BAS & RJ

[2004] FMCAfam 244

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BAS & RJ [2004] FMCAfam 244

FAMILY LAW – PROPERTY – Contributions – husband’s mother gives evidence that she loaned husband $150,000 – obligation to give full and frank disclosure – where a party has effective control of an asset or the information concerning it, that party has a responsibility to provide evidence of its value and the basis upon which the value has been calculated – after separation husband disposes of matrimonial assets – whether premature disposition of matrimonial assets should be notionally added back – wife asserts that court would determine application on basis of assets at date of separation – date of hearing is the relevant date – where court satisfied that husband has secreted funds – legal costs.

EVIDENCE – Unchallenged evidence need not be accepted if it is inherently incredible.

DIVORCE – Whether s.44(3) applies to foreign decree.

Family Law Act 1975

Child Support (Assessment) Act 1989
Evidence Act1995 (Cth)

Weir v Weir (1993) FLC 92-338
Black v Kellner (1992) FLC 92-287
Junti (1986) FLC 91-759
Mezzacappa (1987) FLC 91-853
Jenkins v Livesey (1985) 1 All ER 106
Luciano (2000) FamCA 401
Bonser (1988) 12 FLR 91-846
Cain (1987) FLC 91-808
Savage and Hodgson (1982) FLC 91-281
Espie (1983) FLC 91-347
Kowaliw (1981) FLC 91-092
Lee Steere (1985) FLC 91-626
Ferraro (1993) FLC 92-335
Clauson (1995) FLC 92-595
Zappacosta (1976) FLC 90-089
Townsend (1995) FLC 92-569
Scott and Scott (1994) FLC 92-477
Ellis v. Wallsend District Hospital (1989) 17 NSWLR 553 at 588
Browne v Dunn (1894) 6 R 67
Allied Pastoral Holdings Pty Ltd v. Commissioner of Taxation (1983) 1 NSWLR 1 at 18
Precision Plastics Pty. Limited v Demir (1975) 132 CLR 362
Jones v Dunkel (1959) 101 CLR 298
Ghazal v GIO (NSW) (1992) NSWLR 336
Australian Securities Commission v AS Nominees) (1995) 133 ALR 1 at 12
Farnell (1996) FLC 92-681
Tomassetti (2002) FLC 93-032

Applicant: B A S

Respondent: R J

File No: PAM3581 of 2002

Delivered on: 27 May 2004

Delivered at: Parramatta

Hearing dates: 18 &19 February, 8 April and 26, 27 & 28 August 2003 and written submissions on 12 September 2003, 19 February 2004 and 17 March 2004

Judgment of: Ryan FM

REPRESENTATION

Counsel for the Applicant: Mr S. Thomas

Solicitors for the Applicant: Meehans Solicitors

Counsel for the Respondent: Mr M. Turner

Solicitors for the Respondent: Yarra Legal Centre

Solicitor Advocate for the Children’s Respondent: Ms A. Wearne

Children’s Representative: Legal Aid Commission of NSW

ORDERS

1. Within eight weeks of the date of these orders the husband pay to the wife the sum of one hundred and eighty seven thousand one hundred and fifty six dollars ($187,156).

2. Until the husband has paid the wife all monies due to her pursuant to these orders the husband and his servants and agents are restrained from:

   (a)Transferring, encumbering, mortgaging or otherwise dealing with his interest in the property known as the Penrith Property;

   (b)Transferring, encumbering, mortgaging or otherwise dealing with his interest in the property known as the Bangladesh Property;

   (c)Selling, transferring, encumbering, mortgaging or otherwise dealing with any shares held in his name;

3. In the event the husband fails to comply with Order (1) the parties do all such acts and execute all such documents as may be required to effect a sale of the property situate and known as the Penrith Property in the State of New South Wales to be sold by private treaty at a price agreed upon between the parties and failing such agreement to be determined by the President of the Australian Property Institute of New South Wales or his nominee.

4. Upon the completion of the sale proceeds of the sale be applied as follows:

   (a)To pay all costs, commissions and expenses of the sale.

   (b)Sixty percent to the wife.

   (c)Balance to the husband from which he will pay the wife $161,936 less the net proceeds from the sale of shares.

5. In the event that the property has not been sold by or before a date three (3) months from the date upon which Order (3) becomes operative then the husband and the wife shall make all such arrangements and do all such acts and sign all such documents and the husband shall pay all monies necessary to procure a sale by public auction of the property upon the following terms:

   (a)The auctioneer shall be a real estate agent nominated by the wife;

   (b)The reserve price shall, unless agreed upon by the parties, be as proposed by the auctioneer.

   (c)That auction will take place within two months of this order becoming operative.

6. In the event that the husband fails to comply with Order (1) he shall sell his interest in his share portfolio and pay the proceeds to the wife.

7. In the event that the husband fails to comply with order 1 and the sale proceeds of the Penrith Property and shares are insufficient to pay the wife her entitlement pursuant to Order (1).

8. In the event the husband fails to comply with Order (1) the parties do all such acts and execute all such documents as may be required to effect a sale of the property situate and known as the Bangladesh Property at a price agreed upon between the parties and failing such agreement to be determined by the wife.

9. Upon the completion of the sale proceeds of the sale be applied as follows:

   (a)To pay all costs, commissions and expenses of the.

   (b)Sixty per cent of the net proceeds to the wife.

   (c)The balance due to the wife pursuant to these orders.

   (d)Balance then remaining to the husband.

10. In the event that the Bangladesh Property has not been sold by or before a date two (2) months from the date of these orders then the husband and the wife shall make all such arrangements and do all such acts and sign all such documents and the husband shall pay all monies necessary to procure a sale by public auction upon the following terms:

    (a)The auctioneer shall be nominated by the wife;

    (b)The reserve price shall, unless agreed upon by the parties, be as proposed by the auctioneer.

    (c)That auction will take place within two months of this order becoming operative.

11. In the event that either party fails, refuses or neglects to execute any deed, document or instrument necessary to give effect to these orders, then pursuant to s.106A, a Registrar or Deputy Registrar of the Federal Magistrates Court of Australia is hereby appointed to execute all deeds, documents and instruments in the name of the defaulting party and to do all such acts and things necessary to give validity and operation to such deeds, documents and instruments.

12. In the event that the husband fails to comply with Order (1) interest on the balance outstanding calculated in accordance with Part 22.01 of the Federal Magistrates Court Rules.

13. The children’s representative application for costs is dismissed.

14. In the even either party wish to make an application for costs, any application must be made by arrangement with my associate within twenty-eight days.

15. All exhibits tendered in these proceedings are returned at the expiration of one calender month unless an appeal is lodged.

16. The solicitor who issued any subpoena collects that subpoenaed material and returns it to the owner within seven (7) days.

17. All outstanding applications are dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PARRAMATTA

PAM3581 of 2002

B A S

Applicant

And

R J

Respondent

REASONS FOR JUDGMENT

The proceedings

1. These proceedings are for the adjustment of property and parenting orders.  Whilst the parties agree that their two sons should live with the father, they disagree when these arrangements should be implemented.  Both parties oppose the children’s representative’s application that the children should be placed on the airport watch list. 

Introduction

1. B A S (“the husband”) started the proceedings when he filed an application for final orders on 20 September 2002.  His application related to parenting orders and injunctions.  In her response, R J (“the wife”) also applied for property orders. 

2. The parenting orders concerned the parties’ three children Rosie born in 1987 and her two brothers Luke born in 1994 and Andrew born in 1997 (not their real names). When the hearing commenced on

   
   

   18 February 2003 the wife and children lived in Melbourne.  The hearing was unable to be completed in the two days allocated and on 19 February 2003 the matter was adjourned part-heard to resume on

   
   

   8 April 2003.  The wife indicated that she and the children would return to reside in Sydney during the adjournment.

3. When the matter resumed the wife and children were still living in Melbourne.  Upon the resumed hearing the wife appeared instructing different counsel.   During the adjournment Rosie made an allegation that in 2000 the husband’s brother in law had sexually harassed her. The allegation was made following a contact visit with her father during which she came into contact with him.  By agreement on

   
   

   8 April 2003 pursuant to s.68L of the Family Law Act 1975 an order was made for the children to be represented.  Ms Wearne was appointed to represent the children.

