Ryland & Ryland & Anor
[2018] FamCA 134
•7 March 2018
FAMILY COURT OF AUSTRALIA
| RYLAND & RYLAND AND ANOR | [2018] FamCA 134 |
| FAMILY LAW – PROPERTY SETTLEMENT – Adjustment of interest – Where the wife has absconded internationally with two of the children and refuses to participate in the proceedings – Where the matter proceeds on an undefended basis – Consideration of Family Law Act 1975 (Cth) (as amended) principles per ss 79(4), 75(2) – Meaning of “property” is defined in the Family Law Act 1975 (Cth) in s 4(1) – Where the husband seeks to retain the family home – Where the husband is facing further litigation costs to pursue the children who are abroad with the wife – Where the husband is paying child support – Orders for settlement of property |
FAMILY LAW – PROPERTY – Where a creditor to a party seeks to be paid – Where the creditor has obtained a judgment debt – Whether there is a particular lien or an equitable lien – Where an assessment of costs is to be undertaken
| Family Law Act 1975 (Cth) ss 4(1), 75(2), 75(2)(o), 79, 79(2), 79(4), 79(4)(e), 90MT(1)(a), 90MT(4), 90MZD | |||
| Deputy Commisioner of Taxation v Kliman & Kliman [2002] FLC 93-113 Ex partePatience; Makinson v The Minister (1940) SR (NSW) 96 Grogan & Orr [2001] NSWCA 114 Jackson & Richards [2005] NSWSC 630 Martin & Martin [2015] FamCA 260 Scammell & Co v WorkCcover Corporation & Anor [2006] SASC 258 Stanford v Stanford (2012) 247 CLR 108 Zdravkovic & Zdravkovic (1982) FLC 91-220 | |||
| APPLICANT: | Ms Ryland | ||
| RESPONDENT: | Mr Ryland |
| INTERVENOR: | K Lawyers |
| FILE NUMBER: | ADC | 3889 | of | 2016 |
| DATE DELIVERED: | 7 March 2018 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Berman J |
| HEARING DATE: | 5 February 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | No appearance |
| SOLICITOR FOR THE APPLICANT: |
| COUNSEL FOR THE RESPONDENT: | Mr Reynolds |
| SOLICITOR FOR THE RESPONDENT: | Southern Vales Legal |
| COUNSEL FOR THE INTERVENOR: | Mr Hemsley |
| SOLICITOR FOR THE INTERVENOR: | K Lawyers |
Orders
That in full and final settlement of all claims that either party has against the other for property settlement pursuant to the provisions of the Family Law Act 1975 (Cth) (as amended) (“the Act”):-
(a)That on or before sixty (60) days from the date of this order the husband do pay to the wife the sum of EIGHTY SIX THOUSAND FIVE HUNDRED AND FOUR DOLLARS ($86,504) in the following manner:
(i)To an account held by the Family Court of Australia for and on behalf of the wife the sum of FIFTY FIVE THOUSAND AND FIVE DOLLARS ($55,005); and
(ii)To an account held by the Family Court of Australia the sum of THIRTY ONE THOUSAND FOUR HUNDRED AND NINETY NINE DOLLARS ($31,499) pursuant to a judgment debt in favour of K Lawyers.
(b)That the husband retain free from any claim by the wife the following:-
(i)All equity, interest and title in D Street, Suburb E;
(ii)Motor vehicles in his possession;
(iii)All monies standing to his credit in any bank account, credit union or financial institution;
(iv)All other personalty or realty in his possession and control; and
(v)All superannuation entitlements other than as provided for in these orders.
(c) That the wife retain free from any claim by the husband the following:-
(i)All monies standing to her credit in any bank account, credit union or financial institution;
(ii)Any personalty or realty in her possession and control.
(iii)Her superannuation entitlements in Super SA and Sun Super;
(d)That should the husband fail to pay the settlement sum either in whole or in part by the due date and should the default continue for fifteen (15) days thereafter THEN the husband shall forthwith do all things necessary to list for sale by public auction or private treaty the property at D Street, Suburb E upon such terms and conditions as may be agreed between the parties but in the absence of agreement as may be ordered by this Honourable Court and from the net proceeds of sale the wife is to receive so much of the settlement sum as shall be outstanding and unpaid together with interest at the rate of ten (10) per centum per annum with the balance if any to be paid to the husband.
