SABROSKY & PUTNAM
[2018] FamCAFC 32
•14 February 2018
FAMILY COURT OF AUSTRALIA
| SABROSKY & PUTNAM | [2018] FamCAFC 32 |
| FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – Single judge appeal – Where the wife has not participated in proceedings at first instance or on appeal and did not provide disclosure as ordered by the court – Undefended hearing where the Acting Magistrate foreshadowed making the orders as sought by the husband – Judgment delivered five months after hearing held the husband’s proposed orders were not just and equitable and cash payment ordered in favour of the wife – No notice given to the husband of the order for a cash payment or its form – Held husband denied procedural fairness – Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1 considered – Clear expectation was disappointed and unfairness to the husband – Held Acting Magistrate failed to properly take into account the significance of the wife’s failure to participate in the proceedings – Merit in both grounds of appeal – Appeal allowed. FAMILY LAW – APPEAL – Re-exercise of discretion – Matter proceeded almost entirely on the papers – Appeal court in as good a position as any other judicial officer to determine the matter – Held it is just and equitable to make orders as proposed by the husband – Costs certificate issued. |
| Family Law Act 1975 (Cth) |
| Loomis & ML Lawyer (2016) FLC 93-731; [2016] FamCAFC 168 Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 |
| APPELLANT: | Mr Sabrosky |
| RESPONDENT: | Ms Putnam |
| FILE NUMBER: | PTW | 4196 | of | 2010 |
| APPEAL NUMBER: | WA | 36 | of | 2017 |
| DATE DELIVERED: | 14 February 2018 |
| PLACE DELIVERED: | Perth |
| PLACE HEARD: | Perth |
| JUDGMENT OF: | Thackray J |
| HEARING DATE: | 14 February 2018 |
| LOWER COURT JURISDICTION: | Magistrates Court of Western Australia |
| LOWER COURT JUDGMENT DATE: | 21 September 2017 |
| LOWER COURT MNC: | [2017] FCWAM 239 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Robertson |
| SOLICITOR FOR THE APPELLANT: | NashClavey-Mandurah |
| THE RESPONDENT: | No appearance |
Orders
The appeal be allowed.
Paragraph 5 of the orders made on 21 September 2017 by Acting Magistrate De Maio be set aside.
The Court grants to the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney‑General to authorise a payment under that Act to the appellant in respect to the costs incurred by him in relation to the appeal.
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 Sabrosky & Putnam 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).
| THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT PERTH |
Appeal Number: WA 36 of 2017
File Number: PTW 4196 of 2010
| Mr Sabrosky |
Appellant
And
| Ms Putnam |
Respondent
EX TEMPORE REASONS FOR JUDGMENT
Before the Court today is the Notice of Appeal of Mr Sabrosky (“the husband”), filed on 11 October 2017, challenging paragraph 5 of orders made by Acting Magistrate De Maio on 21 September 2017.[1] The respondent is Ms Putnam (“the wife”), but she has not participated in the proceedings and did not appear today, notwithstanding she has been properly served.
[1]There is a typographical error in the order. Paragraph 5 is followed by an order which purports to be a subparagraph of paragraph 5, but which should in fact be a standalone order numbered 6. The appeal is against only that part of paragraph 5 which requires the husband to make a payment to the wife.
I am hearing the appeal as a single judge, in accordance with a delegation provided by the former Chief Justice. The matter came before me for directions some time ago and was listed for hearing today. At that time I dispensed with the requirement for the filing of a summary of argument, since it seemed that the argument was a very plain one and did not warrant the costs associated with reducing it to writing. This was particularly so in circumstances where the wife failed to attend the directions hearing and obviously did not intend to participate in the appeal.
The factual background is adequately set out in the reasons her Honour delivered on 21 September 2017. No attack is made on the factual findings, and I therefore treat them as uncontroversial. It is noted in particular that her Honour found at [30] of the reasons:
The parties had been separated for a significant period of time. The only property they hold jointly is as trustees of the Superfund. The husband has re‑partnered. In effect the parties have divided their joint assets and gone their separate ways, being financially independent and making decisions as to the purchase and sale of assets without reference to the other. They have treated their assets separately since they sold the joint real estate in 2011. The wife has failed to take part in these proceedings. Since the parties separated the husband, and it appears the wife to a lesser extent, have continued to contribute to the [Sabrosky] Superfund. The husband however complains that due to the wife’s failure to comply with the rules of the super fund and delaying in the provision of taxation documents, that he has paid penalties. The parties enjoy a shared care arrangement and it is difficult to see why the wife would not attend court proceedings and seek to engage with the husband in resolving the remaining joint asset that they hold. Having said that I accept as unchallenged the husband’s position that he seeks to retain the Superfund (him having the larger entitlement in the fund), is accustomed to the operations of a self-managed super fund and would seek to retain the fund but be able to attend to the administration without recourse to the wife and be able to make decisions independent of her.
