WARD & WARD (No.2)

[2015] FCCA 1042

FEDERAL CIRCUIT COURT OF AUSTRALIA

WARD & WARD (No.2) [2015] FCCA 1042

Catchwords:
FAMILY LAW – Property – property orders – consent orders – just and equitable – where one issue remains unresolved – where parties have agreed to refinance a joint debt – where the intention of the parties is that each party will bear the liability for one half of the joint debt only – where one party concerned that an agreement to refinance the joint debt would lead to the debt being called up – where intention of the parties clear but the parties do not consent as to the terms of the proposed order – where judicial decision required.

Legislation:
Family Law Act 1975 (Cth), s.79

Applicant: MS WARD

Respondent: MR WARD

File Number: CSC 260 of 2013

Judgment of: Judge Scarlett

Hearing date: 25 March 2015

Date of Last Submission: 25 March 2015

Delivered at: Cairns

Delivered on: 25 March 2015

REPRESENTATION

Counsel for the Applicant: Mr Weston

Solicitors for the Applicant: Luke Weston Solicitor

Respondent: In Person

ORDERS

1. Within 30 days from the date of this Order the Applicant and the Respondent must apply to (omitted) Bank to refinance and divide the current (omitted) Bank Loan Number (omitted) standing in the names of the parties so as to provide that each party is to assume responsibility to the exclusion of the other for one half of the amount currently owing to (omitted) Bank in respect of their respective share of the said amount currently owing and pay all amounts required to be paid to (omitted) Bank on their respective shares of the said loan as and when they fall due. 

2. THE COURT NOTES that it is not the intention of the parties that the amount currently owing to (omitted) Bank in respect of the said loan number (omitted) is to fall due for immediate payment in full as a result of the operation of this Order.

IT IS NOTED that publication of this judgment under the pseudonym Ward & Ward (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT CAIRNS

CSC 260 of 2013

MS WARD

Applicant

And

MR WARD

Respondent

REASONS FOR JUDGMENT

1. Before the Court today is an application for settlement of property, between the parties in accordance with section 79 of the Family Law Act 1975 (Cth). The parties have busied themselves today, with the assistance of the mother’s solicitor, Mr Weston, in agreeing to settle their property claim, and minutes of consent order have been prepared and with one exception have been the subject of an agreement. I have, after hearing an explanation from Mr Weston about the difficulties in resolving the matter, deciding that on balance I am satisfied that the proposed agreement is just and equitable under the provisions of subsection 79(2) of the Family Law Act.

2. As Mr Weston pointed out, there was a difficulty in that the parties were a long way apart as far as the asset pool was concerned.  One of the difficulties was that there was a significant claim by the Respondent that the Applicant had, over a number of years, wasted money by means of gambling and that the amount calculated was said to be a conservative estimate.  That amount was sought to be added back, but it was apparent that the quantification of that amount, even if there were sufficient evidence to establish that the Applicant’s actions had in fact amounted to a waste of that nature, would have skewed the balance of the asset pool considerably. 

3. It was put on behalf of the Applicant Wife that there were no valuations of the major items, although it was contended on the part of the Respondent that there were in fact some three valuations of certain assets.  The question of contributions by the parties was explained on the basis that the Mother was of the view that she had made a greater non-financial contribution, particularly in the role of homemaker and mother, whilst it was conceded that the respondent made a greater financial contribution, although the Applicant had certainly made some financial contributions. 

4. The parties, however, have been keen to resolve the proceedings between them so that they may move on with their lives.  They have come up with a scheme whereby the Respondent pays to the Applicant by way of a property settlement the sum of $20,000 by way of 12 equal and consecutive monthly instalments of $166.67, the first payment to be made on the beginning of May and monthly thereafter, that the parties would retain certain assets that were in their respective names, and those amounts have been quantified, that there was to be no order for spousal maintenance or an order for costs and that parties would agree to assume separate responsibility of one half each of an amount of money owed under a loan to (omitted) Bank. 

5. The parties were not in agreement, not as to the intention of the parties to assume that separate responsibility, but as to the mechanics of it.  It was certainly the parties’ view that the responsibility for the loan would be divided on an equal basis, which would involve each party being liable for one half only of the current balance, and it was provided that they would enter into a deed of agreement providing for the sole responsibility of half of the loan, the payment of arrears of the loan when they fall due and mutual indemnities in respect of each part of the loan to which that party would assume the responsibility. 

6. It was not the paragraph relating to the sole responsibility or the arrears or the payment of arrears or the mutual indemnities that caused the controversy but the wording of the paragraph relating to the application to (omitted) Bank to enable the parties to divide their responsibility for that loan.  The concern was on the part of the Applicant that there was a possibility that the proposed order could be interpreted in such a way as to enable the provider of the finance to call up the loan immediately so that the Applicant and perhaps the respondent would each become immediately liable to pay the amount of the loan to (omitted) Bank.  That was a concern of the Applicant, and it can easily be understood that that loan being called up and becoming due immediately would well impose a financial hardship. 

7. I have considered the wording of the loan as proposed by the Applicant’s solicitor, and in fairness I must say that I am not of the view that the clause has been drafted in such a way as to inevitably lead to an immediate calling up of the loan to the detriment of the parties.  However, as it was a fact that the parties did not agree to that proposed order in the consent orders, it would have been wrong for the Court to record that order as it stood as an order that was made by consent, because there was clearly no consent to the order in those terms.  I indicated to the parties that I would consider their joint intention to bear a responsibility for one half of the amount outstanding under the loan, which would involve each one indemnifying the other and that I would, after having heard the submissions, hand down an order of the Court. 

8. It is not a Consent Order;  it is an order that the Court has made after consideration of the evidence and hearing the submissions of the parties.  It is perhaps unsurprising that the order which I am about to make is drafted in terms that are somewhat more lengthy and in greater detail to the proposed order that has caused some concern.  I have also gone to the extent of preparing a notation as to the intention of the parties in making of orders relating to the loan, which could perhaps be described as a notation to the fact that it is not the intention of the parties that the loan would immediately become due for payment. 

9. Of course, there is a third party involved in all this, the financial provider, namely (omitted) Bank.  It is impossible to say on the evidence before the Court what attitude the financial provider will take, but it, of course, is a fact that up till now the parties have been jointly liable under the loan and it is intended that they should become severally liable as to a one-half share of the loan.  It would seem to me that the order that I propose to make and the notation that I record will spell out without any doubt as to what it is, the intention of the parties and what the obligations of the parties shall be.  To this extent, I now make the following order and notation. 

10. The parties have applied their minds very seriously to resolving all of the issues between them, both parenting and property, over the past three days.  They will no doubt be relieved that the litigation between them is currently at an end.

I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Associate: 

Date:  27 April 2015