4. On 29 April 2003 Associate Professor Carolyn Quadrio was appointed court expert to investigate the child abuse allegations and other matters relevant to the children’s welfare.  Her report complimented the family report previously prepared by Rod Hibbard on 16 February 2003.

5. The hearing resumed on 26 August 2003.  At the resumed hearing the parties agreed that Rosie should continue to live with the wife and that the two boys should live with the husband.  Final orders were made by consent giving effect to this agreement.  Although clearly concerned that the siblings would live in different cities the children’s representative did not make submissions contrary to this outcome. It was apparent that the wife’s decision to relinquish the care of the boys to the husband could not be undone.  Having made submissions in support of injunctions that would restrain the removal of the children from Australia, without the prior consent of the other party and submissions as to when the changed living arrangements should be given effect to, on 27 August 2003, the children’s representative was excused.

6. The balance of the hearing concerned competing claims for orders under s.79 of the Family Law Act 1975.  When the hearing concluded on 28 August 2003 the court ordered written submissions.  The wife’s submissions were received on 12 September 2003 and the husband’s on 19 February 2004.  By letter dated 17 March 2004 the wife’s solicitors advised that no submissions in reply would be provided.

Credit and disclosure obligations

1. The wife’s counsel contended that this is one of those unusual matters in which the court would uniformly accept the evidence of one party in preference to the other. The husband’s counsel conceded that in material respects his client’s evidence “may not have been as clear as it could have been”, a concession well made but something of an understatement.  He emphasised that the wife’s evidence concerning the parenting issues had been quite unbelievable. While that is so, her unsatisfactory evidence concerned attitudes and recognition of the consequences of her actions.  This is different to giving misleading, incomplete or inconsistent testimony. 

2. The inconsistencies in the husband’s evidence were numerous.  For example in his affidavit[1] the husband said that he spent the Take Away sale proceeds travelling to Bangladesh and for legal fees.  The husband gave evidence in cross examination that the money was actually sent to his mother in Saudi Arabia.  Although he had sworn a number of affidavits concerning his financial affairs, in particular dealing with funds transferred after separation, the husband made no mention of an alleged $30,000 - $40,000 loan made to his friend, J A until he was being cross examined on his own bank records.  His evidence concerning the amount of the loan changed until the best he could do was giving a $10,000 range.  After saying that there were no documents relating to the loan he stated that he had kept records of the repayments that he had thrown away.  The husband was asked how much money he took with him when he went to Bangladesh.  His answers ranged between $2000 and $50,000.  This is too great a difference to be credible.  When dealing with the alleged loan from his mother the husband claimed than in Bangladesh documentation between son and mother is culturally anathema.  This is inconsistent with the document attached to his affidavit where in 1997 he purported to give his mother a parcel of land or the income derived from it.  There are numerous other examples where the husband’s written and oral testimony conflicts and where his oral testimony is internally contradictory.

   [1] Paragraph 17 sworn 2 July 2003

3. Both parties impressed me as having at least average, probably above average, intelligence.  I do not accept that important anomalies in oral and written evidence and within oral testimony on significant matters were mistakes. I accept the wife’s counsel’s submission that the husband deliberately attempted to mislead the court about important financial matters.  Where there is a conflict between the husband’s and the wife’s evidence on financial matters I prefer the wife’s.

4. One of the important issues concerns the parties’ obligation to make full and frank disclosure, which means that they are required to disclose all material facts.  In Weir v Weir (1993) FLC 92-338, the Full Court said at 79,593 “This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black v Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make full and frank disclosure of their financial affairs” (see also Junti (1986) FLC 91-759 and Mezzacappa (1987) FLC 91-853). And further on: “Irrespective of any obligation created by the Family Law Act or the Family Rules that we have identified, in our opinion the obligation of full and frank disclosure applies because of the duty of the Court to consider all of the circumstances of the case (see Jenkins v Livesey (1985) 1 All ER 106).  This is particularly important in cases where the financial circumstances of the parties may be relevant. It is not sufficient for a party to simply adhere to the obligations specified by the rules of court. If the relevant rules are deficient in identifying an aspect of a party's financial circumstance then this is not a basis for a plea that there was non-disclosure because the rules did not identify an aspect of a party's circumstances that may be relevant.”

5. In Luciano (2000) FamCA 401, O'Ryan J summarised the principles that emerge from these cases as follows.

   ·“In proceedings in the Family Court in relation to financial matters, there is an obligation of each party to make a full and frank disclosure of his/her financial circumstances and all matters relevant thereto.

   ·The obligation arises because of the necessity for the court in such proceedings to consider all aspects of the financial circumstances of each party.

   ·The obligation is not created by the rules or the practice of the court and the rules simply set out the procedure by which that obligation may be fulfilled.

   ·If there is a deficiency in the practice adopted for the purpose of making such a disclosure, mere compliance with the requirements of the relevant rules if deficient, is not enough. If there is non-disclosure in the relevant sense then the failure to disclose undermines the whole process of adjudication of the proceedings in relation to financial matters.

   ·A finding of non-disclosure may in appropriate cases, depending on the circumstances, result in the other party being granted without more, the relief sought.”

6. The husband’s counsel emphasised that the parties have a different cultural background and that there are traditions and nuances that the court needed to be conscious of when evaluating the parties evidence concerning intra familial transactions.  I accept this submission.  The most significant cultural factor appears to have been a course of conduct whereby the wife was excluded from direct involvement in the parties’ financial affairs.  By this I mean that all matrimonial property was acquired in the husband’s sole name and that the wife was neither consulted nor included in financial decisions.  Most of the information the wife had she gleaned from conversations overhead between the husband and his mother.  As a consequence the husband had exclusive control of the parties financial records and history.  He was therefore obliged to give an accurate, detailed and complete account of the parties financial history. Where significant transactions were undertaken he needed to prove the asserted facts, corroborating his own testimony and the primary issues in the case to the clearest extent possible.  Where he had notice of contentious issues, for example the alleged loan from his mother he needed to prove not only the loan but ensure there was clear evidence that the money advanced was his mother’s money.  As will become apparent in material respects he failed to do so.

Current orders

1. On 27 August 2003 the court made the following orders.  By consent:

   1.That the children of the marriage namely Luke born in 1994 and Andrew born in 1997 live with the husband.

   2.That the child of the marriage Rosie born in 1987 live with the wife

   3.That each parent have the responsibility for the day to day care, welfare and development of the child or children, whenever the said child or children are in that parties care.

   4.That the husband have contact with Rosie at such times as is in accordance with Rosie’s wishes.

   5.That the husband have telephone contact to Rosie on such occasions as Rosie is willing to receive a telephone call from her father.

   6.That the passports of the children be held by the parent with whom the child resides.

   7.That the parties keep each other informed of the proposals to change the residence of the children and give the other party 28 days notice of their intention to change residence.

   8.Note that the parties will do such acts and things necessary to facilitate counselling between Rosie and her father should Rosie be willing to engage in such counselling.

   9.That in the event that the religious holiday of Eid falls within the wife’s contact.

   10.That the wife have contact to the children namely Luke born in  1994 and Andrew born in 1997 as follows:

   (a)For the first half of the NSW Christmas school holiday, subject to the order made 26 August 2003.

   (b)For one half of the vacations at the end of Terms 1 and 3.

   (c)For the whole of the mid year school holiday, provided always that such contact will conclude on the Friday evening before school recommences as otherwise agreed in agreed.

   11.For the purposes of order 10(b) the children shall have contact with the mother during the week that coincides with the Victorian School Holiday period.

THE COURT FURTHER ORDERS:

12.In order to give effect to Order 1 the husband shall collect Luke and Andrew from the wife’s home on 20 September 2003.

13.Until further order the applicant and the respondent, by themselves, their servants or their agents are hereby restrained from removing or attempting to remove the children Rosie born in 1987, Luke born in 1994 and Andrew born in 1997 from the Commonwealth of Australia.  It is requested that the Marshal of the Federal Magistrates Court and all agents of the Australian Federal Police and all police forces and services of various states and territories of Australia are required and empowered to give effect to these orders to take all necessary steps to restrain either party from removing or attempting to remove the said children from the Commonwealth of Australia.

14.That until further order the Commissioner of the Australian Federal Police and the Secretary of the Ministry of Immigration take all necessary steps to immediately place the said children’s names on the airport watch list, also known as the P.A.S.S. system, at all points of arrival and departure in the Commonwealth of Australia.

