Terrell and Bentley

[2018] FCCA 2941

FEDERAL CIRCUIT COURT OF AUSTRALIA

TERRELL & BENTLEY [2018] FCCA 2941

Catchwords:
FAMILY LAW – Property – undefended final hearing.

Legislation:

Family Law Act 1975, ss.79, 79(2), 79(4), 75(2)

Cases cited:

Stanford & Stanford (2012) 247 CLR 108

Applicant: MS TERRELL

Respondent: MR BENTLEY

File Number: MLC 13252 of 2017

Judgment of: Judge Harland

Hearing date: 27 September 2018

Date of Last Submission: 27 September 2018

Delivered at: Melbourne

Delivered on: 27 September 2018

REPRESENTATION

Counsel for the Applicant: Mr Alexander

Solicitors for the Applicant: Anthonys Solicitors

The Respondent: No Appearance

ORDERS

1. Pursuant to s.106A of the Family Law Act 1975 a Registrar of the Melbourne Registry of the Federal Circuit Court of Australia execute a deed of transfer of instrument in the name of the Respondent, MR BENTLEY and to all tings necessary to transfer to the Applicant all of the Respondent’s right, title and interest in the property situate at and known as Property A that being the whole of the land more particularly described in Certificate of Title Volume including a Discharge of Mortgage form.

2. The parties otherwise retain all assets in their respective possession or properties held on trust for them by others.

3. All extant property matters be otherwise dismissed.

4. The applicant be granted liberty to apply.  

5. In the event that the applicant exercises the liberty to apply to Chambers with putting these orders in effect, the solicitor for applicant is directed to file an affidavit outlining why he failed to address those issues previously together with details of the costs he has charged his client with respect to this matter.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 13252 of 2017

MS TERRELL

Applicant

And

MR BENTLEY

Respondent

REASONS FOR JUDGMENT

1. This is an undefended hearing with respect to property orders.  The wife filed proceedings on 18 December 2017 in circumstances of some urgency when she became aware that the mortgage was in arrears.  The husband has not participated in the proceedings despite having opportunities to do so. 

2. The primary asset of the parties is the former matrimonial home at Property A.

3. The wife is 46 years old.  She undertakes some work as a (occupation omitted).  The husband is 41, and as far as the wife is aware, he is currently unemployed.  The wife has three children from a prior relationship, age 26, 24 and 21. There are two children of this relationship, [X] born 2006 who is age 12 and [Y] born 2007, age 10.  Both boys live with the wife and the wife is solely responsible for their care, including with respect to providing for their financial needs.

4. The wife is also a kinship carer for a two year old child, [A], who has been placed in her care by the Department of Health and Human Services after the child was removed from his mother who is currently imprisoned with respect to drug related offences.  [A]’s mother is a former girlfriend of one of her adult sons. 

5. [A] has been in the wife’s care since 2 June 2017.  The wife annexes a letter from the Department together with an application for an extension of a protection order.  The Department indicates that the protective concerns remain, whilst the ultimate aim is for [A] to be reunited with his mother.  They have sought the wife’s ongoing assistance in caring for [A] and have made an order that extends the protection order until 25 March 2019.

6. The parties commenced their relationship in 2003 and separated in 2012 when the husband was removed from the family home by Victoria Police.  The wife describes a violent relationship characterised by the father engaging in physical, emotional and financial abuse.  It included controlling behaviour, providing very little money in order for the wife to buy food for herself and the children and other items, demanding that the wife not work and when she did work, swearing at her and making threats. 

7. She deposes that he also made threats to kill her and the children if she left him and she describes having to obtain intervention orders on several occasions, including 4 August 2011, 5 August 2013 and 12 January 2015.  She deposes to the father continuing to breach those orders and it certainly is of concern that it has been necessary for the wife to obtain intervention orders over a period of several years. 

8. The wife says that the husband has been jailed from time to time with respect to those breaches.  She does not refer to what periods he has spent in jail but the fact that he has been jailed for violent offences indicates the seriousness of his conduct. 

9. The wife deposes that the parties decided to buy a block of land in Property A two years into their relationship after they had saved enough funds for a deposit with the intention of building a home on the land.  At the time, the mother was caring for [X] and the mother says that the mortgage broker advised that the title and loan should be put in the husband’s sole name as he was the only one working at the time. The mother says it was for this reason that the mortgage and the title are in the husband’s sole name and it is why she was not aware that the mortgage was falling into arrears post-separation.

