Abdoo and Abdoo
[2010] FMCAfam 1117
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ABDOO & ABDOO | [2010] FMCAfam 1117 |
| FAMILY LAW – Property settlement – parties married and divorced twice – credit – full and frank disclosure – findings in favour of innocent party – notional asset pool – attributing value to assets in Turkey that were not valued – compensation award for injury – contributions – neither party in employment – just and equitable. |
| Family Law Act 1975 (Cth) ss.44, 75, 79 Evidence Act 1995 (Cth) s.140 |
| Lee Steere and Lee Steere (1985) FLC 91-626 Zubcic and Zubcic (1995) FLC 92-609 Hayne and Hayne (1977) FLC 90-265 |
| Applicant: | MS ABDOO |
| Respondent: | MR ABDOO |
| File Number: | MLC4987 of 2007 |
| Judgment of: | Roberts FM |
| Hearing dates: | 15, 16 March, 7 & 8 July 2010 |
| Date of Last Submission: | 8 July 2010 |
| Delivered at: | Launceston |
| Delivered on: | 13 October 2010 |
REPRESENTATION
| Counsel for the Applicant: | Ms R Stoikovska |
| Solicitors for the Applicant: | Faram Ritchie Davies |
| Counsel for the Respondent: | Mr G Jackson |
| Solicitors for the Respondent: | Hartleys Lawyers |
ORDERS
That pursuant to sub-section 44(3) of the Family Law Act 1975 (“the Act”) MS ABDOO (“the wife”) is granted leave to institute proceedings for alteration of property interests as between herself and MR ABDOO (“the husband”) pursuant Part VIII of the Act.
That the balance proceeds from the sale of the parties’ property at Property D in Victoria inclusive of interest (“the balance proceeds”) be divided as follows:
(a)the sum of $238,000 to the wife; and
(b)the entirety of the remaining balance to the husband.
That the wife’s solicitors are hereby authorised to distribute the balance proceeds in accordance with Order No.2 hereof.
That other than as is specifically provided for in these Orders the husband and the wife are each solely entitled to the exclusion of the other to all other property and chattels in the possession of each of the parties as at the date of these Orders.
IT IS NOTED that publication of this judgment under the pseudonym Abdoo & Abdoo is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC4987 of 2007
| MS ABDOO |
Applicant
And
| MR ABDOO |
Respondent
REASONS FOR JUDGMENT
Applications
The applicant is MS ABDOO (“the wife”) and the respondent is
MR ABDOO (“the husband”).
In her Application filed on 9 July 2007, the wife sought orders as follows:
1. That pursuant to Section 44 of the Act the Applicant be granted leave to institute proceedings for settlement and division of property.
2. That the Respondent do all such things and sign all such documents as may be necessary to transfer to the Applicant all of his right title and interest in the property known as and situated at Property D.[1]
3. That in the event that the Respondent refuses to sign any relevant document relating to the transfer of the said property within 28 days of the making of the final Orders in this matter the Registrar of the Court be authorised to sign any necessary documents to give effect to the transfer of the Respondent's interest to the Applicant.
4. That otherwise each party retain for their sole use absolutely all right title and interest that they may have in any other property current in their possession or control.
[1] This property has since been sold.
In a Response filed 21 May 2009, the husband sought the following order:
That the matrimonial pool be distributed between the parties as deemed appropriate by this Honourable Court.
On 8 July 2010, at the end of the hearing before me:
·counsel for the wife submitted that I should award all the remaining proceeds of the sale of Property D to the wife; and
·counsel for husband submitted that I should divide the asset pool on the basis of 75% to the husband and 25% to the wife.
Relevant law
It is clear to me that the first order sought by the wife [i.e. the need to obtain leave to proceed under section 44(3) of the Family Law Act 1975 (“the Act”)] has not really been in dispute, even though no such order appears to have been made. As it was run before me, the whole case was about what is an appropriate property division, rather than whether or not the court has jurisdiction to consider the question of an appropriate property division. Consequently, I find that the husband has consented to leave under section 44(3) being granted (if not formally, at least tacitly by his conduct of the matter).
Section 44(3) provides that the court may grant such leave at any time, even if the proceedings have already been instituted, so I will make such an order.
Section 79 of the Act sets out the matters that the court must take into account when considering what orders should be made for the alteration of the property interests of parties. They include:
a)the financial and non-financial contributions made directly or indirectly by or on behalf of each party or by a child to the acquisition, conservation or improvement of any property of the parties;
b)the contribution made by a party to the welfare of the family including any contribution made in the capacity of homemaker or parent;
c)the effect of any proposed order upon the earning capacity of either party; and
d)the matters referred to in sub-section 75(2) as far as they are relevant.
The general approach to the determination of a property settlement application has been well established by authority.[2] It is essentially a multi-step process. The first step is to identify the property, liabilities and financial resources of the parties (generally at the time of the hearing). The second step is to evaluate the contributions made by the parties as defined in section 79(4) of the Act and the third step is to consider those matters contained in section 75(2) that are relevant.
