WALKER & WALKER

[2014] FamCA 757

FAMILY COURT OF AUSTRALIA

WALKER & WALKER [2014] FamCA 757

FAMILY LAW – PROPERTY – Final Orders – Application by wife for matter to proceed on an undefended basis – Application granted – Orders made where the Court is satisfied that orders are just and equitable in the circumstances

Family Law Act 1975 (Cth) ss 79, 106A

Bevan & Bevan (2013) FLC 93-545
Chapman and Chapman [2014] FamCAFC 91

APPLICANT: Ms Walker

RESPONDENT: Mr Walker

FILE NUMBER: LNC 350 of 2012

DATE DELIVERED: 17 July 2014

PLACE DELIVERED: Launceston

PLACE HEARD: Launceston

JUDGMENT OF: Benjamin J

HEARING DATE: 17 July 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr P Welch

SOLICITOR FOR THE APPLICANT: Philip Welch Barrister & Solicitor

COUNSEL FOR THE RESPONDENT: No appearance

SOLICITOR FOR THE RESPONDENT:

Orders

1. Within forty five (45) days of the date of these orders the husband shall:-

   (a)sign all documents and Transfers so as to assign to the wife his interest in
   I Street, Town R in Tasmania (“the I Street property”); and

   (b)sign and return any Discharage of Mortgage Authority provided to him, by or on behalf of the wife, in respect of Mortgage No. …27 and Mortgage No. …00.

2. Within forty five (45) days after transfer of the title of the I Street property to her, the wife shall sign any documents, authorities or papers to cause Mortgage No. …27 and Mortgage No. …00 to be discharged, THE COURT NOTING that there are no liabilities in respect of these mortgages except perhaps the banks fees and Land Titles Office fees in registering the Discharge of Mortgage.

3. As and from the date of these orders the wife shall indemnify the husband in respect of outgoings in relation to the I Street property.

4. Within forty five (45) days of the date of these orders, or such longer period of time as is brought about by the husband’s delay, the wife shall sign and return a Transfer of the property at B Street, Town R (“the B Street property”) so as to transfer to the husband the whole of her interest in that property and the wife shall sign any authorities to discharge Mortgage Registered No. …05 in respect of the B Street property.

5. On or before the settlement date and contemporaneously with the transfer referred to in paragraph 4 hereof the husband shall:-

   5.1lodge at the Land Titles Office a discharge of Mortgage No. …05 executed by authorised officers of the Commonwealth Bank of Australia so as to discharge and release the wife from all liability in relation to that mortgage and associated mortgage loan; and

   5.2provide a copy of the said executed mortgage to the wife’s solicitor.

6. The husband shall pay and indemnify the wife in relation to all outgoings in respect of the B Street property including rates, water rates, land tax, insurance premiums and the mortgage interest and principle.

7. The wife shall, within seven (7) days from the date hereof, resign as Director and Secretary of N Pty Ltd.

8. Within seven (7) from the date of this order, the wife shall transfer the whole of her interest in the shareholding of the company N Pty Ltd by forwarding to the husband and/or the Secretary of that company a share transfer form, the consideration being these orders.

9. On or before the settlement date the wife shall execute all documents as are provided to her by the husband or his solicitor or accountant so as to transfer to the husband or his nominee any interest she has in any loan account the wife has in the company N Pty Ltd or in respect of the Walker Family Trust (ABN …).

10. The husband shall pay and indemnify the wife and keep her indemnified in respect of all or any liability of hers in respect of the company N Pty Ltd and/or Walker Family Trust, including any liability of the wife to the Commissioner of Taxation arising from her interest in the company and/or the Walker Family Trust, and any taxation, interest or penalties payable by her as a result of any assessments or receipt of a Division 7A dividend by her, arising from the transfers pursuant to these Orders, such indemnity shall include indemnity for any tax payable by the wife, as a result of the assignment of any loan account arising pursuant to these orders.

11. Within forty five (45) days from the date of these orders, the wife shall make available for collection by the husband, or his agent, at a time and date agreed between the parties, to remove from the I Street property the items set out in annexure A to the amended application, such annexure is attached hereto and marked Annexure “A”.

12. THE COURT DECLARES the wife shall be entitled, as against the husband, to the household furniture and effects formerly used by the parties jointly but now in the possession and control of the wife, including the items referred to in annexure B to the amended application, such annexure is attached hereto and marked Annexure “B” including any monies at banks, credit unions, savings accounts or investments in the sole name of the wife.

