Tahan & Celik
[2022] FedCFamC1F 1035
Federal Circuit and Family court of Australia
(DIVISION 1)
Tahan & Celik [2022] FedCFamC1F 1035
File number: PAC 380 of 2017 Judgment of: JARRETT J Date of judgment: 4 October 2022 Catchwords: FAMILY LAW – Property adjustment – not just and equitable to make an order Legislation: Family Law Act 1975 (Cth) ss, 90SF(3) 90SM, 90SM(4) Cases cited: Bevan & Bevan (2013) FLC 93–545
Robb & Robb (1995) FLC 92–955
Stanford v Stanford (2012) 247 CLR 108
Division: Division 1 First Instance Number of paragraphs: 22 Date of last submissions: 4 October 2022 Date of hearing: 4 October 2022 Place: Parramatta Counsel for the Applicant: Mr Mando Solicitor for the Applicant: Direct brief Counsel for the Respondent: Ms Coulton Solicitor for the Respondent: Crimcorp Defence Lawyers ORDERS
PAC 380 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS TAHAN
Applicant
AND: MR CELIK
Respondent
order made by:
JARRETT J
DATE OF ORDER:
4 OCTOBER 2022
THE COURT ORDERS THAT:
1.The application filed 31 January, 2017 be dismissed.
2.The response filed 15 December, 2017 be dismissed.
THE COURT DIRECTS THAT:
3.The Registrar of the Federal Circuit and Family court of Australia (Divison 1) refer the transcript of these proceedings and the other papers in the case to the Australian Federal Police and the Fair Work Ombudsman.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JARRETT J:
This is an application for property adjustment under the de facto financial provisions of the Family Law Act 1975 (Cth). On the applicant’s case the parties lived together between February, 2012 and January, 2017. On the respondent’s case it was about two years longer than that. The difference does not matter.
Section 90SM of the Act permits the court to make a property adjustment order if it thinks it is just and equitable to do so. In deciding whether to make an order, the court needs to take into account the matters set out in s 90SM(4), which in turn calls up the matters in s 90SF(3).
But before getting to all of that, of course, the first step is to identify the parties’ property, their assets, their liabilities, their financial resources, because once that it is done, it is only then that the court can make a determination about whether it is just and equitable to make any order: see Stanford v Stanford (2012) 247 CLR 108.
I find that the parties have the following assets: some chattels, household possessions in the possession of the applicant de facto wife that have a value of $30,000. The husband apparently has Motor Vehicle 1, although whether it is in his name or some other name, I am not sure. It is agreed to have a value of $50,000. It is subject to a liability of $25,000 and so has a net value of $25,000. There is a parcel of land at Suburb D. The parties agree that it has a value of $930,000, but it is not owned by either of the parties. It is owned by C Pty Ltd. It seems uncontroversial that the respondent is the only director and shareholder of that company.
I think it is significant, although its significance seems to have been lost on the parties, that the real property is in the name of the company and not one or other of them. The evidence satisfies me that the de facto husband is accustomed to using the company property as if it were his own, but it is not his, and there are responsibilities to creditors that are owed by company directors and others in certain circumstances. I know nothing about the company’s creditors other than what is in evidence and that is that there is a trade creditor that supplies products to the company that is owed about $18,000, and perhaps another creditor who is owed something over $100,000. The de facto husband says he is morally obliged to repay those sums, which tells me they are really creditors of the company. It was not explored in evidence whether the company has any other creditors, but I expect it probably does. There is an overdraft which seems to be secured over the Suburb D property and no doubt the company is the holder of the overdraft. So too the other secured liability, the parties agree, exists over the Suburb D property. The purpose of this discussion is to record that whilst the parties have treated the Suburb D property as property that might somehow be the subject of a property adjustment order, it may not be as simple as that.
There was some talk early in the piece when this matter came on for mention before me this morning that the wife also had Motor Vehicle 2 and a commercial vehicle, but it turns out that she does not. She has the use of the motor vehicle once a week. The motor vehicle is owned by a company of which she is a director and shareholder, but she says she is really a “stooge” for her current fiancé and it is property that is under his control. In any event, she says that company will be liquidated “at the end of the week.” Oh, that it was so simple.
If I include the Suburb D property, then the parties have net assets, it seems to me, of about $355,000. I pay no attention to credit card debts and the like. There was no explanation as to how they had been accumulated or the expenses in respect of which they were incurred.
None of the property is jointly held by the parties. It is not suggested that they have joint ownership of anything and it is clear enough that the Suburb D property is held by the company. The company was formed and operated well before the parties commenced their relationship here in about 2010. It owned the Suburb D property well before the parties commenced their relationship.
In those circumstances, the judgment of the High Court of Australia in Stanford looms large. Is it just and equitable to make any order at all adjusting the interests of these parties in the property? To take a puritan approach to it, if I was to be satisfied that there should be a property adjustment order and it should involve the Suburb D property, then perhaps the best way to deal with that would be to make an order in respect of the husband’s share or shares, I am not sure which because there is no evidence about it before me, in C Pty Ltd. That way, the interests of any creditors of that company could be taken into account.
I find it extraordinary that there is no evidence about many of these things. These proceedings have been on foot since 2017. As I indicated in some reasons I gave earlier this morning, there were directions made in May of this year for the preparation of this matter for a trial. Despite those directions, neither party has done anything. There has been no compliance with those trial directions and no real attempt to comply, either. More than that, there has been an abject failure by each party to disclose their financial circumstances. It only became apparent today that the applicant’s financial circumstances were complicated by her entanglement with her fiancé, and despite having control of a profitable asset – C Pty Ltd – the respondent has never produced a valuation of the company, thinking that it was seemingly appropriate to simply sit in the witness box and say, “I think it is worth nothing, and that is what my accountant and my lawyers say.” For heaven’s sake.
