Becker and Becker

FAMILY COURT OF AUSTRALIA

BECKER & BECKER

[2013] FamCA 778

FAMILY LAW – PROPERTY – SPOUSAL MAINTENANCE

APPLICANT:

Ms Becker

RESPONDENT:

Mr Becker

FILE NUMBER:

MLC

4991

2011

DATE DELIVERED:

7 October 2013

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Bennett J

HEARING DATES:

19 June,
3 – 4 July,
8 August 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Williams

SOLICITOR FOR THE APPLICANT:

McDonald Slater & Lay

COUNSEL FOR THE RESPONDENT:

Mr Wilson

SOLICITOR FOR THE RESPONDENT:

Susan Snyder & Associates

Orders

IT IS ORDERED THAT:

This matter be listed for mention in Court before me on 10 October 2013 at 10.00 am for the purpose of checking on the readiness of the matter for the mediation to which the parties have agreed.
The husband pay to the wife the sum of $100,000 within 45 days hereof as partial property settlement.
The husband pay to the wife the sum of $650 per week by way of consecutive payments for her spousal maintenance from 23 May 2013 until further order or written agreement, the next payment being due on 10 October 2013.
The arrears up to 3 October 2013 be fixed as $12,350 and be paid within 14 days.
The amount of all monies to be paid pursuant to these orders to be paid into NAB account … which stands in the name of the wife.
The application in a case filed by the wife on 15 April 2013 and the response thereto be dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Becker & Becker has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 4991 of 2011

Ms Becker

Applicant

And

Mr Becker

Respondent

REASONS FOR JUDGMENT

These proceedings were initiated by the wife’s Application in a Case filed 15 April 2013 in which she sought an order that the husband pay her the sum of $50,000 by way of spousal maintenance. On 23 May 2013 she amended her application to seek that the husband pay to her the sum of $650 per week for ‘weekly rent and household expenses’ as well as the sum of $50,000 for her legal costs for preparation of and trial of this matter.
The application which I now determine was stated orally on 8 August 2013 and is for the husband to pay the wife the sum of $100,000 by way of partial property settlement (which will be applied by the wife to her legal costs) and spousal maintenance of $650 per week. It was discussed that the spousal maintenance order may be retrospective if retrospectivity is justified and proper. The wife also seeks that the husband pay her costs of this application on an indemnity basis.
By formal response and orally, the relief sought by the wife is opposed by the husband. He contends that his lifestyle is adequately funded and resourced but that he has no capital or excess income out of which to meet the periodic or lump sum relief sought by the wife. When the husband was self-represented on 14 December 2012, the husband stated to the court that he envisaged the wife would be entitled to $400,000 to $500,000 by way of a final alteration of property interests in this proceeding. On the last day of giving oral evidence before me (and being represented by Mrs Snyder, solicitor, and Mr Wilson of counsel) the husband gave evidence to the effect that reasonable periodic maintenance for the wife would be $500 per week. In closing address, Mr Wilson submitted that there was little difference between the $500 periodic spousal maintenance which he construed his client had conceded was warranted and the $650 sought by the wife and did not address to oppose an order in the sum of $650 per week.
The husband maintains that, whilst he has the use of assets and is in receipt of superannuation and other income which covers with his personal expenses, the wealth associated with him is held at arms’ length by third parties and he has no control over either the funds or the person or entity whom he alleges controls of the funds. Variously, the persons whom the husband alleges have ultimate control over assets and income are his son Mr B Becker, his son Mr C Becker and Mr D the grandson of a gentleman whom he much admired and respected and with whose family the husband has been in business with for many years.
The simple description of each party’s position in the context of the current application belies the rather complicated history of the husband’s family fortunes.
Having heard extensive evidence from the husband, I will set out the financial history and details in more detail than an interim determination would usually attract. I will also summarise the evidence given in relation to entities and persons relevant for this application and likely to be relevant on a final hearing.

