Chtibi & Chtibi (No. 2)
[2021] FamCA 243
•29 April 2021
FAMILY COURT OF AUSTRALIA
Chtibi & Chtibi (No. 2) [2021] FamCA 243
File number(s): PAC 3587 of 2015 Judgment of: FOSTER J Date of judgment: 29 April 2021 Catchwords: FAMILY LAW – PROPERTY – property adjustment – where discussion of applicable principles – where both parties seek adjusting orders – where evidence of husband as to asserted loan arrangement not accepted – where failure of husband to call relevant witnesses – where Jones & Dunkel inferences made – where full and frank disclosure not provided by the husband – where consideration of relevant contributions and relevant s 75(2) factors – where orders made that pool be divided as to 60 per cent to the wife and 40 per cent to the husband. Legislation: Family Law Act 1975 (Cth) ss 75(2), 79, 79(1), 79(2), 79(4) Cases cited: Bevan & Bevan [2014] FamCAFC 19
Chapman & Chapman [2014] FamCAFC 91
Farmer & Bramley [2000] FamCA 1615; (2000) 93-060
Horrigan & Horrigan [2020] FamCAFC 25
Jones & Dunkel (1959) 101 CLR 298; [1959] HCA 8
Kessey & Kessey (1994) FLC 92-495
RHG Mortgage Ltd v Rosario Ianni [2015] NSWCA 56
Russell & Russell (1999) FLC 92-877
Stanford & Stanford [2012] HCA 52
Teal & Teal [2010] FamCAFC 120
Willis & Willis [2007] FamCA 819
Number of paragraphs: 113 Date of last submission/s: 15 February 2021 Date of hearing: 5 and 6 February 2018, 7 February 2020, 23 October 2020 and 8 December 2020 Place: Parramatta Counsel for the Applicant: Ms Friedlander (23 October 2020 and 8 December 2020) Solicitor for the Applicant: Mr G (5 and 6 February 2018)
A & J Montgomery Legal (8 December 2020Applicant – Self-represented litigant: Ms A Chtibi in person (7 February 2020) Counsel for the Respondent: Mr Hanrahan (5 and 6 February 2018, 7 February 2020 and 8 December 2020)
Ms Kaiti (23 October 2020)Solicitor for the Respondent: Bond Lawyers ORDERS
PAC 3587 of 2015 BETWEEN: MS A CHTIBI
Applicant
AND: MR B CHTIBI
First RespondentAND: H PTY LIMITED
Third Respondent
ORDER MADE BY:
FOSTER J
DATE OF ORDER:
29 APRIL 2021
THE COURT ORDERS THAT:
1.That within three months from this date the husband by way of property adjustment pay to the wife or as she may otherwise direct in writing the sum of $499,200.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Chtibi & Chtibi has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
FOSTER J:
The proceedings for determination are proceedings as to property adjustment between the applicant wife and the respondent husband and involving the further respondent company H Pty Ltd.
The proceedings were commenced by the applicant wife in 2015 with trial directions having been made on 14 March 2017 as to both parenting and property issues.
Proceedings were listed for compliance with trial directions on 25 May 2017 upon which date the wife was granted an extension of time to file her affidavit evidence to 23 June 2017. On 29 June 2017 proceedings were listed for a further compliance listing and by that date the wife had again failed to comply with directions for the filing of her affidavit material. Proceedings were remitted for judicial case management on 14 August 2017.
By way of a Further Amended Initiating Application filed by the wife on 19 September 2017, she joined as a further respondent the company H Pty Ltd in respect to the sale of the former matrimonial home by the husband to that company shortly after separation.
On 20 September 2017 final parenting orders were made by consent in relation to the children then aged 14 and 12 that provided, in summary, that the children live with the father and that the children spend some defined time with the mother. Otherwise, the parties remained at issue in relation to the question of property adjustment and whether the father would be permitted to travel overseas with the children. The remaining issues were adjourned for hearing commencing 5 February 2018 allocating two days for trial. The parties were directed to file and serve any further affidavit material to be relied upon by no later than 15 December 2017.
The Final Hearing
The final hearing commenced on 5 February 2018. On 5 February 2018 orders were made by consent that, in summary, provided for the wife to vacate the real estate property at K Street, Suburb J and deliver up the keys to that property to the solicitors for the third respondent by no later than 2 April 2018, that there be no order as to costs as between the wife and the third respondent and that the costs order made 10 May 2017 against the wife be discharged. Those orders resolved the issues between the wife and H Pty Ltd leaving only the wife and husband in the proceedings.
In the absence of full and proper disclosure by the husband of his financial circumstances for the three years prior to trial, proceedings were on 6 February 2018 adjourned part heard for further judicial case management to 26 March 2018. On 26 March 2018 the proceedings were further adjourned to 18 May 2018 it being noted that during the adjournment the wife would seek to file an amended application joining further parties.
