Bertalan & Shu
[2023] FedCFamC1F 15
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Bertalan & Shu [2023] FedCFamC1F 15
File number(s): BRC 7798 of 2018 Judgment of: BAUMANN J Date of judgment: 24 January 2023 Catchwords: FAMILY LAW – PROPERTY – Where the husband filed his trial material out of time – Where the husband asserts properties purchased by the Second Respondent are held on trust on behalf of the husband and wife – Where the wife and Second Respondent dispute the husbands assertions – where the wife bought an Application for summary dismissal – Where husband’s application summarily dismissed Legislation: Family Law Act 1975 (Cth) ss 45A, 78, 79, 102NA
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 3.15, 10.09, 10.26, 10.27
Cases cited: Bigg & Suzi (1998) FLC 92-799
Munnings v Australian Government Solicitor (1994) 68 ALJR 169
Ritter & Ritter & Anor (2020) FLC 93-957
Webster v Lampard (1993) 177 CLR 598
Division: Division 1 First Instance Number of paragraphs: 40 Date of hearing: 25 January 2022 Place: Brisbane Counsel for the Applicant: Mr Casey Solicitor for the Applicant: HCM Legal Counsel for the First Respondent: Mr Dodd Solicitor for the First Respondent: Life Law Solutions Solicitor for the Second Respondent: Litigant in person ORDERS
BRC 7798 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR BERTALAN
Applicant
AND: MS SHU
First Respondent
MS NUAN
Second Respondent
order made by:
BAUMANN J
DATE OF ORDER:
24 January 2023
THE COURT ORDERS:
1.That the husband’s Application filed 02 November 2021 for declarations that the Second Respondent holds properties at C Street, Suburb D, E Street, Suburb D and F Street, Suburb D as Trustee for and on behalf of the husband and wife, is summarily dismissed.
2.That the Second Respondent is removed as a party to these proceedings.
3.That these proceedings are listed for Case Management Hearing before the Honourable Justice Baumann at 9.30am on 16 March 2023 in the Federal Circuit and Family Court of Australia in Brisbane.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Bertalan & Shu has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BAUMANN J:
INTRODUCTION
In July 2018, Mr Bertalan (“the husband”) (now aged 84 years) commenced property proceedings against his wife Ms Shu (“the wife”) now aged 58 years.
It is agreed the parties were married in Country B in early 2001, but lived as a couple in Australia for most of their marriage, until separation on 27 June 2018.
When the husband commenced proceedings he asserted, and continues to assert, that the wife’s biological daughter Ms Nuan (known and referred to in these Reasons as “Ms Nuan”) who is now 30 years of age, held property at:
(a)C Street, Suburb D (“the C Street property”);
(b)E Street, Suburb D (“the E Street property”); and
(c)F Street, Suburb D (“the F Street property”),
(collectively called “the properties”) on trust for the husband and wife as tenants in common.
Although the wife and Ms Nuan have consistently rejected such an assertion, the history of the proceedings has been prolonged due to, as contributing factors, the lack of legal representation by the husband; the husband’s poor health and language skills; the husband’s failure to provide evidence in support of this bland assertions.
Although the matter was listed for a final hearing on all property issues for three days commencing 20 April 2020 before Justice Forrest, the trial was vacated by his Honour, it seems at least because the husband had failed to file trial material and make discovery.
The Applications were listed before me, first for a Case Management Hearing on 29 March 2021, when the matter was listed for hearing for two days commencing 12 August 2021, however by 8 July 2021, it was apparent that the husband had not done any preparation for trial despite the application of s 102NA of the Family Law Act 1975 (Cth) (“the Act”) having been identified as early as 29 March 2021. Although Ms Nuan did not obtain legal representation (she being a highly educated, articulate and health professional) her affidavit material reveals compliance with earlier directions for discovery by her.
On 17 September 2021, a solicitor then acting on behalf of the husband explained to the Court that she was having extreme difficulties in obtaining coherent and consistent instructions from the husband such that she had not been able to comply with Order 2 (made 8 July 2021) by having the husband file one consolidated affidavit of evidence in chief by 9 September 2021.
