Sykora & Paquet
[2025] FedCFamC1F 194
•26 March 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Sykora & Paquet [2025] FedCFamC1F 194
File number: MLC 130 of 2023 Judgment of: WILLIAMS J Date of judgment: 26 March 2025 Catchwords: FAMILY LAW – PROPERTY – INTERIM ORDERS – Wife’s capacity to participate in proceedings – Small asset pool of an unknown amount – Application for the sale of property and the distribution of proceeds of sale as a partial property settlement – Order made for the sale of property and partial property settlement to the wife. Legislation: Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) s 102NA
Cases cited: Bearup & Bearup (1993) 16 Fam LR 797
Furtado & Furtado [2011] FamCA 1018
Harris & Harris (1993) FLC 92-378; [1993] FamCA 49
Strahan & Strahan (2009) FLC 93-466; [2009] FamCAFC 166
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Zadenev & Zadenev [2013] FamCA 838
Division: Division 1 First Instance Number of paragraphs: 41 Date of hearing: 12 March 2025 Place: Melbourne The Applicant: Litigant in person Counsel for the Respondent: Mr Duddridge Solicitor for the Respondent: BTT Lawyers Pty Ltd ORDERS
MLC 130 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS SYKORA
Applicant
AND: MR PAQUET
Respondent
ORDER MADE BY:
WILLIAMS J
DATE OF ORDER:
12 MARCH 2025
THE COURT ORDERS THAT:
1.The real property situated at B Street, Suburb C of Volume … Folio … (“the Suburb C Property”) be sold by public auction forthwith.
2.That Respondent shall do all acts and things and sign all necessary documents to effect the sale of the property, and for that purpose the following shall apply:
(a)The Suburb C Property shall be listed for sale by public auction with such real estate agent as is agreed between the parties, and failing agreement within 14 days from the date of these Orders, the real estate agent will be as nominated by then president of the Real Estate Institute of Victoria;
(b)The reserve price of the Suburb C Property shall be such amount as is agreed between the parties, and failing agreement within 14 days of the date of these Orders, the reserve price will be as nominated by the real estate agent and shall be accepted by the parties (Reserve Price);
(c)The sale price of the Suburb C Property shall be such amount as is the highest bid over the Reserve Price.
(d)The conveyancer to facilitate the sale of the property shall be agreed by the parties and in default the respondent shall provide a list of three proposed conveyancer/solicitors to the applicant, and the applicant shall choose the conveyancer/solicitor.
3.The Applicant is to clean the Suburb C Property prior to any inspection by prospective buyers.
4.The Respondent to pay up to $5,000.00 for any necessary repairs or maintenance as recommended by the Agent prior to auction and any such repairs and/or maintenance to be managed by the Agent, with any such expenses to be reimbursed to the Respondent from the net sale proceeds.
5.The parties are to co-operate in every way with the real estate agent in relation to the marketing of the property for sale, including allowing inspection of the property at all times reasonably requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer.
6.That upon sale of the property, the Respondent shall execute the contract of sale and all other documents necessary to complete the sale of the Suburb C Property including all transfer documentation forthwith upon its submission to them by the agent or their solicitor. And the respondent hereby authorises the applicant to receive from the selling agent all information about the sale of the property as may be requested by her.
7.The proceeds of sale of the property shall be paid in the following manner and priority:
(a)To discharge mortgage of the Suburb C Property to NAB;
(b)All sale costs and commissions and conveyancing fees;
(c)Any amounts due to the Respondent pursuant to Order 4 herein;
(d)$50,000.00 to the Applicant to be paid into a bank account nominated by her;
(e)The balance to be held in an interest-bearing controlled money trust account of the estate agent pending final resolution of the proceedings.
8.All applications for final orders be adjourned for hearing before the Hon. Justice Williams on a date to be determined after compliance with Orders 9 and 10 herein as 1-day matter and that the evidence in chief of all witnesses be given by affidavit.
9.By 4.00pm on a date being no more than 30 days before the date for final hearing, the Applicant file and serve upon all other parties an affidavit by a qualified medical practitioner as to her current mental health functioning, medical history both physical and mental, and her capacity to understand and conduct litigation.
