Ayers and Henley
[2009] FMCAfam 600
•21 August 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| AYERS & HENLEY | [2009] FMCAfam 600 |
| FAMILY LAW – Property – contributions of parties – impact of domestic violence – adjustment of section 75(2) factors – payments by husband’s sister of arrears of mortgage not a debt of the parties – orders binding third party pursuant to section 90AE. |
| Family Law Act 1975, ss.75, 79, 90AE |
| Chang v Su (2002) FLC 93-117 Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 |
| Applicant: | MS AYERS |
| Respondent: | MR HENLEY |
| File Number: | MLC 161 of 2008 |
| Judgment of: | Bender FM |
| Hearing dates: | 15 & 16 June 2009 |
| Date of Last Submission: | 16 June 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 21 August 2009 |
REPRESENTATION
| Counsel for the Applicant: | Ms Goldsworthy |
| Solicitors for the Applicant: | Rigoli & Associates |
| Solicitors for the Respondent: | Starnet Legal |
ORDERS
The husband forthwith do all things necessary and sign all such documents as may be required to transfer to the wife, at the expense of the wife, all of his right, title and interest in the real property situate at and known as Property H Victoria being the whole of the real property more particularly described in Certificate of Title Volume [1] (“the real property”).
Ms N forthwith provide to the wife a signed withdrawal of caveat number [G].
In the event the husband and/or Ms N refuses or neglects to comply with any provision of this order:
(a)a Registrar of the Federal Magistrates Court of Australia at Melbourne is hereby appointed to execute all deeds and documents in the name of the party in default and do all things and acts necessary to give validity and operation to these orders; and
(b)the defaulting party is ordered to pay all reasonable costs incurred by the other party for the purpose of enforcing this order and providing his/her damages; and
(c)for the purpose of this order, an affidavit setting out the husband and/or Ms N failure to comply with the orders shall be sufficient evidence of neglect and default.
Contemporaneously with order 1 herein, the wife do all things necessary to obtain a discharge of the mortgage registered number [A] to the Commonwealth Bank of Australia (“the mortgage”) so that the husband is removed as a mortgagee in respect of the real property.
In the event the wife is unable to comply with order 4 herein, then the real property be immediately placed on the market for sale (“the sale”), and upon completion of the sale, the proceeds of same be applied:
(a)firstly, to pay all costs, commissions and expenses of the sale;
(b)secondly, to discharge the mortgage and any other encumbrances affecting the real property;
(c)thirdly, the balance to the wife.
Pending the transfer of the real property and the discharge of the mortgage and/or the sale of the real property:
(a)the husband forthwith vacate the real property;
(b)the wife have the sole right to occupy the real property and during such right of occupation, the wife pay all instalments pursuant to the mortgage and all rates and taxes and like apportionable outgoings of the real property as they fall due, including any arrears of such mortgage instalments and/or rates and taxes currently outstanding on the real property; and
(c)the husband be restrained from further encumbering the real property.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under there or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders (the furniture, personal possessions, and like chattels in the property being deemed to be in the possession of the husband);
(b)each party forgo any claims they may have to any superannuation benefits belonging to or earned by the other;
(c)insurance policies remain the sole property of the owner/beneficiary named thereon;
(d)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(e)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
IT IS NOTED that publication of this judgment under the pseudonym Ayers & Henley is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 161 of 2008
| MS AYERS |
Applicant
And
| MR HENLEY |
Respondent
REASONS FOR JUDGMENT
Introduction
The wife’s application sought orders in relation to both children’s and property matters.
At the commencement of the final hearing, the court was advised that the children’s matters had resolved. Consent orders were made that provided for the parties’ four children [W] born in 1991, [X] born in 1993, [Y] born in 1996 and [Z] born in 2002 to live with the wife, that the wife have sole parental responsibility for the children and that the children spend time with the husband as may be agreed (It is noted that the children have not spent time with the husband since early 2008 and that the Family Report prepared for trial recommended that the children not spend time with their father unless he was prepared to undertake therapeutic interventions to address his behaviours).
In relation to property matters, the wife seeks orders that the former matrimonial home at Property H (“the former matrimonial home”) be transferred to her and she be responsible for the mortgage encumbering the property as well as any outstanding council and water rates (which are currently approximately six thousand dollars). She otherwise proposes that each party retain the benefit of all other assets in their possession or control, including superannuation entitlements.
The husband seeks orders that he pay the wife the sum of $25,000.00 and he retain the former matrimonial home. He otherwise proposes that each party retain the benefit of all other assets in their possession or control, including superannuation entitlements. (This amount represented what he says is the whole of the equity in the former matrimonial home, being its value less the mortgage, less the debt to his sister as set out in paragraph 5 herein and the outstanding council/water rates).
At the commencement of the final hearing, the husband’s sister, Ms N, made an oral application for leave to intervene in the proceedings on the basis she was owed $30,400.00 by the parties. She alleged such monies had been lent by her to the parties to pay arrears of mortgage payments on the former matrimonial home to prevent the mortgagee bank from foreclosing. Ms N foreshadowed such an application when the matter was before the court on 14 January 2009, and she was advised by the court that day she would need to file an application in a case with the necessary supporting material well prior to the matter’s final hearing. She was advised she could otherwise file an affidavit in support of the husband’s case. She had only filed the latter.
The application was opposed by the wife on the basis Ms N had not brought her application in a timely manner, nor in the proper way. More importantly, the wife argued she would not be afforded the opportunity to properly answer the application or any evidence lead by Ms N.
I ruled that Ms N did not have leave to intervene in the proceeding but could be called by the husband as a witness.
Background
The husband was born in 1971 in Somalia and is aged 38 years. He is employed [in the transport industry].
