Scarlett & Scarlett

[2007] FamCA 76

FAMILY COURT OF AUSTRALIA

SCARLETT & SCARLETT [2007] FamCA 76

FAMILY LAW - PROPERTY – Application for consent property orders - Both parties appeared in person, the orders having been previously refused by the Registrar -   Following a full consideration, the orders were made.

s 79(4); s 75(2) Family Law Act 1975 (as amended)

APPLICANT: Mr Scarlett

RESPONDENT: Mrs Scarlett

FILE NUMBER: DGF 940 of 2006

DATE DELIVERED: 17 January 2007

PLACE DELIVERED: Melbourne

JUDGMENT OF: Guest J

HEARING DATE: 17 January 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: In person

SOLICITOR FOR THE APPLICANT: Lyttletons

COUNSEL FOR THE RESPONDENT: In person

SOLICITOR FOR THE RESPONDENT:

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: DGF 940  of 2006

Mr Scarlett

Applicant

And

Mrs Scarlett

Respondent

REASONS FOR JUDGMENT

1. The proceedings before me concern an application for consent property orders wherein Mr Scarlett (“the husband”) is applicant and Mrs Scarlett (“the wife”) is respondent.  That application was filed on 14 November 2006.  It is a most helpful document for it sets out all the formal particulars relating to the background and their financial situation.  I have carefully read that document and, together with the helpful explanation provided by both the husband and the wife, I am familiar with their overall financial position. 

2. Both the husband and the wife presented in court with consummate courtesy.  I am further satisfied that they both understand the effect and ramifications of the orders they have sought this day.  Their application for consent orders sets out in detail the income, child support, property and liabilities of the parties, disclosing their total net worth.  It also sets out their respective superannuation benefits.  I am satisfied that both the husband and the wife are fully apprised of all relevant facts and join together in the making of these orders. 

3. In considering whether or not I should make the orders sought, I have a broad discretion tempered by the requirement that the orders are just and equitable in the circumstances of the case.  In undertaking that task, I make it clear that I am required to take into account the provisions of section 79 and section 75(2) of the Family Law Act 1975 (as amended).

4. The legislation provides me with a discretionary power to adjust the property interests of the parties in such a manner as would do justice and equity between them.  The discretion I have is an extensive one.  The parties have sought the orders be made by consent.  That does not rob me of my discretion, for I have an obligation to ensure that the orders are just and equitable, notwithstanding that they are to be made in this manner. 

5. In exercising that discretion I am not obliged to adopt an excessively mathematical approach in considering contributions, but rather a broad estimate of contributions and otherwise the prospective adjustments pursuant to section 75(2) of the Act.  That is, my task is a matter of authoritative and informed judgment, not an exact computation. 

6. There are three clear steps that I must take into account.  The first is that I am required to identify the property of the parties.  That requirement is satisfied by the Form 11 Application for Consent Orders.  Secondly, I am obliged to make an evaluation of contributions made by the parties under the mandates of the relevant sections of the Act itself.  That is not a task I need undertake in this particular case, given that the parties have come to an arrangement which, on the percentage differential, favours the wife as she is and will remain, as matters presently stand, the primary care-giver to the two children.  It is agreed that the husband shall spend substantial time with them.

7. The parties have, it appears to me, a cooperative and trusting relationship.  The evidence of the cooperation and trust within the ambit of their relationship is evident by the terms of the Consent Orders sought to be made by the court.  I also take into account that I am obliged to consider prospective adjustments pursuant to section 75(2) of the Act.  Such adjustments have been described as “the centre of gravity” of most property cases.  However, that is a provision that is generally considered with some scrutiny when proceedings are contested before the court.  In this matter, I am satisfied from the overall adjustment that the parties have taken account of the provisions of that section.  Such is plainly evident from the Minute of the Orders itself.

8. The proposed orders include provisions concerning the superannuation interests of the husband with A Superannuation Scheme.  I am satisfied that the trustee of that scheme has had brought to his attention the terms of the order sought.  I am so satisfied by reason of a letter dated 28 September 2006 to Lyttletons Solicitors who drew the consent orders and the Agreed Statement of Facts.  The Members Services signatory to the letter required a change to the Consent Orders as presented to them.  That change has been made. 

