Property A Property completed. 19 July 2018 Wife files and serves Financial Statement, Minute of Order and Orders dated 11 May 2018 on Husband noting that the matter is next before the Court on 9 August 2018 and putting him on notice that should there be no appearance by him, Orders may be made in accordance with the Wife’s Minute of Order sought. 20 July 2018 Wife’s solicitor receives email from Husband in response to email of 19 July 2018 requesting the Court name and address for the next Court appearance. 23 July 2018 Wife’s solicitor responds to Husband providing the Court name and address of 9 August 2018. 2 August 2018 (Valuer) provide valuation report for Property A Property. 2 August 2018 Applicant files and serves Case Outline Document.
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Appeal
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Costs
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Remedies
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Procedural Fairness
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Jurisdiction
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