RUGER & SMYTH

[2015] FCCA 3200

FEDERAL CIRCUIT COURT OF AUSTRALIA

RUGER & SMYTH [2015] FCCA 3200

Catchwords:
FAMILY LAW – Undefended property proceedings.

Legislation:

Family Law Act 1975 (Cth), ss.75, 79, 81

Federal Circuit Court Rules 2001 (Cth), r.4.03(2)

Kennon & Kennon (1997) FLC 92-757
Stanford & Stanford (2012) 247 CLR 108
Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143
Bevan & Bevan (2013) FLC 93-545

Applicant: MS RUGER

Respondent: MR SMYTH

File Number: MLC 417 of 2015

Judgment of: Judge Harland

Hearing date: 4 November 2015

Date of Last Submission: 4 November 2015

Delivered at: Melbourne

Delivered on: 4 November 2015

REPRESENTATION

Counsel for the Applicant: Ms Lee

Solicitors for the Applicant: Merhi & Associates Barristers & Solicitors

The Respondent: In person

ORDERS

1. That upon settlement of the sales of the property situate at and known as Property M, in the State of Victoria (“Property M property”) and the property situate and known as Property K in the state of Victoria (“the Property K property”) the proceeds of sale be distributed as follows:

   (a)First, to pay all costs and expenses of the sales;

   (b)Secondly, to discharge the (omitted) mortgage (“the home loan”) and any other encumbrance secured against the Property M property (if any); and 

   (c)The balance then remaining to be distributed as to 70% to the Wife and 30% to the Husband;

   (d)Further to paragraph 1(c) herein, the Wife’s legal costs of $2,820 be deducted from the Husband’s share of the net sale proceeds of the said properties and forthwith forwarded to the trust account of the Wife’s solicitors, Merhi & Associates, in payment of such costs.   

2. That the Wife (or her legal representative) be authorised to do all acts and things and sign all such documents as are necessary to effect the sale of the Property M and Property K properties on behalf of both parties.

3. That pending completion of the settlement of the sales of the Property M and Property K properties:

   (a)The Applicant has the sole right to occupy the Property M property;

   (b)Payment of all home loan and any other secured loan repayments be made from the home loan line of credit as they fall due and payable;

   (c)Payment of all Council and water rates, insurances and the like for the Property M and Property K properties (if any) be made from the home loan line of credit as they fall due and payable;

   (d)The parties hold their respective interests in the Property M and Property K properties upon trust pursuant to these Orders.

4. That unless otherwise specified in these Orders and save for the purpose of enforcing any  monies due under these or any subsequent Orders:

   (a)Each party is solely entitled to the exclusion of the other to all other property (including choses-in-action, funds at bank, vehicles and personal property) in their respective possession or control as at the date of these Orders.

   (b)Each party is solely liable for and will indemnify and keep indemnified the other against any bill, account or other liability of whatsoever nature and kind in the name of that party or for which they are responsible;

   (c)Each party is otherwise solely liable for and indemnifies and keep indemnified the other against any liability of whatsoever nature and kind encumbering any item of property to which that party is entitled pursuant to these Orders;

   (d)Each party forgoes any claim they may have had to any superannuation benefits belonging to and/or earned by the other;

   (e)Any insurance policies are to become the sole property of the owner named thereon;

   (f)Any joint tenancy of the parties in any real or personal property is hereby expressly severed.

5. On the request of the other party, each party will respectively execute any authority, release, instrument or any other document that may be necessary to give effect to the operation of these Orders.

6. That in the event that the Applicant and/or Respondent fails, refuses or neglects to do all acts or things or execute all deeds and/or instruments in compliance with the provision of any Order herein, the Registrar or Deputy Registrar of the Federal Circuit Court of Australia at Melbourne is hereby appointed pursuant to Section 106A Family Law Act 1975 to execute all deeds and/or instruments in the name of the Applicant and/or Respondent and do all such acts and things to give full force and effect to the validity and operation of the terms of these Orders and the defaulting party is thereon liable for all resulting costs incurred or damages suffered by the other party and caused by the default.

