Chang and Liao and Ors
[2009] FamCA 617
•17 June 2009
FAMILY COURT OF AUSTRALIA
| CHANG & LIAO AND ORS | [2009] FamCA 617 |
| FAMILY LAW – PROPERTY SETTLEMENT – Disclosure – Assets and Liabilities – Contributions – Adjustments |
| Family Law Act 1975 (Cth) ss 75 & 79 |
In the Marriage of Hickey (2003) 30 Fam LR 355
CJT and Anor & DAW & DJW [2006] FamCA 270
In the Marriage of Omacini (2005) 33 Fam LR 134
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) 12 Fam LR 139
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414
Weir and Weir (1993) 16 FamLR 154; FLC 92-338
Black and Kellner (1992) FLC 92-287
Giunti and Giunti (1986) FLC 91 -757
Mezzacappa and Mezzacappa (1987) 11 Fam LR 957
| APPLICANT: | Ms Chang |
| FIRST RESPONDENT: | Mr K Liao |
| SECOND RESPONDENT: | Mr H Liao |
| THIRD RESPONDENT: | C Pty Ltd |
| FILE NUMBER: | SYC | 1271 | Of | 2008 |
| DATE DELIVERED: | 17 July 2009 |
| PLACE DELIVERED: | Sydney |
| JUDGMENT OF: | Judicial Registrar Loughnan |
PLACE HEARD: Sydney
| HEARING DATES: | 19 & 20 March 2009 & 8 May 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT WIFE: | Mr T. Hodgson |
| SOLICITOR FOR THE APPLICANT: | Austin Haworth and Lexan Legal |
COUNSEL FOR THE RESPONDENT HUSBAND: | Ms P. Carr | |
| SOLICITOR FOR THE RESPONDENT HUSBAND | Accentro Legal | |
| COUNSEL FOR SECOND AND THIRD RESPONDENTS: | Ms L. Doust | |
| SOLICITOR FOR SECOND AND THIRD RESPONDENTS: | Yau and Wang Lawyers | |
Orders
Within 2 months from the date of these orders the husband shall pay $75,000 to the solicitor for the wife.
The husband and wife are to forthwith do all things and sign all necessary documents to sell by private treaty the property situated at D in the State of New South Wales and in the event that the parties are unable to agree on an issue to do with the price or the marketing of the home they are to request the President of the Real Estate Institute of NSW to make a decision on that issue and will abide by that decision.
Upon settlement of the sale of the D property the husband and wife shall cause the net proceeds of sale to be distributed in the following manner and priority:
(a)Firstly, to discharge the mortgage to the Commonwealth Bank secured on that property.
(b)Secondly, to pay all costs and expenses of the sale including legal costs and disbursements.
(c)Thirdly, in payment of agent’s commission and any advertising expenses.
(d)Fourthly, to meet the costs of the President of the Real Estate Institute of NSW or his delegate, arising from any request made by the parties pursuant to these orders;
(e)Fifthly, in the payment of the remaining net proceeds to the wife.
Otherwise, the husband and wife are each solely entitled, to the exclusion of the other, to all other property, chattels and superannuation in their respective names or possession as at the date of these orders and each shall indemnify the other in relation to any debt associated with any asset that is kept by either of them respectively.
In the event that either the husband or the wife refuses or neglects for more than fourteen (14) days to comply with any provisions of these orders, the Registrar of the Family Court of Australia, Sydney is hereby appointed pursuant to Section 106B to execute all deeds and documents in the name of the husband and to do all acts and things necessary to give validity and operation to the said orders.
The operation of these orders is stayed for a period of 21 days and leave is granted to any party on giving at least 48 hours notice to the other parties, to restore the proceedings in relation to the form of the orders by arrangement with the Associate to Judicial Registrar Loughnan.
IT IS NOTED that publication of this judgment under the pseudonym Chang & Liao and Ors is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 1271 of 2008
| MS CHANG |
Applicant
| MR K LIAO |
First Respondent
| MR H LIAO |
Second Respondent
And
| C PTY LTD |
Third Respondent
REASONS FOR JUDGMENT
After a marriage involving cohabitation for more than 12 years the wife and husband cannot agree on a settlement of their property. The wife seeks to set aside certain transactions between the husband and others.
Applications
The wife seeks orders in terms of her Further Amended Application for Final Orders filed 13 January 2009. The property orders sought are as follows:
PROPERTY/FINANCIAL
5.That pursuant to the provisions of Section 106B of the Act, the transaction whereby the Husband sold his right, title and interest in Taxi Licence Plate No. [1] to [C] Pty Limited for a consideration of $285,000.00 in August 2006, be set aside.
6.That upon Order 5 being made, the Husband forthwith do all acts and things and sign and execute all documents necessary to transfer to the Wife his right, title and interest in Taxi Licence Plate No.[1].
7.That in the alternative to Orders 5 and 6 herein :-
(a)that pursuant to the provisions of Section 106B of the Act, the transaction whereby the Husband transferred the net proceeds of sale of Taxi Licence Plate No.[1], being an amount of approximately $280,000.00 to [Mr H Liao] in December 2006 be set aside;
(b)that [H Liao] forthwith repay to the Husband the amount of $280,000.00 and that such sum be paid into the trust account of the Wife's solicitors Messrs Austin Haworth & Lexon Legal Sydney) and thereafter be applied in reduction of the mortgage to the Commonwealth Bank secured upon the property situated at [D].
8.That pursuant to the provisions of Section 106B of the Act, the transaction whereby the Husband transferred his shares in [C] Pty Limited for a nominal sum to [Mr H Liao] in August 2006 be set aside.
9.That the Husband do all acts and things and sign and execute all documents necessary to transfer to the Wife or her nominee, his shares in [C] Pty Limited.
10.That the Husband do all acts and things and sign and execute all documents necessary to transfer to the Wife all of his right, title and interest in the matrimonial home situated at [D] (the "[D] property") free of encumbrance.
11.That the Husband forthwith do all acts and things and sign and execute all documents necessary to discharge the mortgage to the Commonwealth Bank secured upon the [D] property and indemnify and keep indemnified the Wife in relation to the said mortgage.
12.That in the alternative to Orders 5, 6 and 7 herein that the Husband within twenty-eight (28) days pay to the Wife by way of property settlement the amount of $285,000.00.
13.That subject to these Orders, the Husband forthwith assign to the Wife any interest which he may have in any property in the possession of the Wife or under her control, including but not limited to any bank accounts, motor vehicles, insurance policies and superannuation entitlements.
14.That subject to these Orders, the Wife forthwith assign to the Husband any interest which she may have in any property in the possession of the Husband or under his control, including but not limited to any bank accounts, motor vehicles, insurance policies and superannuation entitlements.
15.That each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
16.That the Husband and the Wife do all acts and things and give all consents and execute all documents and writings necessary to give effect to the Orders made herein.
17.That in the event either party refuses or neglects to execute any Deed or Instrument necessary to give effect to the Orders made herein, an Officer of the Court be appointed pursuant to Section 106A of the Act to execute such Deed or Instrument in the name of that party.
18.That the Husband and/or [H Liao] and/or [C] Pty Limited pay the Wife's costs of and incidental to these proceedings.
The husband seeks orders in accordance with a Minute attached to his counsel’s case outline. The property orders sought are as follows:
Minute of Orders
……….
Property / Financial
11. That the parties do all acts and things and sign and execute all documents necessary to sell the real property situate at and known as [D] [Folio Identifier : ] (“the [D] Property”) and that proceeds of such sale be distributed as follows :-
11.1.payment of any and all mortgages secured on the [D] Property;
11.2.payment of any agent sales commission and/or auction fees;
11.3.payment of any legal costs and expenses of such sale;
11.4.payment of relevant sales adjustments; and
11.5.balance to be added to the pool of assets to be divided between the Parties pursuant to these Orders.
12. In the event that Order 13 is granted, that Accentro Legal be appointed as the solicitors for the sale of the [D] Property.
13. That the total net pool of assets be divided as follows :-
75% to the Respondent Husband;
25% to the Applicant Wife;
14. That the Husband and the Wife do all acts and things and give all consents and execute all documents necessary to give effect to the Orders made herein.
15. That in the event either party refuses or neglects to execute any Deed, instrument or document necessary to give effect to the Orders made herein, an Officer of the Court be appointed pursuant to Section 106A of the Act to execute such Deed or instrument or document in the name of that party.
16. That the Applicant Wife pay the Respondent’s costs and incidental costs of these proceedings.
By their counsel’s Case Outline, the Second and Third respondents seek the following orders:
a)The Applicant's Amended Application for Final Orders dated 13 January 2009, to the extent it seeks the Property/Financial orders set out in the Attached Minute of Orders at paragraphs 5, 6, 7, 8 and 9, be dismissed.
b)The Applicant pay the 2nd and 3rd Respondents' costs of the proceedings.