10. The parties moved into their home at Property A in 2007.  At that time their youngest child was only three months old and the mother was caring for the children.  The father was working.  The mother describes an escalating pattern of violence after they moved into that property and states that the father started taking drugs including marijuana and ice and also drank to excess.  She says she was fearful for hers and the children’s safety, and at times would need to contact his parents for assistance. They would lend her money in order for her to be able to buy food and pay for utility bills, as did friends from time to time. 

11. The mother and children live in the home and have done so since separation.  The mother says that in about 2013 she and the husband reached an agreement that he would continue to pay the mortgage instead of child support, and at that time the mortgage payments were about $380 a week.  The wife says that she assumed that the husband was maintaining that agreement and, as her name was not on the loan, she did not receive any statements or notices from the mortgagee until she received a letter from the mortgagee’s lawyers on 9 October 2017 with a notice to vacate the property due to the arrears. 

12. Upon receiving that notice, the wife contacted the husband and she says that from time to time when the husband was not working, he asked her for money and she said she gave him money believing that he was paying it towards the mortgage.  She says that when she asked him why the mortgage was so far in arrears, he started swearing at her, calling her names and saying that he hoped that she and the children would be homeless.  She was able to enter into arrangements with the mortgagee’s solicitors to stay in the house, provided that she made payments of $600 a week towards the mortgage. 

13. The wife annexes a series of bank statements from September 2017 to June 2018 showing payments being made.  The wife has re-partnered and she says that she and her partner intend to refinance the loan together when the property is transferred to her. 

14. The wife says that on 2018 the father attended their youngest son’s birthday after Ms Terrell asked her if he could attend.  In annexure T-5 to her affidavit is a copy of a letter her lawyer sent to the father on 21 August 2016 and the following annexure T-6 is a copy of terms of settlement which the wife and husband signed. 

15. She says they spoke at some length about the house and the children and he told her that he wanted the proceedings finished and would not be attending court.  The day after he signed the terms he sent the wife abusive text messages. 

16. The wife seeks to have the Property A property transferred to her and that she will discharge and refinance the mortgage.  She obtained a sworn evaluation with respect to that property dated 12 April 2018, valued at $570,000.  The mortgage is currently approximately $230,000.  The wife says she has nominal superannuation entitlements and does not know what the husband’s superannuation entitlements are as he has not filed any material and has not provided any financial disclosure.  There is also evidence that the husband received an inheritance in early 2018 of about $85,000.

17. Apart from buying two laptops for the children, the husband has not provided any other financial assistance with respect to child support and has not made any payments to the mortgage, despite receiving that inheritance.  And it is in these circumstances that the orders are just and equitable. 

18. Until the High Court decision in Stanford & Stanford (2012) 247 CLR 108, the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled with a preferred approach as set out by the Full Court in Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39].

19. The High Court considered the operation of s.79 of the Act in the matter of Stanford. In this case, the majority stated at [35]-[36] that:

    “It will be recalled that s 79(2) provides that "[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.”

    The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [Footnotes omitted]

20. The High Court found three fundamental propositions with respect to the application of s.79, which can be summarised as follows:

    1. Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court emphasised the word ‘existing’.

    2. Secondly, although s.79 gives the court a broad power to make property settlement orders it may not be exercised in an unprincipled fashion. There must be no assumption that the parties’ interests are or should be different to their existing interests.

    3. Thirdly, when considering whether making a property settlement order is just and equitable the court must not assume that one or the other party has the right to a property adjustment order. The court must give separate consideration to s.79(2) in addition to the matters referred to in s.79(4).

21. In Stanford the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of s.79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation.

22. The High Court also pointed out that what is just and equitable is different in every case.

23. I am satisfied that the husband is on notice of the proceedings today and on notice of the orders sought by the wife. The husband has chosen not to attend.  The responded has chosen not to put any evidence before the Court and, therefore, the wife’s evidence is uncontested.  Given the parties’ separation back in 2012, the post-separation financial and non-financial contributions of the wife are significant.

24. Whilst she and the children have been residing in the property, it is clear that the husband has not provided any financial support and, in fact, to the detriment of the parties, has reduced the available pool by failing to pay the mortgage and allowing the mortgage to fall into significant arrears in circumstances where the wife had no way of knowing about that. 

25. The wife will continue to have sole responsibility for the care of the children. The husband rarely sees the children, and when he does see them it is at the mother’s instigation. He also provides no child support and it is unlikely, on the evidence before the Court, he ever will.

