Vurnik & Vurnik (No 2)

Case [2024] FedCFamC1F 34

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Vurnik & Vurnik (No 2) [2024] FedCFamC1F 34

File number(s): MLC 12678 of 2018
Judgment of: BENNETT J
Date of judgment: 2 February 2024
Catchwords:

FAMILY LAW – PRACTICE AND PROCEDURE – non‑appearance of a party – undefended hearing – where husband has not engaged in proceedings since 2019 – where husband has not communicated with the wife since 2018 – where husband has been accorded procedural fairness by service of documents by post pursuant to orders of the court.

FAMILY LAW – PROPERTY SETTLEMENT – alteration of property interests – consideration of add-backs – orders affecting an alteration of property interests whereby each party keep what they have except the husband’s interest in the private superannuation fund is transferred to the wife in its entirety – where the Court is satisfied that the orders are just and equitable and proper in their terms.

Legislation: Family Law Act 1975 (Cth)
Cases cited:

AJO & GRO (2005) FLC 92-218

Bevan & Bevan (2013) FLC 93-545

GVC v HPC (1998) FamCA 143

Marker v Marker (1998) FamCA 42

NHC & RCH (2004) FLC 93-204

SMB & MFB (2006) FamCA 46
Division: Division 1 First Instance
Number of paragraphs: 122
Date of hearing: 14 March 2023, 13 July 2023, 25 January 2024
Counsel for the Applicant: Litigant in Person
Counsel for the Respondent: No appearance

ORDERS

MLC 12678 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS VURNIK

Applicant
AND:

MR VURNIK

Respondent

ORDER MADE BY:

BENNETT J

DATE OF ORDER:

2 FEBRUARY 2024

THE COURT ORDERS THAT:

1.The husband do such acts and things and sign all documents necessary to:

(a)resign as a member of the H Superannuation Fund; and

(b)transfer to the wife all of his right title interest and shareholding in F Pty Ltd as trustee of the H Superannuation Fund.

2.The husband do all acts and things necessary and sign all documents necessary to rollover his member entitlements in the name of the H Superannuation Fund to the wife.

3.For the purposes of paragraphs 1 and 2 of this Order, the husband shall sign and return to the wife any and all documents provided to him by email within three (3) days of being sent those documents.

4.For the purposes of paragraphs 1 to 3 of this Order, in the event the husband refuses or neglects to sign or return to the wife any documents required pursuant to paragraph 1 and 2 of this Order, a Registrar of the Federal Circuit and Family Court of Australia be appointed pursuant to Section 106A of the Family Law Act to sign the documents on the husband’s behalf.

5.For the purpose of paragraph 4 of this Order, it is sufficient proof of the husband having refused or neglected to sign documents if the wife files an affidavit sworn or affirmed by her deposing to having sent documents to the husband and that she has received no response.

6.The wife…

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AGLC
Vurnik & Vurnik (No 2) [2024] FedCFamC1F 34
Case
[2024] FedCFamC1F 34
Decision Date

CaseChat Overview and Summary

The case of Vurnik & Vurnik (No 2) involved a property settlement dispute between the husband and wife, who had been married since 1995. The wife, Ms Vurnik, filed an application for property settlement, and the husband, Mr Vurnik, had not engaged in the proceedings since 2019 and had not communicated with the wife since 2018. The court was required to decide on the legal issues of whether the husband's lack of engagement in the proceedings constituted a non-appearance and whether the orders proposed by the wife were just and equitable.

The court found that the husband had been accorded procedural fairness by the service of documents by post, pursuant to the orders of the court. The court was satisfied that the orders proposed by the wife were just and equitable, and proper in their terms. The court noted that the wife had made relevant concessions and impressed as fair-minded, and her evidence was well-ordered, supported by appropriate documentation and plausible. The court concluded that the alteration of property interests was just and equitable and otherwise proper.

The court ordered that the husband do all acts and things necessary to resign as a member of the H Superannuation Fund and transfer to the wife all of his right, title, interest, and shareholding in F Pty Ltd as trustee of the H Superannuation Fund. The wife was to retain the property at D Street, Suburb B, monies in her bank accounts, her motor vehicle, and her superannuation entitlement. Each party was to retain to the exclusion of the other any real or personal property in their name or possession, any superannuation benefit in their name, and be solely liable for and indemnify the other against any liability in their name or possession. Any joint tenancy of the wife and the husband in any real or personal estate was to be severed.