Affidavits
The wife relied on the following documents:
Affidavit of Wife sworn 21 January 2009
Affidavit of Mr R sworn 12 March 2009.
Amended Financial Statement of Wife sworn 13 January 2009
Updated Financial Statement of Wife sworn 18 March 2009
The husband relied on the following documents:
Affidavit of the husband sworn 3 September 2008 and filed 3 September 2008
Affidavit of the husband sworn 16 May 2008 and filed 16 May 2008
Financial Statement of the husband sworn 10 September 2008 and filed 10 September 2008
The Second and Third Respondents rely upon the following evidence:
Affidavit of H Liao affirmed 27 November 2008.
Affidavit of H Liao affirmed 24 February 2009.
The hearing
The proceedings had a relatively short but tortured history. They were commenced by the wife in August 2008. There was an interim hearing on 10 September 2008. She filed a further Application in a Case on 4 November 2008 and that was made returnable on 16 December 2008. That date was vacated on 11 November 2008 when Judicial Registrar Johnston fixed the proceedings for an interim hearing on 2 December 2008. On 2 December 2008 there was no interim hearing but Judicial Registrar Johnston fixed the proceedings for final hearing commencing on 19 March 2009. Orders were made for the filing of evidence for the trial and a readiness hearing was appointed in January. On 5 February 2009 further orders were made to prepare the matter for trial and a further readiness hearing was appointed before me on 25 February 2009. On that date, Mr Lin first appeared for the husband and announced that he had only just taken instructions. I made orders about interpreters and noted that any application to vacate the hearing date should be made to me on notice to the other parties. On 12 March 2009 the matter came before me on the husband’s application to vacate the hearing date. That application was dismissed for reasons that were given on that date.
The trial commenced on 19 March 2009. But for cross-examination of the only lay witness who is not a party, Mr R, the wife’s case was concluded by just after 12.00 noon and the husband’s cross-examination was commenced. Mr R was not immediately available and the parties agreed to interpose him at 10.00 am on 20 March 2009. On the morning of 20 March 2009, but sadly after Mr R had made arrangements to attend Court, the wife’s counsel was told by the counsel for the respondents he was no longer required for cross-examination. Cross-examination of the husband was protracted for reasons that I will come to later. Mr H Liao was sworn in at 2.27 pm and by about 4.40 pm his cross-examination was not completed. I canvassed the options with counsel and it was agreed that the matter could not be properly completed that day. I offered the parties days in the following week or the 8th or 13th of May. Counsel agreed on 8th May 2009 and the matter was adjourned part-heard to that date. Counsel for the wife thought he had about one hour more of cross-examination of H Liao. Cross-examination on behalf of the husband was estimated at less than 20 minutes.
On 8 May 2009 leave was sought and granted to re-open the wife’s case for the purposes of cross-examination of her on behalf of the husband in relation to her income tax returns and certain term deposits. That was done. There was no further re-examination of the wife. Then cross-examination of H Liao resumed. The matter was heard to conclusion, submissions were made and judgment was reserved.
Issues for determination
The issues for determination, are:
1.Whether the transactions between the Husband and C Pty Ltd and H Liao should be set aside upon the basis that these transactions were entered into to defeat the Wife’s claim.
2.Whether the Husband in collusion with his brother, H Liao, has sought to diminish the quantum of the parties’ net asset pool.
3.Whether the Husband has fulfilled his obligation to make a full and frank disclosure of his financial circumstances and whether the Husband has deliberately sought to mislead the Court in relation to the presentation of his sworn evidence.
4.Did the husband at any time owe C Pty Ltd the $608,800 he acknowledged in a document dated 30 July 2006?
5.What did the husband do with the proceeds of sale of a taxi plate in 2007?
6.Does the husband now owe any amount to H Liao or C Pty Ltd and if so in what sum?
7.If the husband does owe those moneys is that a debt that should be taken into account in identifying the net value of the pool of matrimonial assets?
Short History
As at the date of commencement of the hearing the wife and husband were 43 and 55 years of age respectively. They were married in August 1995 and separated on 4 February 2008. They are not divorced.
Children
There are two children of the marriage:
A and W who were born in August 2002 and as at the date of the commencement of the hearing they were 6 years and 7 months of age;
Background facts
The wife, the husband and his brother, H Liao, were all born in China.
The husband and H Liao came to Australia in May 1980.
The effect of the husband’s evidence in cross-examination is that his first job in Australia was working in his Aunt’s restaurant. He then or also worked in a factory for 31/2 – 4 years. He earned about $20,000 per annum.
On 23 March 1981 H Liao established a company called Q Pty Ltd, which changed its name to C Pty Ltd in June 1981. Both the husband and H Liao were the directors of that company and they each held 6 shares. C Pty Ltd initially imported products from Hong Kong. The husband had no involvement in the day to day operation of that business, nor did he provide capital for the business.
From 1982 to 1992 H Liao operated a food importation business. The husband had no involvement in the day to day operation of that business.
In 1986 the husband bought taxi plate number 1 in his own name. From 1986 to the early 1990’s the husband was fully engaged in driving and managing that taxi.
From 1989 C Pty Ltd ran a mixed business in a Sydney suburb.
During the 1980’s the husband received no dividends from C Pty Ltd.
In 1990 the husband bought a two bedroom unit at W, for about $222,000. He bought the unit with the assistance of funds borrowed on a mortgage.
In 1991 taxi plate number 2 was purchased by C Pty Ltd with the proceeds of sale of the mixed business. The husband put no capital towards that purchase.
In 1993 the husband was appointed manager of taxi plate number 2 by C Pty Ltd. The husband and H say that was the husband’s first real involvement with C Pty Ltd.
In their affidavits, the husband and H Liao give different evidence about the basis on which the husband managed this and later acquired taxi plates on behalf of H Liao or C Pty Ltd.
The wife and husband met in China in 1993. In 1995 the husband sponsored the wife to come to Australia.
In 1995 taxi plate number 3 was purchased by C Pty Ltd. About $100,000 was borrowed from Esanda and the balance was contributed by H Liao. The Esanda loan was ultimately paid off by H Liao.
The wife arrived in Australia in 1995. The wife says she brought with her $US8,000 in savings. She did not tell the husband she had that money. The wife was asked in cross-examination why she did not pay for her own airfare if she had savings and she responded to the effect that the husband was marrying her and it was for him to pay the fare. I accept the wife on this issue.
From September 1995 until 1999 the wife worked as a casual factory worker and earned approximately $376.00 per week. From 1995 to 1997, the wife lived with the husband’s parents and contributed $80.00 per week towards family expenses.
In August 1995 the wife and husband were married. The husband owned the W unit which was subject to a mortgage of about $86,000.00. He also owned a taxi plate number 1 and some shares. The wife had savings of some $16,000.00.
In May 1999 the wife and husband purchased the property situated at D for approximately $550,000. The purchase moneys were made up from the proceeds of the sale of the W property, (an amount of $154,041.36), a loan from HSBC Bank of $387,000.00 and approximately $10,000.00 from the husband’s savings.
In June 1999 the husband commenced to manage the taxi business from the former matrimonial home.
The wife contends that she commenced an accommodation business in 2001. The wife says that she was pregnant with the twins when she commenced that business. The husband asserts she started that business in June 1999. Nothing turns on that issue. The wife says that she had one, two or three clients for most of the time since. She received up to $250 per week per cllient and therefore received as much as $750 a week.
The twins were born in August 2002. The wife says that the husband started paying her $150 per week towards housekeeping.
In 2002 H purchased taxi plate number 4 in his own name with finance from Esanda. The husband managed that taxi plate on behalf of H.
When the children were about 18 months of age the husband increased the weekly payment to the wife to $250.
The husband and H Liao say that from about 2004-2005 they had arguments about the company’s earnings.
On 26 May 2005 the wife transferred an amount of $69,030 to her sister in America. That converted to about $US55,000 and was used by the wife’s sister as a deposit on a house. In her affidavit the wife said that the source of the funds was moneys advanced by their mother. In cross-examination the wife said that part of that sum came from the accommodation business income and part from gifts of money made by her mother.
In September 2005 the husband re-financed the home loan from HSBC to the Commonwealth Bank. He contends that H Liao’s restaurant was not doing well and that he paid an amount of $100,000 to H.
The husband contends that he and the wife separated in May 2006. The husband asserted that separation occurred on that date in a divorce application. That application was subsequently dismissed. I take it that the Court did not accept the separation date contended for by the husband. In any event, at about that time the husband moved to live with his mother. The husband says that he lived in the former matrimonial home for a couple of days each week.
In mid 2006 the husband agreed to resign from his position as director of C Pty Ltd. On 30 July 2006 H and the husband entered into an agreement which acknowledged the appropriation of company funds by the husband; that the husband owed $608,800 to the company; that he would have no further connection with the company; and that he released the company from all claims by him. The translation of that document attached to the affidavit of H Liao has the husband acknowledging that he ‘misappropriated’ company funds. The husband does not agree with that translation but agrees that he held company funds.
