Paskovas and Paskovas

[2012] FamCA 848

FAMILY COURT OF AUSTRALIA

PASKOVAS & PASKOVAS [2012] FamCA 848

FAMILY LAW – PROPERTY

FamilyLaw Act 1975 (Cth)

APPLICANT: Ms Paskovas

RESPONDENT: Mr Paskovas

FILE NUMBER: PAC 753 of 2012

DATE DELIVERED: 9 August 2012

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Loughnan J

HEARING DATE: 9 August 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Schroder

SOLICITOR FOR THE APPLICANT: Rafton Family Lawyers

RESPONDENT: No appearance

Orders

1. Orders are made in terms of the orders sought by the wife in the Minute of Final Orders marked Exhibit 1, as amended, and set out hereunder:

1.    That the Applicant wife be appointed the trustee for sale of the properties known as and situate at [Property A] in the State of New South Wales being the whole of land contained in Certificate of Title Folio Identifier […]29 (hereinafter referred to as "[Property A]") and the property at [Property G] in the State of New South Wales Certificate of Title Folio Identifier […]57 (hereinafter referred to as "[Property G]").

2.    That the wife shall thereafter be empowered and permitted to do all acts and things and sign all Deeds and documents to list for sale [Property A] and [Property G] utilising Rafton Family Lawyers to prepare the Contracts for Sale for both properties.

3.    That the wife shall utilise [Real Estate Agent R] in order to list for sale [Property A] and the wife shall utilise [Real Estate Agent V] to list for sale [Property G].

4.    Following the sale of [Property A] and [Property G], the proceeds of sale shall be applied as follows:-

a)     In adjustment of rates including water and council rates on settlement;

b)     Payment of agents commission on the sale;

c)     Payment of legal and other costs on the sale;

d)In payment of all and any mortgages encumbered against the properties;

e)In payment of the balance remaining as to the wife 70% and the balance to the Husband.

5. That pursuant to Section 78 Family Law Act that each of the husband and the wife shall be and hereby are declared to be the sole and absolute owners at law and in equity of all items of furniture, furnishings, personalty, chattels, jewellery and monies (whether held in cash or in deposit with any bank, building society, credit union or other financial institution) presently in each party's possession, custody or control together with all contributions to or benefits or entitlements arising from membership of any fund of insurance or superannuation.

6. That in the event that either party should fail, neglect or refuse to sign or execute any deed, document or instrument required by or to give effect to these Orders then pursuant to Section 106A Family Law Act that the Wife shall be and is hereby authorised, empowered and directed to sign and execute such deed, document or instrument in the place and instead of such party and to thereafter do all things and acts as are necessary to give validity and operation to same.

7.    That the Respondent husband pay the Applicant wife's costs of and incidental to this Application.

1. Leave to the Wife to make oral application for an injunction restraining the husband from drawing further on the facilities of the parties with the Commonwealth Bank being Veridian Line of Credit Account Identification No. […]33, Standard Variable Home Loan Account No.[…]04 and Colonial Line of Credit Account No. […]80.

1. That application is granted.

1. The Court dispensed with the requirement of the rules in relation to the oral application.

1. Leave is granted to the Wife to serve copies of these orders on officers of the Commonwealth Bank.

1. That the Husband pay the costs of the Wife of and incidental to these proceedings as agreed between the parties or failing agreement, as assessed by a Taxing Officer.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Paskovas & Paskovas has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 753 of 2012

Ms Paskovas

Applicant

And

Mr Paskovas

Respondent

REASONS FOR JUDGMENT

1. These are proceedings for settlement of property.  The application was first filed by the wife on 22 February 2012.  The issue of service on the husband has been a vexed one.  Orders were made for substituted service by a registrar.  The matter came before me on 16 July and there was a combination, I think, on that date of me not being satisfied about service to some extent and the wife’s barrister being concerned that she had asked for something that was slightly different to what she wanted and that led to a problem of the husband having notice.

