Smith and Roberts and Anor - [2007] FMCAfam 960

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SMITH & ROBERTS & ANOR

[2007] FMCAfam 960

FAMILY LAW – Property.

Applicant:

MR SMITH

First Respondent:

MS ROBERTS

Second Respondent:

MS SMITH

File number:

MLC 4377 of 2007

Judgment of:

McInnis FM

Hearing date:

25 October 2007

Delivered at:

Melbourne

Delivered on:

25 October 2007

REPRESENTATION

Counsel for the Applicant:

Mr T.J.Puckey

Solicitors for the Applicant:

Glezer Lanteri & Associates

First-named Respondent:

No Appearance

Second-named Respondent:

In Person

ORDERS

That all extant Applications be dismissed.
That the parties will immediately list the property situate and known as K in the State of New South Wales ("the K Property") being the land more particularly described in Certificate of Title 5XXX for sale by private treaty with such agent as the parties agree to appoint and in default of agreement as to an agent within 14 days after this order comes into effect, such agent as the President of the Real Estate Institute of New South Wales appoints.
The parties will list the K Property for sale at a price agreed upon between the parties and failing agreement a price to be nominated by the agent.
The parties will cooperate with the agent including but not limited to:
(a)Making the key available to the agent to allow inspection of the K Property at all reasonable times requested by the agent;
(b)Do or saying nothing to hinder or prevent the sale being effected;
(c)Ensuring that the K Property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers;
(d)Signing all documents requested by the agent in relation to the listing for sale of the K property except a contract or agreement for which has not been authorised by the parties' solicitors.
The parties will each execute a Contract for Sale in the form prepared by the solicitors having the conduct of the sale, being Norris Somers Solicitors at a price agreed upon between the parties or, in the absence of any agreement at the price nominated by the agent pursuant to paragraph 2.
In the event that the K Property remains unsold for a period of 3 months on date upon which is it first listed for sale, the parties list the K Property for sale by public auction.
The reserve price for the purposes of such auction will be such as the parties agree upon or failing agreement will be the price nominated as a fair market value by a licensed valuer appointed by the President of the Australian Institute of Valuers.
That the proceeds of the sale shall be distributed as follows:
(a)Firstly in payment of agent's commissions, advertising expenses, legal fees and other costs associated with the sale;
(b)Secondly to discharge the mortgage encumbering the K Property;
(c)Thirdly the balance to be divided equally between the Applicant and the First Respondent.
That the parties will immediately list the property situate and known as M in the State of New South Wales ("the M Property") being the land more particularly described in Certificate of Title 2/SP44564 for sale by private treaty with such agent as the parties agree to appoint and in default of agreement as to an agent within 14 days after this order comes into effect, such agent as the President of the Real Estate Institute of New South Wales appoints.
The parties will list the M Property for sale at a price agreed upon between the parties and failing agreement a price to be nominated by the agent.
The parties will cooperate with the agent including but not limited to:
(a)Making the key available to the agent to allow inspection of the M Property at all reasonable times requested by the agent;
(b)Do or saying nothing to hinder or prevent the sale being effected;
(c)Ensuring that the M Property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers;
(d)Signing all documents requested by the agent in relation to the listing for sale of the M Property except a contract or agreement for which has not been authorised by the parties' solicitors.
The parties will each execute a Contract for Sale in the form prepared by the solicitors having the conduct of the sale, being Norris Somers Solicitors at a price agreed upon between the parties or, in the absence of any agreement at the price nominated by the agent pursuant to paragraph 9.
In the event that the M Property remains unsold for a period of 3 months on date upon which is it first listed for sale, the parties list the M Property for sale by public auction.
The reserve price for the purposes of such auction will be such as the parties agree upon or failing agreement will be the price nominated as a fair market value by a licensed valuer appointed by the President of the Australian Institute of Valuers.
That the proceeds of the sale shall be distributed as follows:
(a)Firstly in payment of all agents commissions, advertising expenses, legal fees and any costs associated with the sale;
(b)Secondly to discharge the mortgage encumbering the M Property;
(c)Thirdly the balance to be divided equally between the Applicant, the First Respondent and the Second Respondent.
That in the event that either party refuses or neglects within 30 days to comply with the provisions of these orders:
(a)A Registrar of the Federal Magistrates Court of Australia is hereby appointed to execute all Deeds and documents in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the said order;
(b)The party in default is to pay all reasonable party party costs incurred by the non-defaulting party for the purposes of enforcing these orders to be taxed if not agreed.
Unless otherwise specified in these orders and save for the purposes of enforcing monies due under these and any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders (the furniture, personal possessions, and the like chattels in the real property being deemed to be in the possession of the wife.
(b)Monies standing to the credit of the parties in any joint bank account are to be divided equally between the parties in whose name the account is held.
(c)Each party forego any claims they may have to any superannuation benefits belonging to or earned by the other.
(d)Insurance policies remain the sole property of the owner named therein.
(e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
(f)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
That there be no order as to costs.