13. Pursuant to s 106A of the Family Law Act IT IS DIRECTED a Registrar of the Court sign any necessary transfer documents or any discharge of mortgage authorities to give effect to the terms of these orders, upon the husband having been given twenty one (21) days notice in writing, forwarded to his address at B Street, Town R, Tasmania by ordinary pre-paid post.

14. Unless otherwise specified in these Orders:-

    14.1each party is solely entitled to the exclusion of the other to all other property or chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s record thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides a condition for payment out of such entitlement;

    14.2each party is solely liable for and indemnifies the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and

    14.3any joint tenancy of the parties in real or personal property is hereby expressly severed.

15. Leave be given to both parties to apply in relation to the implimentation of these orders, such liberty to apply for a period of six (6) months from the date of these orders.

16. The wife’s application for costs be dismissed.

IT IS DIRECTED

1. The solicitor for the applicant wife forward to my associate, in electronic form in word format, the form of orders set out in the amended initiating application, together with annexure A and annexure B in similar electronic form in word format.

2. A copy of the reasons for these orders be taken out and placed on the court file.

IT IS FURTHER ORDERED

1. Leave be given to the husband to apply to set aside these orders within twenty eight (28) days from the date of these orders, subject to the following:-

   (a)These orders are forwarded to him by ordinary pre-paid post at his address at B Street, Town R in the State of Tasmania within seven (7) days by the legal practioner for the wife.

   (b)Upon any application made within that time, the husband file an affidavit explaining his delay in participating in these proceedings and not attending court, and filing a statement of his financial circumstances, including his 2012 and 2013 copy income tax returns and the annual statements of the company for the financial years ended 30 June 2012 and 2013.

2. All subpoenaed documents be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.

IT IS CERTIFIED

1. Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Walker & Walker has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT LAUNCESTON

FILE NUMBER: LNC 350 of 2012

Ms Walker

Applicant

And

Mr Walker

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. This is a property application arising from proceedings commenced by Ms Walker, (“the wife”), against her husband Mr Walker (“the husband”) on 11 July 2012 in this Court.  The wife seeks property orders as set out in her amended application filed 11 July 2014 which, in essence, provide that she take 67 per cent of the property and her husband retain 33 per cent of the property.  The husband from time to time engaged in these proceedings but in recent times has not done so. 

2. It was a difficult matter on the basis that there was no contradictor and the amount sought by the wife seems, at first blush, to be somewhat high.  The material that the wife relied upon was as follows: 

   (i)her application filed 11 July 2012;

   (ii)her amended initiating application filed 11 July 2014;

   (iii)her affidavit filed 11 July 2014;

   (iv)her financial statement filed 7 April 2014;

   (v)an affidavit of Mr A as to the value of I Street, Town R, Tasmania filed 11 July 2014; and

   (vi)an affidavit of Mr C filed 11 July 2014 as the value of personal property.

3. In addition, the wife relied upon an affidavit of attempted service of Mr D filed 17 July 2014, a notice of ceasing to act by the then solicitor for the wife filed 12 September 2013 showing the husband’s address at B Street, Town R, 7…, and finally an order made by this Court on 7 July 2014 which showed that a copy of that order was forwarded by ordinary pre-paid post to the husband shortly after that order was signed.

4. In addition the wife gave oral evidence as to the husband still being in the area and having last seen him on the property on Monday this week and he attends at her property to feed the livestock on a regular basis.  The first step I have to determine is whether I ought to hear this matter on an undefended basis.  The wife set out in her affidavit at paragraph 39 the sad history of these proceedings where she has been put to enormous cost, both in emotional and financial terms, in terms of endeavouring to get this matter dealt with by the Court.  That has been frustrated to a large degree by the efforts of the husband.

5. It is clear from the evidence before me that the husband is using a very old-fashioned term, keeping house.  By that I mean he is avoiding the service of process.  The husband was notified by this Court and by letter.  He was aware these proceedings had been on foot for some time and he has chosen not to engage in these proceedings.  He was called outside the Court on the last occasion this matter came before me in earlier July and there was no appearance by him.  He was called outside this Court three times today and there was no appearance by him.  In those circumstances I intend that the proceedings shall commence on an undefended basis.

BACKGROUND

1. The husband is aged 53 and is a tradesman by occupation.  The wife is aged 52 and she is a carer by occupation.  The parties have three children, E, aged 28, F, aged 20, and S, aged 12.  The elder two children are relatively self-sufficient, although in these reasons I have had regard to the circumstance that F was supported and lived with his mother until fairly recently and from the date of separation.  S has some physical conditions which involve the mother in significant care of him, to which she has set out in great detail in her affidavit.