[2] See Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Clauson and Clauson (1995) FLC 92-595, Hickey (2003) FLC 93-143 and C v C (2005) FLC 93-220
In determining what order the court should make under section 79, the court must be satisfied in all the circumstances that it is just and equitable to do so.[3] It is the justice and equity of the actual orders that the court must consider and this has been referred to as “the fourth step”.[4] In Russell v Russell, the Full court said:
Furthermore, it must be remembered in this regard that under s79(2) of the Act, the Court is required to be satisfied that it is the order to be made which is just and equitable, not just the underlying percentage division of the net value of the parties' assets. Indeed we take the opportunity to emphasise that in what his Honour has termed ''the fourth stage'', that is, the consideration of whether the result is just and equitable, it is the justice and equity of the actual orders not of the percentage distribution which must be considered.[5]
[3] See Sub-section 79(2)
[4] Russell v Russell (1999) FLC 92-877, JEL and DDF (2001) FLC 93-075, Phillips and Phillips (2002) FLC 93-104 and Hickey and Hickey (2003) FLC 93-143
[5] See (1999) FLC 92-877 at page 86,439
It will be seen from what follows that I do not believe that the husband made full and frank disclosure of his asset position. Indeed, I formed the very definite conclusion that he was deliberately trying to avoid such disclosure.
The obligation of parties to make full and frank disclosure of all financial matters in family law matters is well settled. For example, the Full Court in Giunti and Giunti said:[6]
It is obviously desirable as a general principle that the court should first of all identify the pool of assets available and evaluate it. If each party complies with his or her obligation to make a full and substantive disclosure of their financial affairs - see Briese and Briese (1986) FLC 91-713, affirmed by the Full Court in Oriolo and Oriolo (1985) FLC 91-653, there is no problem, although there may be disputes as to valuation.
However if, as here, one party fails to fulfil that obligation, is it open to that party then to rely on the absence of satisfactory evidence to prevent the making of an order against him or her which otherwise justice and equity would require? It would be simple, if that were the case, to evade the jurisdiction of this court, not by outright refusal which would attract sanctions but by obfuscation and evasion.
[6] (1986) FLC 91-759 at 75,555
In Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener)[7] the Full Court said: [8]
Section 79, unlike s. 78, requires the Court to consider the whole of the property of the parties, however and whenever acquired, notwithstanding that the parties may only seek an alteration of interest in some of that property. As a consequence of the first step in the preferred approach to the determination of the s. 79 proceedings, each party to the proceedings has an obligation to make a full and frank disclosure of his/her financial circumstances and all matters relevant thereto: Oriolo and Oriolo (1985) FLC 91-653; Black and Kellner (1992) FLC 92-287; Weir and Weir (1993) FLC 92-338 and Tate v Tate (2000) FLC 93-047.
[7] (2003) FLC 93-143
[8] Nicholson CJ, Ellis and O'Ryan JJ at paragraph 40
In Weir v Weir,[9] the Full Court was dealing with an appeal against the refusal by a trial Judge to make orders in relation to unascertained property because it could not be quantified. The Court said:[10]
It seems to us that once it has been established that there has been a deliberate non-disclosure …… then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
[9] (1993) FLC 92-338
[10] Nicholson CJ, Strauss and Nygh JJ at page 79-593
In Gollings & Scott (2007) FLC 93-319 the Full Court said the following at paragraph 85;
The case law as developed establishes that generally an alteration of parties’ interest in property under s 79 is to be made out of their identified property at trial. Exceptions are recognised to this general principle, for example, in the cases involving failure to make a full and frank disclosure of assets where the property at the date of trial cannot be precisely ascertained (see Weir and Weir (1993) FLC 92-338; (1992) 16 Fam LR 154; Chang v Su (2002) FLC 93-117; (2002) 29 Fam LR 406). [11]
[11] My emphasis.
Credit
The parties disagree about many things, particularly about the existence and ownership of assets in Turkey. They cannot both be correct.
I have had the benefit of hearing and observing the wife and the husband giving their evidence, as well as hearing and observing the parties’ eldest child and the husband’s current wife. After considering their affidavits and hearing all their oral evidence, I have absolutely no hesitation in finding that I generally prefer the evidence of the wife and the parties’ eldest child over the evidence of the husband and his current wife.