15.The Australian Federal Police maintain an airport watch of the said children on all flights leaving any international airport in all states and territories of the Commonwealth of Australia.

16.The Australian Federal Police and the Police Forces of the States and Territories of the Commonwealth of Australia assist in the implementation of, and give effect to, these orders.

17.THAT pursuant to section 65DA(2) of the Family Law Act 1975 the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders are set out in Annexure A and these particulars are included in these orders.

18.That the wife’s counsel files and serves written submissions within 14 days.

19.That the husband’s counsel files and serves written submissions within 14 days thereafter.

20.That the wife’s counsel reply within a further 7 days.

Chronology of relevant events

1. The husband was born in Bangladesh in 1960 and is 43 years old.

2. The wife was born in 1968 and is 35 years old.  She was also born in Bangladesh. 

3. The parties married on 13 September 1985.  The husband was nearly 25 years old and the wife was 17 years old.  When the parties married neither party had any assets or liabilities.  Upon their marriage the wife moved to live with her parents-in-law and resided with them until the parties moved to Australia.  After their marriage the husband worked as a ships engineer and was away from home for months on end.  From the commencement of cohabitation until separation the wife was primarily responsible for the home and children.  When the husband was working away from home, she was exclusively responsible for the home and children.

4. Rosie was born in 1987.

5. In the early 1990’s the husband purchased low lying land at Tejgaon, Dhaka for TK[2]450,000.  When he sold the land he received TK600,000 or about $20,000.  As there is no suggestion that the land had been improved, the increase in sale price over only a few years is attributable to upward movements in the value of real estate in the region.

   [2] Talaks

6. In September 1993 the husband purchased a flat at Kakrail, Dhaka, Bangladesh (“The Bangladesh Property”) for $74,000 in his sole name.  The husband paid cash for the property using accumulated savings and the sale proceeds of the Tejgaon land.  As he had no assets at the start of cohabitation the savings and money used to buy both parcels of land came from his wages earned after the parties married.  From the time it was purchased the husband’s parents received the properties rental income.  This ranged between $300 and $500 each month.

7. Their eldest son Luke was born in 1994. 

8. The husband bought a block of land in the district of Narayangonj, India (“The First Narayangonj Property”) in 1994 in his sole name for which he claims to have paid $800. The wife was aware of this transaction but not intimately involved in it. This is because from the commencement of their marriage the husband refused to include her in the families’ financial affairs. A practice that continued until separation. I accept the wife’s evidence that the husband sold some of her gold wedding jewellery and borrowed $900 from her father in order to pay for the land. I am satisfied that the husband paid more than $800 for the land, unfortunately the evidence does not enable the court to make precise funding as to its purchase price. The husband still owns the land, which he says is used for farming and in relation to which he says he derives no benefit. As will become apparent there are many instances where I am satisfied that the husband has attempted to mislead the court concerning his financial affairs. Thus I do not accept his evidence that the property has not increased in value. Regrettably neither party provided the court with a valuation. The wife’s evidence that land values have increased since 1994 appears credible. This will be a factor that will be dealt with further pursuant to s.75(2)(o).

9. In 1995 the parties migrated to Sydney, Australia.  At first the husband found it difficult to find well paid work.  Thus in December 1995 he took work in Darwin with a shipping company.  The wife and children remained in Sydney. In November 1996 he started with a different  company working out of Singapore.  This contract continued until February 1997.   The parties decided that unless the husband could find well paid work in Australia, they would start up their own business.

10. Their youngest son Andrew was born in 1997.

11. In June 1997 the husband exchanged contracts for the purchase of

    
    

    a property in western Sydney (“The Western Sydney property”) for $163,500. This became the family home.  Once again the transaction was completed in the husband’s sole name.

12. The husband returned to Bangladesh in mid 1997 for three weeks.  While there on 12 July 1997 he executed a document styled “Affidavit of oral gift of immovable property”[3] in favour of his mother.  The document is difficult to comprehend and appears to suggest that the husband has given either the income or title to the Bangladesh Property to his mother without charge.  However the husband explains its effect thus “I still own that property, I am still the legal owner of that property, however as I am the eldest son in my family, as is the Bengali custom, it is my responsibility to provide for my parents in their retirement as Bangladesh does not have a social security system or aged pension benefits similar to Australia.”[4]  And “In or about 1997 I entered into an arrangement with my parents that they would receive the benefit of the rental income from that property for their retirement”.[5] The husband claims that he is obliged to transfer the property into his mother’s name “as soon as possible”[6]. He does not explain why he has not already done so. I do not accept the husband is legally obliged to transfer legal ownership to his mother. This claim is inconsistent with his failure to transfer the property and his evidence that he has merely given his parents the right to have the rental income. As there have been no later transactions concerning this property I will include it as a joint matrimonial asset. An obligation to give full and frank disclosure of an asset means more than merely revealing its existence. Where a party has effective control of an asset or the information concerning it, that party has a responsibility to provide evidence of its value and the basis upon which the value has been calculated. Neither party has provided evidence concerning the lands value. The wife says it has probably increased in value however does not know by how much. Given the increased value of the land at Tejgaon in a shorter time frame, an increase is likely. I will include the land at its purchase price and take the matter into account under s.75(2)(o).

    [3] Annexure A husband’s affidavit sworn 2 July 2003

    [4] Paragraph 7 husband’s affidavit sworn 2 July 2003

    [5] Paragraph 8 husband’s affidavit sworn 25 August 2003

    [6] Paragraph 23 husband’s affidavit sworn 2 July 2003

13. The husband returned to Australia on 23 July 1997.  Not long after his parents moved to Saudi Arabia where they still live.

14. Shortly after, in September 1997 the husband purchased a fish and chips shop “Take away” for $133,000.  Settlement took place on 17 October 2001.

15. The husband took a mortgage with the ANZ bank for $130,000 and the balance of the purchase price for both the fish and chips shop and the Western Sydney property came from $150,000 sent to Australia by his mother.  The husband says that this money was a loan. There are no documents evidencing the loan.  His mother claims that she sold a parcel of land at Masdair, Dist. Narayangonj (“The Third Narayangonj Property”) in order to raise the money. The wife asserts that this was a third parcel of land at Narayangonj the husband purchased after the parties married. The Third Narayangonj Property was acquired whilst the wife lived with the husband’s parents. At the time of its purchase the husband was offshore and unable to sign relevant documents. The husband told the wife at that time he was earning in excess of $3,000 per month nett and that he was buying the land.  This was at a time where the wife contends the average income in Bangladesh was about $300 per month. Thus the wife says that although the funds for the purchase came from the husband’s savings, title was registered in his mother’s name. Whilst the wife does not dispute that the monies were transmitted by the husband’s mother from Bangladesh, she says that the monies transferred were matrimonial funds derived from the sale of matrimonial property and held on trust for the husband.

16. The husband ran the fish and chips shop, assisted by the wife from time to time.  This is the first job working outside the home that the wife had following her marriage.  The shop was open seven days a week, 9.00 am until 8.00 pm Monday to Saturday and 10.00 am to 7.00 pm Sunday.

17. In October 1998 the husband secured casual employment as an engineer in Sydney.  He was made permanent in March 2001.  From the time he started the wife became more involved in the day to day running of the shop.

18. In March 2000 the husband purchased an investment property in his sole name at the Penrith Property.  The entire purchase price of $107,000 was borrowed from the ANZ Bank.

19. On 18 April 2001, unbeknownst to the husband, the wife and children returned to Bangladesh.  She telephoned him on 19 April 2001 advising him they were in Dhaka.  This is the date of final separation. 

    
    

    I accept the husband’s evidence that he was in great turmoil and desperate to be reunited with the wife and children. He immediately set about trying to arrange his financial affairs so that he could travel overseas and try to have the children returned to Australia.