The wife was born in 1972 in Somalia and is 37 years of age. She is engaged in home duties.
In her affidavit sworn on 13 October 2008 and filed on
14 October 2008, the wife deposes that she and the husband were first married in Italy in 1990, that the husband then sponsored her to come to Australia and that they “married” again in May 1991 in Australia. In her application for divorce filed on 8 January 2008, the wife deposes the date of marriage as the latter date in Australia.The parties have four children [W] born in 1991, [X] born in 1993, [Y] born in 1996 and [Z] born in 2002.
In or about 1993, the former matrimonial home was purchased for approximately $120,000.00. It was registered in the parties’ joint names. The purchase was financed through a mortgage to Perpetual Trustees Pty Ltd.
In or about 2002, the property was transferred to the wife’s brother Mr M. The mortgage to Perpetual Trustees was discharged and a mortgage to Suncorp-Metway Limited taken out. The parties continued to occupy the former matrimonial home and were responsible for all mortgage payments.
The reason given for this transfer by the parties differed considerably and will be expanded upon later in the judgment.
In January 2007, the property was transferred by the wife’s brother to the husband. The mortgage to Suncorp-Metway Limited was discharged and a mortgage to the Commonwealth Bank of Australia was registered.
It was the wife’s evidence the parties separated on 11 May 2006. It was the husband’s evidence the parties separated in March 2007. This will be explored further later in this judgment.
After separation, the wife and the children remained in the former matrimonial home. It was the wife’s evidence that after separation, with the assistance of her brother, she made approximately $7,000.00 of mortgage payments. She was unable to provide any documentary proof of such payments and did not call her brother to give evidence.
In January 2009, interim consent orders were made for the former matrimonial home to be transferred to the wife upon her production of proof that she was able to refinance the mortgage. Such order was made subject to the husband making no admission as to the ownership of the property.
The mortgagor approached by the wife and her sister was not prepared to refinance the mortgage into the wife’s name on the basis of the interim orders made on 14 January 2009. The mortgagor required unconditional final orders transferring the property to the wife.
In April 2009, the wife and children were “evicted” from the former matrimonial home by the Commonwealth Bank of Australia because the mortgage was in serious arrears. She and the children moved into rental accommodation.
It was the husband’s evidence that his sister made mortgage payments on the former matrimonial home between February 2007 and October 2007, in an amount totalling $11,000.00. It was his evidence that in order to prevent the bank foreclosing on the former matrimonial home, his sister made payments to the Commonwealth Bank of Australia for the arrears of the mortgage in the sum of $6,388.50 on 24 April 2008 and $13,000.00 on 19 May 2009.
It is this amount of $30,400.00 that Ms N claims is owed to her by the parties. She has lodged a caveat over the former matrimonial home in an endeavour to protect what she claims is her interest in the former matrimonial home.
The water and council rates have not been paid by either of the parties. City West Water Limited have also lodged a caveat against the former matrimonial home to protect their outstanding rates and costs in the sum of $2,742.06.
The husband resumed living in the former matrimonial home in
May 2009. No evidence was given as to whether the husband is now servicing the mortgage on the former matrimonial home.
The evidence
The wife
It was the wife’s evidence that during the course of the marriage, she and the children were continually subjected to ongoing physical and emotional abuse at the hands of the husband.
A Family Report was prepared by Dr Michelle Wauchope dated 21 May 2009 in relation to the arrangements for the children. In paragraph 58 of her report, she made the following recommendation
“Based on the protective concerns discussed above, it is recommended that the children remain residing with their mother, and that they have no further contact with their father until
Mr Henley can demonstrate that he can interact with the children without resorting to violence, bullying, or verbal/emotional abuse, and that this change is sustainable.”Because children’s matters settled on the basis of the recommendations of the Family Report, Dr Wauchope was not required to give evidence, nor were the contents of her Report subject to any cross-examination. Be that as it may however, it is noted that Dr Wauchope reports that the three eldest children when interviewed reported that they and their mother had been subjected to continuous verbal, emotional and physical abuse at the hands of their father. Their description of such violence was graphic and disturbing in detail.
It was the wife’s evidence that the parties separated on 11 May 2006. However, in her affidavit sworn on 13 October 2008 and filed on
14 October 2008 in support of her initiating application, she deposes in paragraph 4 that she and the husband separated on or about 26 February 2007. In her trial affidavit sworn and filed on 11 June 2009 she sets out that the date of separation was 11 May 2006, and this is the date of separation deposed to in her Application for Divorce that was filed on
8 January 2008. The wife’s Centrelink benefits card indicates that she has been in receipt of a sole parent’s pension since 21 May 2006.When cross-examined as to the discrepancy in the dates, it was her evidence that the husband vacated the matrimonial home in May 2006, but that he continued to visit her and the children in the matrimonial home up until February/March 2007 in an attempt to persuade her to reconcile. In or around February/March 2007 there was an incident of violence at the matrimonial home where the husband allegedly punched the wife. An intervention order issued for the protection of the wife and the children as a result of this incident. It was the wife’s evidence that it was on this date that she finally determined that there was no future in the relationship.
It was the wife’s evidence that her brother lent the parties $10,000.00 to assist them in the purchase of the matrimonial home in 1993 and that this money had never been repaid. She was unable to provide any proof of this loan.
It was the wife’s evidence that the former matrimonial home was transferred into her brother’s name in 2002 as the parties were having difficulties in meeting the mortgage payments and the then mortgagee was threatening to foreclose. It was her evidence that the transfer took place to prevent she and the husband from losing the property.
It was the wife’s evidence that her brother transferred the property back to the husband in 2007 as the mortgage payments were not being met by the husband, and her brother wished to divest himself of the property and the mortgage to avoid a negative credit rating.
