R & R - [2007] FMCAfam 1044

FEDERAL MAGISTRATES COURT OF AUSTRALIA

R & R

[2007] FMCAfam 1044

FAMILY LAW – Property – adjournment application – prospective inheritance.

Family Law Act 1975, ss.75, 79

Anthony v Anthony (2007) FamCA 581 (4 April 2007)
De Angelis &De Angelis [1999] FamCA 1609
Grace & Grace (1998) FLC92-792, 22 FAM LR 442
Farmer v Bramley [2000] FamCA 1615

Applicant:

Respondent:

File Number:

SYM 8486 of 2006

Judgment of:

Altobelli FM

Hearing date:

20 September 2007

Date of Last Submission:

20 September 2007

Delivered at:

Sydney

Published on:

4 December 2007

REPRESENTATION

Counsel for the Applicant:

Mr Simpson

Solicitors for the Applicant:

Diamond Conway Lawyers

Counsel for the Respondent:

Mr Gould

Solicitors for the Respondent:

Warren McKeon Dickson

ORDERS

I dismiss the wife's application for adjournment.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYM 8486 of 2006

Applicant

And

Respondent

REASONS FOR JUDGMENT

Ex tempore

The present application is one for an adjournment or deferral of property proceedings. Mrs R makes the applicant and Mr R opposes it. The substantive proceedings before me relate to property settlement. It seems as if one of the main issues in the substantive proceedings is what impact, if any, will the expected or anticipated inheritance by Mr R have on the alteration of property interests. Mrs R is the respondent in the substantive proceedings.
The background facts are relatively uncontroversial, Mr R is 63, Mrs R 53, they were married for 34 years. Their property has a value of about $1.1 million. He seeks a property settlement order in the vicinity of 50 to 55 per cent in his favour. Mrs R seeks an alteration of property interests that gives her most of the available assets.
The husband's mother is 94 years old, suffers from pancreatic cancer, and has a normal life expectancy of 3.8 years as per the life expectancy tables. However, she has an actual life expectancy of two years according to the husband, but as little as six months according to the wife She has a Will that currently appoints the husband as an equal beneficiary in an estate to which he might be entitled to as much $1.9 million.
Regrettably the husband's mother's condition is such that her cancer is untreatable and is in fact not being treated. She may die of pancreatic cancer, but she may die with pancreatic cancer but for other reasons.
The basis of the wife's application for an adjournment is that the disproportionality between the prospective inheritance $1.9 million as compared to the pool of assets $1.1 million enlivens s 75(2) which is, of course, an essential aspect of the alteration of property interest exercise.
The adjournment would probably crystallise the prospective inheritance and arguably make quantification of the 75(2) factors easier. The basis of the application is s.79(5), (6) and (7). It is interesting, as I think both counsel pointed out that, s.79(5) appears not to have been intended specifically to use in the context of a prospective inheritance. Its background seems to be more so to deal with superannuation, bankruptcy and other things like that.
There is no doubt however that s 79(5) provides the power to grant the adjournment or the deferral as it has also been described. Indeed, there is only one example of s 79(5) being used in a similar context and that is the decision of Johnston JR on 4 April 2007 in a matter called Anthony v Anthony (2007) FamCA 581.
I was referred by both counsel to the Full Court decision in Grace & Grace (1998) FLC92-792 and whilst the facts of that case are significantly different from the present case, I accept the statement of the Full Court as to the preconditions for the exercise of the adjournment power. Those preconditions are basically: Firstly, that there is likely to be a change in financial circumstances; secondly, that the likely change is a significant one, thirdly; that having regard to the likely and significant change, it is reasonable to adjourn the proceedings; and fourthly, that an order made if that significant change occurs is more likely to do justice and equity as between the parties than an immediate order.
The application for adjournment fails on the last criterion. I am not satisfied that if I were to adjourn the case so that a prospective inheritance were to crystallise, it is more likely to do justice and equity between the parties than an immediate order. Quite frankly I think it will make no difference at all whether the prospective inheritance is crystallised or remains contingent.
It is obvious what this case was going to be about from the time when the wife filed her response on 1 September 2006 and sought Order 3 in her response. Order 3 seeks an order that the husband pay to the wife by way of alteration of property interests a payment of $100,000 upon the death of the husband's mother, M, from his inheritance with receipt of this inheritance deemed to have taken place within three months of the grant of probate of the estate of the husband's mother. So it explicitly refers to the prospective inheritance.
All that has changed, putting it at its very highest, is that it is clearer what the value of the inheritance will be and it is possible that it will take less time to crystallise. I can do no less or more justice and equity now than I could at the time of the filing of the response as I could at the time that the inheritance is actually received. It is common ground that the inheritance is primarily going to be a s 75(2) consideration.
The ultimate alteration of property interests is, in my opinion, no different whether I use the De Angelis &De Angelis [1999] FamCA 1609 approach to prospective inheritance or the Farmer v Bramley [2000] FamCA 1615 approach to treat it as a post-separation asset. It cannot seriously be argued that the wife's claim is based on contribution and even if it is, it could be satisfied out of the available assets.
In any event, I hold it as unreasonable to adjourn the proceedings. The husband is almost 10 years older than the wife and she remains in occupation of the former matrimonial home. I accept the submission of the husband's counsel that an adjournment gives to her precisely what she asks for in her final application. An adjournment creates no prejudice to the wife in any way, but potentially significantly prejudices the husband.
Ultimately the absence of prejudice to the wife is demonstrated by this fact: could I make an order in the terms sought by the wife in her response? Indeed, could I do better by ordering that she receive the entire equity in the former matrimonial home and $100,000 now, rather than on receipt of the inheritance? The answer is, yes, I could. There are funds available out of the pool of assets to do just that. So it makes no difference whether or not the inheritance is received. The order sought by the wife is capable of being made, thus she suffers no prejudice and indeed no greater justice and equity could be done by postponing these proceedings.
I dismiss the wife's application for adjournment.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Altobelli FM

Associate: Lisa Molloy

Date: 4 December 2007