As her Honour said in the paragraph above, the parties have treated their assets separately since they sold jointly owned real estate in 2011 and distributed their assets, thereafter retaining a financial link only in relation to their private superannuation fund in which each of them had an interest, and which increased in value in accordance with contributions they respectively made.
The parties attempted to resolve matters in December 2014 by lodging an application for consent orders, but the registrar requisitioned it, and ultimately the application did not proceed. Instead, in May 2016, the husband instituted proceedings for property settlement. Effectively, as I understand it, that application involved the rolling out to the wife of her entitlement in the private superannuation fund and otherwise for the parties to retain the assets which, it seems, each of them understood they were proposing to keep.
At the first hearing, the Acting Magistrate made directions requiring the wife to file a response, a financial statement and an affidavit – and otherwise ordered the parties to provide disclosure of documents. No such documents were ever filed by the wife. The matter then proceeded to a conciliation conference on 30 September 2016, which the husband and his solicitor attended, but which the wife did not attend. It was noted on the record that the wife was “telephoned on her mobile and at work but was not available”. It was further noted that the wife had failed to file the documents she had been ordered to file.
The matter was then programmed towards an undefended hearing. On 4 November 2016, the husband filed an amended application, but the amendment simply increased the amount the wife was to have rolled out from the superannuation fund, presumably reflecting increases in the value of the wife’s entitlement in the fund. The matter came before a magistrate on 22 November 2016, at which time the wife was ordered to file a financial statement. The wife, unsurprisingly given the history, failed to comply, and, on 31 January 2017, the husband was given leave to proceed on an undefended basis and the matter was set down for an undefended hearing on 3 April 2017.
The husband, who appears to have been conducting the proceedings in accordance with all of the requirements laid down by the court, filed Papers for the Judicial Officer on 10 March 2017, setting out submissions as to why the orders he was proposing were just and equitable. The matter came before Acting Magistrate De Maio on 3 April 2017 as anticipated, and I have the benefit of a full transcript of the hearing.
In summary, Mr Robertson of counsel, who then appeared and again today appears for the husband, engaged in dialogue initiated from the bench about some of the detail relating to the case and in particular the self-managed superannuation fund. It was explained to her Honour that what the husband was seeking to achieve, and had been seeking to achieve all along, was simply to disentangle the parties’ interests in the superannuation fund and otherwise to let them “get on with [their] lives” that they had been leading so separately for some years (transcript, 3 April 2017, p 4).
Some general submissions were made by Mr Robertson, bearing in mind that the matter was proceeding undefended, to explain why the orders proposed were just and equitable. Mr Robertson placed some emphasis, understandably, on the failure of the wife to participate, and in particular her failure to provide disclosure. Well into the proceedings, her Honour indicated that she would like to hear some “quick oral evidence” from the husband about one aspect of his financial position (transcript, 3 April 2017, p 16). Mr Robertson, and then her Honour, examined the husband about some issues concerning his affairs.
At the conclusion of that evidence, her Honour said:
HER HONOUR: Okay. Anything arising out of that, Mr Robertson?
ROBERTSON, MR: Nothing, your Honour.
HER HONOUR: All right. Thank you, Mr [Sabrosky]. You can stay sitting next to Mr Robertson. Okay. So I just want to put my thoughts together, counsel.
ROBERTSON, MR: Yes.
HER HONOUR: And I will issue a written judgment.
ROBERTSON, MR: Yes, your Honour.
HER HONOUR: I can just summarise to say that, look, I’m satisfied that the orders proposed appear to be a just and equitable division. With the additional evidence that the husband has continued to support the child financially and continued to maintain the super fund which is, in effect, a joint asset, but he is the only one that has been maintaining it. So whilst an 85/15 distribution looks skewed I think there’s enough evidence in there to suggest that that would still fall in a range. The wife hasn’t participated. There has been a handover of the child every five weeks and it’s surprising that she hasn’t indicated anything to the husband or said, “I will see you in court,” or anything like that, or, “What’s going on?” It’s anyone’s guess what that means, but she hasn’t participated in the process. So as long as it’s okay with you I will issue judgment from chambers.
