QUELL & KIRBY
[2018] FCCA 3870
•24 December 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| QUELL & KIRBY | [2018] FCCA 3870 |
| Catchwords: FAMILY LAW – Property – where the husband makes an interim application for a property held solely in name of wife be sold and thereafter, a partial property distribution in the sum of $750,000 be made to him from proceeds of sale of said property – where the wife opposes the husband’s interim application, and seeks his Application in a Case be dismissed with costs – where the property the husband seeks be sold on an interim basis is the sole income source for the wife – where the husband is unemployed and suffers a number of health issues – where the Court finds it appropriate for a partial property distribution in the sum of $65,000 to be made to the husband – where the Court makes no order for the interim sale of any property of the parties. |
| Legislation: Family Law Act 1975 (Cth), ss.13E, 79, 80 Federal Circuit Court Rules 2001 (Cth) r.1.03 |
| Cases cited: Fielding and Nichol [2014] FCWA 77 |
| Applicant: | MR QUELL |
| Respondent: | MS KIRBY |
| File Number: | SYC 1626 of 2017 |
| Judgment of: | Judge Harper |
| Hearing date: | 24 July 2018 |
| Date of Last Submission: | 24 July 2018 |
| Delivered at: | Sydney |
| Delivered on: | 24 December 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Livingstone |
| Solicitors for the Applicant: | Jack Rigg Solicitors |
| Counsel for the Respondent: | Mr Jauncey |
| Solicitors for the Respondent: | Marsdens Law Group |
ORDERS
The respondent wife pay to the applicant husband the amount of $65,000 by no later than 1 March 2019.
The Application in a Case filed 2 May 2018 be otherwise dismissed.
All extant applications be adjourned to 3 May 2019 at 10:30am for call-over.
Any Application in a Case or Objection to Subpoena made returnable by the Registry from the date of these orders until the adjourned date will not be heard on that date without the express leave of Judge Harper, however directions in respect of that Application or Objection may be given.
If any party seeks an order for costs, an appropriate application to the Court may be made within 28 days of today’s date (supported by any documentary material) to be filed and served within that time period and a copy forwarded to my Chambers. If no such application is made within the time period specified, no order will be made as to costs.
THE COURT NOTES THAT:
These proceedings relate to property only and appear to be suitable for referral to arbitration pursuant to s.13E of the Family Law Act 1975 (Cth).
Any application as to costs will be dealt with by way of written submissions, unless the parties request to be heard orally.
IT IS NOTED that publication of this judgment under the pseudonym Quell & Kirby is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 1626 of 2017
| MR QUELL |
Applicant
And
| MS KIRBY |
Respondent
REASONS FOR JUDGMENT
Introduction
These are interim proceedings between the applicant husband, Mr Quell (“the husband”), and the respondent wife, Ms Kirby (“the wife”).
The matter came before me for interim hearing on 24 July 2018 following the filing of an Application in a Case by the husband on 2 May 2018, seeking that a property held by the wife solely be sold and thereafter, from the proceeds of sale of said property, an interim property distribution in the sum of $750,000 be paid to him.
The wife opposes the husband’s Application, and seeks the Application in a Case be dismissed with costs.
Regrettably, owing to changes to the judicial calendar and judicial illness, delivery of judgment has been delayed.
Background
The husband was born …1963 and is presently 55 years of age.
The wife was born …1966 and is presently 52 years of age.
The parties commenced a relationship in 1995 and married on …2002.
There are four children of the relationship:
a)[W], born …2000 and presently 18 years of age;
b)[X], born …2002 and presently 16 years of age;
c)[Y], born …2003 and presently 15 years of age; and
d)[Z], born …2003 and presently 15 years of age.
(collectively referred to as “the children”)
The parties separated on 6 May 2015, following a marriage of approximately 13 years.
A Divorce Order was made on 16 December 2016.
Procedural history
The husband filed his Initiating Application, Affidavit, Financial Statement and Notice of Risk on 14 March 2017, seeking parenting orders and orders for property distribution on a final basis. The husband also sought parenting orders on an interim basis together with an order for interim spousal maintenance and other procedural orders with respect to obtaining valuations of various properties.
On 11 May 2017, the wife filed her Response, Affidavit, Financial Statement and Notice of Risk.
The matter first came before the Court in a duty list on 15 May 2017. With respect to parenting, the parties were able to come to an agreement and final parenting orders were made by consent.