The wife and Ms Nuan were, understandably, becoming frustrated by the husband’s failure to comply with Court directions and on 17 September 2021, the following further orders were made:
1.That if the solicitor for the Applicant is unable to file and serve within twenty eight (28) days his affidavit of evidence in chief directed to be filed and served pursuant to the Order dated 8 July 2021, then any application to seek the appointment of a litigation guardian on behalf of the Applicant pursuant to r 3.15 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), be filed and served on or before 1 November 2021.
2.That the First Respondent be entitled to attend [G Cemetery] and take steps to remove her photograph or image from a stone which is meant to identify the final resting place of the parties (who are both still alive but are no longer in a relationship).
3.That the First Respondent’s costs of today be reserved.
4.That these proceedings be adjourned for Case Management Hearing at 9.30am on 4 November 2021 in the Federal Circuit and Family Court of Australia Division 1 at Brisbane.
No application for the appointment of a litigation guardian was filed, with the husband retaining new solicitors, such that on 4 November 2021, Mr Casey of Counsel appeared for the husband and informed the Court that the husband’s consolidated affidavit would be filed by 19 November 2021. It was filed on 24 November 2021. However on 2 November 2021, an Application in a Proceeding was filed by the wife seeking the following orders:
1.That in accordance with Rule 10.09(1)(d) of the Federal Circuit and Family Court of Australia (Family Law Rules) 2021 the Application of [Mr Bertalan] filed 13 July 2018 be dismissed.
ALTERNATIVELY
2.That in accordance with Rule 10.26(1)(a) of the Federal Circuit and Family Court of Australia (Family Law Rules) 2021 the Applicant [Mr Bertalan] is in default.
3.That the Application of [Mr Bertalan] filed 13 July 2018 be dismissed under Rule 10.27(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
On 22 November 2021, the wife’s Application effectively for summary dismissal (on two alternate grounds) was adjourned for hearing to 25 January 2022. That hearing, on the papers and submissions, proceeded with Mr Dodd of Counsel appearing for the wife (and presenting written submissions); Mr Casey appeared for the husband (who made oral submissions) and Ms Nuan appearing for herself and adopting the submissions of Mr Dodd.
The Court expresses its regret that it has not provided these Reasons more quickly.
MATERIAL RELIED UPON
The wife relied upon:
(a)Affidavit filed 27 March 2020;
(b)Affidavit of Ms Nuan filed 26 March 2020;
(c)Affidavit of Ms H filed 26 March 2020;
(d)Affidavit of Ms J filed 27 March 2020;
(e)Affidavit of Ms Nuan’s father filed 27 March 2020; and
(f)Affidavit of Mr K filed 27 March 2020.
The husband relied upon:
(a)Affidavit filed 24 November 2021;
(b)Affidavit of forensic accountant Mr L filed 27 February 2021;
(c)Annexures “MB9” and “MB12”.
PRINCIPLES TO BE APPLIED
As will become apparent, where the Court will order that the Application of the husband seeking orders relating to the three properties shall be dismissed, that these Reasons are directed to the Application for summary dismissal and not, as was sought in the alternative, dismissal for failure to comply with an Orders made 8 July 2021 and 17 September 2021. As explained at the hearing, the Court would only consider the alternate relief if the primary application was not successful. In any event, by the time of the hearing, the husband had filed his affidavit, although out of time.
Section 45A(2) of the Act provides that the Court may make a decree for one party against another if “the court is satisfied that the other party has no reasonable prospect of successfully prosecuting proceedings or that part of the proceedings”. Furthermore, a defence or proceeding need not be:
(a) hopeless; or
(b) bound to fail;
to have no reasonable prospect of success.
Rule 10.09 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) provides that:
(1)A party may apply for summary orders after a response has been filed if the party claims, in relation to the application or response, that:
(a) the court has no jurisdiction; or
(b) the other party has no legal capacity to apply for the orders sought; or
(c) it is frivolous, vexatious or an abuse of process; or
(d) there is no reasonable likelihood of success.