AND THE COURT NOTES:

That the parties intend these orders shall as far as practicable finally determine the financial (and other) relationships between them and avoid further proceedings between them.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLC 4377 of 2007

MR SMITH

Applicant

And

MS ROBERTS

First Respondent

MS SMITH

Second Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

(As Corrected)

These proceedings are proceedings which have been commenced by application of Mr Smith, the husband, initially by application filed in this Family Court of Australia on 6 June 2006. In that application orders were sought in relation to the properties owned by the applicant and the wife and also one property which was a property whereby the second‑named respondent was also a tenant in common with an equal share.
The properties which are the subject of the application are K ("the K property"); and M, (“the M property").
In the initial application the husband had sought sale of the properties and disbursement of the net proceeds of sale of the K property in percentages of 40 per cent to the husband and 60 per cent to the wife; and a one‑third interest in the M property to the second‑named respondent and the remainder, as indicated, to the husband and the wife.
The orders now sought are somewhat different, and I shall refer to those orders in due course.
It is important to note that these proceedings have had what can only be described as a lengthy and protracted history. The respondent wife does not appear in court this day. However, her mother has appeared as an observer and it is noted in current documents that it is her mother's address in South Australia which has been provided by the first‑named respondent as her address for service.
The mother of the first‑named respondent, though an observer, has, after hearing argument, indicated to the court that she would believe that the first‑named respondent expects the proceedings to continue this day, albeit in the absence of the first‑named respondent. The court initially expressed concern about proceeding with this application in the absence of the first‑named respondent.
The second‑named respondent appears on her own behalf and has agreed to the orders now sought by the applicant.
As a preliminary point, it should be noted that the first‑named respondent has conveyed to the court an affidavit together with a response. The affidavit is sworn 15 October 2007 and contains a number of annexures. There is also a response which appears to be relied upon by the first‑named respondent, which, likewise, has been forwarded to the court.
It is perhaps relevant to note that, although the application was initially commenced in the Family Court of Australia, the proceedings were in fact transferred to this court by the Family Court.
It is not necessary for me to recite in detail the chronology of events in terms of court proceedings, save to note that on a number of occasions, even during a time when the first‑named respondent was represented and prior to the time when solicitors otherwise acting for the first‑named respondent withdrew, namely on 21 December 2006, orders and directions were made in relation to various matters, giving the first‑named respondent an opportunity to participate by filing of documents in these proceedings. That opportunity was not pursued.
Nevertheless, it is noted that on this day the applicant, appropriately, and, in my view, reasonably, has not opposed the first‑named respondent's attempt to file, serve and rely upon the response and affidavit to which I referred earlier. Accordingly, I grant leave to the first‑named respondent to file in court her response dated 15 October 2007 and her affidavit purportedly sworn the same day.
The consent of the applicant to that procedure is a significant factor in determining whether I should, having regard to the principles of procedural fairness, proceed to determine the matter in the absence of the first‑named respondent. The rules of the Federal Magistrates Court provide in Rule 13 an opportunity for the court to make orders sought by an applicant in these proceedings in the absence of the respondent and indeed make provision for the court to in fact dismiss any claim for relief in the proceeding by the absent party. The applicant does not seek to rely upon those provisions.
In circumstances where there has been no formal request for an adjournment or indeed a request for the proceedings to be conducted by video or audio link, the court might otherwise have been minded to simply dismiss the claims made by the first‑named respondent. Having regard to the concession appropriately made however by the applicant, I do not propose to follow that course.
In considering further whether to proceed with the application, it is relevant to note that, according to the first‑named respondent, she departed from Australia for Munich, Germany in May this year. On 27 June 2007 orders were made in the absence of the first‑named respondent by a Federal Magistrate of this court. Those orders included what can only be described as procedural orders concerning the further conduct of this application.
