Allen and Yates
[2008] FMCAfam 565
•27 June 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ALLEN & YATES | [2008] FMCAfam 565 |
| FAMILY LAW – Property – just and equitable – lack of full and frank disclosure – disregard “loan”. |
| Evidence Act1995, s.128 Family Law Act 1975, ss.75 (2), (2)(g), (k), (m), (o), 79 (2), (4), (4)(a) - (e) |
| Barker v Barker (2007) 36 Fam LR 650 Biltoft and Biltoft (1995) 19 Fam LR 82 In the Marriage of Chang and SU (2002) 29 Fam LR 406 Ferrero and Ferrero (1993) FLC¶92-335 Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC ¶93-143 Re JS and GP (2006) 35 Fam LR 88 Noetel and Quealey (2005) FLC ¶93-230 AJO and GRO (2005) FLC ¶93-218 Pierce v Pierce (1999) FLC ¶92-844 Prince and Prince (1984) FLC ¶91-501 Russell v Russell (1999) FLC ¶92-877 Z v Z (2006) 34 Fam LR 296 |
| Applicant: | MS ALLEN |
| Respondent: | MR YATES |
| File Number: | PAM 5 of 2005 |
| Judgment of: | Neville FM |
| Hearing dates: | 16 & 17 October & 21 November 2007 (Before Morcombe FM) |
| Date of Last Submission: | 21 November 2007 |
| Delivered at: | Canberra |
| Delivered on: | 27 June 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr Maurice |
| Solicitors for the Applicant: | Equity Lawyers |
| Counsel for the Respondent: | Mr Cairns |
| Solicitors for the Respondent: | Hunter Lawyers |
ORDERS
Mr Yates is to pay to Ms Allen $451,000, being 55 per cent of the agreed value of the W property.
In the event that the sum is unable to be paid, the parties sign all documents and do all things necessary to list the W property for sale forthwith upon terms and conditions agreed between the parties and in default of such agreement, by a person nominated by the President (for the time being) of the Real Estate Institute of New South Wales, and upon completion of sale, the proceeds of the sale be applied as follows:-
(a)To pay all costs, commissions and expenses of the sale;
(b)To discharge the mortgage and any other encumbrances affecting the Property;
(c)The balance to be divided 55 per cent to Ms Allen and 45 per cent to Mr Yates.
In the event that the Property is not sold in accordance with Order 2 within three (3) months, then the Property is to be listed for sale by public auction with an auctioneer appointed by the parties and failing agreement, by a person nominated by the Real Estate Institute of New South Wales and the proceeds of the sale to be applied in accordance with Order 2.
Should the parties be unable to agree on the reserve price, then the reserve price is to be set by the agent who has conduct of the sale.
Each party is solely entitled to the exclusion of the other all other investments, chattels, items of furniture, motor vehicles, superannuation investments of any nature standing in their name or to their credit, and that each party is the sole and beneficial owner of all other items of property presently in that party’s possession or recorded in that party’s name.
Each party pay their own costs.
IT IS NOTED that publication of this judgment under the pseudonym Allen & Yates is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAM 5 of 2005
| MS ALLEN |
Applicant
And
| MR YATES |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings were heard by Federal Magistrate Morcombe, in Parramatta, over three days; two in mid-October, the last on 21st November 2007. A short time after the conclusion of the hearing, later that month, his Honour died suddenly. Requiescat in pace. The parties have agreed that the matter would be determined “on the papers”, which obviously includes, perhaps most especially but not exclusively, the transcript of the hearing before his Honour. These are the reasons for the Orders made in this matter.
These are property proceedings. At the outset of the hearing, Counsel for the Respondent former husband stated, with significant certainty, if not optimism: “… it is not a complicated case at all.”[1] As it transpired (from what is recorded in the transcript), at the level of issues for determination, that is perhaps correct. However, given the significant gaps in the evidence, which thereby must inevitably lead to fewer issues capable of determination, and given that the case had to be extended for an extra day, in part, because of the difficulties in obtaining either (i) evidence at all, (ii) evidence that was in admissible form, and/or (iii) evidence that was remotely let alone reasonably credible, the confident prediction by Mr Cairns of the lack of complication of the case was at least premature. Moreover, as Morcombe FM observed in the course of submissions, “I’d be amazed if anything matched up.”[2]
[1] Transcript (16th October 2007) p.3.