The wife’s brother did not provide any sworn material in relation to these transactions, and was not called by the wife to give evidence in relation to same.
It was the wife’s evidence that after separation, with the assistance of her brother, she made some mortgage payments by placing money directly into the husband’s account for him to make the mortgage payments. Her evidence as to when this occurred and why she paid the money to her husband rather than to the bank was at best vague. Further, she was unable to provide any documentary proof as to these payments and did not call evidence from the family members whom she claimed assisted her in the making of these payments. I am unable to make any findings that the wife made any mortgage payments on the former matrimonial home after separation.
When cross-examined as to why she hadn’t made any further payments in relation to the mortgage when she and the children were living in the property, it was the wife’s evidence that she had been advised not to do so as the property was not in her name and there was no guarantee that she would ever be recompensed for those payments.
It was also her evidence that she was not in a financial position to make the ongoing payments at that time.
When cross-examined as to her capacity to meet mortgage payments into the future in the event that orders were made in the terms that she was seeking, it was her evidence that her sister and other members of her family would be assisting her in relation to any refinancing of the property and in relation to the ongoing mortgage payments. The wife filed no affidavit material from her sister confirming this assistance. However, it is noted that in Exhibit W4, which is correspondence from the Commonwealth Bank of Australia to the wife’s solicitors, the bank indicated that they were dealing with both the wife and her sister in relation to any proposed refinancing of the mortgage over the matrimonial home in the event that there were orders made transferring it to her.
In relation to the alleged mortgage payments made by the husband’s sister, Ms N, the wife’s evidence was that she knew nothing of any such payments and had never asked Ms N to make such payments. She also raised the possibility that if such payments were made, the source of the funds for those payments was the husband and not his sister.
The wife provided to the court correspondence from the Family Assistance Office confirming that she had been exempted from taking maintenance action in relation to the children because of possible domestic violence. It was her evidence that she has received no child support from him since separation. The husband swore he had paid the wife $950.00 in 2007 in relation to the children, but conceded he was not making any child support payments at this time as he had a “nil” assessment.
Shortly after the parties separated, they met with the three senior Imans in their community. There was some agreement reached in relation to children’s and property matters at this time. As part of that agreement, the wife made available to the husband their Ford Falcon motor vehicle and it has been in his possession ever since. No other aspects of that agreement were complied with by either of the parties.
In 2007, a Ford XT 2002 motor vehicle was purchased at auction. It was the wife’s evidence that this vehicle was purchased with funds provided by her sister and it was registered in her mother’s name. Because she does not have a vehicle, it was the wife’s evidence that her mother allows her to retain this car for her use and for the benefit of the children.
Whilst there were areas of the wife’s evidence that were less than convincing, especially in relation to alleged payments of the mortgage by her family after separation, generally speaking where her evidence differed from that of the husband, I preferred the wife’s evidence on those aspects of the case.
The husband
The husband denies all allegations of domestic violence against the wife and the children. In his only affidavit filed in these proceedings on
5 January 2009, the husband denies the allegations of abuse and alleges it was the wife who assaulted him.In the Family Report of Dr Wauchope referred to earlier in this judgment, Dr Wauchope observed the husband to be aggressive, intimidating and bullying in his interactions with the children during interview. In paragraph 49 of the Family Report, Dr Wauchope noted as follows:
“The fact is that despite Mr Henley’s denials, Ms Ayers and all three children individually reported that Mr Henley had been physically and verbally abusive towards all of them, over a long period of time, and they have each given various examples; with the consistent nature of their reports and the detail and context they were able to provide suggesting that these reports are likely to be true. The children’s attitude towards their father and their demeanour during observation also supports the allegation that
Mr Henley has been abusive, as does the writer’s observations during this assessment.”
It was Mr Henley’s evidence that the parties separated on or around
2 March 2007. His evidence was that he vacated the former matrimonial home to avoid the ongoing physical assaults on him by his wife. In particular, he claims that she had threatened him with a knife.An application for an intervention order was taken out on behalf of the wife by the police at this time, and in response the husband sought an intervention order against the wife on his own behalf in which he alleged the “knife incident”. This matter came before the Sunshine Magistrates Court on 2 May 2007, and both parties were present at court. The wife’s application for an intervention order only was granted.
I note that no evidence was given as to the circumstances of the hearing of this matter in the Sunshine Magistrates Court and whether the husband defended the wife’s application. It is not known if the husband pursued his application for an intervention order.
I am satisfied that the wife and the children were subjected to ongoing physical and verbal abuse at the hands of the husband during the course of the marriage. I do not accept the husband’s denials of this behaviour.
In relation to the date of separation, the court does not need to determine the date for the purposes of determining an appropriate outcome of the division of property between these parties.
In relation to the former matrimonial home, the husband confirmed the timelines in relation to the various transfers of this property.
It was the husband’s evidence that the transfer of the matrimonial home to the wife’s brother took place in order for the wife’s brother to obtain the benefit of the $7,000.00 first home buyer’s grant as the wife’s brother was in financial difficulty at that time.
When cross-examined as to the circumstances of this transfer, and in particular when asked questions as to who paid the stamp duty on the transfer and why this seemed a rather complex way for the wife’s brother to obtain a mere $7,000.00, it was the husband’s evidence that there was no stamp duty payable on the transfer of the property because they reduced the price of the house. It was his evidence that his brother-in-law didn’t have to pay the husband or the bank any money. It was also his evidence that it was his brother-in-law who was able to obtain a $100,000.00 loan. However the husband was unable to explain why if his brother-in-law was eligible for a $100,000.00 loan, why his brother-in-law didn’t borrow the $7,000.00 that the husband was alleging the brother-in-law needed.
