Summers and Brand

[2011] FMCAfam 114

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SUMMERS & BRAND [2011] FMCAfam 114

FAMILY LAW – De facto relationship – threshold issue – whether relationship ended before or after 1 March 2009.

Conveyancing Act 1919, ss.66G, 66I
Family Law Act 1975, ss.4AA, 39B, 90SK
Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008

Applicant: MS SUMMERS

Respondent: MR BRAND

File Number: WOC 298 of 2010

Judgment of: Altobelli FM

Hearing dates: 28 January 2011 & 7 February 2011

Date of Last Submission: 7 February 2011

Delivered at: Sydney

Delivered on: 7 February 2011

REPRESENTATION

Counsel for the Applicant: Mr Campton

Solicitors for the Applicant: Kells The Lawyers

Respondent: Self-represented

ORDERS

1. Declaration that there was a de facto relationship in existence between the Applicant and Respondent commencing on or about 21 June 2004 and concluding on or about 1 November 2009.

2. Pending further order, the Respondent be restrained from selling, transferring, mortgaging or in any way encumbering or otherwise dealing with the property situated at or known as Property A.

3. I DIRECT the Respondent to produce to the solicitor for the Applicant within 14 days, copies of his taxation returns for the financial years 2004 to 2010 inclusive.

4. I DIRECT the Respondent to forthwith facilitate attendance on the Property A property of a valuer appointed on behalf of the Applicant and to cooperate with the solicitor for the Applicant in this regard.

5. The Conciliation Conference on 15 February 2011 is vacated.

6. The matter be adjourned to 14 March 2011 at 9:30am for Mention in Sydney.

7. Leave be granted to the parties to attend by telephone on the next occasion, provided they contact my Associate on [omitted] no later than 7 days before the Mention to provide a contact telephone number.

1. The parties have liberty to apply on 72 hours notice.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

WOC 298 of 2010

MS SUMMERS

Applicant

And

MR BRAND

Respondent

REASONS FOR JUDGMENT

1. Ms Summers is a 42-year-old [occupation omitted] living in New South Wales and is the applicant in these proceedings.  Mr Brand is a 51-year-old self‑employed tradesman, also living in New South Wales.  He is the respondent.  It is common ground between the applicant and the respondent that they lived in a de facto relationship from about June 2004 to November or December 2007.  The respondent contends, however, that the relationship ended at about that time, whereas the applicant asserts that the relationship continued until November or December 2009.

2. The applicant commenced proceedings by way of alteration of property interests in this Court, but the respondent raises the threshold issue of whether the Court is, in fact, seized with jurisdiction.  The Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 came into effect on 1 March 2009.  As the legislation does not have retrospective effect, insofar as it does not apply to de facto relationships that broke down prior to 1 March 2009, the central issue in the present proceedings is when the de facto relationship ended.  The respondent says it happened well before the implementation of the de facto referral of powers to the Commonwealth, whereas the applicant says the separation took place many months later.

Background

1. It is not necessary for me to go into an explanation of the detailed financial circumstances of the applicant and respondent except insofar as it relates to the jurisdictional issue.  The applicant seeks an order that the property in which they lived in Property B be sold and that net sale proceeds be paid to her, after discharging the mortgage over the property.  In addition, she seeks the payment of a further sum to her by the respondent.  The property at Property B is jointly owned and was purchased in 2004.  The parties moved into the property on 13 May 2005.  The relationship was not without its stresses.  There were tensions in the household between the respondent and the applicant’s children.  In November 2007 a fire occurred at a property at Property A owned by the husband, placing a considerable stress on him.  The husband asserts that the fire at Property A was a precipitator of the end of their relationship as de facto husband and wife, and that thereafter they continued as, in effect, co‑owners of the Property B property.  It was clearly implicit in the respondent’s submission that from the end of 2007 he and the applicant were no longer in any form of close personal relationship, but continued to be in a form of business partnership based around the Property B property.  By contrast, the applicant asserts that their relationship as a couple living together on a genuine domestic basis albeit not married continued until late 2009.

Applicable Law

1. Part VIIIAB of the Family Law Act to a large extent mirrors the property and spouse maintenance provisions contained in Part VIII of the Family Law Act.

2. The definition of “de facto relationship” is contained in section 4AA of the Family Law Act and provides:

   (1)     A person is in a de facto relationship with another person if:

   (a)     the persons are not legally married to each other; and

   (b)the persons are not related by family (see subsection (6)); and

   (c)having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.