(e)(i) That pursuant to s 90MT(4) of the Act this Honourable Court do allocate to the applicant wife a base amount of TWO HUNDRED AND EIGHTY THOUSAND AND THIRTY TWO DOLLARS ($280,031) from the respondent husband’s interest in the superannuation scheme named L Superannuation Fund Account Number …-01.
(ii)That pursuant to s 90MT(1)(a) of the Act whenever the Trustee of the L Superannuation Fund shall make a splittable payment out of the respondent husband’s interest in the L Superannuation Fund, the Trustee shall pay to the applicant wife, her executors, administrators, beneficiaries, heirs or assigns the entitlement calculated in accordance with Part VI of the Family Law (Superannuation) Regulations 2001 and that there be a corresponding reduction to the entitlement the respondent husband would have had in the L Superannuation Fund but for this order.
(iii)That this order has effect from the operative time. That the operative time shall be the fourth business day after the service of this order on the Trustees.
(iv)That this order shall bind the Trustees of the said L Superannuation Fund.
(v)That the Trustees of the said L Superannuation Fund shall do all such acts and things and sign all such documents as may be necessary so that, in accordance with the Act and the Family Law (Superannuation) Regulations 2001 the Trustees can calculate the entitlement of, and make payment to the applicant wife in accordance with this order.
(vi)That the terms of these paragraphs herein shall be binding on the executors, administrators, beneficiaries, heirs or assigns of the respondent husband.
(vii)That the Trustees of the said L Superannuation Fund and the applicant wife do have liberty to apply with respect to the operation of paragraph 1(e) herein.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Ryland & Ryland has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADC 3889 of 2016
| Ms Ryland |
Applicant
And
| Mr Ryland |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
Ms Ryland (“The wife”) and Mr Ryland (“the husband”) have been engaged in litigation since 2016 with respect to property settlement and children’s matters.
By Initiating Application filed 17 October 2016 the wife sought final orders in respect of the parenting arrangements for the following children:-
B born in 2006 (“B”);
C born in 2004 (“C”);
F born in 2002 (“F”); and
G and H both born in 2000 (“G” and “H” respectively) (collectively “the twins”)
The wife sought that B, C and F live with her and spend time with the husband and that the twins live with the husband and spend time with the wife.
Relevant to the background are the orders sought that the wife be able to travel with the children C, B and F out of the Commonwealth of Australia and in particular to Europe on a regular basis.
The wife sought orders in respect of property settlement in the following terms:-
That the assets and financial resources of the parties be divided as this Honourable Court deems fit.
On 9 November 2016 the wife filed an Amended Initiating Application which sought orders now placing F in the primary care of the husband and included a further order that the wife be permitted to relocate the primary residence of B and C to regional South Australia.
There was no amendment to the order for settlement of property.
On 3 May 2017 the wife filed a Notice of Discontinuance in relation to the Initiating Application filed 17 October 2016 and two Interim Applications filed 17 January 2017.
It is likely that it was an oversight by the wife in discontinuing the initial application rather than the amended application.
By Amended Response filed 21 September 2017, the husband opposed the orders sought by the wife. The final orders seek to place the children in the primary care of the husband and that he have sole parental responsibility. If made, the orders would have prevented C and B from being able to travel out of the Commonwealth of Australia without his consent.
By way of property settlement the husband seeks the following orders:-
(8)That the respondent retain the former matrimonial home.
(9)That the parties retain their respective Superannuation entitlements and all other assets currently in their possession.
(10)That the respondent pay such sum as Ordered by this Honourable Court to the wife.
PROCEDURAL HISTORY
The proceedings were transferred from the Federal Circuit Court of Australia to the Family Court of Australia on 4 May 2017. On that occasion there was no appearance by or on behalf of the applicant wife. The husband was represented by his solicitor acting as counsel. The following notations appear as a preamble to the order of transfer:-
UPON NOTING THAT:
(a)The mother did not return the children to Australia as ordered by this Court, the mother returning in January and subsequently departing for [Europe] in January 2017,
(b)The mother and the children remain in [Europe] without the consent of the father and an application pursuant to the Hague convention is underway,
(c)The father seeks to have this matter transferred and listed on the first available date in the Family Court of Australia,
A directions hearing was convened by Registrar Paxton on 23 May 2017. The order notes that there was no appearance by or on behalf of the wife. The husband was again represented by his solicitor as counsel. It was noted that Hague Convention proceedings had commenced and that the wife and two of the children, namely B and C remain in Europe.