It is not controversial that in determining whether the husband’s application that Ms Nuan holds the three properties on trust for him and the wife, has no reasonable likelihood of success, I must take into account the material on which the Respondent seeks to make out the case, or as often expressed take the Respondent’s case “at its highest” unless the Respondent’s version is inherently incredible or unreliable (see Munnings v Australian Government Solicitor (1994) 68 ALJR 169 at [171]; Bigg & Suzi (1998) FLC 92-799; Webster v Lampard (1993) 177 CLR 598 at [608] as referred to at [66] in the recent Full Court decision of Ritter & Ritter & Anor (2020) FLC 93-957).
I begin that examination of the Husbands evidence now.
HUSBAND’S CASE
It should, at the commencement, be noted that the evidence of the husband has not been tested, however such application at an interlocutory stage is generally considered on the papers, without the benefit of cross examination.
The husband deposes relevantly, that, inter alia:
(a)the husband and wife commenced a relationship in mid-2000 and were married in early 2021 in Country B and upon his return to Australia (3 months after the marriage) the husband applied for a spouse visa for the wife. Although initially rejected, an appeal against the rejection was successful and the wife and her daughter Ms Nuan (aged approximately 10 years) were able to enter Australia and have lived here since then;
(b)the wife took “control of all our finances including funds I received from my government aged pension” (approximately $395 per week after deduction of Department of Housing fees) but only gave the husband $50 per week. The husband says the wife also received “a pension as my carer”;
(c)the wife would travel to Country B at least once each year and on two occasions twice in one year. He says he was often left in a position where he had no money and would have to borrow money “from my family which would take me a long time to repay from my minimal allowance”;
(d)separation occurred after an altercation on 13 June 2018, and, the husband claims, after years of being badly treated by the wife;
(e)at paragraph 31, the husband says in Country B he noticed the wife would spend a “significant amount of time on the computer” and he interpreted her actions and words to mean the wife was “trading shares on the [Country B] stock market”;
(f)the husband assumed that after the wife came to Australia she would still use a computer (initially at her sister’s home) and then after a computer was purchased, at the family home “for stock trading”;
(g)at paragraph 36 the husband asserts that:
each occasion that [the wife] would travel to [Country B] she would take large sums of cash with her to invest into the [Country B] stock market. I knew this because [the wife] told me she was taking extra money for the stock market. She said to me words to the effect of ‘to make money there you need to have money there’.
(h)the wife would take amounts in cash “of up to $20,000”;
(i)the husband claims that “in around 2015, [the wife] told me that our share portfolio had reached the value of approximately $1,000,000 (Australian Dollars)”;
(j)the wife agreed, the husband says, to withdraw funds from Country B and transfer the funds to Australia, which she did before the market crashed in Country B – I infer, from the husband’s evidence, sometime in 2015;
(k)the husband alleges that the three properties purchased between 2015 and 2016 were “funded” by the husband and wife as Ms Nuan was only 22 years of age at the time, although she was a university graduate and had just commenced working;
(l)the E Street property was purchased for $570,000 in mid-2015. The parties inspected the property and the husband says:
(i)$5,000 was paid from the joint Commonwealth Bank account;
(ii)a balance of deposit of 25 per cent of the purchase price (approximately $140,000) was “paid from our stock market funds in [Country B]”,
at paragraph 61, the husband says that rental was received “in cash” without receipts being given to tenants so that their government benefits would not “be cut”;
(m)the C Street property was purchased in late 2015 for $592,000. The parties inspected the property and the husband says he directly negotiated a reduced price with the owner. The husband says the property was purchased “outright and unencumbered by mortgage”. He says the initial deposit of $5000 was paid from the joint Commonwealth Bank account with a further $63,000 paid from the joint personal account. Rental on the property was paid in cash;
(n)the F Street property was purchased in mid-2016 for $488,000, with a deposit of $10,000 coming from the Commonwealth Bank account with the “remainder of the purchase price” secured through a M Group Limited mortgagee;
