Siskatos & Zervides
[2022] FedCFamC2F 1501
Federal Circuit and Family Court of Australia
(DIVISION 2)
Siskatos & Zervides [2022] FedCFamC2F 1501
File number(s): MLC 2106 of 2022 Judgment of: JUDGE O'SHANNESSY Date of judgment: 21 September 2022 Catchwords: FAMILY LAW – property alteration orders – leave to proceed with property alteration application out of time – undefended hearing – where the respondent has had the opportunity to participate but has not – orders for the sale of a property – negative contributions where a property has been left in a real mess – costs. . Legislation: Family Law Act 1975 (Cth) ss 44, 79, 90SF, 90SM, 106A, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021, rr 10.26, 10.27, 15.19
Cases cited: Hickey and Hickey and the Attorney-General [2003] FamCA 395; (2003) FLC 93-143
Keskin & Keskin and Anor [2019] FamCAFC 236; (2019) FLC 93-932.
Kowaliw and Kowaliw (1981) FLC 91-092
Stanford v Stanford [2012] HCA 52; (2012) FLC 93-518
Division: Division 2 Family Law Number of paragraphs: 43 Date of hearing: 21 September 2022 Place: Melbourne Counsel for the Applicant: Mr C. Dunlop Solicitor for the Applicant: AFL Kordos Lawyers Solicitor for the Respondent: No appearance ORDERS
MLC 2106 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS SISKATOS
Applicant
AND: MR ZERVIDES
Respondent
order made by:
JUDGE O'SHANNESSY
DATE OF ORDER:
21 SEPTEMBER 2022
THE COURT ORDERS THAT:
1.The applicant have leave to proceed with her application for property alteration out of time pursuant to s.44(6) of the Family Law Act1975.
2.That each of the parties forthwith do all acts and things and sign all necessary documents to effect a sale of the real property known as and situate at B Street, Suburb C (“the real property”) and by way of consequential arrangement:
(a)Subject to paragraph 2 (f) of these orders, the sale be by private treaty;
(b)the Applicant have the conduct of the sale of the real property, and keep the Respondent advised by text message of offers received;
(c)the selling agent for the sale be as nominated by the Applicant, and each of the parties shall forthwith sign an authority to engage the selling agent nominated by the Applicant;
(d)the listing price be as determined by the selling agent, in consultation with the Applicant;
(e)the conveyancer be as nominated by the Applicant;
(f)in the event that the real property has not been sold by or before a date three (3) months from the date of these orders, then each of the parties make all such arrangements and do all such acts and things and sign all such documents necessary to procure a sale by public auction of the real property upon the following terms:
(i)the auctioneer be as nominated by the selling agent.
(ii)the auction take place within 3 months after the deadline date for sale by private treaty.
(iii)the reserve price, unless agreed upon the parties, be as proposed by the auctioneer.
(g)In the event that the real property is not sold by auction or by private negotiation within fourteen (14) days after the said auction, then each of the parties do all such acts and sign all necessary documents necessary to procure a second auction within a further five (5) weeks of that date with the Applicant to pay 60% and the Respondent to pay 40% (with the Applicant to pay the Respondent’s part in the first instance) of all moneys necessary for that arrangement and otherwise upon the same terms and conditions as apply to the first auction.
3.On completion of the sale of the real property pursuant to paragraph 2 of these orders, the proceeds of the sale be applied as follows:
(a)to pay all costs, commissions and expenses of the sale;
(b)to discharge the mortgage and any other encumbrances affecting the real property;
(c)the balance remaining to be divided in the proportions of:
(i)40% to the Respondent with the following adjustments:
A.Plus the sum of $6,180 (40% of the assets);
B.Minus the sum of $11,000 (costs) on account of Order 10 below; and
C.Plus any reimbursements pursuant to Order 3(d) below.
(ii)The balance thereof to the Applicant.
(d)if either party pays any necessary auction, cleaning, property maintenance, property repair expenses, insurance or rates expenses for the real property, then that party be reimbursed for those expenses from the other party’s entitlement under (c) above;
4.The net proceeds payable to the Respondent pursuant to Order 3(c) above shall be held on trust for the Respondent by AFL Kordos until such time as the Respondent provides to AFL Kordos a written authority for the release and direction of the monies signed by him together with proof of identity as deemed appropriate by AFL Kordos.
5.That pending completion of the sale of the real property:
(a)the parties hold their respective interest in the real property upon trust pursuant to these orders.
(b)neither party encumber or further encumber the real property without the consent in writing of the other party.
6.That each party sign all documents and do all acts and things needed to close any joint bank accounts and for the funds in any joint bank accounts to be divided equally.
7.That unless otherwise specified in these Orders:
(a)Each party shall be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such parties at the date of the making of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s records thereof, insurance policies are deemed to be in the possession of the party named as the life insured, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlement and the chattels in the real property are deemed to be in the possession of the Applicant.
(b)Each party shall 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.
8.That both parties shall do all acts and things and sign all documents necessary to give effect to these Orders.