The court noted that the orders were subject to review to remedy minor typographical or grammatical errors or to record a variation to the order. The court also noted that these orders shall, as far as practicable, finally determine the financial relationship between the parties and avoid further proceedings between them. The form of the order is subject to the entry in the Court’s records.

Orders

Orders of the court

MLC 12678 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS VURNIK

Applicant

AND:

MR VURNIK

Respondent

ORDER MADE BY:

BENNETT J

DATE OF ORDER:

2 FEBRUARY 2024

THE COURT ORDERS THAT:

1. The husband do such acts and things and sign all documents necessary to:

(a) resign as a member of the H Superannuation Fund; and

(b) transfer to the wife all of his right title interest and shareholding in F Pty Ltd as trustee of the H Superannuation Fund.

2. The husband do all acts and things necessary and sign all documents necessary to rollover his member entitlements in the name of the H Superannuation Fund to the wife.

3. For the purposes of paragraphs 1 and 2 of this Order, the husband shall sign and return to the wife any and all documents provided to him by email within three (3) days of being sent those documents.

4. For the purposes of paragraphs 1 to 3 of this Order, in the event the husband refuses or neglects to sign or return to the wife any documents required pursuant to paragraph 1 and 2 of this Order, a Registrar of the Federal Circuit and Family Court of Australia be appointed pursuant to Section 106A of the Family Law Act to sign the documents on the husband’s behalf.

5. For the purpose of paragraph 4 of this Order, it is sufficient proof of the husband having refused or neglected to sign documents if the wife files an affidavit sworn or affirmed by her deposing to having sent documents to the husband and that she has received no response.

6. The wife retain, to the exclusion of the husband:

(a) the property at D Street, Suburb B;

(b) monies in her bank accounts;

(c) her Motor Vehicle 1; and

(d) her superannuation entitlement.

7. Except as otherwise provided for in this Order: -

(a) each party retain to the exclusion of the other any real or personal property in their name or possession;

(b) each party retain to the exclusion of the other any superannuation benefit in their name noting the husband’s interest in the name of the H Superannuation Fund is to be rolled over and retained by the wife solely;

(c) each party be solely liable for and indemnify the other against any liability in their name or possession; and

(d) any joint tenancy of the wife and the husband in any real or personal estate be and is hereby expressly severed.

8. Paragraphs 8 to 16 inclusive are binding upon the wife in her capacity as a director and trustee of F Pty Ltd in its capacity as the trustee company of the H Superannuation Fund.

9. Pursuant to section 90XT(1)(a) of the Family Law Act 1975 whenever a splittable payment becomes payable in respect of the interest in the Fund held by the husband, the wife shall be paid the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using the base amount, being 100 per cent of the husband’s entitlement, provided it shall not exceed the value of the interest determined under section 90XT(2) and there shall be a corresponding reduction in the entitlement the husband would have had in the H Superannuation Fund but for this order (the “rollover”).

10. The wife in her capacity as trustee and director of F Pty Ltd shall forthwith do all things necessary and sign all such documents as are required to:

(a) calculate in accordance with the requirements of the Act and the Regulations the Payment Split to be awarded to the wife in paragraph 9 herein; and

(b) pay the entitlement whenever F Pty Ltd makes a splittable payment out of the husband’s superannuation interest in the Fund.

11. Paragraph 8 to 16 inclusive take effect from the operative time.

12. The operative time is the date of this Order.

13. Service of this Order upon F Pty Ltd shall be deemed to have occurred on the date of this order by reason that the wife is the sole director and trustee of F Pty Ltd and the Court notes that service will enliven the operating standards under Part 7A of the Superannuation Industry (Supervision) Regulations 1994 (Cth).

14. Upon compliance with paragraph 9 of this Order, the wife indemnify and shall keep the husband indemnified against all liabilities of and in relation to the fund including taxation payable in respect of the H Superannuation Fund and all other liability of, or howsoever arsing in relation to, the H Superannuation Fund.

15. Prior to the rollover, the wife in her capacity as a director of the trustee forthwith do all such things and sign all such documents as necessary to ensure that the H Superannuation Fund is compliant with its financial and taxation obligations as at that time.

16. Contemporaneously with the rollover the husband to transfer to the wife any shareholding he may have in the trustee company.