20. On the wife’s application, the parties were divorced in Bangladesh on 21 April 2001. It appears that a divorce was pronounced on 2 August 2001. During the hearing the husband’s counsel submitted that the wife required leave pursuant to s.44(3) of the Family Law Act 1975 before her application for s.79 of the Family Law Act 1975 orders could proceed. Neither counsel was able to refer the court to any decided cases as to whether s.44(3) applied to foreign decrees. There are a number of decisions in which it has been held that s.44(3) does not apply to a foreign divorce. See In the Marriage of Cain (1987) FLC 91-808, In the Marriage of Savage and Hodgson (1982) FLC 91-281, and In the Marriage of Espie (1983) FLC 91-347. Writing extrajudicially in Butterworths Australian Family Law[7] Justice Chisholm suggests that these earlier decisions may be questioned because “...it is difficult to see how the definition of “decree” in s.4, or anything else in the Act, prevents the opening words from applying to the orders of the foreign court granting dissolution, nullity or judicial separation.”  However compelling Chisholm J’s reasoning the Full Court’s decisions are binding authority. In order to avoid unnecessary complications, the court ordered that if leave was required it be given.  The delay was insignificant and the hardships to the wife manifest if leave was refused.  Since separation the parties had been in turmoil and for a considerable period both parties were in Bangladesh. Even if the wife had been made aware of her legal rights and relevant time limitations, with her limited English language skills and effective social isolation in Australia, I doubt that she had the knowledge or resources to protect her interests. The fact that the wife took no action to protect her interests is satisfactorily explained. 

    [7] at p1224

21. When the wife left Australia the parties’ principal Australian assets comprised the take away shop, the Penrith Property and the Western Sydney property.

22. Almost immediately after the wife left the husband made arrangements to sell the fish and chips shop and the family home.  Upon the wife’s departure, the husband said it was impossible for him to take over running the take away shop and maintain his full time job.  Although reluctant to concede the point, eventually the wife agreed that her conduct placed the husband in a difficult position.

23. On 7 May 2001 the husband exchanged contracts for the sale of the Western Sydney pProperty.  It sold for $225,000.  Settlement took place on 1 June 2001.  At settlement $169,761.19 was paid to the ANZ Bank.  The ANZ mortgage was secured against the subject property as well as the Penrith Property.  Approximately $112,412.45 related to the acquisition of the Penrith Property and the remaining $57,000 was attributable to the purchase of the Western Sydney property.  The pay out to the ANZ bank on settlement meant that the Penrith Property was unencumbered.  From the sale proceeds the husband received $47,077.35.[8]

    [8] Paragraph 16 husband’s affidavit

24. On 4 June 2001 the husband deposited $32,093 from the sale proceeds into his interest savings account.  The next day he established an equity manager account with an overdraft limit of $150,000. The overdraft was secured against the Penrith Property.  He later increased the overdraft limit to $176,000. As at then end of June 2003 the husband had drawn down $167,334 against the overdraft.  The wife has not received any of this money.

25. On 7 June 2001 the husband withdrew $35,000 from his interest saver account which he contends was lent to a friend, J A.  No mention was made of this series of transactions until the husband was being cross examined on his bank records.  He claimed a series of transactions in which he loaned J A between $30,000-$40,000, most of which has been repaid. The wife contends that there was no such loan and that the explanation is a weak attempt to mask movement of funds in and out of the husband’s account. 

26. In two $25,000 transmissions on 5 July 2001 the husband transferred $50,000 to his mother from the ANZ Bank.  Although she did not and still has not requested that he repay her the alleged advance, the husband says this is partial repayment of the 1997 loan.

27. On 6 July 2001 in two transactions, one of $25,000 and one of $12,000 he transferred a further $37,000 to his mother by telegraphic transfer from the ANZ Bank.  This is also attributed to loan repayments.  Thus in total the husband sent his mother $87,000 in these two days.

28. On 11 July 2001 the husband withdrew $11,300 from his interest savings account and paid it into his equity manager account.  He said the money paid into his interest savings account was part repayment of the monies borrowed by J A.

29. On 18 October 2001 the husband sold the shop for $24,000.  After the wife left he hired temporary staff to keep the shop open.  He says this arrangement was unsatisfactory as the running costs increased and staff were less than enthusiastic about their work.  When he sold the shop the husband did not advertise the sale in any newspaper or engage a business agent, relying on word of mouth and a hand written notice in the shop window. When the business was purchased in 1997 the parties paid $130,000 comprising $35,000 plant, fittings and chattels and $93,000 goodwill.  On its sale the entire purchase price comprised stock.  Settlement of the sale of the shop took place on 18 November 2001.  The husband received $23,450 nett.  Both parties contend that the other party should be held to account for wasting in a Kowaliw (1981) FLC 91-092 sense, losses arising from the sale of the business. The wife claims that the husband had a duty to preserve the asset and should either have leased the business, employed full time staff to run it or shut the business down while he was overseas, reopening upon his return. There is a tone of outrage in the husband’s Kowaliw submission.  The husband’s counsel submitted that it would be a travesty of justice that the wife could be the author of the problems which beset the husband upon her unannounced and hurried departure from the country and then criticise him because he did not approach the solution of the problem to her satisfaction.  If there was a loss occasioned by the hurried sale of the business, the husband says this is the inevitable financial consequence of the wife walking out from the business.  Because there is no evidence of the value of the business as at the date of separation, both parties have considerable difficulty with their waste argument. 

30. On 31 October 2001 the husband transmitted $25,000 to his mother in Saudi Arabia.  

31. On 1, 2 and 5 November 2001 $5,000 was deposited each day into the husband’s equity manager account.  The husband claimed that these deposits are part repayments of J A’s loan.  Further payments were attributed to J A of $850 on 8 January 2002, $1000 on 12 March 2002 and $10,200 on 6 June 2002. 

32. On 10 November 2001 the husband travelled to Bangladesh, via Saudi Arabia.  He travelled to Saudi Arabia to collect his parents so that they could come with him to Bangladesh enabling the male heads of both families to negotiate a marital reconciliation.  Upon arrival the husband and his family drove to the wife’s parents home hoping to see the wife and children. On the way they were involved in a car accident and returned to Dhaka by ambulance.

33. During December 2001 the husband married F S.  They returned to Australia on 14 January 2002. 

34. On 28 December 2001 without telling the husband that she and the children had returned to Australia, the wife and children arrived in Melbourne. 

35. On 10 May 2002 the husband withdrew $20,006 from his equity manager account.  He gives no explanation for the withdrawal.

36. On 3 June 2002 the husband withdrew $10,000 which was paid to the Department of Immigration and Multicultural Affairs.  This related to his current wife’s migration to Australia.  DIMA refunded these monies on 17 September 2002.

37. On 17 June 2002 the husband withdrew $10,000 and on 28 June 2002 a further $5,000 from his equity manager account.  He gives no explanation for the withdrawals.

38. In order to continue his search for the children the husband returned to Bangladesh in July 2002.  Not long after he arrived he discovered that the wife and children were in Australia.  Upon making this discovery he returned to Australia and started proceedings seeking residence of the children.

39. On 3 March 2003 the husband transmitted $30,028 to his mother by telegraphic transfer.

40. In total since separation the husband has sent at least $142,000 to his mother in Saudi Arabia, ostensibly in repayment of the 1997 loan.

41. On 4 March 2003 the husband withdrew $8,487 from his equity manager account.  He says that this and another $5,000 withdrawn on 4 April 2003 was probably spent on renovations to the Penrith Property.  Asked to produce receipts he produced only a small number in much smaller amounts.

42. The husband moved into the Penrith Property on 20 May 2003.

43. The husband’s equity manager account now stands at $161,000 debit. He has used all of the monies drawn from the equity manager account since separation.  None of the monies have been given to the wife or spent supporting the children.

Relevant Law

1. The approach to the determination of an application under s.79 is well established by authority: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro (1993) FLC 92-335; and Clauson (1995) FLC 92-595. The process ordinarily involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in s.79(4)(a) to (c) and the effect of any proposed order upon the earning capacity of either party. I must then evaluate the matters contained in s.75(2) insofar as they are relevant, any other order made under the Family Law Act 1975 affecting a party or child and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide, or might be liable to provide in the future, for a child to the marriage.

1. In determining what order the court should make under s.79, the court must be satisfied in all the circumstances that it is just and equitable to do so [s.79(2)]. It is the justice and equity of the actual orders that the court must consider: Russell v Russell (1999) FLC 92-877.