On 3 August 2006 the husband resigned as a director of C Pty Ltd and transferred his shares in that company to H Liao, for a nominal sum.
In an affidavit he affirmed in September 2008 the husband said that in August 2006 he sold Taxi Plate number 1 to C Pty Ltd for $270,000 and paid the net proceeds of sale of some $255,500 to his brother, H Liao. H Liao denies that and asserts that the husband was paid by C Pty Ltd and no moneys were paid to him. The husband adopted that affidavit before me but during his cross-examination he said that his affidavit of May 2008 was wrong. The husband then reviewed both affidavits and sought to change his evidence on this issue to the effect that he sold the plate to C Pty Ltd for $295,000 and did not pay the proceeds to his brother. Minutes later he said that he sold the taxi plate to C Pty Ltd for $285,000 and after paying CGT and sales tax of $14,500 he cleared $270,500. Although not asserted in either affidavit, the husband said in cross-examination that he paid the $270,500 into an account and withdrew it at the rate of $1,000 a day and paid that money to his wife. He asserts that the payments were in lots of $1,000, sometimes $4,000 or $5,000.
In August 2006 the husband and his brother visited an ANZ Bank in D to deposit money.
The husband says that in August 2006 he paid $136,949.60 in part payment of an asserted debt to C Pty Ltd.
The husband says that in November 2006 he paid $150,000 to C Pty Ltd in part payment of the asserted debt.
H Liao says that on 30 November 2006 he agreed (on behalf of C Pty Ltd) to purchase taxi licence number 1 from the husband for $295,000.
Ministry of Transport records reveal that on 6 December 2006 taxi plate number 1 was transferred by the husband to C Pty Ltd for a consideration of $295,000.
In December 2006 the wife received a loan statement from the Commonwealth Bank which indicates the husband had made redraws totalling $334,000.00 in a six (6) month period.
From April to August 2007 C Pty Ltd paid a total of $285,000 to the husband. It issued cheques for $50,000 to the husband on 18 April 2007, 9 May 2007, 7 June 2007, 4 July 2007, 2 August 2007, and a further cheque for $35,000 on 31 August 2007.
In May 2007 the husband ceased paying the wife’s living expenses and thereafter the wife commenced drawing $500 per week from the CBA home loan account.
The wife contends that she and the husband separated on 4 February 2008.
On 6 February 2008 the wife drew an amount of $7,200 from the Commonwealth Bank joint account for living expenses for herself and the children.
In March 2008 the husband ceased paying mortgage repayments on the D property.
On 3 March 2008 the wife sold her Telstra shares.
On 19 August 2008 the wife received $3,033 by way of child support from the husband.
On 8 September 2008 the wife witnessed the husband depositing money at the ANZ Bank at D.
On 10 September 2008 orders were made by me in the following terms:
1.Until further order each of the parties be restrained from removing or causing the children [A] (female) and/or [W] (male) both born […] August 2002 to be removed from the Commonwealth of Australia without the prior written consent of the other parent AND THE COURT REQUESTED that the Australian Federal Police assist in the implementation of this order and that in addition they place the names of the children on the PASS alert system at points of international departure from Australia pending further order of the Court.
2.That pending further order each of the parties be restrained from doing any act or thing to cause the mortgage to the Commonwealth Bank to be increased by making a re-draw on that mortgage without the prior written consent of the other party.
3.Orders are made in terms of paragraphs 1, 2, 5 and 6 of the Application in a Case filed on behalf of the wife on 15 August 2008 as set out hereunder:
“1.That the Respondent within 7 days pay to the Commonwealth Bank the total amount of arrears presently outstanding in relation to the mortgage secured upon the property situated at [D] as and when they fall due.
2.That the Respondent meet the mortgage repayments to the Commonwealth Bank in relation to the mortgage secured upon the property situated at [D] as and when they fall due.
5.That the Respondent disclose to the Applicant’s solicitor within 7 days particulars of all cash amounts held by him in whatever currency together with particulars of all bank statements and/or transaction histories from 1 January 2006 to date in relation to all bank accounts or accounts held with any other financial institutions in his name or held jointly with any other party or held upon trust for him in the name of any other party or which are subject to his control in Australia or in any other countries including but not limited to the People’s Republic of China.
6.That leave be granted to the Applicant to serve a subpoena upon the Ministry of Transport in relation to the licensing records of the Respondent.”
4.That the husband pay to the Commonwealth Bank $2,000 within seven (7) days from today’s date, to be applied to the mortgage secured on the property at [D] in the State of New South Wales.
5.That the husband file and serve any Amended Response setting out the detail of the living arrangements he proposes by way of parenting orders within fourteen (14) days from today’s date.
6.That the wife file and serve her Reply within 14 days thereafter.
7.The parties are to attend for family dispute resolution by arrangement with the Manager Child Dispute Services AND THE COURT REQUESTED that the Registry arrange for an interpreter in the Mandarin language to assist each of the parties for the purposes of that counselling.
8.The proceedings in relation to interim parenting issues and otherwise are adjourned to the Judicial Registrar’s Call-over at 9:30 am on 20 October 2008 AND THE COURT NOTED the parties have a Case Assessment Conference at 11:30 am on that date.
9.The costs of the parties of and incidental to the appearance today are reserved.
10.Leave to restore the matter to the list on giving 48 hours’ notice to the Court and to the other party.
The wife says that the husband failed to comply with that order in relation to mortgage payments.
On 27 October 2008 the wife received a notice under Section 57(2)(b) of the NSW Real Property Act 1900 from the Commonwealth Bank in relation to the D property.
It is the unchallenged evidence of the wife that interim parenting orders were made. The husband makes no reference to such orders and the terms of the orders are not in evidence.
Credit and Submissions
The evidence of the witnesses
The only witnesses called for cross-examination were the wife, the husband and H Liao. All three witnesses had the assistance of an interpreter but all three gave many answers in English.
The wife gave her evidence in a direct manner and without embellishment. The wife readily conceded many of the propositions put to her in cross-examination. However she was not shaken in relation to her evidence about having $US8,000 savings at the commencement of the marriage; starting the accommodation business in 2001 and not 1999; never receiving $1,000 per week from the husband; earning $300 per week and not $200 per week from 1995; using that income for household purposes and not saving it; never having as many as 4 clients at any one time; the fact that she received some moneys from her mother when she came to stay; the fact that the husband did not move out in May 2006 for the final time. The wife was not asked to concede various aspects of the husband’s case.
One needs to be particularly careful about credit findings and even more so when a witness does not have English as his or her first language. Nevertheless, the husband was a poor witness. Moments into cross-examination the husband called into question the accuracy of his own affidavits. They were affirmed in May and September 2008. The husband said the first affidavit was wrong and that he did not have the contents of either affidavit translated to him before he signed them. He says that his Financial Statement affirmed in September 2008 was prepared in great haste. He said that he did not realise that it was important that the Financial Statement and Affidavits be accurate. The husband has new solicitors and it was not possible to check how the documents were executed. Even if the husband was given the benefit of the doubt in relation to his documents as originally executed, the problems did not stop there.
The husband’s disclosure about the execution of his documents resulted in a halt in the hearing for two hours while the husband reviewed his documents and then adopted as true and correct, amended versions of the documents. Unfortunately, upon the resumption of the oral trial, the husband almost immediately repudiated aspects of the corrected documents. Although he was invited to correct his Financial Statement, he did not. His Financial Statement is inaccurate. For example, in the Statement he is required to identify any income earning members of his household. That section of the form is largely blank, except for the entry “$0.00” against the income of such a person. However he told the Court that he lives with his mother who is in receipt of the age pension. He deposes to receiving no benefit from her expenditure and to no persons receiving any benefit from his expenditure. However, in cross-examination he said that his mother pays the outgoings on her home and he makes no contribution to those costs. He and his mother share the cost of food. It is also likely that the twins benefit from his expenditure when they are with him. His income is greater than the Financial Statement discloses. The husband omitted from the Statement any reference to a debt that he now says he owes his brother and C Pty Ltd of about $300,000. The Statement may well be correct in that regard but the document is inconsistent with his case.
The husband’s case is inconsistent with a representation made by his then solicitor on 10 September 2008. It is his case that he owed over $600,000 to his brother and C Pty Ltd as at 30 July 2006 and has repaid only half. In his presence, his former solicitor told the court in September 2008 that the husband had repaid over $655,000 since September 2005.
Prior to correcting his September Affidavit the husband had deposed as follows:
31.I sold my taxi licence plate [number 1] for $270,000. I paid about $14,500.00 as sale tax and capital gain tax and then send all the net proceeds to my brother.
