Raffles & Raffles

[2013] FCCA 624

FEDERAL CIRCUIT COURT OF AUSTRALIA

RAFFLES & RAFFLES & ORS [2013] FCCA 624

Catchwords:
FAMILY LAW – PRACTICE AND PROCEDURE – Wife brings property settlement application – fails to appear at trial – promotes adjournment via letter of son annexing medical certificate – whether adjournment should be granted – whether order just and equitable.

Legislation:  

Family Law Act 1975 ss.79(4)(a), (b) and (c), 79(4)(e), 75(2) ,

Transfer of Land Act 1958 (Vic) s.76

Stanford v Stanford [2012] HCA 52

Applicant: MS RAFFLES

First Respondent: MR RAFFLES

Second Respondent: MR JORDAN

Third Respondent: MS JORDAN

File Number: MLC 3782 of 2012

Judgment of: Judge Lindsay

Hearing dates: 20 & 23 May 2013

Date of Last Submission: 23 May 2013

Delivered at: Melbourne

Delivered on: 23 May 2013

REPRESENTATION

Counsel for the Applicant: No Appearance

Solicitors for the Applicant: No Appearance

Counsel for the First Respondent: Ms Hession

Solicitors for the First  Respondent: Nevin Lenne & Gross

Counsel for the Second and Third Respondents: Mr Cook

Counsel for the Second and Third Respondents: Nicholas O’Donohue & Co

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

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT MELBOURNE

MLC 3782 of 2012

MS RAFFLES

Applicant

And

MR RAFFLES

First Respondent

MR JORDAN

Second Respondent:

MS JORDAN

Second Respondent:

REASONS FOR JUDGMENT

1. On the 23^rd of May 2013 I made final orders resolving matters of property settlement between the applicant and first respondent. 

2. On the 20^th of May the application for property settlement first came before me.  I granted leave for the solicitor’s for the wife to withdraw as they were without instructions.  I indicated in Court that the Registry had received a letter on the 17^th of May from [name omitted] who indicated in the letter that he was the son of the wife.  The letter sought a 4 week adjournment on her behalf and referred to certain medical conditions that his mother suffered from.

3. The letter was accompanied by a medical certificate from the Family Medical Centre dated the 16^th May 2013 which identified the wife and in which a Dr P certified that the wife was suffering from “severe anxiety/depression” and was not “medically fit” to attend Court on the 20^th of May 2013. 

4. The wife did not attend in person to promote this application.  No legal representative appeared on her behalf with instructions to promote such an application. 

5. The application was opposed by the husband through his counsel Ms Hession.

6. In the light of the wife’s non-appearance I indicated that I was satisfied that it was appropriate to hear the matter on an undefended basis notwithstanding the terms of the medical certificate.

7. I had extensive affidavit material of the husband before me and I took a substantial amount of oral evidence from him in addition on that day. 

8. At the end of that evidence I indicated my preparedness to make orders in terms of a minute of order finalising the property matters provided to me by Ms Hession.

9. The orders provided, inter alia, for the sale of a jointly owned property at [G] owned by the husband and the wife but I knew at the close of the evidence that possession proceedings by persons who held a mortgage over that property had been filed in the Supreme Court of Victoria.

10. Consequently I adjourned further consideration of the matter to the 23^rd of May and directed that the husband’s solicitors serve a copy of the proposed order on the legal representatives of the mortgagee and acquaint them with what had transpired in Court before me that day.

11. On the 23^rd of May the mortgagees were represented by counsel.  An amended minute of order was provided to me and there followed some colloquy between the Court and counsel as to the terms of that amended minute.  Further negotiations between the husband’s solicitors and the mortgagees’ solicitors transpired and ultimately I made the orders finalising this matter as referred to in paragraph 1 of these Reasons.  At the time of making those orders I indicated I would provide Reasons for doing so in due course.  These are those Reasons.

12. I deal first with the decision to proceed on an undefended basis.  Rule 13.03C deals with the default of appearance of a party.  It provides, in sub-rule 11 (c) that if a party is absent from a hearing the Court may:

    (e) proceed with the hearing generally or in relation to any claim for relief in the proceeding.

    Give judgment or make any other order against the respondent.

13. Of course in relation to proceedings pursuant to s.79 of the Family Law Act the Court cannot finalise the matter unless it is satisfied that the orders it proposes to make are just and equitable.  I deal with that aspect of the matter hereunder.

14. The proceedings were initiated by the wife on 30 April 2012.  She filed an affidavit and financial statement with the application at that time.

15. She filed an amended application on the 3 July 2012 having filed a further affidavit on the 28 June 2012. 

16. The Court records show that an Outline of Case Document was filed on her behalf on 23^rd of May.

17. On the 3^rd of July 2012 Judge Bender listed the matter for trial on the 8^th April 2003.  At that time she made a series of trial directions which required the applicant to file and serve any further affidavit to be relied upon by the 12^th of March.