17. Liberty is reserved to each party to apply in relation to implementation of this Order.

18. All extant applications be dismissed and the matter be removed from the list of cases awaiting determination in the docket of the Honourable Justice Bennett.

AND THE COURT NOTES THAT:

A. Pursuant to Section 81 of the Family Law Act 1975, these Orders shall, as far as practicable, finally determine the financial relationship between the parties and avoid further proceedings between them.

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.

Background

Background to the litigation

A statement of fact is a finding of fact.RELEVANT BACKGROUND The husband and wife met in 1992. The husband was 23 years old and living in Sydney at the time, supporting himself as his parents lived in Queensland. He was completing a five-year contract as a technician. He moved to Melbourne in August to pursue a relationship with the wife who was living in Suburb T with her parents and working as an educator. At the commencement of the relationship, the husband had an old car and very little money. He was living with a friend, in Suburb U, rent free for a short amount of time. The husband obtained a job at a company in Suburb V for a brief time. He then moved into a share accommodation in Suburb B, where he was paying a small amount of rent. The wife, who was also 23 years old and was employed as an educator, had savings at the time, a relatively new car which the wife had purchased outright and a one-half interest in a property at D Street, Suburb B (“the Suburb B property”). Prior to the marriage the wife lived with her parents at the Suburb B property which the wife and her father purchased together in 1990 as tenants in common for $175,000. The husband and wife purchased their joint property at Suburb L in 1994 for around $150,000. The property was registered in both their names as joint tenants. The husband and wife paid equal shares for the 10 per cent deposit of around $15,000 along with loan repayments. The husband lived in the property on his own for approximately six months prior to marriage, as the wife’s family expected her to live with her parents in their family home until marriage. Prior to their marriage, the wife spent a lot of time with the husband at their joint home in Suburb L but did not stay there overnight. The husband and the wife were married in 1995 and commenced living together at the Suburb L property. The wife’s parents continued living in the Suburb B property until 1997. The loan repayments on the Suburb B property were paid by the wife and her father. The wife was working as an educator, as well as having a part-time job in retail which she worked on the weekends. The wife was also working privately after hours during the week. Her workload was directly attributable to her need to assist with the loan repayments for the Suburb B property. The wife’s father gifted his share in the Suburb B property to her in 1997. This property was unencumbered by mortgage at that time. At this time, the wife’s parents had both retired and returned to live at their property, located in Suburb W. Approximately six months later her father was diagnosed with an illness and died within six months of the diagnosis, in 1998, at the age of 63. The wife’s mother continues to live in Suburb W. She is now 82 years old. The husband and the wife had their first-born child, Ms M, in 1998. The wife was also the sole carer for her recently widowed mother during Ms M’s infancy. The parties’ second born, Mr N, was born in 1999. The wife deposes that she did not take extensive maternity leave as the husband and the wife were paying off their mortgage over the Suburb L property at the time of Mr N’s birth. By mid‑1999 the wife went back to work as an educator while her mother (the maternal grandmother) looked after both children. The wife’s workplace was across the road from her mother’s house in Suburb W. The wife went to her mother's house during her lunch breaks to nurse the children, check on them and on her mother.