In respect of financial matters, orders were made by consent which provided, amongst other things, for the wife to give financial disclosure, for various properties to be valued and for an interim superannuation splitting order to be made, with the proceeds to be distributed between the parties. Also, orders were made by consent for the wife to sell shares, the proceeds of which were to be used (after payment of CGT) to pay fines over the vehicle registered …, and thereafter the wife was to transfer said vehicle to the husband, and for the wife to pay to the husband interim spousal maintenance in the sum of $350 per week.
The matter subsequently came before me on 13 July 2017 for interim hearing. However, no hearing took place because the parties were able to reach agreement and consent orders were again made. The consent orders provided, in summary, for the wife to obtain a loan of $20,000 and thereafter pay to the husband the sum of $750 per week, and pending obtaining said loan, the wife was to pay the husband the sum of $500 per week, with such payments to be characterised at a later date. By consent, the husband’s application for interim spousal maintenance was dismissed.
The matter returned for mention on 29 November 2017 and on this occasion, I referred it to a Conciliation Conference.
On 9 January 2018, orders by consent were made in Chambers which provided for the wife to pay to the husband the sum of $15,000, by way of partial property settlement.
The parties attended a Conciliation Conference on 23 March 2018 but the matter did not settle.
On 2 May 2018, the husband filed an Application in a Case seeking orders for an interim property distribution, including the sale of a property at Property A (“the Property A property”), which is held solely in the name of the wife.
The matter returned for mention before me on 25 May 2018 and I listed it for Interim Hearing on 24 July 2018.
On 24 July 2018, the Interim Hearing took place.
Material relied upon
The husband relied upon:
a)Case Outline, dated 23 July 2018;
b)his Application in a Case, filed 2 May 2018;
c)his Financial Statement affirmed and filed 2 May 2018; and
d)his Affidavit affirmed and filed 2 May 2018.
The wife was cross-examined.
The wife relied upon:
a)Case Outline, dated 19 July 2018;
b)her Response to an Application in a Case filed 25 May 2018;
c)her Financial Statement sworn 24 May 2018 and filed 25 May 2018; and
d)her Affidavit sworn 24 May 2018 and filed 25 May 2018.
The following documents were tendered and placed into evidence:
| Exhibit Label | Document | Tendered by |
| A | Centrelink Medical Certificate | Husband |
Competing proposals
By way of his Application in a Case filed 2 May 2018, the husband seeks orders as follows:
(1)That within two (2) weeks of the date of these Orders being made the Respondent do all acts and things and execute all documents required to list the property known as Property A, in the State of New South Wales being the whole of the land in Lots …in Deposited Plan …(“the real property”). for sale by public auction within six (6) weeks from the date of listing.
(2)The real property is to be listed for Sale with a Real Estate Agent as agreed between the Applicant and the Respondent and failing agreement the agent is to be appointed by a nominee of the President of the Real Estate Institute of New South Wales.
(3)The parties must appoint a Solicitor to act on the sale of the real property as agree between them and failing agreement within seven (7) days of the listing the Solicitor is to be appointed by a nominee of the President of the Law Society of New South Wales.
(4)The Respondent must keep the property in good repair and presentation for the purpose of presentation for sale.
(5)The parties are to nominate the reserve price fourteen (14) days prior to the auction being a reserve price as agreed between them and failing agreement within twelve (12) days of the auction date the reserve price is to be the market value as nominated by a representative of the President of the Real Estate Institute of New South Wales.
(6)In the event the property fails to sell at auction the parties must negotiate with the highest bidder and accept any offer which is no more than 10% lower than the reserve price.
(7)In the event that the property has not sold at or shortly after the auction in accordance with Order 6 herein then the parties must list the property for sale by private treaty at a list price 10% lower than the reserve price at the auction.
(8)On Completion of the sale of the said property the Respondent must do all acts and execute all documents necessary to cause the proceeds of sale to be paid in the following order and priority:
(a)In payment of all agent’s commission, auctioneer’s expenses, advertising expenses and legal costs referrable to the sale;
(b)To pay the …Finance the full balance of the mortgage due that day.
(c)That the Respondent is to be paid the sum of $750,000.
(d)The balance of proceeds of sale be placed in a controlled money account by the solicitor acting in the sale of the property pending further order of this Court.