There were numerous inconsistencies in the evidence of the husband and his current wife and it became clear to me that they were tailoring their evidence in a combined attempt to deprive the wife of her entitlement to a just and equitable property settlement. I detail some of those inconsistencies below:
a)In his affidavit evidence the husband denied having an interest in a vineyard in Turkey as claimed by the wife,[12] yet when he was cross-examined he said that his father had given him “that vineyard” because he had not charged family members any rent over a period of approximately ten years whenever they came in from the country and stayed in a particular property that he owned (“the 3rd floor apartment”). He said that his father had said: “I give it to you towards those rents”. Shortly after giving that oral evidence, he clearly realised his mistake and attempted to ameliorate that by saying that his father had only promised to leave that vineyard to him as an inheritance, adding: “Maybe he will change his mind tomorrow … to give it to my brother”.[13]
[12] For example, see paragraph 49 of his affidavit filed 20 November 2008
[13] Transcript: 7 July 2010 at pages 53 and 54
b)The husband claims to have sold the 3rd floor apartment in August 2005 “for $11,500 for the purpose of paying the costs associated with (the parties’ eldest child’s) wedding” which he said was “a very expensive exercise”.[14] In her affidavit, the parties’ eldest child disputed that the 3rd floor apartment had been sold for that purpose. She said that she was married in a rented dress and that the costs of the hall, the cake, the music and the dress rental were all paid by the groom’s family. She conceded that her father had paid for some items for her home, but described the suggestion that her wedding was a very expensive exercise as “complete rubbish”. In relation to this, I note that:
[14] Paragraphs 13 and 14 of his affidavit filed 22 October 2009.
i)The parties’ eldest child was unshaken in cross-examination whereas, even allowing for possible nervousness and the fact that an interpreter was needed, the husband was much less than convincing;
ii)Annexure “VA2” to the wife’s affidavit filed 26 October 2009 is a translation of a Turkish Property Tax Declaration showing that as late as 25 August 2009 the husband was still the registered taxpayer in relation to the 3rd floor apartment;
iii)In his oral evidence the husband said that the 3rd floor apartment was sold for 11,500 Turkish Lira (i.e. not Australian dollars); and
iv)The husband’s statement “I do not have any documentation in relation to the sale of the property as this was all handled privately at the Land Titles Office in Turkey”[15] is somewhat hard to believe, when one considers the fact that the parties have been able to produce both title certificates and property tax declarations in relation to various properties in Turkey.
c)The husband claimed in his affidavit filed 3 March 2010 to have sold an apartment at Property K in Turkey (“the 13th floor apartment”) on 10 October 2006 to his current wife for forty thousand New Turkish Lira (TRY40,000). In his oral evidence he said that he sold it in March 2006. However, in a Financial Statement completed in his own handwriting on 20 November 2008, he lists that property as being 100% owned by him at a value of forty-six thousand Australian dollars ($AUD46,000). When this was pointed out to him, he blamed his former solicitor for those inconsistencies by saying that his former solicitor had told him to include that property in his Financial Statement, and further that his former solicitor had asked him to “put the market value higher than it is” because otherwise “the judge wouldn’t believe it”.[16] His evidence in relation to that was quite literally “incredible”.
d)When she gave her oral evidence in relation to her purchase of the 13th floor apartment, the husband’s current wife stated initially that she had paid only TRY20,000 for it, and she twice said that she had paid a deposit of TRY2,000 in May 2006 and a subsequent payment of TRY18,000 in September 2006. That was clearly inconsistent with her affidavit evidence, and later in her oral evidence she reverted to the claimed total payment of TRY40,000.
e)The Turkish title document relating to the 13th floor apartment was produced by the husband’s current wife on the final day of the hearing (after I specifically requested her to produce it). It shows that the property was transferred to her for TRY104,000 on 31 December 2008. Significantly, that was two months after the husband became involved in these proceedings, and is consistent with the hearsay evidence to that effect contained in the wife’s affidavit filed 29 June 2009.[17] (I will refer to the value of that property further below.)
f)The husband and his current wife say that the 13th floor apartment has been empty since they last left Turkey in 2008, but the wife and a Turkish licensed valuer both say that when they separately attempted to inspect the 13th floor apartment, they were each prevented from doing so by the tenant.[18]
g)The husband and his current wife even gave inconsistent evidence about the start of their relationship. The husband said that they married one month after they had met on 15 September 2006 and that their fathers knew each other so they arranged it quickly,[19] but his current wife said that they married on 15 September 2006,[20] four months after they met.[21]
[15] Paragraph 13 of that affidavit.
[16] Transcript: 7 July 2010 at pages 36 and 37
[17] At paragraph 5
[18] Transcripts: 15 March 2010 at page 26 and 7 July 2010 at page 85
[19] Transcript: 7 July 2010 at pages23 and 24
[20] Paragraph 2 of her affidavit
[21] Transcript: 7 July 2010 at page 73
Very shortly after the start of her cross-examination, the husband’s current wife stated that she had a good memory and that her husband’s memory was not as good. She said that he has been “affected by these proceedings” and “his memory is worn out”.[22] Those statements were made “out of the blue” and were not responsive to any question that she had been asked by counsel. I concluded that her husband had probably told her during the preceding adjournment that his cross-examination had not gone very well for him.
[22] Transcript: 7 July 2010 at page 72
There were other inconsistencies between the evidence of the husband and that of his current wife that I need not detail here. It suffices to repeat that I have no hesitation in finding that I generally prefer the evidence of the wife and the parties’ eldest child over the evidence of the husband and his current wife.
Background
Where I make any statement of fact in these Reasons, it should be regarded as a finding of fact unless a contrary intention is clear from the context.
