Monday, 23 June 2014

Take care with caveats- Family Court

In Homer's classic tale of the wanderings after Troy, the Odyssey, one of the challenges facing Odysseus was to escape the Sirens. These three singing maidens would sing to seafarers, calling them to their deaths when the seafarers, hearing their beautiful voices, would steer their ships to certain doom on the rocks. Odysseus, wisest of them all, plugged all his sailor's ears and had himself tied to the mast of the ship. He gave strict orders that when he called out to follow the Sirens, his men must ignore him. When the time came, and the Sirens sang out, Odysseus and his men, alone of all the sailors, sailed safely past.

If only this approach had been taken by the wife in a recent case before the Family Court. In the case, called Auricchio and Auricchio, the wife started court proceedings seeking 90% of the property owned by the parties. The husband filed his documents in response, saying that there was little point in the wife seeking certain restraining orders, or injunctions, against property to be sold, because the property had already been sold. The same day as the husband filed his documents, the wife lodged her caveat.

A caveat (which is from Latin and means "beware" or "warning") is a very powerful document. it prevents the registration of any dealings on land with the consent of the person who lodged the caveat. In effect you may be unable to sell, lease or mortgage property. This puts the caveator in a very strong position.

To lodge a caveat you must show that you have a caveatable interest- a specific interest in that land. If you don't then as part of the accountability for lodging such a document, the court can remove the caveat. You can also be liable for interest, costs and damages. Hence- be very, very careful indeed in lodging a caveat without justification.

When the matter finally came before the court, the wife said that she needed more time before the caveat argument could be put, as she needed more disclosure from the husband and his companies. She said the disclosure had been late and deficient.

Justice Forrest, in considering whether or not the caveat should remain, said that there was a three part the test that the caveator had to establish:

  • "(i) there is a serious question to be tried which involves showing “a sufficient likelihood of success to justify in the circumstances the preservation of the status quo”; and
  • (ii) it is fairly arguable that the caveator has a caveatable interest in the land, and, if so 
  • (iii) the balance of convenience favours the retention of the caveat on the title.”
His Honour stated:

 
  1. The adjournment of the application for the removal of the caveat was not made on the basis of the fact that the wife had only been given notice of it on Monday 7 April, two days before the hearing. It was made on the basis that the husband’s disclosure pursuant to Kent J’s orders had been late and deficient, and that the wife thus needed more time to consider the disclosed documents. Mr Looney QC submitted that proper consideration of the disclosed material would better place the wife to be able to present her case as to the balance of convenience favouring the retention of the caveat.
  2. Mr North SC made the submission in response that if the wife’s evidence did not disclose an arguable case for the determination of a caveatable interest in the subject property, there was no point to the adjournment that was being sought to more carefully consider the preparation of her case in respect to the balance of convenience argument. I respectfully considered that submission to have merit and considered that if I was not satisfied by the wife’s evidence that she had an arguable case to establish the interest in the land that she claimed in the caveat that there was no point in granting the adjournment just so matters relevant to the balance of convenience could be further considered.
  3. I set out in paragraph 18 of these reasons the interest claimed by the wife in the caveat she lodged and the grounds of the claim that she set out in the same caveat. She asserts she owns “an estate in fee simple as beneficial owner” on the basis of an “implied, resulting or constructive trust”. Although the Court was informed that there was a current intention to file in the proceedings in this Court an Amended Application seeking to establish the interest the wife claimed, that had not been done by the time of the hearing, which was just under three weeks from the lodgement of the caveat. Of course, a caveator has 3 months from the lodgement of the caveat to take such a step before the caveat lapses or only 14 days from the date of being served with a notice requiring her to do so by the caveatee.[5] The caveatee (the Second Respondent) had not served such notice at the time of the hearing and the wife had not yet “asserted” her interest, in the sense of taking a formal step in the proceedings in this Court to establish her interest as claimed.
  4. Nevertheless, the onus to satisfy the Court that she had an arguable case for an equitable or beneficial interest in the C Street property was on her and it may have been easier for her to meet that onus had a formal step been taken such as the filing of an Amended Application with an attached pleaded case in the form of a Statement of Claim. That had not happened and the wife was in the position of having to try to meet the onus on the evidence that was before the Court....\
To be able to establish that she had a caveatable interest, the wife asserted that her interest in that land arose by virtue of an implied, resulting or a constructive trust. Unfortunately, the wife had no evidence before the court to say so. His Honour stated of Mr North SC who represented the husband:

  1. He submitted, correctly, I was satisfied, that she did not depose to any bases asserting a caveatable interest such as claimed by her. He also submitted, again correctly, I was satisfied, that no trust was deposed to of the nature asserted by the wife in the caveat. The submission went on to assert:
... the Wife offers no evidence to support the existence of a trust, a breach of trust, or some other foundation for the remedy of constructive trust, for instance some unconscionable dealing.
  1. Again I respectfully accepted that submission. ...
  1. "With respect, the highest I could put the position advanced by Mr Looney QC for the wife on the evidence is that there is an inference available to be drawn by the Court that the wife, therefore, somehow contributed $48,000 into the cost of purchasing the Q Street development site or the cost of constructing the units on that site. Without actually having deposed to the assertion or without actually submitting it was the case, I understand the wife’s case is likely to be that she therefore somehow acquired an equitable interest in the Q Street development that on the sale of all of the units in that property must be traceable, through the use of the $530,000 from the sale proceeds of those units in the purchase of the C Street site for around $1,500,000, into an interest in that property.
  2. As Mr North SC submitted, correctly, I was satisfied, there was simply no evidence from the wife, who carried the onus of persuading the Court, that the $48,000 was somehow transferred by her to the Second Respondent other than as a loan and actually applied in the Suburb R development in some way. The Court was simply being asked to draw inferences to this effect from the evidence and Mr Looney QC himself even submitted that the wife could not fully “articulate all of the events that give rise to such a trust”.
  3. As Mr North SC ultimately pointed out, even putting the wife’s case at its highest, with all inferences being drawn in her favour, the value of any equitable interest that she might potentially establish she had in the Q Street development that cost approximately $2,700,000 alone just to construct would have to be minimal. Tracing that through the $530,000 of the total $4,119,000 sale proceeds from Q Street that were put into the approximate $1,500,000 total purchase price of the C Street property would, if it somehow could be demonstrated to have given rise to an equitable interest, be an interest of even more minimal value.
  4. In all of these circumstances, I was just not satisfied by the wife that there was a serious question to be tried and that she had demonstrated “a sufficient likelihood of success to justify in the circumstances the preservation of the status quo”. I was not persuaded that the wife had a “fairly arguable” caveatable interest in the C Street property.
  5. Accordingly, I determined not only that the adjournment sought by the wife should not be granted but also that the caveat should be ordered to be removed without even going on to hear any further argument as to the balance of convenience."
In ordering the removal of the caveat, Justice Forrest reserved the costs of the husband. 

Monday, 2 June 2014

Having sex with others means you can still be in a de facto relationship: Family Court

Having sex with others during the duration of a relationship can still mean that you are in a de facto relationship, even if you consider that you aren't, according to a recent Family Court decision, although as Justice Tree stated, "although there may have been some aspects of the parties’ relationship which some may regard as unusual or unconventional."

In the case, known as Crowley and Pappas, a gay couple had lived together in a de facto relationship from 1987 until 2005 or 2006, when they split up. Although they moved in together in 2005 or 2006, the question was whether the de facto relationship had resumed. If it had, as Mr Crowley maintained, then it continued until 2011. Mr Pappas maintained that they had lived as flatmates.

One of the problems with that approach was about their sex life. Whether parties have sex is not the be all and end all about whether there is a de facto relationship. There are many couples, after all, who do not have sex, and many other couples who are not in a de facto relationship who do have sex.