Again, it is not necessary for the court to make a finding as to the circumstances of the transfer of the property to the wife’s brother in 2002 in order to be able to determine the appropriate division of property as between the parties.
The huge variance in the parties’ evidence on this issue, together with the absence of any independent evidence, either documentary or of the alleged individuals involved, was indicative of the manner in which the hearing was conducted.
It was the husband’s evidence that the wife’s brother transferred the matrimonial home back to him in 2007 as the wife’s brother’s financial problems were over, he had no need for the property anymore so “he said thankyou and he gave it back”.
The husband gave evidence that at the time of the transfer of the matrimonial home back to him, he made application to the Commonwealth Bank of Australia for a further loan. It was his evidence that the house was encumbered by way of a $100,000.00 mortgage at that time, but that he took out a loan of $155,000.00. It was his evidence that the additional $55,000.00 obtained by him was used to renovate the former matrimonial home and to purchase the motor vehicle that is now in the wife’s possession.
When questioned as to what renovations were completed on the matrimonial home, it was the husband’s evidence that the carpet was removed and replaced by wooden floors and that the interior of the house was painted. The wife denied that any renovations had taken place.
As the transfer of the property back to the husband took place in early 2007, if the wife’s date of separation is accepted, it is difficult to believe that the husband would have expended monies on renovating a property in which he was not residing. If these renovations did not take place, the equity in the matrimonial home was reduced by the husband in the amount of $55,000.00 and he retained the benefit of those monies.
The husband did not produce any documentary evidence confirming the expenditure on the matrimonial home.
It was a feature of this case that despite repeated requests by the wife and her practitioners to the husband for full and frank disclosure by him, including the production of all relevant documentation, the husband failed to provide same.
During the course of the hearing of this matter, and in particular during his cross-examination, the husband was requested on a number of occasions to produce the documentation that would have supported the evidence he was giving to the court. It was his evidence that he had all the documentation in a samsonite bag which he had with him in court on the first day of the hearing. On the second day of the hearing when he was being cross-examined, it was his evidence that he had lost that case overnight and therefore had none of the documentation available. This explanation for the absence of the documentation was not believable.
In relation to the purchase of the motor vehicle in the wife’s possession, it was the husband’s evidence that he purchased this vehicle for $11,500.00 at auction. He then indicated that he drove it to Vic Roads, where he proceeded to register it in the wife’s mother’s name. He offered no explanation as to why he registered the motor vehicle in the wife’s mother’s name, other than the purchase took place during a period when he was trying to save his marriage and he did this to please his wife.
This explanation makes no sense because, on the husband’s evidence, the parties had not separated at this time and they already had a motor vehicle.
Again, if I accept the wife’s evidence as to the acquisition of this motor vehicle, the husband had the benefit of the full amount of the $55,000.00 borrowed by him over and above that which was necessary to refinance the home when it was placed in his name.
In relation to the payment of the mortgage on the former matrimonial home, it was the husband’s evidence that he paid the mortgage from separation until October 2007. He indicated that those payments were made utilising his own money and money from his family. It was his evidence that he stopped making mortgage payments when it was apparent there was no possibility of reconciliation.
It was his evidence that in or around April 2008, an amount of approximately $6,000.00 was paid in relation to the arrears of the mortgage over the former matrimonial home, and that these funds were provided by his sister.
It was his evidence that no further mortgage payments were made after this date until May 2009, when arrears of some $13,000.00 were paid by his sister, and that as a result of this payment, the bank ceased their processes to repossess the property and he moved back in to the property. The husband gave no evidence, nor was he questioned, as to whether he has continued to meet the mortgage payments since that date.
It was the husband’s evidence that his sister had made some $11,000.00 worth of mortgage payments between the date of separation and
October 2007, $6,400.00 in or around April 2008 and a further $13,000.00 in or around April 2009. In addition, his sister lent him $16,000.00 to purchase a [vehicle to be used for his employment in the transport industry]. In support of this, the husband tendered a handwritten document dated 6 March 2007 in the following terms:“6th of March 2007
I, Mr Henley of Property B declear (sic) that I kindly asked my sister Ms N
To meet all house repayments of property Property H
After my ex-wife could not meet the payments of the house she is living.
I was and still is confused and streesed (sic) that my ex-wife was taking me to courts.
My sister paid to c/wealth ban (sic) the sum of 17,400.
$6,400 out of that money was outstanding or defaults and $11,000 she was paying to house repayments every months.
I agreed with my sister to also pay all my legel (sic) costs as she is my sources of income.
My sister re-financed her house to save my childrenz (sic).
I, my ex-wife that c/wealth bank not to take the house.
I told and agreed my sister as a creditor and she can even put a caveat in to the property.
I also borrowed $16,000 for [vehicle to be used in the transport industry].
Mr Henley
06/03/07”
There are a number of problems with this document. Firstly it is dated
6 March 2007. This date pre-dates, by a considerable period, the alleged payments by the husband’s sister. Secondly, it is clearly written by the husband and signed by the husband only. It has not been witnessed and can not be seen in any way to represent an agreement between himself and his sister in relation to the payment of those monies.It is my finding that this is nothing more than a self-serving document prepared by the husband at an unknown time and cannot be seen in any way to verify the husband’s claims of those payments made by his sister or any indebtedness he and/or the wife have to her to repay those amounts. It does not create a caveatable interest in the property for his sister.
The husband is currently employed [in the transport industry]. Whilst neither his affidavit filed in this matter on 5 January 2009 or his statement of financial circumstances that was filed in this matter on 11 June 2009 make any reference to the husband having any interest in [the transport] business, leave was given to the solicitor for the husband to lead viva voce evidence in relation to such business/businesses.
