Reines and Waller

[2013] FCCA 2242

FEDERAL CIRCUIT COURT OF AUSTRALIA

REINES & WALLER [2013] FCCA 2242

Catchwords:
FAMILY LAW – Application to alter property interests following the end of de facto relationship of approximately six years in duration – undefended proceedings – conduct of proceedings to date – failure to conduct proceedings with due diligence – small asset pool – assessment of contributions – assessment of section 90SF(3) factors – just and equitable.

Legislation:  

Family Law Act 1975, ss.90SM(4)(c)

Taylor v Taylor (1979) 143 CLR 1

Applicant: MR REINES

Respondent: MS WALLER

File Number: CAC 1343 of 2012

Judgment of: Judge Brown

Hearing date: 15 November 2013

Date of Last Submission: 15 November 2013

Delivered at: Canberra

Delivered on: 15 November 2013

REPRESENTATION

Counsel for the Applicant: In Person

Solicitors for the Applicant: Not Applicable

Counsel for the Respondent: No Appearance

Solicitors for the Respondent: Not Applicable

ORDERS

In full and final settlement of all claims for the settlement of de facto property, it is ordered:

1. Within 35 days of the date of these orders, the respondent pay the applicant the sum of $20,000.

2. Concurrently with the payment referred to in order 1 hereof, the applicant execute a transfer and all necessary documents to transfer all his estate and title in the property currently registered in his and the respondent’s joint names and being the whole of the property known as and situated at Property H in the Australian Capital Territory, herein after referred to as the subject property to the respondent.

3. In the event the respondent fails to comply with order 1 hereof, the aforesaid property be placed on the market for sale by private treaty at a price to be agreed between the parties and failing agreement, to be $420,000, with the selling agent to be agreed between the parties and failing agreement, to be an agent nominated by the secretary of the Real Estate Institute of the Australian Capital Territory or his/her nominee.

4. That pending sale of the property, the respondent be responsible for keeping the property in good order and repair and paying all outgoings, including mortgage rates and taxes and all other payments relating to the property.

5. Upon settlement of the sale of the property, the proceeds be divided as follows:

   (a)To pay all necessary selling costs.

   (b)To discharge the mortgage in favour of the (omitted) Bank.

   (c)As to 50 per cent of the remainder to the applicant and 50 per cent to the respondent.

6. That as from the date of these orders, each party retain all assets currently in his or her possession for their sole use and benefit, absolutely free from any further claim or demand by the other.

7. That each party shall do all such things and acts and sign all necessary documents to give effect to the terms of these orders.

8. That pursuant to section 106A of the Family Law Act 1975, the registrar of the Federal Circuit Court of Canberra is appointed to execute all necessary deeds or instruments required to be completed to give effect to these orders in event either party refuses or neglects to comply with the orders herein.

9. In the event that the respondent fails to comply with order 4 hereof, in respect of the payment of outgoings in respect of the property and to keep it in good repair, the applicant shall be entitled to apply to the Court for an enforcement order for the seizure and sale of the subject property pursuant to order 4 hereof.

10. A copy of the orders made today are to be served on the respondent personally.

11. All applications be otherwise dismissed.

12. These reasons be transcribed.

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

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT CANBERRA

CAC 1343 of 2012

MR REINES

Applicant

And

MS WALLER

Respondent

REASONS FOR JUDGMENT

Introduction

1. These reasons for judgment were delivered orally immediately following the hearing.  Given the judgment was delivered in the absence of one of the parties it was ordered that the reasons be transcribed.

2. These are the reasons concerned.  They have been corrected from the transcript in the sense that punctuation has been inserted; paragraphs inserted as intended; errors in expression corrected; footnotes, headings and case references inserted; and corrections made necessary to make the orally delivered reasons amenable to being read.

3. These reasons for judgment relate to the settlement of de facto property issues.  The parties to the proceeding are Mr Reines, to whom I will refer as the applicant and Ms Waller, to whom I will refer as the respondent. 

Background

1. The applicant commenced these proceedings on 30 August 2012 in the court’s registry in Canberra.  The matter has had a chequered history in the period since. 

2. The case first came on for directions before Brewster FM, as he then was, on 10 October 2012.  The respondent appeared in person on that occasion.  She was directed to file a response and affidavit in support and a statement of her financial circumstances by 16 November 2012. 