The assets and liabilities as at the date of hearing

1. The parties were able to reach agreement about some of the assets, liabilities and their value at the date of hearing.  The wife’s counsel submits that the court would determine the asset pool as at the date of separation and exercise its discretion upon those values rather than as at the date of hearing.  This is described as the constructive assets of the marriage[9]. There is a long line of authority that the court should attempt to ascertain the asset pool as at the date of hearing. See In the Marriage of Zappacosta (1976) FLC 90-089. Although phrased differently, the wife’s counsel appeared to submit that the court would apply the approach identified in Townsend (1995) FLC 92-569 and notionally add back assets held at separation but later disposed of by the husband.

   [9] Exhibit H

2. Identifying the asset pool is one of the pivotal issues in this matter.  The central issue concerns a series of transactions whereby the husband’s mother advanced $150,000 during 1997 and the husband’s payments to her of about $142,000 after separation. The issue is whether these monies have been sent in repayment of a loan or whether, as the wife says, the monies have been sent to put them beyond her reach.

3. The husband’s mother swore an affidavit on 8 October 2002 in Bangladesh.  It is attached to the husband’s affidavit[10].  Relevantly, she deposes, “that I gave my son B A S an amount of $Tk45,000,000 = (Taka forty-five lacs) as a loan in the year, 1997 by selling my land property situated at Masdair-Dist.  Narayangonj, Bangladesh (the Third Narayangonj Property).  Out of the total loan amount of $Tk45,000,000 = (Taka forty-five lacs) my son B A  S has paid back to me a partial amount of $Tk33,040,000 - = (33 lacs forty thousand) on July 2001 and the balance amount of  $Tk11,60,000 = (11Lacks 60,000 remain outstanding still today as loan”.

   [10] Annexure D

4. One of the most troubling aspects of this matter was the failure to cross examine the husband’s mother concerning the alleged loan. Apparently, this was a pragmatic decision predicated upon the wife’s belief that her former mother-in-law’s testimony would be unshaken.  The wife’s counsel contends that examination of the entirety of the circumstances surrounding these transactions will result in the sworn testimony being assessed as inherently improbable. 

5. In Scott and Scott (1994) FLC 92-477 the Full Court said, at 80,729:“There is, in Australia, no rule of law that a Judge must accept evidence which is unchallenged: Cross on Evidence, 3rd Australian ed. (1986) - footnote 483 para.9.66 at 440; and Ellis v. Wallsend District Hospital (1989) Aust. Torts Reports 80-289 at 69,090;  (1989) 17 NSWLR 553 at 588 (per Samuels, JA). However, a number of authorities establish that it may be "wrong, unreasonable or perverse to reject unchallenged evidence" (per Samuels, JA., Ellis v. Wallsend District Hospital, supra at Aust. Torts Reports 69,090; NSWLR 587) and that if an appellate court concludes that it were so, in the particular circumstances of a given case, it may overturn the decision of the primary Judge on the basis of an error of fact, rather than an error of law. This principle has its foundation in the application of what has been referred to as the second aspect of the so-called "rule" in Browne v. Dunn (1894) 6 R 67, namely "a rule relating to the weight or cogency of evidence not challenged by cross-examination'': per Samuels, JA. in Ellis v. Wallsend District Hospital (supra) at Aust. Torts Reports 69,090; NSWLR 587 and see also Hunt, J. in Allied Pastoral Holdings Pty Ltd v. Commissioner of Taxation (1983) 1 NSWLR 1 at 18.  However, it has frequently been recognised that whether or not it is an error of fact for a Judge to reject unchallenged evidence depends very much on the circumstances of the particular case, and the presence or absence of any stated reason for the rejection.  For example, it has frequently been said that unchallenged evidence need not be accepted by a Judge if it is inherently incredible or improbable, and the lack of any inherent incredibility in the evidence of the plaintiff in the case of Precision Plastics Pty. Limited v. Demir (1975) 132 CLR 362 has been put forward as the explanation for the dictum of Gibbs, J., as he then was, at p.376 of that case, that the jury was "bound to accept" the plaintiff's unchallenged evidence that she intended to work until she reached the age of 55 years: see per Samuels, JA. in Ellis v. Wallsend District Hospital (supra) at Aust. Torts Reports 69,090; NSWLR 586.”

6. The husband’s father is 73 years old and his mother is 58 years old. Both were teachers by profession and retired in early 2001. As teachers the wife guessed that the husband’s parents earned no more than about $150 per month each. The husband explains that since 1993 they also receive between $300 and $500 per month rental income from the Kakrail flat. Since their retirement, every few months he and his sister send his parents approximately $800-$1000.  The husband explains that other than these regular advances the Kakrail rental is their only source of income.  It follows that they have no income producing assets or cash reserves than produce a regular income.  Challenged by the wife’s counsel about his mother’s financial capacity to buy the Third Narayangonj Property and/or loan him $150,000 the husband contended that his father ran a mathematics institute and his mother a small business which produced substantially greater income than their full time teaching jobs.  He made no mention of this in his affidavit and his evidence appeared to be recent invention. I accept the wife’s testimony that during the years she resided with them, the husband’s parents worked solely as teachers and that the husband’s contentions as to the mathematics institute and his mother’s business are fabrications. 

7. The wife conceded that the husband’s mother was the legal owner of the Third Narayangonj Property. Other than giving the address of the land the husband’s mother provides no other particulars.  There is no evidence concerning when the property was purchased or its purchase price.  The husband’s mother gives no evidence concerning sale price or to whom the property was sold. The husband did not challenge the wife’s evidence that he returned to Bangladesh in mid 1997 for about three weeks at which time the land was sold.  The wife says the court would infer that he returned in order to sell the Third Narayangonj Property and to arrange to transfer his money from Bangladesh so that they could settle the Australian property and business purchases.  She understood that this was the purpose of his trip.

8. It is difficult to accept that the husband’s mother sold land for about $150,000 yet at the same time the husband says that he orally gave his mother the Bangladesh Property in order to provide for his parents financial support. If he and his mother each owned a valuable asset why wouldn’t they each retain their respective properties rather than advance each other money?  No adequate explanation was provided by either the husband or his mother for these apparently inconsistent transactions. 

9. When the husband’s mother paid the monies in 1997 the transaction was completed over a number of months. Some of the money was sent from Bangladesh by telegraphic transfer and $65,000 was sent using the Hundee system.  Mr M H, a grocer from Mascot explained, “in addition to my normal business activities, I also offer my loyal customers a free service of money transfer from Australia to Bangladesh or from Bangladesh to Australia.  I do not charge any fees or take any profit from my customers for this service.  No bank is involved and no physical transfer of money takes place in this process”.  This is the Hundee system.  As the broker, Mr H locates counterparts in Australia and Bangladesh who wish to send money between the two countries.  He matches transactions so that a person in Bangladesh wishing to send money to Australia will pay at the direction of his Australian counterpart the agreed sum to a specified person in Bangladesh.  The Australian wishing to transfer money to Bangladesh will pay an equivalent sum at his Bangladeshi counterpart’s direction to a person presently in Australia.  This means that large sums of money can sent internationally without cash leaving either country.  I accept the wife’s counsels submission that the husband has access to a facility, the Hundee system, which enables him to transfer money to Bangladesh and Saudi Arabia undetected.  

10. There are other aspects concerning the alleged loan that are difficult to accept or internally inconsistent.  These include:

    a)The failure of either the husband or his mother to provide any documentation for the loan.  I accept the wife’s counsel’s submission that the affidavit of oral gift contradicts the husband’s evidence that Bengali custom negates the need to document financial dealings between mother and son.  This was a large financial transaction and the absence of any documentation is significant.

    b)The lack of particulars about the terms and conditions of the loan.  That is the length of the loan and when it was to be repaid.

    c)The husband’s mother made no demand that the loan be repaid yet although he claims to have been in financial distress the husband repaid it.

    d)The husband took steps to send the money to his mother as soon as he became aware that the wife had left him.

    e)When she completed her statement on 8 October 2002 the husband’s mother says that he had made “a partial payment …on July 2001”.  She makes no suggestion that any other repayments have been made.  However the husband claims that he also sent her $25,000 on 31 October 2001 and a further $30,000 on
    3 March 2003 and that possibly other additional funds were sent.  Neither the husband nor his mother reconciled these different accounts.  Their failure to do so seriously undermines their evidence concerning the initial loan and the husband’s claim that the money he sent to his mother repaid a loan, partially or at all.