   Paragraph (c) has effect subject to subsection (5).

   There is a geographical requirement set out in section 90SK that is not in issue in these proceedings. If the existence of a de facto relationship can be established beyond 1 March 2009, there is no doubt that the de facto relationship was in existence for at least two years.

3. The real issue in this case, therefore, is whether there was in existence a de facto relationship between the applicant and the respondent after 1 March 2009.

The Evidence

1. The applicant filed two affidavits sworn 1 April 2010 and 20 January 2011.  She was cross‑examined by the respondent.  Other affidavits were filed in her case, but not read.  The applicant was represented at all relevant times by a solicitor, and her counsel, Mr Campton, appeared at the hearing.

2. The respondent’s evidence consisted of his affidavits sworn 24 January 2011, 21 January 2011 and 10 September 2010.  The respondent represented himself at the final hearing, but had been represented by a solicitor until at least September 2010.  The respondent was cross‑examined.

Evidence and Findings

1. Where the evidence of the applicant and the respondent conflicts, for the reasons I set out below I prefer the evidence of the applicant.  Indeed, I find the respondent’s evidence so unreliable that it would be unwise to accept any relevant, significant assertion made by him unless corroborated by documentation.  The respondent was not an impressive witness.  He was uncooperative, and often unresponsive in cross‑examination.  His answers were often quite irrelevant.  The most significant problem with the respondent’s evidence is the inconsistencies in his evidence, particularly as between his affidavit sworn 10 September 2010 and his oral evidence.  Thus, for example, in correspondence between his solicitor and the applicant’s solicitor, he had instructed his solicitor to assert that there was no de facto relationship in existence between them at all.  However, his affidavit on 10 September clearly concedes a de facto relationship between June 2004 and November or December 2007.  Indeed, it appears that in the Supreme Court proceedings commenced by the respondent against the applicant seeking a severance of the joint tenancy in respect of the Property B property, and orders for sale (proceedings commenced, coincidentally, immediately after the commencement of proceedings in this Court) he makes no concession whatsoever about the existence of any de facto relationship, at any period of time.  This was clearly misleading the Supreme Court.  Moreover, at paragraph 30 in the affidavit he filed in the Supreme Court proceedings, he asserted that he did not share a room with the applicant at all.  In the proceedings before this Court, however, he asserted that he did not share a room with the applicant after November or December 2007.

2. Whereas at paragraphs 25 and 27 of his affidavit the respondent asserts that he occupied a separate bedroom to the applicant from the end of 2007, in cross‑examination he conceded that he slept in the same bed as the applicant during holidays they had taken together as late as October 2009.  I fully recognise that this fact is not determinative in its own right, but the present issue here is credibility, and his concession in cross‑examination leads to an inference that his dogmatic assertions in this Court, and in the Supreme Court, were misleading and plainly incorrect.

3. The respondent’s credibility is further undermined by his failure to produce relevant documents, which would have been highly relevant to the question of the existence of the de facto relationship at the relevant time.  For example, by way of order made on 10 September 2010, he was directed to produce taxation returns.  He did not do so.  He offered no plausible explanation for not doing so.  I am entitled to infer, and I do strongly infer, that the production of those documents would have been unhelpful to the respondent’s case.  To compound this, the respondent was again asked to produce those documents by way of a notice to produce dated 21 January 2011, and again he failed to do so.

4. At paragraphs 18 and 26 of the respondent’s affidavit sworn 10 September 2010 he makes a number of assertions about separation of finances.  For example at paragraph 18 he asserts “Ms Summers and I have always run our finances separately,” though he does explain there was one occasion in 2005/2006 when he made two repayments on her mortgage.  At paragraph 26 he deposes to moving out of the Property B property at about November 2007 and that “Ms Summers and I continued to keep our finances separate.”  In cross‑examination, however, he conceded that notwithstanding the clear assertions in his affidavits that the applicant had in fact given to him blank cheques drawn on her account for him to pay bills.  The respondent attempted to explain that what he meant by saying that he and the applicant kept their finances separate was that they kept separate bank accounts.  I do not accept this explanation.  The respondent also conceded in cross‑examination that the applicant’s bank account was used to pay the mortgage and outgoings on the Property B property, until at least 2009.  Whilst, on one view, this evidence may be seen as corroborative of his assertion that after the end of 2007 his relationship with the applicant was as a business partner in relation to the Property B property, in the broader context of this case, it is almost impossible not to infer that their relationship after the end of 2007 was far more than that of business partners.