18. On the 19^th of March written advice was given to the parties through their solicitors that the trial date of 18^th of April had been vacated and that the matter was listed before me on the 20^th and 21^st of May 2013.

19. In any event the wife filed no further affidavit material.

20. The husband filed Further Affidavit material on the 7^th of May and 13^th of May 2013 and a Further Financial Statement on the 9^th May 2013.

21. The wife’s solicitors filed their Notice of Withdrawal as lawyer on the 22^nd of May 2013 but I had already granted them leave to withdraw on the 20^th May 2013.

22. I was not satisfied that it is an appropriate discharge of the wife’s obligations as a litigant to have her son write to the Court on the last business day before the commencement of the trial seeking an adjournment of a trial listed some 11 months previously.  The husband had been given no notice of her intention to seek an adjournment.  The assertion in the son’s letter that his mother was returning to hospital on “Monday” (which would have been the first day of the trial) was not substantiated or corroborated by the medical practitioner’s certificate which makes no reference to hospitalisation.  Indeed the medical certificate gave no indication how long Dr P had been treating the wife or in relation to the degree of his familiarity with her circumstances.

23. The son’s letter had attributed her anxiety and depression to the legacy of a car accident some 6 years previously.  Once again this is not referred to in the medical certificate.

24. The very least the Court can expect in these circumstances is for the wife to have filed an affidavit as to the matters she said required her to seek an adjournment.  The affidavit could also have explained why her anxiety and depression was of such degree as to disable her from attending Court personally to seek the adjournment.

25. There is no indication in either the son’s letter or the medical certificate that she is receiving any form of treatment or medication for the anxiety and depression she is said to suffer from.

26. The husband was fully prepared for trial.  His solicitors had instructed counsel and provided me with a lengthy outline of case document.  His entitlement to have the proceedings determined had to be balanced against any unfairness associated with not committing the mother to have her adjournment.  Because I had been provided with so little information as to the reasons for her non-attendance and for her failure to promote the adjournment application in a timely way and support it by affidavit.  I considered that it was appropriate to exercise my power under the Rules and to enable the hearing to proceed.

27. I ordered accordingly.

28. The husband’s outline of case document and his affidavit material indicated that the asset pool at trial was in the order of approximately $330, 000.00.  The most significant aspect of the asset pool was the home in [G] which was said to have an equity of $280, 000.00.  The husband’s affidavit material and the oral evidence of the husband revealed a history of financial dealings by the parties in the latter stages of the marriage which was highly imprudent and to some extent inexplicable.

29. I was obliged to scrutinise the affidavit material and the oral evidence carefully because of my obligation under s.79(2) of the Act not to make an order by way of property settlement unless I am satisfied the order is just and equitable. 

30. The exercise involved in the just and equitable determination has been clarified in recent times by the High Court in the decision of Stanford v Stanford 2012 HCA 52.  The High Court there made it clear that one must first determine whether it is just and equitable to make any order altering or adjusting the existing property interests of the parties. I must not start with any assumption that I must make any property adjustment order at all. A property adjustment order is not to be regarded as just and equitable only in the light of the various criteria that are set forth in s.79(4) of the Act.  As the plurality judgment says at [40]:

    … Whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4).  The power to make a property settlement order must be exercised “in accordance with legal principles, including principles which the Act itself lays down” [28].  To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.

31. If I am satisfied that it is appropriate to make a property adjustment order the statutory criteria must still be applied, of course. I must identity the property of the parties to the marriage. I must then evaluate the contributions of the parties in accordance with the criteria set forth in s.79(4)(a), (b) and (c) of the Family Law Act. I must then, pursuant to s.79(4)(e) consider the matters referred to in s.75(2) of the Act so far as they are relevant and determine the adjustment (if any) which should be made to the contributions-based entitlements of the parties on account of those matters, which include, but are not limited to, the future needs of the parties.

32. Having determined that it is just and equitable to make an order I must then ensure that I am satisfied that the specific order that I am proposing to make is a just and equitable one in its terms. 

33. The parties married in 1980.  At trial the husband was 57 years of age and the wife 54. They separated in September 2011 after a co‑habitation of approximately 31 years.  There are 2 adult children.  The eldest is aged 29 and lives independently.  The youngest is the son who wrote the letter to the Court.  He is aged 26 and is employed as a [omitted] and lives with his mother.

34. The parties purchased the [G] property in 1980. The wife exercised principle responsibility for the children but also engaged in regular employment. The husband worked as a [omitted] for a variety of employers. The wife received Workcover payments in respect of injuries she suffered in various employments.

