SMITHIES v BARRY (Civil Dispute) - [2016] ACAT 31

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

SMITHIES v BARRY (Civil Dispute) [2016] ACAT 31

XD 1252/2015
Catchwords: CIVIL DISPUTE – debt – question of jurisdiction – family law – domestic relationship – de facto financial cause – no jurisdiction

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 (ACT) ss 20, 39
Family Law Act 1975 (Cth), ss 4AA, 90SB, 39A, 90RC, 121
Acts Interpretations Act 1901 (Cth) ss 2B

Papers/Texts Cited: Explanatory Memorandum to the Family Law Amendment (De Facto Financial Matters and Other Measures Bill) 2008
Family Law Amendment (De Facto Financial Matters and Other Measures) Bill 2008

Tribunal: Senior Member H Robinson

Date of Orders:  18 April 2016
Date of Reasons for Decision:         18 April 2016
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          XD 1252/2015

BETWEEN:
REBECCA SMITHIES
Applicant

AND:
DAVID BARRY
Respondent

TRIBUNAL: Senior Member H Robinson

DATE:18 April 2016
ORDER

The Tribunal orders that:

Pursuant to section 39(2) of the ACT Civil and Administrative Tribunal Act 2008 a person must not publish any evidence given at the hearings of this matter that may identify a party to the proceedings, including any evidence that identifies:
(a)the name or title of any party;
(b)the address of any premises at which a party resides or works or the locality which such premises are situated; or
(c)the interests of a party in any real or personal property.
The application is otherwise dismissed for want for jurisdiction.

The Tribunal notes that pseudonyms are used for the parties names.

………………………………..
Senior Member H Robinson

REASONS FOR DECISION

This is an application by the applicant, Ms Rebecca Smithies to recover an alleged outstanding debt from the respondent, Mr David Barry. The alleged debt is in the form of an outstanding balance on a VISA credit card, comprising expenditure for ‘living expenses’ and private school fees for the respondent’s son. These expenses were incurred during, and perhaps also shortly after, the parties were in a de facto relationship.
Although the alleged debt is in excess of $10,000, the applicant has waived the excess so as to come within the jurisdiction of the Tribunal, as provided for in subsection 20(2) of the ACT Civil and Administrative Appeals Tribunal Act 2008 (ACAT Act).
The preliminary question that has arisen is whether the proceeding falls outside the jurisdiction of the Tribunal by reason of being a ‘de facto financial cause’ under the Family Law Act 1975 (Cth) (Family Law Act).

Process to date

The applicant filed her application on 6 November 2015 and the respondent filed his response on 3 December 2015. The matter was set down for a conciliation conference on January 2016, and as that process was unsuccessful, was set down for hearing on 15 March 2016. Directions were made for the filing of submissions.
The respondent’s submissions squarely raised the issue of the Tribunal’s jurisdiction Accordingly, the hearing on 15 March 2016 was concerned with this issue. Following evidence and submissions from both parties, that hearing was adjourned to 6 April 2016 to allow further evidence on to be filed. The applicant was offered an opportunity to file any further documentation evidencing an agreement between herself and the respondent in relation to the VISA card debt, and the respondent was in turn offered an opportunity file any further evidence in reply.
The applicant filed a copy of a text message between herself and the respondent on 16 March 2016. The respondent filed further documentation and submissions on 29 March 2016, including financial records and bank account statements.
In considering this matter, I have taken into account all the documentation filed by the parties, and the submissions made at both hearings.

The jurisdictional issue

The applicant contended that no proceedings under the Family Law Act were on foot at the time of the hearings, and nor were any contemplated when she lodged her application in November 2015. She says, further, that there is in any case a contractual arrangement between the parties that is separate from any Family Law proceedings, and that should be enforceable in the same manner as any other contract. This was, in her view, a straightforward ‘debt recovery matter’.
The respondent’s evidence to the Tribunal at both hearings was that he intends to commence proceedings under the Family Law Act shortly, and that those proceedings will involve consideration the expenses on the VISA card. While he conceded that the parties had reached an agreement on the repayment of the VISA card (or some of it), he said that the agreement was not in the terms alleged by the applicant, and in any case circumstances had changed such that the agreement is either, effectively, completed or frustrated.