5. This point is further demonstrated by other evidence given by the respondent in cross‑examination.  He could not satisfactorily explain why so many of his business tax invoices up until August 2008 required his debtors to pay into the applicant’s bank account.  The respondent could provide no satisfactory explanation as to why, as late as September 2009, he renewed motor vehicle insurance referring to the applicant as “driver”.  He provided no plausible explanation as to why various roads and transport authority documents referred to the applicant as his de facto wife.  Moreover, he conceded in cross-examination that during the period January to July 2008, when he was disqualified from driving, at the very least the applicant drove him around several times.

6. The respondent was faced with evidence by way of photographs which is clearly inconsistent with his assertion about the end of the de facto relationship at the end of 2007, and the commencement of a business partnership.  In evidence there were SMS messages wholly inconsistent with his assertions.

7. I do not accept the respondent’s evidence on the relevant issues.  I am satisfied that, on the balance of probabilities, there existed a de facto relationship between the applicant and the respondent that commenced on or about June 2004, and ended on or about 1 November 2009.  I am prepared to accept that as at the end of 2007 there was a change in the relationship between the applicant and the respondent, but it did not change the fundamental nature of their relationship as that of a couple living together on a genuine domestic basis.  They certainly did not separate as is asserted by the respondent.

Conclusion and Orders

1. My findings about the existence of a de facto relationship means, in effect, that this Court has exclusive jurisdiction. The fact is however, that on 16 July 2010 the Supreme Court of New South Wales, in its equity division, made certain orders pursuant to section 66G and 66I of the Conveyancing Act 1919 (NSW). It was not argued before me, nor could it be the case, that the Supreme Court lacked a jurisdiction to make the orders made. In any event, the orders are consent orders. Those orders appoint trustees for sale of the Property B property and prescribe how the proceeds of sale are to be applied. In the proceedings before me, the applicant sought an order that the balance of the proceeds of sale of the Property B property be paid into the applicant’s solicitor’s trust account. I am not prepared to do so. The consent orders made in the Supreme Court clearly deal with this issue. Those orders provide for the first mortgage to the [omitted] to be discharged, and that a further mortgage to the [omitted] Bank secured over the respondent’s Property A property be paid out. Any balance then remaining should be held in trust. In view of the findings that I have made in these proceedings, I can understand the applicant’s concern in relation to the Supreme Court orders. Her concern may well be tempered by the fact that I have no reservation, on the evidence before me, about making an injunction against the respondent from dealing with the Property A property in any way. As I have indicated above, there are serious issues about his credit and his willingness to comply with his obligations of disclosure to this Court. Be that as it may, and even if this Court does have exclusive jurisdiction in the dispute between the applicant and the respondent as a result of the findings I have made, that does not change the inherent validity of the orders made in the Supreme Court on 16 July 2010. I leave open the possibility of my being asked to make orders compelling the applicant and respondent to do all things necessary to discharge or vary the Supreme Court orders. That is not what I was asked to do, though it was clearly contemplated in exhibit A4.

2. I was also asked to make orders about the payment of occupation fees in respect of the respondent’s occupation of the Property B property.  Not only did I not have appropriate evidence in this regard, but the fact is that the trustees appointed under the Supreme Court order would be the recipients of such occupation fee and I doubt very much whether I would have the jurisdiction to compel the trustees to use those occupation fees for a particular purpose, such as paying the mortgage.

3. It is regrettable indeed that these proceedings have assumed an unnecessary level of complexity.  Based on the information presently before the Court, the parties do not have a very large asset pool to divide between them.  Now that findings have been made about the Court’s jurisdiction, this is really a matter that ought to settle at a conciliation conference.  I encourage the respondent to obtain legal advice as, ultimately, I suspect this will save him money.  If the respondent complies with his obligation of disclosure to the Court, and to the applicant, this will greatly facilitate a just and equitable resolution of this case.  I have vacated the existing conciliation conference and will appoint a fresh one once I am satisfied that the respondent has complied with orders in relation to production of tax returns and valuation of the Property A property.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Altobelli FM

Date:     15 February 2011