2. I have had regard to that and also the other aspects of his ability to learn to which she has also alluded.  The parties’ background commenced in 1984 when they began living together and E was born shortly thereafter.  The parties married about two months after E was born.  They separated in 1989 and divorced in 1990.  The parties then reconciled and remarried in November 1991 and lived together from then until April 2008 when they separated.  The primary care of the children was left to the mother, although she accepts that she had help from the father from time to time and that he was a hard worker and a good provider.

THE LAW

1. The law regarding the treatment of property has been clarified following the High Court decision in Stanford v Stanford.[1]  Prior to that decision the preferred approach was the four step process as reflected by the Full Court in cases such as Hickey v Hickey and the Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143.

   [1] [2012] HCA 52, (2012) 293 ALR 70.

2. Following Stanford v Stanford (supra) the approach is that a Court must firstly be satisfied that before making any order it is “just and equitable”[2] to do so. Then consider what orders, if any, should be made having regard to s 79(4) of the Act.

   [2] Section 79(2).

3. This approach was later adopted in Bevan & Bevan,[3] where Bryant CJ and Thackray J noted that the Stanford and Stanford (supra) decision:-

   … serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so. [4]

   [3] (2013) FLC 93-545.

   [4] Ibid at para 65.

4. In Chapman and Chapman[5] the Full Court considered the independence of ss 79(2) and 79(4) and confirmed that Bevan v Bevan correctly stated the law in relation to the Courts consideration of s 79(2), whether the making of an order is just and equitable. At paragraph 19 of their joint reasons Strickland and Murphy JJ said:-

   Section 79 demands a consideration, separately, of all of its requirements without conflation.

   [5] [2014] FamCAFC 91.

5. However, their Honours disagreed with any intention of plurality in Bevan v Bevan, in that the Court must consider the matters in s 79(4) when addressing s 79(2) of the Act in terms of what order is to be made. To clarify, Bryant CJ said in a separate judgment:-

   Whatever differences may exist as to the meaning of [84] and [85] of Bevan, I am in agreement with Strickland and Murphy JJ that it is not a requirement to take account of the matters in s 79(4) when considering the question of whether it is just and equitable to make any order under s 79(2). But as long as they are seen as separate and not conflated, the factors in s 79(4) have the potential to inform the decision under s 79(2) …

6. Accordingly, the approach I will adopt, when determining a division of property, is:-

   1.Identify, in the context of ordinary legal principles, the existing legal and equitable interest of the parties in the property;

   2.Consider whether in the circumstances of the parties it is appropriate and just and equitable for any order to be made having regard to s 79 of the Act; and

   3.To consider and take into account any contributions and other matters, as are relevant, having regard to the provisions of s 79(4) of the Act and make such order as is appropriate. It is the function of the court to consider those relevant factors in the context of what is appropriate in all of the circumstances, provided always that it is just and equitable to do so.

7. Suffice to say, given the evidence before me I am satisfied that it is appropriate for this Court to exercise its jurisdiction and consider an adjustment of property as between the parties.  I have good evidence of the property in this undefended hearing.  It is set out in paragraph 61 of the wife’s affidavit and the legal and equitable property of the parties and liabilities of the parties are as follows:

PROPERTY

[B Street, Town R]	$159,000
[I Street, Town R]	$550,000
Household furniture to be retained by the wife at [I Street, Town R]	$10,205
Balance of the property to be retained by the husband	$150,825
[Livestock] at [B Street, Town R]	$8,500
husband’s interest in the AMP Flexible superannuation as at 30 June 2013	$29,739
Total	$908,269

1. The liabilities are a loan secured over B Street, Town R with the Commonwealth Bank of Australia in the sum of $76,122 leaving a balance of $832,147.

2. The orders I have made provide that the wife retain the I Street property valued at about $550,000, the household furniture and effects valued at $10,205 making a total sum $560,205 which is about 67 per cent of the property pool.  The husband would retain the livestock, the superannuation, the B Street property, the household furniture and effects and the balance of the property and he would be liable for the mortgage over B Street, Town R.

3. The two pieces of real property were valued by Mr A and his evidence is before the Court.  I accept that evidence.  The household furniture and effects were valued by Mr C and I accept that evidence of value.  The value of the livestock at B Street, Town R were valued by the wife and I accept, given the history of this marriage, that her assessment of the value of those livestock is accurate and I accept her evidence as to the value of the AMP Flexible super.  The wife made inquiries of the Commonwealth Bank Australia and I am satisfied as to the accuracy of the liability with regard to B Street, Town R.

