Romero and Chavez (No 2)

[2011] FamCA 411

FAMILY COURT OF AUSTRALIA

ROMERO & CHAVEZ (NO 2) [2011] FamCA 411

FAMILY LAW – PROPERTY SETTLEMENT – Where the husband seeks the existing consent property orders be set aside – Where the wife was to retain the former matrimonial home and the mortgage attached to it – Where wife was to assume liability for all creditors and the mortgage debt – Where the amount of the debt to the Australian Taxation Office remains unresolved – Where no evidence to support the husband’s value of matrimonial property – Husband’s inability to produce evidence does not constitute substantial and significant circumstance – Husband’s application under section 79A dismissed.

FAMILY LAW – CONTRAVENTIONS – Where the wife has filed three separate contravention applications – All contravention applications dismissed.

APPLICANT:

Ms Romero

RESPONDENT: Mr Chavez

INDEPENDENT CHILDREN’S LAWYER: Ms Lilley, Solicitor

FILE NUMBER: BRC 2969 of 2008

DATE DELIVERED: 6 June 2011

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Barry J

HEARING DATE: 6 June 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: The Applicant Mother appearing in person

COUNSEL FOR THE RESPONDENT: Mr Byrne of Counsel appearing for the Respondent Father

SOLICITOR FOR THE RESPONDENT: Sharma Lawyers

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Ms Lilley, Solicitor of Legal Aid Queensland

Orders

IT IS ORDERED THAT:

Children’s Issues

UPON THE UNDERTAKINGS OF THE MOTHER AND FATHER FILED
6 JUNE 2011

1. The child, V born … August 1993 shall live with and spend time and communicate with each parent in accordance with his wishes.

2. Unless otherwise agreed to in writing by the parties, the children, J born … November 1995 and R born … February 1997, shall live with the parents in a shared care arrangement in a fourteen (14) day cycle.

3. The Mother and Father shall have equal shared parental responsibility for the children, except education and medical issues (but not sole financial responsibility for same) which shall be the sole parental responsibility of the Mother.

4. The Father is to be at liberty to attend any school function to which parents are invited and at his own expense may request he be supplied with the children’s school reports, school photos, news letters and any other material forwarded to parents of children attending the school.

5. The Father is at liberty, at his expense, to request a report or any information from any medical practitioner or treating health professional who may have seen the children for any treatment.

6. The Mother is to advise the Father in writing within seven (7) days of any medical treatment the children receive together with the names of the medical practitioners or health professionals and the address at which such treatment has been carried out.

7. Each parent is to immediately inform the other in writing of any medical emergency or serious injury involving the children as soon as reasonably practicable.

8. Each parent keep the other informed of any change of address, telephone number and email address within seven (7) days of such change.

1. Each parent will ensure that the children attend all school and extra curricular activities in which the children are engaged when they are in that parent’s care.

2. The children spend school holiday periods with each parent as may be agreed by the parents in writing, but in the event they are unable to agree then with the Mother for the first half of the school holidays in years ending with an odd number and the second half of the school holidays in years ending with an even number.  At all other times the children are to spend school holidays with the Father.

3. The Independent Children’s Lawyer to supply a copy of the reasons for judgment delivered on 30 May 2011 to Ms M, psychologist and college counsellor at School 1, the school at which the children attend.

4. Paragraph (2) of the Order of this Honourable Court dated 24 February 2010 be discharged.

5. Each parent is, as soon as practicable, to arrange and to complete a Parenting Orders Program with Counselling Service 1 (telephone …), or Counselling Service 2 (telephone …), or, at each parent’s own expense, with a private service such as that offered by Counselling Service 3 at Brisbane Suburb 5.

6. At each parent’s completion of a Parenting Orders Program, each parent shall provide to the other, evidence of completion of the Program, such as a certificate issued by the service provider.

7. The Independent Children’s Lawyer has leave to attend on the children at their school, on an occasion to be arranged by her with the children’s school counsellor, to explain these Orders to the children.

8. That these Orders are made on the parties’ undertakings, given by them, to comply with and to fully implement these Orders in the future.

1. The Independent Children’s Lawyer to be discharged one (1) month from today’s date.

Property Issues

1. The Husband’s oral application for an adjournment of his s 79A application is dismissed.

2. The Husband’s application seeking the consent property orders dated 23 October 2008 be set aside under section 79A is dismissed.