ROBERTSON, MR: Yes.
HER HONOUR: And deliver it with the orders to the parties.
ROBERTSON, MR: Yes, your Honour.
HER HONOUR: I intend to make orders in terms of the minute, although I suspect that you will need to do some enforcement action, maybe, perhaps – perhaps, but I will leave it up to you. She’s obviously working. She would obviously have to have – [her employer] would have nominated a fund.
ROBERTSON, MR: They would have to have a fund. Correct.
HER HONOUR: Or if she nominated a fund then – but you could issue a subpoenas to [her employer] to find out where that went – where that was going. So I won’t give a date to come back. I will just reserve my decision.
ROBERTSON, MR: Yes, your Honour.
HER HONOUR: And judgment will issue from chambers.
ROBERTSON, MR: Thank you, your Honour.
HER HONOUR: Yes. Okay. All right. Thank you. So I will release you from your oath, Mr [Sabrosky]. Thank you for your assistance today. This court will now stand adjourned. Thank you.
As can be seen from this passage, her Honour was apparently satisfied that the orders proposed by the husband were just and equitable. Her Honour also announced her intention to make orders in terms of the husband’s proposal. She foreshadowed only the possibility that there might need to be some enforcement action in relation to the orders that she foreshadowed making.
No doubt due to the pressure of the work, her Honour did not deliver judgment until 21 September 2017. In her 16 pages of reasons, her Honour set out the uncontroversial facts and made certain findings in relation to the existing property interests of the parties, again, an uncontroversial aspect of the matter. She set out what I have already referred to at [30] of the reasons. She also made some observations in relation to contributions and, in the middle of those observations, made reference to the lack of disclosure by the wife and again acknowledged that the wife had failed to take part in the proceedings or file any documents. Her Honour did, however, mention that the wife had disclosed her financial position in 2014, at which time it was accepted the wife did not have substantial assets. Her Honour then said:
Looking at the wife’s financial position in 2014, and there unlikely being any significant change to that position due to the wife’s resources, proportionally I do not consider the wife’s lack of disclosure has any impact on contributions or the size of the assets.
I might pause there to note that there was no real foundation for a finding that it was unlikely there was any significant change in the wife’s financial position since 2014. This matter was being heard in 2017. The wife had been twice ordered to file a financial statement and had failed to do so. It would have been more accurate for her Honour to have found that the wife’s financial position at the time was simply unknown.
In any event, having discussed the lack of disclosure and having found that the failure to provide proper disclosure had not had “any impact on contributions or the size of the assets”, her Honour found that as at the date of separation, the parties’ contributions were relatively equal. She then made reference to the post-separation contributions, and here, properly, in my view, acknowledged that it was “difficult to calculate what if any [sic] the contribution of the wife was post separation as she failed to participate in the proceedings, save to say that she continued to contribute in a non-financial capacity for the care of the child” (reasons at [48]).
Her Honour then concluded at [49] that she was satisfied the husband post‑separation “has made a far greater financial contribution to his assets without contribution from the wife [and] similarly the husband has not made any contribution to the wife’s assets”.
Her Honour went on to assess the s 75(2) factors and indicated that in the circumstances, she did not consider there should be an “adjustment” to allow for those factors. It is not entirely clear from what figure her Honour would have been making any adjustment, because at no other point in her reasons did she attribute any finding in terms of percentage or dollars to the respective contributions of the parties.
Her Honour then went on to set out her conclusions under a heading “the outcome”:
57 The husband’s proposal [is] that the property of the parties is divided as to 85% to him and 15% to the wife. His proposal recognises the significant post separation contribution that he made and also recognises that the parties since separation have maintained separate accounts. The husband’s position is that primarily the parties resolved their financial relationship when they divided the proceeds of sale of their former matrimonial home and at that stage made separate contributions and in effect went their own way. This also refers to the parties’ superannuation fund which appears to have been separately contributed to since their separation and indeed since 2007 when they rolled their accounts into the self-managed superannuation fund.