(9)That pending the payment or completion of the sale:
(a)The Respondent have the sole right to occupy the real property and during such right of occupation the Respondent pay all instalments pursuant to the mortgage and all rates and taxes and like apportionable outgoings of the real property as they fall due.
(b)The Respondent is prevented from encumbering the real property without consent in writing of the Applicant.
(10)In the event that the Respondent either refuses or neglects to sign any document or give any necessary authority or consent or do any act or thing necessary to give effect to these orders within 7 days of being requested to do so then the Registrar of the Federal Court Sydney is appointed pursuant to s106A of the Family Law Act 1975 to execute all such documents in the name of the party in default and to do all things necessary to give validity and operation to these orders.
(11)That the Respondent pay the Costs of this Application.
The husband gave evidence that he would use a partial property settlement as follows:
43. Get appropriate accommodation, where my children can come stay as I believe this would improve would provide [sic] me with a more stable lifestyle.
44. A partial property settlement would also allow me to retrieve the many items I have given to money lenders as security which currently totals approximately $7,000.00.
45. A substantial payment would also allow me to pay a number of personal debts that I have been unable to service which are incurring interest charges. Some of these debts could be paid at a substantial discount if I had the funds to pay them at the time various offers of settlement have been made. The debts currently total $30,064.00.
46. There are also moneys borrowed from friends which I would like to pay back. At present I owe my friends approx. $21,900.
47. I am also not able to pay my legal fees and I’m informed by my solicitor that my outstanding account as at today’s date the total of my Legal Fees in excess of $65,270.00
48. There is also a current Centrelink debt of $7,061.92.
49. I currently owe in respect of my current accommodation is $1,070.00.
By way of her Response to an Application in a Case filed 25 May 2018, the wife seeks orders as follows:
(1)That the Application in a Case filed by the Applicant Husband on 2 May 2018 be dismissed.
(2)That the Applicant Husband pay the costs of the Respondent Wife incidental to the preparation of this Response.
Relevant Law
In the case of parties to a marriage, the legislative foundation for an order for partial property distribution is ss. 79 and 80(1)(h) of the Family Law Act 1975 (Cth) (“the Act”). In combination, those provisions confer power on the Court to make orders for interim property settlement.
Section 80(1)(h) which is in Pt VIII of the Act provides:
80 General powers of court
(1) The court, in exercising its powers under this Part, may do any or all of the following:
...
(h) make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order;
...
In Strahan & Strahan [2009] FamCAFC 166; [2009] FLC 93-466; (2009) 241 FLR 1; (2009) 42 Fam LR 203 (“Strahan”), Thackray J at [213] noted as follows:
Section 80 prescribes a variety of orders the Court may make when exercising its power under s 79. It is important to recognise that s 80 is an “enabling provision” and not an independent source of power: Davidson and Davidson (No 2) (1994) FLC 92-469.
Section 79 of the Act confers a power to make an order for property settlement:
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.
(5) Without limiting the power of any court to grant an adjournment in proceedings under this Act, where, in property settlement proceedings, a court is of the opinion:
(a) that there is likely to be a significant change in the financial circumstances of the parties to the marriage or either of them and that, having regard to the time when that change is likely to take place, it is reasonable to adjourn the proceedings; and
(b) that an order that the court could make with respect to:
(i) the property of the parties to the marriage or either of them; or
(ii) the vested bankruptcy property in relation to a bankrupt party to the marriage;
if that significant change in financial circumstances occurs is more likely to do justice as between the parties to the marriage than an order that the court could make immediately with respect to:
(iii) the property of the parties to the marriage or either of them; or
(iv) the vested bankruptcy property in relation to a bankrupt party to the marriage;
the court may, if so requested by either party to the marriage or the relevant bankruptcy trustee (if any), adjourn the proceedings until such time, before the expiration of a period specified by the court, as that party to the marriage or the relevant bankruptcy trustee, as the case may be, applies for the proceedings to be determined, but nothing in this subsection requires the court to adjourn any proceedings in any particular circumstances.
(6) Where a court proposes to adjourn proceedings as provided by subsection (5), the court may, before so adjourning the proceedings, make such interim order or orders or such other order or orders (if any) as it considers appropriate with respect to:
(a) any of the property of the parties to the marriage or of either of them; or
(b) any of the vested bankruptcy property in relation to a bankrupt party to the marriage.