2. The matter was put over to today’s date and I made an order for service in similar terms to the order for substituted service made by the registrar and included a warning in the orders as to what would happen if the husband did not appear today. I required that notice be given to him of both those orders, the adjourned date and the terms of the orders now sought by the wife. I am satisfied that those orders were complied with.

3. There was no appearance by or on behalf of the husband when I first called the matter this afternoon and since.  The husband lives in the former matrimonial home and that was the address at which substituted service was effected. The evidence of the process server was consistent with the husband keeping house in the technical sense, in other words, avoiding service. I am satisfied that this is an appropriate matter to deal with undefended.

4. The background of the case is a wife and husband who are 44 and 46 years of age respectively. They married in 1998 and separated on 24 December 2010. Thus they had about 22 years of cohabitation.  They have four children who are aged  28, 20, 17 and 15.  The older children live with the husband and the youngest child with the wife. 

5. The task of the Court in undefended proceedings is in some ways more onerous than it is in defended proceedings because evidence is required about things that might be agreed in contested matters. Therefore the willing party is put, as the wife was here, to obtaining formal evidence about valuation, evidence about title searches and so on. As to the pool of assets, the wife has identified the two pieces of real estate.  Mr O is a valuer and he has prepared a valuation in respect of the former matrimonial home at Property A in the State of New South Wales.  He identified that property as the property referred to in an annexed title search. The property is in the husband’s name and is Lot … in deposited plan …29 at Suburb W and is represented by folio identifier …29.  The valuer says that, in his view, the property has a value of $600,000.  This is a valuation dated 13 July 2012.  Mr B is also a qualified valuer and about the same time he was asked to value Property G.  He identified that property as the property described by folio identifier …57, being in the name of the parties as joint tenants. In his opinion, that property has a value of $345,000. 

6. The wife says then that she has a motor vehicle, a Ford, to which she attributes a value of $14,000.  That is the value placed on it in the wife’s Amended Financial Statement of 21 June 2012 and I accept that value as an admission against interest.  The wife says that there is a business, T Pty Ltd, in respect of which she has no share.  She gives evidence elsewhere that that is her husband’s company.  She doesn’t know the value of that company.  The husband has taken no meaningful part in the proceedings and has filed no evidence from which a value could be divined.

7. The wife says that she owns $20,000 in household contents. The wife deposes to a number of facilities secured on the properties and she says that she drew down $60,000 in two tranches on 22 February last year and 4 March 2011. She says that she used those funds to rehouse herself and her daughter and to fit out the rental premises that they occupy. As I understand her case, the wife would say that the $20,000 of the drawing is reflected in the household contents that she has identified in her Financial Statement.

8. Otherwise, it is the wife’s evidence that her income was low and she used some amounts from the drawn funds, after she had exhausted her savings and so on, for living expenses.  She says that the husband drew down two amounts, $56,500 and $28,505.40, and thereby exhausted a facility. The wife argues that those moneys drawn – be included as an add back in the balance sheet as preliminary distributions to a party in the line of decisions referred to in In the Marriage of Omacini (2005) 33 Fam LR 134. I accept that to be an appropriate approach here.

9. As to debts, the wife has provided statements from the Commonwealth Bank in relation to facilities secured on the former matrimonial home and Property G.

1. Therefore there are assets of $1,044,000 and liabilities at $487,192.59. Thus, net assets of $556,807.41. The wife has a modest superannuation interest at $1931. 

1. As to contributions, the wife says – and her evidence is unchallenged – that she brought in about $4500 to the marriage – the husband brought in about $10,500. The wife had two compensation awards. I think one might have been based before the marriage but was paid out later, and there was a worker’s compensation claim. In each case the payment was about $20,000. It is the wife’s evidence that those funds were applied to the benefit of the marriage.

2. The wife was worked in personal services, and she stopped that work after the first child was born, and she was thereafter a homemaker.  She did a little bit of work part-time when the first child was young.  She assisted the husband in the business, typing quotations, preparing invoices, making phone calls to various suppliers. 

3. There is not really any evidence about the husband’s contributions. The wife deposes to the husband being self-employed.  He operates the business under the name T Pty Ltd. The wife says that the business is engaged in commercial work carried out on office buildings.