9.That if either party refuses or neglects to sign, within 7 days of a written request to do so, any documents necessary to effect the terms of these orders, Mr Steven Edward Solicitor is and be hereby appointed pursuant to the provisions of Section 106A of the Family Law Act 1975 (Cth) to execute such documents or instruments on behalf of such party, including any necessary PEXA or Victorian conveyancing authority required by the conveyancer appointed for the sale of the real property.
10.The Respondent contribute to the costs incurred by the Applicant in relation to this proceeding fixed in the sum of $11,000 with such costs to be paid upon the completion of the sale of the real from the Respondent’s entitlement pursuant to Order 3(c)(1)(b) hereof.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Siskatos & Zervides has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
JUDGE O’SHANNESSY
These are the settled reasons of an ex tempore judgment in an undefended case. The transcript of orders and reasons has been “settled” for grammar and repetition and passages from precedent cases referred to orally but not read out, have been inserted.
The Applicant de facto Wife (‘the Wife’) is aged 43 and employed in the finance industry. The Respondent de facto Husband (‘the Husband’) is aged 38 and on the information available to the Wife is unemployed.
The parties commenced cohabitation in 2009 and on 1 December 2009 they became the joint proprietors of land and a dwelling (‘the property’). The relationship broke down on or about May 2017. Since then, the Wife, until a point some years subsequent to separation or the end of the relationship, but prior to issuing proceedings, attended to payment of the mortgage secured on the property.
The Wife issued proceedings on 22 March 2022, seeking leave to proceed out of time in regard to the application for property relief that she sought under section 44(6) of the Family Law Act 1975 (‘the Act’). For the application for property relief to have been filed within the standard period under section 44(5) of the Act, it needed to have been filed on or before the end of May 2019.
The history of the matter coming before me in the settled reasons will be set out by inserting the transcript of Mr Dunlop's submissions today, given the care and detail of that submission, and I will not repeat those matters.
Counsel for the Applicant today made the following submissions:
MR DUNLOP: Your Honour, this is an application that was commenced by way of an initiating application filed on 2 March 2022. Your Honour, that initiating application contained unparticularised final orders, but importantly contained an application pursuant to section 44(6) of the Act which is the out of time application. And ultimately, on a final order, sought that the net proceeds of sale of the only real property, being [the property], be divided on a 60-40 basis. The interim orders filled in the gaps, to use the colloquial, in relation to the sale provisions of [the property].
Ultimately, that application has now been amended and it’s an application that I rely upon and I ask your Honour to read, that now includes the sale … with the distribution flowing upon the settlement of that sale. The application first came before Judicial Registrar T on 4 April 2022. There had been an affidavit filed on 22 March 2022 by Mr K, who is a process server. He deposes to having been instructed on 7 March 2022 to serve the initiating process upon the respondent … at his last known address being [address].
He attempted service by way of personal service on three occasions, the 10th, the 13th and 15 March this year. He was unable to serve.
Your Honour, my client, in support of the issue concerning his last known address, swore an affidavit on 24 March 2022 and she deposed to her knowledge of his last known address being the [S address]. She was advised on 16 March by her lawyer, by my instructor, who had been told by Mr K that service hadn’t been affected, and she goes into details in relation to her knowledge of the respondent, keeping in mind the history of the matter insofar as the separation date and the fact that the parties had been now physically separated for a little over – for about three years.
HIS HONOUR: Yes. Sorry, could I just ask a question there. So what did she say about how she knows that’s where he was living? Or does she say, “I’ve only got a rough idea”?
MR DUNLOP: No. She gives the specific address, but the source of that knowledge is not deposed to, your Honour. But she says at paragraph 6, as far as she knows, he has no – she is not aware of him working, and she has no contact with family or friends and she doesn’t have an email address known. What she was advised by the respondent on 17 March 2022 was to use his old mobile number which is a mobile number – and I’ll just use the ending – of 72. 2, for that affidavit, is a text message which details– how she was advised.
Orders were made on 4 April (which is that first return date), having regard to the affidavit and the material from [Mr K] and my client, and those orders, your Honour ... included an adjournment to 30 May. So it was about a six week adjournment. And that was for a .... procedural hearing. Order number 1A had the telephone [numbers].... and order number 2 required the respondent to appear and/or be legally represented on the adjourned date. Order number 3 dealt with the issue of service. It’s highlighted by Mr K and my client, insofar as dispensing with further service of the application on condition that my client, on or before 11 April 2022, send an SMS to both numbers provided by and used by the respondent included in the order.
The respondent was required by order number 4 to file and serve a response and associated documents by 16 May 2022 which would be about two weeks prior to that adjourned date that was given by Judicial Registrar T. And my client was required to file an affidavit of compliance prior to the adjourned date in relation to service. That was order number 5, that last order I made mention of, your Honour. Pursuant to that order, my instructor, Mr E, swore an affidavit, and he ultimately deposed to the fact that he was unable to carry out the requirements of that order because on each known telephone number, he was either disconnected or he had a receipt message saying it wasn’t delivered.
Those attempts were made on 6 April 2022, so prior to the deadline provided for by order 3 of those orders from Judicial Registrar T. There is a second affidavit filed in relation to this issue, an affidavit deposed by Ms S, who is a solicitor in the employ at my instructor’s office. That was filed on 11 May 2022.