(7) The court may, in forming an opinion for the purposes of subsection (5) as to whether there is likely to be a significant change in the financial circumstances of either or both of the parties to the marriage, have regard to any change in the financial circumstances of a party to the marriage that may occur by reason that the party to the marriage:
(a) is a contributor to a superannuation fund or scheme, or participates in any scheme or arrangement that is in the nature of a superannuation scheme; or
(b) may become entitled to property as the result of the exercise in his or her favour, by the trustee of a discretionary trust, of a power to distribute trust property;
but nothing in this subsection shall be taken to limit the circumstances in which the court may form the opinion that there is likely to be a significant change in the financial circumstances of a party to the marriage.
…
In Strahan (supra), the Full Court held that there are two steps to considering an Application for an order for partial property distribution prior to final hearing, the first step being a “procedural step” and the second being the “substantive step”: Strahan at [115].
With respect to the first step, the Full Court in Strahan (supra) approved the approach adopted by Federal Magistrate Reithmuller (as he was then known) in Wenz v Archer [2008] FMCAfam 1119; (2008) 40 FamLR 212 where he identified the need for there to be appropriate circumstances for an interim order to be made, rather than compelling circumstances. Boland & O’Ryan JJ commented:
[132] In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.
Recently in Sirola & Sirola and Ors [2018] FamCA 1011, McClelland J (as he then was) pointed out at [34] that, although compelling circumstances are not necessary, as the High Court emphasised in Stanford and Stanford (2012) 247 CLR 108 at [40], applications for property adjustment should not be commenced with the assumption “that one or other party has the right to have the property of the parties divided between them” and this caution applies equally to interim applications for partial property adjustment.
Consequently, an applicant for partial property adjustment carries the onus of satisfying the Court that it is in the interests of justice for such an order to be made, rather than for a “once and for all” order to be made at final hearing. This entails considering both the interests of the parties and the public interest, which includes the fact that the usual order pursuant to s.79 is “once and for all” and contemporary rules of Court emphasise the just, efficient and economical resolution of proceedings at a reasonable cost, and the general undesirability of a multiplicity of interim applications: Sirola at [36]-[40]; Federal Circuit Court Rules (2001) (Cth) Rule 1.03; Family Law Rules 2004 (Cth) Rule 1.04.
The second step identified in Strahan (supra) involves the exercise of the Court’s power pursuant to s.79 of the Act. Insofar as it is possible in interim proceedings, this step requires the Court to:
a)Identify “the parties’ property and of their interests in it” (Medlow & Medlow [2016] FamCAFC 34; [2016] FLC 93-692 at [69]); and
b)Consider and apply the provisions of s.79 (Strahan (supra) at [135]).
In the decision of Osferatu & Osferatu [2012] FamCA 408, Watts J at [41] made clear a detailed inquiry is not required:
[41] As was discussed in Harris and confirmed in Strahan, the second step in making an interim property order is to have regard to the usual matters in a section 79 order (ss 79(2) and 79(4) FLA). A detailed inquiry is not required, but there must be some assessment of section 79 factors. Given it is an imprecise exercise, the interim property order has to be “conservative” so that the final outcome of property settlement will not be compromised by the interim property order. Either the remaining property needs to be sufficient to meet the legitimate expectations of both parties at the final hearing, or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.
I take account also of the following propositions:
a)In order to establish an appropriate case for an interim property settlement order more is required than the mere fact that upon a final hearing the applicant would receive the property being sought (or an amount in excess of the funds being sought) from the other party: Strahan at [139].
b)The onus was upon the husband to establish that there were sufficient assets available for the interim distribution and that the effect of any interim order was capable of being reversed as part of the final hearing or at least would not defeat the wife’s property claims: Medlow (supra) at [86].
c)If an order is made, being a preliminary property order, the husband may choose to spend the money however he wishes: Osferatu at [42].