IT IS ORDERED BY CONSENT THAT:

1. The Mother’s contravention applications filed 22 July 2010, 31 August 2010, and 31 May 2011 are dismissed.

IT IS FURTHER ORDERED THAT:

1. Pursuant to s 62B and s 65DA(2), the particulars of the obligations these Orders create and the particulars of the consequences that may follow if a person contravenes these Orders, and details of who can assist parties to adjust to and comply with an order, are set out in the document entitled “Parenting orders – obligations, consequences and who can help”, a copy of which is annexed to these Orders.

NOTATION:

Each party acknowledges that the children will remain enrolled at School 1, and each child will attend at that school until the completion of his secondary education.

It is noted that publication of this judgment under the pseudonym Romero & Chavez (No 2) is approved pursuant to s 121 (9) (g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 2969 of 2008

Ms Romero

Applicant

And

Mr Chavez

Respondent

REASONS FOR JUDGMENT

1. Consent orders for property settlement were entered into between the parties on 23 October 2008.  Those orders are set out in the reasons for judgment which I published in this matter this morning.  The orders were made after a conciliation conference with a Registrar of this Court.  The orders provided that the husband was to transfer the home at Brisbane Suburb 1 to the wife.  The wife was to take over the mortgage which was then $174,000 and the wife was to assume liability for all of the creditors.

2. The creditors were set out in paragraph 3(a) to (f) and there was a notation to the order that, regarding the Australian Tax Office debt the tax accountant is currently negotiating the debt whilst the wife will assume all responsibility and indemnify the husband, and will come to an arrangement with the Australian Tax Office if necessary.  The orders provided for the parties to retain in their name, possession and control the money in their respective superannuation funds and bank accounts.  In the event the creditors had not been paid within 120 days then the property was to be sold and the sale proceeds were to be distributed in paying out the mortgage, payment of the other creditors as referred to in paragraph 3, agent’s commission, legal costs and then any balance was to be distributed 35 per cent to the husband 65 per cent to the wife.

3. In June of last year, about a month before this matter was due to proceed on children’s issues, the father Mr Chavez filed an amended response document and for the first time sought by paragraphs 7 to 11 that the consent orders for property settlement be set aside pursuant to section 79A of the Family Law Act.  He sought a new order whereby he transfer the house to the wife and contemporaneously with the transfer she pay him a sum of $40,000 or in the alternative that the property be sold and the proceeds divided equally.  The husband filed a financial statement with that application.  In that financial statement he values the property at $320,000.  There is no evidence that the husband is a registered valuer, that he has consulted a registered valuer, or how he has arrived at that figure other than it is a figure that is in effect plucked out of the air.  I am satisfied there is no admissible evidence to support the contention.  I admitted today exhibit 1, what purported to be an Internet search.  I am not satisfied that that document should have any weight placed upon it at all.

4. An affidavit was filed by the father on 21 July 2010 and in that document under the heading “Property Matter”, he proceeds to set out what he says were discussions that took place at the conciliation conference.  That material is not admissible and at any hearing of this matter would be struck out.

5. The situation is that the orders became deadlocked because of the fact that the house had not been transferred in accordance with the terms of paragraph (1).  The result of this is the wife could not borrow on the property to pay out the creditors.  I am satisfied because of the delays in payment she has had to incur further interest accumulating on some of those liabilities.  At paragraph 66 of his affidavit the husband says:

   It now appears that for some reasons not known to me [Lender Co 1] is not able or willing to provide any evidence of the money loaned by them to us.  They have not complied with the subpoena issued by my solicitor.  It would appear the Taxation Office have agreed to reduce the debt considerably.

6. Paragraph 67-

   Given that I had agreed to resolve the issue of property settlement on the basis that there were substantial outstanding debts for which the wife had taken over the responsibility, it is not fair that the wife solely reap the full benefit if certain debts that are not payable.

7. In the affidavit the husband makes an assertion for which I find there is no evidence, namely the wife was in a de facto relationship at the time and gives a number of other reasons why the orders should be set aside namely at the time he was very stressed and he had lost his job some time after the conciliation conference.  He sets out various other reasons why the court should set aside the consent orders.

8. Setting aside consent orders is always a difficult task.  There is a presumption that there should be finality to litigation.  There is provision clearly under section 79A where if a litigant can meet the terms of that section then the upshot of it is that the court has the ability to vary or set aside the particular orders in question.

9. Now, at paragraph 71 of that affidavit to which I have made reference, the father says he valued the property at $350,000.  Why he would value the property at $350,000 when in a document filed a month earlier he had valued it at $320,000 I am unable to say.  He comes to court today with his application under section 79A and clearly when I am asked to read the material relied on, there is no evidence to support the valuation.