58The wife has not taken any part in the proceedings and has not complained about this the proposed division of the assets of the parties or either of them. She has had every opportunity to do so and has not done so.
59In addition the husband says that he is not aware of the wife’s true financial position her having not disclosed it by filing a Form 13 Financial Statement. The husband also complains however that the wife has been a poor money manager and has purchased and sold property such that the $130,000 she received in 2011 has effectively been depleted. In those circumstances it is unlikely that the wife has additional cash reserves.
60In practical terms after a 19 year relationship with three children, a shared care arrangement for a 12-year-old, the husband presently with greater earning capacity, although older than the wife and not having security of employment in the future, whether the husband continues to contribute additional funds for the care of the child including the payment of child support, she retains assets and superannuation of $143,420 while he retains assets and superannuation of $821,349. This represents a difference of $678,000. The period of cohabitation in the Court’s view outweighs the extensive financial contribution made post separation (only seven years).
61Even though proceedings are undefended and the Court has only the benefit of one party’s story the Court must still be satisfied that the end result is a just and equitable one that recognises the contributions of the parties in a financial and non-financial capacity and appreciates the duration of the relationship.
62I do not consider in the circumstances that that represents a just and equitable division of the assets of the parties. I accept that the Court should engage in orders that resolve their financial relationship, however consider that there should be an additional payment to the wife.
63In practical terms if there is no superannuation split then the wife should be paid a sum of money - and I intend to have recourse to the amount of savings held by the husband even though they have been acquired post separation.
64I propose to order the husband pay to the wife the sum of $57,000 in addition to the assets that she has in her name and her superannuation balance. This results in a percentage division of 20.6% to the wife. I have considered that the proceedings were undefended and that the husband would have spent money on a solicitor to bring the case to court, however, in the circumstances I consider the proposed orders results in a final resolution of the parties’ financial relationship and will mean the husband can build on his base without any consideration of the wife’s entitlement or claim.
As can be seen, at [62] her Honour announced that she did not consider the division that the husband proposed represented a just and equitable division of the assets. This finding would have come as somewhat of a surprise to the husband and those who represented him, given that on the day of the hearing her Honour had announced that she considered the orders were, in fact, just and equitable, and foreshadowed making orders as proposed by the husband.
It is in this factual context that I turn to consider the two grounds of appeal.
Ground 1 – Procedural Fairness
Dealing first with the procedural fairness issue, Ground 1 states:
The learned Magistrate erred by failing to accord to the [husband] procedural fairness and/or by denying the [husband] natural justice by failing to provide the [husband] with any or adequate notice that she was considering ordering the [husband] to make a cash payment to the [wife] which cash payment was not proposed by either the [husband] or the [wife] and by doing so denied the [husband] the opportunity to put before the Court evidence about or make submissions about, inter alia, why a cash payment would not be appropriate, whether the [husband] has capacity to fund a cash payment to the [wife] or whether there should be a further superannuation splitting order in leiu [sic] of a cash payment (Reasons 64).
In this ground, and in the submissions advanced in support of it, the husband draws attention to the fact that not only was he not on notice about the order that her Honour ultimately made requiring him to pay the wife $57,000 more than he was proposing, he had been led to believe by what her Honour had said during the hearing that she was going to make the orders he was seeking.
Unsurprisingly, the argument is that the husband has been denied procedural fairness because there was no contender at the hearing and her Honour had not indicated any intention to depart from his proposed orders. Had she announced at the time that she was minded to find that the husband’s proposed orders were not just and equitable, then the husband would have been in a position to make submissions explaining why that was not an appropriate finding.
Although it is a somewhat weaker argument in my view, it was also said today that an opportunity may have been taken by the husband to adduce further evidence if he had been aware her Honour was not minded to make the orders he was seeking. It would have been reasonably thought, in my view at least, that the husband should have come to the hearing below armed with all of the evidence and not anticipated being given an adjournment to put on further evidence. But, it is certainly the case that he was entitled to put his case fully, and given the way the matter transpired, that was simply denied to him.
As a subsidiary to that argument, had it been the case that the husband was unsuccessful in persuading her Honour that the orders proposed were not just and equitable, then, at the very least, he would have been entitled to be heard on the question of whether or not the adjustment should be made in the form of cash, which her Honour ordered, or whether it should have been made in the form of some redistribution of entitlements in the superannuation fund. This opportunity too was denied, and in my view, there has therefore been a denial of natural justice.
