SAMADI & AMAYA

[2020] FCCA 2936

FEDERAL CIRCUIT COURT OF AUSTRALIA

SAMADI & AMAYA [2020] FCCA 2936

Catchwords:
FAMILY LAW – Property settlement – marital relationship – wife not participating in the proceedings – equal division of assets.

Legislation:
Family Law Act 1975, ss.75(2), 79, 79(2), 79(4), 81, 121, 106A
Federal Circuit Court Rules 2001, r.16.05(2)(a)

Case cited:
Stanford v Stanford (2012) 247 CLR 108; (2012) 293 ALR 70; (2012) 87 ALJR 74; (2012) 47 Fam LR 481; (2012) FLC 93-518; [2012] HCA 52

Applicant: MR SAMADI

Respondent: MS AMAYA

File Number: MLC 8574 of 2018

Judgment of: Judge Riley

Hearing date: 16 October 2020

Date of last submission: 16 October 2020

Delivered at: Melbourne

Delivered on: 29 October 2020

REPRESENTATION

Counsel for the applicant: Ms Bastick

Solicitors for the applicant: ASA Law

Advocate for the respondent: No appearance

Solicitors for the respondent: None

ORDERS

1. Within 14 days of these orders, the applicant husband place on the market for sale:

   (a)the property situated at B Street, Suburb C, being the property more particularly described in certificate of title volume ... folio ..., and as Lot ... on plan subdivision ...; and

   (b)the property situated at D Street, Suburb C, being the property more particularly described in certificate of title volume ... folio ..., and as Lot ... on plan subdivision ...,

   (together, “the properties”).

2. The applicant husband have authority to:

   (a)conduct the sales of the properties either by public auction or by private treaty;

   (b)nominate the agents and lawyers to have carriage of the sale;

   (c)nominate the minimum reserve prices;

   (d)transfer the properties to the purchaser or purchasers; and

   (e)receive and disburse the proceeds of sale.

3. The proceeds of sale be disbursed as follows:

   (a)firstly, to pay the costs and commissions of sale;

   (b)secondly, to discharge the mortgages and any other encumbrance registered against the properties; and

   (c)thirdly, to pay one half of the balance to the applicant husband and one half of the balance to the respondent wife.

4. The applicant husband have leave to apply on seven days’ notice in respect of the implementation of any of these orders and in relation to any further machinery orders required to effect the sale of the properties.

5. The respondent wife do all acts and things, sign all documents and give all consents necessary to give effect to these orders.

6. In the event the respondent wife refuses or neglects to execute any deed or instrument necessary to give effect to any of these orders, a registrar of the court be appointed pursuant to s.106A of the Family Law Act 1975 to execute the deed or instrument in the name of the respondent wife and to do all other acts and things necessary to give validity and operation to the deed or instrument.

7. Unless otherwise specified in these orders and save for the purposes of enforcing the payment of any money due under these or any subsequent orders:

   (a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders;

   (b)insurance policies remain the sole property of the beneficiary named therein;

   (c)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and

   (d)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

NOTATIONS

(A)Pursuant to r.16.05(2)(a) of the Federal Circuit Court Rules 2001, the court may vary or set aside a judgment or order made in the absence of a party.

(B)Pursuant to s.81 of the Family Law Act 1975, these orders are intended to finally determine the parties’ financial relationship.

(C)Section 121 of the Family Law Act 1975 provides that it is an offence punishable by imprisonment for up to one year to publish or disseminate to the public any account of family law proceedings which identifies the parties, witnesses or other people concerned with the proceedings, unless specifically authorised by the court.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 8574 of 2018

MR SAMADI

Applicant

And

MS AMAYA

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an application for property adjustment under s.79 of the Family Law Act 1975 (“the Act”). The application was filed by the husband. The wife has not participated in the proceedings at all.

2. After the wife’s failure to file responding documents, a registrar of the court made orders for substituted service. They appeared to have been complied with. Still, the wife did not file any documents or contact the court or the husband.

3. The matter was listed for final hearing by Microsoft Teams on 15 May 2020. It was understood that the wife was then living in Country F with the child of the relationship. The wife did not respond to the court’s invitation to attend electronically. The hearing proceeded on an undefended basis, and judgment was reserved.