3. Accordingly, there can be no doubt that Ms Waller became aware of the proceedings in October of 2012, a period now about twelve months ago.

4. As is usually the case in property matters, the parties were directed to attend a conciliation conference with a registrar of the court on 28 November 2012.  Mr Reines, who lives in Victoria, attended the conference as directed.  Ms Waller did not. 

5. The registrar’s order notes that she (Ms Waller) telephoned the court at 12.30 pm on 28 November 2012 and advised that she was unwell and unable to attend the conciliation conference.  It is also the position that she had not complied with His Honour’s orders that she file answering material.

6. Thereafter, the matter has been adjourned on a number of occasions.  Registrar Parker, following the conciliation conference, adjourned the matter back before Brewster FM on 5 December 2012. 

7. Ms Waller did not attend at court on that date and on the application of Mr Reines’ then solicitor Mr Lynch, His Honour made final orders in terms of Mr Reines’ application.  This decision led to Ms Waller, it seems, making some form of oral application to the court on 30 January 2013 that the orders be set aside.

8. His Honour had allowed Ms Waller, in his order of 5 December 2012, given it was made in her absence, to have the matter relisted and apply to have the orders set aside.  She was successful in her application.

9. Accordingly, pursuant to that order, Brewster FM set aside his orders on 30 January.  He also ordered that Ms Waller pay Mr Reines' costs, which were set in the sum of $264.00.  Ms Waller was granted until 13 February 2013 to file her answering documents.  The record reveals that she did not comply with that order.

10. The matter returned to court on 26 February.  On that occasion again, Ms Waller appeared in person and the respondent was granted until 12 March 2013 to file her documents and the case was further adjourned to 25 March 2013. 

11. On 25 March once again, Ms Waller appeared in person by which stage she had finally filed some answering affidavit material.  On 25 March, the matter was fixed for final hearing on 17 July 2013.

12. On 17 July, the hearing did not proceed and it was again adjourned until 27 September.  Ms Waller appeared on 17 July but regrettably, due to the illness of Judge Brewster, the matter was taken out of the list and has finally been relisted before me today.  The parties were formally advised of the re-listing by mail to their respective service addresses.

13. Ms Waller has not done anything of a proactive nature since filing her responsive material and she did that only after she was given a number of extensions of time and only after judgment in default had been entered against her.  It was necessary as I say for her to apply to have His Honour’s orders vacated.  The matter has been listed before me today for final hearing.

14. In an administrative sense, Mr Reines clearly knows of the matter’s listing and what was intended to occur today.  There can be no doubt that he received the correspondence from the court and he has again travelled from Victoria to pursue his application. 

15. The matter was called on at 10 o’clock this morning and Ms Waller did not appear.  I was dealing with another matter at the time and after discussions with Mr Reines, the matter was stood down in order to give Ms Waller a time or some time to come to court if she was running late or was delayed. 

16. I am also satisfied that Ms Waller also is aware that the proceedings have been fixed for final hearing today for the following reasons.  A person, purporting to be Ms Waller’s daughter, has telephoned today the court’s call centre.

17. She – the person who telephoned – reports that her – a person described as her mother – suffers from anxiety and panic attacks and will not be able to attend court today. 

18. The person was advised by the call centre that the matter had been stood down until 2.15, which indeed it had been and the person was advised that Ms Waller should do what she could to attend court and if she did not, the matter might proceed in her absence.

19. Ms Waller was also invited to send an email or a fax setting out her position in more detail and perhaps indicating a telephone number on which she could be contacted, but the daughter apparently informed the call centre that – from her perspective – her mother would be too anxious to attend by telephone. 

20. On oath, Mr Reines has informed me that it is his understanding that Ms Waller does not have any children at all.  Certainly not a daughter.  He is dubious about the truthfulness of the contents of the message, as indeed am I.

21. The text of the message clearly indicates that the caller and so by necessary implication, Ms Waller knew of the proceedings and knew that they are scheduled for hearing today.  As I say, the proceedings have been on foot since 30 August 2012. 

22. What is at stake in the case, although of great significance to Ms Waller and indeed to Mr Reines, does not concern a significant amount of money.  Mr Reines has been represented throughout the proceedings but his lawyer, Mr Lynch, has recently withdrawn.