Background

The wife is 66 years of age. She works part-time in administration. In her most recent financial statement the wife deposed to receiving income of approximately $674 per week and incurring expenses of approximately $1,340 per week, not including legal expenses. She has not re-partnered.
The husband is 70 years of age. He is in a self-funded superannuation fund and receives a pension and extensive benefits from the E Superannuation Fund. The husband describes himself as being otherwise employed as a consultant on a part-time basis. The husband worked in a professional occupation for many years until he was declared bankrupt in 1996. He has not re-partnered.
The parties began living together in approximately 1992 and were married in 2001. They separated finally on 19 March 2011. It was a second marriage for both. The husband and his first wife, Ms F Becker, were divorced on 13 March 1996. A final alteration of property interests between the husband and Ms F Becker was effected in proceedings MLF10938/1994 in this Court on 16 February 1995. Pursuant to that settlement, the husband transferred two properties to Ms F Becker in return for her assigning to him all of her interests in the Ms F Becker Family Trust No 1 and G Pty Ltd.
Mrs. Ms F Becker is still involved in some of the husband’s financial affairs. My impression is that their relationship and ongoing financial involvements are entirely amicable.
By way of history, the husband was declared bankrupt in 1996. He was a partner in the firm H Pty Ltd which had merged with another company in 1988. The husband became involved in a number of disputes with the other partners, who then commenced legal action against him. H Pty Ltd obtained judgment against the husband for $14,304.29 and costs estimated at $384,611.49.
Reference was made to the husband’s bankruptcy proceedings early in the husband’s cross evidence. In the Federal Court of Australia before Heerey J, the husband had sought a review of a decision of the trustee of the husband’s estate not to call a meeting of the creditors. Of the husband’s financial affairs, Heerey J said:
The evidence before me indicates clearly that there is a need for a very thorough investigation indeed of the affairs of [Mr Becker]. To take but one instance, it is apparent that in truth he is conducting his [business] in partnership with his son. His interest in the partnership was not disclosed in his statement of affairs but was in an application for registration as a tax agent. [Mr B Becker] has a limited interest in the partnership but there is no one else who could be enjoying the benefits of the substantial income derived (a gross of some $283,908.95) other than [Mr Becker] himself.
Furthermore, Heerey J made a finding that the husband had backdated loan agreements which he said showed a debt owed by him to G Pty Ltd. His Honour stated:
[Mr Becker] displayed no contrition after being caught out in a brazen attempt to deceive this Court by the use of false documents.
The reference to Heerey J’s findings served as an early but forceful reminder to the husband of the need for him to give his evidence truthfully and in a manner which would not mislead the court or the wife and this much was acknowledged by the husband in the witness box.
The husband was discharged from his bankruptcy in 2004.
There are no children of this marriage although each party has independent adult children from previous relationships. Both of the husband’s sons, Mr B Becker and Mr C Becker, are heavily involved in a number of entities in which the husband also has an interest or from which he receives benefits. Neither son was called upon by the husband to give evidence in support of his case but, given their extensive involvement in the financial circumstances of the husband I will spend some time on the husband’s evidence in relation to each of them.
The husband’s evidence is that Mr B owns and operates Becker Partners Pty Ltd, and Mr C Becker owns and operates Becker Partners.
Mr B Becker is divorced and has four children who attend fee-paying non-Jewish schools. The husband’s evidence was that Mr B recently purchased a house in Suburb I for $1.6 million. The husband said that Mr B’s former wife received their former matrimonial home as part of their property settlement and Mr B had been living in rental accommodation until his recent acquisition on the house in Suburb I. There was no evidence adduced in these proceedings of what evidence was relied upon by Mr B Becker in his own property proceedings vis a vis his proprietorship of his business and his beneficial entitlement to entities in which his father is/was involved or from which the husband received benefits.
Mr C Becker is married with three children. His wife is engaged in home duties and the children attend a fee-paying Jewish school.
The wife has children but they did not figure in these proceedings.
Whilst there is some dispute between the parties as to whether they cohabited for eighteen years or twenty years, that discrepancy is not significant for the determination of this proceeding.
The parties were divorced on 17 July 2012.
The wife issued proceedings in the Federal Circuit Court on 8 June 2011 seeking final orders for final alteration of property interests, discovery and spousal maintenance. In her affidavit sworn 1 June 2011 the wife’s evidence was that the husband controlled the parties’ finances during the relationship and that they had an arrangement where she would use a credit card for most of their living expenses which the husband then paid on a monthly basis. The wife deposed that the husband “has informed me from time to time that, although we are financially very well placed he has nothing in his name and all of his assets are in corporate structures and trusts”.
On 18 July 2011 orders were made by Judge O’Sullivan for discovery and adjourning the matter to 13 February 2012 for final hearing.
On 7 November 2011 Judge O’Sullivan made orders by consent that the husband pay the wife the sum of $25,000 within 45 days to be characterised by the trial judge, that the wife be precluded from making any further claim for spousal maintenance or lump sum contribution to her costs prior to the end of February 2012, that the husband complete his disclosure requirements and that the trial date be vacated. Judge O’Sullivan also ordered that the husband pay the wife’s costs including the costs of the conciliation conference thrown away, her application in a case and that day’s hearing in the sum of $6,707.
On 21 December 2011 orders were made by Judge O’Sullivan for the matter to be transferred to this Court on the basis of its complexity. This was, with respect, a sensible and entirely accurate assessment on his Honour’s part.
Young J (as he then was) made orders by consent on 30 July 2012 providing for the appointment of Mr J, accountant, to review the financial structure and circumstances of the parties and prepare a joint single expert report. Young J also ordered that the husband pay the wife’s solicitors the sum of $50,000, with such sum to be characterised by the trial judge, and that the husband be restrained from dealing with or disposing of any property in which he has an interest save in the usual course of business. Accordingly, following Young J’s orders, the wife was in receipt of capital payments of $75,000, requiring characterisation by the trial judge, being:-
a)$25,000 by Order of 7 November 2011 (Judge O’Sullivan);
b)$50,000 by Order of 30 July 2012 (Young J).
The parties agree that the husband also voluntarily paid the wife the sum of $25,000 on 27 February 2011. Accordingly, the wife received and had the benefit of capital payments, the nature of which is yet to be characterised, of $100,000.
This matter was allocated to my docket on 21 November 2012. There was a telephone mention on 5 December 2012 and a mention in court on 14 December 2012 to resolve immediate responsibility for payment of the extra fees of the single expert witness so that his report could be concluded and the matter progressed. The husband was self-represented at this time but gave every impression of being at ease with the court process and not at all reticent to impart information about his past and present financial affairs. In due course I decided the issue of the responsibility for immediate payment to the expert and also made an order requiring that the husband contribute to the wife’s costs of those proceedings fixed in the sum of $2,440. It is fair to say that the husband was entirely dissatisfied with the single expert witness’ work to date and indicated that he would seek to adduce alternative expert evidence. However, in the meantime he would have to pay for it.
By the time of the hearing on 8 March 2013, the husband had retained Ms Susan Snyder as his solicitor. The wife has had the same lawyer throughout.
On 18 March 2013 I made orders listing the matter before me for mention on 1 May 2013 for the purpose of determining any application for interim property settlement, any application to adduce expert evidence other than from Mr J and for further directions.
On 2 May 2013 I made orders by consent for the husband to provide documents to Mr J and to the wife and for the husband to pay to the wife’s solicitors the sum of $10,000 by way of partial property settlement. Accordingly, the wife has received $110,000 being $100,000 in funds yet to be characterised and $10,000 by way of partial property settlement.
The hearing of this matter was conducted on 19 June, 3 and 4 July and 8 August 2013.
The proceedings have been listed for a final hearing before me on 27 November 2013 and the parties have agreed to a private mediation on 14 October 2013 to be convened by the Hon. Mr Young QC. Notably, counsel for each party has assured me that their clients take no issue with the fact that their mediator was previously a member of this Court and has made orders in these proceedings.

