REID & REID

[2015] FCCA 536

FEDERAL CIRCUIT COURT OF AUSTRALIA

REID & REID [2015] FCCA 536

Catchwords:
FAMILY LAW – Property – application for property settlement –where respondent did not attend court – contributions of the parties – whether proposed orders are just and equitable.

Legislation:

Family Law Act 1975 (Cth), s.79

Federal Circuit Court Rules 2001, rr.13.03C, 16.05

Cases cited:
Hickey & Hickey [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143
Stanford v Stanford [2012] HCA 52; (2012) 47 Fam LR 481; FLC 93-518

Applicant: MS REID

Respondent: MR REID

File Number: SYC 4724 of 2014

Judgment of: Judge Scarlett

Hearing date: 2 March 2015

Date of Last Submission: 2 March 2015

Delivered at: Sydney

Delivered on: 2 March 2015

REPRESENTATION

Solicitor for the Applicant: Mr Doumanis

Solicitors for the Applicant: Diamond Conway Lawyers

Respondent: No appearance

ORDERS

1. The Applicant is granted leave to proceed ex parte.

2. The parties are to do all acts and things and sign all documents necessary to give effect to the sale of the property known as [H] (“the [H] Property”) pursuant to the Contract of Sale from Ms Reid and Mr Reid to [names omitted], all of [address omitted] for the sum of $825,000 plus or minus any adjustments necessary pursuant to the conditions of the Contract of Sale.

3. In the event either party refuses or neglects to execute any deed or instrument necessary to give effect to these Orders, the Registrar of the Federal Circuit Court of Australia at Sydney Registry is appointed pursuant to Section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the deed or instrument.

4. Upon settlement of the sale of the [H] Property, the proceeds of sale are to be paid in the following manner and priority:

   (a)payment of all costs, commissions and expenses of the sale;

   (b)payment of any council and water rates and utilities outstanding in respect of the [H] Property;

   (c)discharge of the mortgage or any other encumbrances affecting the [H] Property;

   (d)payment to the Wife for an amount equivalent to 75% of the net sale proceeds;

   (e)the balance then remaining to the Husband.

5. Other than as is specifically provided in these Orders each party is to be solely entitled to the exclusion of the other to all property (including real estate) in the possession of or registered in the name of such party as at the date of these Orders including but not limited to choses in action or money standing to the credit of any party in any financial institution, shareholdings, motor vehicles, superannuation or interest in any trust or estate.   

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 4724 of 2014

MS REID

Applicant

And

MR REID

Respondent

REASONS FOR JUDGMENT

Application

1. This is an Application by the Wife for orders for settlement of property matters between the Husband and herself, relating to the parties’ former matrimonial home in the Sydney suburb of [H]. The Husband has not filed a Response or any supporting documents and has not attended Court on any occasion.

Procedural History

1. The Wife commenced proceedings on 30^th July 2014 by filing an Application for property orders under s.79 of the Family Law Act 1975 (Cth), together with a Financial Statement and a supporting affidavit. The Application was returnable on 27^th October 2014.

2. Sealed copies of the Application and supporting documents were served personally on the Respondent by a Licensed Commercial Agent on 2^nd August 2014. The Respondent was still residing in the former matrimonial home at that time, albeit living separately and apart from the Applicant.

3. On 4^th September 2014 the Applicant commenced divorce proceedings by filing an Application for Divorce, returnable on 16^th October 2014. The Application for divorce was accompanied by an affidavit of the Applicant and an affidavit of the parties’ adult son Mr R, deposing as to the circumstances of the parties’ separation under the one roof.

4. The divorce documents were served on the Respondent on 8^th September 2014.

5. The parties were divorced by Order of this Court on 16^th October 2014.

6. The Applicant and her solicitor attended Court on 27^th October 2014. There was no appearance by or on behalf of the Respondent. As I was satisfied as to service I made interim orders that:

   (a)The Respondent was to vacate the former matrimonial home at [H] within fourteen days;

   (b)The Applicant was to have exclusive occupation of the property;

   (c)The parties were to do all acts and things necessary to submit the property for sale, initially by private treaty; and

   (d)The Applicant would continue to occupy the property until completion of the sale.

7. The Application was then listed before the Court for further mention on 3^rd December 2014. Again, there was no appearance by or on behalf of the Respondent. The Respondent was again ordered to file and serve a Response, an affidavit and a Financial Statement and the application was listed for an undefended final hearing on 2^nd March 2015.

8. The Applicant attended Court on 2^nd March, accompanied by her solicitor. Again, there was no appearance by or on behalf of the Respondent.    