23. Mr Reines himself, is not a wealthy person.  At the present time he is in receipt of social security payments.  I accept that he has travelled from his home in Victoria to pursue his application, on several occasions, including today and this has put him to expense.

24. In terms of managing this matter, I have not only to think of the interests of Ms Waller and the injustice that may be wrought to her by dealing with the matter in her absence.  I also have to think about Mr Reines. 

25. Mr Reines has done everything that has been required of him in the case to date.  He has travelled from his home in Victoria, no doubt at some expense to himself, five or six times. 

26. He is anxious, for obvious reasons, to conclude the matter and end what from his perspective, was an unhappy and difficult relationship both personally and financially with Ms Waller.

27. In addition, I have to think of the interests of justice generally.  This is a busy court dealing with often emotional and difficult issues concerning every day citizens which arise following relationship breakdown.  Citizens come to the court seeking assistance to resolve issues to do with property division and the care of children.   

28. Many people need the services of the court.  Some of them in very urgent circumstances. In those circumstances, the court has a responsibility to finalise its cases efficiently so that other cases awaiting hearing can also be disposed of expeditiously.

29. Accordingly, I am not only required to consider the interests of the parties in this case but also the interests and entitlements of other citizens to have their cases dealt with appropriately by the court. 

30. I am satisfied that Ms Waller knows of these proceedings.  However, as a result of intransigence or perhaps a fear of the outcome or for some other reason or reasons, about which I can only conjecture, she has chosen not to take part in the proceedings. 

31. I cannot compel Ms Waller to engage with this litigation.  I am, however, obliged to ensure that she has an opportunity to put evidence before the court and if she wishes to contest any evidence, to have an opportunity to test that evidence.  I also have an obligation to finalise Mr Reines’ application.  He too is entitled to his day in court.

32. It is, I acknowledge, a significant thing for a court to finalise proceedings in the absence of the one of the parties to it.  Before a person can be adversely affected by judicial order, he or she must be afforded an adequate opportunity to be heard. [1]    

    [1]  See Taylor v Taylor (1979) 143 CLR 1

33. I am satisfied that Ms Waller has been given such an adequate opportunity to appear and put her position before the court.  She has chosen not to take up that opportunity. 

34. Rule 13.1A of the Federal Circuit Court Rules deals with the court’s authority to enter judgment against a respondent if that respondent defaults in complying with a court order or fails to prosecute any proceedings with due diligence. I am satisfied that Ms Waller has failed to prosecute these proceedings with such due diligence.

The Evidence

1. The court’s pre-eminent responsibility is to ensure a just result between the parties according to the applicable provisions of the Family Law Act 1975.  Accordingly, Mr Reines is not entitled to the orders which he seeks as a matter of right merely because Ms Waller has failed to appear. 

2. For that reason, I have taken evidence from Mr Reines on oath.  That evidence of course has not been tested in any way, but I am satisfied that Mr Reines is a person of credit and I accept his evidence. 

3. At the present time he is living in (omitted), a suburb of Melbourne.  He is 45 years of age having been born on (omitted) 1968.  He is not currently working but is receiving a Newstart allowance of $500 per fortnight.

4. Accordingly, I accept that he is not a wealthy person.  As I have already indicated his straitened financial circumstances are another reason why he is entitled to have closure in respect of this matter. 

5. I accept his evidence that he and Ms Waller commenced a de facto relationship at some time in 2006.  I am satisfied that the relationship between them was a de facto relationship and that the parties shared their lives together in both a financial and emotional sense. 

6. In her response filed on 20 March 2013, Ms Waller does not seek to challenge Mr Reines’ assertion that the parties were in a de facto relationship. 

7. The parties have a similar background.  Mr Reines concedes that he has not had the easiest of lives.  He has on his evidence, had significant drug and alcohol issues since he was a teenager.  That also seems to be the position with Ms Waller as the parties in fact met through Alcoholics Anonymous. 

8. In 2006, I am satisfied that they began to live together as man and wife in a caravan park in the ACT.  Neither party had any significant asset backing behind them.

9. Mr Reines owned a (omitted) motor vehicle which was manufactured in (omitted) and he had a (omitted) ute.  Ms Waller had two motor vehicles – a Ford and a Lancer – but it seems clear that they did not have significant value. 