Evidence

Evidence Before The Court

Section 79 of the Family Law Act 1975 (Cth) (“the Act”) defines the Court’s responsibilities in determining applications for property settlement. First, I am required to identify, to the extent that there is evidence that enables me to do so, the legal and equitable interests of the parties in property. Property includes superannuation interests. Second, I must be satisfied that it is just and equitable, within the meaning of s 79(2), to make an order altering the interests of the parties in property. If I am not satisfied (which is not the case here), the property application would be dismissed. Third, I will assess the contributions made by the parties as defined in section 79(4)(a) to (c). That is, direct or indirect, financial and non-financial contributions to property and contributions as a homemaker and to the welfare of the family. Fourth, I will consider the effect of any proposed alteration of property interests on the income earning capacity of either party within the meaning of s 79(4)(c). Fifth, I will consider the matters contained in section 75(2) in so far as they are relevant. By virtue of s 75(2)(o), the matters include any fact or circumstance which, in the opinion of the Court, the justice of the situation requires be taken into account shall be taken into account. In this case, that includes add backs. Finally, I must be satisfied that, in all of the circumstances, the order which I propose to make is just and equitable within the meaning of s 79(2) of the Act and appropriate within the meaning of s 79(1).EVIDENCE The wife was the only party to give evidence in the proceedings and did so by way of affidavits in respect of which she made submissions. The wife relied on the following documents:(a)further amended initiating application filed 23 June 2023;(b)updated financial statement filed 23 June 2023;(c)her consolidated trial affidavit filed 26 June 2023;(d)her further affidavit annexing the property valuation for G Street, Suburb J filed 25 May 2023;(e)her further affidavit annexing the property valuation for D Street, Suburb B filed 30 June 2023;(f)a further affidavit sworn 17 November 2023 in relation to superannuation. The wife impressed me as fair-minded and prepared to make relevant concessions. Her evidence was well ordered, supported by appropriate documentation and plausible. I accept the wife’s evidence.ONUS OF PROOF AND FINDINGS OF FACT Section 140 of the Evidence Act 1995 (Cth) provides the relevant test for the court’s assessment of evidence in this matter: the facts in issue are to be proved by the party with the persuasive onus on the balance of probabilities. A statement of fact is a finding of fact.RELEVANT BACKGROUND The husband and wife met in 1992. The husband was 23 years old and living in Sydney at the time, supporting himself as his parents lived in Queensland. He was completing a five-year contract as a technician. He moved to Melbourne in August to pursue a relationship with the wife who was living in Suburb T with her parents and working as an educator.

Decision

Reasons for decision

I am satisfied that the alteration of property interests is just and equitable and otherwise proper. CONCLUSION There is a natural symmetry to each party retaining what they have, save that the wife takes over all of the superannuation from a private fund. I am satisfied that the overall adjustment is just, equitable and proper within the meaning of the legislation and make the orders set out in the beginning of these reasons in order to affect an alteration in those terms. There will be liberty reserved to each party to apply in relation to any problems with implementation of this order.

Ratio Decidendi

Legal Principle Established

The order proposed by the wife does not impact on the earning capacity of either party. Considerations under s 75(2) Section 79(4)(e) requires the court to take into account matters referred to in s75(2) so far as they are relevant. Section 75(2) of the Act sets out the matters which must be taken into account by the Court when determining applications with respect to maintenance. This is the prospective element of the determination of the application for property settlement. The assessment of contributions during the marriage is the retrospective element.The age and state of health of each of the parties (s 75(2)(a)) and the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment (s 75(2)(b)) The wife is 54 years old and the husband is 53 years old. The wife is in gainful employment and the husband’s employment status is not precisely known but for the purpose of this decision I take into account that it would be negligible. The wife does not know where the husband is but it is his sincere understanding that he has fallen on hard times, is not functioning and is likely to be dependent on social security payments. I have set out the legal and equitable interests of the parties in the table which appears above. On the basis that the wife is entitled to 70-75 per cent on an assessment of contributions, her entitlement is $2,052,519 and the husband’s is $571,381. Commitments of each of the parties that are necessary to enable the party to support himself or herself and a child or other person that the person has a duty to maintain and the responsibilities of either party to support another person (s 75(2)(d) and (e)) The wife supports herself and the two adult children of the marriage who are of independent means but still live at home, incurring for her household expenses in excess of her own but which she is happy to pay to preserve a sense of family life. The wife also supports her mother, emotionally and to a certain extent financially. The wife collects her mother each Friday and cares for her at the Suburb B property each weekend. The children have the benefit of seeing the maternal grandmother each week. The wife has acted to preserve a family life for the children and has done so successfully. She is not legally obliged to support the children or her mother but she does so on the basis of a moral imperative. The husband has not acted for the benefit of the family since separation. Eligibility of either party for a pension, allowance or benefit from the government or from a superannuation fund or scheme (s 75(2)(f)) The parties’ superannuation interests are described above. The wife is not entitled to any pension, allowance or benefit from the government or from a superannuation fund. The husband is likely to be receiving an income-tested pension or benefit. A standard or living that is in all circumstances reasonable (s75(2)(g)) A reference to ‘reasonable’ in this sub-paragraph imputes a necessity to economise if necessary. The wife has been frugal since separation in preserving the property and providing a family home for the children. The Suburb B property represents a reasonable form of accommodation for the time being, but ultimately the wife may require differently appointed and situated housing at a higher cost.