11. For all of these reasons I am satisfied that the property held in the husband’s mother’s name was held by her on trust for him. On the information available it defies credulity that the husband’s mother had sufficient funds to acquire the land as an investment, needing as she did the income from the Bangladesh Property to live on. The simultaneous transactions are inconsistent with the husband’s mother being the actual and beneficial owner of the land.  The husband returned to Bangladesh in 1997 to sell the property and arrange to have the sale proceeds remitted to Australia.  The husband’s mother acted at his direction when she sent his $150,000 in 1997.  She did no more than send his funds to Australia at his direction. Thus I am satisfied that the husband’s allegation that his mother loaned him $150,000 is untrue. Money transmitted after separation attributed to loan repayments is transactions designed to send money out of Australia and ostensibly beyond the wife’s reach.

12. The second key issue concerns the manner in which the husband encumbered the Penrith Property and the extent to which monies received by him should be notionally added back into the asset pool.  From the sale of the business and former matrimonial home, after discharge of the mortgages and payment of other selling costs the husband had about $70,500 remaining.  He received $47,077 on 1 June 2001 at which time, other than the alleged debt to his mother, he had no significant liabilities. With this money available and no demand from his mother to repay the alleged loan he had no obvious need to establish a $150,000 overdraft facility on 5 June 2001.

13. It is almost beyond belief that if in financial difficulty that on 7 June 2001 the husband withdrew $35,000 which he says he loaned J A.  The husband did not call any evidence from J A concerning the loan.  As a consequence the wife’s counsel submitted the court would apply the rule in Jones v Dunkel (1959) 101 CLR 298 to the failure to call him. In Ghazal v GIO (NSW)(1992) NSWLR 336 Kirby P, with whom Mahoney and Clarke JJA agreed, explained (at 343) the rule in Jones and Dunkel (supra) thus:-“The rule in Jones v Dunkel is one of commonsense reasoning. It provides that an unexplained failure by a party to call a witness may, in appropriate circumstances, lead to an inference that the uncalled evidence would not have assisted the case of the party who might be expected to call the witness. It is important to note that this is a facility. It is not an obligation in the reasoning of the decision-maker.”  Despite the passing of the Evidence Act 1995 (Cth) a Jones v Dunkel inference may still be drawn (See Australian Securities Commission v AS Nominees) (1995) 133 ALR 1 at 12.

14. From both parties perspective this is a significant financial transaction.  The husband’s counsel submitted during the hearing that his client could not make J A available during the last days of the hearing and producing him would require an adjournment that his client was unable to afford. This is not an entire answer.  These proceedings had been listed for hearing on a number of occasions prior to the last block of days.  There was ample opportunity earlier on to adduce evidence from J A, but no attempt was made to do so.  Although difficult, he may have been able to give evidence by telephone.  Given the size and importance of the transaction I would have expected the husband to ensure that J A corroborated his evidence.   In the circumstances I am satisfied that J A’s evidence would not have assisted his case.  I am not satisfied that the husband loaned J A between $30,000 - $40,000.  Thus the draw down on the overdraft facility attributed to the loan to Mr J A is no more than a ruse whereby the husband put money, probably sent overseas using the Hundee system so that the wife could not have it.  Loan repayments he attributes to J A are likely to be money retrieved from accounts managed by his mother when he required it. It is highly likely that this money remains available to the husband.

15. The husband claims that he has spent about $34,000[11] in travel, telephone, miscellaneous expenses including $5000 legal fees in Bangladesh. Applying Farnell (1996) FLC 92-681 his paid legal fees are added back in. During cross examination the husband disclosed that these expenses included his brothers return airfares between Australia, Saudi Arabia and Bangladesh and his parents airfares between Saudi Arabia and Bangladesh. Also renting a house and car in Dhaka for the entire family and their living costs. During this time he located and married a new wife, remaining in Bangladesh for a few months to settle into married life. While some of this expenditure is reasonable and necessary I am not satisfied that all, for example his brother’s expenses or those incurred after his marriage, should be treated as joint expenditure. The amount allowed as reasonable is $20,000. As the source of funds appears to have been the overdraft facility the additional $9,000 will be notionally added back.

    [11] Paragraph 20 husband’s affidavit sworn 25 August 2003

16. Since separation the husband has taken 106 days leave without pay in order to search for the children.  This also includes time spent with his new wife.  Overall he says he has lost about $21,538 gross in lost wages.  The point of this is that he needed to use sale proceeds in order to meet day to day living expenses.  Thus he partially explains how he has spent the $70,000 sale proceeds.  I considered carefully whether the husband’s use of the $70,000 should be categorised as a premature disposition of matrimonial assets.  Townsend does not establish a rule of general application that all assets held at separation, if disposed of, must be notionally added back into the asset pool.  Excluding the $14,000 (Bangladesh legal fees and a portion of travel and accommodation expenses) I am satisfied that the husband has used the money reasonably.  In total he will have had the benefit of $56,000 which moneys appear sufficient to have met his actual expenses as well as living expenses incurred while he was on leave without pay.

17. I do not accept that the money sent overseas has been to repay the husband’s mother, loaned to J A or needed to pay extraordinary expenses or living costs. Nor do I accept that the husband is unable to recall the reasons for large withdrawals.  The entire circumstances satisfy me that the husband has drawn down on the overdraft facility to the greatest extent possible in order to establish cash resources that he has hidden overseas.  Those monies are highly likely to still be available and could be returned to Australia at his direction. Applying Townsend the draw down of overdraft facility secured by a joint matrimonial asset will be categorised as a premature disposition of matrimonial assets.  As the husband has had exclusive use of the funds, he will be treated as having the benefit of them.

18. The husband has unpaid legal fees, which he says are $60,000. Both parties have been through difficult litigation, responsibility for which rests with both of them.  If the husband considers that he has a proper basis for bringing an application that the wife pays his legal costs he can do so. Taking his unpaid legal costs into account as a matrimonial liability would be inappropriate and thus they will be the husband’s responsibility and not included in the pool of assets and liabilities. See Farnell (1996) FLC 92-681.

19. Finally, the wife contends that the husband sold the shop recklessly and as a consequence the true value of the fish and chip shop was not realised. This is a different issue as to how the actual sale proceeds should be treated. Essentially, the wife contends that the husband wantonly disposed of a valuable asset. I found the submissions concerning treatment of this asset confusing. Doing the best that I can it appears that the wife contends that its value at separation should be notionally added back or taken into account pursuant to s.75(2)(o). Although there is no valuation evidence the wife contends that at separation the business was worth $106,400. This represents its original purchase price less 20% depreciation. There is no evidence of turnover, income or liabilities during the years the parties owned it. After the husband started working on the ferries the wife was intimately involved in its operation, relevantly managing the banking. Yet she adduced no evidence concerning its operation prior to separation. The husband’s counsel submits that it is not possible to conclude that the difference between the purchase price and sale price equates to the loss suffered by the parties. This is because there is no valuation evidence of the business. I agree that the evidence is too incomplete and imprecise for the court to reach a conclusion concerning its value at separation.

20. Hence the wife’s claim that the business should be valued at $106,000 and thereafter notionally added back into the asset pool fails.

21. I find that the assets, liabilities and financial resources as at the date of hearing are set out in the table below.

Assets	$
Husbands paid legal fees	5,000
Money used from sale proceeds (H)	9,000
Monies withdrawn from overdraft (H)	161,000
The Penrith Property (H) (agreed)	200,000
Car (H) (agreed)	3,000
Share portfolio (H) (agreed)	3,015
The Bangladesh Property, India (H)	74,000
The Third Narayangj property, India (H)	NK
Husbands superannuation (agreed)	17,894.35
TOTAL ASSETS	472,909.35
Liabilities
ANZ mortgage on the Penrith Property[12]	161,000
NETT ASSETS	311,909.35

[12] Exhibit G

Section 79(4) evaluation of contributions and other factors

1. Section 79(4) requires that the court look at the entirety of the contributions, both financial and non-financial to the welfare of the family as well as to the acquisition, conservation and improvement of those assets. Contributions are not required to be tied to the acquisition, conservation or improvement of a particular asset and are to be taken into account generally as contributions in a total sense.