[2] Transcript (21st November 2007) p.178. The context of his Honour’s comment related to lack of disclosure of income to the Australian Tax Office. In my view, the well-chosen remark of Morcombe FM has wider application to most issues canvassed in the course of the hearing.
On the papers and evidence available to me, it seems that resolution of the following issues are central in reaching a determination of what is a “just and equitable” order for the purposes of the application by the wife, Ms Allen, under s.79(2) of the Family Law Act1975 (Cth) (“the Act”). Those issues include:
i)the relevance and validity (and enforceability) of a cash “loan” from the Respondent’s brother to the Respondent;
ii)the nature and extent of the Applicant wife’s overseas pool of assets, as well as issues (factual and other) surrounding the living situation of, and ownership of property by, the parties in Palestine after their marriage (in Palestine in February 1989) and prior to their migration to Australia in 1995;
iii)the health of the parties (and state of medical evidence relevant thereto);
iv)the general question marks over the disclosure (or lack thereof) of assets and income by both parties, as well as their credibility;[3]
v)there is also an issue over when the parties separated: on the wife’s evidence, they separated under the one roof in early December 2004, while the husband says that separation took place on 17th November 2003.[4] Mr Yates contends, and it seems undisputed (and indisputable), that the parties were divorced under Australian law on 10th January 2006. In the result, it may not matter greatly because the length of the marriage was either 14 years (on the husband’s evidence) or 15 years (on the wife’s evidence).[5]
[3] The issue of disclosure, on the husband’s side, has two dimensions: the adequacy of disclosure of assets to the Court (i.e. his assets and those which his new wife brought to the marriage), and the admitted failure to disclose income to the Australian Tax Office, notably, but not exclusively, by his new wife. In relation to the latter, a certificate was granted by his Honour, Morcombe FM, pursuant to s.128 of the Evidence Act 1995. See Transcript (17th October 2007) p.108. Questions of Ms Allen’s disclosure appear limited to the former aspect. Among other admissions by Mr Yates of non-disclosure include: (a) his new wife does not lodge tax returns, although she works six or seven hours every day in his nursery business. Thus, her income is not disclosed in the proceedings, nor what, if any, assets she brought to the marriage; (b) a new Commonwealth Bank account; (c) the proceeds of the sale of a green-house, said to be approximately $9000.00; (d) weekly cash proceeds from the sale of nursery goods at the farm gate; and (e) at least question marks over how many accounts there are with the Arab Bank. It would appear that there is, or has been, at least one account in Australia and another in Palestine. See Transcript (17th October & 21st November 2007) pp.100, 104-105, 105-107 & 159-162. Mr Maurice, Counsel for Ms Allen, started to submit, which submission was completed by his Honour, that the credibility of both parties was an issue. See transcript (21st November 2007) p.173.
[4] See respectively the Affidavit of Ms Allen of 24th November 2006 (par.48), and the Affidavit of Mr Yates of 24th August 2006 (par.5).
[5] See Mr Yates’s evidence about retaining and using in the proceedings some of Ms Allen’s documents from the residence in which she formerly resided. Transcript (17th October 2007) pp.126-27. To his credit, he also stated that Ms Allen could recover all of her things from the property.
Orders Sought
The applicant, Ms Allen, seeks final orders whereby the former matrimonial home, the principal asset in contention which is located at W and has an agreed value of $820,000.00, be sold and the proceeds divided equally between her and Mr Yates.
For his part, Mr Yates seeks relief under curiously framed orders (a) dismissing Ms Allen’s application, (b) declaring that he is the absolute owner of the former matrimonial home and the property on which it is, and two other dwellings are, located,[6] and (c) paying Ms Allen $115,000.00 by way of property settlement.
[6] See the evidence of Mr Yates, Transcript (17th October 2007) pp.124-26.