The husband conceded that he had not sought to correct that evidence, by deleting all of the words after ‘capital gain tax’, until after cross-examination started in the final hearing. He was asked why he gave that evidence in the first place (if it was untrue) and he responded with words to the effect “because I wanted to keep the money”. Of all of his testimony, that answer has the ring of truth about it.
I gave the husband warnings on a number of occasions in relation to the need to be careful about his evidence. At times he was argumentative. On a number of occasions the husband said one thing and moments later said the opposite. The husband’s cross-examination was prolonged by these problems. The husband is not a reliable witness and findings of fact on disputed issues cannot be safely based on his uncorroborated testimony.
The husband’s brother was a poor witness. His version of events does not support his contention that his brother owes him or C Pty Ltd any money. He could not satisfactorily explain why he left the husband managing a taxi plate from 2004 until 30 June 2006 when he suspected all that time that the husband was untrustworthy and thought that he was gambling with company funds. He could not satisfactorily explain why he had paid or caused the payment of nearly $300,000 for the husband’s taxi plate and $125,000 for director’s fees while asserting that the husband owed him or the company nearly the same amount. He did not call evidence that would corroborate aspects of what is an unlikely case. For example he did not call the Accountant for C Pty Ltd. Presumably because that evidence would not help his case.
Submissions
The written submissions on behalf of the wife are as follows:
E. CURRENT FINANCIAL CIRCUMSTANCES OF PARTIES
Property:
Item Ownership Value (H) Value (W)
Property situated at D Joint $1,150,000 $1,150,000
Interest in [C]Pty Ltd* Husband NK NK
Taxi Plate no [1]* Husband NK $295,000.00
Monies paid to [H Liao]
from redraw* Joint $100,000.00 NK
Bank Accounts
ANZ Wife $46.00
NAB (as at 10.09.08) Husband $2,137.41
Motor vehicles
Daewoo 1998 model Wife $ $4,000.00
Husband $
Household contents Husband $10,000.00
Household contents Wife $4,000.00
Superannuation
AMP (as at 10.09.08) Husband $90,000.00
Australian Super Wife $10,978.73
NB*The Wife contends that these items should be included in the net assets pool and in the case of the transfer of the Husband’s interest in [C] Pty Ltd to [H Liao] and the sale of taxi plate [1] to [C] Pty Ltd that these transactions should be set aside as they were made with the intention to defeat the Wife’s claim pursuant to the provisions of Section 106B of the Act.
Liabilities
Mortgage Joint $750,000.00
Loan – [YZ] Wife $20,000.00
Credit card (10.09.2008) Husband $300.00
F. CONTRIBUTION CONSIDERATIONS
1.The Wife was in employment from the date of the marriage in August 1995 until 1999 and contributed the income which he sic earned for the benefit of the family in paying outgoings and household expenses.
2.The Wife was primarily responsible for performing household duties during cohabitation.
3.The Wife was solely responsible for the care and supervision of the children of the marriage during cohabitation.
4.The Wife has been primarily responsible for the financial support of the children of the marriage since the time of separation.
5.The Wife has been primarily responsible for the care and supervision of the children of the marriage since the time of separation.
G RELEVANT SECTION 75(2) FACTORS
1. The Husband is aged 55 years and the Wife is aged 43 years.
2. Both parties are in good health.
3.The period of cohabitation was for some 12 years 5 months (according to the Wife).
4.The Wife has the continuing care of the two (2) children of the marriage which shall continue for a further 11 ½ years.
5. The Husband has a superior earning capacity to that of the Wife.
6.The duration of the marriage has adversely affected the Wife’s earning capacity. The Wife has not worked since 1999 and has no formal qualifications.
7.The Husband has sought to diminish the asset pool available for division between the parties by ostensibly divesting himself of assets since the date he asserts that separation occurred,
8.The Husband has failed to make a full and frank disclosure of his financial circumstances.
HISSUES FOR DETERMINATION
1.Whether the transactions between the Husband and [C] Pty Ltd and [H Liao] should be set aside upon the basis that these transactions were entered into to defeat the Wife’s claim.
2.Whether the Husband in collusion with his brother, [H Liao] has sought to diminish the quantum of the parties’ net asset pool.
3.Whether the Husband has fulfilled his obligation to make a full and frank disclosure of his financial circumstances and whether the Husband has deliberately sought to mislead the Court in relation to the presentation of his sworn evidence.
I EFFECT OF ORDERS AS SOUGHT BY WIFE
Because of the unusual and unsatisfactory nature of the financial disclosure and the evidence of the Husband, it is submitted that the Court should not be unduly cautious in the exercise of its discretion in favour of the Wife, particularly having regard to Section 75(2) factors. The Wife is unable to quantify with precision the net asset pool available for division between the parties. The Wife contends that she should receive by way of property settlement the [D] property unencumbered, together with a cash adjustment of some $285,000.00 (or the transfer to her of Taxi plate no.[1]) together with the Husband’s interest in [C] Pty Ltd, assuming the transfer of his shares to [H Liao] is set aside.
In oral submissions learned counsel for the wife addressed the asset pool.
It is submitted that after May 2006 the husband asserted that he had a liability to C Pty Ltd and or his brother of $608,800. The wife knew nothing about this. There is no written record of any advance to the brother in that sum. A finding on this issue relies on the uncorroborated testimony of the husband and his brother. At that time the husband was a Director and 50% shareholder of C Pty Ltd. The wife’s case is that the husband and his brother concocted a debt owed by the husband to C Pty Ltd to avoid a claim by the wife. The husband drew on the mortgage secured on the D property as to about $300,000 and paid that money to his brother. Then the husband resigned as a director of C Pty Limited and transferred his shareholding to his brother for a nominal consideration. The husband sold taxi plate number 1 to H and at first said that the price of the taxi was retained by his brother. H said that he paid the husband and did not retain those funds. The husband later gave evidence that he paid the price of the cab to the wife. Part of that payment related to a piano. The evidence suggests that the piano was bought at a different time. Then the husband was paid $125,000 in directors’ fees from C Pty Lt.
It is submitted that this entire scenario was a sham and intended to defeat the wife’s claim – that the husband and H Liao thought up a debt of $608,800; the husband drew nearly $300,000 on the D property mortgage and paid that to or for C Pty Ltd; he transferred his interest in C Pty Ltd to H for a nominal consideration; he sold his taxi plate number 1 to his brother and paid the consideration back to his brother.
It is submitted that those transactions should be set aside under section 106B as they were made with the intention of defeating the wife’s claim or had that effect. The wife seeks that the transaction of the sale of the plate be set aside and the plate come back to the pool. In the alternative she seeks that the repayment of the proceeds to H should be reversed.
The wife seeks that she receive the D home without encumbrance, taxi plate number 1 or the proceeds of sale of that plate and the husband’s former interest in C Pty Limited. She cannot succeed in that claim without orders under section 106B.
The wife’s case is not argued on the basis of a particular percentage of contributions or adjustment. It is submitted that the wife was in paid employment from the date of marriage to 1999. Thereafter she had primary responsibility for the children and the household and sole responsibility since separation. Since separation the husband had not met his child support obligation. It is submitted that the conduct of the husband comes within that described in Black v Kellner; and Weir and Weir and therefore the court has a wide discretion.
The husband is 12 years older than the wife, there is no evidence about their health, the wife has the main care of two young children and the husband has attempted to frustrate her property claim.
It is submitted that I should ignore Mr H Liao’s evidence that he could not operate C Pty Ltd if the wife was to hold the husband’s share holding, upon the reversal of the transfer of his shares.
The written submissions on behalf of the husband put the list of assets and liabilities as follows :
Asset
Value
[D property]
$1,150,000
Add back of funds sent by the wife to her sister overseas
$69,000
Household contents - wife
$7,000
Wife’s 1998 Daewoo motor vehicle
$4,000
Add back for wife’s withdrawal of $7,200 from the home loan on 6 February 2008
$7,200
Wife’s superannuation
$10,978
Husband’s superannuation
$90,000
$1,338,178.00
Liabilities
Value
Mortgage to the Commonwealth Bank secured on [D property]
$750,000
Husband’s debt to [C] Pty Limited
$268,451
$1,018,451.00
In short, it is the husband’s case (and the case of his brother H) that the husband had no beneficial interest in C Pty Ltd; that he never put funds into C Pty Ltd; that he was made a Director and Shareholder as a matter of convenience and that he never had any practical involvement in the management of the company beyond managing and driving taxis. The husband first managed a taxi plate for C Pty Ltd in 1993. The submission on behalf of the husband and H Liao is that the husband failed to account to C Pty Ltd for takings on a number of taxi plates. The case goes go on that H Liao became increasingly concerned about the taxi takings in the hands of the husband and the fact that the husband was gambling. H was too busy to address that issue until 2005, when he was planning to give up a restaurant business. The brothers say that there were angry discussions and in 2006 H and the husband settled the matter by an acknowledgment of a debt from the husband to C Pty Ltd of $608,800. The husband resigned and transferred his shareholding back to H Liao for nominal consideration. It is submitted that he paid back $286,949 in two payments – one of $136,949.60 to the vendor of taxi plate number 5 and $150,000 deposited into C Pty Ltd’s account on 1 November 2006. It is the husband’s case that he also paid back amounts of $40,000, $7,500 and $5,000. I am not sure how that arithmetic brings the debt to $268,451. On the other hand it was submitted on the husband’s behalf that according to the evidence of H Liao that the debt stands at $266,036.40. Replacing that figure for the husband’s calculations, that would bring the net pool to $322,141.60. After resigning as a director and expressly abandoning any claim against C Pty Ltd, the husband was paid $125,000 in Director’s fees.