4. The wife says that at one point the husband had jobs on hand that resulted in a payment of about $180,000 and enabled them to buy Property G, virtually without encumbrance. The wife gives no other evidence about his contributions. There is no evidence about significant non-financial contributions that don’t fall within either running a business, which is a financial matter, or the categories of parent and homemaker contributions. As to homemaker contributions, the wife says that she did the work relating to the children and completed all home duties – cooking, cleaning, housework. She says that the husband ran his business.

5. The case is artificial because there is no financial disclosure on behalf of the husband. Therefore I do not know what the pool is. I do not know the value, if any, of the business, and I don’t know what other assets the husband has.  The wife’s case is argued on the basis that she can make a claim to contributions at 55 per cent of the real estate, which is a pretty modest claim in the circumstances, given that she also, no doubt, made a contribution to, for example, the husband’s drawings, even if one puts to one side the business and what else there might be. The wife asserts that she has made a contribution of that order and  the husband doesn’t cavil with it.

6. It seems to me that in the generous ambit of discretion I have in cases such as this, particularly, where there is no disclosure and no involvement by the husband and no objection to the wife’s material, I should be satisfied with that.  The wife seeks an adjustment from that outcome. Since separation, the wife has mainly been in rented premises.  The husband has had the use of the former matrimonial home.  The younger child has lived with her, and the wife has received no assistance with that child. Of the older children, only V is under 18 years of age, but nevertheless, the wife has received no financial support.

7. As far as the wife knows, the husband is in full-time employment. The wife has subsequently returned to the paid workforce. She obtained employment on a full-time basis as a receptionist.  She first obtained that employment in January 2010. Her current salary is $44,000 a year. She has been advised that her salary will increase to about $50,000 a year.  She has had the benefit of Centrelink benefits, indicating that she is a low income earner. T is the youngest child. She is in Year 10 at C High School.

8. The wife says that, going forward, she has some health problems, and she saw a Mr P, who is a psychologist, and he gives evidence as a treating practitioner rather than as a forensic expert. He has seen the wife on approximately 23 occasions.  He has administered a social science assessment, which reveals to him that the wife has extremely severe stress, depression and anxiety symptoms.  She reported to him, and she has given very broad evidence, without any detail – of abusive acts inflicted by the husband, and that leading to anxiety and depression. What the wife told the psychologist fits the description, he says, of post-traumatic stress disorder. He lists the characteristics with which the wife presents. He says that the prognosis is not good, on the basis that he has been told that the trauma has occurred over the length of the marriage, and again, he says that he thinks the symptoms fit the Diagnostic and Statistical Manual in its fourth revision as to post-traumatic stress disorder.  The wife talks about the financial difficulty she has had.  She says that she has suffered from breakdowns, anxiety and panic attacks during the marriage.  In April of last year, she attended the emergency department at Hospital M.  She has been prescribed Lovan, but she has not been able to afford it.  Her GP has provided her with some samples.

9. Those matters are relevant and by reference to section 79(4)(d), (e), (f) and (g), there should be an adjustment in favour of the wife. I have addressed the parties’ age and health. I am not informed about the financial circumstances of the husband. I have identified those of the wife and her living arrangements.  As to the impact of the marriage, there is no probative evidence to support a case in the line of In the Marriage of Kennon or related cases, whereby it might be found that a marriage has had an impact on the wife due to the husband’s conduct. However, the wife was out of the paid workforce and lost 22 years of opportunity in terms of acquiring jobs and skills and promotion, long service leave and all of the things that come with an unbroken history of paid employment. Conversely, her work caring for the children has freed the husband to do his work, and she has directly assisted in his business. The wife has made no provision at all for a funded retirement.  It seems to me that those matters justify an adjustment in favour of the wife.

10. As I say, it’s a fairly artificial exercise, firstly because there was a lack of disclosure, and secondly, because the wife has elected to only claim against certain assets - putting aside the motor vehicle, against the real estate.  And finally, of course, the husband doesn’t oppose the arguments either in relation to contribution or adjustment.  On the basis of that, it seems to me that there would be a just and equitable settlement of property if orders are made in the terms sought by the wife.