The order provided for service on the wife to be effected by email to … and by post to:-
[Ms M],
Lawyer,
N Street,
City O,
Country P
The Court file reflects service on the wife as ordered.
On 10 October 2017, a solicitor appeared for the wife as a matter of courtesy to the Court for and confirmed that the wife and the two children in her care remained in Europe and did not have a present intention to return to Australia. The husband was represented. Orders were made listing the matter for trial directions on 14 November 2017 and again the order reflected that the Court would advise the wife of the adjourned date and forward a copy of the order to her.
On 14 November 2017, the wife appeared this time by telephone.
The submission of the wife (as noted in the order) was that she intended to file an application seeking to reinstate her discontinued initiating application insofar as it relates to orders of property settlement. The application was to be filed by 4pm on 29 November 2017.
Accordingly, further consideration of the trial directions currently listed for hearing to commence on 5 February 2018 were adjourned to 1 December 2017.
On the adjourned date the wife was represented by counsel but was not physically present. The husband was represented by his solicitor acting as counsel and counsel appeared on behalf of the wife’s former solicitors in respect of an application in a case seeking that leave be granted for K Lawyers to be joined to the proceedings, that there be a declaration that K Lawyers are entitled to a lien in respect of their outstanding costs and that the wife be restrained and an injunction be granted restraining her or her servants or agents from transferring, assigning or in any way dealing with the sum of $31,499.97 from any settlement sum that is ordered to be paid to her.
The application was supported by an affidavit of the wife’s former solicitor. In summary, the solicitor represented the wife from 31 August 2016 to 15 February 2017, when a Notice of Withdrawal as Lawyer was filed.
Tax invoices were issued on various dates and remain unpaid. The total outstanding and invoiced to the wife was $29,510.65.
The solicitors issued a claim in the Adelaide Magistrate’s Court of South Australia (Civil Division) seeking the amount of their outstanding fees together with the costs of issuing the claim.
The wife filed a Defence on 21 February 2017 asserting that the claim should be struck out for the following reasons:-
·That the claim failed to comply with the rules of Court and did not provide sufficient particularity or detail that would enable the wife to file a Defence.
·That the claim should be struck out “for various reasons, which will be set out in an APPLICATION, to be filed in due course”.
·The claim is void and/or voidable, ab initio.
·The wife reserves the right to file and serve a counter-claim at a date and time when the defendant is “in a position to qualitify (sic) particular losses and/or damages.”
The wife did not appear on the first hearing date on 11 April 2017. Her Defence was struck out and she had leave to file an Amended Defence within 21 days. The proceedings were adjourned to 19 May 2017 with a notation that if there was no attendance by the wife at the adjourned hearing then the court would consider entering default.
The wife did not file the Amended Defence and on 19 May 2017 the Magistrate ordered judgment by default to K Lawyers in the sum of $31,499.97 inclusive of interest (the judgment sum). Judgment was formally delivered. As at the date of the affidavit the wife has made no payment and the judgment debt remains outstanding.
On 1 December 2017 trial directions were made requiring the husband to file and serve his affidavits of evidence and any amended response by 4pm on 22 December 2017 and by 4pm on 31 December 2017 the wife was to serve her affidavits of evidence and any amended initiating application upon which she intended to rely.
Each party was also required to provide a case outline document. Only the husband complied.
On 23 January 2018 a Registrar’s order required the wife to file and serve a Notice of Address for Service in Australia in compliance with Rule 8.05(4) of the Family Law Rules within seven days with a notation that the application of the intervenor was to be dealt with at the trial currently listed to commence on 5 February 2018.
On 5 February 2018 there was no appearance by the wife or any legal representative, the husband was represented by his solicitor acting as counsel and counsel appeared for the intervenor.
Upon the application of the husband that the matter proceed on the basis of an undefended hearing limited to property settlement only, ex-tempore reasons were delivered and the trial commenced in the absence of the wife.
The husband’s solicitors had neglected to provide proof of procedural fairness being afforded to L Limited, the trustees of the husband’s superannuation interest in L Superannuation Fund and providing to them a draft Minute of Order for their consideration. Pursuant to the order made on 5 February 2018, correspondence from the trustees was forwarded to my Chambers which I consider satisfies the obligation to provide procedural fairness, with the consequence that any order by way of a superannuation split will bind the trustees pursuant to s 90MZD of the Act.