RECORDED:  NOT TRANSCRIBED

1. In his case outline document which was produced in July 2010, the husband says:

   The orders made by consent were on the basis of the facts that the debts were owed by the parties at the time as set out in the orders and that the wife was going to pay those debts, the children were to live with the mother and the mother did not earn much at that time nor did she have any partner at that time. 

2. Paragraph 6:  

   In view of the following, the mother wife has not paid the debts as required by the court orders.  The father/husband seeks equally shared parenting arrangements and the mother/wife is in a relationship and the wife earns substantially more than the husband. 

3. The husband contends it would be unjust and an inequitable result to allow the orders to stand.

4. My understanding of the situation is it is necessary to establish not only a ground pursuant to section 79A, but also that the result would be materially different the second time round and counsel, quite properly has conceded that once the adjournment is refused the second leg of the section 79A application can not be established.  In the husband’s financial statement of today’s date, he does not value the property at all.  It is just left blank.  There is at item 50 a loan indebtedness of $40,000, but I do not understand that.

RECORDED:  NOT TRANSCRIBED

1. It seems to be conceded by the wife that the debt of $28,000 to Lender Co 1 should not have been a liability.  What is in dispute is the liability to the Australian Taxation Office.

RECORDED   :   NOT TRANSCRIBED

1. The evidence before the court consists of an Annexure G to the wife’s affidavit, sworn on 18 September 2009, which would suggest there is a liability to the Tax Office for an amount of $27,007.80.  That document appears to have been obtained through a tax agent’s portal and relates to figures as at February 2009. To her affidavit sworn on 27 May 2011, the wife annexes an email communication from her accountant, a Ms C, from Accounting Firm 1.  She says that the business that was operated by the parties, and I take it was not operated under a company structure, it seems to have been a partnership business.  Business L was the name of it and the company never lodged tax returns to the 2004/2005 financial years.  The Taxation Office only requires lodgement up until the 2005 period and a final GST return for that period needs to be lodged because of sale of assets, presumably assets of the business. 

2. The current account owing, presumably for previous liabilities was said to be $24,995 and then she said, “There will be additional tax and GST to pay on top of this figure.  In the next sentence she notes, “[Mr and Ms Chavez] partnership owes $33,000 to the ATO.” Why the figure magically changes from $24,000 to $33,000 I am unable to say but the email was sent in December 2010 and I would prefer that as a more reliable position.  It seems clear the final situation with the Tax Office has not yet been resolved.

3. Section 79A says:

   Where on application by a person affected by an order made by a court under section 79 in property settlement proceeding, the court is satisfied that: (a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence including failure to disclose relevant information, the giving of false evidence or any other circumstance… then the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the orders so set aside.

4. Now, there is no evidence of bad faith in this instance by either party.  However, I would be prepared to find that the fact that the figures may not be accurate, if sufficient proof was forthcoming, then that would be sufficient to bring the case within the expression, “Any other circumstance”.  But the onus of proof is on the father at all times; the proceedings have been in existence for 12 months, the matter was set down for trial today and the view that I have formed is, the court, under the rules, is only to grant an adjournment for substantial and significant reason (Rule 16.03).  Failure to prepare properly for a hearing or failure to adduce evidence does not constitute a substantial and significant reason.  The evidence could so easily have been obtained in appropriate form. 

5. There are a number of other factors that I have adverted to during the course of the submissions today.  The court would have to look as I said at the additional costs as referred to by the wife in relation to the failure to transfer the house.  The differences in income, the differences in superannuation, the fact that many expenses were paid by the wife in relation to dental and medical expenses (and they have been particularised in the material before me) and she had virtually the primary care of the children for the 2008/2009 years. 

6. As I say, on the material before me, I am unable to find that the husband has shown that the result would be materially different, even if he could establish the exact amount of the moneys owing or even allowing for the $28,000 which appeared to be an additional liability to Lender Co 1.  I have noted the fact that there is no proof of what the superannuation figures are but they do not appear to be in dispute.  Other assets appear to have been, again, just estimates made by the parties. 

7. I have had regard to the father’s affidavit, that was filed on 29 November 2010 and the other documents referred to by his counsel on today’s date.  I refuse the adjournment.  I proceed on the basis that the case, because he is unable to establish values for the Tax Office debt which is acceptable by the court, he is unable to establish the value of the property, the application must fail and I will dismiss that application.  I understand the parties have had negotiations and the wife is prepared to withdraw three lots of contravention applications.  The applications for contravention filed on 22 July 2010, 31 August 2010, 31 May 2011, they will all be dismissed by consent.

RECORDED   :    NOT TRANSCRIBED

I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Barry delivered on 6 June 2011.

Associate: 

Date:  6 June 2011