In a rather sketchy (2 pages) and undated Respondent’s “Outline of Case Documents”, Mr Cairns of Counsel stated: “The effect of the orders sought will provide the wife with not less than 30% of the know [sic] assets.” Mr Cairns added parenthetically, not unreasonably: “At the time of drafting this document the full extent of the wife’s monies is not known.” No updated Outline, so far as I can detect, was filed on behalf of Mr Yates.
Ms Allen’s Counsel, Mr Maurice, filed two Case Summaries. The first, of 6 pages, is dated 15th October 2007; the updated second Outline of Submissions (of similar length to the first) is dated 20th November 2007. Neither party has any superannuation entitlements, or at least none that are disclosed.
The parties also seek orders whereby personal property and effects currently in the possession of each of them will be retained by that person. There may be some practical difficulty with such an order given that the husband admitted in cross examination, albeit somewhat reluctantly and seemingly less than fulsomely, that he retained a number of his former wife’s documents (and possibly other personal effects) since he had possession of all of the dwellings on the property in one of which Ms Allen lived for some time after separation.
Factual Background
The parties are now aged respectively 47 (wife) and 57 (husband). They were married in Rafah, Palestine in 1989. According to the wife’s evidence (which was not contradicted or otherwise put in issue), it was an “arranged marriage” and celebrated under Islamic Sharia Law. The Marriage Certificate is Annexure “A” to Ms Allen’s affidavit of
24th November 2006. There were no children from the marriage.Ms Allen contends, and which seems not to have been contested, that she now lives in a women’s refuge. She has not re-married or re-partnered, nor is she in paid employment, doubtless due to her recently acquired criminal record. The circumstances that gave rise to these matters are detailed in Ms Allen’s affidavit of 11th October 2007. I need not repeat them, especially since there seemed little challenge to the circumstances in which Ms Allen now finds herself, although there was dispute as to the factual history of the tensions and assaults that transpired between Mr Yates and his new wife, and Ms Allen. I see no need to recount the respective versions, save to note that her criminal record will undoubtedly plague her employment prospects. After the end of the marriage, Ms Allen had worked part time in a nursing home for modest remuneration.
Mr Yates has re-married. According to Ms Allen, in approximately May 2005, she learnt that she had been divorced by Mr Yates under Islamic Sharia Law on 30 March 2005. A copy of the divorce certificate, dated 16th April 2005, is Annexure “E” to her affidavit of 24th November 2007. She also contends that Mr Yates remarried on the same day (16th April 2005). A copy of that marriage certificate is Annexure “F” to the same affidavit. Annexure “G” is a letter, dated 17th May 2006, from the Rafah Sharia Court, which confirms the divorce and remarriage as deposed to by Ms Allen.
There is no mention of his remarriage in either of Mr Yates’s affidavits filed in the proceedings. I have already noted that there is no disclosure of his current wife’s income or contributions. This is and must remain a matter of interest and some concern to the Court in the determination of matters in these proceedings.
Ms Allen contends that she qualified as a seamstress, but after her marriage did not pursue that career. Mr Yates has a degree in agriculture from an un-named university in Egypt. Prior to commencing a nursery business in Rafah, he pursued (but seemingly did not complete) other studies (such as in public health administration) for a couple of years. He also worked in Libya for some years in the nursery business where, he says, he learnt “the trade of growing plants and cultivating techniques.”
Mr Yates says that at the time he married Ms Allen, he had saved approximately $US25,000.00, while his Wife had no money or assets.
After their marriage, Mr Yates says that the couple lived in one bedroom of a three-bedroom house that was owned by his family. He acknowledges that his wife cooked and cleaned the matrimonial home from the commencement of the marriage.[7]
[7] Affidavit of Mr Yates of 24th August 2006, (pars. 15 & 16).
For her part, Ms Allen claims that the living situation of the young couple was rather different to the account provided by Mr Yates. She says that as a young married couple they lived for one year with
Mr Yates’s parents. They also acquired a plot of land as a government grant on which they built a small one-bedroom stone house. They lived in that house, she says, for approximately 5 years.[8]
[8] Affidavit of Ms Allen, 24th November 2006, pars.7-13.