Expert reports as to the parties’ interests in the Becker Group

At the earliest hearings before me, the husband (who was then self-represented), voiced his criticism of Mr J’s methodology and less than satisfactory reporting and costing processes. Whereas Young J made an order on 30 July 2012 for the husband to pay the fees and disbursements of Mr J’s initial report up to a sum of $10,000, Mr J’s fees eventually amounted to $47,500. Excluding the sum of $5,000 which was paid by the wife, the balance ($42,500) was paid by the husband under protest.
The affidavit of Mr J was sworn 5 June 2013 and filed 14 June 2013. Mr J described the structure of the Becker Group investments as follows:
The Parties have interests in a portfolio of corporate entities, joint ventures, unit trusts and discretionary trusts that I have termed the ‘[Becker Group]’. The [Becker Group] operates specific-purpose investment vehicles that typically invest in real property assets tenanted by (often high-profile) retailers, such as Safeway, Officeworks and others.
Mr J valued the husband’s interests in the Becker Group, consisting of the Becker 1992 Trust, the Becker 1996 Trust and the Ms F Becker Family Trust No 1 as totalling $19,214,899 at 30 June 2012 on a pro rata basis, or $14,522,887 allowing for the husband’s minority interest.
Rule 15.49(2) of the Family Law Rules 2004 (Cth) provides as follows:
The court may allow a party to tender a report or adduce evidence from another expert witness on the same issue if it is satisfied that:
(a) there is a substantial body of opinion contrary to any opinion given by the single expert witness and that the contrary opinion is or may be necessary for determining the issue;
(b) another expert witness knows of matters, not known to the single expert witness, that may be necessary for determining the issue; or
(c) there is another special reason for adducing evidence from another expert witness.
The husband engaged Mr K, accountant, to review Mr J’s report. At the mention before me on 19 June 2013 the husband sought to rely on Mr K’s report pursuant to Rule 15.49(2). Counsel for the wife did not oppose the husband’s reliance on Mr K provided that Mr J would become the wife’s expert witness. I made orders that, henceforth, Mr J would be the expert witness of the wife and that the husband has permission to adduce evidence from Mr K as an expert witness.
Mr K’s affidavit sworn 29 May 2013 identifies a number of aspects of Mr J’s report with which Mr K takes issue. For example, Mr K disagrees with the minority interest discount adopted by Mr J. Mr K values the husband’s interest in the Becker Group at $9,959,000, or $4,400,000 allowing for the fact that he has a minority interest.
Accordingly, the difference is valuations of the husband’s interests in the Becker Group is, currently, the difference between the $4,400,000 estimated by Mr K for the husband and the $14,522,887 estimated by Mr J for the wife.

The Hearing

At the hearing the wife relied on the following documents:
·her Amended Application in a Case filed 23 May 2013;
·her Financial Statement sworn 23 May 2013;
·her Affidavit sworn 15 April 2013;
·her Affidavit sworn 23 May 2013; and
·the Affidavit of Elda Bradford sworn 23 May 2013.
Counsel for the husband did not seek to cross-examine the wife. Accordingly, I accept her evidence.
Counsel for the husband submitted that on the basis of the wife’s latest financial statement, the wife has more than $60,000 in cash and shares on which she should rely before seeking partial property settlement from the husband. However, in that statement the wife also deposed that there was a shortfall of $666 per week between her weekly income and her weekly expenditure. Counsel for the wife submitted that the difference between her income and her expenses each week was being met out of that capital.
The husband initially only sought to rely on his affidavit sworn 26 April 2013, however on the last day of hearing he also sought to rely on his affidavit sworn 6 August 2013. Counsel for the wife did not oppose the husband’s reliance on the second affidavit and I granted leave for him to do so.
Counsel for the wife cross-examined the husband extensively about his interests and positions in various entities. The husband tended to give long and tangential answers. He certainly covered a great deal of his financial history. He was a polite witness.
The husband’s evidence was that he is employed part-time as a consultant for G Pty Ltd and in that capacity receives an income of approximately $10,000 to $15,000 a year. The husband stated that the home he lives in, which is the former matrimonial home, is owned by G Pty Ltd, but that he is responsible for all outgoings and mortgage repayments. The husband’s evidence was that there are three directors of G Pty Ltd: the husband, Mr D and Mr C Becker. The husband conceded that the only financial statement he has filed in these proceedings does not reflect the mortgage repayments for which he now says he is, and was, responsible.

In that statement which was sworn on 10 October 2011 the husband deposed to finances as follows:
·Average weekly income of $2,688
·Weekly personal expenditure of $1,048
·Property owned by the husband of total value $250,950
·Superannuation of total value $958,839
·Liabilities of total value $2,132
·Total financial resources of $500,000
Annexed to the financial statement was a list of entities in which the husband said he had an entitlement or interest. The list included two corporations, the three family trusts and 28 unit trusts.
In his affidavit sworn 26 April 2013 the husband deposed that his taxable income was $10,418 for the year ending 30 June 2010 and $27,084 for the year ending 30 June 2011. He also deposed to receipt of a pension from the E Superannuation Fund of $97,200 per annum. The husband deposed to expenses of $113,814 per annum.
There are personalities and entities which figure regularly in the husband’s description of his financial affairs. I will record some of the evidence below. Unless otherwise specified, the evidence is from the husband.