And Ms S deposes to the fact that on 11 April 2022, she had messaged the number that was provided in the orders, the number ending #..., with a link to a Dropbox folder containing the documents required to be served. In response, Ms S received three text messages, and this is deposed in Ms S’s affidavit.
…
There were three – there were three received, and Ms S deposes to this at paragraph 4 of her affidavit.
…
“Sorry. I have been told not to respond as there is an intervention order.”
The second message states:
“Have been in and out of hospital from a serious heart attack. I have been told I do not have very long before I pass. I think this is not – I think this is now approaching harassment.”
And the third message reads:
“I’m being represented by Legal Aid.”
Ms S then deposes at paragraph-
HIS HONOUR: And what are the dates of those messages?
…
MR DUNLOP: Yes, they’re all 11 April.
…
MR DUNLOP: Paragraph 6, Ms S deposes to having then telephoned Legal Aid on 10 May 2022, and having a discussion with Legal Aid and ..... informed by Legal Aid or from Legal Aid that there is an open file ..... However, it’s a criminal file.
…
Your Honour, the matter then returned to court on 30 May.
…
And in my respectful submission, the requirements pursuant to those orders made 30 May had been met by my instructor and my client in relation to service. And ultimately on 30 May, Judicial Registrar T conducted a telephone hearing and she adjourned the matter for a further procedural hearing on 17 August 2022. And your Honour, this is the time order number 2 provided that the matter was listed for a possible undefended hearing before your Honour on 21 September 2022.
…
So 30 May, your Honour, had two listings. Adjourned till 17 August for a procedural telephone hearing, and then listed for a possible undefended hearing today. Order number 4 of those orders required my client to serve by SMS a copy of the order, details of the next court date, and a screenshot of the order – of the orders which displayed the login details.
Your Honour, in a moment, I’m going to take your Honour to an affidavit sworn by my instructor, Mr Steven Edwards, on 10 August 2022 which deposes to ..... in relation to paragraph 4 of that order. We then have order number 5 … That required the respondent, again, to file and serve a response and response material by 15 July 2022.
…
Your Honour, can I say this. As an overall proposition, I’ll ultimately submit to your Honour that [the Husband] is pretty “head in the sand.”
HIS HONOUR: Yes. No, I think I can see that. But I think I can comfortably find on the balance of probabilities that it was [the Husband] that sent those three text messages on 11 April when he was aware of (1), the proceedings and (2), how to access the documents if he chose.
MR DUNLOP: Yes. And your Honour, on that point, there’s a clincher to that point that I’ll take your Honour to in a moment … and that comes in the crescendo of the August hearing where-
…
So we have then, your Honour, I think I dealt with paragraph 5 from 30 May. We’ve got then paragraph 6 which required my client to, by 1 August, file and serve by ..... an amended initiating application, affidavit and form 13. And that’s where she does particularise her final orders. She puts on her material in relation to an overall adjustment and material in relation to the out of time application. And they were filed on 28 July 2022, those documents. And order 7 required my client to put on an affidavit of compliance by the adjourned date in terms of order number 4 and 6 which is the SMS of the order, and … filing and service of her trial material. There was a notation to that order, a usual notation, if I can say that, in relation to failure to comply.
…
We then – I also then rely on an affidavit by my instructor – so this is the third affidavit by Mr E – filed 10 August 2022. And that’s an affidavit that is deposed in compliance, and detail in compliance with order 4 of the May orders. And order 4, your Honour, just to bring you back to that, was that we were required to serve by SMS a copy of the order, details of the next court date, and a screenshot of the orders which display the ..... detail. So we then move forward, your Honour, to 17 August 2022.
…
There’s certainly some detail to the service issue, your Honour.
HIS HONOUR: Yes. An undefended hearing is not necessarily easier than the defended one.
…
MR DUNLOP: So at court on 17 August 2022. This is the third court date again, before Judicial Registrar T. Orders were made confirming the matter remain listed for … So on 17 August 2022, it’s a telephone procedural hearing. Via Teams, sorry, I apologise. He telephoned in, I’m instructed. On that occasion, notation A records that… the respondent was removed from the hearing.
…
So notation A –
HIS HONOUR: Putting aside the profanities, what was the substance of what [the Husband] was trying to say other than that he was cross?
MR DUNLOP: I don’t think it got to that point, your Honour. I’m instructed that my instructor, Mr E, was making submissions to Judicial Registrar T. The respondent managed to come online. He did so via the telephone. Told everyone to F off, and otherwise didn’t delve into any of the detail –
…
But he listened briefly … and then told everyone where to go.
HIS HONOUR: And apart from telling everyone where to go, and that’s a euphemism for more vulgar speech of the same substance, and hence the implicit acknowledgment that he had notice of the proceedings, in substance, could we tell what else he disagreed with other than everything possibly?
MR DUNLOP: No. Nothing. He – there – it was a short appearance on his behalf, and one where he just – he just told everyone –
HIS HONOUR: So he actually used the words, “to fuck off”.
MR DUNLOP: Yes, twice. Told everyone to fuck off, twice.