Background

The Relationship

It is not in dispute that the applicant and the respondent were in a de facto relationship for a period, or periods, of time. There is some disagreement over the exact duration.
The parties agree that the de facto relationship commenced around 21 December 2011, when the respondent moved into a property owned by the applicant (the house). The de facto relationship ended sometime between March and August 2015 – Ms Smithies contends it was the former date, Mr Barry the latter. The relationship was certainly concluded by August 2015 when the respondent and his children (by a previous relationship) moved out of the house.
While the degree to which the parties melded their financial affairs was the subject of some contention, it is common ground that following the commencement of the de facto relationship, the respondent became a signatory to the applicant’s VISA card. The evidence of the applicant, which was not really contested, was that she remained the primary signatory to the card, but both parties used it, and indeed put most of their living expenses on it, including electricity, gas, internet, water and various other purchases, such as internet games, groceries and pet supplies. The intention was to accrue maximum frequent flyer points.
The applicant’s contention was that throughout the relationship, the parties would each pay off the debts associated with their own expenses and would split the joint living expenses. The applicant further contended that it was possible to identify the VISA card expenses that were the respondent’s expenses alone by reference to a document he lodged with the Child Support Agency in which the applicant set out his income and expenses, as at 2012, in some detail.
The respondent denied this and contended that he in fact paid three quarters of all the expenses of the VISA account.
The applicant is seeking to recover from the respondent credit card liabilities for the period 15 June 2015 through 16 August 2015 – that is, the period during which she says the de facto relationship had ended, even though the parties continued to cohabit to some degree. The outstanding amount from this period, as at the date of the application, was $11,723.35, with interest accruing.