So I approach the case on the basis that neither party has made full and frank disclosure of their financial position and that is consistent with my view about their credit. I do not think either of them told me the truth. Both of them were given to telling untruths. The de facto wife habitually does so. The evidence clearly establishes that she tells untruths to Centrelink and to banks to secure finance for her fiancé. The de facto husband does the same thing. I was satisfied of neither witness’s credit.
It seems to me that it is likely that the applicant in this case did in fact do considerable work in the C Pty Ltd business. Not as much as she says. Her evidence about that makes no sense. It would be an extraordinary feat for her to complete the work that she says she did for the company and then make the homemaker contributions she claims to have made. But I am sure that the husband’s evidence undersold her contribution significantly.
But the C Pty Ltd business was not a joint endeavour. This was an endeavour that was embarked upon and well-established by the respondent by the time the applicant came along. It might have been convenient for both of them for her to work in the business, but that does not mean that it was a joint endeavour.
There is no suggestion in the material or by either party in their oral evidence that she was to take on an ownership interest in the business – to become a proprietor or a shareholder in the company. At best, she was an employee and according to her own evidence, there were agreements about wages that were to be paid to her but never were. That is inconsistent with her having a future proprietorial interest in the business. Her contributions to the business were rewarded by her employment. That she may not have been paid her wages might give her recourse in other places, but it is difficult to see how it is or could count as a contribution to the acquisition, conservation or improvement of the parties’ property or each of them.
Even if I am wrong about that, the contribution is, on the evidence before me, unquantified in the sense either quantitatively – how much it meant to the business, rather than what it meant to her – or qualitatively – what it meant for the business in terms of its operations, convenience and all of the other matters that go towards the benefits to be derived by having an efficient employee in a business.
The de facto wife’s case is that aside from her contributions to the business, there were contributions as a homemaker. She would cook, clean, wash and vacuum and do all of the household tasks. The respondent’s case is that he would share in those from time to time. I suspect, again, that the truth is somewhere in the middle. I do not expect that all of the time, seven days a week, or even four days a week or even three days a week the de facto wife did everything as she now claims. I am sure that it was shared. Perhaps she did more, but then her son was living with the parties and that is a significant contribution by the respondent. The provision of accommodation to the applicant and her son is something of considerable significance.
It is not quite a Robb & Robb (1995) FLC 92–955 contribution because there is no evidence before me that would suggest that the nature of the relationship between the applicant’s son and the respondent was of such a quality as to attract the sorts of adjustments that Robb & Robb speaks of, but it is, nonetheless, a significant contribution, both by reason of provision of accommodation and payment of expenses such as food.
In Bevan & Bevan (2013) FLC 93–545, the Full Court of the Family Court of Australia made the point that it is important not to conflate the s 79(4) exercise with the step – if I can call it a step – pointed out by the High Court in Stanford of deciding whether it is just and equitable to make any order. Although, in Bevan, the Full Court said that it was appropriate to have regard to the matters in s 79(4) for the purposes of determining whether it was just and equitable to make any order at all, one needs to be careful not to conflate the two exercises. Hence, I started this part of my reasons by referring to Stanford but then have gone on to talk about contributions. That is, for the purposes of informing whether it is just and equitable to make an order.
The conclusion I have come to about that is that it is not. I see no basis to make an order for property adjustment in this case. I do not think it is just and equitable to make an order because, first, there is no jointly owned property. That, of itself, is no answer to the making of a property adjustment order, of course, but it underscores that these parties did not embark on a joint endeavour for the purposes of accumulating property or their future life together. I have referred to that in the context of the employment arrangements between the applicant and the company. Second, it is not just and equitable to make an order because the contributions to which I have referred are such that it would not result in an adjustment, in any event. There are contributions and countervailing contributions. There is an overwhelming contribution by the respondent of property initially and it is still represented in the asset pool (assuming I treat the company property as his). Although the cases counsel decision-makers against overstating the weight to be given to property introduced at the commencement of the relationship, it is nonetheless important to take into account the property that was present at the commencement of the parties’ relationship and that it has been maintained and remains at the conclusion of it.
I am not satisfied in the circumstances of this case that it is just and equitable to make any order at all. Even if that view is wrong, for the reasons I have just expressed, I would conclude that there would be no contribution-based assessment in favour of the applicant and there is no basis under s 90SF(3) to make any adjustment to that contribution-based assessment. That is because, on the evidence that I have heard from these witnesses, both have an earning capacity. I cannot figure out who has the greater earning capacity because I cannot figure out what it is that either of them earn or are capable of earning. The respondent has a profitable business, but he does not tell me what the profit is. Both parties have not disclosed properly and so in terms of s 90SF(3), it would be impossible to come to a conclusion about an adjustment.
Further, I am simply not persuaded on the evidence that either of the parties suffer from any medical conditions, the cost of treating which should feature in an adjustment to my contribution-based assessment. Neither of them suggest that their work would be impacted by their conditions; although the de facto wife did say that she did not think she would get a job in her current state, whatever that might be.
The overall conclusion is even if I was wrong about it not being just and equitable to make an order, there would be no order, in any event. The application and the response stand dismissed.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jarrett delivered on 4 October 2022. Associate:
Dated: 20 December 2022
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