(o)the husband concedes that each of the properties was purchased in the name of Ms Nuan – a situation he was not happy with and further, particularly the F Street property, a purchase he says Ms Nuan did not wish to be involved in;
(p)at paragraphs 93 and 94, the husband gives details of various rental payments he claims were made to the Commonwealth Bank account which between mid-2015 and early 2018 totalled $10,640;
(q)at paragraph 95, the husband alleges that a number of house related payments (variously described as “property”, “rent”, “mortgage”, “house”, “[M Group Limited] insurance”, and “loan” between mid-2015 and mid-2017 totalling $42,408.30 were paid from the joint Commonwealth Bank of Australia account;
(r)although the husband says “as far as” he was aware Ms Nuan made no contributions towards the mortgage, he carefully does not claim either he or his wife made such contributions beyond the amounts set out earlier;
(s)he says he did repairs to the properties. At paragraph 103 to 105 the husband alleges the wife would prefer to use cash for transactions and would keep a “large sum of cash under her pillowcase on the bed”. At paragraph 106, relying on “MB8” the husband says that in the period mid-2010 to early 2018 “significant cash withdrawals from the joint […] account” were made;
(t)in early 2013, the husband received over $20,000 from a personal injuries award which was deposited to the joint Commonwealth Bank of Australia account (see “MB9”), and Ms Nuan paid from about early 2014 approximately $250 per fortnight to her mother, although annexure “MB10” only covers a period to early 2014 (some six weeks). Additionally in mid-2017, the husband received a further personal injuries claim award for around $6,000 (nett) deposited to the Commonwealth Bank of Australia account.
Furthermore, the husband relies on a report of forensic accountant Mr L, filed 28 February 2020 who was retained as a single expert to report on the “source of funds used to purchase” the three properties. In this role, the he had access to significant documents including bank accounts for the joint Commonwealth Bank of Australia account (number …. …08) and various bank statements for accounts conducted by Ms Nuan.
In short, Mr L was aware of the competing positions of the parties as set out at paragraphs 3.3 and 3.4 of his report namely:
(a)the husband claims that the properties were purchased using the parties’ joint funds and mortgage payments were met by rental payments received from tenants in the properties. The properties and mortgages were held in the daughter’s name so that the parties could continue to receive government benefits and carer allowances; and
(b)the wife and daughter claim the properties were purchased by the daughter using funds loaned to her by her father and mortgages provided by Australian banks.
At paragraph 3.7, Mr L says he had been provided with a copy of a loan agreement dated early 2017 between Ms Nuan and her father Mr N for total alleged advances of 880,000.
At paragraph 2.1, a summary of the expert’s opinion is set out and reproduced now:
2.0 SUMMARY OF OPINION
2.1 A summary of my opinion is set out in the table below:
CONTRIBUTIONS TO PROPERTY PURCHASES FIRST PROPERTY
$SECOND PROPERTY
$THIRD PROPERTY
$KNOWN PURCHASE COSTS 591,150 604,490 506,618 Source of Funds
(based on bank statement descriptions):Bank loan 456,000 - 429,500 Parties - 65,000 10,000 Daughter 2,236 12,900 20,000 Father 61,182 68,000 - Unknown parties 53,018 198,564 47,122 Cash deposits 18,660 - - TOTAL SOURCES INDENTIFED 591,096 344,464 506,662 Unreconciled amount 54 260,026 (4) Table 1
2.2 I note the following:
(i) Known purchase costs have been determined with regard to the source information provided to me and my own research. Details of these sources and a breakdown of the known purchase costs are set out in Section 5.0 of this Report;
(ii) I have identified the sources of funds by tracing relevant transactions in the provided bank statements. Details of the relevant transactions, and my specific assumptions, are also set out in Section 5.0 of this report;
(iii) Amounts attributed to ‘Father’ and ‘Unknown parties’ are comprised of nine transfers made to the Daughter’s account […26]. The transaction description of each of these transfers includes a name, which I have assumed is the sender of funds in each instance. I have discussed these transfers in detail at Section 6.0 of this Report; and
(iv)The unreconciled amount represents the amount of known purchase costs that I have not identified in the provided bank statements.