Ms Allen also contends that during their time in Palestine Mr Yates leased another parcel of land on which he conducted a nursery business. Ms Allen says that she assisted in the work on the nursery. She also says that over the five years of that business, the couple saved funds (in Jordanian currency) that totalled approximately $A70,000.00. She also contends that Mr Yates took this cash to the Arab Bank in Ghaza where it was converted into Australian currency. She also says that Mr Yates took these funds with him when he moved to Australia.[9]
[9] Ibid pars.14-15.
The parties are at least agreed that they arrived in Australia in July 1995, in the case of Mr Yates, and December 1995, in the case of
Ms Allen.[10] Mr Yates attests to paying certain expenses relating to the relocation to Australia, such as airline tickets [for both parties], application fees for visas [for both parties], certain unspecified and un-costed expenses for medical examinations, and approximately $US2000.00 in relation to English language classes for Ms Allen.[11]
[10] There is a contest between the parties over the difficulties which Ms Allen says she experienced over her living situation with Mr Yates’s brother while she remained in Palestine, until she migrated to Australia. For the purposes of these proceedings, I do not think that any finding needs to be made in relation to these events, which are recounted in Ms Allen’s first affidavit, pars.16 ff. There was a related issue as to a power of attorney which Mr Yates is said to have sent to Ms Allen’s Father and her brother-in-law to deal with the house built by the parties. In the larger scheme of the proceedings, and given the difficulties regarding evidence, I do not think that much turns on the power of attorney. It was relied upon as evidence, among other things, as going to the credibility of Ms Allen’s account of the living situation in the early stages of the marriage, and similarly relevant to the credibility of Mr Yates regarding the same issue. As will become apparent soon, credibility was a seminal issue in the case.
[11] Affidavit of Mr Yates of 24th August 2006, par.20.
Mr Yates next recounts borrowing $US160,000.00 from his brother. A copy of the loan agreement, in Arabic and in English translation, is Annexure “A” of his affidavit of 24th August 2007. He contends, in my view not unreasonably, that he borrowed the money to assist him in establishing himself in Australia. Curiously, however, in later applications to borrow funds from St George Bank, Mr Yates failed to notify the Bank of this borrowing. His explanation, while somewhat plausible, does pose some problems regarding the straight-forwardness of his business dealings and general accountability and transparency (or rather lack thereof) of them. In cross-examination, he contended that he did not disclose the funds because they were actually his funds. I understand him to say here that because he was in possession of the money, it was thereby his to do with as he pleased and did not have to describe it to anyone as a loan.[12]
[12] See Transcript (17th October 2007) p.118.
It is convenient here to note that Mr Yates acknowledged in cross-examination that the loan from his brother, according to the agreement referred to in the previous paragraph and annexed to his affidavit, “expired” in 2002. He also confirmed that since that date, or at any other time, he has not paid back anything under the loan.[13] I need not canvass further the historical background. Before dealing with each of the principal issues in dispute, I simply wish to note the following summary of the parties’ financial situation, taken from their respective documents, such as they are.
[13] Transcript (17th October 2007) p.121.
Summary of financial situation:
Applicant’s Summary –
Husband Wife
FMH $820,000 ANZ 8,398
Mortgage (126,000) St George 6
ANZ 2,826 Effects 1000
Cth a/c 6996 Funds remitted 40,000
Arab Bank 1148
Nursery 2500
Ford 2500
Contents 3000
Legal Fees 7345
Funds o/s NK
O/S Real estate NK
Total 720,315 49,404[14]
[14] Mr Cairns, Counsel for Mr Yates, provided approximately five lines of summary about the financial positions of the parties. Ms Allen did not concede that the funds remitted overseas, which it is claimed were from her accumulated Centrelink benefits, should be part of the asset pool.
Issues in Dispute
Of the five issues I identified in paragraph [3] of these Reasons, two may be dealt with reasonably summarily.
First, I have already noted the little likely difference it makes to the overall result whether any formal finding is made that the marriage was of 14 or 15 years duration, or even just on 16 years. I need not dwell further on this point.