The D Family

The husband has had a close relationship with the D family since the husband met Mr L D when they were both at primary school. Mr L D’s father, Mr M D, was involved in a manufacturing business and then purchased a number of blocks of apartments in partnership with Mr Mr N. After Mr M D passed away, Mr L D renovated the apartments and sold them at a profit. Mr L D then invited the husband to participate in a new business venture, a venture into which the D family put most of the capital. The husband took up the offer.
The husband lookeded after Mr M D’s financial interests. Mr M D passed away approximately two years ago and the husband has continued a relationship with Mr M D’s son, Mr D. Mr D is a director of G Pty Ltd and the guardian of the Becker 1996 Trust. The husband’s evidence was that for the last 25 to 30 years the husband and the Ds have purchased and developed a large number of regional and sub-regional shopping centres, as well as six purpose built ‘bulky goods’ stores such as Officeworks or Harvey Norman, and a nursing home.
The husband’s evidence was that there were approximately fifteen different people or families who contributed capital to a number of business ventures on a regular basis and that, as the family members who were originally involved have passed away, their children have succeeded them in their positions in the various trusts and companies. The husband’s evidence is that in addition to the Becker family, the D and N families, the O family, the P family, the Q family and the R family invested in this way and generationally.
The husband has been at the helm of the Becker family investments for many years now and he has had the opportunity to observe management of other families’ interests passing into the hands of their younger members. At times, his evidence carried a sagest quality. He was critical of some of the children from other families for removing, rather than reinvesting, capital and talked about the wealth that was created by older generations being frittered away by the younger generation. For example, the husband said of one family (whom he named in the course of his evidence but whose details it is neither necessary nor appropriate to record in these reasons):
When [Mr X] passed away, he had two sons; those sons have a capacity to, I don’t know, eat up the capital. So they cannot get enough money, and then their children in turn don’t work; they’re quite happy to try and live off the estate so that the – whatever wealth has been created is going down the – has been wasted.
The husband in his evidence and through his counsel stated that the Becker family have borrowed from the D family over the years, in the range of $10 million, and still owe approximately $2.5 million. Central to the husband’s explanation of why he does not have direct or even indirect control of entities and assets which are the culmination of his life time of work and financial dealings is that he ceded ultimate control of everything in the “bucket entities” to Mr D as security for the borrowings outstanding from time to time by the Becker family to the D family. The husband clarified that the “bucket entities” are the entities which hold valuable assets. It was conceded by the husband that Mr D has no interest in assets of the Becker family over and above his security interest which it is said is protected by Mr D having ultimate control of all trusts.

The Becker 1996 Trust

The assets of the Becker 1996 Trust include the former matrimonial home at S Street, Suburb T, in which the husband lives. There is a mortgage over the property held by ING. The husband’s evidence was that the property is valued at approximately $1,600,000 and the mortgage is in the range of $700,000–$750,000. The husband’s evidence was that he makes most of the mortgage repayments and Mr C Becker occasionally assists him with some of the repayments.
The husband’s evidence on 4 July 2013 was to the effect that Mr D is the appointer and guardian of the Becker 1996 Trust. However, by affidavit sworn 6 August 2013 the husband purported to correct errors in his evidence by deposing that the settlor and appointor of the trust is the late Mr L D, (father of Mr D). Annexed to the later affidavit was a copy of the original Trust Deed dated 18 July 1996 and a copy of the Deed of Appointment of a New Trustee dated 19 June 1997 in which Mr B Becker retired as trustee and G Pty Ltd, a company of which the husband is a director and the sole shareholder, was appointed as the trustee. G Pty Ltd remains the trustee and, in that capacity, has power to transact for the Becker 1996 Trust.
The husband tendered a certified copy of the front page of the Grant of Probate for the Will of Mr L D which was dated 27 January 2011 and identified Mr D as the executor of the Will. Counsel for the wife objected to the husband’s reliance on the document for the purpose of proving that Mr D is now the appointor of the Becker 1996 Trust by way of succession.
The husband’s evidence was that he is also a general beneficiary of the Becker 1996 Trust and also receives a car allowance from the trust. Counsel for the wife acknowledged that the wife is also a beneficiary of the trust.
The husband conceded, in his evidence and through his counsel, that if he is required to make capital payments to the wife as a result of this interim proceeding, such funds would most likely come from the Becker 1996 Trust and may well be by way of a draw down against the ING facility secured by mortgage over the property in which he resides. The husband stressed, however, that if he accessed capital in this way or through the Becker 1996 Trust in general, Mr D may well disapprove on the basis that the same capital could be applied in reduction of the indebtedness of the husband and the Becker family to the D family. There was no evidence as to precisely what would flow from Mr D’s ‘disapproval’ over and above the husband saying that fund raising would have to be a matter of prior discussion between himself and Mr D and drawing on capital, in the absence of such an arrangement, might lead to the D family suing the Becker family. More particularly, on 4 July 2013 the husband was cross-examined by counsel for the wife and questioned by me as follows:
MR WILLIAMS: So the highest level you’ve got is that you were in a discussion process with [Mr D] about intercompany trust loans; is that fair to say?
[MR BECKER]: That’s fair to say.
MR WILLIAMS: Yes. And there is no restriction in terms of you borrowing that money, other than the wishes of [Mr D] preferring you not to do it, correct?
[MR BECKER]: He – if he says that it’s not going to happen, the involvement with the [D] family is such that a catastrophe could happen in regard to the loans if people start suing everybody – this is – end up being somewhat of a mess.
MR WILLIAMS: Well ‑ ‑ ‑?
[MR BECKER]: So if, in fact, he decides – and I say, sitting around the table, one would want to have harmony and a commercial realism to resolve the financial situation.
MR WILLIAMS: So at the end of the day it’s a harmony situation that is causing you to be reluctant to borrow money against that redraw facility which is available; correct?
[MR BECKER]: No. I think that it goes further than that. I do need to be in a position whereby we can carry on, realistically, the business. There are financial stressors on the properties at the present moment.
…
HER HONOUR: Sorry, I think we’re missing out something that we’re going to have to deal with, in any event. But you can – in terms of submitting an application, or drawing down, who would have to sign the documents?
[MR BECKER]: Who would have to sign the document?
HER HONOUR: Yes, you could do that, couldn’t you?
[MR BECKER]: I could do that.
HER HONOUR: Right – in your role as Director of [G]?
[MR BECKER]: Correct.
HER HONOUR: Right. Okay. And that is the legal owner of the [Suburb T] property as trustee for the 1996 trust? Is that right?
[MR BECKER]: The [G] is the trustee of the 1996 trust, yes.
HER HONOUR: Okay. So if you just go ahead and do it, what, if anything, do you anticipate is likely to happen, other than you get $150,000 from the bank?
[MR BECKER]: The relationship – see, in the commercial world, what we – we do is as follows: the parties do not sit and watch every – every penny that might be – be moving around in sums up to, say, $5000, there is a discretion. But when it comes to substantial sums of money, the parties meet – and it may not be in the same room, but there’s a telephone conversation and it goes on all the time. If there are major matters or drawings or expenses, there is a flurry of phone calls, there is an agreement, and if, in fact, there’s no agreement. So there’s room to manoeuvre in running an organisation, but when it comes to major items – and this would be a major item – it would be absolutely incorrect of me to simply say, “I’m taking $150,000.” That ain’t going to work.
HER HONOUR: But what would it – so do you say that when you left court on the last occasion and obtained what you say was [Mr D’s] consent to take another $15,000, right, to pay [Mr J’s] fees, I think, that’s what occurred?
MR BECKER: That’s what occurred.
HER HONOUR: Okay. What would the consequence be of you just doing the $150,000?
MR WILLIAMS: And it was ‑ ‑ ‑
HER HONOUR: How much do you ‑ ‑ ‑?
[MR BECKER]: My guess that he – if that was to occur, if I simply drew a cheque for $150,000 without authority, he would – my guess – change the trustee, remove that, dispose of the – dispose of the property, which he’s at liberty to do.
The husband’s evidence was mere speculation as to what Mr D might do if he did not agree to the husband accessing funds through the Becker 1996 Trust. The husband confirmed that, notwithstanding all of the adjournments in this rather drawn out interim proceeding, he had not initiated any discussion with Mr D about fund raising. By contrast, prior to agreeing to make an earlier interim payment at a mention before me on 14 December 2012, the husband sought that the matter be stood down saying that he wanted an opportunity to obtain Mr D’s approval to access $15,000, which approval the husband alleges was forthcoming.
I am satisfied that the husband had ample opportunity to try to adduce direct evidence from Mr D about fund raising and he offered no explanation as to why he did not do so. Conversely, the husband sought and obtained leave to file an affidavit on the day of final addresses and notwithstanding that the evidence in each party’s case had concluded. I conclude that the husband failed or neglected to adduce evidence from Mr D because any such evidence would not assist his case and I do so consistently with the principles enunciated in Jones and Dunkel (1959) 101 CLR 298.