It is submitted on behalf of the husband that if the wife is accepted about separation occurring in February 2008 then the 2006 agreement was not made in the context of the separation. It is submitted that whatever role the husband had after July 2006 he was not permitted to handle money for C Pty Ltd. The husband received $270,000 odd from the sale of taxi plate number 1 which he now says he paid to the wife.
As to why the husband was paid Director’s Fees, the submission is that the H Liao knew that the husband needed money.
The husband seeks 75% of the net pool of assets based on contributions, with no adjustment under section 75(2).
It is submitted that the wife cannot establish an initial contribution of $16,000 while the husband had equity in a unit at W and a taxi plate. Since separation the wife has retained the income from the accommodation business clients. The former matrimonial home was bought with the deposit from the proceeds of the W unit. The wife had 7 years without children. The husband worked throughout the marriage as a taxi driver.
As to section 75(2) the husband is 12 years older than the wife. There are no orders in relation to the children. It is submitted that on the husband’s own evidence of emotional problems, he is unlikely to have much of an income earning future.
The submissions on behalf of the second and third respondents are to the following effect:
· The second and third respondents seek no orders beyond opposing the orders sought by the husband under section 106B;
· In relation to the application to set aside the sale of taxi plate number 1. There was no sale of the plate. In fact the plate was transferred by the husband to C Pty Ltd. Ultimately the husband acknowledged the receipt of a payment for the plate. It is submitted that the Court could not find that the husband sold the plate to a third party and gave the proceeds to his brother. Therefore I cannot make the orders proposed at paragraph 7 in the order sought;
· In relation to the orders sought at paragraphs 5 & 6 – in order for a section 106B order the court would need to be satisfied that the transaction was intended to defeat an order of the Court or would have that effect. It is submitted that there was no order in place at the time of the transfer and therefore the transaction could not defeat an existing order. As to whether there could be said to be an anticipated order – no application was threatened or contemplated or foreshadowed until nearly 12 months later. The wife says the parties had not separated in August 2006. The husband said that he was out of the home in May 2006 but relates that to the wife’s desire to earn more from accommodation clients. It is submitted that I cannot look backwards to that time and find that as at December 2006 orders were anticipated. If the court finds that an order was anticipated then it is submitted that the Court would not find that the transfer was intended to or likely to defeat an anticipated order. It is submitted that ‘likely’ means ‘probable’. I am referred to In the Marriage of P No. 2. If that submission finds no favour then it is submitted that the transfer was for good consideration – a similar sum to the price paid by C Pty Limited for taxi plate number 5 in August 2006 was $285,000. Thus the transaction was not likely to defeat an anticipated order as it gave good value for the asset. As the asset had been the husband’s asset since 1986, his ownership of that asset was not likely to be disturbed under section 79.
The approach in proceedings under section 79
The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [1]
[1] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370
There is no mention of steps in section 79 but it is convenient to approach the exercise of discretion in a structured way. As I say, the Full Court has supported such an approach.
The property of the husband and wife at the date of the hearing
The Court is required to make a finding as to the property of the husband and wife. That involves identifying assets and liabilities and financial resources and their values.
Application to set aside transactions
The wife seeks that certain transactions be set aside.
Section 106B of the Family Law Act 1975 relevantly provides:
Transactions to defeat claims
(1) In proceedings under this Act, the court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.
….
(2) The court may order that any money or real or personal property dealt with by any instrument or disposition referred to in subsection (1), (1A) or (1B) may be taken in execution or charged with the payment of such sums for costs or maintenance as the court directs, or that the proceeds of a sale must be paid into court to abide its order.
(3) The court must have regard to the interests of, and shall make any order proper for the protection of, a bona fide purchaser or other person interested.
….
The wife’s case is argued in the alternative. First, as to the order sought at paragraphs 5 & 6:
5.That pursuant to the provisions of Section 106B of the Act, the transaction whereby the Husband sold his right, title and interest in Taxi Licence Plate No.[1] to [C] Pty Limited for a consideration of $285,000.00 in August 2006, be set aside.
6.That upon Order 5 being made, the Husband forthwith do all acts and things and sign and execute all documents necessary to transfer to the Wife his right, title and interest in Taxi Licence Plate No.[1].
Going to the heart of this claim, whatever was the husband’s intention, the sale of the taxi plate itself could not defeat an anticipated claim by the wife. The action that threatened an anticipated claim was the husband’s dealing with the proceeds of sale.
In CJT and Anor & DAW & DJW [2006] FamCA 270 Coleman J dealt with an appeal from a Federal Magistrate who made an order under section 106B. In upholding the appeal against that order, his Honour accepted the submission made on behalf of the purchasers of a property as follows:
42.Put simply, it is the case of the appellants, particularly as articulated in these two grounds, that the learned Federal Magistrate erred by not recognising that, on his own findings and conclusions, particularly as to the value of the Emu Plains property at the time of its sale in 2002, the husband’s actions rather than the sale of the property for $10,000.00 less than the value prevented the wife from recovering what his Honour found the wife’s entitlement to have been.
In that case it was not the sale of a property undervalue that defeated the wife’s claim, but the husband’s conduct in disposing of part of the proceeds of that sale.
Here, there is no suggestion that the husband did not receive proper value for taxi plate number 1. The price was similar to the price paid by C Pty Limited in June 2006 for plate number 5.
This claim must fail.
Turning then to the order sought at paragraph 7:
7.That in the alternative to Orders 5 and 6 herein :-
(c)that pursuant to the provisions of Section 106B of the Act, the transaction whereby the Husband transferred the net proceeds of sale of Taxi Licence Plate No.[1], being an amount of approximately $280,000.00 to [H Liao] in December 2006 be set aside;
(d)that [H Liao] forthwith repay to the Husband the amount of $280,000.00 and that such sum be paid into the trust account of the Wife's solicitors Messrs Austin Haworth & Lexon Legal Sydney) and thereafter be applied in reduction of the mortgage to the Commonwealth Bank secured upon the property situated at [D].
The evidence about the relevant chronology is:
· On 30 November 2006 an agreement was signed for the sale of taxi plate number 1 by the husband to C Pty Ltd for $295,000;
· Ministry of Transport records reveal that on 6 December 2006 taxi plate number 1 was transferred by the husband to C Pty Ltd for a consideration of $295,000;
· The husband and H Liao say that the sale price was reduced to $285,000 because of the age and poor state of repair of the motor vehicle;
· From April to August 2007 C Pty Ltd paid a total of $285,000 to the husband. It issued cheques for $50,000 to the husband on 18 April 2007, 9 May 2007, 7 June 2007, 4 July 2007, 2 August 2007, and a further cheque for $35,000 on 31 August 2007;
· The wife filed an application seeking property orders on 15 August 2008;
· In his primary affidavit sworn and filed on 3 September 2008 the husband deposed:
31.I sold my taxi licence plate [number 1] for $270,000. I paid about $14,500 as sale tax and capital gain tax and then sent all of the net proceeds to my brother.
· The husband repudiated that affidavit after his cross-examination commenced and when he submitted a corrected version, it had the words: “and then sent all of the net proceeds to my brother” struck out of the document. The husband was asked about that in cross-examination. The husband conceded that he had not sought to correct his affidavit until after cross-examination started in the final hearing. In cross-examination the husband sought to explain the fate of the proceeds of sale of the taxi plate by saying that he withdrew $1,000 a day and paid all of the $270,500 to his wife in amounts of $1,000 or $4,000 or $5,000. The husband conceded that he had not given that evidence in any affidavit and that the proposition had not been put to his wife in her cross-examination. He was asked why he had sworn that he gave the money back to his brother (if it was untrue) and he responded with words to the effect “because I wanted to keep the money”.
The first and most vexing question is whether I can find that there was a transaction that I can now set aside. Is it true that the husband gave $285,000 or $270,500 back to his brother? The only assertion about such a transaction is the repudiated statement in paragraph 31 of the husband’s evidence. The statement did not include the date or dates of the transaction nor any other details about the passage of moneys. The husband is a discredited witness. There is no clear trail of deposits from the husband to H Liao or C Pty Ltd showing a repayment by the husband of the moneys he received over the period from April to August 2007. H Liao gives no evidence of receiving such moneys. H Liao was not challenged on this issue in cross-examination and rejected the suggestion in re-examination. Thus evidence of the transaction rests on the fragile foundation of a withdrawn admission by a discredited witness. On that basis I cannot find that there was a repayment of $270,500, being the net proceeds of sale of taxi plate number 1, by the husband to H Liao or C Pty Ltd.
