Starkey and Starkey and Anor (No. 2)

[2009] FamCA 432

FAMILY COURT OF AUSTRALIA

STARKEY & STARKEY AND ANOR (NO. 2) [2009] FamCA 432

FAMILY LAW – PROPERTY SETTLEMENT – Breakdown of Consortium Vitae – Capacity to Commence s 79 Property Proceedings

Family Law Act 1975 (Cth)

Jennings & Jennings (1997) FLC 92-773

APPLICANT: Mr Starkey

1^st RESPONDENT: Ms Starkey

2^nd RESPONDENT: D Starkey

FILE NUMBER: LEC 245 of 2007

DATE DELIVERED: 24 March 2009

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: MURPHY J

HEARING DATE: 24 March 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Cameron

SOLICITOR FOR THE APPLICANT:

SP Lawyers

Byron Bay

COUNSEL FOR THE RESPONDENT: Mr Page SC

SOLICITOR FOR THE 1^ST RESPONDENT:

Stephensons Solicitors

Alstonville

2^ND RESPONDENT: Appearing in person

Orders

IT IS ORDERED THAT

1. The Wife shall within 14 days transfer to the Husband all her interest in the following properties:

   (i)the G Street unit (Title Reference …);

   (ii)the L Street unit (Title Reference …);

   (iii)Units 1 and 2 O Street (Lot 1 SP … and Lot 2 SP …);

   (iv)the M Street property (Lot … SP …).

2. The Husband shall indemnify the Wife in respect of any liabilities relating to any of the above transferred properties, and shall be entitled to all rentals accruing after 1 April 2009 whether or not the transfers have been effected by that date.

3. The Husband will within 14 days transfer to the Wife all of his interest in the following properties:

   (i)the Z Street property (Lot … DP …);

   (ii)the A Street property (Lot … SP …);

   (iii)The partnership business known as “Starkey & Starkey”, and including the parcel of land at T (Lot … DP …).

4. Subject to Order 5 below, the Wife shall indemnify the Husband in respect of any liabilities relating to any of the above transferred properties, and shall be entitled to all rentals and income accruing after 1 April 2009 whether or not the transfers have been effected by that date.

5. The parties shall forthwith do all things necessary to dissolve the partnership Starkey & Starkey as at 31 March 2009, and upon the taking of accounts, the assets of the partnership then remaining as are not otherwise dealt with by these orders shall be divided equally between the parties.  The winding up of the partnership and the taking of accounts is to be conducted by Mr N who will consult with Mr V.  In the event there is any dispute, such dispute shall be referred out to W Accountants, as referees.

6. The parties shall forthwith do all things and sign such documents as required to discharge the current mortgage security held by Westpac Banking Corporation over the properties at O Street or any other real property situate in New South Wales or Queensland.

7. Contemporaneously with the transfers referred to in Order 3 above, the Wife shall pay to the Husband the sum of $131,000.

8. The business Starkey Company (comprising inter alia, the benefit of Contracts A and B with the Director-General [“Director – General”] of the Ministry of Transport, New South Wales; land known as Lot 51 in Deposited Plan … at …; the company’s equipment; and goodwill be vested in the wife as and from 1 April 2009 and contemporaneously with the payment provided for in paragraph 7 hereof.

9. The said Director- General, the Registrar General, Department of Lands, New South Wales and any other registering authority register the name of the wife as transferee of the business referred to in the preceding paragraph, acting upon the signatures of the Case Guardians, accompanied by a sealed copy of these orders, without further enquiry.

10. To the extent that any Affidavit or any document filed by or on behalf of Mr D Starkey indicates a claim by him in these proceedings, such claim be dismissed.

11. Each of the parties will do all such things and execute all such documents required to give full effect to the terms of this order and in the event that either party shall refuse or neglect to do any thing or execute any document required to be done then the Registrar or a Deputy Registrar of the Family Court of Australia at Brisbane is appointed to do such thing and execute such document in the name of that person and to do all such things and execute all such documents necessary top give validity and operation to the thing or document and an affidavit of the solicitor for the requesting party shall be sufficient proof of the refusal or neglect.

12. Each party pay their own costs and any order for costs or reserved costs be discharged.

13. That any of the parties hereto be at liberty to provide a copy of these orders to the Office of the Protective Commissioner and/or the Guardianship Tribunal of NSW.

IT IS FURTHER ORDERED THAT

1. Paragraphs 1 and 6 of the Amended Response to an Application for Final Orders filed by the Wife on 15 February 2008 are dismissed.