The wife is 44 years old and the husband is 54 years old. They have been married to, and divorced from each other twice.
The wife was eight years old when she first arrived in Australia from Turkey in 1974. When she was only 15 years of age she was taken back to Turkey by her father for the purpose of an arranged marriage to the husband, whom she had never met or even seen.
After that first marriage, the wife’s father returned to Australia but the parties remained in Turkey in order to complete migration formalities. In late July 1982 they arrived in Australia and lived initially with the wife's parents. The wife found work at a [omitted]. Her work hours were from 5.00 p.m. until 2.00 a.m.
At that time the husband did not speak English and was unemployed for an initial period of four or five months. However, he subsequently found employment in a relatively unskilled capacity for a period before finding employment [omitted]. The wife also obtained employment with the same [employer].
In or about 1984 the parties purchased the 3rd floor apartment in Turkey using their savings from employment and the proceeds of the sale of the wife’s gold dowry. That property was unencumbered and was registered in the sole name of the husband.
The parties’ first daughter was born in Australia in May 1984. Shortly thereafter she was taken by the wife’s family to Turkey, in order that the parties could continue working.[23] She was returned to their care in 1986.
[23] See paragraph 9 of the husband’s affidavit filed 20 November 2008.
The wife had a workplace accident and received compensation in the sum of $25,000 which was used as a deposit for the purchase of the Proeprty D property for $68,500 in 1986.
The parties’ second daughter was born in 1986.
In 1987 the parties returned to Turkey for a holiday and separated there. The wife returned to Australia but the husband remained in Turkey with their two children for a period. I accept that the husband refused to allow the children to return to Australia with the wife.
The husband returned to Australia with those two children in 1988 and the parties reconciled for a short period. However, they separated again in late 1988, at which time the wife was pregnant with their third daughter who was subsequently born in 1989.
The parties were divorced in 1990 and the wife and the three children continued to live in the Property D property. In or about 1993 the husband and the wife reconciled again and resumed living together in that property.
In 1994 the husband suffered a serious injury to his arm in a workplace accident while he was operating a [omitted]. After that accident the wife looked after the husband and children while the family income consisted mainly of WorkCover payments.
In 1996 the parties remarried and moved to the [S] district of Victoria. Property D was let to tenants and the rent received assisted the parties to pay their own rent in the [S] district.
In 1999 the husband’s workplace injury compensation claim was settled by a payment to him $437,032. Shortly thereafter, the family moved to Turkey again. While in Turkey the husband purchased interests in a number of properties. The wife’s evidence (which I accept) is that those properties were:
·the 13th floor apartment;
·a 10th floor apartment in another building, purchased as a member of a cooperative in 2001 but which has not yet been completed (the 10th floor apartment”); and
·a vineyard comprising more than 20 hectares (“the vineyard”).
At that time the husband still retained the 3rd floor apartment.
Shortly after the purchase of the 13th floor apartment in 2002, the parties separated again and the wife was required to leave that property. She went initially to live with her parents and then returned to Australia in January 2003 without the children.
The parties were divorced for a second time in Turkey in 2004 and a Turkish court awarded him custody of the children.
The husband cared to the girls for a period. However, they have all since returned to Australia, with the youngest returning to live with her mother in 2006.
The wife filed her application in this matter on 9 July 2007 and the husband filed his initial responding material in November 2008. Their competing applications were heard by me in March and July 2010.
Ascertaining the nature and extent of the asset pool
It would appear that both parties want me to add assets that may no longer exist back into a notional asset pool. For example:
·Counsel for the husband suggested that I should add back $30,619, being $25,000 paid to the wife in accordance with an earlier order of this court and $5,619 also paid from joint funds for the valuation she obtained of the 13th floor apartment in Turkey. (In fact, the wife did not receive $30,619, and the actual distributions to the wife are set out at paragraph 45 below.)
·At the very least, counsel for the wife would have me “add back” the value of the 13th floor apartment to the asset pool, even if it has been legitimately transferred to the husband’s current wife. However, it is clear that the wife also wants me to take the 3rd floor apartment, the 10th floor apartment and the vineyard into account in arriving at a proper distribution of the parties’ property.
In Townsend and Townsend[24] the husband had sold a taxi licence after the separation of the parties. He spent much of the proceeds for his own benefit. Nicholson CJ said:[25]
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case.
[24] (1995) FLC 92-569
[25] At page 81,654
In that case Fogarty and Jordan JJ agreed with the reasoning of Nicholson CJ, but Fogarty J added:
Whilst the terms of section 79 and the leading cases in this Court upon it make it clear that the property of the parties and their contributions are to be assessed as at the time of the trial, nevertheless the Court is entitled to and should in appropriate cases give direct weight to any premature distribution before trial of property by one party and should do so in the way which the Chief Justice has indicated.