7. That each party has liberty to apply to this Court for enforcement of the terms and conditions contained herein upon the giving of at least 7 days’ notice to the other party.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 417 of 2015

MS RUGER

Applicant

And

MR SMYTH

Respondent

REASONS FOR JUDGMENT

1. These reasons for judgment were delivered orally.  They have been corrected from the transcript.  Grammatical errors have been corrected and an attempt has been made to render the orally delivered reasons amenable to being read.

2. This matter was listed today for an undefended final property hearing, after there being serious non-compliance by the husband with respect to orders of this Court.  The husband appeared today, not having filed any documents, seeking to rely on documents that in no way comply with the Court rules and seeking to delay the matter further.  I refused an application to adjourn the matter, given the history of these proceedings, which the wife commenced on 21 January 2015.

3. The husband has had ample opportunity to file documents and to put his case in response.  The Court is required to give both parties procedural fairness.  That is, to give them the opportunity to be heard.  That does not translate to an opportunity to be heard as and when it suits the respondent.  The husband has been given the opportunity to file material and to put his case on numerous occasions since these proceedings began.

4. Rule 4.03(2) of the Federal Circuit Court Rules 2001 (Cth) requires a respondent to file a response, affidavit and financial statement within 14 days after service of the documents. The only document the respondent has filed in these proceedings is a notice of address for service, which he filed on 21 April 2015. Despite the husband not having filed documents, a Conciliation Conference was ordered. The husband attended that Conference. However, little could be achieved, as he had not filed any documents in compliance with court orders.

5. On 21 April 2015, the husband was ordered to file material and then again on 6 August 2015; he did not do so.  It is now 4 November 2015. It is far too late for him to now seek to adjourn the proceedings in order to give him a chance to comply. The husband turned up today not having filed documents. If he had filed documents before today, then the position might have been different, but there would have been a costs order.

6. The wife relies on a proposed minute of order and seeks a division of the two pieces of real property in Australia in the percentage of 80 per cent in her favour.  This is a long marriage. The parties were married for 35 years.  They have seven children, the youngest of whom is 13 and lives with the mother.  She receives child support from the husband in the minimum amount of $7 a week. 

7. The wife is reliant on a Centrelink disability support pension, and outlines in the three affidavits that she has filed in these proceedings her health conditions and the contributions that the parties made during the marriage. She refers to the marriage being characterised as one of violence by the husband to her, although she does not provide particulars sufficient for there to be a claim under Kennon & Kennon (1997) FLC 92-757 and I do not understand her to be making that claim.

8. The difficulty that the wife has in this case is that the husband has not disclosed his assets and liabilities.  He today provided a Centrelink statement and a bank statement to the wife’s solicitor, but has not sworn a financial statement.  There is an issue in dispute between the parties about the existence of farm land or the ownership of farm land in (country omitted).  The wife deposes in her affidavit that that was purchased during the marriage in 1980, and that the property was transferred to their eldest son in 2010, but that the husband has been making threats to the oldest son and others and wants that property transferred back to his name after the property proceedings are finalised.  I have no evidence as to value of that property. 

9. The husband today says that his mother purchased that property.  He, of course, says this from the bar table and has not sworn any evidence about that issue.  He has been on notice for months as to the wife’s case and the allegations that she was making.  It was clear when the husband attended today that he had received all of the wife’s material, including her most recent affidavit.

10. The property pool that the Court and the wife are aware of in Australia consists of two pieces of real property, one at Property M and the other at Property K both in Victoria.  There is a mortgage secured against the Property M property.  Both of those properties are on the market for sale.  The estimate is that after the sale of the properties and the discharge of the mortgage, there will be approximately $600,000 to distribute between the parties.  It is not necessary to be precise about that, because the sale of the properties will determine the value of those properties and the mortgage will be discharged upon the sale of the property, as well as the selling costs. 

11. The wife deposes that she does not have any superannuation. The husband has not filed a financial statement disclosing his assets and liabilities.  He says from the bar table that he does not have any superannuation.  The wife’s solicitor points out that the husband has remarried and has not provided any disclosure with respect to that. 