Any order for partial property adjustment should not exhaust the discretion in s.79 of the Act. In Strahan at [136] the Full Court said:
As to the third matter identified at 79,930 by the Full Court in Harris, in discussion before us it was described as the “adjustment issue” or “claw-back issue”. It was submitted by senior counsel for the Wife that it is relevant to consider whether an order would give the applicant “more than they would be indubitably entitled to on a final hearing” or alternatively “would it give them so much that it could not be adjusted on a final hearing?” As we have observed the Full Court in Zschokke at 83,220-221 stressed the importance of consideration of the “adjustment issue” if the power in s 80(1)(h) of the Act is being exercised. We accept the submission and observe that this matter is relevant because the discretion conferred by the power in s 79 is to make such order as the Court considers appropriate provided it is just and equitable to make the order in circumstances where the power will not be exhausted by the interim order. As Bryant CJ and Coleman J observed in Gabel v Yardley at [69] and [72] the interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal. As Finn J said at [126] the interim order must be “capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power”.
Further Relevant Facts
The property of the parties
The wife set out in her Case Outline a table of the parties’ property, which is replicated below, with which the husband, by way of his Case Outline, indicates he accepts apart from a liability to …Finance in the amount of $2,320,000. I discuss this further below.
Assets | W/J/H | Wife’s Value $ | Husband’s Value $ |
| Non-superannuation | |||
| Property A (“the former matrimonial home”) | W | $2,100,000 | $2,100,000 |
| Property A (“the Property A property”) | W | $4,800,000 | $4,800,000 |
| Property C, Country C (“Property C property”) | W | E$701,051 | E$701,051 |
| Country C Bank account (ending …) | W | $17,394 | $17,394 |
| Country C account (ending …) | W | $2,334 | $2,334 |
| Motor Vehicle 1 | W | E$5,000 | E$5,000 |
| Business 1 | W | Nil | Nil |
| Business 2 | W | Nil | Nil |
| Business 3 | W | Nil | Nil |
| Business 4 | W | Nil | Nil |
| Household contents | E$1,000 | E$1,000 | |
| Total | $7,626,779 | $7,626,779 | |
| Superannuation | |||
| Superannuation Fund | E$15,000 | E$15,000 | |
| Total | $15,000 | $15,000 | |
| Total Assets | $7,641,779 | $7,641,779 | |
| Liabilities | |||
| NAB mortgage (ending …) | W | $94,958 | $94,958 |
| NAB mortgage (ending …) | W | $159,262 | $159,262 |
| NAB mortgage (ending …) | W | $237,339 | $237,339 |
| NAB mortgage (ending …) | TBC | $115,692 | $115,692 |
| NAB Velocity Rewards Visa | TBC | $5,732 | $5,732 |
| …Finance for Business 4 | W | $2,320,000 | |
| Total Liabilities | $2,932,983 | $612,983 | |
| Total Net Property | $4,708,796 | $7,028,796 | |
With respect to the …Finance included in the above balance sheet by the wife, whilst the husband, by way of his Case Outline, acknowledges this debt, “the extent to which it is a debt of the marriage is not accepted at this time”. The husband contends the …Finance was taken out in July 2015, some two months after the parties separated. The husband accepts that $1,400,000 was used to “discharge the existing mortgage” and that there were some renovations undertaken to a previously held property, however the husband contends that there has never been an appropriate accounting as to how the balance of the moneys has been disbursed or verification as to the extent or costs of said renovations.
Taking a broad brush approach without a detailed inquiry, it is clear the matrimonial pool ranges from approximately $4,700,000 to $7,000,000. The material and substantial assets are all in the form of real property and held in the name of the wife. One item of real estate is located in the Country C.
In respect of contributions, I note the following:-
a)It is accepted by the husband that through inheritance and family assistance, the wife has made a greater financial contribution to the acquisition of property.
b)It is accepted by both parties that the wife purchased the former matrimonial home in her sole name prior to the parties meeting. The husband submits the parties undertook substantial renovations to this property in both 1998/99 and 2006 and that he assisted with said renovations.
c)The husband submits that the wife’s father suffered a stroke in either 1998 or 1999 and thereafter lived in the former matrimonial home with the parties. The husband submits he assisted with the care of the wife’s father.
d)In 1999, the wife purchased the Property A property, and the adjacent property, being Property B, with her father. The property consists of a combination of commercial and residential premises that are leased through a company managed by the wife, Business 1.
e)In 2004, following the death of the wife’s aunt, the parties travelled to the Country C and undertook renovations to the Country C property, which the wife’s father had inherited. The husband contends he assisted with the renovations.
f)In 2006, the property at Property B was sold, with the proceeds of sale used to fund renovations to the former matrimonial home. The wife also contends these funds were used to pay off credit card debt and fund a family holiday to the Country C.