4. While preparing the judgment in the matter, it came to my attention that an affidavit of service indicated that service on the respondent had been effected at an incorrect email address. I also registered that, while the husband proposed a 50:50 split of the parties’ assets in his initiating application, he proposed receiving 100% of the parties’ assets in his final proposals.

5. Consequently, the matter was listed for another directions hearing. I required the husband to issue subpoenas to:

   a)the immigration department, for the wife’s movement records;

   b)her banks, for her contact details; and

   c)the real estate agent dealing with the parties’ investment property, for the wife’s contact details.

6. Those subpoenas bore fruit.  It transpired that the wife had been in Country F but had returned to Melbourne nine times since late 2017, most recently on 4 February 2020. She has not left Australia after that date and remains here.

7. The subpoenas also provided an address for the wife in G Street, City H. However, further enquiries revealed that she had later moved to an address in Suburb J. The wife was served by mail at the Suburb J address and by email at her correct email address.

8. A covering letter informed the wife of the date and time of the rescheduled final hearing. The wife was invited to participate in the hearing by Microsoft Teams. Again, she did not file any material or respond to the hearing invitation or contact the court.

9. Consequently, the final hearing, for a second time, proceeded on an undefended basis on 16 October 2020. As explained to the husband at the hearing, pursuant to r.16.05(2)(a) of the Federal Circuit Court Rules 2001, an order made in the absence of a party may be set aside in appropriate circumstances.

Background

1. The husband is 36 years old and the wife is 38 years old. They commenced cohabitation in 2011 and married in 2012. They separated on 15 December 2016 and divorced on 10 November 2018. The period of cohabitation was almost six years.

2. The parties have a child, X, who was born in 2013. X lives with the wife. X and the wife relocated to Country F in about late 2017 without the husband’s consent. X has not spent time with her father since then. As noted above, the wife has returned to Melbourne nine times since late 2017.  It is not known if X also returned to Melbourne with the wife on any of those occasions, or if X is presently in Australia.

3. The husband is a professional. The wife has worked as a public servant.

Chronology

1. The husband provided to the court a chronology in substantially the following terms:

Date	Event
The parties and their relationship
In 2011	The parties started living together.
In 2012	The parties were married.
In 2013	X was born.
2013	The parties jointly purchased an investment property at D Street, Suburb C.
2015	The parties jointly purchased an investment property at B Street, Suburb C.
15 December 2016	The parties separated.
Late 2017	The wife went to Country F with X.
Legal proceedings
10 November 2018	The parties were divorced.
7 November 2019	The application for property orders was filed.
17 January 2020	The application and supporting documents were sent to the wife via email.
11 February 2020	There was a first directions hearing.
14 February 2020	The wife was served by email with the application, financial statement, supporting affidavit and the orders.
23 March 2020	There was a second directions hearing.
13 April 2020	The wife was served by email with the husband’s amended application for orders, affidavit of contributions and needs, amended financial statement and the orders. Two affidavits of service were filed.
13 May 2020	The husband’s case outline, chronology, table of assets, liabilities, contributions and needs and minute of proposed orders were emailed to the wife.

Material relied upon

1. In relation to the substantive issues, the husband relied upon his affidavit affirmed on 13 April 2020. It was not challenged, and I accept the husband’s evidence.

2. The wife did not file any documents.

Proposal

1. As mentioned above, the husband initially proposed a 50:50 split of the parties’ assets. At the first final hearing, he sought 100% of the parties’ assets. However, at the second final hearing, the husband returned to his initial proposal of a 50:50 split.

2. With that amendment, the husband proposed orders as follows:

   1)That within 14 days of these Orders the property situated at B Street, Suburb C and being more particularly described as Volume ..., Folio ..., Lot ..., on a plan subdivision of ... on the certificate of title and the property situated at D Street, Suburb C and being more particularly described as Volume ..., Folio ..., Lot ..., on a plan subdivision of ... (together ‘the properties’) be placed on the market for sale.

   2)The Applicant have the authority to conduct the sale of the properties either by public auction or by private treaty and to nominate the agent and lawyer to have carriage of the sale and to nominate the minimum reserve price, as the case may be, and to transfer the properties to the purchaser or purchasers and to receive and disburse the proceeds of sale.

   3)The proceeds of sale to be disbursed as follows:

   a)To pay the costs and commissions of sale;

   b)To discharge the mortgages and any other encumbrance registered against the properties; and

   c)[50% of the]balance to the Applicant [and 50% of the balance to the Respondent].