It is clear that the respondent has not complied with those orders in terms of the dates set for the filing and service of further material by the first‑named respondent. The proceedings on 27 June 2007 were fixed for final hearing this day. It is clear that the first‑named respondent at all material times has been aware of the hearing date and that the proceedings would be listed before this court as a final hearing this day.
I also observe that a notation which appears on the orders of the court of 27 June 2007 includes the following:
“A.In the event of non compliance by any party with the orders, directions, Rules or Regulations of this Court relating to
(a) the filing of documents, or
(b) any other procedural issues,
the application may be struck out, the proceedings may be directed to proceed undefended or the trial date may be vacated and the Court may direct that a further date not be fixed until all parties have complied with the said orders, directions, Rules and Regulations.”
That notation is relevant for the present proceedings and I accept that the parties have been notified that at least one option before the court this day may be that the matter proceeds, effectively, undefended. I am inclined to accept that that is the most appropriate course to follow in the interests of all parties and having regard to the material relied upon by the first‑named respondent and the indication given to the court by the first‑named respondent's mother, who is present in a capacity which I stress is only as an observer.
Nevertheless, on a proper reading of the affidavit material, the substantive issue between the parties does not appear to be great, in terms of the identification of the properties in question and the respective values, which I accept are the values that have been announced by counsel appearing this day for the applicant.
It is important to note that the applicant before the court this day has now provided minutes of proposed orders which are annexed to a summary of argument. It is those updated minutes which are now sought to be relied upon.
The minutes of the orders annexed to the summary of argument will be incorporated in this judgment. It is clear from those minutes, which I have set out in this judgment, that the applicant now seeks an equal division of the net proceeds but has regard to the equal division in relation to the M property amongst the three tenants in common.
The affidavit material relied upon by the applicant provides what, in my view, is an accurate summary of the background in relation to this application. That summary in the affidavit material is accurately set out in the summary of argument prepared for and on behalf of the applicant. In my view, that summary, supported by the affidavit material, leads to a conclusion that it would be just and equitable to make the orders sought in the minutes, which I have set out earlier in this judgment.
I should add that when I consider the affidavit material of the first‑named respondent it is clear to me that there are a number of issues raised by her in that affidavit concerning what might be described as credit debt incurred by the applicant husband. That credit debt is referred to in some detail in paragraph 70 of the applicant's affidavit which was affirmed on 26 September 2007:
“70.My Personal finances are otherwise set out in my Financial Statement. By way of summary I own a 1993 Saab 9000 motor vehicle worth approximately $3,900. Annexed and marked “N” is a copy of a redbook valuation in relation to that vehicle. I also have the following credit cards:
(a)     Commonwealth Bank Mastercard - $4,786;
(b)     Virgin Mastercard - $10,500;
(c) Aussie Homeloans Mastercard – E$10,000;
(d)     ANZ Mastercard – E$14,000;
(e) CBA Mastercard – E$4,400
In an endeavour to pursue our relationship as indicated herein I also spent periods of time overseas. While things did not work out this proved to be an expensive exercise. In addition the dot.com boom technology industry had experienced had come to an end and it became difficult for a number of years to obtain employment in the technology field. Despite these difficulties I have been required to service the mortgage repayments while Ms Roberts has received the rental income from the property. As such there were periods when I became reliant on credit card debt in order to survive.”
That paragraph which I have set out provides a total of debts of $43,686. It is noted that, as a result of the orders that the court is asked to make on behalf of the applicant, it is the intention of the applicant to retain responsibility for those debts. To that extent, it is clear that the concerns expressed by the first‑named respondent in her recent affidavit are not concerns which will then be translated into orders of a kind which would be described as adverse to the first‑named respondent.