CONTRIBUTIONS

1. The wife, through her counsel, asserts the submission that contributions up to the date of separation, that is 2008, were equal.  There is a clear history of buying and selling real estate and I note that soon after the parties married the second time that the husband put in $30,000 from the sale of a property that had been acquired during the course of their first marriage, or after their first marriage.  The wife had the care and supervision of the three children of the marriage over a considerable period of time having regard to the disparity of their dates of births.

2. In addition she significantly helped him in terms of his business.  I am satisfied given the evidence of the wife, that up to the date of separation the wife and the husband made essentially equal contributions to the property that existed at that time.  However, since that time the wife has made greater contributions, bearing in mind her care of their youngest child with his significant disability and in the absence of any significant financial help from the husband, except by way of occupation of the former matrimonial home.

3. She also had the care of F until fairly recently.  The husband, on the other hand, has had the benefit of the income from the business.  It is not clear what that income is, although it has, from time to time, been a profitable business.  The husband has not provided meaningful information as to how much he earns, but I am satisfied that he earns at least a modest, perhaps larger income, although the precise amount is not clear.  In addition, at the end of these reasons I will be explaining why I made no order for costs.  I was asked to make an order for costs and I carefully considered that aspect of it.

4. Particularly given the history to which the wife eluded and the costs involved in these proceedings by virtue of the husband’s refusal to participate or find a meaningful settlement and I have given weight to the significant emotional and no doubt financial aspect of the involvement of proceedings, particularly when there are so many visits to the Court.  I have had regard to those in relation to paragraph 39 of the wife’s affidavit. I am satisfied that given the whole of the evidence in terms of contribution, that the contributions ought to be treated as 55 per cent by the wife and 45 per cent by the husband.

OTHER FACTORS

1. In terms of the other factors, there is no evidence as to the wife’s health, although there is significant evidence as to her capacity to work.  She has no formal training and has not been in formal employment for many years, although I accept her evidence that she worked in the management and paperwork, as it were, in relation to the business until 2008.  The husband, on the other hand, is a trained tradesman and has a business which has run for some time. 

1. There was no claim for goodwill in the business although the wife was of the view that the business is worth something, although the husband has the business essentially for the value of the plant and equipment.  The wife has the care of S, and that is an onerous responsibility and that will continue for many years into the future.  She is in receipt of carer’s benefits from Centrelink of which I have had regard to.  She is not receiving any meaningful child support from the husband.

2. The effect of these orders will mean that the wife will have significant property but in the absence of any meaningful way to earn income into the future, bearing in mind her care of their youngest child.  The husband will be left with a smaller amount of property but with the tools and equipment to manage his business and to continue to earn income from it and I accept that he is capable of continuing in that employment.  There is no evidence of his health being other than good.

3. The wife has the care of S and I have referred to that earlier.  S is aged about 12 and a half.  From the material before me, in particular the wife’s financial statement, she has a very modest lifestyle and manages on fairly limited funds.  She has an obligation to maintain S and as I said, is in receipt of a carer’s allowance.  It is clear that since separation her standard of living has fallen as has that of S.  It is unlikely that she can retrain at least for the next five and a half to six years.  This is a long marriage or a long series of marriages in which the wife’s earning capacity has been diminished.

4. She wishes to continue to care for their youngest child and given his health difficulties that it entirely understandable. I have had regard to the whole of the property in terms of the orders that I propose to make. Given those circumstances I determine that it is just and equitable and otherwise proper for me to make the orders that the wife seeks, that is the home and the furniture. There was an application for costs and I considered that in the light of s 117A of the Family Law Act 1975 (Cth), particularly in terms of the wife’s parlous financial circumstance, albeit it much improved by these orders, and in terms of the husband’s failure to engage in these proceedings.

5. However, rather than make a costs order I have had regard to the extended nature and emotional and presumably financial costs set out in the mother’s affidavit and in those circumstances decline to make a costs order. I have determined that there ought to be an order under s 106A of the Family Law Act 1975 (Cth), as I think it is inevitable, given the husband’s approach, that he will not sign the documents and he will not participate and therefore such an order put in place will reduce further applications necessitated by the wife.

6. The husband has not participated in these proceedings but I intend to give him one further option to participate by providing that the orders be served upon him and he can apply, provided he gives reasons for his failure to participate at the time he makes his application and provided that he provides a financial statement and some financial records.  It may well be that if that occurs the question of costs will need to be revisited, at least costs up until today.  However, that will be a matter for me or others or another at a later time. 

I certify that the preceding twenty eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 17 July 2014.

Associate:     

Date:              17 July 2014