FEDERAL CIRCUIT COURT OF AUSTRALIA
| SHEARER & DEFAZIO | [2013] FCCA 1596 |
| Catchwords: FAMILY LAW – Property – Husband admitted to nursing home – wife remained living in matrimonial home registered in her sole name – Husband through his granddaughter acting as his Litigation Guardian initiated proceedings purporting to seek alteration of property interests – Husband dies before final orders made – Application by granddaughter to be substituted for Husband pursuant to s.79(8)(b) of Family Law Act – Application by Wife for summary dismissal of whole proceedings. |
| Legislation: Federal Circuit Court Act 1999, s.17A |
| Stanford and Stanford [2012] HCA 52; (2012) 247 CLR 108; 47 Fam LR 481; [2012] FLC 93-518 Fisher v Fisher (No.2) (1986) 161 CLR 438 Whitehouse [2009] FamCAFC 207; (2009) 42 Fam LR 319 Latorre v Maddock (2012) 47 Fam LR 206 George (a bankrupt) v Fletcher (trustee) [2010] FCAFC 53 Spencer v Commonwealth of Australia (2010) 241 CLR 118 In the Marriage of Pavey (1976) 1 Fam LR 11,358 Hepworth v Hepworth (1963) 110 CLR 309 |
| Applicant: | MS SHEARER (ON BEHALF OF MR DEFAZIO (DECEASED)) |
| Respondent: | MS DEFAZIO |
| File Number: | BRC 9410 of 2012 |
| Judgment of: | Judge Lapthorn |
| Hearing date: | 29 May 2013 |
| Date of Last Submission: | 29 May 2013 |
| Delivered at: | Brisbane |
| Delivered on: | 11 October 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Hamwood |
| Solicitors for the Applicant: | Crowley Greenhalgh Solicitors |
| Counsel for the Respondent: | Mr Green |
| Solicitors for the Respondent: | Littles Lawyers |
ORDERS
That pursuant to S.17A(2) of the Federal Circuit Court Act 1999 the Initiating Application filed 17 October 2012 be summarily dismissed;
That pursuant to S.17A(2) of the Federal Circuit Court Act 1999 the Application in a Case filed 21 February 2013 be summarily dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Shearer & Defazio is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRC 9410 of 2012
| MS SHEARER (ON BEHALF OF MR DEFAZIO (DECEASED)) |
Applicant
And
| MS DEFAZIO |
Respondent
REASONS FOR JUDGMENT
Introduction
Ms Shearer, the granddaughter of Mr Defazio who died on 13 November 2012 filed an application on his behalf on 17 October 2012. This application was drafted in very broad terms. During the course of the hearing I was called upon to decide if those terms were sufficient to establish a valid application under the Family Law Act 1975 (Cth). Mr Defazio’s wife who is the Respondent in these proceedings argued that the application should be summarily dismissed. Ms Shearer sought an order that she be substituted as the applicant in light of Mr Defazio’s death.
Applications
In the Initiating Application (Family Law) filed 17 October 2012 final orders were sought in the following terms:
1. That the parties interests in the joint asset pool be quantified after the disclosure…
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- SHEARER & DEFAZIO [2013] FCCA 1596
- Case
- [2013] FCCA 1596
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the Court was whether it was just and equitable to alter the property interests of the estate of Mr Defazio and Ms Defazio. This required the Court to consider the principles governing property settlement orders under the relevant Act, particularly in circumstances where the separation of the parties was not voluntary.
The Court reasoned that the determination of whether it is just and equitable to alter property interests must be distinguished from the evaluation of contributions under s 79(4) of the Act. The Court emphasised that a principled reason is required to interfere with existing legal and equitable interests. In cases of involuntary separation, the mere fact of separation does not automatically demonstrate a reason to alter property interests, especially if common use of assets continues or if the competent party is able to make necessary adjustments. The Court noted that the magistrate had erred in not considering the consequences for the husband if a property settlement order were made as sought, particularly given the wife's needs were being met and the husband's continued residence in the matrimonial home.
The Court ordered that the Initiating Application filed on 17 October 2012 and the Application in a Case filed on 21 February 2013 be summarily dismissed pursuant to s 17A(2) of the Federal Circuit Court Act 1999.
Orders
Orders of the court
1.
That pursuant to S.17A(2) of the Federal Circuit Court Act 1999 the Initiating Application filed 17 October 2012 be summarily dismissed;
2.
That pursuant to S.17A(2) of the Federal Circuit Court Act 1999 the Application in a Case filed 21 February 2013 be summarily dismissed.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Therefore it is important in determining whether it is just and equitable to alter the property interests of Mr Defazio’s estate and/or Ms Defazio that care be taken not to conflate that task with the evaluation of contributions under s.79(4). Again the decision of the plurality is of assistance in understanding the just and equitable requirement:[41] Adherence to these fundamental propositions in exercising the power in s 79 gives due recognition to “the need to preserve and protect the institution of marriage” identified in s 43(1)(a) as a principle to be applied by courts in exercising jurisdiction under the Act. If the parties have made a financial agreement about the property of one or both of the parties that is binding under Pt VIIIA of the Act, then, subject to that Part, a court cannon make a property settlement order under s 79. But if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Pt VIIIA, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact. And if the parties to a marriage have not expressly considered whether or to what extent there is or should be some different arrangement of their property interests in their individual or commonly held assets while the marriage continues, the application of these principles again accommodates that fact. These principles do so by recognising the force of the stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.[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).[43] By contrast, the bare fact of separation, when involuntary, does not show that it is just and equitable to make a property settlement order. It does not permit a court to disregard the rights and interests of the parties in their respective property and to make whatever order may seem to it to be fair and just.[44] When, as in this case, the separation of the parties is not voluntary, the bare fact of separation does not demonstrate that the husband and wife have any reason to alter the property interests that lie behind whatever common use they may have made of assets when they were able to and did live together. Common use of some assets may very well continue, as it did here when the husband made provision for the wife's care and accommodation. Past arrangements that the parties have made about their property interests on the assumption, expressed or implicit, that those arrangements were sufficient and appropriate during the continuance of their marriage are not necessarily falsified. If both parties are competent, it can still be assumed that any necessary or desirable adjustment can be made to their property interests consensually. And if one of the parties has become incompetent it is not to be assumed that the other party lacks the will and ability to make those necessary or desirable adjustments.[45] Contrary to the submissions of the husband in this Court, there may be circumstances other than a voluntary separation of the parties marking the breakdown of their marital relationship in which a court may be satisfied that it is just and equitable to make a property settlement order. For example, demonstration of one party's unmet needs that cannot be answered by a maintenance order may well warrant the conclusion that it is just and equitable to make a property settlement order. It may be that there are circumstances other than need. [46] As has already been emphasised, nothing in these reasons should be understood as attempting to chart the metes and bounds of what is "just and equitable". Nor is anything that is said in these reasons intended to deny the importance of considering any countervailing factors which may bear upon what, in all the circumstances of the particular case, is just and equitable. In particular, as the Full Court pointed out in its first judgment in this matter, the magistrate erred in not taking account of the consequences that would follow for the husband if a property settlement order were to be made in the terms which were sought on behalf of the wife. The husband would be required to sell the matrimonial home, in which he was still living, despite the needs of his wife then being met by the provision of full time care, a further provision of money against future contingencies and the possibility, if needed, of making a maintenance order.[11] [11] Emphasis added and references removed