SAVAGE & ADAM

[2015] FCCA 1693

FEDERAL CIRCUIT COURT OF AUSTRALIA

SAVAGE & ADAM [2015] FCCA 1693

Catchwords:
FAMILY LAW – Property – application for property settlement – where respondent failed to attend court – just and equitable.

Legislation:

Family Law Act 1975 (Cth), ss.90SF,90SM

Federal Circuit Court Rules 2001, rr.13.03C, 16.05

Cases cited:
Hickey & Hickey [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143
Stanford v Stanford [2012] HCA 52; (2012) 47 Fam LR 481; FLC 93-518

Applicant: MR SAVAGE

Respondent: MS ADAM

File Number: SYC 380 of 2015

Judgment of: Judge Scarlett

Hearing date: 15 June 2015

Date of Last Submission: 15 June 2015

Delivered at: Sydney

Delivered on: 15 June 2015

REPRESENTATION

Solicitor for the Applicant: Mr Quinn

Solicitors for the Applicant: John R. Quinn & Co

Respondent: No appearance

ORDERS

1. The Applicant is granted leave to proceed ex parte.

2. The Respondent must forthwith do all acts and things necessary and sign all documents, deeds, instruments and writings necessary to cause the sale of the property known as Property G (hereinafter referred to as “the property”) by public auction.

3. With respect to the sale of the property by public auction the Respondent must do all acts and things to give effect to the abovementioned Order including but not limited to:

   (a)Placing the property with an estate agent in the area (hereinafter referred to as “the real estate agent or the auctioneer”) for the sale of the property at the earliest possible date;

   (b)Executing all documents requested by the real estate agent or the auctioneer for the sale of the property;

   (c)Requesting the real estate agent or the auctioneer to recommend a reserve price to be placed on the property for the purpose of the auction sale and consider such recommended reserve price;

   (d)Paying to the real estate agent or the auctioneer any sum requested for advertising expenses in relation to the sale;

   (e)Giving such instructions as are necessary to the Respondent’s solicitor for the preparation of a Contract for sale in conjunction with John R. Quinn & Co Lawyers and for the Contract for Sale to be made available to the real estate agent or the auctioneer and to carry out the conveyancing of the sale of the property and to apply the net proceeds in accordance with these Orders;

   (f)Attending at the auction sale of the property and negotiate with the highest bidder in the event that the reserve price is not reached;

   (g)Accepting the advice of the real estate agent or the auctioneer as to the acceptance of a price less than the reserve price;

   (h)Executing the Contract for Sale;

   (i)Co-operating in every way with the real estate agent or the auctioneer in relation to the sale of the property including making a key available, allowing inspection of the property at all times requested by the real estate agent or the auctioneer and ensuring that the property is in a neat and tidy condition at the time of inspection by prospective purchasers; and

   (j)Executing all other documents necessary to complete the sale.

4. In the event that the property is not sold:

   (a)at an auction in accordance with these Orders; or

   (b)within seven (7) days of the date of the auction by negotiation with the highest bidder at the auction,

   the Respondent is to do all acts and things and execute all documents necessary to cause to be held a further auction of the property within three (3) months of the date of the first auction.

5. The Respondent is until the sale of the property in accordance with these Orders granted the right to occupy the property. The Applicant will do no act or thing to interfere with the Respondent’s occupancy under this Order.

6. Until the sale of the property in accordance with these Orders the Respondent is to pay all rates, taxes and mortgage instalments on the property.

7. Upon the sale of the property the proceeds of sale are to be paid in the following manner and priority:

   (a)Payment of agent’s commission and auction expenses if any due on the sale of the property;

   (b)Payment of all moneys outstanding under the mortgage registered on the title of the property to the (omitted) Bank registered number (omitted);

   (c)Payment of all legal costs on the sale of the property;

   (d)Payment of water rates, council rates and other applicable conveyancing adjustments;

   (e)Payment of 60% of the balance to the Applicant; and

   (f)Payment of 40% of the balance to the Respondent.

8. Henceforth the property in the following:

   (a)the furniture and personal effects in the possession of the Applicant;

   (b)the Applicant’s separate savings and investments;

   (c)the Applicant’s superannuation entitlements;

   (d)any life insurance or life assurance of the Applicant; and

   (e)any other real or personal property and financial resources of the Applicant in the name or possession of the Applicant not otherwise specified,

   are to vest in the Applicant free of all further claim or demand or right or entitlement of the Respondent.