DOCUMENTS RELIED UPON BY THE HUSBAND
The husband relies upon the Updated Amended Response filed 22 December 2017 which seeks that he retain the former matrimonial home and that each party retain their respective superannuation entitlements and all other interests currently in their possession. He also relied on a Financial Statement filed 22 December 2017.
DOCUMENTS RELIED UPON BY THE WIFE
The wife did not participate in the proceedings and irrespective of the specific order made by the Registrar that the wife have a Notice of Address for Service within the jurisdiction, she nonetheless filed a Notice of Address for Service on 16 January 2018 which again provided the address of her lawyer in Europe.
She also filed two trial affidavits on 3 January and 23 January 2018.
The wife’s affidavits of evidence are unhelpful. Primarily the wife contends that the Court does not have jurisdiction “over the matrimonial assets of this marriage”, submitting that the appropriate court is in the Federal Republic of Europe. If the Court considers that it does have jurisdiction, then she seeks 70 percent of the non-superannuation assets and 90 percent of the husband’s superannuation entitlements both in Australia and overseas.
The content of the most recent trial affidavit was of some assistance in terms of the conduct of the proceedings.
For completeness I set out the contents of paragraphs 6 to 12:-
6.I refer to the first of the two “Open” matters [as identified in GFY1] and say that as of 18th January, 2017 I have resided in [Europe] – and I have NOT been served with ANY “Case Application” dated 01-Dec-2017.
7.I refer to the document identified as GFY2 and say there is NO “Proof of Service” filed with respect to any Case Application filed on 01-Dec-2017 on the Court file.
8.I refer to the second of the two “Open” matters [as identified in GFY1] and say that as of 03-Mat-2017 (sic) my “Notice of Discontinuance” was filed – and in fact discussed by the Judge on 2nd June 2017, and as far as I am concerned ALL and ANY matter with respect to my affairs and between me and my former husband are CLOSED – as of 3rd May 2017.
9.I say that IF my former husband wishes to commence fresh proceedings with respect to ANY matter before the Federal Circuit Court or the Family Court of Australia, it is always open for him to do so – at any time in the future.
10.I say that given that this matter is closed (and as I have not been served with any other ‘open’ file) ALL matters in respect to the Family Court of Australia are CLOSED – and the Court has NO JURISDICTION to continue or commence ANY trial.
11.I say for matters of completeness, that given that I am a German citizen – and living in [Europe] – the Family Court of Australia has NO Jurisdiction to hear any matter affecting me or my Property – whether or not it is part of a joint matrimonial estate which is located in Australia.
12.Finally, I say that given I always resided in the State of South Australia, I fall OUTSIDE the scope and ambit of any federal jurisdiction and no Commonwealth Court has Jurisdiction over me or my property in South Australia.
The matters as set out by the wife are not said for the first time. The wife has held the view that because she discontinued the proceedings that the Court has no jurisdiction either in respect of parenting or property orders.
The same proposition was the subject of a failed Appeal to the Full Court on 10 November 2017.
It is an important consideration that whilst the Notice of Discontinuance referred to technically relates to the First Initiating Application and not the Amended Initiating Application, the wife confirms that it was her intention to discontinue all proceedings.
BACKGROUND
The husband is 53 years of age and holds dual citizenship with Australia and the United Kingdom. The wife is 52 years and holds dual citizenship with Country P and Australia.
The parties met in April 1990 and were married in Europe in that year.
There are seven children of the relationship. Two of the children are now adults and live independently of the parties.
The husband was working in Europe when the parties met. The wife was a university student.
At the conclusion of the husband’s contract the family moved to the United Kingdom in 1993. The husband commenced work as a public servant. He served in this capacity for about 11 years.
The wife fulfilled the role of homemaker and supplemented the family’s finance by working part time.
The arrival of other children very quickly required the wife to devote her entire time to the supervision, maintenance and welfare of the family whilst the husband continued in his fulltime employment.
The family came to Australia on 15 March 2006.
The parties purchased vacant land at D Street, Suburb E (“the former matrimonial home”) and following the construction of their home the family took up occupancy in August 2008.
The family was large and each of the parties did the best they could to maximise their contributions to the household.
The husband accepts that the wife had made allegations about him being violent and having access to a gun. The husband denies that he was the perpetrator of family violence but rather, asserts that it was the wife who was aggressive in her demeanour and language towards him. The husband’s assertion is that the wife was coercive in her conduct towards him.
The wife undertook further studies and gained a qualification.