10.The Applicant shall do all things so as apply to the Commonwealth Family Violence and Cross-Examination of Parties Scheme (“the Scheme”) for representation, pursuant to Order 17 of Orders made on 2 October 2023 by the Hon. Justice Hartnett, with any such application must be made at least 12 weeks prior to the final hearing.
11.The Applicant will vacate the property prior to settlement noting that the conveyancer/solicitor will be instructed to obtain a release of the deposit monies prior to settlement which will be paid to the applicant as part of the funds to be paid to her pursuant to order 7(d) hereof.
12.Liberty to apply to both parties.
THE COURT NOTES THAT:
A.Further information about the legislation and the Scheme can be found at Part 4 of the attached Family Violence Information Sheet.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 the pseudonym Sykora & Paquet has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILLIAMS J
INTRODUCTION
On 12 March 2025, this proceeding was listed before the Court as a three-day trial to determine the parties’ respective applications for property settlement.
The matter had previously been listed for trial on 12 August 2024, when both parties were represented by counsel. On that day, counsel representing the applicant wife expressed his concerns about the wife’s capacity to understand the nature of the proceedings, and to provide instructions.
Because of counsel’s concerns, orders were made providing for the wife to file and serve an affidavit from a qualified medical practitioner as to her capacity to understand and conduct litigation.
Both parties were represented by counsel pursuant to a grant of Legal Aid under s 102NA of the Family Law Act 1975 (Cth), in circumstances when orders were previously made by a judge of this Court restraining either party from personally cross-examining the other.
In the event she did not have the capacity to do so, the wife was ordered (via a potential litigation guardian) to file an application seeking the appointment of a litigation guardian.
The issue of the wife’s mental capacity had previously been raised on 29 May 2023, when an order was made for the wife to file an affidavit from a medical practitioner as to her mental health functioning and competency to conduct litigation.
BACKGROUND
The applicant wife (“the wife”) was born in Country D in 1984 and is 40 years old. The respondent husband (“the husband”) was born in Country D in 1978 and is 46 years old. In 2008 the husband travelled to Australia on a student visa, and in mid-2012, the parties met via a newspaper advertisement in Country D. They subsequently married a month later.
The parties moved to Australia together in early 2013, and lived in rental accommodation in Sydney.
On 29 June 2015 a dispute occurred between the parties, and due to police involvement, the husband left the rental accommodation. He also ceased making rental payments. The wife was requested to leave the rental accommodation by the landlord and returned to Country D in June 2015.
According to the husbands Outline of Case, the City E District Court made an ex parte order granting the wife spousal maintenance of $3,333 per month on 3 March 2017. On 21 March 2018, this order was placed on hold due to the husbands’ proof of income, and it was subsequently ordered the amount be reduced to $450 a month.
In February 2019 the parties engaged in mediation and resolved their marital issues. In mid‑2019 the wife returned to Australia to live with the husband in rental accommodation in Sydney.
New South Wales Police referred the Crisis Assessment and Treatment Team (“CATT”) to visit the wife in late 2019. The wife was taken to the F Hospital in Sydney and remained there for 10 days.
The parties relocated to Melbourne in late 2019 where they resided in rental accommodation. The husband purchased the property located at B Street, Suburb C (“the Suburb C property”) in his sole name in mid-2020.
The parties separated on a final basis on 30 September 2022, following a tumultuous few years in which the CATT team was again involved with the wife, an Intervention Order was obtained on behalf of the husband, and the wife made various allegations of sexual assault against the husband.
The wife filed an Initiating Application in Division 2 of this Court on 9 January 2023 seeking various property orders. The matter was transferred to Division 1, and on 23 February 2023 the husband was ordered to make payments relating to the Suburb C property including the mortgage and utilities, and $5,000 in lump sum spousal maintenance.
The trial commenced before me on 12 March 2025.