10. To Mr Reines’ great credit, he went out to find work for himself.  He does not have any great skills or educational qualifications.  And as I say, he has had a difficult background, so the sort of employment that was open to him was (omitted) work.  In these circumstances he chose to do (omitted) work.

11. He was doing contracting (omitted) work – hard work I accept – earning $200 per day prior to tax, grossing around $1,000 per week.  He was responsible it would seem, for his own insurance and also for paying tax. 

12. He and Ms Waller were sharing a caravan.  It was a cheap way to live.  He was sober and drug-free, concentrating on his work and getting his life in order.  I accept that he lived modestly.  Ms Waller was studying to be a (occupation omitted) at the (omitted) School.

13. She has also had all manner of difficulties in life and it would seem to be the case that she was motivated to do (occupation omitted) so she could help others avoid perhaps some of the problems that she had struck as she had grown up. 

14. So the parties as I say had much in common.  Mr Reines is not a sophisticated person.  I mean him no disrespect in categorising him as such.  He gave his wages to Ms Waller.  She paid the bills and he had a modest allowance and it seems to be the case that given that the parties were living cheaply, that they were able to save and both of them were anxious to get ahead in life.

15. Their only significant expenses, apart from living expenses, seem to be a mutual interest in tattoos and motorcycles.  It is Mr Reines’ evidence that he has many tattoos and Ms Waller had more tattoos applied whilst the parties were living together. 

16. At any event, the parties were interested in getting into the property market.  A property at Property H in Property H came onto the market in 2009 and the parties were able to secure it.  The purchase price was $395,000 and the parties by this stage had saved a deposit of $20,000.

17. I am satisfied that that deposit was a result of the significant contributions that Mr Reines had made between 2006 and September of 2009 when the property was purchased. 

18. The parties continued living in the home together.  By this stage, Ms Waller had begun to work as a (occupation omitted).  She had some wages.  Mr Reines continued in his work as a (omitted).  Regrettably, both parties had a slip from sobriety and their relationship began to deteriorate.

19. Mr Reines is frank that this period was a volatile one.  The police seem to have been involved at least on one occasion and Mr Reines was removed from the property in April of 2011, which he marks as the end of the relationship between the parties. 

20. So accordingly I am satisfied that these proceedings have been commenced within two years of the end of the relationship, as they were instigated, as I say, on 30 August 2012. 

21. Mr Reines is a person of modest proprietorial interests.  He left at the Property H property his motorcycle gear, his knives, stones and steels - I'm not sure if he’s been a cook or something like that - and some personal possessions – two swags, some pictures described as (omitted) pictures and some jewellery and all his personal documents. 

22. He has attempted to recover those items but has been unsuccessful.  It is his concern that Ms Waller is in the grip of drug addiction and may have sold his items to fund her addiction.  He is also concerned that Ms Waller has all the parties’ furniture.

23. The parties purchased a lounge suite, a television set, washing machine, a dryer and some bedroom furniture.  They purchased those items on credit.  Mr Reines’ evidence is that he regularly helped to pay the moneys owed for those items which Ms Waller has retained.  He also put money into the mortgage.

24. So from Mr Reines’ point of view, the matter is currently very unsatisfactory.  He is a joint tenant in respect of the Property H property, but he gets no benefits from it.  He does not have the benefit of its contents to which he contributed.

25. More significantly, he remains liable for the mortgage on the property and he is concerned that the evidence available to him indicates that the mortgage is in arrears and he fears that the relevant mortgagee, the (omitted) Bank, is likely to foreclose on the property to both his and Ms Waller’s detriment. 

26. He has deposed on his oath that he suffered an injury to his hand whilst at work around about the time the parties separated.  He fortunately had insurance and for a period of about 12 months the insurer has assisted to keep the mortgage up to date.

27. As recently as 8 September 2013, it was his understanding that a sum of around $5,356 was in arrears in the mortgage.  I have been provided with a balance of the loan which indicates that as of today’s date, the balance outstanding is $367,994.09. 

1. So in reality, the parties have made very little headway in respect of paying off the mortgage during their relationship.  However, as a result of upward pressures in the market, the property is now worth $420,000. 

2. I have been provided with two appraisals of the property, so in raw terms, as best as I can ascertain, the parties have an equity available to them of around $52,000 contained in it in the former home but I accept that Ms Waller also has the benefit of other items of property.