It was the husband’s evidence that he purchased a “[transport] business” two years ago. It was his evidence he paid $29,000.00 for a one year lease. In order to buy that business, the husband’s sister provided him with $16,000.00 and the balance of the funds were paid by way of a financial agreement with Toyota. It was his evidence that he no longer has this vehicle as Toyota repossessed the car some two months ago. He was unable to produce any documentation from Toyota or any other source to verify this evidence.
He also gave evidence that he has an interest in a second “[transport] business” which is ongoing. In relation to this latter business, it was the husband’s evidence that he was in partnership with a gentleman by the name of Mr F, and that the [vehicle] in question is registered in this gentleman’s name and is subject to finance. It was his evidence that he had borrowed $5,000.00 from another of his sisters which was paid to
Mr F and this was how he had gone into partnership with this gentleman. Again, there was no documentation verifying the existence of this partnership or of the monies advanced by the sister.It was the husband’s evidence that he and Mr F share the driving of this vehicle. It was his evidence that neither of them actually own a [vehicle omitted] license and that that is owned by [C], to whom they pay $2,500.00 a month for the lease of that license. He indicated that the finance payments on the car are $510.00 per month, and they are also responsible for the payment of all necessary maintenance, registration and petrol.
It was his evidence that there are times when the [transport] business does not earn enough to meet these outgoings.
Again, the husband produced no documentation to verify any of this evidence.
The husband also gave evidence that in April 2008, he borrowed some $10,000.00 from [C] Pty Ltd, which money he gave to his wife in the expectation that this would facilitate a reconciliation. In support of this claim, he produced a document dated 20 April 2008 on the letterhead of [C] Pty Ltd, which states that:
“Mr Henley has borrowed $9,000.00 from our company for business purposes on the 20th of April 2008.”
The wife denied that the husband had given her $10,000.00 in or around April 2008 or at any other time subsequent to the parties’ separation.
This evidence of the payment to the wife of the $10,000.00 runs contrary to the husband’s previous evidence that he had ceased making mortgage payments on the matrimonial home in October 2007 as he realised at that time there was no possibility of reconciliation. It is noted this loan took place around the time that the husband travelled overseas to Africa for some months. It also appears to coincide with the time that the husband allegedly entered into the partnership in relation to the current [transport] business and coincides with the payment of $6,400.00 to meet the then arrears of the mortgage on the former matrimonial home.
In the event the husband did borrow money from [C] Pty Ltd, I am satisfied that he did not give this money, or any other money, to the wife.
The husband was cross-examined at some length in relation to his work history during the course of the marriage. In summary, the history provided by the husband was as follows: Upon arrival in Australia in 1987, he worked at the [F] factory for some eight years. He then bought a [vehicle] which he drove for some two years until it was sold. He then drove a [vehicle] for someone else for some two to three months when he bought another [vehicle] which he drove for some year and a half. He then worked in [T], another factory, for some four to five years, after which he worked at [R] (another factory) for some months. Thereafter, he has been employed [in the transport industry].
The husband confirmed that whilst working for [F], [T] and [R], he accumulated superannuation entitlements. He was unable to provide any documentation as to the value of his superannuation entitlements and denied having any knowledge of exactly how much his superannuation entitlements were. Any documentation as to his superannuation entitlements was allegedly in the missing samsonite case.
It is also noted the husband made no reference to having superannuation entitlements in his financial statement filed on 12 June 2009.
As to his current weekly income from the [transport] business, it was the husband’s evidence that he earns approximately $200.00 per week only. Annexed to his affidavit filed 5 January 2009 was a copy of his tax return for the financial year ended 30 June 2009 and it disclosed an income for that year of $9,830.00.
Generally speaking, the husband was an unimpressive witness. He was not frank in his evidence and was at times evasive and inconsistent. There were times when his evidence was unbelievable. By way of example, his claim that his brother-in-law had not been required to pay stamp duty on the transfer of the former matrimonial home to him in 2002 is not legally possible.
Ms N
As set out earlier in this judgment, the husband’s sister, Ms N, made an oral application to intervene in the proceedings at the commencement of the final hearing. Such application was disallowed. Ms N gave evidence in the proceedings.
Ms N filed an affidavit in the proceedings on 12 June 2009, the contents of which she adopted as true and correct. It was her evidence that between February 2007 and October 2007, she made mortgage payments on behalf of the husband in the sum of $13,000.00. It was her evidence that in April 2008, her brother was contacted by the Commonwealth Bank of Australia and advised that unless the arrears of the mortgage over the former matrimonial home were immediately paid, then the property would be repossessed. It was her evidence that she withdrew the sum of $6,388.50 from her Award Saver Account with the Commonwealth Bank of Australia and paid that amount to the Commonwealth Bank of Australia in full satisfaction of the arrears of the mortgage.
In support of that evidence, she produced a bank statement from the Commonwealth Bank of Australia for her Award Saver Account which shows a withdrawal of that amount of $6,388.50 on 24 April 2008. She also produced a copy of the mortgage statement account for the former matrimonial home which shows a payment of the exact same amount into the mortgage account on that date.
When cross-examined as to the source of these funds, it was Ms N’s evidence that in 2007 she had refinanced the loan against her property at Property B, and that she was able to utilise this refinancing so as to be able to obtain these funds. Perusal of the statement from her Award Saver Account showed a phone transfer from an account number [2] of $8,000.00 on the same day of the payment of $6,388.50. When asked to produce documentation from her mortgage account confirming that the transfer of the $8,000.00 was from her mortgage account, Ms N was unable to do so.