The first-named respondent in her affidavit has otherwise substantially agreed with the market value of the two properties and the mortgage: the K property, valued at $380,000, supported by sworn evidence, which I accept, with a mortgage of approximately $54,000; whilst the M property, valued also at $380,000, has a mortgage of approximately $305,000. I accept, for present purposes, those figures when calculating and identifying the property pool in this matter.
Other matters which have been identified accurately in the property pool ultimately will not be of any significant concern, particularly in circumstances where I note that these parties had cohabited together since March 1992, married in April 1994 and were separated in October 2001 and that there are no children of the marriage. It seems clear to me, on the background material and on the affidavit evidence to which I have referred, that the orders now sought in the minutes of orders would result in what I find to be a just and equitable distribution of the property pool which I have identified.
Other less important property matters, which are identified in proposed order 16, in my view, are appropriately dealt with in the manner described. Significantly, it is also appropriate, in my view, that the superannuation referred to in the affidavit material should, likewise, be dealt with in the manner suggested.
Given the circumstances of this hearing, I have not dealt in detail with all of the matters raised in the affidavit material; but, for the sake of convenience, it seems to me appropriate that I should incorporate the summary of argument provided for and on behalf of the applicant, which I accept, on the affidavit material, is accurate both in terms of identifying the contributions made to the property pool and indeed identifying the pool itself as follows:
“Financial contributions
At the commencement of the relationship the wife had assets to the value of approximately $200,000. The husband had assets to the value of approximately $6,000. The husband worked throughout the relationship either part time or full time and contributed his income to joint expenses of the parties including rent, mortgage repayments, utilities and food.
The parties purchased three properties throughout the relationship. In 1996 K (‘the K property’) was purchased for $195,000. The wife contributed approximately $179,000, the husband contributed $5,000 and the balance was secured by a Members Equity mortgage. The husband made all of the mortgage repayments.
The wife has received the rental income in relation to the K property of approximately $15,600 per year for 6½ years.
In 2000 the parties purchased the P Property for $185,000. The purchase price was fully borrowed against the K property. This property was sold in 2001. Monies were applied to reduce the K mortgage and ultimately towards stamp duty for the M Property.
In December 2001 M (‘the M property’), was purchased in December 2001 with the husband’s sister as tenants-in-common. The stamp duty was obtained from the proceeds of sale of the P property. The balance was secured by way of a mortgage. At various stages the respective parties did live in the property and paid market rental. At other stages it has been tenanted and the rental has been applied against the mortgage. The shortfall in the mortgage of approximately $115 per week has been met by the parties. Since September 2005 the wife has paid none of the shortfall.
The husband estimates he has paid a minimum of $32,000 towards the M property including mortgage, rates, fixtures and fittings.
He estimates he has paid $51,000 towards mortgage repayments and other expenses related to the K property.
In 1997 the husband cashed in his superannuation with LUCRF of approximately $5,000 to meet general living expenses.
Non-financial Contributions
The parties contributed equally to the homemaker role other than in 1995 when the wife was completing her Honours. During that year the husband did 90% of household tasks.
The husband carried out maintenance work on the parties’ motor vehicles.
The husband carried out significant renovations to the properties including:
Repainting the K property;
Installation of shelving and hooks;
Installation of floating floor and light fittings;
Installation of shower screen and blinds.
The husband has managed the M property.
The husband did the conveyancing in relation to the K property.”

Having regard to those findings and the history of the matter, I will make the orders sought, as set out earlier in this judgment, in the minutes of orders.
In these proceedings, although either party may, for reasons which are apparent, have sought an order for costs, and I note the first-named respondent does so in her recent material, it is further noted that despite there being offers of compromise, which would have been more advantageous to the first-named respondent, which were made by the applicant to the first‑named respondent, the applicant does not seek an order for costs. That in itself, in my view, represents a significant concession. In those circumstances, it is my conclusion that the appropriate order accordingly is that there be no order as to costs.

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of McInnis FM

Associate:

Date: 20 November 2007