The Becker 1992 Trust

Initially, the husband’s evidence was that the appointer of the Becker 1992 Trust is Mr D. However, in his affidavit sworn 6 August 2013 the husband deposed that he (the husband) was originally the appointor of the trust but he resigned by Deed of Indemnity dated 19 January 1993 and Mr L D became the appointor. The trustee of the trust is U Pty Ltd. The husband’s evidence was that he is a director of U Pty Ltd as well as a 50 per cent shareholder in the company. Mr B Becker, Mr C Becker and Mr D are the other directors of that company.
Initially, the husband’s evidence was that he is a general beneficiary of the Becker 1992 Trust, however the original Trust Deed which he annexed to his affidavit sworn 6 August 2013 discloses that the sole primary beneficiary of the trust is ‘[Mr Becker of V Street, Suburb I]’.
The assets of the Becker 1992 Trust include a number of investments in unit trusts. A balance sheet as at 30 June 2012 was tendered by the husband and reveals that the trust had total assets of $9.7 million on that date and total liabilities of $9.9 million. Counsel for the husband asserted on 8 August 2013 that the trust’s liabilities are $10,186,000.

The Ms F Becker Family Trust No 1

The husband’s evidence was that the Ms F Becker Family Trust No 1 was established in or about 1978 and that the appointer of the trust is Mr D. However, in his affidavit sworn 6 August 2013 the husband deposed that the guardians and appointors of the trust are the husband, Mr B Becker and Mr C Becker.
The husband’s evidence on 4 July 2013 was that the trustee of the trust is G Holdings Pty Ltd, however annexed to the husband’s affidavit sworn 6 August 2013 are a Deed of Settlement dated 6 June 1978 and a Deed dated 20 April 1995 which disclose that an entity called G Pty Ltd is the trustee. In the context of the Becker 1996 Trust, the husband gave evidence that G Pty Ltd is a company of which the husband is a director and the sole shareholder but there was no evidence identifying the directors of G Pty Ltd. The husband’s evidence was that the beneficiaries of the trust are the children of Ms F Becker. He stated that the last time he had received a benefit from the trust was either before his divorce from Ms F Becker or at around about that time.

W Pty Ltd

W Pty Ltd (‘W’) was registered on 11 October 2010 and the husband’s evidence was that he is the sole director and sole shareholder. During cross-examination the husband conceded that he did not depose to his interest in W in his financial statement. His explanation was that the shares have no value as the company is solely a corporate trustee.
Counsel for the husband submitted that W is trustee for the W Unit Trust. During the husband’s evidence he frequently referred to W. However, on reflecton, it is unclear when he was referring to the company and when he was referring to the unit trust
The husband’s evidence was that W holds 30 of the 90 shares in X Pty Ltd. Counsel for the husband stated that the beneficial owner of W is the Becker 1996 Trust.

X Pty Ltd

The husband’s evidence was that X Pty Ltd was incorporated in approximately April 2013. The directors of this company are the husband, Mr Y (who is a tradesman) and Mr Z (also a tradesman). They are also shareholders in equal parts. The husband’s shares are held by W, of whom the husband is the sole director and shareholder. The husband’s evidence was that X Pty Ltd acts as trustee for the X Pty Ltd Trust, which is a unit trust. The husband said that some of the units were held by AA Pty Ltd, a trust, of whom the trustee is W.
The bank statements for X Pty Ltd which were tendered by the wife reveal a series of sums of money transferred into the company’s bank account:
·$37,000 was deposited on 30 May 2013. The husband’s evidence was that this sum was received from W.
·$20,000 was deposited on 20 March 2013. The same sum of money was withdrawn from the bank account of the Becker Group 2011 Trust on the same date with the transaction description, “Loan shot X”.
·$30,000 was deposited on 19 March 2013. The same sum of money was withdrawn from the bank account of the Becker Group 2011 Trust on the same date with the transaction description “loan X”.
The husband’s evidence was that he travels to Country BB on approximately six occasions a year as a consultant for X Pty Ltd. The husband said he was hopeful of receiving director’s fees from the company in the future.