Evidence of the Agreement

The applicant’s position was that the respondent had expressly agreed, on or about 9 August 2015, to pay half the outstanding debt on the VISA card, and all expenses incurred after the separation. This agreement, she contended was comprised of verbal discussions and email messages. The key evidence was a series of texts that the applicant contended proved the agreement:
RS:          Tues 11 August
[David], I have sent bank information to your email. Please confirm amount you will transfer and when you will transfer all sums.
DB:         Saturday 29 August
I have deposited $2000 into your account being part payment of last VISA bill. As agreed, and due to establishment costs since separation, I will continue monthly payments to cover my amount owing.
DB:         Fri 9 October
I’ve transferred today $2000 to your account for prev visa. ...
The respondent acknowledged that on or around 9 August 2015 he agreed to pay $7000 toward the VISA card balance and that, consistent with this agreement, he paid $4000 directly to the applicant in two $2000 dollar instalments. But, he says, no final agreement was reached. In support of his position, the respondent filed a more comprehensive selection of the text messages between himself and the applicant during the period August to October 2015.
I accept that the texts show that the text messages provided by the applicant were part of a series of discussions about financial issues arising out of the breakdown of the relationship. However, I also accept that there was an agreement that the respondent would pay at least $7,000 off the VISA card.
The respondent contends, however, that whatever the status of that original agreement, it became irrelevant after he the applicant transferred some $34,200 from ‘joint’ saving and home loan accounts to the VISA card.
In support of this argument, the respondent relied upon various documents and financial records, including:
(a)records from a savings account that appeared to be in both names, showing transfers of monies from that account to the VISA as follows:
(i)      $3000 on 10 August 2015;
(ii)     $10,400 on 10 September 2015; and
(iii)   $10,000 on 8 October 2015.
(b)a statement showing a transfer from a mortgage account of $10,800 on 11 August 2015, coupled with correspondence from the bank relating to that account and addressed to both parties.
The respondent contended that these transactions meant that his agreed debt was discharged, by reason of having been paid from joint funds, or was frustrated.
In response, the applicant raised numerous factual issues, including that the mortgage account was only ever in her name, and that the monies in the joint account were exclusively from her redundancy payment – in other words, notwithstanding the names of the accounts, the monies were not ‘joint’.
Consideration
The issue before the Tribunal is what, if any, jurisdiction it has in relation to a dispute of this nature. Can, as contended by the applicant, the Tribunal simply look to whether there is either a debt, or an enforceable agreement in relation to the payment of that debt, such that this action can be bought under the Tribunal’s civil jurisdiction? Or is this, as per the respondent’s submissions, a matter that falls within the ambit of the Family Law Act, such that the Tribunal has no jurisdiction?
The Family Law Act
On 1 March 2009, amendments to the Family Law 1975 (Cth)[1] governing ‘de facto financial causes’ took effect. These provisions allow parties to an ‘eligible de facto relationship’ to apply to specified Courts for a determination about a ‘de facto financial cause’. The purpose of the provisions was stated to include offering eligible de facto couples access to equivalent financial resolution mechanisms to married couples, and allowing such proceedings to be brought in a single jurisdiction, including in family courts with experience in relationship matters.[2]
[1] By Family Law Amendment (De Facto Financial Matters and Other Measures) Bill 2008
[2] See Explanatory Memorandum to the Family Law Amendment (De Facto Financial Matters and Other Measures Bill) 2008 page 3
An ‘eligible de facto relationship’ is defined in section 4AA of the Family Law Act. The section sets out a series of criteria for considering whether a couple is in a genuine domestic relationship. I do not need to consider this definition in any depth, as there is no dispute that the parties meet the definition for at least a part of their relationship.
Section 90SB of the Family Law Act sets out when a Court with jurisdiction under the Act can make an order for the maintenance or for a declaration or alteration of property interests. One criteria is that the relationship is at two years duration as per subsection 90SB(a) – that criteria is met in this case.
A ‘de facto financial cause’ is defined in the interpretation section in section 4 of the Family Law Act to include “proceedings between the parties to a de facto relationship with respect to the distribution, after the breakdown of the de facto relationship, of the property of the parties or either of them.” There is a significant amount of case law about the meaning of ‘property’ for the purposes of the Family Law Act. It includes assets that have been acquired by either or both parties during the relationship. It would certainly include the cash savings and financial assets of the parties.
Subsection 39A(5) of the Family Law Act provides that a de facto financial cause that may be instituted under the Family Law Act must not, after the commencement of section 39A (that is, after 1 March 2009), be instituted otherwise than under the Family Law Act. In other words, if this proceeding concerns a ‘de facto financial clause’, then it may only be bought under the Family Law Act. This is consistent with the stated object of the Act of enabling proceedings to be resolved in a single jurisdiction.
In case there is any doubt as to the intention of the Commonwealth in this regard, section 90RC(2)(a) expressly states that the Commonwealth parliament intends that the Family Law Act provisions exclude the operation of any State or Territory law dealing with financial matters relating to the parties to an eligible de facto relationships arising out of the breakdown of those de facto relationships .
It bears noting that there are, in the Family Law Act, a range of exceptions that preserve some residual jurisdiction outside of the Family Law Act. The exceptions include matters that do not have a sufficient geographical or temporal connection to fall under the Family Law Act, or would otherwise fall outside the scope of that law (clearly, there being no intention to deprive parties whose actions do not fall under the Family Law Act of a remedy). However, it is not apparent that any of the exceptions apply in this case.
Once the jurisdiction of the Family Law Act is enabled, section 39A of that Act provides that proceedings under the Family Law Act may be instituted in the Federal Court, the Family Court, the Federal Circuit Court, the Supreme Court of the Northern Territory, or a “Court of summary jurisdiction of a participating jurisdiction.”