   4)The Applicant have leave to apply on 7 days’ notice in respect to implementation of all or any of these orders and in relation to any further machinery required to effect a sale of the properties.

   5)The Respondent do all acts and things, sign all documents and give all consents necessary to give effect to these orders.

   6)In the event the Respondent refuses or neglects to execute any deed or instrument necessary to give effect to all or any of the orders made, that the Registrar of the Court at Melbourne be appointed pursuant to s106A to execute the deed or instrument in the name of the Respondent and to do all other acts and things necessary to give validity and operation to the deed or instrument.

   7)That unless otherwise specified in these orders and save for the purposes of enforcing the payment of any money due under these or any subsequent orders:

   a)Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders.

   b)Insurance policies remain the sole property of the beneficiary named therein;

   c)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;

   d)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

   NOTATION:

   Pursuant to s81 of the Family Law Act 1975 these orders intend to sever the parties’ financial relationship.

3. The wife did not propose any orders.

The legislation

1. Section 79 of the Act gives the court power to alter the interests of the parties to a marriage in the property of the parties to that marriage. Sub-section 79(2) of the Act provides that:

   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.

2. Section 79(4) of the Act sets out the matters the court must take into account when considering what orders, if any, should be made for the alteration of the interests of the parties in property. Those matters are:

   (a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and

   (b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and

   (c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and

   (d)the effect of any proposed order upon the earning capacity of either party to the marriage; and

   (e)the matters referred to in subsection 75(2) so far as they are relevant; and

   (f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and

   (g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.

3. The matters to be taken into account under s.75(2) of the Act are as follows:

   (a)the age and state of health of each of the parties; and

   (b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and

   (c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and

   (d)commitments of each of the parties that are necessary to enable the party to support:  

   (i)  himself or herself; and

   (ii)  a child or another person that the party has a duty to maintain; and

   (e)the responsibilities of either party to support any other person; and

   (f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

   (i)any law of the Commonwealth, of a State or Territory or of another country; or

   (ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

   and the rate of any such pension, allowance or benefit being paid to either party; and

   (g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and

   (h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and

   (ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and

   (j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and

   (k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and

   (l)the need to protect a party who wishes to continue that party’s role as a parent; and

   (m)if either party is cohabiting with another person — the financial circumstances relating to the cohabitation; and

   (n)the terms of any order made or proposed to be made under section 79 in relation to:

   (i) the property of the parties; or

   (ii)vested bankruptcy property in relation to a bankrupt party; and

   (naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:

   (i)a party to the marriage; or

   (ii)a person who is a party to a de facto relationship with a party to the marriage; or

   (iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or

   (iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and

   (na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and

   (o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and

   (p)the terms of any financial agreement that is binding on the parties to the marriage; and

   (q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.

The approach to applications under s.79

1. In Stanford v Stanford (2012) 247 CLR 108; (2012) 293 ALR 70; (2012) 87 ALJR 74; (2012) 47 Fam LR 481; (2012) FLC 93-518; [2012] HCA 52, the High Court explained the proper approach to an application under s.79 of the Act as follows:

   37.First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. … The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.

   38.Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed that a power to make such order with respect to property and costs “as [the judge] thinks fit”, in any question between husband and wife as to the title to or possession of property, is a power which “rests upon the law and not upon judicial discretion”. … (footnotes omitted)

   39.Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, 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. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that “[c]ommunity of ownership arising from marriage has no place in the common law”. Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be “decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses”. The question presented by s 79 is whether those rights and interests should be altered. (footnotes omitted)

   40.Third, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act. (emphasis in original) (footnote omitted)

   …

   42.In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4). (emphasis in original)

1. Stanford requires the following matters to be determined in applications brought under s.79 of the Act:

   a)whether the parties have separated;

   b)the assets and liabilities of each party;

   c)the contributions of each party;

   d)the future needs of each party;

   e)bearing in mind all of the foregoing matters, whether it is just and equitable to make any orders altering the interests of the parties in their property; and

   f)what orders, if any, are just and equitable in all the circumstances of the case.

2. Stanford does not require these matters to be addressed in any particular order. In most cases, it would seem rational to consider them in the order set out above.