Secondly, regarding the parties’ health, there is attached to their affidavit material medical reports regarding their health problems. None of the medical specialists or general practitioners was called to give evidence. The reports speak for themselves. Also relevant here is that, notwithstanding his claim to being limited in his labour, Mr Yates continues, with his current wife, to conduct what seems to be a modestly profitable, or at least genuinely viable, nursery business. It is certainly sufficient to enable him to continue to pay the mortgage. And he clearly paid his way to return overseas to remarry. Without wishing to down-play the importance of it, other matters, as noted below, are of greater moment in the proceedings than the health of the parties.
Two related important issues in the proceedings, as indicated earlier in these reasons, concern (a) the contributions of the parties - direct and indirect - in relation to the purchase of the W property, and (b) the contributions – direct and indirect – in relation to the conduct of the nursery business on it. Related to the latter is Ms Allen’s contention that she was never paid any money for her labour at the nursery. It is, consequently, related to the claim by Mr Yates that Ms Allen worked prodigiously, not at her husband’s nursery, but on neighbouring properties.[15] But, as with other matters, given the state of the evidence, the ability to make any substantive findings, other than Ms Allen performing the domestic responsibilities of the parties essentially for the duration of the marriage, is almost impossible. As well, without putting undue weight on the observation, his Honour, Morcombe FM, indicated by way of comment in the course of submissions that it appeared to be a “joint effort” in every respect.[16] Nothing I have read suggests that this commentary was in any way awry.
[15] In this regard, see Ms Allen’s evidence where she denied working at other nurseries and maintained that she `worked like a horse with him [Mr Yates]:’ Transcript (16th October 2007) p.42.
[16] Transcript (21st November 2007) p.171.
What is not disputed is that, although married to Mr Yates, and for some time, Ms Allen was not named as an owner of the property purchased by her husband. It was purchased in his name only.
This is a convenient juncture to deal with the issue of the loan from
Mr Yates’s brother, in part because it is asserted by the respondent that those funds were used to purchase the W property. Indeed, I regard the loan and the wife’s overseas funds as perhaps the two primary issues to deal with in order to make orders under s.79. It is to those two issues that I now turn.
The Cash Loan from Palestine
Mr Yates submitted that the loan from his brother was in 1995. The funds ($US160,000) were in cash, which had been kept by his brother “under mattress, hide in the house where he’s keeping his money.”[17] I have already noted that this “loan” was not disclosed to St George Bank when Mr Yates applied for a loan in relation to the purchase of the W property, and why, according to Mr Yates, it was not disclosed.
[17] Transcript (17th October 2007) pp.121-124.
I have also previously noted that there has been no attempt to repay the loan, nor has there been any demand by the brother for it to be repaid. In submissions, Mr Cairns acknowledged that the terms of the “loan” were “soft.”[18] Such a description is, at least, delicate if not discreet.
[18] Transcript (21st November 2007) p.180.
For his part, Mr Maurice submitted that the loan was either a matter in relation to which no formal determination could be made by the Court, or that, because of that position, it could not be treated as a contribution to the marital asset pool by the husband. Put another way, while there was evidence that some funds came from Palestine, the precise details of them were so unreliable that no formal finding could be made in relation to them. He accented that (a) the loan had never been called in by Mr Yates’s brother and (b) Mr Yates had never re-paid anything of it. As well, Ms Allen challenged the amount of the loan. Mr Yates also seemed to concede, with some qualification, that in any event the loan from his brother had expired in 2002.[19]
[19] Transcript (17th October 2007) p.121.
In his view, Mr Maurice also made a similar submission regarding the [unreliable] facts concerning the “property” in Palestine. On the Husband’s evidence, there is and was only one property that was owned by his family, in which the newly married couple lived. It was, and is, not capable of being sold. On the wife’s evidence, there was a separate property, on which was erected a dwelling in which they lived, which the couple obtained courtesy of a government grant. Ms Allen contends that this remains an asset in Mr Yates’s hands. There is no evidence at all before the Court of its value.