In a 2007 decision of the Full Court of the Family Court,[26] Bryant CJ, Finn and Boland JJ said:
The question of constructing a notional pool of property for division between parties in proceedings under s 79 is not without difficulty and has been the subject of a number of decisions each dealing with differing factual situations. (See Townsend and Townsend (1995) FLC 92-569; C and C [1998] FamCA 143; Re NHC and RCH (supra); Omacini and Omacini (2005) FLC 93-218 and Gollings and Scott [2007] FamCA 397). These cases all recognise the discretion reposed within the trial Judge in adjusting property between parties pursuant to s 79.
Property in Australia
[26] Wilde & Wilde [2007] FamCA 1044
Property D sale proceeds
In accordance with an agreement reached between the parties, their former matrimonial home at Property D was sold and the net sale proceeds received on 16 July 2009 were $263,811.21.[27] That total has been increased by the following interest payments on the invested sum:
[27] See Exhibit “W2”
3 December 2009
$3,192.00
9 March 2010
$2,003.31
3 July 2010
$4,081.92
Total
$9,277.23
Distributions have also been made, as follows:
Distribution to wife
$12,500.00
Valuation of 13th floor apartment ($US5,000)
$5,619.12
Brief fee
$2,200.00
Total
$20,319.12
The net total after adding the interest payments and deducting distributions on behalf of the wife is $252,769.32.[28]
[28] My calculations accord with those on the second page of Exhibit “W2”.
Both counsel agreed that that sum $2,200.00 paid as a brief fee on behalf of the wife should be added back into the notional asset pool. That is clearly appropriate and in line with the authorities.[29]
[29] For example, see Re NHC and RCH (2004) FLC 93-204
The husband’s counsel would also have me add back the $12,500.00 paid to the wife and the $5,619.12 paid for the valuation of the 13th floor apartment. However, I decline to add either of those two amounts back into the asset pool for the following reasons:
a)An order of this Court of 26 June 2009 permitted the release of an amount of $25,000 to the wife “pending final orders in relation to division of property between parties”. It was said during the hearing that the wife had received $12,500 of that sum and that she had used the balance $12,500 to pay legal fees. Clearly that is incorrect and she has only had the benefit of $2,200 for legal fees.
b)It was the wife’s evidence that she used the sum of $12,500 to travel to Turkey in an attempt to ascertain the existence and value of assets there. In my view, she may have been a little naive in the way that she went about things, but it is clear that her travel to Turkey to carry out investigations was directly caused by the husband’s failure to make full and frank disclosure of his assets. Consequently, I do not believe that I should add back that sum of $12,500.
c)Similarly, because the husband was saying that he had disposed of the 13th floor apartment for TRY40,000 (and I find that he was saying so dishonestly), I consider that it was proper for the parties’ joint funds to be used to pay for a proper valuation. Notwithstanding that, proportionally to the value of the asset valued, it is the most expensive valuation fee that I have ever encountered, the wife was somewhat “over a barrel” as a result of the tyranny of distance between here and Turkey. I also note that the husband did not suggest a cheaper way of getting that property independently valued.
d)I also note that on 26 June 2009 the husband was ordered to make full and frank disclosure in relation to assets in Turkey. He did not do so, and he is therefore the author of his own misfortune if joint funds were used by the wife in her attempts to ascertain the nature and extent of the asset pool. In my opinion, full and frank disclosure requires a party to disclose all assets and to cooperate in the process of having them properly valued if there is no agreement.
Consequently, the “notional” value of the remaining sale proceeds for the Property D property is $252,769.32 plus $2,200, making a total of $254,969.32 (or $255,000 in round figures).
Other property in Australia
The parties’ Financial Statements reveal that they have very little else by way of property in Australia, other than vehicles and chattels of very minimal value. I intend to ignore those under the principle of de minimis non curat lex.[30]
[30] For a discussion of the application of the de minimis principle see the Full Court decision in Milankov and Milankov (2002) FLC 93-095
Property in Turkey
On the last day of the hearing (8 July 2010) a Turkish Lira (TRY) was worth approximately 0.75 Australian dollars (AUD). Naturally, that fluctuates from time to time but I consider that to be an appropriate rate of exchange to apply in my calculations.
The 13th floor apartment
I accept that this property was purchased before the parties finally separated, and not afterwards as claimed by the husband.
While it appears that the husband has transferred it to his current wife, I do not accept that he transferred it for proper consideration (if any at all). I am also satisfied that he and his current wife arranged that transfer in late 2008 solely in order to remove it from the asset pool for the purposes of these proceedings. In this regard, I note that his current wife says:
I say that I own this property outright, and that it does not form part of the matrimonial pool as between [Mr Abdoo] and his wife.[31]
[31] Paragraph 10 of her affidavit filed 22 June 2010.
In my view, a reasonable explanation of why a purchase price of TRY104,000 is shown on his current wife’s title document is that it would have been necessary to show a consideration for Turkish transfer tax purposes that was more realistic than the claimed consideration of only TRY40,000.
In my view, this property should be added back into the notional asset pool at a realistic value.