2. The Application in a Case filed on 19 January 2009 is dismissed.

3. All extant applications be otherwise dismissed and removed from the list of cases awaiting finalisation.

4. All subpoenaed documents be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.

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

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: LEC245 of 2007

MR STARKEY

By his Case Guardians Mr T and Mr C

Applicant Husband

And

MS STARKEY

1^st Respondent Wife

And

D STARKEY

2^nd Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. The parties to the marriage in this sad case were married almost 40 years ago.

2. Currently the issue before the Court is an application by the husband for a settlement of property pursuant to s 79 of the Act.  That application was brought by him on 27 March 2007 at a time when he was of full legal capacity.  Events preceding and succeeding that time are important. 

3. Prior to that time, on 21 April 2006, there was, what might be described as an attempt to file in this Court orders by consent effecting a division of the property of the parties or either of them pursuant to s 79.  That document on its face evidences the parties representing themselves and also evidences an agreement expressed in unsophisticated lay terms. 

4. There are now many factual disputes surrounding the making of that agreement which, in the context of the current issue, do not need to be determined.

5. Subsequent to the filing of the application by the husband, orders were made by the Guardianship Tribunal of New South Wales as a result of what that Tribunal found to be the lack of capacity on the part of the husband. 

6. There is no evidence before me to suggest that the husband lacked capacity at the time when he originally filed the application to commence these property proceedings.  But, equally, the evidence is clear that, at a time subsequent to that, he did in fact lack capacity, and, as a result, managers in respect of his financial affairs were appointed and have conducted his financial affairs ever since.

7. The facts and circumstances surrounding that appointment and the evidence before the Guardianship Tribunal of New South Wales has been traversed at some length by me in earlier reasons for judgment given in respect of interim proceedings in this matter. I incorporate then for the purposes of this judgment but I do not propose to repeat them here.

8. Since that order was made, the husband's case in this Court has been conducted on his behalf by his case guardians as not only they are entitled to do but, as I read the orders of the Guardianship Tribunal of New South Wales and the legislation governing that Tribunal, as they are obliged to do.

9. Various procedural orders were made so as to prepare for the hearing of the s 79 application by me. 

10. In the lead up to those proceedings, the wife filed an amended response to an application for final orders on 15 February 2008.  Paragraph 1 of that response seeks an order that the application for settlement of property be dismissed for the reasons set out in the document. 

11. The same document sets out the reasons in par 6 as follows:

    "(a)     the husband and wife have not separated;

    (b)the husband and the wife do not intend to bring their marriage to an end;

    (c)as a matter of principle and public policy the Court should not make orders that promote the downfall of the marriage but seek to protect that marriage;

    (d) the proceedings have been initiated and maintained for purposes other than the purposes consistent with the Family Law Act;

    (e)until the parties separate the Court will not be able to properly exercise consideration of contributions of the parties."

12. The husband is currently in a hostel nursing home type of accommodation and, on all the evidence, it seems highly likely that he will see out his life in that institution.  It is, of course, necessary to repeat that which I said at the outset of these reasons, namely that it is profoundly sad that the Court is dealing with proceedings in respect of settlement of property at the end of a 40 year marriage.

13. It is also true to say, as I said in earlier reasons for judgment given in respect of other interlocutory proceedings, that there can be little doubt, as I think Mr Page SC said during the course of submissions, that an important part of the context of this case is an internecine war between various members of the family. 

14. That internecine dispute, I have no doubt, lies at the core of many of the issues in these proceedings.  Equally, that internecine conflict makes it difficult for a Court to determine precisely what conflict belongs to what part of the various disputes between family members. 

15. It is in that context that Mr Page SC, who appears for the wife in these proceedings, raises as a preliminary point that the Court ought not exercise its discretion to make orders pursuant to s 79 of the Act. 

16. It is first necessary to say that there is no doubt that the jurisdiction of this Court has been properly invoked. 

17. Secondly, and contrary to that which is asserted, in effect, at par 6(a) of the response, the fact that the parties have not separated is not a bar to the Court exercising jurisdiction pursuant to s 79, nor to making orders pursuant to s 79, although, of course, that somewhat unusual fact may well be a significant matter (if found to be correct) in the exercise of the discretion as to whether exercise jurisdiction in a particular matter.

18. Insofar as it is contended, at pars 6(d) and (e) of the response, that the proceedings have been initiated and maintained for purposes other than purposes consistent with the Family Law Act, I repeat that the internecine conflict not only between the parties inter se but also between the parties and various family members, make the picture with respect to purpose or intention of those various players somewhat murky.

19. However, an assertion of the type just mentioned is a very serious assertion and, essentially, amounts to an assertion that a party or parties are using the Family Law Act, and more particularly the procedures of this Court, for an improper purpose.  I would not be inclined to make a finding to that effect unless there was clear evidence before me of which I could be well satisfied that such an assertion has been made out. 