Mr Pappas said that Mr Crowley had previously been unfaithful, before they split in 2005 or 2006 , "seeing other men behind my back whom he contacted through a  gay  chat site" and that in late 2005 he discovered that Mr Crowley was seeking sex with another man. His evidence was that Mr Crowley said “I want an open relationship.” To this Mr Pappas replied “I do not want an open relationship. That is not what a relationship is all about....I was devastated. I did not want an open relationship or to be with other people and I just wanted to have a loving and committed life partnership with [Mr Crowley]. [Mr Crowley] however expressed to me that [he] did not want this any more.”

Mr Pappas then said that about four weeks later, Mr Crowley brought another man to their home and invited Mr Pappas to join in sex with them, which invitation Mr Pappas declined. Nonetheless Mr Crowley and the other man engaged in sex in front of Mr Pappas. After that event Mr Pappas says that he told Mr Crowley “[o]ur relationship is over. What just happened makes me feel physically ill. All trust between us is gone. If you want an open relationship you can have one, but not with me.” Mr Pappas said that from that day onward, he considered that their de facto relationship was over.

Mr Pappas then says, after they started living together again:

[Mr Crowley] pressured and intimidated me into sleeping in the same bed as [him], and I succumbed, however there was absolutely no sexual contact or intimacy between [him] and I.I did not want to share a bed with [Mr Crowley] and I locked him out of the bedroom as often as I could and I would sleep in other rooms to try to avoid [him] whenever possible.
[Mr Crowley] became furious and would humiliate me whenever I broached the topic of having separate sleeping arrangements and he would become aggressive, storming off and shouting. I was intimidated by [him]. I kept sleeping in the same bed as [him] to keep the peace and avoid [his] fury. I believe that [Mr Crowley] would physically harm me if I continued to disagree with [him].
When [Mr Crowley] and I did share a bed [he]and I each slept away from each other and there was absolutely no sexual contact or intimacy between us."

Mr Pappas did concede that there had been sex between them after they started living together again:


  • on one occasion where it was said that the parties had jointly engaged in sex with a third person whilst holidaying overseas. Mr Pappas appeared to concede that event, but said that on the night in question his drink had been spiked. 
  • Mr Crowley  volunteered the names of two persons with whom he said both he and Mr Pappas had engaged in mutual sexual encounters, along with “several others whose names I don’t know,” which assertion was not thereafter squarely challenged by Mr Pappas. Mr Crowley went on to say that he had opened an account with a particular internet site in the mid to early 2000’s, and that both he and Mr Pappas used it to find third parties to bring into their relationship for sexual encounters. Faced with such specific assertions, Mr Pappas chose not to investigate or challenge them further in his cross-examination of Mr Crowley. 
Justice Tree stated:

The principal concern of Mr Pappas appears to be that the parties did not have a mutual commitment to an exclusive, monogamous, sexual relationship. Whether by virtue of that or otherwise, he further said that he had no mutual commitment to share his life with Mr Crowley, because in fact he was planning, upon achieving financial security, to “make a stand, after which it was going to be my rules from now on.” Leaving aside that his evidence as to that matter was not challenged, in my opinion Mr Pappas did indeed intend, after 2005, to ensure that he became financially independent of Mr Crowley My view is that he was so hurt by his long-time partner’s desire to have a non-monogamous relationship, that he wanted to be able to wholly separate from him – emotionally, physically, financially and otherwise – in the event that circumstances in the future inclined him so to do.

However that finding does not preclude Mr Pappas nonetheless being in a de facto relationship. It is equally consistent that Mr Pappas was keeping his options open to “escape” the relationship, if things went badly, but also to continue the relationship if things were tolerable. Indeed, such a strategy has a degree of common sense to it.

Sunday, 1 June 2014

Love and marriage go together like a horse and carriage...

Last week I happened to be in Melbourne, as I was a speaker at the Surrogacy Australia conference. This was the beginning of a manic week, which also involved attendances in the Family Court in Adelaide, and Cairns (twice).

In any case, I happened to be walking past the Commonwealth Courts building in Melbourne, which houses the Family Court of Australia and the Federal Circuit Court of Australia. Then I saw this, which I took to be ironic.

How often does romance end in divorce? More importantly, in this picture, how often do those intending to marry take a horse drawn carriage past the place where they may divorce? Is this an omen of bad things to come?