Thus there is no transaction to set aside. That is the end of the issue in terms of section 106B but leads to further questions. That finding means that the husband has not accounted for $270,500.
Finally, there is the order sought at paragraph 8:
8.That pursuant to the provisions of Section 106B of the Act, the transaction whereby the Husband transferred his shares in [C] Pty Limited for a nominal sum to [H Liao] in August 2006 be set aside.
It is an agreed fact that the husband transferred his shares in C Pty Limited to his brother. H Liao says that the shares were transferred in August 2006. An unsigned transfer form in respect of 6 shares is annexure G to the affidavit of H Liao sworn 27 November 2008. The form does not identify the consideration for the transfer but it appears to be an agreed fact that the transfer was for little or no consideration.
The problem with this is whether the company has any value and if so, what it is. There is no valuation of the company. Not only is there no valuation evidence, I cannot make sense of the financial records that are in evidence. Exhibit 7 contains copies of financial reports for C Pty limited for the years ending 2005, 2006 and 2007. In summary the documents said to represent the balance sheets report:
Year ended
30 June 2005
30 June 2006
30 June 2007
Total assets
$407,710.36
$385,982.01
$636,304.65
Total liabilities
-$569,062.41
-$585,874.61
-$832,182.11
Net Assets /
(Liabilities)
$136,582.90
$164,509.99
$170,368.36
Whereas the calculation in each case results in the following:
Net Assets /
(Liabilities)
($161,352.05)
($199,892.60)
($195,877.46)
I cannot find that the husband’s shareholding in C Pty Limited had any significant value and therefore would not exercise the Court’s discretion to set the transfer of that shareholding aside.
Add Backs
There are circumstances whereby assets are included in the list for division although they no longer exist. In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
[30] To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:
[11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.
(b) Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
(c) In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.
The $69,030 the wife sent to her sister
On 26 May 2005 the wife transferred an amount of $69,030 to her sister in America. That converted to about $US55,000 and was used by the wife’s sister as a deposit on a house. In her affidavit the wife said that the source of the funds was moneys advanced by their mother. In cross-examination the wife said that part of that sum came from accommodation business income and part from gifts of money made by her mother.
It was submitted on behalf of the husband, without complaint on behalf of the wife, that it is common ground that $69,000 should go back into the asset pool
I will read back this sum as a notional asset. There appears to be no dispute about it. Even if it is disputed that approach is appropriate. The wife made the transfer and the forensic onus shifts to her if she seeks to establish that some part of the transfer was not sourced in matrimonial funds. In any event, presumably her sister owes her $69,030 or has a moral obligation in relation to that advance.
The $7,200 the wife drew on the Commonwealth Bank Account on 6 February 2008
On 6 February 2008 the wife drew an amount of $7,200 from the Commonwealth Bank joint account for living expenses for herself and the children. As a general proposition Courts have not added back as a notional asset, moneys applied to general living expenses after separation. This drawing falls outside the circumstances described in In the Marriage of Omacini above. I will not add that sum as a notional asset.
Household contents
No submissions were addressed to this issue. The husband and wife do not agree on the value. I will include the wife’s household contents at the figure she asserts as an admission against interest. I will not include any figure for the husband’s household contents as there is no evidence of value.
The logic of In the Marriage of Omacini applies to liabilities.
The alleged debt of $266,036.40 owed by the husband to H Liao
It is the husband’s evidence that he built up a debt to H Liao and C Pty Ltd for income received on taxi plates. He says that he managed taxi plate number 2 for C Pty Ltd from 1991 until 1996, that he leased the plate from C Pty Ltd, received payments from the driver/drivers of various taxis owned by C Pty Ltd and H Liao and did not account to them for net lease payments of between $250 and $300 per week.
In their affidavits, the husband and H Liao give different evidence about the basis on which the husband managed taxi plates for C Pty Ltd and H Liao.
At paragraph 7 of his September 2008 affidavit the husband says that he had the following conversation with his brother:
[Husband]:What do you want me to do with the rental that I have collected?
[H]:You keep the money for me. You need to have savings for your future family. My business is going well and I do not need the money now.
[Husband]:I can’t just take your money as the taxi licence and Company shares are paid by you.
[H]:Let’s make it as a loan and you have to repay me the money one day.
The husband does not say when that conversation occurred but he set it out in his (corrected) affidavit of September 2008 in sequence after his evidence about 1991 and before his evidence about a 1993 meeting with his wife.
H does not remember that or any similar conversation. At paragraph 15 of his November 2008 affidavit H says:
15.I never had any arrangement in writing with my brother about operating the business nor did I ever have any specific verbal agreement with him about the terms on which he would operate the business and manage the assets of the company. For many years, he operated the business and I received a small income from the business which was in the region of $5,000 to $7,000 per year, which did not reflect the actual income generated by the business. I had always understood that [the husband] was holding the money generated from the business on behalf of me and the company. [The husband] showed me the profit and loss statement that he prepared for the business every year and these showed ongoing profits. Although I believed that [the husband] was using the money from the business for his own purposes, I always understood that he would account to me for that money one day.
The husband says that in 1996 H Liao took over the management of that plate. Counsel put a series of calculations to the husband and he conceded that could have amounted to about $90,000 over 5 or 6 years. The husband says that he declared that income and paid the required tax.
Next the husband says that between 2002 and 2006 he was managing taxi plate number 4 that was owned by H Liao. He collected about $1,000 per week from the drivers and did not account to H for those payments. He says that in the case of plate number 4, H declared the income and paid the required tax but the tax was reimbursed by the husband.
The husband says that the first written demand he received for repayment was on 30 July 2006 and on that same day he executed the declaration acknowledging a $608,800 debt. There were two documents prepared for the husband and H Liao on that date. H Liao says they were witnessed by Mr Z. Those documents and translations of them are attached to the affidavit of H Liao sworn 27 November 2008. First there is a document that is said to reflect a calculation of the husband’s indebtedness to his brother as at 30 July 2006 and omitting the certificate of the translator, the translation which forms the annexure is as follows:
Text of annexure E
30/7/06
Rent owed to [HH]
[taxi plate 2]: 15 yrs x 52 x 500.00 = 390,000.00
[taxi plate 6]: 18 yrs x 52 x 500.00 = 208,000.00
[taxi plate 4]: 4 yrs x 52 x 500.00 = 140,000.00
702,000.00
[taxi plate 4]: 1/3/02 to 30/12/06 Total 56 months
224 weeks x 500.00 (AVG) = $112,000.00
[taxi plate 7]: 6/99 to 30/12/06 Total 90 months
360 weeks x 480.00 (AVG) = $172,800.00
[taxi plate 2]: 91 to 30/12/06 Total 180 months
720 weeks x 450.00 (AVG) = $324,000.00
608,800
312,000.00
166,400.00
83,200.00
570,600.00
I am told that “[HH]” is a reference to H Liao.
H Liao said that the first set of calculations reflected what he asserted was owed to him and the second set reflected what the husband asserted and was conceded by him (H Liao). I was given no explanation about the final set of figures.
The second document, prepared on 30 July 2006 purports to be an acknowledgment from the husband and omitting the certificate of the translator, the translation which forms annexure F, is as follows:
30/7/06
Declaration
My name is [K Liao] of [D address]. I now resign from director of [C] Pty Ltd. I confirm that since 1991 up to now (30/7/2006) I have misappropriated [C] Pty Ltd’s taxi rental in the amount of 608,800.00 Australian dollars.
I will repay in full the above amount to [C] Pty Ltd by instalments whenever my financial situation allows. From this day on, I have no connection with any affairs of [C] Pty Ltd and I will make no claims whatsoever against [C] Pty Ltd.
I hereby declare the above.
[K Liao] [ signature]
[C] Pty Ltd Sole Director
[H Liao] [ signature]
Witness [Mr Z] [ signature]
Both H Liao and the husband now dispute the accuracy of the translation represented in annexure F in that it contains the word “misappropriated”. During cross-examination and notwithstanding that the document is attached to his own affidavit, H Liao adopted the translation of the relevant word made by the interpreter who assisted him for the hearing, as “removed”.
There are a number of problems with the husband’s case on this point.
ØThe calculations in annexure “E” make no allowance for the income tax paid by the husband or for the payments “in the region of $5,000 to $7,000 per year” received by H from the husband. Nor is there any express allowance for income tax payments H made in the period 2002 to 2006 on income received and retained by the husband.