2. At the commencement of cohabitation neither party had any assets, liabilities or financial resources.  The duration of cohabitation was about sixteen years and all assets owned by the parties at separation were acquired after cohabitation.  Throughout their marriage the husband took primary financial responsibility for the family.  During the period of cohabitation, other than for a short time after the parties arrived in Australia, the husband was continuously engaged in well-paid employment and utilised his earnings for the benefit of the family.  His income enabled the parties to acquire property in Bangladesh, including the land held in the husband’s mother’s name sold in order to fund the acquisition of the former matrimonial home and fish and chips shop.  After 1998 the husband worked full time and part time in the shop.  From 1993 until separation the husband earned sufficient income to support the family, acquire assets and also to contribute to his parents’ support.  Other than the money given to his parents, the husband applied all income earned prior to separation to joint matrimonial purposes. 

3. Since separation the husband has continued to contribute to superannuation. I am not satisfied that since separation the husband has applied all income to joint matrimonial purposes.  He has, however, supported the Penrith Property and maintained the business and former matrimonial home until they were sold.  The husband embarked on a course of conduct designed to move as much of the matrimonial assets out of Australia as possible.  As I have already found, I am satisfied that the husband has these funds secreted, probably in Bangladesh or Saudi Arabia in accounts managed by his mother.

4. The husband has made minor improvements to the Penrith Property, which may have contributed to its capital growth.  Because the improvements are minor, it is likely that the property’s current value has also grown because of upward movements in the property market.  The capital growth achieved because of market conditions is a windfall to which both parties have contributed. 

5. The wife made a financial contribution from the income earned from the shop during the years that she worked in it.  Other than the $900 loan advanced by her father, who has been repaid, prior to separation the wife made no other financial contribution directly or on her behalf. 

6. Comparatively the husband made a vastly greater financial contribution than the wife did.

7. Neither party contends that they made improvements to the former matrimonial home. There were no substantial repairs or renovations made to any of the matrimonial assets prior to separation. There are no relevant s.79(4)(b) contributions as at the date of separation. Sub contractors completed minor improvements made to the Penrith Property after separation. These improvements are acknowledged in my findings concerning the husband’s greater financial contributions.

8. The husband's employment meant that the day to day care of the family and management of the home was overwhelmingly the wife’s responsibility.  The husband’s work on ships meant that he was away from home for months on end during which periods the wife was exclusively responsible for the children. After he obtained work he was away from the home most days, all day.  The wife’s diligent attention to the children and the home throughout cohabitation meant that the husband could pursue his career confident that their children’s daily needs were competently attended by the wife.  He trusted the wife to largely meet their joint parental responsibility for the care of the children and accepted her judgment in relation to the daily matters necessary to run the children’s lives.  Their roles were complimentary and to a significant degree, prior to separation, both excelled.  The husband made a contribution to the welfare of the family to the extent that he was able to.  Quite apart from providing financially for the family he spent time with the wife and children when he was able.

9. Since separation the wife has been exclusively responsible for the children’s care.  Although the wife is properly criticised for her removal of the children from Australia and her secretive return, the effect of which was to deprive the husband of the opportunity to contribute to the welfare of the family in his role as a parent, the court must concern itself with actual contributions. What cannot be ignored are the dreadful circumstances the husband found himself in post-separation because of the wife’s secretive departure from Australia with the children.  Such contributions as he made were made in arduous circumstances.  He went to great lengths to try and locate his family, hoping to be reunited with his children.  This is a contribution to the welfare of the family.  Overall the wife made a vastly greater contribution as a parent and to the welfare of the family than the husband did. See Ferraro (supra).

10. The orders I propose will not affect the earning capacity of either party.

11. The wife persuaded the Child Support Agency that she should be required to apply for child support from the husband.  Her point being that if she applied for child support he would become aware that she and the children had returned to Australia. Upon her husband discovering her whereabouts the wife had no need to maintain her ruse and hence applied for child support.  From the time he was assessed the husband has paid about $315.00 per week child support. 

12. This is a matter in which the financial and non-financial contributions carry significant and equivalent weight. The parties divided family responsibilities along traditional cultural lines and both worked hard to fulfil the responsibilities and role each expected of the other. Having regard to all of the contributions within the meaning of s.79(4)(a), (b) and (c) from the date of the marriage to the date of the hearing and the other factors to which I have made reference expressed as a percentage of the net value of their assets, the parties contributions are equal.

Section 75(2)

1. Subsection (a).  As at the date of hearing the husband was 43 years old and the wife 35 years old.  Both parties are in good health.  I make no adjustment pursuant to the subsection.

2. Subsection (b).  I have already made findings concerning the parties property and financial resources and do not repeat them.  The wife is unemployed and her entire work force experience is the few years part time work in the shop.  She has limited English language skills and no relevant qualifications or work experience that equip her for paid employment.  Coupled with her social isolation it is unlikely that she will obtain paid employment.  Before she could do so she would need significant training as well as the opportunity to acquire reasonable English language skills.  It would be mere speculation to postulate that she may eventually obtain some form of paid employment.  The wife’s income comprises a social security payment of about $206 per week, which payment reflects that the three children lived with her and that she was receiving $315 per week child support.  As a consequence of the parenting orders, the wife’s social security payments will be reassessed because the parties’ sons will no longer live with her. As well as her social security payments changing so will her child support payments.  I accept the wife’s counsel’s submission that the wife, “Will become dependent on social security payments and trapped in an endless cycle of poverty”.  The husband has secure well paid employment.  He has many years of experience as an engineer and earns on average about $1,442 per week gross.  There is no comparison between the income the husband will earn compared to the wife’s social security payments.  I am satisfied that the husband will continue in well paid employment until he reaches retirement age.  Overall, I am satisfied the husband will continue to earn a considerably greater income than the wife will.  The disparity is such that I make an adjustment pursuant to he subsection in her favour.

3. Subsection (c).  Rosie is 17 years old, Luke is nearly 10 years old and Andrew is 7 years old.  The husband will have the younger children’s care for much longer than Rosie will be dependent upon the wife.  The wife is unlikely to ever pay child support for the two younger children.  I make an adjustment in the husband’s favour pursuant to the subsection.

4. Subsection (d).  This subsection focuses on the financial needs of the parties, including their financial commitments supporting their children.  The wife uses all of her income supporting herself and Rosie.  The husband supports his wife and will financially support the two younger children.  From the time the two younger children are in the husband’s care, even though the husband has a far greater income than the wife, it is likely that he will spend most of it on day to day necessary expenses.  I have already taken into account the financial disparity and the parties’ income pursuant to subsection (b) and make no adjustment pursuant to subsection (d).

5. Subsection (e).  The husband has remarried.  His wife is financially dependent upon him.  However, his greater income enables him to support not only the wife, but also the children in his care and does not warrant an adjustment pursuant to the subsection.

6. Subsection (f).  Presently the wife receives Centrelink benefits.  Both parties may become eligible to receive some form of family allowance.  Other than these payments neither party currently receives a pension, allowance or benefit from any superannuation fund or scheme.  I make no adjustment pursuant to the subsection.

7. Subsection (g).  Both parties have suffered a reduction in their standard of living post-separation.  The husband lives in a home unit which he owns whereas the wife lives in modest rental accommodation.  Both parties have contributed to the fall in their standard of living.  Comparatively, the wife lives in more parlous circumstances than the husband does and it is appropriate to make a small adjustment in her favour pursuant to the subsection.

8. Subsection (h) – (k).  These subsections do not arise. 

9. Subsection (l).  I have already taken into account the wife’s lack of future employment prospects.  The husband does not contend that there should be an adjustment in his favour pursuant to the subsection.  In the circumstances I make no adjustment pursuant to the subsection.

10. Subsection (m).  The husband has remarried.  His wife speaks no English and her professional qualifications that enabled her to teach in Bangladesh are unlikely to enable her to obtain employment in Australia.  The husband’s wife has no income or assets of her own.  The wife has not re-partnered.  I make no adjustment pursuant to the subsection.

11. Subsection (n). Section 75(2)(n) achieves a cross-referencing between s.75(2) and s.79(4). The outcome of the assessment of contributions and other factors has resulted in the parties having an equal share of the assets. Neither party seeks a split of superannuation. These factors do not warrant an adjustment pursuant to the subsection.