Discussion

1. In terms of the matters which I must take into account in dividing the parties’ property, I have to bear in mind the matters set out in section 90SM (4), which details the contributions to which the court must have regard in assessing what each party has done in respect of the acquisition and preservation of the property of the de facto partners in question. 

2. This involves the court ascertaining the contributions which each party has made towards those assets.  Contributions fall into two broad categories.  The first kind is contributions to the property: financial contributions and non-financial contributions made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.

3. The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contributions made in the capacity of home maker or parent.”[2] 

   [2] See Family Law Act s90SM(4)(c)

4. On the basis of the evidence available to me, I am satisfied that both parties have made equal contributions towards that property.  Mr Reines clearly worked very hard, Ms Waller too it seems has made some contributions, through employment and otherwise.

5. In any event, Mr Reines today does not seek to say that his contributions were greater than those of Ms Waller.  The relationship between the parties seems to have been not a long one and it, as I say, has not been without its difficulties. 

6. There were no children of the relationship so there is no issue relating to contributions relating to parenting.  There has been no exploration from Mr Reines’ point of view of homemaking issues. 

7. I have to also consider the matters which are set out in section 90SM(3).  I am directed not to make an order altering the proprietorial interests of former de facto partners unless it is just and equitable to do so.

8. The relationship between the parties has clearly come to end.  In those circumstances, there no longer exists any basis to continue to the parties’ common ownership of their former home together. 

9. Mr Reines is entitled to end his financial relationship with Ms Waller, particularly his potential liability in respect of the mortgage.  It is just and equitable to make a property order.

10. The court is also directed to consider a range of matters set out in section 90SF(3) of the Act.  In the main, these factors deal with the likely prospective needs of the parties.

11. In this regard, both parties are not without their challenges in the future.  Mr Reines would like to get away from doing (omitted) work and he is currently sober.  He attributes that to his current partner.  He is doing well.  He would like to be a (occupation omitted) in future. 

12. Of course, that’s usually not a very well paid position.  So it seems to me that it is fair or just and equitable that the property available to the parties in the form of the Property H property be divided relatively equally.

13. I am concerned, and I think Mr Reines shares my concern, that Ms Waller is being capricious in respect of these proceedings because she knows that ultimately, she will have to either pay Mr Reines some money or the property in question will have to be sold and for those types of reasons she wishes to avoid the evil hour and has put her head in the sand.  That is not an uncommon response to proceedings of this kind.

14. However, at the end of the day, Mr Reines is entitled to have the matters finalised and if Ms Waller continues to be uncooperative, ultimately, Mr Reines is entitled to the assistance of the court to have Ms Waller removed from the property in question and for it to be put up for sale. 

15. However, it seems pragmatic and also fair to Ms Waller that she be given an opportunity to pay some sum of money to Mr Reines in order to finalise these proceedings.  Mr Reines did not seem to me to be a vengeful person.  Rather he wishes to receive what he believes have been his fair contributions to the parties’ former family home.

16. I acknowledge that Ms Waller is unlikely to pay the sum in question.  Her life seems to be in some chaos.  That is sad but it is not, of course, Mr Reines’ responsibility. 

17. If Ms Waller does not pay the sum in question, Mr Reines is entitled to have the property sold without further reference to the Court and if necessary, the Court’s appropriate officer should be authorised to sign all necessary documents and if necessary, Mr Reines should be entitled to gain vacant possession of the property without further reference to Ms Waller.

18. So I have calculated that it would be – bearing in mind the costs of sale, that an appropriate sum to settle the matter would be $20,000 but, thereafter, if Ms Waller does nothing, the property will have to be sold and the proceeds, after the paying of outgoings, divided equally.

19. It is declared, pursuant to section 90SB of the Family Law Act 1975, that a de facto relationship existed between the parties which broke down on or about 30 April 2011 and which relationship was in excess of two years in duration and therefore, the Court has authority to make an order altering the property interests of the parties pursuant to section 90SL(2) of the Act.

20. In the circumstances of this case, I am not prepared to make any order allowing Ms Waller to apply to set these orders aside in any formal sense.

21. For all these reasons, the order of the court will be as set out at the commencement of these reasons for judgement.

I certify that the preceding eighty-seven (87) paragraphs are a true copy of the reasons for judgment of Judge Brown

Date:  15 November 2013