ØThe calculations in annexure “E” make no allowance for the payment of $100,000 to H Liao in September 2005 by way of the husband re-financing the home loan from HSBC to the Commonwealth Bank;
ØIn “F” the husband renounced his connection with C Pty Ltd. Despite that fact, C Pty Ltd paid the husband a total of about $125,000 during 2007 for director’s fees, being fees that he had earned, at the rate of $5,000 a year, since 1981. The husband was asked why C Pty Ltd paid him about $125,000 if he owed the company $608,800 and volunteered that they had been given advice that the debt and the fees were different amounts. In the absence of any credible explanation, it beggars belief that a company could be obliged to pay about $125,000 to a creditor who owed it over $600,000. H Liao was asked about this in cross-examination and said that his brother demanded the payment and $125,000 was paid. He could not explain how the figure was calculated. The figure is problematic because the figure shown in the C Pty Ltd accounts for 2004, 2005, 2006 and 2007 as a debt to K Liao, is a static $125,000. If these were accumulating director’s fees, why did the debt not increase by $5,000, at least for 2005 and 2006?
ØSimilarly, in 2007 C Pty Ltd bought taxi plate number 1 from the husband. A contract for sale was dated 29 November 2006 whereby the husband agreed to sell the taxi plate and cab number 1 to C Pty Ltd for $295,000. In fact the price was reduced to $285,000 because the cab itself was damaged and had very high kilometres. By five instalments of $50,000 starting on 18 April 2007 and a final payment of $35,000 on 31 August 2007, C Pty Ltd paid the revised purchase price to the husband. Again, it beggars belief that a company could be obliged to pay $285,000 to someone who at that same time, owed the company in excess of $300,000. H was asked about this in cross-examination and after suggesting that these were different types of transactions, said that his brother had used harsh words to him. Unusually, the matter was raised for a second time with H Liao by learned counsel for the wife and H explained those events by saying that the husband said he needed the money and that the company accountant said that money had to be paid for the company’s records but could then be paid back by the husband. That last explanation makes no sense because H Liao has given evidence that the company paid tax on the lease payments notwithstanding that the husband never accounted to the company for those payments. One wonders how was that represented in the company accounts?
ØThe timing of events is unusual. In July 2006 the husband and H Liao agree on the existence of a $608,800 debt by the husband to C Pty Ltd. In August 2006 the husband paid $136,949.60 to C Pty Ltd in part payment. In November 2006 he paid a further $150,000 to C Pty Ltd. To that point he had paid nearly $287,000. H then agreed to pay the husband $295,000 which was later reduced to $285,000 for a taxi plate. Between April and August 2007 that payment was made;
ØNeither the husband nor H Liao were able to say how much the husband now owes H Liao and C Pty Ltd until the final day of the hearing. Even then they arrived at different figures. After initially saying he had paid other amounts, the husband thought he had paid a total of $326,949.60 ($286,949.60 drawn on the mortgage on the D property in August & November 2006 and $40,000 from the proceeds of sale of taxi plate number 1 or from the payment of director’s fees in 2007). H agrees about the $286,949.60 but was unsure how much else has been paid. He had notes of amounts paid which he said he had prepared from bank statements. Even looking at the bank statements in the witness box he could not verify the notes, let alone identify the amount paid. He said he assumed that deposits in large even amounts, into the relevant account of C Pty Ltd were from the husband.
Albeit that the evidence was something of a moveable feast, the submission on behalf of the husband is that he paid back $286,949 in two payments – one of $136,949.60 to the vendor of taxi plate number 5 and $150,000 deposited into C Pty Ltd’s account on 1 November 2006. It is the husband’s case that he also paid back amounts of $40,000, $7,500 and $5,000. I am not sure how that arithmetic brings the debt to the $268,451 that he asserts remains owing. Notwithstanding those figures, I understand from his counsel’s submissions that the husband now accepts the evidence of his brother that the debt stands at $266,036.40;
These problems come on top of the unfortunate timing of the husband’s declaration of debt. In May 2006 the husband thought his marriage was over and started to live on a regular basis with his mother. In July 2006 the debt was identified.
The husband says[2] that in February 2008 through his solicitor he proposed a settlement whereby the wife would receive half of the equity in the D property. If the husband owes his brother over $250,000 then that would seem to be a settlement skewed very much in favour of the wife.
[2] paragraph 38 of the Husband’s corrected version of the affidavit sworn and filed 3 September 2008
At an absolute minimum, neither the husband nor H Liao adhered to or treated seriously the propositions set out in the declaration made by the husband on 30 July 2006. Why would this Court take a different attitude?
It follows that there is no debt owed by the husband to H Liao or to C Pty Ltd.
That begs the question of whether I should read back into the list of assets a figure for the payments made by the husband to H / C Pty Ltd. In September 2005 the husband re-financed the home loan from HSBC to the Commonwealth Bank and paid an amount of $100,000 to H Liao. In 2006/2007 he paid a total of $326,949.60 to or on behalf of C Pty Ltd. It is submitted on behalf of the wife that I should include those sums as a notional asset. The husband opposes that course. In my view I am obliged to include $426,949.60 as a notional asset, as a consequence of my findings about the original ‘debt’ of $608,800.
I find that the assets are:
Assets
Value
D property (joint)
$1,150,000
Wife’s ANZ Bank savings
$46.00
Wife’s 1998 Daewoo motor vehicle
$4,000
Household Contents (W)
$4,000
Add back for the $69,030 the wife sent to her sister
$69,030
Australian Superannuation Fund (W)
$10,978.73
National Australia Bank Account (H)
$2,137.41
Add back for the $426,949.60 paid by the husband to and on behalf of C Pty Limited and or H Liao
$426,949.60
AMP Superannuation (H)
$90,000
Total
$1,757,141.74
Liabilities:
The mortgage on D property to the Commonwealth Bank
The parties have used an agreed figure of $750,000 for the mortgage notwithstanding that they have not made mortgage payments for some time. I have no choice but to use that figure.
The liabilities are:
Liabilities
Amount
Mortgage D property (joint) Commonwealth Bank
$750,000
Wife’s debt to YZ
$20,000
Husband’s credit card debt
$300.00
$770,300.00
Net assets
The net assets have a value of $986,841.74 ($1,757,141.74 - $770,300).
Financial Resources
There is no evidence that the wife has any financial resources. The evidence suggests that the arrangements between the husband and H Liao are flexible and informal. There is no evidence from which findings can be made about the financial circumstances of H Liao but he represents a financial resource to the husband. Similarly there is financial co-operation between the husband and his mother but without evidence of her financial circumstances it is not possible to find that she represents a valuable financial resource to him.
Contributions
The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[3]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties[4].
[3] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1
[4] In the Marriage of Shewring (1987) l2 Fam LR 139
As to whether the Court should apply the considerations in section 79(4) to the assets globally or asset by asset, the authorities have it the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:
“… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”
Here the submissions were made on a global basis and I will deal with the assets globally.
Section 79(4)(a) Contributions
Financial contributions, both direct and indirect were made by each of the husband and wife.
The wife brought $US8,000 in savings with her to Australia. By the date of marriage she had $16,000 in savings. The husband came into the marriage with a unit at W and a taxi plate. The net proceeds of sale of the unit in 1999 was $154,041.36. The taxi was ultimately sold in 2006 for $270,500. The husband has not accounted for the disposition of the proceeds of sale of taxi plate number 1 in the sum of $270,500.
From September 1995 until 1999 the wife worked as a casual factory worker and earned approximately $376.00 per week. The husband worked throughout the marriage as a taxi driver.
As a result of the wife’s efforts, there was income during the marriage and since from accommodation clients.
Section 79(4)(b) contributions
This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions.
From 1995 to 1997, the wife and husband lived with the husband’s parents. They contributed $80 per week.
The neighbour of the husband and wife, Mr R, observed the husband servicing taxi cabs and changing over and replacing various taxi vehicles. Otherwise there is no evidence of significant contributions of this type.
Section 79(4)(c) contributions
This provision deals with contributions in the form of parent and homemaker contributions.
The wife was the primary parent and homemaker. From 1999 she was out of the paid workforce. The husband and wife had struggle in having children, leading finally to an IVF program. From 2001 the arrangement between the husband and the wife had her more available and more responsible for the children and the household. The wife was not challenged in relation to her evidence that she was solely responsible for the care and supervision of the children and primarily responsible for carrying out all household tasks and domestic duties, including cooking washing and cleaning.
The husband has had time with the children on alternate weekends. The wife complains that the husband regularly drove a taxi on one day of the weekend and left the children with his mother. Nevertheless I accept that the husband is a loving father and wants the best for his children.
Conclusion on Contribution
The wife’s case does not identify a proportion in which contributions were made. The husband contends that the wife’s contributions were about 25% compared to his at 75%.
The husband made a far greater initial contribution than the wife. Until 1999 both parties had paid employment. The husband’s employment continued throughout the marriage in the form of driving and managing taxi cabs. Largely through the wife’s efforts there was income from the accommodation business clients during the marriage and since.