HIS HONOUR: All right. Okay. Yes. Thank you. That’s 17 August during the hearing, and then following that, we then have the orders that are made.
…
MR DUNLOP: … it’s effectively a belt, braces and packing tape approach where Mr E deposes to sending the respondent an SMS copy of the court’s email which was ..... dated 8 September 2022 with the listing details for today and the practitioner guide as well.
…
So your Honour, that is the history and the order in a very long way around it.
…
PROCEED UNDEFENDED?
The first matter I must determine is whether it is appropriate to proceed undefended. I am determining that now before I return to the issues of leave out of time and/or property settlement if leave is granted.
The evidence recited above, as outlined with some care by Mr Dunlop, satisfies me that the Husband is aware of the proceedings and has had every opportunity to participate in the proceedings, and has either chosen not to participate or has been unable to. I am satisfied that the Husband has had the benefit not only of the opportunity to participate in the proceedings by filing of documents on at least two occasions, but he has been ordered by the Court to file documents in response to the Wife's allegations on two occasions.
The relevant legislation is contained within the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
Rule 10.26 When a party is in default
…
2. For the purposes of rule 10.27, a respondent is in default if the respondent fails to:
(a)give an address for service before the time for the respondent to give an address has expired; or
(b)file a response before the time for the respondent to file a response has expired; or
(c)comply with an order of the court in the proceeding; or
(d)file and serve a document required under these Rules; or
(e)produce a document as required by Division 6.2.2; or
(f)do any act required to be done by these Rules; or
(g)defend the proceeding with due diligence; or
(h)prosecute with due diligence any application the respondent has made in the proceeding.
Rule 10.27 Orders on default
…
2. If a respondent is in default, the court may:
(a)order that a step in the proceeding be taken within the time limited in the order; or
(b)give judgment or make any other order against the respondent; or
(c)make an order referred to in paragraph (b) to take effect if the respondent does not take a step ordered by the court in the proceeding in the time limited in the order.
(Emphasis added)
The court may make an order of the kind referred to in subrule (1) or (2), or any other order, or may give any directions, and specify any consequences for non-compliance with the order, that the court thinks just.
Rule 15.19 Failure to attend a court event
1. If a party to a proceeding is absent from a court event (including a first court date), the court may do one or more of the following:
…
(g)proceed with the hearing generally or in relation to any claim for relief in the proceeding.
2. If a party to a proceeding is absent from a court event, the court may also make an order of the kind referred to in subrule 10.27(1) or (2) (orders on default), or any other order, or may give any directions, and specify any consequences for non-compliance with the order, that the court thinks just.
I am satisfied that the Husband is in default of a court order and that it is appropriate to proceed on an undefended basis.
I would further say that the efforts of the Wife, her solicitor and the Court to bring the proceedings to the Husband's attention and to give him opportunities to participate can only be described as bending over backwards. Again and again, attempts have been made to attempt to have the Husband engage in the proceedings, for the sole purpose of the Husband putting before the court his side of the story in the event that he chose to do that.
The matters which Mr E and Ms S have undertaken, by way of both service and then careful evidence of that service, is a textbook example to practitioners of how to proceed in the face of a difficult respondent, and how to have appropriate evidence before the court of those matters. I am quite satisfied that not only is it appropriate to proceed undefended, but the interests of justice and the administration of justice compel me to that point.
Applicable law
The oral reasons referred to but did not recite the relevant legislative provisions of the Act. These are now recited here and are as follows:
Section 44 Institution of proceedings
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5.Subject to subsection (6), a party to a de facto relationship may apply for an order under section 90SE, 90SG or 90SM, or a declaration under section 90SL, only if:
(a)the application is made within the period (the standard application period ) of:
(i) 2 years after the end of the de facto relationship; or
(ii)12 months after a financial agreement between the parties to the de facto relationship was set aside, or found to be invalid, as the case may be; or
(b) both parties to the de facto relationship consent to the application.
…
6.The court may grant the party leave to apply after the end of the standard application period if the court is satisfied that:
(a)hardship would be caused to the party or a child if leave were not granted; or
(b)In the case of an application for an order for the maintenance of the party--the party's circumstances were, at the end of the standard application period, such that he or she would have been unable to support himself or herself without an income tested pension, allowance or benefit.
Section 90SM Alteration to property interests
1.In property settlement proceedings after the breakdown of a de facto relationship, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the de facto relationship or either of them--altering the interests of the parties to the de facto relationship in the property; or
(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the de facto relationship--altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c) an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the de facto relationship; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the de facto relationship or a child of the de facto relationship, such settlement or transfer of property as the court determines.
Note 1: The geographical requirement in section 90SK must be satisfied.
Note 2: The court must be satisfied of at least one of the matters in section 90SB.
Note 3: For child of a de facto relationship , see section 90RB.
2.If a party to the de facto relationship dies after the breakdown of the de facto relationship, an order made under subsection (1) in property settlement proceedings may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
3.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.
4.In considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) 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 de facto relationship 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 de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) 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 de facto relationship or either of them; and
(c)the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, 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 de facto relationship; and
(e)the matters referred to in subsection 90SF(3) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.