It seems to me that there are three options regarding the “loan.” One is to treat it strictly and simply as a loan to Mr Yates from his brother. If that course was followed it would need to be considered on the regular basis as a debt. I need not elaborate further. A second course would be to treat it as a loan but only notionally so because, in addition to its “soft terms,” the real intention was and remains that it is never to be repaid. In such a case, it may more properly be described or regarded as a “gift” either to Mr Yates or to and for the benefit of both parties. Again, I need not elaborate on the legal treatment of “gifts.” A third option would be somewhat similar to, and something of a variation of, the first and or second options already described. However, whether treated as either a loan or a gift, the details of it are so imprecise, indefinite and or unreliable, both as to amount and as to repayment, that the only safe course is for the Court to disregard it altogether.[20]
[20] On these matters generally, see the remarks of Evatt CJ in Prince and Prince (1984) FLC ¶91-501 at p.79,076, and the Full Court of the Family Court in Biltoft and Biltoft (1995) 19 Fam LR 82 at pp.91-92, and later decisions, which have endorsed the remarks of Evatt CJ and/or the Full Court in these cases, such as the Full Court (Finn, Coleman & Boland JJ) decision in Z v Z (2006) 34 Fam LR 296 (see Finn J at [18] and Coleman & Boland JJ at [127]), and (Kay, Warnick & Boland JJ) in Re JS and GP (2006) 35 Fam LR 88 at [110].
In Biltoft, the Full Court said: “Notwithstanding the general practice which has developed, the court has indicated that it may properly determine not to take into account or to discount the value of an unsecured liability in certain circumstances. Such liabilities would include but are not limited to a liability which is vague or uncertain, if it is unlikely to be enforced or if it was unreasonably incurred.”[21]
[21] Biltoft and Biltoft (1995) 19 Fam LR 82 at p.94.
I regard the evidence of the parties in relation to both the cash loan, and the overseas property, to be sufficiently or so problematical that the Court is unable to make any formal determination regarding the facts surrounding both matters. It necessarily flows from such a result that the Court is unable to make any determination regarding the legal significance or effect of them for the purposes of the proceedings. In my view, and in accordance with the Full Court authority of Biltoft and later cases, they cannot be taken in to account for the purposes of the s.79 application before the Court and therefore must be put to one side.
Ms Allen’s Overseas Funds
The next issue relates to what, if anything, to make (i.e. the accuracy of the limited information regarding, and the legal import) of funds that Ms Allen confirms she sent overseas. She says that because she was never paid anything by Mr Yates, she accumulated Centrelink funds and sent them overseas, and that, from time to time, she uses them.
Mr Cairns submitted, in my view correctly, that the Court could never be sure how much had actually been sent overseas by Ms Allen. It may be in the order of $56,000. The same query could also be made in relation to the source of the overseas funds, especially since Mr Yates contended that Ms Allen worked for other nurseries in the area, rather than for his nursery, for which she was paid. As previously indicated, Ms Allen denies this.[22]
[22]As with other matters, the evidence regarding the overseas funds of
Ms Allen is also sufficiently unreliable that the Court is unable to make any determination regarding their source (or sources) and the amount of them. It necessarily flows from such a view that the Court is unable to make any determination of the legal significance or effect of them for the purposes of the proceedings. In my view, this issue too must be put to one side. In any event, the amount involved would not, and does not, alter greatly the ultimate result.
The Facts & the “Four Steps”
It remains, both by way of summary and according to judicially sanctioned due process, to consider the facts of these proceedings in the light of the fundamental principle of s.79(2) of the Family Law Act 1975 (Cth) (“the Act”), to determine “in the light of all the circumstances what is the just and equitable order to be made between the parties regarding their competing property claims?” The answer to that question is largely dependent on deciding the respective contributions of the parties to the relationship. Subject to what has been said already regarding “contributions” and income-earning capacity, as with many cases, the reality here is not completely removed from the Full Court’s description in Ferrero and Ferrero:
The task of evaluating and comparing the parties’ respective contributions where one party has exclusively been the breadwinner and the other exclusively the homemaker, is a most difficult one to perform because the evaluation and comparison cannot be conducted on a “level playing field.”[23]
[23] (1993) FLC¶92-335 at p.79,572. It cannot be said with any certainty that the playing field on which the parties lived their lives was in any way “level,” or indeed what the boundaries of the field at any one time actually were.