Whilst it appears that the wife had an intention to take up a position in J Town (given the wife’s application to relocate the children from Adelaide), she did not take up the placement and the parties separated on 13 April 2016.
It took the family some time to settle the ongoing living arrangements for their children. Eventually it was decided that B and C would live with the wife and F and the twins would remain with the husband.
Orders were made on 13 December 2016 that provided for the children C and B to spend time with the husband from 15 December to 22 December 2016, with the wife being permitted to take C and B (hereafter “the children”) to Europe from 22 December 2016, but returning to Australia on 13 January 2017. The children would then spend the balance of the 2017 Christmas school holidays with the husband.
The wife did not return the children as ordered. She did return for a few days in January and returned to Europe on 13 January 2017. The husband initiated an application under the Hague Convention. Orders were made in the District Court of City O on 4 September 2017 that the children should be returned to Australia. The wife filed an Appeal on 22 September 2017 and the Appeal was subsequently rejected on 19 October 2017.
The children have not yet returned. The husband asserts that the wife has caused C to be committed to a psychiatric hospital for ongoing mental health treatment.
On 2 June 2017 orders were made that the children live with the husband, that B and C be placed on the Family Law Watchlist and that the wife’s interest in the former matrimonial home (“the Suburb E property”) be transferred to the husband to assist in funding any litigation or other cost that might be incurred in seeking to secure the return of the children to the jurisdiction.
HUSBAND’S COSTS
Following the trial direction orders, the husband tendered a notice of his legal fees and costs as at 2 February 2018 which forms exhibit “3” in the proceedings.
Those fees appear to have been paid by the husband from his income and in particular, the costs incurred in 2017 in the total sum of $20,941 relates almost entirely to the pursuit of the wife following her unlawful retention of the children including costs incurred in assisting the Central Authority to prosecute the Hague Convention proceedings for the children to be returned.
The status of the children remaining in Europe is unknown. Whilst the current orders suggest that the wife’s application for the children to remain in Europe has been exhausted, it is not known what further litigation may be required. The husband is currently taking advice and it is contemplated that if the alleged personal circumstances of the children prevent them from returning to Australia pursuant to the orders made by the District Court of City O, then the husband may well need to consider litigation either being pursued and/or him being in some way involved in any ongoing proceedings that may have been commenced by the wife.
The uncertainty of any future proceedings in Europe has made it difficult for the husband to promote a figure representing the likely future costs. It is reasonable to find that they will be substantial and possibly in the tens of thousands of dollars.
The Court would have been assisted if the husband’s solicitor had presented evidence of a scale of likely costs to be incurred in Europe, but in the absence of same I still consider it reasonable to bring to account the likely future expenditure incurred in seeking to have C and B returned to the Commonwealth of Australia.
LEGAL PRINCIPLES TO BE APPLIED
The husband seeks that there should be an alteration of the interests of the parties in property. I take into account that the parties are no longer living in a marital relationship and will not in the future have the benefit of common property.
Section 79(2) of the Act provides:-
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.
“Property” is defined in s 4(1) of the Act meaning:-
… [P]roperty to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion…
In Stanford v Stanford (2012) 247 CLR 108 the majority held:-
[35]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”…
Importantly, the Court found at [39]:-
...whether it is “just and equitable” to make the order is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist...
I am satisfied that it just and equitable in the circumstances of a mutual commitment made by each of the parties during the course of a long marriage that the Court should embark upon a consideration of an adjustment to the property interests of each of the parties.
ASSETS AND LIABILITIES
The husband’s counsel assisted the Court by the preparation of a Case Outline document which sets out (with the support of the husband’s Trial Affidavit) the following list of assets and liabilities:-
Assets
Value
D Street, Suburb E (husband)
400,000
Credit Union account (Husband)
36
O Bank (wife)
3,500
Motor vehicle 1 (husband)
400
Motor vehicle 2 (husband)
400
Household contents (husband)
2,000
Household contents (wife)
3,000
Motor vehicle 3 (wife)
9,000
TOTAL
$418,336
Liabilities
Q Bank mortgage (husband)
126,000
TOTAL
$126,000
NET ASSETS
$292,336
Superannuation Entitlements
S Super (wife)
559
R Super (wife)
2,442
T Super at 30/6/17 (husband)
196,777
L Superannuation Fund at 13/12/17 (husband)
358,485
Personal pension (husband)
7,800
TOTAL SUPERANNUATION
$566,063
WIFE’S PROPERTY IN EUROPE
The husband alleges that the wife’s grandmother owned real estate of considerable value in City O, Country P. Upon the wife’s grandmother’s death, the wife’s mother allegedly inherited various properties and provided an apartment each for the wife, her sister and two of her cousins in City O, Country P. The husband suggests that “[t]hey are each conservatively valued in excess of [one] million euro”. Whilst the husband states that the wife is now living in this apartment, he knows nothing of the title details, but considers that in some way she holds the legal or equitable interest.