12. The husband was seeking a delay of the sale of the property for another year, claiming that the prices are not good. Again, the husband has no formal application before the Court, and in circumstances where the wife is solely reliant on Centrelink benefits and these proceedings have been going on for some time, she is entitled to finality, pursuant to section 81 of the Family Law Act 1975 (Cth).

Legal Principles and their application to this case

1. Part VIII of the Family Law Act1975 is the part of the Act dealing with property, spousal maintenance and maintenance agreement. The major provisions relating to marital property division are contained in ss.79(1); 79(2); 79(4); & 75(2) of the Act.

2. Pursuant to s.79(1) the Court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a marriage in relevant property.

3. The expression “property” is defined in s.4(1) in relation to the parties to a marriage or either of them as meaning “…property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.”

4. Pursuant to s.79(2) the Court is actively prevented from making such an order unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitory words “shall not” in the relevant section.

5. Section 79(4) provides the mechanics of how a Court is to make an order altering marital property interests.

6. Paragraphs (a), (b) and (c) categorise contributions made by marital partners, which are relevant.  Paragraph (d) directs the Court to take into account any order regarding the earning capacity of either party to the marriage concerned. 

7. Paragraph (e) directs the Court to consider a list of matters contained in s.75(2), which are germane to spousal maintenance or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs. Finally, paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.

8. Until the High Court decision in Stanford & Stanford (2012) 247 CLR 108, the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled with a preferred approach as set out by the Full Court in Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39].

9. The High Court considered the operation of s.79 in the matter of Stanford. In this case, the majority stated at [35]-[36] that:

   “It will be recalled that s 79(2) provides that "[t]he 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. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.”

   The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [Footnotes omitted]

10. The High Court found three fundamental propositions with respect to the application of s.79, which can be summarised as follows:

    1.Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court emphasised the word ‘existing’.

    2.Secondly, although s.79 gives the court a broad power to make property settlement orders it may not be exercised in an unprincipled fashion. There must be no assumption that the parties’ interests are or should be different to their existing interests.

    3.Thirdly, when considering whether making a property settlement order is just and equitable the court must not assume that one or the other party has the right to a property adjustment order. The court must give separate consideration to s.79(2) in addition to the matters referred to in s.79(4).

11. In Stanford the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of s.79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation.

12. The High Court also pointed out that what is just and equitable is different in every case.

13. I am satisfied that it is just and equitable to make a property adjustment in these proceedings. 

14. I am satisfied that the parties made equal contributions during the relationship to the best of their abilities in their different spheres of responsibilities. It was a traditional marriage. The real issue in dispute is what the adjustment should be for s.75(2) factors. The husband says that there should be an adjustment of 55 per cent in the wife’s favour. The wife seeks an adjustment of 80 per cent. The relevant s.75(2) factors that favour an adjustment in the wife’s favour are her poor health, her responsibility for the parties’ 13 year old son, and the fact that she receives very limited child support, which is unlikely to change. The other relevant factor in her favour is the non-disclosure by the husband of his financial circumstances.

15. The other issue is the respective earning capacities of the parties.  I do not have much information from the husband about that.  Certainly it is apparent that the wife is unable to work, being in receipt of a disability support pension.  And the wife is aged 50 and the husband is aged 61.  Considering those factors, I find that it is just and equitable to make an adjustment in favour of the wife of 70 per cent. 

16. The wife also seeks that the husband pay her costs of $2820, with those costs to be taken from his share of the proceeds. Those costs relate to the Conciliation Conference and the last court attendance. In the circumstances, I find that it is appropriate for the husband to pay those costs. Those costs are fairly modest and are appropriate in the circumstances, where the wife has had to go to the expense of having lawyers appear for her five times. She is not seeking all of her costs, but simply the costs of the failed Conciliation Conference, which could not achieve a settlement because of the husband’s failure to comply with the orders.

I certify that the preceding twenty eight (28) paragraphs are a true copy of the reasons for judgment of Judge Harland

Associate: 

Date:  1 December 2015