As will be apparent, the facts of the matter are not straight-forward. However, the long-standing judicially sanctioned “four-step” approach to determine applications of this kind that are brought pursuant to s.79 of the Act is much more so.[24]
[24] There is abundant authority in relation to the judicial prescription to use the “four inter-related steps” approach. See, for example, the Full Court decisions in Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC ¶93-143 at p.78,386, and AJO & GRO (2005) FLC ¶93-218 at p.79,619.
For ease of reference, the “four important steps to be taken in determining a property dispute are”:
a)“To identify and value the net property of the parties (usually at the date of trial);[25]
b)to consider the contributions of the parties within paragraphs (a) – (c) of s.79(4);
c)to consider the s.75(2) factors; and
d)to consider whether the order proposed is just and equitable.”[26]
[25] For discussion of issues relating to the identification and disclosure of property, a matter already canvassed a number of times in these reasons concerning both parties, see the Full Court discussions in In the Marriage of Chang and SU (2002) 29 Fam LR 406 and Barker v Barker (2007) 36 Fam LR 650.
[26] This is the `four-step’ process as described in AJO & GRO, at p.79,619.
Given my determination earlier in these reasons to disregard (a) the overseas “loan” to Mr Yates, (b) the overseas property of the parties (however described), and (c) the overseas funds of Ms Allen, the only property that the Court can realistically consider for distribution is that which is located at W, and which has an agreed value of $820,000.00. Thus, step 1 is completed.
The contributions for the purposes of step 2 are somewhat more problematic. On the one hand, in my view, it cannot be realistically disputed that Mr Yates brought to the marriage the initial capital, albeit unsubstantiated and imprecisely quantified. For example, he deposes to saving, at the time of the marriage, approximately $US25,000. Then there is the disputed “soft loan” from his brother said to be in the order of $US160,000.
In relation to the purchase of the W property, Mr Yates says that in addition to the sums already referred to he borrowed $A160,000 from St George Bank. He also deposes to saving a further $A40,000 to make up the purchase price of $410,000 on the property. He also contends that while Ms Allen performed some domestic duties, she did not work at the farm/nursery (at W), that he paid all the bills, and that Ms Allen worked outside the farm but kept all her earnings for herself in a separate bank account.[27]
[27] All of these matters are set out in Mr Yates’s affidavit of 24th August 2006.
In her amended Financial Statement (filed 12th October 2007),
Ms Allen declares that she receives unemployment benefits of $215.00 per week, and that she has a single bank account (with St George Bank at Liverpool) with an estimated credit balance of $1000.[28]
[28] The same bank account had been disclosed in the two earlier Financial Statements filed by Ms Allen on 25th October 2005 and 24th November 2006.
Ms Allen contends that the couple accumulated savings of approximately $A70,000 from their joint labours in Palestine, which (she says) Mr Yates brought to Australia, and that she brought with her to Australia $A10,000 worth of jewellery. As submitted by her Counsel, the purchase of the W property (solely in Mr Yates’s name) in the sum of $410,000 was secured by savings of $100,000, a bank loan of $160,000, and the balance from “the proceeds of sale of belongings and the nursery business in Palestine.” Details of these “proceeds of sale” were not provided.
In her oral evidence, Ms Allen stated that she had sent to her brother overseas approximately $A4000 for a nephew’s [undetailed] operation, that sometimes her brother sent her small amounts of money (in the order of $A100-200 each time), and that she had transferred $A26,700 to her sister.[29]
[29] Transcript (16th & 17th October 2007) pp.19, 37 & 82 respectively. Mr Cairns put to Ms Allen that the total of funds available to her overseas was in the order of $A101,000. She denied this figure. It also seems clear that she did not disclose an ANZ bank account. See Transcript (17th October 2007) p.75. See also the warning, through Counsel, to Ms Allen about disclosure by FM Morcombe at Transcript (17th October 2007) p.86.
As already noted, Ms Allen also contends that the Palestine property, granted to the couple by the government, remains an asset in the husband’s hands.[30] Also as noted, there is no evidence before the Court as to the value of this property.
[30] Among other places, see the Outline of Submissions of Applicant Wife: 20th November 2007.