There is no evidence before the Court that the wife holds any valuable interest in real estate in Europe or elsewhere. The husband was not able to provide any further evidence to support his assertion. It is surprising that his solicitors made no enquiry on his behalf. Given that the street, district and city are identified by the husband, it should not have been an insurmountable enquiry to ascertain whether the property in which she lives is owned by her. Moreover, there is no independent evidence of the value of the alleged property.
I do not consider that the evidence provided by the husband at paragraph 49 of his trial affidavit is admissible given that the assertions must be based on hearsay or the husband’s mere supposition. Even if admissible, the assertions are not capable of being given any weight.
Whilst I am entitled to bring to account evidence as presented by the husband, particularly in circumstances where it is not the subject of challenge by the wife, I am still obliged to assess its reliability.
I do not bring to account either as an asset of value or a financial resource any interest that she purportedly has in property in Europe.
APPROACH TO BE ADOPTED
The property of the parties is modest at $292,336, whereas the husband retains significant superannuation entitlement.
The husband is 53 years of age, the wife 52. Each of the parties are currently employed and whilst no evidence was presented as to the ability of the husband to satisfy a condition of release, it is reasonable to assume that the minimum age at which that could occur would be 60 years for the husband.
I consider that there are different contribution and s 79(4)(e) considerations that apply to the non-superannuation and superannuation interests of the parties.
Accordingly, I propose to adopt a two pool approach.
CONTRIBUTIONS
The parties were in a relationship for 26 years until separation. Each of the parties made a valuable contribution to the family. The husband was in full-time employment, the wife in part-time employment but predominantly engaged in the role of homemaker necessary by her care for the seven children of the marriage.
The evidence does not support any contention that either party came into the relationship with significant property. Whatever they had at the commencement of their cohabitation was modes.
During the marriage it is difficult to argue any other outcome than a finding that the parties made an equal contribution.
The gravamen of the husband’s case must be to consider the post-separation contributions which can be summarised under the following headings:-
(1)Significant credit card debt incurred by the wife post-separation and prior to her removal of the children to Europe.
(2)The substantial outstanding school fees required to be paid by the husband without contribution from the wife as they had previously agreed.
(3)That the husband has incurred significant legal fees as a result of the wife’s unlawful retention of the children.
To some extent these are represented by the sum of $20,941 expended in 2017, but as I understand the evidence, that money was derived by extending the mortgage over the property from $96,500 as at 30 April 2016 to $126,000 as at 30 January 2018. Whilst I accept that there are likely to be more fees incurred in the husband attempting to have the children brought back into the jurisdiction, that is best dealt with as one of the factors pursuant to s 75(2)(o) of the Act.
The husband remains solely responsible for the three boys remaining in his care. The twins are currently 17 years of age and F nearly 16 years. Their care is not without complexity. H has a diagnosis of Autism and Dyslexia. He will remain in the husband’s care for the balance of his life.
Whilst the evidence is scant, I accept the husband’s assertion that H will struggle to find or maintain employment even at the most menial level and that he has significant anger and oppositional behaviour issues.
The credit card liability paid by the husband incurred by the wife was $20,000.
The school fees for the five children as of 10 December 2016 was in the sum of $1,369 for C and B and in the sum of $10,760 for G, H and F.
I also accept that the husband has had significant expenses in respect of the care of the three boys in his home from the date of separation to the date of hearing.
The husband has a Child Support Assessment of $374 per fortnight for C and B. That child support has been paid.
Whilst it is not disputed that there is a valid assessment in place, it is of some surprise that no efforts were made by the husband to seek to have the child support extinguished or at least the subject of review given that the current order provides for C and B to live with him. Significant fees have been paid by him to date pursuant to the Hague Convention proceedings which may also be a relevant consideration.
The question of the weight to be given to each of the separate considerations relevant to determining the proper adjustment to reflect the parties separate contributions must be considered globally. It should not start from any assumption that the contributions of the parties are equal and then an adjustment made thereafter.