A ‘court of summary jurisdiction’ is defined in section 2B of the Acts Interpretation Act 1901 (Cth) as “ ...any justice of the peace, or magistrate of a State or Territory, sitting as a court of summary jurisdiction.” The ACAT is not a Court, its members are not magistrates, and it does not exercise summary jurisdiction. It cannot hear proceedings under the Family Law Act.
Consequently, if this matter concerns as ‘de facto financial cause’, then these proceedings cannot proceed in the ACAT and must instead be commenced in a Court with jurisdiction to hear matters under the Family Law Act.
Does this matter concern a ‘de facto financial cause’?
A stated above, a de facto financial cause is defined in section 4 of the Family Law Act to mean a proceeding between the parties to a de facto relationship with respect to the distribution, after the breakdown of the de facto relationship, of the property of the parties or either of them.
That applicant, as I understand her argument, argues that this matter does not involve a dispute over the ‘distribution of property’ – the dispute has been resolved through the making of an agreement, which she is asking the Tribunal to enforce.
On one level, the applicant’s argument is attractive. There may be circumstances where former de facto partners have come to contractual arrangements, where that arrangement may be capable of enforcement through the ordinary civil procedures within the Tribunal on the basis that it does not really involve a dispute over the ‘distribution’ of property.
However, when one looks at the complicated tapestry of circumstances set out above, I do not think this could be considered such a case.
This dispute arises out of a debt to a third party (the ANZ Bank). The debt arose from expenditure incurred by the parties during their de facto relationship, and in the months directly following the breakdown of that relationship (and I note here the different views as to when the relationship ended). Although the debt is not itself ‘property’, the dispute is, in essence, about out of whose assets the debt should, at least in part, be paid.
Significantly, the parties do not agree on the circumstances in which the VISA card was used during the relationship, or on the terms of its use after the relationship ended. The oral submissions of both parties about this issue refer to agreements about living expenses, liabilities, family arrangements, and other property interests. Having regard to this evidence, I accept the respondent’s argument that I cannot reach a conclusion about what was agreed without, at the least, considering the broader circumstances of the breakdown of the relationship, the subsequent arrangements made between the parties and their broader property interests. These matters are ‘de facto property causes’.
Still, the respondent has conceded that he agreed to pay $7000 directly to the applicant to go toward to VISA card, and that $3000 of this remains outstanding. Can, as the applicant contends, the Tribunal simply apply to ordinary principles of contract law to this agreement? The reason why it cannot becomes apparent when looking to the respondent’s response.
The respondent’s defence to the claim is that the VISA card has at least been partially discharged by payments from what, he contends, are a joint savings account and a joint mortgage account. The applicant agrees that these transactions took place, but says that the mortgage account was in fact in her name alone, and the joint account contains monies that are exclusively hers. Both parties referred to potentially conflicting documentation (some of which was filed, but much of which was not) and the applicant made a number of appeals to fairness. What should be apparent from this is that I cannot make any decision on these issues without unpicking the financial arrangements between the parties and determining the ‘ownership’ of the monies in the respective accounts and their distribution. Conflicts over ownership of this nature can be resolved through the making of a ‘financial interest declaration’ under section 90SL of the Family Law Act and as such this is a ‘de facto financial cause’.
Consequently, I am satisfied that, no matter how one characterises this dispute, it is a matter that is properly a de facto cause under the Family Law Act, or at least is so extrinsically intertwined with such a financial cause that I cannot feasibly hear this matter without considering issues that fall exclusively within the ambit of the Family Law Act.
Other property dispute
In the course of their respective submissions to the Tribunal, both parties raised numerous other issues arising from the relationship, including disputes over various individual items of property, superannuation debts and the house. At the hearing of 15 March 2015, the applicant withdrew her claims for orders relating to the return of property and simply pressed the claim for $10,000 in compensation, and consequently I do not need to decide them. However, the existence of these related claims, and the fact the applicant on several occasions during the hearing submitted evidence of them are illustrative of the central problem with the Tribunal hearing this matter – and that is that the VISA card is one issue amongst many falling from the breakup of this relationship, and accordingly this is a matter more appropriate dealt with in a forum that has appropriate jurisdiction to resolve the financial disputes between the parties under the Family Law Act.
Confidentiality
As this matter concerns the breakdown of a personal relationship, it has inevitably required consideration of the personal and private affairs of the parties. Had the applicant commenced this proceeding under the Family Law Act, then section 121 of that Act would broadly prohibit the publication of information that might identify them. Moreover, it is the practice of the Family Court and the Federal Circuit Court in such cases is to publish decisions with the parties identified by pseudonyms. Given the unusual circumstances, I am satisfied that the private lives of the parties require that I make some provision that is consistent with the approach taken to personal privacy in other jurisdictions. Accordingly, I will make an order under section 39(2) of the ACAT Act prohibiting the publication of certain information that may identify a party. Additionally, the names of the parties in these published reasons are pseudonyms.

Pursuant to section 39(2) of the ACT Civil and Administrative Tribunal Act 2008 a person must not publish any evidence given at the hearings of this matter that may identify a party to the proceedings, including any evidence that identifies:
(a)the name or title of any party;
(b)the address of any premises at which a party resides or works or the locality which such premises are situated; or
(c)the interests of a party in any real or personal property.
The application is otherwise dismissed for want for jurisdiction.

………………………………..
Senior Member H Robinson

HEARING DETAILS

FILE NUMBER:	XD 1252/2015
PARTIES, APPLICANT:	Smithies
PARTIES, RESPONDENT:	Barry
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	Senior Member H Robinson
DATES OF HEARING:	6 April 2016