The valuation report provided by the registered valuer[32] states that the property is worth TRY200,000. That converts to $AUD150,000. However, the valuer was not able to gain entry to the property because that was not permitted by the tenant. He therefore had to value it on the basis of the floor plan and on an assumption “that 3. class materials are used in the construction”.[33] When he was questioned about the quality of such materials, he said:
Average. But it’s accepted as good in Turkey.[34]
[32] Exhibit “W1”
[33] Exhibit “W1”, page 6.
[34] Transcript: 7 July 2010 at page 85
The wife’s evidence was that the materials used in the construction were above average and the parties’ eldest daughter describes the apartment (in which she lived for eight or nine months) as being “a very modern and high grade finished apartment … of significant value”.[35] Notwithstanding this, I do not consider that any premium should be added to the valuation of that property to take account of the use of superior materials in the construction.
[35] Paragraph 2.8 of her affidavit
Given what the Full Court said in Weir v Weir as quoted at paragraph 13 above, I consider that the 13th floor apartment should be included in the notional asset pool at a value of $150,000.
The 3rd floor apartment
This property was purchased in or about 1984 using the parties’ savings from employment in Australia and the proceeds of the sale of the wife’s gold dowry. I do not accept that the husband sold it in 2005 for only TRY11,500 to some unknown male factory worker in order to pay for the eldest child’s wedding as claimed by him. [36] Indeed, I think it is far more likely that it is now registered in the name of a collaborative friend or relative in order to remove it from the asset pool and make it less traceable. In relation to this I repeat what I said at subparagraph 17(b) above.
[36] See Transcript for 7 July 2010 at pages 46 to 50
When he was cross-examined, the husband conceded that the 3rd floor apartment is a thee bedroom apartment occupying the whole top floor of its building.
Although I have very little evidence upon which to estimate its value, I am satisfied that the 3rd floor apartment is smaller and in a less desirable neighbourhood than the 13th floor apartment.[37] However, it seems reasonable to me to attribute a value of at least $50,000 to it.
[37] The valuer of the 13th floor apartment said: “High income people live in the mentioned area…”
Again, given what the Full Court said in Weir v Weir as quoted at paragraph 13 above, I consider that the 3rd floor apartment should be included in the notional asset pool at a value of $50,000.
The 10th floor apartment
Ever since she filed her first affidavit on 9 July 2007, the wife has maintained that the husband has an interest in the 10th floor apartment. Other than to deny owning such a property, the husband gives very little evidence about it.
The parties’ eldest daughter stated in her affidavit that the building was being built when her father purchased his interest in it. She states that she believes her uncle also bought a similar property on the 7th floor. She was not cross-examined directly about that.
Having considered the evidence, I am satisfied on the balance of probabilities that the husband purchased an entitlement to the 10th floor apartment through a cooperative and that, because the property is not yet completed, title has not yet issued. However, I am satisfied that he has an entitlement to have that property registered in his name, either now or at some time in the not too distant future. As a result, that entitlement must have a value to him.
On the very limited evidence that I have, I conclude that the 10th floor apartment is more “upmarket” than the 3rd floor apartment, but it is not in a neighbourhood as desirable as that of the 13th floor apartment. However, it is not yet complete, so I consider it appropriate to attribute a value of at least $50,000 to that property. I will therefore include it at $50,000 in the notional asset pool.
The vineyard
Similarly, the wife has consistently maintained that the husband purchased an interest in a vineyard. I have already referred to some of the husband’s inconsistent evidence about the vineyard above.
The parties’ eldest daughter stated the following in her affidavit:
I also know that my father has or had an interest in a vineyard in Turkey. My father gave some money to my grandparents to enable them to travel to [omitted]. In return for this gift they put my father’s name into the vineyard Title. I recall that my father showed this document in public to many people. I have often attended at the vineyard for picnics.[38]
[38] At paragraph 2.10
She was not cross-examined specifically about that evidence. However, when that was put to the husband, he said:
My father was retired from [omitted], so he had his own finances and moneys to support himself. I didn’t have to give anything to him.[39]
[39] Transcript: 7 July 2010 at page 54
The husband was subsequently asked why he had never mentioned the vineyard as a possible inheritance in any of his affidavits, given that the wife had always alleged that he owned a vineyard in Turkey. His initial response was that he had not been asked about that.
I am satisfied that the husband has an interest in a vineyard in Turkey, and it matters little whether he purchased it directly, received it in return for assisting his parents financially or it was given to him in return for not charging rent for a property that was purchased from funds contributed by both parties.
His interest in that vineyard is clearly “property” for the purposes of Part VIII of the Act, and I must take it into account. The difficulty that I have is how to attribute a value to it, and that difficulty is a direct result of the husband’s failure to make full and frank disclosure of his interest in that vineyard.[40] In my view, it is one thing to attribute estimated values to apartments in a particular town when one is in possession of a sworn valuation of another apartment in the same town, but it is another to attribute an estimated value to a vineyard, because it is an entirely different species of real estate. Consequently, having considered that, I am of the view that the vineyard should not be included in the notional asset pool. Instead, it will be a factor that I will take into account under sub-section 75(2) of the Act below.