In the circumstances I consider that the adjustment for contribution should be 55/45 in favour of the husband. That outcome represents a differential of 10 percent which has the notional monetary equivalent of almost $30,000.
That outcome seems reasonable taking into account the husband’s considerable expenditure on the children and the household liabilities including the wife’s credit card debt incurred post separation.
SECTION 75(2) FACTORS
Section 79(4)(e) requires the consideration of s 75(2) of the Act. The parties are of similar age. There is no medical evidence presented which would suggest that their ability to work to retirement age is in any way impeded.
I accept the husband’s evidence that the wife is in employment in Europe. The husband is also in employment.
Each of the parties currently have children in their care.
Whilst it is self-evident that there are relatively few years left before the three boys who remain in the father’s care will reach the age of majority, nonetheless there are significant and ongoing expenses that will be required.
The husband continues to pay child support in favour of the children in the care of the wife.
The most significant factor is the likely cost to be incurred by the husband in securing the return of the children to the Commonwealth of Australia.
The various proceedings in Europe have not provided the necessary clarity as to the children’s future circumstances. Whilst the wife has failed in her bid to avoid an order for return pursuant to the Hague Convention, it seems that there are other proceedings now being taken by the wife which centre upon the poor mental health of C.
The husband is exhausted by the process. It is reasonable that he express a high level of uncertainty as to what the next step should be. Logically it is likely to be necessary for the husband to travel to Europe either in an attempt to see the children, or to obtain appropriate legal advice not able to be sourced from Australia.
The husband has also incurred substantial legal fees in relation the proceedings generally, but in particular to the pursuit of the wife following the wrongful removal of the children.
Some of those fees have been paid by a drawdown on the mortgage and whilst that extra liability is in part borne by the wife, it is difficult to see why the husband should bear any of that responsibility.
The Court has not been provided with any clear evidence of the husband’s likely future legal fees, but it is reasonable to assume they will be substantial.
G is currently repeating Year 11 at his high school and there will be school fees for at least two years. H is in Year 12 and F will be entering Year 10. The school fees for H and F are in the vicinity of $5,000 each for the 2018 school year and G’s costs are more modest at $1,000.
I consider that it is just and equitable to bring to account the preponderance of s 75(2) factors in favour of the husband as represented by a 10 percent adjustment.
Accordingly, the overall apportionment of property of the parties should be 65/35 in favour of the husband.
On the basis of a net asset pool of $292,336, the husband should receive $190,018. The husband however seeks to retain the following:-
Suburb E property
400,000
Motor vehicles
800
Household contents
2,000
Total
402,800
Less mortgage on Suburb E property
126,278
Balance of property retained by husband
276,522
Less husband’s entitlement
190,018
Amount payable to wife
$86,504
SUPERANNUATION
At the commencement of cohabitation the husband had a modest entitlement in a UK Pension Fund. There is also a suggestion that the wife may have had an interest in both a Country P and a UK Pension Fund.
There is little or no evidence to assist in the extent to which those interests are currently represented in the parties respective superannuation entitlements.
The superannuation interests are accumulation benefits. I accept the evidence of the husband as to the value of the parties separate interests but in the absence of evidence as to the mechanics of the fund and the manner in which the accumulated entitlement is increasing, there appears no good reason why it should not be considered that the parties have accumulated their superannuation interests over the course of a long period of cohabitation. I propose to adjust the superannuation interests of the parties to equality and in doing so bring to account the circumstances of the parties going into the future. It is likely that the wife will accrue the equivalent of superannuation or a retirement plan pension or benefit in Europe (if she remains) and similarly, the husband is also likely to continue contributing over the balance of his working life.
There should be no adjustment for s 75(2) factors in relation to the superannuation interests.
The total superannuation of the parties is $566,063. The wife should be entitled to $283,031. She retains her own modest superannuation entitlement of $3,000.
An order should be made that there be a superannuation split in favour of the wife of $280,031 with L Superannuation Fund in terms of the draft Minute of Order forwarded to the trustees and noting their approval.
HUSBAND’S COMPENSATION PAYMENTS
I note the husband’s evidence that he is likely to receive a modest payment in or about the sum of about $6,000 arising from a work related injury in April 2016.
There is some disagreement between the parties as to the extent to which the wife may have an outstanding personal injuries claim or claims.
There is little evidence presented in respect of the compensation claims either relating to the husband or the wife. It is reasonable to assume that once legal fees are extracted any payment received by the husband is likely to be minimal.