It was Ms N’s evidence that in or around May 2009, her brother again advised her that an amount of $13,000.00 was needed to be paid in relation to the arrears of the mortgage over the former matrimonial home to avoid a mortgagee auction of that property. It was her evidence that she made payment of this amount. In support of that claim, she produced a photocopy of a deposit receipt that showed a payment of $13,000.00 going into the mortgage account on 19 May 2009. She also exhibited a document that proved an amount of $8,000.00 was deposited into her account on 19 May 2009. She also produced a photocopy of her Award Saver Account bank statement that showed that between 15 and 18 May 2009, a cash deposit of $10,000.00 was paid into her account and an assisted phone transfer numbered 7904 of $5,000.00 out of that account took place.
When cross-examined as to the source of the $13,000.00, it was her evidence that she borrowed $13,000.00 from “a friend” (unnamed). This “friend” is allegedly holding Ms N’s gold until Ms N repays this amount to the “friend”. There was no documentary evidence confirming this loan and the “friend” was not called to substantiate this evidence.
Ms N was cross-examined as to whether she had any documents evidencing the alleged payments by her of the mortgage on the matrimonial home between February and October 2007. It was Ms N’s evidence that she had given her brother cash and that she did not have bank statements that showed any regular withdrawals of cash amounts representing the mortgage payments on a regular basis during this period.
The husband tendered, by way of evidence, a copy of the Commonwealth Bank of Australia mortgage statements in relation to the former matrimonial home for the period 11 January 2007 until 30 June 2008. Perusal of those statements show that for the period February 2007 to October 2007, there were mortgage payments made in the sum of $8,571.50, an amount of some $4,428.50 less than the amount claimed by Ms N as reflecting her mortgage payments during this period.
Ms N confirmed that at no time did the wife request of her any loan or payment of the mortgage on the former matrimonial home. She also confirmed that at no time did she discuss with the wife the payment of these funds as she has had no communication with the wife since at or around the time of separation.
The legislation
Section 79 of the Family Law Act1975 (“the Act”) defines the Court’s powers in determining applications for property settlement. Sub-section 79(2) of the Act provides that:
The Court shall not make an Order under this Section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.
Section 79(4) of the Act sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The four-step approach
In Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 at [39], the Full Court of the Family Court described the preferred four-step approach in property matters as follows:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), ("the other factors") including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case ….
Assets and liabilities
Value of the former matrimonial home
A joint sworn valuation of the former matrimonial home was obtained by both parties’ then solicitors on 18 January 2008. The sworn value of the property at that time was $215,000.00.
Neither party was able to place before the court any alternative evidence as to the value of the former matrimonial home, and accordingly for the purposes of the determination of its value for these proceedings, it is accepted that the value is $215,000.00.
It was the husband’s evidence that the amount currently outstanding on the mortgage in relation to that property is some $156,000.00. It is also common ground that there is somewhere between $4,000.00 to $6,000.00 outstanding in relation to the council and water rates.
The alleged debt to Ms N in relation to the mortgage over the former matrimonial home
The husband and Ms N both seek a finding that Ms N has loaned the parties some $30,400.00 in order to make payments in relation to the mortgage registered against the former matrimonial home. It was their contention that in determining the property pool, in addition to the amount owing to the Commonwealth Bank of Australia in relation to the registered mortgage, allowance should also be made for the debt to Ms N and that any orders of this court make provision for the repayment to her of that amount.
In the event the husband was successful in obtaining orders in the terms proposed by him, he would indemnify the wife in relation to this debt.
I will deal with the amounts alleged to have been paid by Ms N towards the mortgage over the former matrimonial home.
As set out earlier in this judgment, the independent documentary evidence in relation to these advances is at best sketchy. There were important “gaps” in any documentary evidence produced and no independent evidence was called to verify the claims of loans by third parties to enable the payments to be made.
In relation to the alleged payments made by Ms N between February and October 2007, the husband in his viva voce evidence, indicated that the mortgage payments made during this period were made not only by his sister, but by himself. Ms N’s evidence was that she had given the husband cash and it was he who made the payments. Ms N was unable to produce any documentation or statements from her bank that showed regular withdrawals by her from her account of amounts reflecting the regular payments to her brother. The husband was unable to provide any documentary proof of the receipt by him of those monies. As noted earlier in this judgment, there was a large discrepancy between the amount actually paid and the amount that Ms N claimed that she contributed during this period.
Accordingly, in these circumstances, I find that I cannot be satisfied that it was Ms N who made the mortgage payments in respect of the former matrimonial home between February and October 2007.
In relation to the payment of the $6,388.50 in April 2008, I am satisfied that such payment was made by Ms N from funds in her account. However, I am unable to make any finding as to what the source of those funds were, and in particular whether they arose by way of a drawdown by her against the mortgage on her property in Property B. The wife raised the possibility that the husband had paid the funds via his sister, though no evidence was adduced by her as to this claim. However, this payment coincides with the husband’s evidence of a $10,000.00 loan from [C] Pty Ltd. I have found I do not accept his evidence that he had given those monies to the wife. Thus, I cannot be satisfied that this amount was paid by the husband’s sister from her own funds or from funds provided by the husband or some other source.
In relation to the payment of $13,000.00 in May 2009 towards the mortgage on the property, I am satisfied that such payment was made and in all probability, it was Ms N who made the payment on
19 May 2009. It was Ms N’s evidence that she borrowed these monies from a friend. The documentation in support of her claim in relation to these funds consists of proof of a deposit of $8,000.00 into her account
36 seconds prior to the payment of $13,000.00 and a phone transfer of some $5,000.00 out of her Award Saver Account somewhere between
15 and 18 May 2009. Ms N claimed she had been lent these monies by “a friend”. However there was no independent proof of this loan and the documentary evidence in support does not reflect a loan of $13,000.00. As with the payment of $6,388.50 in April 2008, I am unable to be satisfied that the monies paid were monies provided by Ms N.It was conceded by the husband and Ms N that any payments made by
Ms N in relation to the mortgage on the former matrimonial home was as a result of an agreement entered into directly between themselves, and that the wife neither requested nor was ever a party to these funds being advanced in this way.In paragraph 14 of Ms N’s affidavit, she deposes as follows:
“After six months from October 2007, the bank contacted my brother and told him that they would repossess the property unless the sum of $6,400.00 was paid immediately. I paid this sum directly from my savings account. Now produced and shown and marked ‘NH1’ is a copy of my bank statement evidencing this. At the time my brother also signed an agreement in which he undertook to repay the monies and allowing me to lodge a caveat to register my interest in the property.”