[40] See the last sentence of sub-paragraph 48(d) above.
Consequently, the notional asset pool is as follows:
Sale proceeds – Property D property
$255,000
The 13th floor apartment
$150,000
The 3rd floor apartment
$50,000
The 10th floor apartment
$50,000
Total
$505,000
Contributions
The husband tried to substantially minimise the contributions of the wife. For example, it was put to him that the 3rd floor apartment had been purchased from savings earned by both of them from their employment in Australia. To that he responded:
She’s never worked. She’s never worked.[41]
[41] Transcript: 7 July 2010 at page 46
When it was pointed out to him that that was inconsistent with his own evidence that she had received compensation for a work injury his response was:
She’s only worked for a week. One week. And then she got on the pension.[42]
[42] Transcript: 7 July 2010 at page 46
The wife’s counsel then pointed out that the wife’s assertion was that their eldest daughter had been taken to Turkey when she was a baby so that he and she could do [omitted] work. To that the husband appeared to suggest that the wife’s father had taken the child to Turkey to ensure that the husband would pay for the wife’s tickets to return to Turkey. However, that is directly contradicted by the husband’s own affidavit filed 20 November 2008 in which he said that the wife’s family had taken the child to Turkey “so we could work”.
I accept that the husband worked in paid employment for significant periods for five different employers in Australia between 1982 and 1994, mainly doing [omitted] work. However, I also find that the wife worked in paid employment for significant periods before and after their eldest child was born. It is not possible on the evidence to exactly quantify either party’s periods of employment, but I am satisfied that each worked as long and as hard as they could.
After the husband was injured and was receiving WorkCover payments, the wife [omitted] to supplement the household income. The husband tried to belittle that contribution also, but I am satisfied that she worked very hard in that endeavour, which involved co[omitted]. I accept the wife’s evidence in preference to that of the husband in relation to that.
The family clearly received a significant capital injection when the husband received his compensation payment of $437,032. In that regard, their Honours Baker and Rowlands JJ said in Aleksovski: [43]
In our opinion, in most cases, a damages verdict arising from a personal injury claim, whenever received, is a contribution by the party who suffered the injury. It should not be considered in isolation, for the reason that each and every contribution, which each of the parties makes to the relationship, must be weighed and considered at the same time.
[43] (1996) FLC 92-705
To his credit, Counsel for the husband conceded that on the evidence the wife was primarily responsible for the children for 17 to 18 years. I calculate that the wife was the primary carer of the children between 1986 and 2002; a period of approximately 16 years. During that time she was their sole carer from the end of 1988 until the parties reconciled in 1993. In addition the youngest child was only 16 years old when she was returned to the wife’s sole care in 2006.
The husband was the sole carer of one or more of the children in Turkey between the time that the parties separated in 2002 and when the youngest child returned to the wife’s care in 2006. I accept that he was responsible for their education, health and general welfare during that time without any financial assistance from the wife.
Counsel for the husband said that the husband’s evidence was that after he suffered his workplace injury “he did what he could to assist the family in the home”. That may be so, but I conclude that for a substantial period he did very little, simply because he was significantly incapacitated. I also conclude that the wife’s contributions to the welfare of the family as homemaker and parent at that time were made more arduous than they would otherwise have been. In this regard, I accept the wife’s evidence that:
·she assisted the husband with his personal care for a long time after his accident;
·she took the husband into [S] on a regular basis to see his solicitors in relation to his compensation claim;
·she took the husband to doctors in Melbourne every second or third week (a round trip of approximately three hundred kilometres according to Google Maps); and
·she made trips approximately every second week to another country town to enable the husband to see his general practitioner.
I also accept that in addition to taking the husband to solicitors and doctors in relation to his WorkCover claim, the wife also assisted the husband in a further significant way to realise (and, possibly maximise) his WorkCover compensation payment by fooling people at his former place of employment into allowing her to video the machine that injured him. By doing that she assisted the husband to acquire, and possibly improve the quantum of the compensation award that the husband received. These are relevant factors to be considered under section 79 of the Act.[44]
[44] See Zubcic and Zubcic (1995) FLC 92-609
However, it is clear that an assessment of contributions under section 79 is not an exercise of mathematical precision. In Hayne and Hayne[45], Pawley J said:
In matters such as this one cannot approach the problem with an eye for meticulous detail. It should rather be dealt with broadly so that the end result can be said to be just and equitable.
[45] (1977) FLC 90-265 at p. 76,415
In Garrett and Garrett[46] the Full Court of the Family Court of Australia held that in long marriages, where the parties have devoted their resources and incomes for the benefit of the family, it is not possible to have a precise accounting of their contributions.
[46] (1984) FLC 91-539
Clearly, any evaluation of the weight to be attributed to different types of contributions cannot be a science involving precise measurement.