12. Subsection (na).  At the time of the hearing the husband was paying approximately $315 child support.  Consequent upon the parenting orders, the husband’s child support obligation will change dramatically.  If he is liable to pay any child support for Rosie, the amount payable is likely to be modest and will end in twelve months. 

    
    

    I make no adjustment pursuant to the subsection.

13. Subsection (o). Both parties contend that the court would make an adjustment pursuant to s.75(2)(o) in their favour. The husband claims that the financial consequences of the wife’s flight from Australia and subsequent disinterest in the preservation of the matrimonial assets had grave financial consequences for the family. He does not contend that the former matrimonial home was sold at an under value. It is his contention that the loss of the shop is directly attributable to the wife’s departure from Australia. I have already found that the husband was unable to continue to manage the shop whilst maintaining his employment. The wife’s claim that the husband could have found reliable employees or shut the business while he was attempting to reunite the family finds no favour. The business was a cash business and during the years that the parties operated it, neither trusted employees with the takings. Thus, I accept the husband’s decision to sell the business was reasonable.

14. The difficulty with the husband’s waste argument is the paucity of evidence concerning the business’s operations.  He had exclusive control of all the business’s financial records.  The court did not receive profit and loss statements, bank records, evidence of comparable sales or any documentation, which would enable the court to come to any safe conclusion concerning the viability of the business at separation.  While the parties worked hard in the business, neither had previous experience running a shop.  Although they paid a large sum as goodwill there is no evidence that at separation or the point of sale a prudent purchaser would have paid any goodwill component.  Hence although the sale of the shop is directly attributable to the wife’s departure from Australia I am not persuaded that the business sold at an undervalue.

15. The husband owns two parcels of land in Narayangonj, India, (“The First Narayangonj Property” and “The Second Narayangonj Property”) neither of which was valued for these proceedings. The wife has no available funds that she could have used to value these properties, whereas the husband has both the funds and connections that would have enable valuations to be obtained. Both properties are likely to have increased in value since their acquisition to an extent that the court cannot determine. Both properties have been included at an undervalue. As the husband has, and will retain, possession and control of these assets I make an adjustment in the wife’s favour pursuant to s.75(2)(o).

16. Subsection (p).  This issue does not arise.

17. Having regard to all of the s.75(2) factors I find that it is appropriate that there should be an adjustment in the wife’s favour of 10 per cent. This outcome reflects the cumulative outcome of the findings I have made pursuant to s.75(2). See Tomassetti (2002) FLC 93-032. Any lesser adjustment given the size of the asset pool would be notional.

Section 79(2) is this outcome just and equitable?

1. Because the court must consider the actual orders, not just the percentage distribution under s.79(2) justice and equity in cases like this requires that the court stands back and looks carefully at the outcome of the s.79(4) and s.75(2) process. It is at this stage that the court considers the actual structure of the orders.

2. I will not repeat the findings made thus far.  There are key findings that lead to my comfortable satisfaction that an outcome favourable to the wife 60 per cent compared to the husband’s entitlement at 40 per cent is just and equitable.  Simply put these include that the wife made an overwhelmingly greater contribution as a home maker and parent throughout the marriage, which contribution must be given significant weight.  By taking responsibility for the home and the children the wife enabled the husband to pursue his career and secure well paid employment that is likely to continue until he reaches retirement age.  Until separation both parties worked as hard as they could in order to establish their families’ future in the roles that each took.  The husband worked hard in order to provide for the family financially.  He has remained in the workforce and has employment opportunities that will forever be denied the wife.  The wife is unlikely to ever again work in the paid workforce and there is virtually no prospect that she will acquire superannuation or other assets as a consequence of earned income.  Such modest assets that she may acquire and retain will be achieved by a frugal lifestyle. 

3. The husband will have financial responsibility for the younger two children much longer than the wife will be financially responsible for Rosie.  However, the time will come when he will be freed of their financial dependency from which time he will have the benefit of his career and secure employment.  Although freed from financial responsibility for the children the wife is destined to live in parlous circumstances dependant upon social security income.  The disparity in the parties’ future circumstances must be recognised in the outcome of these proceedings. 

4. Neither party sought a superannuation splitting order. The wife is obviously content to have her s.79 entitlement defined by reference to the available assets. The husband took a similar approach.

5. In her amended response the wife contended that the court would order the husband to pay, “such sum by way of final property settlement as this honourable court deems fit”.  In submissions this was clarified as being an adjustment of 60 per cent in the wife’s favour from what was described as the constructive assets of the marriage.

6. The husband will be ordered to pay the wife her s.79 entitlement within two months. This will give him sufficient time to arrange the transfer of funds from wherever they are secreted to Australia. Because the risk that he will refuse to do so and may dispose of the remaining assets, he will be restrained from further encumbering the matrimonial assets until he has complied with the court’s order. He has conducted a deliberate and deceitful campaign in order to deprive the wife of any financial adjustment and demonstrated as clearly as a person possibly could his determination that the wife should have nothing. Only with these injunctions in place can the court be confident that its orders will be complied with. If the husband fails to pay the money to which the wife is entitled, the Penrith Property and other specified assets must be sold. Interest on the balance outstanding will run in accordance with Part 22.01 of the Federal Magistrates Court Rules, hence by adoption the Family Law Rules.

7. Sixty per cent of $311,909 is $187,156.  This is the amount the husband must pay the wife.  In the event he fails to do so, the Penrith Property and share portfolio will be sold.  Although they have an agreed value, the nett proceeds cannot be known.  The total assets excluding the home unit and share portfolio are $269,894; sixty per cent of which is $161,936.  The wife does not have any assets, therefore, on the sale of the property when the husband receives his forty per cent share he will have to make an adjustment to the wife of $161,936 less the net proceeds from the sale of shares.  Obviously, there will be a shortfall.  If the shortfall is not paid immediately, the husband shall sell Kakrail and pay the wife 60% of the net proceeds and the balance outstanding to the wife.  The balance outstanding will comprise 60% of the other assets together with applicable interest.

8. Pending settlement, the husband must maintain the Penrith Property and the Bangladesh Property as well as pay rates and taxes as and when they fall due.  If he defaults, he must make good the default.

Parenting issues

1. The parties disagree about when the residence orders should be given effect to.  The children’s representative submitted that the younger children should finish the current school term and during the next school holidays move to live with their father.  I made orders to this effect.  This gave the children sufficient time to finalise friendships and prepare to start life with their stepmother and father.  Allowing the change of residence to linger too long is likely to have been distressing for the children and deprive them of the living arrangements with which both parties agree best served their long term interests.

1. The children’s representative submitted that the court should make orders that restrained the parties from removing the children from Australia unless the other party agreed.  It was contended that the consequences for the children of removal are serious and steps taken to avoid the prospect that they may be removed.  The consequences for the children of their removal at separation have already been serious.  For example the children were pulled out of school and their education seriously disrupted.  Importantly they were denied face to face contact with their father for well over one year.  Re-establishing regular contact has been fraught with difficulty even though the parties only live in different cities.  Maintaining contact between the children and parents if the children are removed from Australia will be virtually impossible.  As parents these parties have shown little respect for each other post separation.  Neither party appears able to plan their children’s future with the children’s relationships at the forefront of their thinking.

2. The risk that the children may be removed from Australia is too high to be ignored.  The orders against removal will merely require notice and consent.  They protect against secretive removal and retention.  Although inconvenient to the parties the orders proposed by the children’s representative are in the children’s best interests.

Costs

1. Before the children’s representative withdrew she sought an order that both parties pay the children’s representative’s costs of the proceedings.  Significant costs were incurred obtaining a transcript of the first part of the proceedings in which the children’s representative did not participate.  The factor that has persuaded me that the court should not make an order for costs in the children’s representatives’ favour, are the parties’ financial circumstances.  Until the wife receives her property entitlement, she only has a pension to live on and has no available assets.  Once she obtains her property entitlement, she will need every cent that she receives in order to obtain accommodation.  After paying the wife her entitlement, the husband will only have his income and modest assets.  In the exceptional circumstances of this case I am not satisfied that I should impose further financial burden on the family by ordering costs as contended by the children’s representative.

2. For these reasons I make the orders set out at the start of these reasons.

I certify that the preceding one hundred and twenty-two (122) paragraphs are a true copy of the reasons for judgment of Ryan FM

Associate:  S. Mashman

Date:  27 May 2004