Contributions were made over 13 years. The husband’s initial contributions were far greater than those made by the wife. Those contributions were the platform from which the husband and wife were able to acquire the former matrimonial home. That initial contribution still requires acknowledgment in the overall finding on contribution. The financial contributions of the husband were greater than those by the wife. The wife was the primary parent and homemaker.
But for his failure to account for the proceeds of sale of taxi plate number 1, I would have found that the contributions were made in the proportions 60% by the husband and 40% by the wife. Failure to make proper disclosure permits the Court latitude in relation to findings on contribution.
In Weir and Weir (1993) 16 FamLR 154; FLC 92-338 the Full Court referred to Black and Kellner (1992) FLC 92-287, Giunti and Giunti (1986) FLC 91 -757; and Mezzacappa and Mezzacappa (1987) 11 Fam LR 957 and said:
“It seems to us that once it has been established that there has been a deliberate non disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.”
Given that the husband did not account for $270,500 I find that the contributions were equal.
The other matters in Section 79
Once contributions have been assessed, the other factors in section 79(4) need to be considered.
Dealing with the matters identified in the legislation:
Section 79(4) (d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties. There was mention during the case of the possibility of the wife retaining the former matrimonial home of obtaining alternate accommodation sufficient to continue to her accommodation business. The evidence does not permit any findings based on that possibility.
Section 79(4)(e) - Section 75(2) Factors
The relevant matters in Section 75(2) would seem to be paragraphs (a), (b), (c) and (na).
(a) the age and state of health of each of the parties;
First, as to the age and state of health of each of the wife and husband. The wife and husband are 43 and 55 years of age, respectively. There is no probative evidence about their health. The husband asserts that he drives a cab only two or three days a week because of stress occasioned by the wife or associated with these proceedings.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The wife’s income is $1,083.21 per week made up of $200 per week in wages from part-time employment at a retail store, $500 per week from accommodation business clients, $99.31 in a Family Assistance payment and $283.90 by way of Parenting Payment. In her new position in a retail store, the wife works 5 – 10 hours a week and is paid $20 per hour. There is an assessment of child support but the wife does not receive child support payments.
The wife lives in the former matrimonial home with the parties’ children.
The wife’s expenses are as follows:
Expense
Amount
Rates and unit levies
$48.17
CTP Insurance – AAMI
$7.09
Comprehensive Insurance - AAMI
$14.00
Home and contents insurance - NRMA
$11.27
Motor vehicle registration – Daewoo motor vehicle
$5.17
Visa card – Commonwealth Bank (min payment $25)
$300.00
Living expenses
$871.00
Food
$260.00
House supplies
$16.00
House repairs
$13.00
Gas
$14.00
Electricity
$15.00
Telephone
$45.00
Petrol
$60.00
Fares and parking
$12.00
Clothing and shoes
$70.00
Childrens activities
$40.00
Medical dental and optical
$20.00
Entertainment & hobbies
$40.00
Holidays
$50.00
Education expenses including school fees
$120.00
Chemist pharmaceuticals
$11.00
Gardening lawn mowing
$20.00
Repairs furnishings and appliances
$4.00
Books and magazines
$8.00
Gifts
$30.00
Hairdressing, toiletries
$23.00
$871.00
Total
$1256.70
The wife breaks down the living expenses between herself and children. Of $871 per week she spends $375 on herself and $496 on children. The wife was not cross-examined on the issue but I take it that included in the expenditure on children is the costs associated with the accommodation business clients.
Evidence about the wife’s assets and liabilities is set out earlier in these reasons.
There was no issue in the trial about the wife not exercising her earning capacity. That is to say, she was not cross-examined on the issue.
The husband earns $400 per week by way of wages as a part-time Taxi Driver. He lives alone, save for the twins living with him 4 nights a fortnight. By his Financial Statement the husband puts his expenditure in the following terms:
Expense
Amount
Income tax
$30.00
Mortgage payments to Commonwealth Bank
$1,250.00
Rates and unit levies
$50.00
Child support
$250.00
All other expenditure
$80.00
Total
$1,660.00
As to accommodation, it transpires that the husband lives in his mother’s home, with her.
The husband asserts that he drives a cab only two or three days a week because of stress occasioned by the wife or associated with these proceedings. To the extent that the latter is a consideration, I assume that he will resume full time work once the proceedings are over.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
The wife and husband have 6 year old twins. Under the current arrangement the children spend four nights each fortnight with the husband and 10 nights with the wife. The wife contends that some of that time is spent with the paternal grandmother and not the husband. There are parenting proceedings on foot. The husband seeks that the children live week about between the parents.
(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
I have set out the evidence in relation to the expenses.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,
and the rate of any such pension, allowance or benefit being paid to either party;
As is recorded above, the wife receives the Family Allowance and a Parenting Payment.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
There is little evidence in relation to the standard of living of the wife and husband during the marriage.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
There is no application for maintenance.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
This is not a significant aspect of the case.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
No maintenance is sought. Since the children were born the wife’s income from paid employment related to accommodation business clients. The marriage would appear to have facilitated that endeavour.
(l) the need to protect a party who wishes to continue that party's role as a parent;
In her affidavit the wife said:
“It is not my present situation to work as I desire to be available to care for the children.”
The wife has since taken paid employment albeit on a part-time basis. The children are young and still require close supervision outside school hours.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
I have set out that evidence above.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
The wife says that the current assessment is for $12.00 per week. She contends that the husband owes about $4,000 in child support arrears.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
The financial arrangements between the husband and his brother have been informal and that is likely to continue.
(p) the terms of any financial agreement that is binding on the parties.
There was no binding agreement made between the parties.
Section 79(4)(f)
The wife refers to an interim parenting order but the order is not attached to her affidavit and I am not aware of the date on which it was made, nor it’s precise terms. The common ground evidence however, has an arrangement in place whereby the husband is entitled to spend time on alternate weekends, overnight with the children.
Section 79(4)(g)
I have referred to the child support position.
Conclusion
The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
Ø The husband is 12 years older than the wife;
Ø The wife has the preponderance of day to day care of the children of the marriage. They are 6 years of age and the child support is at a very low level;
Ø The husband has an informal, financial relationship with his brother;
As with contributions the wife does not argue for a particular percentage adjustment. She relies on a broad discretion enlivened on the authority of cases such as Black and Kelner and Weir and Weir.
The husband argues that there should be no adjustment.
All of the factors referred to above, except for the difference in the ages of the husband and wife, warrant an adjustment to the wife.
In my view there should be a 5% adjustment. In the context of this case that represents nearly $50,000 making a differential of about twice that sum.
Just and Equitable
Neither the husband nor the wife seeks a splitting order in relation to superannuation.
The net assets have a value of $986,841.74. If the wife receives 55% she should receive about $542,763, leaving the husband with about $444,078. The wife has or has had the benefit of :
Assets
Value
Wife’s ANZ Bank savings
$46.00
Wife’s 1998 Daewoo motor vehicle
$4,000
Household Contents (W)
$4,000
Add back for the $69,030 the wife sent to her sister
$69,030
Australian Superannuation Fund (W)
$10,978.73
Minus Wife’s debt to YZ
-$20,000
Total
$68,054.73
In order to bring her to 55% the wife should receive a further $474,708. She will owe her legal fees for these proceedings and any other personal debts.
The husband has or has had the benefit of :
Assets
Value
National Australia Bank Account (H)
$2,137.41
Add back for the $426,949.60 paid by the husband to and on behalf of C Pty Limited and or H Liao
$426,949.60
AMP Superannuation (H)
$90,000
Husband’s credit card debt
-$300.00
Total
$518,787.01
To bring him back to 45% of the net assets he should pay the wife about $75,000.
The remaining asset is the former matrimonial home. It is represented in the pool of assets as:
Assets
Value
D property (joint)
$1,150,000
Mortgage D property (joint) Commonwealth Bank
-$750,000
Total
$400,000.00
On the available evidence there would seem to be no prospect of the wife retaining the home. Therefore it will be sold. The ultimate effect will depend on the actual net proceeds of sale but it seems to me that it would be just and equitable for the wife to retain what she has, to receive the entire net proceeds of that sale and a payment of $75,000 from the husband.
It is usual to craft orders in a way that provides a level of self execution. That is not possible here because there is no fund, to which the husband admits, which could secure the payment of $75,000 by him to the wife. In the circumstances it may have been prudent for the wife to seek a splitting order in relation to the husband’s superannuation. Given that fact and the complexity of the proceedings, I propose to make orders but to stay their operation for 21 days to give the parties an opportunity to bring the matter back before me in relation to the form of the orders.
Conclusion under Section 79
In my view the outcome I have identified would be just and equitable.
I certify that the preceding two hundred (200) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.
Associate:
Date: 17 July 2009
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Remedies
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Stay of Proceedings
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Jurisdiction
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