g)In 2007, the husband contends he received an inheritance from his mother’s estate of $20,000.
h)In 2010, the wife’s father passed away and the wife inherited the Country C property.
i)In 2011, the husband contends he received $30,000 compensation payment due to a work-related injury.
j)The husband is presently unemployed and contends to have been unemployed since May 2015. However, up until this time, the husband submits he engaged in well-paid employment and contributed substantially to the income of the household.
k)The wife concedes that when the husband was working, “he did make some contributions, but not significantly” (paragraph 22, Affidavit sworn 24 May 2018). The wife contends no assets were purchased during the marriage and she was financially independent. The husband contends the wife did not allow him to financially contribute to acquisition of property.
In respect of future needs of the parties, I note the following:-
a)The husband is 55 years of age. At paragraph 41 of his Affidavit filed 2 May 2018, the husband deposes as follows:
41. I suffer a number of physical disabilities, which limit my ability to work. On 20 November 2015, the Department of Human Services assessment my current job capacity based on a number of medical conditions:
a) Permanent psychological/psychiatric disorder, which is fully treated, diagnosed, treated and stabilised and has moderate functional impact on mental health functioning. Initial treatment of this condition commenced in 2004.
b) Permanent drug dependence undiagnosed: permanent and fully diagnosed but not yet fully treated and stabilised. The medications referred to are prescription medication not illicit drugs.
(c) Permanent spinal disorder: initial onset in 1996 due to a workplace injury. Further complications sustained in 2002 and 2005. Spinal surgery in 2005 and 2007. Ongoing treatment is unlikely to result in any significant improvement.
(d) Permanent ischaemic heart disease. Initially diagnosed in 2007, and still being treated. It currently has functional impact in that it results in occasional chest pain and reduced stamina as well as fatigue on moderate exertion.
(e) Permanent lower limb deficiencies, a knee meniscal tear, which is considered fully diagnosed.
(f) Permanent shoulder and upper arm disorder, diagnosed in 2012, which causes paid and some restrictions.
(g) Permanent diverticular disease, diagnosed in 2014.
b)In addition to the above, the husband, by his own omission, has also experienced issues with alcoholism both during the relationship and post-separation, for which he has attended a number of rehabilitation/ detox programs for treatment.
c)The wife is 52 years of age. The wife does not depose to any health issues.
d)As noted above, the husband is presently unemployed and stated he has been unemployed since May 2015. The husband deposes to having “more than 25 years of experience in both Employment Industries” (paragraph 37, husband’s Affidavit affirmed 2 May 2018), however as this line of work involves a lot of physical work, he is unable to perform due to health issues.
e)As set out in his Financial Statement affirmed 2 May 2018, the husband contends to receive income of $318 per week, being his Centrelink Newstart Allowance payment.
f)The husband contends to have expenditure of $265 per week, leaving a surplus of $53 per week.
g)The wife, in her Financial Statement sworn 24 May 2018, notes her current occupation is professional and contends her income to be $5,811 per week, consisting primarily of rent of $5,349 from the Property A property, rent of $300 from the Country C property and $162 by way of Family Tax Benefit. The wife contends she ceased outside employment in 1999 following being made redundant and thereafter has been deriving income as a professional.
h)The wife claims expenses of $7,805 per week, resulting in a weekly shortfall of $1,994 per week.
i)The wife submits by way of her Case Outline that the husband’s “age and surrounding conduct suggest he could undertake some work particularly of a sedentary nature” however, no evidence exists that the husband has applied for suitable employment.
j)The wife submits in her Case Outline to having provided the husband with approximately $61,618 since separation. The wife contends these funds were for the following purposes: rent, general living, car related expenses, registration, phone expenses, medical expenses, funds to spend with children on activities, and other miscellaneous expenses. In addition, as per orders made 15 May 2017, 13 July 2017 and 9 January 2018 respectively, the wife deposes to having provided the husband with an additional $55,000. The wife also submits the husband has drawn down on funds he has received by was of a superannuation split pursuant to orders made 15 May 2017.
k)At paragraph 16-18 of his Affidavit affirmed 2 May 2018, the husband deposes as follows:
Money received since separation
16. The $20,000 received in weekly instalments as per order dated 13 July 2017 were used to cover my general living expenses.