The agreement to which Ms N makes reference is the document tendered by the husband that is set out in full in paragraph 68 of this judgment.
As found earlier in this judgment, this document is not an agreement as it’s dates and contents are incompatible and it is not signed by both parties. I have found it to be a self-serving document, unilaterally prepared by the husband which does not verify in any way the claims made by Ms N of the payments claimed to have been made by her.
Accordingly, I cannot be satisfied that Ms N paid the amount of $30,400.00 or such other or lesser amount towards the mortgage on the former matrimonial home nor that she is owed such an amount by the parties.
Further, if such monies, or part thereof, were advanced by Ms N, it is not a joint debt of the parties, but is a debt of the husband only.
Section 90AE of the Act empowers the court to make orders in proceedings under section 79 that are binding on third parties. Section 90AE of the Act provides:
(1)In proceedings under section 79, the court may make any of the following orders:
(a) an order directed to a creditor of the parties to the marriage to substitute one party for both parties in relation to the debt owed to the creditor;
(b)an order directed to a creditor of one party to a marriage to substitute the other party, or both parties, to the marriage for that party in relation to the debt owed to the creditor;
(c)an order directed to a creditor of the parties to the marriage that the parties be liable for a different proportion of the debt owed to the creditor than the proportion the parties are liable to before the order is made;
(d)an order directed to a director of a company or to a company to register a transfer of shares from one party to the marriage to the other party.
(2)In proceedings under section 79, the court may make any other order that:
(a)directs a third party to do a thing in relation to the property of a party to the marriage; or
(b)alters the rights, liabilities or property interests of a third party in relation to the marriage.
(3)The court may only make an order under subsection (1) or (2) if:
(a)the making of the order is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; and
(b)if the order concerns a debt of a party to the marriage - it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full; and
(c)the third party has been accorded procedural fairness in relation to the making of the order; and
(d)the court is satisfied that, in all the circumstances, it is just and equitable to make the order; and
(e)the court is satisfied that the order takes into account the matters mentioned in subsection (4).
(4)The matters are as follows:
(a)the taxation effect (if any) of the order on the parties to the marriage;
(b)the taxation effect (if any) of the order on the third party;
(c)the social security effect (if any) of the order on the parties to the marriage;
(d)the third party's administrative costs in relation to the order;
(e)if the order concerns a debt of a party to the marriage - the capacity of a party to the marriage to repay the debt after the order is made;
Note: See paragraph (3)(b) for requirements for making the order in these circumstances.
Example: The capacity of a party to the marriage to repay the debt would be affected by that party's ability to repay the debt without undue hardship.
(f)the economic, legal or other capacity of the third party to comply with the order;
Example: The legal capacity of the third party to comply with the order could be affected by the terms of a trust deed. However, after taking the third party's legal capacity into account, the court may make the order despite the terms of the trust deed. If the court does so, the order will have effect despite those terms (see section 90AC).
(g)if, as a result of the third party being accorded procedural fairness in relation to the making of the order, the third party raises any other matters--those matters;
Note: See paragraph (3)(c) for the requirement to accord procedural fairness to the third party.
(h)any other matter that the court considers relevant.
Having made a finding that any monies lent by Ms N is a debt of the husband only, Ms N does not have a caveatable interest in respect to the former matrimonial home. Section 90AE(2)(a) of the Act allows the court to make an order directing a third party to do a thing in relation to the property of a party to the marriage. Section 90AE(3) of the Act places certain “conditions” on when the court makes an order pursuant to section 90AE(2). In particular, the order must be “reasonably necessary” to enable the division of property between the parties to the marriage, if it concerns a debt of a party to the marriage, the order would result in the debt not being paid, that the third party has been afforded procedural fairness and such order is just and equitable.
An order will be made requiring Ms N to withdraw the caveat she has lodged against the former matrimonial home. This order is necessary to enable the former matrimonial home to be transferred to the wife. In the event Ms N wishes to pursue the husband for the monies allegedly owed (including the monies advanced by her in relation to the husband’s [transport] business), nothing in this order prevents her from doing so. Ms N has been accorded procedural fairness in this matter, including being heard in relation to her alleged debt and interest in the former matrimonial home. Finally, such an order is clearly just and equitable in the context of the findings made by me in relation to the alleged debt and to the proper outcome of this matter generally.
Other assets
It was agreed that the motor vehicle in the husband’s possession has a current value of $3,000.00.
The husband gave evidence as to having had and continuing to have various interests in [transport] businesses. He gave evidence of various loans, repossessions of vehicles, debts to [C] Pty Ltd and gifts from various family members in relation to these businesses. The absence of any documentary evidence verifying the financial arrangements surrounding these interests make it impossible to determine the extent of any entitlement of the husband in these businesses or any liabilities that may or may not be outstanding in relation to same.
The husband concedes that he has superannuation entitlements, but was unable to produce any documentation evidencing the extent of those entitlements.