When I weigh up the parties’ contributions in this matter, it is clear that the husband made significantly greater direct financial contributions than the wife, but the wife’s contributions to the welfare of the family (including the husband’s welfare) as a homemaker and parent were considerably greater than those of the husband. Considering these mattes carefully, I assess the relative weight of their contributions during their relationship and post-separation as being 60% in favour of the husband and 40% in favour of the wife.
Sub-section 75(2) factors
As mentioned, the husband is 54 and the wife is 44 years old. Neither of them is employed, and both claim to have health difficulties that prevent them getting employment.
The husband received a significant injury in 1994, for which he received a substantial compensation payment. He says that that injury now prevents him from working. His Australian employment was shift work in factories, and I accept that his injury prevents him from undertaking such work again.
The wife says that she suffers from bipolar affective disorder, and that she also suffers from ulcerative colitis and osteoarthritis. I accept that her medical conditions prevent her from seeking paid employment.
Both parties are in receipt of Disability Support Pensions so Centrelink accepts that they are not reasonably capable of undertaking paid employment.
The evidence presented by the wife suggested that the husband may have been receiving a Turkish pension at the same time as he was receiving Australian Centrelink benefits. He vigorously denied it and stated:
I would be jailed. It’s very serious. It’s a serious crime, you can’t do that.[47]
[47] Transcript: 7 July 2010 at page 62
However, these proceedings are not criminal proceedings and as a result the criminal standard of proof does not apply. The appropriate standard of proof to be applied is the civil standard. However, sub-section 140(2)(c) of the Evidence Act 1995 specifically incorporates dicta in cases such as Reifek v McElroy[48], Helton v Allen[49] and Briginshaw v Briginshaw[50], all of which state that the degree of satisfaction which the civil standard of proof calls for may vary, having regard to the gravity of the facts to be proved.
[48] (1965) 112 CLR 517
[49] (1940) 63 CLR 691
[50] (1938) 60 CLR 336
A passage of Dixon J’s judgment in Briginshaw reads as follows:
The truth is, that when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independent of any belief in its reality.
Social Security fraud is very serious and, given what I have said in the two preceding paragraphs, I find that I am not satisfied to the requisite standard that the husband has indulged in such conduct. Had I been so satisfied, I would have referred the matter to the Federal Police for further investigation.
The husband now has another wife and a young child. His current wife says that she is pregnant again. However, she did admit during cross-examination to giving consideration to working in the future and letting her husband look after the children.
I note also that the husband and his current wife also have the 13th floor apartment and, despite their denials, I find that it is let to a tenant. That must mean that they have a rental income stream that has not been declared to the Court. However, even if it is not tenanted, the 13th floor apartment is clearly capable of being let as a furnished apartment, because the husband’s current wife said that they had left all their furniture in the apartment when they came to Australia. I also note that the valuer said that “high income people” live in the area. I therefore conclude that it could attract a reasonable rent.
As I said above, I will also take account of the husband’s interest in a vineyard under sub-section 75(2) of the Act. Normally a vineyard of more than 20 hectares would be expected to produce an income, but there are vineyards and there are vineyards. For example, I would expect a 20 hectare vineyard with good Riesling vines in Clare, South Australia to produce a reasonable income, but nobody is suggesting that this is such a vineyard. However, I conclude that, at the very least the husband could sell his interest in the vineyard and receive some payment. To that extent, it is a financial resource that is available to him that is not available to the wife. Having come to that conclusion, I still have the same difficulty quantifying the resource that I referred to above. All I can say is that it favours the husband to some degree because he has been reluctant to reveal his real interest in it.
When I weigh up these sub-section 75(2) factors, I conclude that there should be a 7.5% adjustment in favour of the wife.
Conclusions
I have concluded that the notional asset pool is $505,000.
If this matter was to be decided on contributions alone, I would award 60% to the husband and 40% to the wife. However, I have also determined that there should be a 7.5% adjustment in favour of the wife for sub-section 75(2) factors. That means that there should be a division of the notional asset pool on the basis of 52.5% to the husband and 47.5 % to the wife.
A 52.5% share of the notional asset pool of $505,000 is $ 265,125 and a 47.5% share is $239,875.
This means that the wife should receive $239,875. However, she has already had the benefit of the sum of $2,200 that forms part of the notional asset pool. That means that she should receive a further $237,675 to receive her full entitlement. In my view, that should be rounded up to $238,000 and she should be paid that sum from the remaining proceeds of the sale of the Property D property.
The husband should receive the remaining balance inclusive of any further interest that has accrued since 3 July 2010. I do not know how much that additional interest would be, but I note that interest rates have not declined since July so it should be in excess of $3,000. Although that interest has not been included in the notional asset pool, I consider that it is just and equitable for the husband to receive that as well.
I will make orders to take account of what is set out above, which I consider to be a just and equitable settlement on the basis of how the matter was presented to me.
I certify that the preceding one hundred and five (105) paragraphs are a true copy of the reasons for judgment of Roberts FM
Associate:
Date: 13 October 2010
[51] Briginshaw at page 361
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