The Becker 2011 Group Trust

The husband’s evidence was that the Becker 2011 Group Trust is a unit trust, in which the units are owned by three other trusts: “CC” trust which holds on behalf of Mr B Becker’s family, “DD” trust which holds on behalf of Mr C Becker’s family and U Pty Ltd of which the husband is a director and 50 per cent shareholder.
The husband conceded that Mr C, Mr B and he control the Becker 2011 Group Trust.

The husband’s financial resources

Counsel for the wife cross-examined the husband about his financial statement in which he had deposed to having financial resources of $500,000. The husband explained that he had provided that estimate after having consulted with three actuaries who had advised him that he had a life expectancy of only another four years. The husband estimated that he was entitled to or expected to receive approximately $100,000 a year as a general beneficiary of various trusts and multiplied that amount by five years to arrive at a figure of $500,000. I find it curious that the husband was prepared to accept the advice of three actuaries about his diminishing and short future life expectancy to the exclusion of asking his doctor but the husband did not appear to be infected with any such curiosity himself. I am left with the impression that the husband has circumscribed his financial resources exclusively by reference to his own necessary expenses and to the exclusion of any allowance from which he could provide for, say, the wife. Significantly, he seeks to avoid an obligation to pay capital to the wife at this interim juncture saying that he has insufficient financial resources to do so and has no direct and indirect control of the assets of the Becker Group.
The husband further stated that his entitlement to financial resources of $500,000 is under the control of the D family by virtue of Mr D having ultimate control of the trusts.
The husband’s explanation for what he described as the ‘comfortable’ lifestyle he enjoyed with the wife during the marriage, but what counsel for the wife described as ‘lavish’, was that essentially he had lived on loans provided by the D family. He stated, ‘the arrangement was very good, and [Mr L D] was very generous’. The husband impressed me as a financially prudent man and I am left with some doubt that the parties were living ‘on credit’. They may have been living in the shadow of commercial loans but I doubt that the husband was spending money to which he was not entitled or could not afford.
The husband also conceded that he did not disclose in his Financial Statement his membership entitlement to $69,950 in the Trustee G Pty Ltd superannuation fund. His explanation was that the superannuation pension he receives from the E Superannuation Fund is streamed through the Trustee G Pty Ltd fund, and so he considered the two funds to be one and the same.
The husband conceded that on 25 June 2012 a sum of $50,000 was deposited into his bank account, removed on the same day and then deposited into the bank account for the Trustee G Pty Ltd superannuation fund. The husband later stated, “the $50,000 has probably gone into that superannuation fund and bounced back again”.
I questioned the husband about why he (the husband), who is clearly financially astute, knows so few details about the entities in the Becker Group and about his influence and control of the Becker 1996 Trust and the other trusts and companies that together form the Becker Group. Part of that interchange was as follows:-
HER HONOUR: …The impression that I could get is that the reason you don’t know who the appointer of the trust is, is that it does not matter who the appointer of the trust is, because they’re not going to take an active or punitive role, or seek to remove the trustee. In your experience, is that correct? Would that be a correct impression?
[MR BECKER]: Well, it depends on the circumstances, whether they would take a punitive action.
…
HER HONOUR: No. Is anything going to happen with the [Becker Group] 2011 Trust that you don’t actually want to have happen?
[MR BECKER]: Yes, at the present moment, there are transactions through the bank account that I don’t want to happen. But not with my consent.
HER HONOUR: The 16,000 and the 20,000?
[MR BECKER]: Yes, [Mr C] did those, and not with discussion with myself. I would have – it is not my desire that those funds be disbursed the way he has done so, but he did that.
HER HONOUR: Well, he disbursed them to an entity of which you are the sole director and shareholder?
[MR BECKER]: Well, part of them, he did…