CONCLUSION
The husband is to pay to the wife a settlement sum of $86,504. In addition, there will be a superannuation split from his interest in L Superannuation Fund to a fund nominated by the wife of $280,031.
I consider it reasonable that the husband be given an opportunity to obtain the settlement sum to maximise his ability to retain the former matrimonial home.
Whilst it is not permissible to compromise the wife’s entitlement by a finding that the husband would seek to remain in the former matrimonial home for good reason, nonetheless I am entitled to consider the mechanics of the order if that has the benefit of enabling the husband to retain the property. Sixty days for the husband to pay the settlement sum brings to account the interests of both parties.
INTERVENORS CLAIM
K Lawyers (“the intervenor”) seeks the payment of $31,499.97 from the wife’s settlement proceeds. In the circumstances it seems reasonable that the wife’s solicitor be paid. The wife is aware of the intervenor’s claim but did not appear and did not seek to challenge either the quantum or that the said sum be paid into Court by the husband.
Consideration was given to whether an order could or should be made for the judgment sum to be paid directly to the intervenor rather than a payment into Court pending an assessment of costs.
The success of the intervenors application requires that there be a causal link established between the solicitor having acted for the client and the resulting payment to the client, that is, the litigation needs to “bear fruit” (expartePatience; Makinson v The Minister (1940) SR (NSW) 96; Jackson & Richards [2005] NSWSC 630).
Sheller JA in Grogan & Orr [2001] NSWCA 114 at [62] in the context of Family Court proceedings said that:-
…the whole of the parties’ property is under consideration and the orders the court makes are the fruits of the cause produced by the industry of the solicitor…
In Jackson v Richards (supra) White J said at [51]:-
… [t]he fact that the court has power to make orders to adjust the whole of a party’s property is irrelevant unless one or other of the parties invokes the power by asking the court to determine its rights by reference to all of the parties’ property.
In Zdravkovic & Zdravkovic (1982) FLC 91-220 at 77,205 the Court said:-
…once it is clear and beyond doubt that a debt is owing to a third person and that all the probabilities are that it will be enforced unless it is discharged by payment, then the Court is not precluded from ordering its discharge by the parties or one of them as a condition or as part of the overall readjustment of the parties financial rights, if such a course is convenient or just…
The judgment sum in favour of the intervenor is not to be considered a joint matrimonial debt. It is a debt incurred by the wife and remains her responsibility.
Unlike the position of the wife’s solicitors in Martin & Martin [2015] FamCA 260 it could not be said that the conduct of the husband resulted in there being:-
…a sufficient nexus between the rights of [the solicitors] and both the husband and the wife and their specific interests in the property… [that the solicitors had] the property rights to enforce.
The intervenor has an equitable lien over that proportion of the settlement sum to which the wife is entitled.
The outcome in the proceedings is not such that the wife’s entitlement is insufficient to satisfy the intervenor’s claim.
In Martin & Martin (supra) Cronin J spoke of the power to order payment from one party to a creditor at [65]:-
…[t]he power lies in s 79 (see Deputy Commission of Taxation v Kliman & Kliman [2002] FamCA 629; (2002) FLC 93-113). A similar position was adopted by the Full Court in Zdravkovic and Zdravkovic (1982) FLC 91-220 where the Full Court held that once it was clear and beyond doubt that a debt was owing to a third person, and that it would in all probability be enforced, there are clearly appropriate cases where as part of the adjustment of the financial rights of the parties, the order could be made for the payment direct to the creditor…
I consider there is merit in the intervenor’s claim. There are “legal proceedings” and there is now a judgment debt. The solicitors were clearly instructed by the wife to assist her in the proceedings and I am satisfied that the entirety of their fees were incurred in fulfilling the wife’s instructions in the litigation.
In Scammell & Co v WorkCover Corporation & Anor [2006] SASC 258Layton J said at [53]:-
…before a court would enforce a particular lien for the specific amount of costs to be paid as distinct from securing the amount of those costs, such costs would have to be relevantly agreed by the Worker as being a debt, or assessment by a court or taxed.
In the current circumstances the intervenors have secured a judgment debt. I am not asked to order direct payment but rather, for the money to be secured pending an assessment of costs being undertaken.
I propose to so order.
I certify that the preceding one hundred and thirty-seven (137) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 7 March 2018
Associate:
Date: 7 March 2018
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