9. This matter formerly came before the Family Court Registrar in November 2006 who wrote the parties a letter on 1 December 2006 advising that their Application for Consent Orders pursuant to the Form 11 had not been made out.  Accordingly, the matter was listed to be brought before the Judicial Duty List this day.  It was said by the author to the letter that the purpose of the listing was to enable the parties to address me as to “the appropriateness of the proposed consent orders”.  This they have done, and I am satisfied that it is appropriate to make orders.

10. The Registrar in the letter expressed concern that the orders provided for an “ongoing financial relationship” as directors and shareholders of Scarlett Pty Ltd, which the author said was, "contrary to section 81 of the Family Law Act 1975". I disagree with the Registrar's interpretation of that particular section of the Act which simply provides that, wherever it is practicable to do so, the parties sever their financial relationship.  It is not a mandatory requirement, but an obviously practical step to take in most circumstances. 

11. It seems to me that the parties have run a tight line in their investment company which has ultimately proven quite successful.  They have, together, operated upon a commercial strategy that has worked and are to be congratulated.  I do not see the remaining “connection” between them as directors and shareholders of Scarlett Pty Ltd as being contrary to s 81 of the Act.  They at all times have responsibilities, duties and obligations pursuant to the Corporations Act 2001 as directors and equal shareholders of that company.

12. Both the husband and the wife have a clear understanding of the operations of that company.  They have a future designed to ensure the eradication of debt, all things working to plan of course, and to secure their own respective financial situation.  The reference to the liability in favour of P Pty Ltd of D & Scarlett Pty Ltd in the sum of $390,000 bears part of the orders to be made by the court and well understood by the parties.  I understand the caution expressed by the Registrar and in my view he did act wisely in referring the matter to me for my consideration. 

13. I also have before me an Agreed Statement of Facts prepared and forwarded to the court by Lyttletons, the solicitors to whom I have earlier referred.  In the course of the letter, the following is stated by them:

    “We confirm that the writer has on a number of occasions urged [the wife] to seek independent legal advice.  Nevertheless, she has made it quite clear that she had no intention of incurring legal costs as she is more than happy with the proposals and wishes the orders in their current form to be made by the court.  It is apparent to the writer that she is a woman of some intelligence and quite clearly wishes the orders to be approved by the court.”

14. The wife has adopted a commercially‑strategic course consistent with her knowledge of the surrounding facts and both she and the husband are able, by their own cooperative actions, to adjust the financial differences between themselves in the manner that they have.  They are both to be congratulated in achieving this result, which demonstrates cooperation and trust between the two of them.  Ultimately that spills over to their joint nurture of their two children.  I agree with the writer of the letter that the wife is a “woman of intelligence”, as is the husband. 

15. I need not recite in detail the Statement of Facts, save to say, by way of formality, that the husband is 36 years of age, being born in New Zealand in July 1970.  The wife is also 36 years of age and is about to celebrate her 37th birthday very soon.  They commenced cohabitation in 1995 and married in January 1998.  They separated in January 2006.  Theirs is a union of some 11 years.  There are two children of the union, namely P, born in October 2003, and H, born in January 2006.

16. The Agreed Statement of Facts sets out the initial contributions of the parties in paragraph 5.  The obligation that the husband has to the wife by way of child support is set out in paragraph 6.  There is an explanation in the agreed statement concerning Scarlett Pty Ltd, which I hasten to say is not a shelf company, but is an income‑earning venture and trading as such. I note that given the reasonably young age of the children the wife is currently not working and the husband intends to help out with the children as much as he can and not necessarily restrict himself to payment of assessed child support.

17. The statement of facts also records that the husband contributed to his superannuation scheme with A for approximately 12 years prior to cohabitation and for a further eight years during cohabitation.  It records, importantly, that the wife is aware of her right to obtain separate legal advice and has been urged to do so, but nonetheless has chosen not to seek such advice.  Paragraph 11 sets out the effect of the orders, which is reflected in the Form 11 Application Consent Orders.  The parties are both in good health, as are the children of the marriage.  

18. I have been through the Minute of Consent Orders, which I mark Exhibit "A".  I am satisfied the orders are just and equitable.  I propose to make orders in terms of Exhibit “A”.  I will direct that the letter from A to Lyttletons dated 28 September 2006 remain on the court file.  It is obvious that the letter from Lyttletons to the Registrar dated 29 November 2006, to which I have already referred, will also remain on the file.  I will further that the Agreed Statement of Facts remain on the court file, and direct that Lyttletons engross the court orders, as amended in discussion with myself.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Guest.

Associate: 

Date:  19 February 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as SCARLETT & SCARLETT