When questioned further, the husband’s evidence was that on 30 May 2013 a sum of $16,000 was transferred from the Becker Group 2011 Trust to W Pty Ltd who then transferred it to X Pty Ltd, a company which has no formal relationship with the Becker Group 2011 Trust. The husband conceded that he is the only common link between X Pty Ltd and the Becker Group 2011 Trust. The husband’s evidence corresponds with the bank statements for the Becker Group 2011 Trust which show that on 30 May 2013 three sums of $16,000 were transferred out of the account. The first transfer is described on the statement as ‘DD Loan’, the second is described as ‘CC Loan’ and the third states ‘W adv’. As stated earlier in these reasons, ‘CC’ and ‘DD’ are trusts which hold on behalf of Mr B and Mr C’s families respectively.
The husband also gave evidence that on 19 September 2012 a sum of $20,000 had been transferred from the Becker Group 2011 Trust to W Pty Ltd.
Specifically, the husband complained about his son Mr C transferring the $16,000 and $20,000 from the Becker 2011 Group Trust to W:
The funds were to be utilised to complete or advance to the [EE] – the [EE Trust] – that’s the one – the property up in Queensland – has got substantial expenditure there. There’s a very substantial redevelopment going on up there, and the funds are required at the present moment. Mr C has decided to disburse those funds in a particular manner which I find shouldn’t have taken place. That creates animosity between the parties or the directors. They’ve got to sit down to resolve those. It’s very difficult when you’re dealing with directors who are your children. I cannot win that argument because you will know that there’s more pain and suffering as a result of fighting with your children who might, then, in fact not discuss issues with you. I have to then bring in other parties, such as the [Ds], to mediate with the children. I don’t enjoy that. If, in fact, it came to a confrontation, you have a major split in the family – not something I would like to see happen, but it does happen in the best of families.
The husband’s evidence on this included the following:
HER HONOUR: Well, it wouldn’t have happened without you, would it?
[MR BECKER]: But it did.
HER HONOUR: Well, how did it happen without you having ‑ ‑ ‑?
[MR BECKER]: [Mr C] – [Mr C] transferred the funds.
HER HONOUR: And you didn’t transfer them back?
[MR BECKER]: No ‑ ‑ ‑
HER HONOUR: If you’re so affronted by it?‑‑‑
[MR BECKER]: Because that would then – that – that – because there was – if you have a look at the transfers, there is an amount of money that’s gone to [CC] and another trust called [DD], and I have to get – you know, I’ve got to start stomping on people’s toes or hands to ensure that that goes back. So ‑ ‑ ‑
HER HONOUR: All right. Well, who controls how much money went to those two entities, which I don’t recall hearing about?
[MR BECKER]: The what – same amount of money.
HER HONOUR: Right?
[MR BECKER]: The same amount of money.
HER HONOUR: Are those two entities controlled respectively by [Mr C] and [Mr B]?
[MR BECKER]: Yes.
HER HONOUR: Okay. So was [Mr C] just sitting there one day, thinking, “I want $16,000. If I give everyone $16,000, then it will be all right”?
[MR BECKER]: That’s what he did.
HER HONOUR: Okay. So he was certainly benefitting you when he paid the $16,000 because he has no interest in the [X Pty Ltd] business, does he?
[MR BECKER]: No.
HER HONOUR: So the $20,000 last September, what happened to that?
[MR BECKER]: Same thing.
HER HONOUR: So [Mr C] was sitting at his desk, he wanted $20,000, so he gave twenty – he paid $20,000 to [W], who – what did [W] then do with that?
[MR BECKER]: Lend it to [X Pty Ltd].
HER HONOUR: Right. Any agreement with [X Pty Ltd] to perhaps, you know, repay it?
[MR BECKER]: Well, their – the units in [X] are held by [W]. The [W] may be a unit trust, actually, and the units held by the [W] Trust is held by the – I think it’s held by the Becker 1996 Trust in which [Mr C] and [Mr B] are beneficiaries.
HER HONOUR: But you said that the only people with interests in the [X] business were you and three ‑ ‑ ‑?
[MR BECKER]: The [X] – but ‑ ‑ ‑
HER HONOUR: ‑ ‑ industry people?
MR BECKER: Okay. We’re the directors. The units are held by [Mr Y], [Mr Z], and [W]. My recollection is that [W] is a unit trust, and the units in [W] are held by the [Becker] 1996 Trust, and if we have a look at the documentation, I think that’s correct. So that there’s a direct benefit back to the beneficiaries in the [Becker] 1996 Trust.
HER HONOUR: Okay. So [Mr C] is sitting at his desk – I will take you back to the scenario – he says, “I want $16,000”, right? “So if I give [Mr B] and if I give dad $16,000, that will be fine”; right? That’s what you said happened. But it now turns out, as your recollection develops, that he took his $16,000 – hopefully [Mr B] took his $16,000 – but your $16,000 went into an entity which is – the interest may be controlled by you, but it’s beneficially held by a trust of which they are also beneficiaries?
[MR BECKER]: That’s correct.
HER HONOUR: So dad didn’t get it at all, on your scenario?
[MR BECKER]: Sorry?
HER HONOUR: You say you didn’t get it at all?
[MR BECKER]: No, I didn’t personally get that. That’s held in the [X] Trust at the present moment.
HER HONOUR: Well, how does he justify the fact that if he wants $16,000, he gets $16,000, [Mr B] gets $16,000, and somebody else gets yours?
[MR BECKER]: Yes. That gives rise to the dispute with your children and how to reconcile that, so…