5.Without limiting the power of any court to grant an adjournment in proceedings under this Act, if, in property settlement proceedings in relation to the parties to a de facto relationship, a court is of the opinion:
(a)that there is likely to be a significant change in the financial circumstances of the parties to the de facto relationship or either of them and that, having regard to the time when that change is likely to take place, it is reasonable to adjourn the proceedings; and
(b) that an order that the court could make with respect to:
(i)the property of the parties to the de facto relationship or either of them; or
(ii)the vested bankruptcy property in relation to a bankrupt de facto party to the de facto relationship;
if that significant change in financial circumstances occurs is more likely to do justice as between the parties to the de facto relationship than an order that the court could make immediately with respect to:
(iii)the property of the parties to the de facto relationship or either of them; or
(iv)the vested bankruptcy property in relation to a bankrupt party to the de facto relationship;
the court may, if so requested by either party to the de facto relationship or the relevant bankruptcy trustee (if any), adjourn the proceedings until such time, before the expiration of a period specified by the court, as that party to the de facto relationship or the relevant bankruptcy trustee, as the case may be, applies for the proceedings to be determined, but nothing in this subsection requires the court to adjourn any proceedings in any particular circumstances.
6.If a court proposes to adjourn proceedings as provided by subsection (5), the court may, before so adjourning the proceedings, make such interim order or orders or such other order or orders (if any) as it considers appropriate with respect to:
(a)any of the property of the parties to the de facto relationship or of either of them; or
(b)any of the vested bankruptcy property in relation to a bankrupt party to the de facto relationship.
7.The court may, in forming an opinion for the purposes of subsection (5) as to whether there is likely to be a significant change in the financial circumstances of either or both of the parties to the de facto relationship, have regard to any change in the financial circumstances of a party to the de facto relationship that may occur by reason that the party to the de facto relationship:
(a)is a contributor to a superannuation fund or scheme, or participates in any scheme or arrangement that is in the nature of a superannuation scheme; or
(b)may become entitled to property as the result of the exercise in his or her favour, by the trustee of a discretionary trust, of a power to distribute trust property;
but nothing in this subsection limits the circumstances in which the court may form the opinion that there is likely to be a significant change in the financial circumstances of a party to the de facto relationship.
8.If a party to the de facto relationship dies after the breakdown of the de facto relationship, but before property settlement proceedings are completed:
(a)the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings; and
(b) if the court is of the opinion:
(i)that it would have made an order with respect to property if the deceased party had not died; and
(ii)that it is still appropriate to make an order with respect to property;
the court may make such order as it considers appropriate with respect to:
(iii)any of the property of the parties to the de facto relationship or either of them; or
(iv) any of the vested bankruptcy property in relation to a bankrupt de facto party to the de facto relationship; and
(c)an order made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
9.The Federal Circuit and Family Court of Australia (Division 1) must not make an order under this section in property settlement proceedings (other than an order until further order or an order made with the consent of all the parties to the proceedings) unless:
(a)the parties to the proceedings have attended a conference in relation to the matter to which the proceedings relate with the Chief Executive Officer, or a Senior Registrar or Registrar of the Federal Circuit and Family Court of Australia (Division 1); or
(b)the court is satisfied that, having regard to the need to make an order urgently, or to any other special circumstance, it is appropriate to make the order notwithstanding that the parties to the proceedings have not attended a conference as mentioned in paragraph (a); or
(c)the court is satisfied that it is not practicable to require the parties to the proceedings to attend a conference as mentioned in paragraph (a).
10.The following are entitled to become a party to proceedings in which an application is made for an order under this section by a party to a de facto relationship (the subject de facto relationship ):
(a)a creditor of a party to the proceedings if the creditor may not be able to recover his or her debt if the order were made;
(b) a person:
(i)who is a party to a de facto relationship (the other de facto relationship) with a party to the subject de facto relationship; and
(ii)who could apply, or has an application pending, for an order under section 90SM, or a declaration under section 90SL, in relation to the other de facto relationship;
(c)a person who is a party to a Part VIIIAB financial agreement (that is binding on the person) with a party to the subject de facto relationship;
(d) a person:
(i)who is a party to a marriage with a party to the subject de facto relationship; and
(ii)who could apply, or has an application pending, for an order under section 79, or a declaration under section 78, in relation to the marriage (or void marriage);
(e)a person who is a party to a financial agreement (that is binding on the person) with a party to the subject de facto relationship;
(f)any other person whose interests would be affected by the making of the order.
11. Subsection (10) does not apply to a creditor of a party to the proceedings:
(a)if the party is a bankrupt--to the extent to which the debt is a provable debt (within the meaning of the Bankruptcy Act 1966 ); or
(b)if the party is a debtor subject to a personal insolvency agreement--to the extent to which the debt is covered by the personal insolvency agreement.
12.If a person becomes a party to proceedings under this section because of paragraph (10)(b), the person may, in the proceedings, apply for:
(a) an order under section 90SM; or
(b) a declaration under section 90SL;
in relation to the other de facto relationship described in that paragraph.