Hearing

1. The Applicant relied on the following affidavits:

   a)her affidavit of 29^th July 2014;

   b)her affidavit of 2^nd March 2015; and

   c)the affidavit of her solicitor, Mr Doumanis, of 27^th February 2015.

2. The Applicant gave short oral evidence in support of her case.

Orders Sought

1. The Applicant seeks orders that the parties should sell the former matrimonial home at [H] and divide the net proceeds as to 75% to her and the balance to the Respondent. She also seeks an order that each party would otherwise retain the property they currently hold.

The proper approach to determination of a property application

1. The way a court approaches a property application under s.79 of the Family Law Act 1975 (Cth) is, first of all, to follow the principles set out by the High Court of Australia in Stanford v Stanford.[1] First, the Court must consider the requirement in subsection 79(2) of the Act that prescribes:

   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.

   [1] [2012] HCA 52; 47 Fam LR 481; FLC 93-518

2. The High Court held (at [37]) that the Court must first identify the existing legal and equitable interests of the parties in the property. Although s.79 confers a broad power on a court to make a property settlement order, “it is not a power that is to be exercised according to an unguided judicial discretion” (at [38]).

3. The third principle, and perhaps the most important, is:

   …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 the marital property which is fixed by reference to the various matters (including financial contributions) set out in s.79(4).[2]

   [2] [2012] HCA 52; 2012 47 Fam LR 481; FLC 93-518 at [40]

4. Thus, the decision in Stanford means that the Court must consider the requirements of s.79(2) before embarking on the four-step process set out by the Full Court of the Family Court in Hickey & Hickey.[3]

   [3] [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143

5. In Hickey, the Full Court set out a process of four inter-related steps that must be taken by a court when determining a property application:

   Firstly, the Court should make a finding as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties… and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters…including…the matters referred to in s.75(2) so far as they are relevant…Fourthly, the Court should…resolve what order is just and equitable in all the circumstances of the case.[4]

   [4] [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143 at [39] per Nicholson CJ, Ellis & O’Ryan JJ

6. It is neither contradictory nor redundant to consider again whether a proposed order is just and equitable under s.79(2), because the Court is considering the matter after having undertaken the three previous steps referred to in the decision in Hickey.

7. The requirement in Stanford that the Court should commence by considering whether it is just and equitable to make an order is really a way for the Court to decide at the outset whether it would be just and equitable to make a property order at all. If the Court cannot be so satisfied, then the further steps in the process need not be considered any further, in my view.

Just and Equitable

1. The parties are divorced. The principal asset is the former matrimonial home at [H], which is registered in the names of both parties. The Respondent has moved out of the former matrimonial home and contracts have been exchanged for its sale. It is just and equitable that orders should be made resolving the property matters between the parties.

The Matrimonial Assets

1. The Applicant believes that the matrimonial assets are:

   a)The former matrimonial home at [H]                    $825,000.00[5]

   [5] Contracts have been exchanged for the sale of the property at $825,000.00

   b)Mazda motor vehicle  $   10,500.00

   c)Mitsubishi Triton utility  $   15,000.00

   d)Household contents  $   10,000.00

   e)Jewellery  $   3,000.00

   f)Westpac shares (estimate)  $   4,000.00

g)[D] Pty Ltd and tools                     $   20,000.00

TOTAL$8,875,000.00

Liabilities

1. The only liability is the sum of $270,000.00 owed on the mortgage to the CBA.

Net non-superannuation assets

1. The net non-superannuation assets amount to $860,500.00.

Superannuation

1. Wife’s superannuation  $200,000.00

2. Husband’s superannuation  $   40,000.00.

Contributions

1. It is the Applicant’s case that her contributions, financial, homemaking and parenting are overwhelmingly in her favour, to the extent of 75% by her and 25% by the Respondent.

Matters under sub-section 75(2) of the Family Law Act

1. The Applicant submits that there are no matters that support an adjustment under s.75(2) of the Family Law Act 1975, as both parties are in good health and capable of maintaining a reasonable earning capacity.

Conclusions

1. The Respondent has not filed any material by way of affidavit or financial statement and has not challenged any of the Applicant’s assertions. On my assessment of the applicant’s case and having heard her give oral evidence, I am satisfied that I should make the orders that she seeks.

2. I am satisfied that, in all the circumstances, the proposed orders are just and equitable.

3. The orders are being made in the absence of the Respondent. His attention is drawn to the provisions of Rule 16.05, which applies to applications to set aside orders made in the absence of a party.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Associate: 

Date:  10 March 2015