9. Henceforth the property in the following:

   (a)the furniture and personal effects in the possession of the Respondent;

   (b)the Respondent’s separate savings and investments;

   (c)the Respondent’s separate superannuation entitlements;

   (d)any life insurance or life assurance of the Respondent; and

   (e)any other real or personal property and financial resources of the Respondent in the name or possession of the Respondent not otherwise specified,

   are to vest in the Respondent free of all further claim or demand or right or entitlement of the Applicant.

10. In the event that either party refuses or neglects to comply with the provision of any of the above Orders the Registrar of the Court at Sydney is hereby appointed under section 106A of the Family Law Act 1975 to execute all deeds, documents and instruments in the name of either the Applicant or the Respondent and do all acts and things necessary to give validity and operation to the said Order.

11. Either party is to have liberty to apply on seven (7) days’ notice in the event of any difficulty arising out of the implementation and enforcement of these Orders.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 380 of 2015

MR SAVAGE

Applicant

And

MS ADAM

Respondent

REASONS FOR JUDGMENT

Application

1. This is an Application for orders for property settlement.

2. The Application was filed on 23^rd January and was returnable on 20^th April.  Essentially, the Applicant was seeking the sale of the parties’ principal asset which is a home unit in the Sydney suburb of Property G.  The Applicant also seeks that the other assets held by the parties should be retained by them as they are. 

3. It is his submission that the division of the proceeds should be on the basis of 60 per cent to the Applicant and the remaining 40 per cent to the Respondent. 

4. The Applicant is a (occupation omitted) who currently resides in the State of Victoria.  The Respondent is a (occupation omitted).  She resides in Sydney in the Property G property. 

5. The procedural history is that the Respondent did not file a response or a financial statement, notwithstanding the fact that she had been served with the documents as long ago as 9^th February 2015. 

6. She did not appear at Court on 20^th April and has not appeared since.  She has not filed any documents since then even though a direction was made on 20^th April that she must attend Court or orders may be made in her absence. She was also ordered to file and serve a response, a financial statement and an affidavit within 21 days. Again, she has chosen not to do so. Accordingly, when the matter came on for hearing, I was of the view that the matter should proceed ex parte under the provisions of rule 13.03C of the Federal Circuit Court Rules 2001. 

7. The Applicant relied on his affidavit of 21^st January 2015 and the affidavit of his solicitor, John Robert Quinn, of 15^th June.  Mr Quinn’s affidavit annexed copies of correspondence that he had sent to the Respondent on 6^th May and 3^rd June advising her of the proceedings and enclosing copies of the orders.  Mr Quinn deposed that he did not receive any response to either of his letters to Respondent. 

The proper approach to determination of a property application

1. The proper approach to determination of a property application under, in this case, section 90SM of the Family Law Act 1975, is first of all to follow the principles set out by the High Court of Australia in Stanford & Stanford.[1] 

   [1] [2012] HCA 52; (2012) 47 Fam LR 481; FLC 93-518

2. First, the Court must consider the requirements in subsection 90SM(3) of the Act which are in similar terms to those in subsection 79(2) which apply in respect of people who are married.  Subsection 90SM(3) provides that:

   The Court must 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.

3. The High Court held in Stanford that the Court must first identify:

   …the existing legal and equitable interests of the parties in the property.

4. Second, their Honours held that although section 79, which is the equivalent to section 90SM:

   …confers a broad power on a court to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion.

5. The third principle, and perhaps the most important, is:

   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 contributions) set out in subsection 79(4).

6. Thus, the decision in Stanford means the Court must consider the requirements of subsection 79(2) or, in this case, 90SM(3) before embarking on the four step process set out by the Full Court of the Family Court of Australia in Hickey & Hickey[2].  In Hickey, the Full Court set out a process of four interrelated steps that must be taken by a court when determining a property application:

   Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing.  Secondly, the Court should identify and assess the contributions of the parties within the meaning of subsection 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties.  Thirdly, the Court should identify and assess the relevant matters referred to in subsection 79(4)(d), (e), (f) and (g), (“the other factors”) including the matters referred to in subsection 75(2) so far as they are relevant.  Fourthly, the Court should resolve what order is just and equitable in all the circumstances of the case.

   [2] [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143

7. It is neither contradictory nor redundant to consider again whether a have proposed is just and equitable under subsection 79(2) or 90SM(3) because the Court is considering the matter after having undertaken the three previous steps referred to in the Hickey decision.

Just and equitable 

1. Turning first of all to whether it is just and equitable to make orders for settlement of the parties’ property, the Court only has the benefit of the material filed by and on behalf of the Applicant. The Respondent has filed no document whatsoever. 