There was an issue in relation to the motor vehicle driven by the wife that is registered in her mother’s name. It was the husband’s evidence that this vehicle was purchased utilising funds borrowed against the former matrimonial home. It was the wife’s evidence that this vehicle was purchased by her sister. On the balance of probabilities, I prefer the wife’s evidence to that of the husband on this issue and am satisfied it is not a matrimonial asset.
In these circumstances, the matrimonial pool looks like this:
| Property H, valued at $215,000.00 less the mortgage to the Commonwealth Bank of Australia of $156,000.00, less outstanding rates of $6,000.00 (E), leaving equity of $53,000.00 | $53,000.00 |
| Ford Falcon motor vehicle in husband’s possession | $3,000.00 |
| Husband’s interest in [transport] business | Not known |
| Husband’s superannuation entitlements | Not known |
| TOTAL | Not known |
In this case, there is no doubt that there has been a failure by the husband to make full and frank disclosure of his financial affairs, and as a result of this, it is not possible to determine with confidence the exact value of the matrimonial pool.
This does not prevent this court from determining the matter. In
Chang v Su (2002) FLC 93-117, the Full Court held that where there has been findings of non-disclosure by one of the parties, it is open to the court to make orders without reference to an overall pool if such an order can be assessed to be just and equitable.
Contributions
During the course of the marriage, the husband was in paid employment, engaged in either factory work or [in the transport industry].
During the course of the marriage prior to separation, there were periods when the parties were unable to meet their mortgage commitments. I accept that there were occasions where this occurred when both parties’ families provided some financial and/or practical assistance to enable them to retain the property. The exact amount of those contributions and the manner in which they occurred cannot be definitively determined in this judgment because of the lack of independent evidence.
I have made a finding that on the evidence before me, I cannot be satisfied that Ms N paid the arrears of the mortgage on the former matrimonial home either in the amounts claimed by her or that any such payments were from her own funds. I have made a finding that if such payments were made by Ms N, they are not a matrimonial debt recoverable by her as against the assets of the parties. In the event such payments were made by Ms N, it would be at best a contribution on behalf of the husband that enabled the former matrimonial home to be retained and he would be given credit for that contribution.
The parties have four children and the wife, prior to separation, had the primary role of homemaker and carer of the children.
Since separation, the wife has been solely responsible for the care of the children of the marriage without any input, either financially or in a parenting capacity, from the husband. She will continue to bear this responsibility solely into the future. The child [Y] suffers from Type 1 Juvenile Diabetes and the child [Z] is an asthmatic. The wife is and will continue to be responsible for the additional care that these children require.
As previously set out in this judgment, I find that the wife and children were subject to ongoing serious physical, emotional and verbal abuse from the husband during the marriage.
Because of the wife’s cultural, social and language difficulties, I am satisfied that her contribution as parent and homemaker was more onerous because of the domestic violence suffered by her and the children.
Accordingly, the contributions of the wife in caring for the home and the children in circumstances where they were all subject to ongoing domestic violence at the hands of the husband and her sole responsibility for the children since separation and into the future are such that her contributions greatly exceed those of the husband.
Section 75(2) factors
Both parties are in good health. The husband claimed that the stress of the breakdown of his relationship and these proceedings have impacted on him, in that he is depressed and this is interfering with his earning capacity. He provided no evidence in support of this contention. I am satisfied there are no health issues preventing the husband from engaging in gainful employment.
The wife has limited English and has been engaged in full time home duties since arriving in Australia in 1991. It was her evidence that she has recently undertaken some training in order to be able to engage in childcare in her home. At the time of trial, she was not engaged in this employment.
The husband’s evidence was that he has previously worked extensively as a factory hand and is currently employed [in the transport industry]. It was his evidence that he is only earning some $200.00 a week at this time. He provided no evidence that confirmed his current level of income or his income earning capacity per se.
I am satisfied that with the wife’s limited English, her commitment to care for the children and her lack of any proper qualification, the husband’s earning capacity is greater than that of the wife.
As noted previously in this judgment, the wife has the full time care of the parties’ four children who are aged 17, 15, 13 and 7 years. The children spend no time with the husband and he pays no child support to the wife. Accordingly, the practical, emotional and financial responsibility for these children rests with the wife.
What order is just and equitable?
There is no doubt that the husband made a contribution to the parties’ assets throughout the marriage through his efforts as the principal income earner.
However, the contribution of the wife during the course of the marriage as the primary carer of the children, particularly in the circumstances of the domestic violence that I have found to have been a constant during the course of the relationship, greatly outweighs that of the husband.
In relation to the section 75(2) factors, I am satisfied that the husband has a greater earning capacity than the wife. The wife has since separation and will into the future solely bear the responsibility for the parties’ children and will do so without any assistance, either practically or financially, from the husband.
The only quantifiable assets of the parties consist of the equity in the former matrimonial home, which is a relatively small amount of $53,000.00 and the motor vehicle, valued at $3,000.00, that is in the husband’s possession. That the husband has an interest in a [transport] business and superannuation entitlements of some unknown quantum is acknowledged.
It is the wife’s evidence, which I accept, that with the assistance of her family, she will be in a position to refinance the property and pay out the arrears of council and water rates. This will enable her to provide for herself and the children the security and comfort of being able to reside in the former matrimonial home and will ensure their security into the future.
In these circumstances, I am satisfied that orders that make provision for the husband to transfer to the wife the former matrimonial home and for her to refinance the property and to indemnify him in relation to any mortgage payments and outstanding rates and taxes is a just and equitable outcome in accordance with the provisions of section 79. The husband shall retain his motor vehicle, superannuation entitlements and his interest in the [transport] business to the exclusion of the wife.
I certify that the preceding one-hundred and forty-three (143) paragraphs are a true copy of the reasons for judgment of Bender FM
Associate: Sarah Hession
Date: 21 August 2009
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