11. There are three potential practical problems. Firstly, an order is sought that the registrar sign documents to give effect to the orders, in lieu of the husband. Unless her counsel objects strongly, what I might do is leave the wife to sign in his stead rather than the registrar. There could be some complications, depending on the order in which the properties sell and rather than having the registrar get across all that information, it would be better that the wife, as advised, do that.

12. Nextly, there is an issue about vacant possession of the former matrimonial home.  Somebody who has kept house and hidden from process servers might not be sanguine about leaving the premises.  If necessarily, the Court has power to issue a warrant of possession to facilitate the sale of the property.  The third thing is that the parties have each made independent drawings on the facilities.

13. That stopped because they have exhausted the facilities. However, that might not be the case if there is a partial discharge of one of the debts in the sequence of sale of the property. The wife’s counsel, sought leave to make an oral application for a restraint on the husband drawing further on any of the secured facilities. That is a sensible consequential course, and notice of that injunction can be given to the bank.  And, in my experience, banks are usually pretty good about respecting such an order or at least giving notice of a drawing so that there is no mischief done. 

ORDERS DELIVERED

1. As an application for costs it is not unusual that there be costs order in undefended proceedings. 90 something per cent of disputes or the overwhelming majority of family law disputes, resolve.  There is a hurdle put in the way of parties coming to court – compulsory settlement requirements and pre action procedures. Once they are at court every manner of thing is thrown at them in terms of inducements to settle and it is a remarkable thing in a fairly unremarkable case that the wife was put to prove the things that she has had to prove here. 

2. The husband hasn’t done the wife the courtesy of saying “I don’t like the orders you want”, or “I have another proposal”, or “I will come along and agree that we have those properties and here is my bank account” and so on.  Instead, as Mr Schroeder has said, the wife has been put to proving from first principles what she has, what she owns, what she owes and so on.

3. In terms of the legislation the general position is that parties bear their own costs. 

4. The court has power to make an order and in doing so is required to consider the things that Mr Schroeder has succinctly addressed just now.  Most relevantly, the husband hasn’t favoured us with his financial circumstances.  There is a not ungenerous provision for him in the orders that the wife, herself, has sought.  In particular, he retains the benefit of $85,000 drawn by him and he retains 30 per cent of the net value of two pieces of real estate but he also retains a business, the value of which he has not disclosed.

5. He retains anything he might have purchased with the $85,000 he drew on the facilities and he retains any other contents, presumably, the contents in the former matrimonial home left there by the wife and motor vehicles. His income earning capacity is likely to be greater than that of the wife. The indication she gave in relation to the profit available from a few jobs some years ago suggests that there can be significant turn over, if not profit, in this business and the husband has exclusive access to that.  The wife has been out of the paid workforce for a long time and so she is coming back into it late and her income is low.  Her health isn’t uncompromised. There is no legal aid. 

6. As to the conduct of the parties and particularly conduct related to the proceedings. In a sense the husband hasn’t done anything wrong.  He was free to not contest the proceedings if he was happy with the orders sought. However, it is unusual, in my experience, that somebody who has ignored the proceedings is happy with the orders sought.  More likely he just has his head in the sand about the issues. There is no doubt, as Mr Schroeder says, that the proceedings have been delayed because of the husband’s lack of response. 

7. The wife wouldn’t have normally have to obtain the valuations she has obtained, wouldn’t need to obtained statements from the lending authorities, wouldn’t need an affidavit from her treating doctor, and so on, if the proceedings were resolved by consent.  There has been no breach of orders. Neither party has been wholly unsuccessful.  I don’t know of any offers of settlement in writing. As to the catch all provision, the husband’s failure to take part and more importantly to make any proper disclosure has really jeopardised the exercise of judicial power in relation to this settlement of property. In my view, the wife has been not ungenerous in the orders she has sought. The wife is entitled to her costs of these proceedings. 

ORDER DELIVERED

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 9 August 2012.

Associate: 

Date:  4 October 2012