13.If a person becomes a party to proceedings under this section because of paragraph (10)(d), the person may, in the proceedings, apply for:
(a) an order under section 79; or
(b) a declaration under section 78;
in relation to the marriage (or void marriage) described in that paragraph.
14. If:
(a)an application is made for an order under this section in proceedings between the parties to a de facto relationship with respect to the property of the parties to the de facto relationship or either of them; and
(b)either of the following subparagraphs apply to a party to the de facto relationship:
(i) when the application was made, the party was a bankrupt;
(ii)after the application was made but before it is finally determined, the party became a bankrupt; and
(c)the bankruptcy trustee applies to the court to be joined as a party to the proceedings; and
(d)the court is satisfied that the interests of the bankrupt's creditors may be affected by the making of an order under this section in the proceedings;
the court must join the bankruptcy trustee as a party to the proceedings.
15.If a bankruptcy trustee is a party to property settlement proceedings in relation to the parties to a de facto relationship, then, except with the leave of the court, the bankrupt party to the de facto relationship is not entitled to make a submission to the court in connection with any vested bankruptcy property in relation to the bankrupt party.
16.The court must not grant leave under subsection (15) unless the court is satisfied that there are exceptional circumstances.
17. If:
(a)an application is made for an order under this section in proceedings between the parties to a de facto relationship with respect to the property of the parties to the de facto relationship or either of them; and
(b)either of the following subparagraphs apply to a party to the de facto relationship (the debtor party ):
(i)when the application was made, the party was a debtor subject to a personal insolvency agreement;
(ii)after the application was made but before it is finally determined, the party becomes a debtor subject to a personal insolvency agreement; and
(c)the trustee of the agreement applies to the court to be joined as a party to the proceedings; and
(d)the court is satisfied that the interests of the debtor party's creditors may be affected by the making of an order under this section in the proceedings;
the court must join the trustee of the agreement as a party to the proceedings.
18.If the trustee of a personal insolvency agreement is a party to property settlement proceedings in relation to the parties to a de facto relationship, then, except with the leave of the court, the party to the de facto relationship who is the debtor subject to the agreement is not entitled to make a submission to the court in connection with any property subject to the agreement.
19.The court must not grant leave under subsection (18) unless the court is satisfied that there are exceptional circumstances.
20.For the purposes of subsections (14) and (17), an application for an order under this section is taken to be finally determined when:
(a) the application is withdrawn or dismissed; or
(b)an order (other than an interim order) is made as a result of the application.
Section 90SF Matters to be taken into consideration in relation to maintenance
1.In exercising jurisdiction under section 90SE (after being satisfied of the matters in subsections 44(5) and (6) and sections 90SB and 90SD), the court must apply the principle that a party to a de facto relationship must maintain the other party to the de facto relationship:
(a)only to the extent that the first-mentioned party is reasonably able to do so; and
(b)only if the second-mentioned party is unable to support himself or herself adequately whether:
(i)by reason of having the care and control of a child of the de facto relationship who has not attained the age of 18 years; or
(ii)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(iii) for any other adequate reason.
Note: For child of a de facto relationship , see section 90RB.
2.In applying this principle, the court must take into account only the matters referred to in subsection (3).
3. The matters to be so taken into account are:
(a)the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship); 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 de facto relationship 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 (4), 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) 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
(i)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 de facto relationship 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 90SM in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(o)the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i)a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii)a person who is a party to another de facto relationship with a party to the subject de facto relationship; 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
(p)the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i) a party to the subject de facto relationship; or
(ii)a person who is a party to a marriage with a party to the subject de facto relationship; 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
(q)any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s)the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t)the terms of any financial agreement that is binding on a party to the subject de facto relationship.
4.In exercising its jurisdiction under section 90SE, a court must disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.
Leave out of time
This passage was not included in the oral reasons but was referred to by inference and so included her for completeness.
The Wife should have leave to bring her property application out of time pursuant to section 44(6) of the Act because she would suffer hardship if not permitted to do so. Her explanation of her delay is that she and the Husband continued to live in the property, but separately, for about two years after separation. Thereafter she delayed as the Husband continued to live there.
The title to the former relationship home is in joint names but contribution is far from equal, and it is likely that on a proper examination of those matters relevant to sections 90SF and 90SM of the Act the Wife will receive more than half of the equity in the property. To not have the opportunity to do so would be hardship to her within section 44(6) of the Act.
Property Division
I will now decide the issue of the property division.
Below is the table of the assets as set out in the Wife’s outline of case, but with some items excluded for the reasons set out below.