26. The fact that the husband has received an inheritance post-separation is a significant s.75(2) factor to take into account, particularly in circumstances where he has not provided or rectified the financial position with respect to the parties.  It is also the case that where a party has chosen not to make any disclosure to the Court, the Court is entitled to take a generous approach to the party who has.

27. Of course, the Court is not in a position to know what the husband’s financial position actually is.  In the circumstances of this case, and bearing in mind the significant contributions that the wife has made, particularly post-separation, and the fact that she will retain the care of the children without financial support, I am satisfied that the orders that the wife proposes are just and equitable.

28. Unfortunately, it is necessary to make comments about the way this matter has been prepared and conducted by the wife’s solicitor.  The preparation of this matter has fallen well short of the standards the Court and the wife, indeed, parties to these proceedings, are entitled to expect from legal practitioners and, particularly, legal practitioners who regularly practice in this Court.

29. When matters are being run on an undefended basis, it is even more important that the documents that are filed fully and completely disclose the position to the Court so the Court is able to determine whether or not orders should be made and in the absence of the other party.  It is not simply a matter of the Court being able to make orders simply on application of a party without making an independent assessment as to whether or not, in the circumstances of the case, the orders are just and equitable.

30. This matter would have been resolved with final orders made on 19 July 2018 if the case had been prepared with the proper care and diligence.  It was listed for an undefended hearing on that occasion, but I was not in a position to be satisfied that the orders sought were just and equitable on that occasion because of a lack of evidence.  The wife’s solicitor has now prepared a further trial affidavit and financial statement in support of the orders sought, but the application, which was efiled, did not contain any of the annexures and it was necessary for my chambers to contact his office yesterday to advise of that to ensure that the annexures were brought to Court.

31. It was also necessary to stand down the matter so that counsel could inquire of his instructor as to whether or not the annexures had also been served on the husband and the answer is not entirely clear, given that the instructor is, in fact, overseas, and his office has indicated that they think the annexures were served, however, it cannot be certain.  I do note that the annexures have been properly witnessed and executed on the same day as the affidavit.

32. It is not just the issue about the affidavit. On the last occasion, I was concerned about the prejudice to the wife in not being able to make final orders on that occasion. I made orders transferring the property to her as I was satisfied, on that occasion, that it was just and equitable for her to receive the property.  The issue was whether or not there should be any payment to the husband. It was because I could not be satisfied as to that issue, that the matter could not be finalised.

33. One of the issues raised on the last occasion is the fact that the conveyancing practices have changed to introduce online conveyancing. A consequence of this practice is that if any conveyancing matters are conducted on the online system, registrars of the Court are unable to execute documents pursuant to section 106A where parties neglect or refuse to sign documents.

34. This is because they are not clients for the purposes of that registration system and they are not in a position where they are able to provide their own identification, including passports and the like, for the purposes of signing such documents. Nor should they be required to do so. This results in somewhat of a quandary for lawyers and the Court when people do not comply with orders.  It is for that very reason that I raised it on the last occasion with the expectation that the wife’s solicitor would have looked into that in terms of how to address it.

35. I also expected that orders actually would have been implemented.  Instead, the interim orders have not been implemented at all. I note, and this is an indication of the lack of care and attention to detail in this matter, is the fact that annexure T-6, which includes the terms of settlement signed by the parties, includes a proposed consent order, simply noting that the parties have agreed to terms of settlement and that the wife is to file a notice of discontinuance.

36. It is as if the orders that I made on the last occasion simply do not exist. Mr Alexander has appeared in this matter on several occasions, including on the last occasion, and it is most unfortunate that the husband is presented with terms of settlement rather than the actual conveyancing documents that he may well have signed, given that he has signed the terms of settlement.  Given his change of heart and the abusive text messages, it may well be that there are going to be difficulties with enforcing this matter.  I find that concerning, because that would lead to further difficulties and prejudice to the wife, as these are matters that are outside of her control.

37. I will make the orders that are sought in the wife’s outline of a case and I will also give her liberty to apply in circumstances where I anticipate there may well be problems with having these orders put into effect.  If that is the case, I will require the solicitor to file an affidavit, without charge to his client, to explain why he has failed to address these issues previously.  In the event he needs to file an affidavit with respect to that, I will also require him to include details of the costs he has charged his client with respect to this matter.

I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of Judge Harland

Date: 17 October 2018