17. The $15,000 received at the end of the year was used as follows:
· $7,500 to retrieve 2 of my guitars and my watch from a moneylender.
· $2,000 to register the car.
· Miscellaneous bills, medical and general living expenses.
· The rest of the money was spent on Christmas with children.
18. Regarding the $60,000 that Ms Kirby claims to have given me; I dispute that I have received this amount. Ms Kirby only made sporadic and irregular payments to me and paid for some very short-term accommodation. I have not been provided with particulars in relations to the mount [sic] claimed by Ms Kirby.
l)The wife raises concerns with respect to lack of disclosure from the husband as to what he has done with the funds he has been provided over the course of proceedings.
m)The wife presently resides with the children in the former matrimonial home.
n)The husband is presently residing in shared accommodation but is unable to accommodate the children, and has been unable to do so since separation.
o)The husband gave evidence that at the end of September 2015, he had been approved for priority housing and asked the wife for assistance with the rental bond however the wife did not provide any assistance for this purpose. However, the husband does concede that the wife agreed to be guarantor for the husband to rent a studio apartment at Suburb P. The husband was subsequently evicted from the Suburb P property, he contends in January 2017, due to unpaid rent. The wife contends that following the husband’s eviction, she paid the rental arrears and cleaned the property.
p)Thereafter being evicted, the husband deposes as follows:
32. Following the eviction, I stayed at numerous hotels or in my car which Ms Kirby booked and paid for me. This was always last-minute accommodation for a couple of days at a time. It left me feeling very unsettled and insecure as I would often have to check out early in the morning without knowing where I would spend the following night until late in the afternoon. I was unable to have the children overnight.
33. This situation dragged on for approximately three months, and severely affected my mental health and stability as I was basically homeless, having to pack up my belongings on an almost daily basis and even spending the night in my car on several occasions. I feel like this was just another way of Ms Kirby asserting control over my life, refusing to assist me with stable, priority housing but rather moving me from one place to another without consulting me at all.
q)The wife deposes at paragraph 21 of her Affidavit sworn 24 May 2018:
21. Following Mr Quell’s eviction from this lodge, I attempted to assist him with accommodation wherever I could. I recall that I often paid for temporary accommodation on my credit card, however, Mr Quell always demanded that I book a double room with a private bathroom. In the event that Mr Quell did not like the type of accommodation I was able to afford and provide for him, he chose to sleep in his car instead. During this period Mr Quell was very verbally aggressive and demanding and expected me to organise and pay for everything.
r)Due to the accommodation restrictions of the husband, the wife has primary care of the parties’ four children.
s)The husband presently pays no child support to the wife.
t)The husband makes reference to the wife cohabitating with her partner however the wife makes no reference to this.
In respect of the Final Orders Applications of the parties:
a)In summary, by way of her Response filed 11 May 2017, on a final basis the wife seeks to retain the Property A property, along with the former matrimonial home and Country C property, and to make a cash payment to the husband in the sum of $750,000, along with transferring to the husband the Motor Vehicle N.
b)Alternatively, on a final basis the husband seeks, in summary, that the former matrimonial home, Property A property and Country C properties be sold, and the balance (after payment of associated expenses (legal fees, agent fees, commission)) be divided equally between the parties. Further, the husband seeks that any joint bank accounts be divided equally between the parties, and any sole bank, superannuation or personal property held by either party be retained by that respective party.
Discussion
This is a case where the parties, by their Initiating Application and Response, accept it would be just and equitable for a property adjustment should be made, that is, the case is being conducted in the basis that adjustment should take place and the just and equitable requirement is readily satisfied by the fact of separation: Stanford at [41], [42]; Fielding and Nichol [2014] FCWA 77 at [43].
In this regard, I observe that in his Initiating Application the husband seeks sale of all properties with an equal division of the net proceeds of sale. In her Response, filed 11 May 2017, the Wife seeks final property adjustment orders for her to pay the husband $700,000 within 6 months of the date of the orders.
The husband submitted that the wife holds all the significant net assets. The husband is clearly correct. He has very little, lives a hand to mouth existence and has been compelled to make demeaning approaches to the wife as an economic supplicant. He seeks the “modest” amount of $750,000 which is only 15% of the asset pool. He accepts the wife made a greater contribution overall, but also submits the wife unfairly denigrates his contributions, being care for the children and the family, and assistance with renovations. He points to his serious health problems, age and poor employment prospects. He submitted that on a final basis he was “unlikely” to pursue an adjustment giving him 45 or 50% of the net assets, indicating that he accepted a more modest adjustment would be appropriate.