2.3 I have identified further bank accounts and sources of information that may be relevant to this matter, but for which I have not sighted documents. A discussion of these items is set out at Section 6.0 of this Report.
It is clear from the totality of Mr L’s report, the he might have been assisted by having access to other documents, and as a result, there are some limitations identified in his report.
TAKING THE HUSBAND’S CASE AT ITS HIGHEST
The husband says that with income from two pensions only – which totalled approximately $40,000 per annum – and after payments of living expenses, and trips annually at least to Country B, between 2011 and 2015 – savings were made that enabled modest investments to be undertaken on the Country B stock market, which enabled $1 million in stock portfolio to be created.
There is no documentary corroboration in the evidence to support this allegation. There is no evidence that significant funds came to the husband and wife from Country B into Australian bank accounts in their control. I regard the husband’s suggestion as “inherently incredible”. In such circumstances, the Court is entitled to take into consideration other evidence to explain or support the husband’s assertions. The evidence of Mr L, holistically, does not do so – although his opinion that the husband and wife contributed $65,000 to the acquisition of the C Street property does support the husband’s case at first blush. I deal with that issue shortly.
The evidence offered to the Court by the wife, although again untested, provides a clear foundation for how substantial funds came to Australia from Ms Nuan’s biological father. It is not appropriate for the Court to ignore the evidence, where the husband’s evidence is so incredible.
I accept the submissions of Mr Dodd (at paragraphs 17 and 18) which is broadly consistent with the evidence of Mr L.
At all times, for each property, the legal owner has always been Ms Nuan and, where bank security was required for loans, she is the only one who has been burdened with the legal obligation to meet bank payments.
I accept, on the husband’s case and supported to some extent by Mr L, that some modest payments can be traced from the joint account – the largest of which was the payment to O Lawyers from the joint account, of $63,000 in early 2016. Whilst the husband points in his evidence to that payment, curiously he did not adequately explain how the source of the funds into the account to meet this payment. Annexure “MB3” reveals two deposits were made of $60,240.70 and $818.10, however Ms H (Ms Nuan’s aunt) deposes to being the source of the funds. No other explanation is offered by the husband – other than in some way these funds represent proceeds coming back into Australia from the alleged Country B stock portfolio.
The receipt and use of rental income is murky to say the least. I accept some intermingling of income from the properties had taken place between the parties and Ms Nuan – but in my view, of such modest and uncertain proportions as not to be a corroboration of the husband’s case of substantial contributions.
The receipt by the husband of a personal injuries payment in early 2013 – over two years before the purchase cannot be demonstrated by the husband as being available for the purchase of the properties.
CONCLUSION
It is common ground that if the three properties (or a substantial proportion of their equity) do not form part of the divisible property pool between interests of the husband and wife, then sadly there is little other property to divide.
Whilst I accept it is probable that the husband (and his family) truly and honestly believe that:
(a)the loans from the biological father of Ms Nuan and other relatives; and
(b)the clear contributions made by Ms Nuan in managing the income in a way as the legal owner is obliged and entitled by law to undertake,
are all shams and that the true source of the funds is some accumulated share portfolio in Country B, the evidence of the husband is such that I find his claim has no reasonable prospects of success.
It would further be an abuse of process to allow the husband to prosecute his claim in the hope that his very weak case might get stronger, through cross examination of the wife, Ms Nuan and the family who have given evidence of the loans they made and, in most cases, have supported their evidence with foreign bank records.
I do not accept that everyone (other than the husband) have been involved in some sort of designed undertaking to move funds from Country B to Australia for some ulterior or improper purpose, any more than I can accept, taking the husband’s case at is highest, a stock portfolio of $1 million in Country B was created.
ORDERS
I will dismiss the husband’s applications for orders and/or declarations under s 78 of the Family Law Act 1975 (Cth), directed to the three properties owned by Ms Nuan. I will remove her as a party to the proceedings.
In view of the limited property amenable to orders under s 79 of the Act, I will give the husband and wife 30 days to try and negotiate final property orders.
The matter will be listed for Case Management Hearing at 9.30am on 16 March 2023.
I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann. Associate:
Dated: 24 January 2023
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