2. In his affidavit, the Applicant sets out the history of the purchase of the property in Property G property which he and the Respondent regarded as their permanent place of residence.  The circumstances are that the parties have separated and, indeed, it appears that they finally separated in July or August 2014.  The Respondent has remained living in the property.  The Applicant resides in a suburb of Melbourne. Clearly, the relationship between the parties has irretrievably broken down. 

3. I am satisfied that it is just and equitable in all the circumstances to make orders for the settlement of the parties’ property.

The assets and liabilities of the parties 

1. Looking at the property and liabilities of the parties, again the Court only has the benefit of the material filed by the Applicant.  The assets of the parties, as far as the asset pool is concerned, consists of the Property G property, the Applicant’s superannuation entitlements, and some money in the (omitted) Bank standing in the sum of $916.00, some investments by way of shares that the Applicant holds, amounting to $23,646.00. 

2. He also has a Toyota RAV4 motor vehicle with an estimated value of $4,000.00. The Applicant deposes to having two superannuation interests.  One with (omitted) Super with a gross value of $67,304.00, the other with (omitted) Super amounting to $140,308.00, making a total value of $207,612.00.  The Applicant deposes to liabilities of some $87,282.00 including credit card debts of $49,431.00 and an income tax assessment of $37,851.00.  The Applicant estimates that the home unit is worth approximately $500,000.00 to $525,000.00 and it is encumbered by a mortgage to the (omitted) Bank with a liability of about $70,000.00.  Whilst there is no valuation on the Court record, it is the Applicant’s application that the property, in fact, be sold and the proceeds be divided between the parties.

The parties’ contributions 

1. The Court is required to consider the parties’ contributions.  It is clear that the Applicant’s contributions are significantly greater than those of the Respondent.  There are two reasons for that.  First, he is some 12 years older than the Respondent, being presently aged 42 years, and by comparison the Respondent is 30 years of age and is a (occupation omitted) by occupation.  Thus, throughout the term of the relationship, the Applicant has had a significantly greater income from his (business omitted) as a (occupation omitted).  It would be not unrealistic to find that the contributions favour the applicant by 70 per cent to 30 per cent. 

2. The Court should look at the effect of any proposed property order upon the earning capacity of either party.  It does not appear to me that the orders which the Court is being asked to make will have any effect upon either party’s earning capacity.

Relevant matters under subsection 90SF(3) 

1. It is important that the Court considers relevant matters referred to in subsection 90SF(3) of the Family Law Act 1975.  The Applicant was born in (country omitted) on (omitted) 1972.  He is 42 years of age and in good health.  The Respondent was born in (country omitted) on (omitted) 1984.  She is presently 31 years of age and is presumably in good health.  The Applicant is employed as a (occupation omitted), giving his employer as the (employer omitted) in Queensland, and he earns a total average weekly amount of $4,403.00 before tax.  He estimates his total average weekly income at $5,410.00.  The Respondent has provided no financial details, but it is a reasonable inference that as a (occupation omitted), her income is significantly less than that. 

2. There is no evidence that either party receives any benefit or is entitled to any pension allowance or benefit under any law of the Commonwealth or of a state or a territory.  The Applicant possess superannuation interests but has no entitlement at his age to draw on his superannuation.  There is no child of the relationship.  There is no evidence that either party is cohabiting with another party.  There is no evidence that either party has the responsibility of caring for any other person.  The Court looks at the duration of the de facto relationship and the extent to which it has affected the earning capacity of a party.  In this case, the Applicant’s evidence is that the relationship was in operation between February 2007 and August 2014, approximately seven years and six months. 

3. Should there be any adjustment under the provisions of subsection 90SF(3), in my view, there should, and there should be an adjustment in favour of the Respondent. It has long been said that the most significant asset that a party can take out of a marriage or a relationship is an earning capacity, and the Applicant takes his earning capacity as a (occupation omitted) out of the relationship. It is anticipated that in the years to come, he will continue to earn at a greater rate than the Respondent. In my view, that is a matter that needs to be taken into account, and there should be an adjustment of 10 per cent in favour of the Respondent.

Just and equitable

1. Once again, the Court must consider whether the proposed orders are just and equitable.  The Applicant will receive 60 per cent of the net asset pool, and the Respondent will receive 40 per cent.  The Applicant will retain his superannuation intact.  The proposed orders will not affect his earning capacity.  The proposed orders will not affect the Respondent’s earning capacity.  I am satisfied that the proposed orders are just and equitable, and I propose to make the orders as sought.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Associate: 

Date:  19 June 2015