PRELIMINARY MATTERS
When the trial was due to commence, it became obvious that the wife had significant problems with her mental health, notwithstanding the affidavit she had filed on 1 October 2024 which annexed a report from her treating general practitioner, Dr G, which said the wife currently lives on her own, and can manage her financial and legal affairs, and she appears to have a good mental capacity and functioning, and the doctor believes she has capacity to understand and conduct litigation.
Whilst that might have been the case in September 2024, as at the date of the report, I formed the opinion that the wife did not have the requisite capacity to proceed with running a trial as a self-represented litigant.
The basis of my opinion was the wife’s statements that she had been poisoned by the husband the previous day, notwithstanding the husband was nowhere near the wife’s residence, and that she had been forced by the husband and his associates to take medication without her consent, which had extremely adverse effects on her.
Additionally, I was informed by my associate that her presentation outside the court room was florid, and her behaviour was unusual.
Attempts were made to explain to the wife the nature of the proceedings and how a trial would be conducted, that she would not be permitted to cross-examine the husband personally, and the consequences of the husband’s unchallenged evidence. She was also reminded that she could have availed herself of legal representation by the s 102NA scheme had she chosen to do so.
HEARING ON 12 MARCH 2025
Notwithstanding the problems referred to above, the wife seemed to have some grasp of the issues in the case, although she was fixated on various ideas such as the husband’s parents wealth in Country D, which she described in her trial affidavit as her parents-in-law owning a property in City E which would be worth around AUD35,000,000, the husband enjoyed a luxurious lifestyle, and had assets and resources which were cleverly hidden by him and had not been disclosed to the Court.
She also accused the husband of having increased the mortgage secured against the main asset of the relationship, a unit situated at Suburb C, and having disposed of the proceeds without accounting to the Court. An examination of the bank statements which were annexed to the husband’s trial affidavit filed on 4 March 2025 revealed that since the commencement of the mortgage in August 2020, the husband had made substantial lump sum credit deposits into the mortgage prior to withdrawing the sum of $73,000 on 21 March 2022.
The application filed by the wife on 19 February 2025 includes an application for ongoing spousal maintenance as well as a payment to her of the proceeds of sale of the Suburb C property. It is impossible to ascertain what may be the proceeds of sale of the property because there is no up-to-date valuation of the property although there are various estimates, depending on whether or not some minor works are carried out to the property.
What was abundantly clear was that despite multiple orders made by another judge of this Court, and me, requiring the husband to continue to pay the mortgage payments on the property, he had not done so. Contrary to orders, the husband had directly contacted the mortgagee, NAB, and arranged for a moratorium on payments in respect of both loans encumbering the property, as from March 2024. The result of the husband’s non-payment of both loans is that the equity in the property has been eroded since March 2024, and his actions may result in action by the mortgagee to take possession of the property and conduct of mortgagee sale.
If the bank were to conduct a mortgagee sale, it is axiomatic that the proceeds available for distribution between the wife and the husband would be significantly reduced by both additional legal fees incurred by the mortgagee’s solicitors and probably a reduction in sale price.
The husband has continually pressed for the sale of the property and asserts he has no capacity to pay the mortgage payments, whilst the wife asserts that he leads a lavish lifestyle, has the capacity to meet the mortgage payments, but rather chooses not to do so, to deliberately disadvantage her. The wife has not worked for many years and is reliant on social security to meet her expenditure, and for the husband to pay the mortgage on the property. She clearly has no capacity to meet the existing mortgage payments and retain the property.
Whatever the truth of the matter, the husband has failed to comply with Court orders, and I have no confidence that he would reinstate mortgage payments in the future to fend off a mortgagee sale.
The only viable option is to sell the property which will avoid a mortgagee sale and enable the quantum of the asset pool to be determined.
Documents relied upon by the wife
The wife relied upon the following documents:
(a)Amended Application for Final Orders filed 19 February 2025;
(b)Affidavit of the wife filed 18 February 2025;
(c)Affidavit of the wife filed 22 January 2024;
(d)Outline of Case document filed 12 August 2024;
(e)Affidavit filed by the wife, annexing medical certificate, filed 1 October 2024.