In the course of argument today, Mr Robertson has drawn attention to authorities, including the decision of the High Court in Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1, where there was a discussion of the proposition known as “legitimate expectation”. It is unnecessary to consider authority relating to that topic in any detail here, it being sufficient to recite from the judgment of Gleeson CJ, who said at 12 – 13:
Not every departure from a stated intention necessarily involves unfairness, even if it defeats an expectation. In some contexts, the existence of a legitimate expectation may enliven an obligation to extend procedural fairness. In a context such as the present, where there is already an obligation to extend procedural fairness, the creation of an expectation may bear upon the practical content of that obligation. But it does not supplant the obligation. The ultimate question remains whether there has been unfairness; not whether an expectation has been disappointed.
(Footnote omitted)
I am of the view that in the present case not only has a clear expectation been disappointed, but in the process, there has been unfairness for the reasons I have given.
In arriving at this decision, I have taken into account other relevant authority, which, as Mr Robertson said, has been very usefully collated in the reasons of Murphy J sitting on appeal as a single judge in Loomis & ML Lawyer (2016) FLC 93-731 at [47] and following.
As Mr Robertson has said today, success in Ground 1 renders it strictly unnecessary to consider Ground 2, but for the sake of completeness, I should note that Ground 2 asserts that “the learned Magistrate erred in law by failing to give adequate reasons for the finding that ‘there should be an additional payment to the wife’ … and for finding that the cash payment should be $57,000”.
As I have mentioned, her Honour did not make any percentage or dollar finding as to the respective contributions of the parties, but did find that there should be no adjustment on account of s 75(2) factors. It must therefore follow that her Honour reasoned that the husband’s contribution assessment of 85:15 in his favour was not the appropriate finding, and that the wife should instead be found to have contributed about five per cent more than the husband proposed.
One difficulty with her Honour’s reasoning is that she does not say how she balanced the equality of contributions that she found existed prior to the separation and the inequality of contributions she found following separation. Further, with respect to her Honour, she failed to properly take into account the significance of the failure of the wife to participate in the proceedings in any way. The wife did not provide a current statement of her financial position nor the disclosure which the court had ordered and which the rules require.
When a party refuses, as this party has refused, to participate in proceedings, or when a party fails to comply with court orders, or fails to provide to the court the basic information upon which decisions should be made, then, as Mr Robertson urged in his submissions below and has urged again today, the court should adopt a robust approach. Given the absence of disclosure and the non-compliance with orders, her Honour has not adequately explained why the orders she made were just and equitable and to be preferred over the orders the husband had sought all along and which the wife had elected not to contest.
For those reasons, I also consider that there is merit in the second ground of appeal. There being merit in both grounds, the appeal will be allowed.
Re-exercise of discretion
The next question is whether I should re-exercise the discretion of the Acting Magistrate or whether the matter should be remitted for further consideration by another judicial officer. Mr Robertson correctly submits that there would be no point in referring the matter back to another judicial officer, as the case proceeded entirely on the papers, save for a snippet of unchallenged oral evidence. Accordingly I am in as good a position as another judicial officer would be to determine the appropriate outcome. In doing so, I will save expense and further trouble for the husband and save work for the magistracy.
When stepping back and looking at all of the matters that her Honour found which are uncontroversial, and when proper weight is placed upon the failure of the wife to participate in the proceedings and, more importantly, her failure to provide the material upon which a court could make an assessment of what is just and equitable, I am satisfied that her Honour’s initial view following the hearing of the oral argument was the correct position. The orders proposed by the husband were just and equitable, recognising, of course, that there is always a range of possible results.
Accordingly, I will make the order sought by the husband in this uncontested appeal.
Costs
The final matter to consider is the question of costs. The husband does not seek costs but rather seeks a costs certificate pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 (Cth). The appeal having succeeded on a point of law, in circumstances where the husband did not contribute to the errors I have identified, it is appropriate such a certificate be provided.
For those reasons, the formal orders of the Court are as follows
1.The appeal be allowed.
2.Paragraph 5 of the orders made on 21 September 2017 by Acting Magistrate De Maio be set aside.
3.The Court grants to the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney General to authorise a payment under that Act to the appellant in respect to the costs incurred by him in relation to the appeal.
I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Thackray J delivered on 14 February 2018.
Associate:
Date: 1 May 2018
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