Given the facts and circumstances of these proceedings, very limited findings can be made regarding the contributions, direct and indirect, regarding the parties to these proceedings. Such findings that are possible may be summarised as follows:
a)
Notwithstanding the lack of relevant detail, for the purposes of s.79(4)(a), financial contributions to the marriage favour
Mr Yates. That said, given the duration of the marriage, the import of the initial financial contribution has diminished somewhat, or rather its significance is one of weight more than anything else.[31]
b)
For the purposes of s.79(4)(b), I accept FM Morcombe’s observation (it cannot be put any higher, but it also cannot be put any lower) that the contributions to the marriage, including the nursery business, otherwise reflected a joint enterprise, save for Ms Allen’s responsibilities as homemaker, which allowed
Mr Yates to devote all his energies to the nursery business.[32]
c)I have already noted my acceptance of the essentially uncontested evidence regarding Ms Allen’s contribution as homemaker, thus a relevant factor for the purposes of s.79(4)(c).
d)For the purposes of s.79(4)(d), the facts are plain that the orders of this court in these proceedings will have minimal impact on the income-earning capacity of the parties. In the case of Mr Yates, he will more likely than not continue to work in the nursery business, either at the W property or elsewhere, aided by his wife. In the case of Ms Allen, given her criminal record, her prospects of gainful employment are significantly reduced.[33]
[31] See for example, Pierce v Pierce (1999) FLC ¶92-844.
[32] Transcript (21st November 2007) p.171.
[33] See, for example, Ms Allen’s affidavit of 11th October 2007, pars 24 – 28 and annexure “B”, and the submissions of Mr Maurice, Transcript (21st November 2007), p.183.
For the purposes of s.79(4)(e) and the application of s.75(2), the following summary must suffice:
a)
The ages and health of the parties is noted above. I accept the [untested] medical evidence of both parties, also referred to earlier in these reasons. On balance, it would appear that
Ms Allen’s health is the poorer of the two parties, in no small measure doubtless due to the situation in which she finds herself – with a criminal record, and a failed marriage and (at this stage) no partner.
b)On the other hand, notwithstanding his state of health, Mr Yates continues to work, aided by his new wife (a factor relevant under s.75(2)(m)), whose financial assets and contributions were never put before the Court, or to the Australian Tax Office (a factor under s.75(2)(o)).
c)
Mr Yates has by far the greater financial and other resources and capacities of the two parties. Since separation, it is clear that
Ms Allen’s standard of living has diminished significantly, evidenced not least by her now living in a refuge (see s.75(2)(g)).
d)For the purposes of s.75(2)(k), the marriage may be categorised at least as being of moderate duration – just under 16 years (maximum) or 14 years, on Mr Yates’s evidence. It need only be noted again, for the sake of completeness, that there were no children of the marriage, and that there is no evidence of any superannuation interests for either party.
Just & Equitable: Conclusion
In Russell v Russell, the Full Court of the Family Court said:
… under s 79(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.[34]
[34] Russell v Russell (1999) FLC ¶92-877 at p.86,438. Emphasis in original. Comments to similar effect can be found also in the more recent decision of the Full Court in Noetel and Quealey (2005) FLC ¶93-230 at p.79,805.
The circumstances of the case are such that, in my view, there should be a determination that the marriage of the parties was, in essence and in reality, a joint enterprise, as intimated by his Honour, Morcombe FM. As well, in my view there should be a small adjustment, in the order of 5%, in favour of the wife as a result of a consideration of the factors enumerated in s.75(2) of the Act.
In these circumstances, in my view the most just and equitable order is that Mr Yates is to pay to Ms Allen $451,000, being 55% of the agreed value of the W property.
In the event that that sum is unable to be paid, I order that the
W property be sold and the net proceeds be divided, 55% to Ms Allen and 45% to Mr Yates.
In the result, each party should pay their own costs.
I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of Neville FM
Associate: Renee Davidson
Date: 27 June 2008
Later in these reasons, I re-visit briefly the evidence regarding (a) Ms Allen’s overseas funds, (b)
Mr Yates’s “loan” from his brother and (c) the overseas property in Palestine.
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