The wife submitted no partial property distribution should be ordered, the amount sought by the husband was unreasonable, and could only be satisfied by the sale of the Property A property, being Property A, since Property B is the former matrimonial home where she lives with the children, and the Country C property is in poor condition. If sale of the Property A property was ordered, this would deprive the wife of her only source of income, which supports her and the four children, of whom she is the primary carer, and pays to service the mortgage secured against the former matrimonial home. She contended the husband’s application was “malicious”, being targeted to the only income earning asset of the wife. The wife rejects the husband’s claims of contribution, and says his health issues and diminished employment capacity have been brought about by his addiction issues, and there is insufficient evidence adduced by him of attempts to find suitable employment. She argues that she has already been very generous to the husband by way of interim distributions.
A noteworthy aspect of this application is that although the wife resists any payment, she appears to concede that the husband would be entitled to at least $700,000 on a final basis. This gives some perspective to the husband’s claim for an interim amount of $750,000. If such an amount was ordered as an interim property adjustment, it would broadly equate to the final relief sought by the wife.
The wife argues that she should be given the opportunity to retain both Property A and Property B properties by a cash payment. She argues that an interim cash payment, of the size sought by the husband, would deny to the trial judge such an outcome.
An order for sale of the Property A property and payment to the husband of $750,000 could exhaust the discretion conferred by s.79, and it could be described as “more than [the husband] would be indubitably entitled to on a final hearing” and it could “give [the husband] so much that it could not be adjusted on a final hearing?” The husband’s proposed orders, if made, come close to final relief.
An order for payment to the husband of a much smaller amount suffers none of these vices.
I am satisfied he has established circumstances which make it appropriate for a partial property adjustment to be made at this stage. The husband’s diminished earning capacity, poor health and his modest living conditions weigh in favour of a partial order now, even allowing for the dispute between the parties about his employment capacity.
Furthermore, the wife accepts that on a final basis she would be obliged to raise a cash sum to pay the husband. By her Response she seeks a period of six months to raise $700,000. She does not suggest a sale of the Property A property would be necessary for this to happen. The wife gave no evidence and made no submissions about her capacity to pay a much smaller amount. I am not clear why the wife could not raise a smaller cash amount now, when she concedes she would have to pay at least $700,000 on a final basis, and her available assets are very valuable. Any amount paid on an interim basis would be taken into account in formulating final orders.
The broad impression of the evidence of contributions supports the likelihood of a final order being made in the husband’s favour for some property adjustment, and, as already noted, the wife concedes adjustment should be made by payment to him of $700,000 on a final basis.
I have taken account of the interests of the parties and the public interest. I accept that the wife has been generous to the husband already. However, a payment now should reduce the likelihood of further interim applications by the husband, which would inevitably occupy scarce judicial time, prior to a final hearing.
In the exercise of my discretion, I am satisfied that the husband should receive a partial property adjustment, but at a much lower figure than he seeks in his application. Consequently, although I am not satisfied that the husband should receive the $750,000 as claimed by him, I am not satisfied that his application should simply be dismissed.
Since neither party made any submission about the size of an alternative figure, I am left to determine the appropriate amount on the basis of the evidence before the Court.
Taking a “broad brush” approach, I will order a partial property adjustment in favour of the husband of $65,000. This is a conservative amount. If he is paid a $65,000 by the wife pursuant to my proposed orders, the total amount received by him prior to final hearing will remain well below $700,000. It will be capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power in this case.
Costs
Section 117 of the Act sets out that each party shall bear his or her own costs, subject to the considerations in s.117(2) of the Act. Although it is not the only relevant factor in relation to costs, I am satisfied that neither party achieved complete success in relation to this husband’s application.
Any order for costs must also be determined in light of the substantive judgment and the relative success or failure of the parties. This is naturally something that can only be addressed after judgment has been delivered.
The Court proposes to make the orders and directions in relation to any application for costs that might be made as set forth in the orders at the commencement of these reasons.
I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of Judge Harper
Date: 24 December 2018
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Jurisdiction
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Remedies
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Procedural Fairness
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Statutory Construction
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