Documents relied upon by the husband
The husband relied upon the following documents:
(a)Amended Response filed 7 August 2024;
(b)Final trial affidavit filed by the husband on 31 January 2024;
(c)Financial statement of the husband filed 31 January 2024;
(d)Outline of Case document filed 7 August 2024;
(e)Affidavit of valuer filed 12 February 2024.
The following documents were tendered:
Exhibit
Description
A-1
Letter from NAB to husband dated 21 February 2023
A-2
Pages 1-6 of documents filed by the wife on 8 March 2025.
A-3
Medical centre letter dated 15 November 2024.
A-4
Text messages (without admitting authenticity) between wife and an unknown person.
RELEVANT LEGAL PRINCIPLES
Section 80 of the Act empowers the Court to make various orders. Section 114 of the Act enables the Court to make an injunction in relation to the property of a party to a marriage. The orders for sale of the matrimonial home were made in this case to preserve the limited equity in the property; see Bearup & Bearup (1993) 16 Fam LR 797.
As to the Court’s power to order interim funding and the principals to be applied, the Full Court of the Family Court in Strahan & Strahan (2009) FLC 93-466 stated at [132] and [137] that:
[132]In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the "overarching consideration" is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.
…
[137]Once a court proceeds to exercise the power in s 79 of the Act, being in the substantive phase, a court is required to undertake consideration of the matters in s 79(4) including by reference to s 79(4)(e) the matters in s 75(2) so far as they are relevant. However consideration of such matters may be brief and if it is established that "it seems likely to the court that … the applicant … will be likely receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made”…
As to the restraint and caution which should be exercised by a trial judge, the Full Court said at [136]:
[136]As to the third matter identified at 79,930 by the Full court in Harris, in discussion before us it was described as the "adjustment issue" or "claw-back issue". It was submitted by senior counsel for the Wife that it is relevant to consider whether an order would give the applicant "more than they would be indubitably entitled to on a final hearing" or alternatively "would it give them so much that it could not be adjusted on a final hearing?" As we have observed the Full court in Zschokke at 83,220–221 stressed the importance of consideration of the "adjustment issue" if the power in s 80(1)(h) of the Act is being exercised. We accept the submission and observe that this matter is relevant because the discretion conferred by the power in s 79 is to make such order as the court considers appropriate provided it is just and equitable to make the order in circumstances where the power will not be exhausted by the interim order. As Bryant CJ and Coleman J observed in Gabel v Yardley at [69] and [72] the interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal. As Finn J said at [126] the interim order must be "capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power".
See: Bearup & Bearup (1993) 16 Fam LR 797, Harris & Harris [1993] FamCA 49, the decision of Murphy J in Furtado & Furtado [2011] FamCA 1018 at [10]-[11] and Watts J in Zadenev & Zadenev [2013] FamCA 838 at [21].
CONCLUSION
In order to preserve and hopefully maximise the equity in the property I made orders providing for the sale of the property and for the wife to have the first $50,000 from the proceeds of sale to enable her to re-establish a rental home for herself and have some capital to live off in the interim, pending final determination of the property application. I also made an order that the balance of the proceeds of sale are to be held in an interest-bearing controlled money trust account, pending final resolution of the proceedings.
Orders were made enabling her participation in the nomination of a selling agent and a conveyancer to assist with the sale of the property, and for the husband to carry out rectification repairs or maintenance as recommended by the selling agent, to a maximum of $5,000.
The wife was also advised, and an order was made to that effect at paragraph 12 of the Orders, that she should endeavour to obtain an early release of the deposit monies, which would be credited against the $50,000 she is to receive from the partial proceeds of sale.
Orders were also made for a further attempt to hear the trial of the outstanding property, and spousal maintenance claims, upon the wife filing a further affidavit from a medical practitioner no more than 30 days prior to the final hearing date and for her to apply for legal representation pursuant to the s 102NA scheme.
Upon settlement of the property, I anticipate being advised by both parties that they are ready to obtain a trial date, and I will list the matter for a further day with priority to enable this to be resolved.
I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Williams. Associate:
Dated: 26 March 2025
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