Interim property order

There are three possible sources of power for an interim payment such as the wife now seeks. However, the wife confines herself to a partial alteration of property interests under s 79 of the Family Law Act 1975 (Cth) (‘the Act’) as is permitted by s 80(1)(h) of the Act.
In Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466, the Full Court stated at [86] that if an interim order is sought under s 79 of the Act, then the Court “may make such an order as it considers appropriate provided it is satisfied that it is just and equitable to make the order”. The Full Court referred with approval to Zschokke v Zschokke (1996) FLC 92-693 (‘Zschokke’) in which an earlier Full Court identified a number of matters relevant to the making of an order under s 80(1)(h). Contextualising those matters to this case, they are:
(1)The complexity of the husband’s financial affairs;
(2)The need for expert investigation into those affairs;
(3)The relative financial strength on the part of the husband;
(4)A capacity on the part of the husband to meet his own costs;
(5)The inability of the wife to meet her costs.
I assess all of these matters in favour of the wife in this case.
Other factors identified as being relevant in Zschokke were “complexity in the financial affairs of the respondent and a need for an expert investigation into those affairs”, as well as whether the applicant for the order “will be likely to receive by way of property settlement a sum sufficient to cover the advance”.
In Bing & Bing (2007) FLC 93-318, the Full Court refused leave to the husband to appeal an order by Mushin J for the husband to pay the wife security for costs ($200,000) and urgent spousal maintenance ($30,000) with a reservation of power to the trial judge to recategorise those payments as an advance of capital in relation to the wife’s eventual property entitlement. In Bing, the Full Court stated:
23. […] The mere assertion that there are no immediately available funds to provide to the applicant to enable him or her to continue on with the proceedings cannot simply be accepted at face value. If it is apparent that one of the parties controls a vast pool of assets (irrespective of whether those assets are readily capable of liquidation) then the Court has a broad enough discretion to enable an order to be made for the provision of funds by the holder of those assets to enable the other party to continue on with litigation.
…
27. Finally it has been asserted that the husband was and remains unable to raise the capital sum sought by the wife. This is a matter which may become relevant if and when the husband defaults in the order and an enforcement application is brought. However, the question of enforcement of the order remains a separate question from the propriety of granting the order in the first place.
On the evidence of the husband’s expert witness, Mr K, the husband’s interests in the Becker Group total at least $4.4 million. Furthermore, counsel for the husband conceded that the parties’ assets in the Becker Group exceed what is owed by them to the D family. If the husband’s evidence that he owes approximately $2.5 million to the D family is correct then he has property of at least $1.9 million.
To date the wife has received $100,000 from the husband in three payments which are to be characterised by the trial judge and $10,000 by way of a partial property settlement. This is a relationship of between 18 and 20 years of cohabitation. The wife was employed outside the home so made a financial contribution as well as homemaker contributions. The wife will attract a number of matters pursuant to s 75(2) which are likely to result in a positive adjustment to her contribution based entitlement. At an early mention before me the husband estimated the wife’s final entitlement at between $400,000 and $500,000. That is certainly not a figure by which he is in any way bound and nor is it determinative in these proceedings but I note that there was no submission by Mr Wilson of counsel that the relief now sought by the wife would, together with the $110,000 which she has already received, exceed her reasonable final entitlement.
Counsel for the husband did submit that the wife has capital, of approximately $60,000, at her disposal. When I asked him to address the fact that the wife’s unchallenged evidence was that her expenses have substantially exceeded her income by more than $600 per week for a significant period, he responded that it would be more appropriate to make any interim maintenance order retrospective than to take into account that her capital had been eroded by her inability to meet her unchallenged living expenses from her income from employment.
I accept that the wife has access to some modest and finite funds and that the $100,000 she now seeks could exceed what further sums she will spend on legal costs but this is not a strict accounting exercise. I must be satisfied, in all the circumstances, that it is just and equitable to make an interim property order and that the order is proper. Any excess may well obviate the need for the wife to return to court with another application in the event of some unforeseen circumstances. In any event the wife recovers same as part of her entitlement to property and it will be taken into account as such.
It is too early for me to make findings as to the credit of either party.
I have set out much of the husband’s evidence hoping, perhaps in vain, that it can be augmented rather than repeated at the final hearing. My impression is that the husband’s finances are structured so that it appears that he is comfortably provided for but there is nought available, beyond that which he wishes to pay, to satisfy the claims of the wife. The evidence is inconclusive but the picture painted by the husband, through his own evidence, is of considerable wealth accumulated by his considerable skill and business acumen, preserved notwithstanding his bankruptcy, and held for the benefit of his family which, most certainly, includes himself but does not now include the wife. I did not obtain the impression that the husband’s children share with the husband or put into a common pool the wealth which they have generated through their respective occupations. The husband’s description of the other investing families indicates that passing the baton to the younger family members is a one way transaction. The husband presented as someone who is soberly thoughtful about how many years he has left to live but there is every indication that he still steers the Becker family ship insofar as it is comprised of wealth accumulated by him from a lifetime of business and investment. His relatively new ventures in Country BB also indicate that his commercial life is far from over. My current impression is that the husband has not yet passed the baton to Mr B and/or Mr C Becker. Of course, evidence to be adduced by the husband at the final hearing may prove that my current impression is incorrect but this is how I assess the situation now based on the fairly extensive evidence I have heard.
Preliminarily and for the purpose of this interim application, I am satisfied that the relief the wife seeks, by way of a capital payment, is not beyond the reach and capacity of the husband to satisfy. I am satisfied that, in all the circumstances of this case, it is just and equitable to make an interim property order and that an order in the sum sought by the wife is proper.
I will ask counsel to settle the form of the order. The husband should have 45 days in which to make the payment. Any longer will jeopardise the final hearing.
In the course of final submissions, the husband proposed that he sell some public listed shares with a value approximately $46,000 and that the proceeds of sale of the shares be distributed in equal parts to the husband and the wife for their legal costs. The wife opposed the sale of the shares. The husband is currently restrained from selling the shares. Absent agreement by the wife, I will not discharge the injunction against the sale of shares at this stage.

Periodic spousal maintenance

Counsel for the husband did not seek to be heard in opposition to an order that the husband pay $650 per week by way of interim spousal maintenance.
As indicated, the husband conceded during cross-examination that he thought the wife was entitled to $500 per week spousal maintenance. He stated:
…my statement previously was I do not believe that [Ms Becker] should […] be denied funds. The source of those funds need to be resolved. Do I have the capacity to provide them at the present moment other than from the pension? The answer is no. If it’s going to come from the pension, then, and you just outlined that if, in fact, I’m living in the poorhouse, then I will be living in the poorhouse.
The husband’s reference to his pension is to benefits from his self-managed superannuation fund. At the moment, the husband does not share any superannuation or other income or benefits with the wife. The above discussion was that an interim spousal maintenance order may result in the husband having to do without some aspects of the lifestyle and benefits he currently enjoys. The husband also stated, ‘it’s already been resolved and put to me that I should vacate the [former matrimonial home]’, presumably in favour of less expensive accommodation and with any rental income from the property at S Street, Suburb T being applied in satisfaction of the mortgage over the property.
I am satisfied that interim spousal maintenance in the sum of $650 per week is proper for the provision of maintenance for the wife having regard to Part VIII of the Act including such of the matters set out in s 75(2) as are relevant to this case.
I am attracted to the submission by Mr Wilson that the wife’s periodic needs should be met by way of a maintenance order which is retrospective rather than a notional erosion of capital. I will order that the wife’s entitlement to interim spousal maintenance commence on 23 May 2013 which was when the wife filed her application for interim spousal maintenance.
I ask that counsel draw minutes which provide the mechanics for payment of clear funds, in advance, into a bank account specified by the wife. The retrospective element of the order will create immediate arrears of about $12,000. Those arrears should be made good by the husband within 14 days and be paid direct to the wife. This is considerably earlier than the interim property payment but appropriate having regard to the fact that the wife has been without adequate day to day support for a long time.

Costs

It is appropriate that the parties have an opportunity to read these reasons and then make submissions as to costs. I ask each party to consider agreeing that I fix the amount of any costs which may be ordered rather than requiring that the matter proceed to an assessment with a Registrar which would be a costly and time consuming exercise..
If there are to be written submissions as to costs, the submissions will be limited to 3 single sided pages of double spaced type in font 13. Of course I am happy to take submissions orally.

I certify that the preceding one hundred and eight (108) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett delivered on 7 October 2013.

Associate:

Date: 7 October 2013

[2013] FamCA 778

7 October 2013

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Legal Concepts

Remedies

Costs