Property interest, superannuation and financial resources Description Ownership Applicant’s value Respondent’s value ASSETS 1 The property Joint $600,000 Not known 2 Wife’s savings Applicant $3,700 Not known 3 Shares Applicant $11,693 Not known 6 Respondent’s personal assets Respondent Not known Not known Assets subtotal $615,393 LIABILITIES 7 Mortgage on the property Joint $206,331 Not known Liabilities subtotal $206,331 SUPERANNUATION Name of fund Type of interest Member Applicant’s value Respondent’s value 10 Wife’s Super Accumulation Applicant $214,269 Not known Superannuation subtotal $214,269 Not known TOTAL (assets – liabilities) $409,062 Not known TOTAL (assets – liabilities + superannuation $623,331 Not known FINANCIAL RESOURCES Description Ownership Applicant’s value Respondent’s value 11 Nil NIL Not known 12 Nil NIL Not known Financial resources subtotal NIL Not known Other subtotal NIL Not known TOTAL (assets – liabilities + superannuation + financial resources + other) $623,331 Not known
I am not satisfied that the Wife’s estimate of house contents being $5,000 is accurate or reliable and it is unduly generous to the Husband or harsh to herself. Further, I will not include the liability of a loan from the Wife’s parents for legal costs of $40,000, because that is balanced out by the asset of having those legal costs paid. I will not include the Wife’s motor car of approximately $17,000 because it is encumbered by a personal loan of approximately $17,000.
I am satisfied it is just and equitable to make property adjustment orders in the circumstances where the parties have been the joint owners of the property for a number of years and have had the joint enjoyment of that property.
Stanford v Stanford
In the High Court of Australia case of Stanford v Stanford [2012] HCA 52; (2012) FLC 93-518 ('Stanford') the majority stated some fundamental propositions about section 79 proceedings. Section 90SM(3) mirrors section 79(2) and so Stanford is applicable in this case.
In Stanford the essential issue was whether it was just and equitable to make any property order at all, in circumstances where the consortium vitae or marriage relationship had not broken down by way of a separation. The Family Court of Western Australia had made an order for a property settlement that would have necessitated the sale of the former matrimonial home where the husband continued to reside. For 37 years prior to the wife moving to a nursing home, the parties had made their matrimonial home in a house registered in the husband's name. The wife's expenses in accommodation were being met and she had the benefit of a sum set aside in the event she needed anything further.
In the High Court the husband's argument that there was no power in the circumstances to make a property settlement order was dismissed and the case turned on whether, considering section 79(2), it was just and equitable in to make a property settlement order at all, and whether section 79(8) of the Act, which relates to the continuation of proceedings after the death of the parties, had been complied with.
The High Court varied the order of the Full Court and found that in the circumstances it was not just and equitable that a property settlement or property alteration order be made at all. This was so despite 37 years of marriage and contribution by the wife. Hence section 79(4) contribution, even 37 years of it, was not to be conflated with the section 79(2), or section 90SM(3) "just and equitable" requirement but should be considered separately and first.
Apart from the general observations about s 79 (the same provision as section 90SM) the High Court also observed that it should not be concluded that the making of an order is just and equitable only because of, or by reference to, the matters in s 79 without a separate consideration of section 79(2), or section 90SM(3).
In Stanford the High Court did not go on to comment upon how section 79(4) should be applied where it was just and equitable that a property alteration or settlement order be made. Stanford was not concerned with the nuts and bolts of how section 79(4), or section 90SM(4), was to be applied in the ordinary run of cases, to the extent there is such a thing.
THE PREFERRED APPROACH
In Keskin & Keskin and Anor [2019] FamCAFC 236; (2019) FLC 93-932 ('Keskin') the Full Court, Strickland, Kent & Austin JJ, at [44] approved what was the age old and pre Stanford “preferred approach" as to the how the nuts and bolts of section 79(4), and hence section 90SM, fitted together:
[20] In Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener)[2003] FamCA 395; (2003) FLC 93-143 at [39] the Full Court, in setting out what the case law revealed as the "preferred approach" to the determination of an application under s 79 of the Act, referred to four inter-related steps, including that "the Court should identify and assess the contributions of the parties within the meaning of ss. 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". The Full Court did not purport to elevate the preferred approach as being mandatory, as was observed by a later Full Court in Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545 at [61]-[63], [72]. However, adoption of that preferred approach is a means by which many of the mandatory factors in s 75(2) of the Act, in particular paragraph (b) - the income, property and financial resources of each of the parties; paragraph (ha) - ability of a creditor to recover debt; paragraph (n) - the terms of any proposed order under s 79 of the Act; can be considered, as these must be considered, in determining any adjustment pursuant to s 75(2) of the Act. Conversely, if the preferred approach is not adopted there must be a means discernible from the reasons to identify that these relevant mandatory s 75(2) factors have been considered, and how they have been brought into account, in the making of any s 75(2) adjustment...
That preferred approach set out at [39] of Hickey and Hickey and the Attorney-General [2003] FamCA 395; (2003) FLC 93-143 ('Hickey') is as follows (citations omitted):
[39] The case law reveals that there is a preferred approach to the determination of an application pursuant to the provisions of section 79. That approach involves four interrelated steps. 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 hearing. Secondly the court should identify and assess the contributions of the parties within the meaning of section 79(4)(a), (b) & (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 section 79(4)(d), (e), (f) & (g) ("the other factors") including, because of section 79(4), the matters referred to in section 75(2) so far as they are relevant and determine the adjustment study (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.
Lest it be said there is a conflict between Stanford’s disavowal of "entitlement" to a section 79 order by mere separation and/or section 79(4) contribution on the one hand, and the use of the word "entitlements" in the Hickey passage cited above, I regard the use of that word in the above context as synonymous with "assessment." I will have regard to what I find to be the contribution based assessment rather than entitlement. For practical purposes sections 79 and 75(2) of the Act, applicable to married parties, is the same as sections 90SM and 90SF for de facto couples.