Whether the parties have separated

1. There was no dispute that the parties have separated.

The assets and liabilities

1. The husband submitted that the parties’ assets and their values at the time of the final hearing were as follows:

Joint Assets	Value
a.     Property at D Street, Suburb C	$355,000
b.     Property at B Street, Suburb C	$365,000
c.     Mortgage account	$24.76
Total joint assets	$720,024.76

1. The husband submitted that the parties’ joint liabilities at the time of the final hearing were as follows:

Joint Liabilities	Value
a.     CBA mortgage	$197,564
b.     CBA mortgage	$47,195
c.     Bank of Country F mortgage	$208,853
d.     Unpaid rates/insurance/owners corporation	$2,970
e.     Costs of selling investment properties	E$24,650
Total joint liabilities	$481,232

1. The husband submitted that his individual assets at the time of the final hearing were as follows:

Husband’s Assets	Value
a.     Savings account	$1,000
b.     Motor Vehicle 1	$13,870

1. The husband submitted that his individual liabilities at the time of the final hearing were as follows:

Husband’s Liabilities	Value
a.     Car loan	$20,396
b.     Credit card	$4,259.29
c.     Personal loan	$2,367

1. The husband submitted that his superannuation at the time of the final hearing was worth $75,033.

2. The husband submitted that the wife’s individual assets, liabilities and superannuation at the time of the final hearing were unknown.

3. In the absence of any dispute about these matters, I accept the husband’s claims about the parties’ assets, liabilities and superannuation, save that the costs of selling the investment properties should not have been included, because that liability has not yet been incurred. Consequently, the value of the pool, so far as it is known, is $326,323.47.

Contributions

a.         Initial contributions

1. The husband submitted that neither party made any significant initial contributions.

b.         Contributions during the marriage

1. The husband submitted that the parties made equal contributions during the marriage, with the husband being the primary breadwinner and the wife being the primary homemaker. The husband submitted that both parties received gifts of similar amounts from their families to assist with the purchase of the two investment properties.

c.          Contributions post separation

1. The husband submitted that he had made greater contributions post-separation in that he had expended $24,458 on rates, agents’ fees and maintenance of the investment properties.

2. The husband submitted that post-separation, the wife had had the benefit of:

   a)$32,104 in her bank accounts, even though the husband had contributed to them;

   b)$6,089 net rental income from the B Street, Suburb C property; and

   c)$2,500 worth of household goods.

d.         Conclusion on contributions

1. In the absence of any evidence to the contrary, I accept the husband’s claims in regard to contributions, save that, on his own account, the wife has been the sole carer of the parties’ child post-separation. That is a significant contribution.

The s.79(4)(d), (e), (f) and (g) and the s.75(2) factors

1. The husband said that:

   a)he earns $105,000 per annum;

   b)he is in good health;

   c)he pays child support to the wife of $722.17 per month;

   d)the wife has tertiary qualifications;

   e)she has the care of their child, who is now seven years old; and

   f)to the husband’s knowledge, neither party has any other obligations to maintain anyone. 

2. In the absence of any evidence to the contrary, I accept the husband’s claims in regard to the parties’ future needs.

Whether it is just and equitable to alter the parties’ property interests

1. The difficulty with this case is that the wife has not participated in the proceedings at all, notwithstanding that she has been put on notice about them. The corollary of the wife’s failure to participate in the proceedings is that she has not made any disclosure. In accordance with authority, it is open to the court to conclude that the wife has not made disclosure and has not participated in the proceedings because it would not be in her interests to do so. That is, it is open to the court to conclude that the wife has other assets which, if disclosed, could be claimed, at least in part, by the husband.

2. In circumstances where the wife has not participated in the proceedings, and where the parties have been divorced for nearly two years, it is just and equitable to alter their interests in their joint property to bring about a finalisation of the financial relationship between them.

What order is just and equitable?

1. On the material before the court, the contributions somewhat favour the husband, and the future factors somewhat favour the wife. However, because the wife has not given any disclosure, the true value of the asset pool is unknown.

2. In my view, on the information as it is presently known, it is just and equitable to make orders substantially in the terms that the husband now seeks, being a 50:50 split of the known asset pool.

3. I will also include the usual notation under r.16.05(2)(a) of the Federal Circuit Court Rules 2001, which provides that the court may vary or set aside a judgment or order made in the absence of a party, so that if, by some mischance, the wife was not in fact aware of these proceedings, she will have the opportunity to seek to set aside the orders.

4. There will be orders accordingly.

I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Judge Riley

Associate:

Date:         29 October 2020