35. The financial history of the marriage to that point is relatively straightforward.

36. The parties’ difficulties arose in 2010 when they met a woman by the name of Ms D.  She was setting up a [omitted] company in Papua New Guinea.  She persuaded the parties to invest the sum of $350 000.00.  The husband was to be employed by the business venture.

37. The sum of $350 000.00 was borrowed from the mortgagors who still had their security at trial.  They were persons to whom the parties were introduced by Ms D and her accountant.  The documentation relating to that advance and the provision of security was something the parties received independent legal advice about.  The sum of $33, 250.00 was deducted immediately from the advance as the first year’s interest payment and a further sum of $18, 000.00 was paid to Ms D’s accountant, Mr W.  Shortly after the advance Mr W requested and

    
    

    Mr Raffles paid a further sum of $50, 000.00 to him. 

38. The husband’s affidavit material and his oral evidence then catalogued a number of transactions involving the disbursement of the balance of the funds.  I do not propose to describe in detail the history of those transactions.  I cross-questioned the husband in significant detail in relation to these transactions and I compared his evidence with that which was contained in those bank statements that were provided to me as exhibits.

39. The transcript of the evidence taken from the husband reveals significant concerns I had in relation to the prudence of a number of the transactions and indeed as to the irrationality of the conduct of both of the parties during this short-lived venture.

40. I was satisfied that all of the funds had been disbursed.  A significant proportion of them were disbursed at the direction of Ms D.

41. Despite my concerns about some aspects of the husband’s behaviour (identified in the transcript) I was satisfied that he was endeavouring to give me an honest account of these transactions and of his role in them.

42. I am satisfied that he does not retain any of the funds advanced by the mortgagors.  He has accessed an amount of approximately $33, 000.00 being the member balance of his superannuation account since the parties separated.  He and his wife retained motor vehicles.  She has a modest superannuation entitlement in the order of $5,700.00 and the husband has disposed of a horse float and saddle since separation netting approximately $10, 000.00 in total from that exercise.  He is not currently in employment.  He is living in rental accommodation in [omitted].  The wife has remained in the former matrimonial home in [G] since separation.  She was in that home at the date of the trial. 

43. In October 2012 the mortgagees issued the parties with a Notice to Pay pursuant to s.76 of the Transfer of Land Act 1958 (Vic). The husband brought an Application in a Case to this Court seeking urgent interim orders for the sale of the property. That application was listed on the 3^rd of December 2012.

44. Prior to that date the solicitor’s representing the mortgagee informed the husband that the wife had paid the sum of $18, 000.00 to them and that consequently the Notice to Pay had been withdrawn. The Application in a Case of the husband was subsequently withdrawn.  The next tranche of interest pursuant to the mortgage was due in March 2013.  It was not paid and consequently the application for possession of the [G] property had been brought by the mortgagees as at the date of trial.

45. The husband contended that the wife had been receiving continuing assistance from Ms D and was continuing to be associated with her at the trial not withstanding the high degree of irregularity associated with the conduct of Ms D and Mr W during the course of the ill fated business enterprise. 

46. Certainly there was no evidence before me as to the source of the wife’s funds in December 2012 that enabled her to meet the interest payment but neither was Mr Raffles able to put before me sufficient material to enable me to find that Ms D had assisted the wife in that regard. 

47. The contributions-based entitlements of the parties on the evidence before me I regard as being equal.  I had very limited information before about the wife’s future needs.  I know that she is receiving Workcover payments.  The husband has undertaken a TAFE course in 2012 in [omitted] and also obtained preliminary qualifications for [omitted].  He obtained casual work as a [omitted] in 2013.

48. Neither party has re-married.

49. Following the opportunity being given to the mortgagees to be heard on the form of the orders, various amendments to the orders were made which enabled them to be consulted on matters relating to the orderly sale of the property and to secure the payment of principal and interest owing to them.  They undertook through their solicitors not to prosecute their Supreme Court proceeding without leave of the Court.

50. I determined that the benefits the husband received from the sale of the horse float and saddles and to cashing in of his superannuation policy were counter-balanced to some degree by the wife having the opportunity to reside following separation in the former matrimonial home, presumably up to that point at which the home is sold.  In addition to that I was in such a state of uncertainty as to the nature of her financial circumstances that it was not just and equitable in my view to apportion to her a greater share of the net proceeds of sale of the home than that to which the husband will be entitled. 

51. The husband was prepared to accept an equal division of the proceeds of sale.

52. The wife’s failure to participate meaningfully in the proceedings and disclose her financial position at trial left me in a position where the making of any adjustment and the extent of any adjustment in the sharing of the proceeds of sale would have been speculative.

53. For these reasons I considered the orders that I was asked to make by the husband were just and equitable.  And I so ordered.

I certify that the preceding fifty-three (53) paragraphs is a true copy of the reasons for judgment of Judge Lindsay

Associate: 

Date:  24 June 2013