20. I do not consider that there is such evidence before me in these proceedings.

21. The response also asserts that, until the parties separate, the Court will not be able to properly give consideration to the contributions of the parties. I consider that assertion has no merit.

22. Firstly, these two parties have been married for a very lengthy time; secondly, in effect, the parties essentially assert that contributions should be assessed as equal, an assertion which, it seems plain to me, is readily open on the evidence. Thirdly, the husband has been in a nursing home now for some considerable period of time and is likely to remain there.

23. That then leaves for consideration the two matters specifically mentioned in the amended response as giving rise to the exercise of the discretion by the Court to dismiss the application. They essentially form the core of Mr Page SC's submissions on behalf of the wife. 

24. He asserted, as do sub-pars (b) and (c) of par 6 of the amended response, that the marriage relationship between the parties, or the consortium vitae between the parties, has not broken down. 

25. In circumstances where the consortium vitae has not broken down, it would be inappropriate, he submits, for the Court to exercise jurisdiction pursuant to s 79 which has, as its core, the distribution of property upon the cessation of the marriage relationship. Additionally, when consideration is given to s 81 of the Act which obliges the Court to bring an end finally to financial proceedings between the parties, the exercise of the jurisdiction should be confined to circumstances where the consortium vitae between the parties has broken down.

26. Mr Page SC refers me to a decision of Dessau J in Jennings at (1997) FLC 92-773. He submits that the facts in that case mirror significantly the facts in this.

27. In particular, Mr Page SC refers me to what her Honour said at p 84538 of the report. Her Honour said that, in the particular and unusual circumstances of the case before her - and I agree with Mr Page SC that the facts are somewhat similar to those here - that there was nothing to be gained from a property settlement. There, no apparent intention of the parties to separate was evident and visits between the parties in that case continued to occur between the parties to the marriage in circumstances where the husband was hospitalised.  Her Honour concluded that it "could not be fair or just" to make an order in those circumstances.

28. In my view, however, there are distinguishing features between that case and this. 

29. In particular, I take account of the fact that the husband himself, at a time when he did not lack capacity, commenced proceedings for settlement of property.  It seems to me that this is as significant a piece of evidence in the somewhat murky facts of this case as can be found with respect to intention and its relevance to the breakdown of the consortium vitae. 

30. In a similar vein, it can be seen that, on 21 April 2006, the parties were prepared, on the face of that document, to avail themselves of s 79 of the Act. 

31. It is true, on the evidence before me, that there is considerable conflict about the events leading up to the making of those consent orders, and the circumstances in which they were made. Nevertheless, on the face of the document there was an intention on the part of the wife and the husband to affect a distribution pursuant to s 79 of the Act. 

32. It may well be that the wife now says that the orders contained in that document are not orders to which she would now consent. Furthermore it might be said by the wife that, subsequent to the submission of those orders, which I should emphasise were never made, she withdrew her consent. 

33. Those matters may be relevant to the issue of whether the orders or prospective agreement contained within that document, represented a just and equitable settlement of property as distinct from whether the Court should exercise its jurisdiction in the first place to make orders that are designed to represent a just and equitable settlement of property. 

34. It seems to me that, again, that document is good evidence that each of the parties intended the Court to exercise its discretion to make orders pursuant to s 79 of the Act, whatever might be the merits or demerits of the particular orders sought in that document.

35. Thirdly, it is pointed out by Mr Page SC, implicitly by reference to the decision in Jennings, that, similar to the factual situation in that case, the parties here, if they have separated, continue to have an ongoing relationship.  It seems clear on the evidence before me that is right, in that it seems plain that the wife continues to visit her husband, it seems on a regular basis, at the nursing home. 

36. I should add that the evidence before me, and in particular evidence relevant to earlier interim determinations made by me in this case, is that those visits have not been without either conflict or controversy.  I referred in earlier decisions to evidence from, for example, nursing staff at the nursing home.

37. Be that as it may, the fact that the wife visits the husband, whether on a regular basis or otherwise, is evidence which is, to my mind, neutral insofar as it points to whether there is a breakdown in the consortium vitae, or as a pointer for or against the discretion to exercise s 79 power.

38. It is, to me at least, unsurprising that after a marriage of 40 years that a marriage might have broken down but yet the parties to the marriage maintain some form of contact particularly in the circumstances where, as I have said, the husband is now incapacitated and in a nursing home.

39. Finally, it was submitted, perhaps faintly, that the wife is effectively estopped by reason of her earlier actions from now saying that the Court ought not exercise its discretion.  Without deciding the issue of estoppel it seems to me that it is not necessary to make any decision about that specifically by reason of the other conclusions I have come to with respect to the facts which, to my mind at least, are determinative of the issue of whether I should exercise discretion or not.