The preferred approach assists me in making a principled and orderly determination of the parties' property dispute.
Step one: identify the property and liabilities
The property was able to be purchased back in 2009 because of the gift to the Wife of the sum of $20,000 from her parents.
Step two: Section 90SM(1)(a), (b) & (c) contribution
Thereafter from 2009 until 2017, both parties contributed to the upkeep of the property and the mortgage payments. The Wife made the greater financial contribution, but that was because of her greater earning capacity. I regard the eight-year period from 2009 to about 2017 of being roughly equal contribution. From 2017 to 2019, the parties resided, while separated under the one roof in the property, with the Wife making the bulk of the payments towards the mortgage.
The Wife left the property in about 2019 or early 2020, and thereafter until this time, the Wife is the only one of the parties that has made contributions towards the mortgage. The Wife’s efforts have managed to reduce the mortgage from the time of separation to what it is now. The payment of the mortgage has been crucial to the acquisition of the property as the payment of the mortgage has enabled the parties together to maintain ownership of the home and to take advantage of the rapid market escalation of the property over the last couple of years. Had the mortgage not been paid, the property would have been sold by the mortgagee and the parties would not have had the benefit of all of that financial gain.
There is a further aspect. The state of the property and its market value is affected by the condition of the property as it was left following the Husband vacating the property at an unknown date. I accept the evidence of the Wife that the property is significantly damaged and uncared for. The actual expense of that repair will be reimbursed to her. Nonetheless, the trouble and effort of arranging all that and attending to the bits and pieces of cleaning up is a burden on the Wife. I regard the Husband leaving the property in that condition as a negative contribution or waste, pursuant to the principles in Kowaliw and Kowaliw (1981) FLC 91-092. The relevant passage at [76645] is as follows:
If a party has acted in the manner to which I have referred earlier either by:
(a) embarking upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) acting recklessly, negligently or wantonly with matrimonial assets the overall effect of which has reduced or minimised their value,
then such conduct in my view and the economic consequences which flow therefrom are clearly matters to which the Court may have regard …
I do take into account that the state of the property reflects the social disadvantage of the Husband of having a substance abuse disorder and potentially a mental health issue as well. Nonetheless, the condition of the property is a significant negative contribution, particularly when marked against the Wife’s positive contributions over the many years.
It was put to me that I should regard contribution as roughly 65/35. However, I am not persuaded about that, and I regard the Wife’s contribution overall as being roughly in the order of three times the Husband's contribution, or figures of roughly a 75/25 position at the end of step two.
Step three: Section 90SF factors
It was put that the section 90SF adjustment in favour of the Husband. Contribution should be in the order of 5%. After discussion with the Wife’s counsel, I am of the view that that adjustment in the Husband’s favour should be in the order of 15%. This figure accounts for the fact that the Husband has significant social disadvantage and has not for some time, and is unlikely in the foreseeable future on the evidence I have, to be capable of earning an income supporting himself, other than by claiming social security.
Further, the Wife has substantial superannuation relative to the size of the unencumbered assets of roughly $215,000, and no superannuation splitting order is sought or will be made.
I also take into account that the Wife has a career path and secure employment to the extent that employment in the financial industry can be regarded as secure in this day and age, and earns an income of a gross figure of approximately $110,000. That is a significant income relative to the Husband’s and a significant income relative to the size of the non-superannuation asset pool. In all of those circumstances, the 90SF adjustment should be 15% in the Husband’s favour.
Step four: Just and equitable and conclusion
Turning to the last step of the conclusion and the nuts and bolts of how that fits together, the overall adjustment of all of the assets should be 60/40.
The Wife seeks an order for the sale of the property, and I will make that order. Further, I am concerned at the unnecessary expense that the Wife will be put to of attempting to coax the Husband into cooperation with these orders, though the Husband should have the opportunity to cooperate and will ultimately end up with a sizeable chunk of money from that. I am not satisfied he will cooperate appropriately, and in the event that he fails to complete any document or authority necessary for the now somewhat complex conveyancing circumstances, the Wife's solicitor Mr E should be and will be authorised, pursuant to section 106A of the Act, to execute any document or authority on behalf of the Husband to ensure these orders are carried out.
The nuts and bolts of the order will be that the proceeds will be divided 60/40 after the reimbursement to the Wife of the necessary expenses to prepare the property for sale, to maximise its value. But further, there should be a payment from her of 40% to the Husband of $6,160, to take account of items 2 and 3 of the asset pool, that being the savings and the shares. Those items are a total of $15,400, or thereabouts, and 40% of that is $6,160, and that should be paid to the Husband.
Costs
Taking into account the Husband’s conduct of the proceedings and the additional expense that has caused, and section 117 of the Act, it is appropriate that he pay costs. Some costs are necessary in any event. I have determined that only part of the Wife’s costs, on scale, of $11,000 should be paid by the Husband.
I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of Judge O'Shannessy. Associate:
Dated: 21 September 2022
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