40. Finally, Mr Page SC points out in reply, particularly with respect to the submission made by Mr Cameron on behalf of the case guardians for the husband, that the wife's earlier indication of an intention to sever joint tenancies, which joint tenancies were in fact, I gather, severed by the case guardians for the husband, should be seen in same light as that applied to the submission of the consent orders, namely a circumstance whereby the wife was frightened of family members and where there were varying family agendas.

41. The answer to that submission, I think, is that to which I have earlier referred, namely that the matters that Mr Page SC refers to, whilst pointing to a considerable degree of murkiness in the facts surrounding the submission of those orders, nevertheless the application was made by the husband when he was of full capacity. The submission of those orders, and other actions by or on behalf of the wife, including indicating an intention to sever joint tenancies, are sufficient to convince me that I should exercise my discretion so as to permit the s 79 proceedings in this Court to proceed before me.

42. For those reasons I dismiss pars 1 and 6 of the amended response to an application for final orders filed on 15 February 2008.

    ORDERS DELIVERED

43. The following reasons support orders that I will now make in respect of s 79 of the Act. Those orders occur in circumstances where these parties have been married now for nearly 50 years. 

44. A document which, for convenience only, was admitted into evidence as Exhibit W1, sets out a means by which the property can be divided equally between the parties. 

45. In circumstances where the parties agree that there ought be an equal division between them, it is probably not necessary to do other than observe that the value of the net property of the parties, or either of them, within the meaning of s 79 of the Act is about  $2.85 million and comprises a number of pieces of real property situated both in northern New South Wales and on the Gold Coast and real property in a Sydney suburb as well as what has been described in the proceedings as “the […] business” valued at some $875,000.

46. The remaining area for the exercise of discretion is the means by which orders of this Court can effect an equal division between the parties. 

47. Mr Page SC, whilst not contending for any particular division on behalf of his client, points out matters which, it seems to me, are not seriously in issue and they are matters which are essentially agreed to on behalf of the husband through his case guardians, by Mr Cameron of counsel. 

1. The wife is aged 70.  She needs a home, and she needs an income to meet her day to day needs.  The husband is currently in a nursing home, the fees for which are in the region, it is agreed, of about $50,000 and a sum is needed by him in order to meet those requirements.  So, too, any other needs of his can be met by income received from what are essentially investment properties.

2. That being the case, if I effect a division of property, in essence, in accordance with what Mr Page SC gives as an example, and from which Mr Cameron does not demur, then it can be seen that the husband would receive four pieces of real property which could either be capitalised or retained for the purposes of receiving income, and which can be seen to provide to him the potential for either a capital sum or income from which the nursing home fees and his other needs and expenses can be met.

3. In the same vein, the earlier disputes between the parties have centred around the business and, in particular, the running of the business.  In that respect Mr D Starkey, and I gather the wife, raised issues with respect to the extent to which the case guardians for the husband should be involved in the running of that business.  In essence, and in broad terms, they each objected to the case guardians involving themselves in the running of the business.  

4. The orders put up by Mr Page SC as an example of the sorts of orders that might be made by the Court in the exercise of its discretion would see the business going to the wife.  That would eliminate the problem which she, and Mr D Starkey, have indicated as being, I think it is fair to say, their main issue during the interlocutory stages of these proceedings. 

5. It would also allow finality to be brought to the financial affairs of the parties because the partnership, which is the current means by which the business is run, would be dissolved and the sole rights to the business would devolve to the wife.

6. In addition, the wife would also receive two valuable pieces of real property: a property in northern New South Wales valued, it is agreed, at $270,000; and a unit in the suburbs of Sydney, valued, it is agreed, at almost $400,000.  That, too, provides the wife, given her age and stage in life, to either capitalise those properties into cash and/or choose to receive income from them.  I should also mention that Z Street in northern New South Wales has been the parties' matrimonial home, and the wife continues to reside there.  Needless to say orders along the lines of those suggested, as an example, would allow the wife to continue residing at that property.

7. It seems to me that whilst those orders are put forward, in effect, as an example by Mr Page SC and Mr Cameron contends for those orders as being just and equitable, an examination of the orders, suggests that they provide for precisely the sorts of things that should exercise my mind in arriving at orders at what is often said to comprise the fourth step in s 79 proceedings, given that it is agreed - and I consider is just and equitable - that the distribution of property should occur equally between the parties to this marriage.

8. At an interlocutory stage, an application was made on the part of the case guardians for the business to be sold.  Obviously enough, in light of the orders that have been made by me today, that application in a case filed on 19 January 2009 is dismissed. 

I certify that the preceding fifty five (55) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy

Associate:     

Date:  25 May 2009