On 4 May 2018 the wife filed a Further Amended Initiating Application joining as second and third respondents the husband’s brother Mr C Chtibi and his wife Ms D Chtibi. On 18 May 2018 directions were made for the wife to file a further Amended Initiating Application setting out with particularity orders sought as against the second and third respondents, that the second and third respondents file and serve a Response to the wife’s amended application and that the second and third respondents file any affidavit material to be relied upon by them. Proceedings were then listed for further judicial case management on 19 July 2018.
The husband filed an Amended Response on 8 May 2018 in which he sought no orders, presumably to the effect that the wife’s application be dismissed. That position was later clarified by his reliance at trial on an outline of case filed 14 September 2017, seeking, in summary, orders that the wife’s application seeking property adjustment be dismissed or in the alternative that the husband pay to the wife a lump sum equivalent to half of the net joint matrimonial property or in the alternative such sum as the Court considers appropriate.
Thereafter the wife made application to reopen her evidence. Orders and directions in relation to that application were made on 21 August 2018 as follows:
1.Proceedings are adjourned for further judicial case management to 9.30am 21 September 2018.
2.The time proscribed by orders made 18 May 2018 for the wife to file and serve written submissions in support of her application to reopen evidence be extended to close of business on 20 September 2018 and in default the application to reopen shall stand dismissed.
3.The time proscribed by orders made18 May 2018 for the wife to file a further amended application setting out with particularity the orders sought against the second and third respondents be extended to close of business on 20 September 2018 and in default the second and third respondents shall be discharged as parties to these proceedings.
4.The time proscribed by orders made on 18 May 2018 for the second and third respondents to file a response to the wife’s amended application be extended to close of business on 28 September 2018 noting that any such response will seek a dismissal of the wife’s case as against the second and third respondents.
5.The wife pay the husband’s costs thrown away by reason of the further adjournment with those costs to be a charge as against any property entitlement of the wife if any but otherwise not enforceable until final orders are made in these proceedings.
6.The wife pay the second and third respondent’s costs thrown away by reason of the further adjournment with those costs to be a charge as against any property entitlement of the wife if any but otherwise not enforceable until final orders are made in these proceedings.
On 20 September 2018 the wife filed a third Further Amended Initiating Application, inter alia, seeking to re-join H Pty Ltd as a party. In that amended application the wife, in summary, sought the following orders:
(a)that the Memorandum of Transfer dated about 8 April 2015 between the husband as transferor and the third respondent as transferee in relation to the husband’s interest in the property at K Street, Suburb J be set aside pursuant to section 106B of the Act;
(b)that the proceeds of sale of the property at K Street, Suburb J be returned and deposited in a controlled monies account for the benefit of the husband and wife pending further order;
(c)that the husband do all things necessary and sign all necessary documents to transfer to the wife his interest in L Pty Ltd.
The application to re-join H Pty Ltd was not pursued.
The solicitor for the wife later clarified the relief sought in that the wife in substance sought an order that the husband and/or H Pty Ltd (sic) pay to the wife by way of final property adjustment the sum of $400,000.
On 21 September 2018 the wife’s application seeking leave to reopen her evidence was dismissed. The wife had failed to comply with directions for the filing by her of a further amended application setting out with particularity orders sought by her as against the second and third respondents and as provided for in orders made 21 August 2018. The wife’s case insofar as it related to the second and third respondents was dismissed and the second and third respondents were discharged as parties to these proceedings.
On 19 December 2018 the wife was ordered to pay the costs of the second and third respondents in the sum of $5,959.25 within two months.
Proceedings were then adjourned part heard for continuation of the final hearing to Friday 29 November 2019. As a consequence of changes in the judicial calendar, the final hearing was further adjourned to 7 February 2020.
On 7 February 2020 the wife appeared unrepresented with the assistance of a duty solicitor. Upon noting that the provisions of section 102NA of the Act applied, an order was made for the representation by Legal Aid NSW of the wife and proceedings were adjourned part heard to 14 August 2020. On 14 August 2020 the wife’s application for legal aid pursuant to section 102NA had not as yet been determined and proceedings were further adjourned part heard for final hearing to 23 October 2020.
At Trial
At trial the wife relied upon the following documents:
(a)her third Further Amended Initiating Application filed 20 September 2018;
(b)her Financial Statement filed 22 July 2015;
(c)her primary trial affidavit sworn and filed 19 September 2017;
(d)the affidavit of Mr M filed 19 September 2017.
At the commencement of the trial the husband relied upon the following documents:
(a)his Amended Response filed 8 May 2018;
(b)his Financial Statement filed 19 May 2017;
(c)his updated Financial Statement filed 20 October 2020;
(d)his primary trial affidavit filed 19 May 2017;
(e)the affidavit of his brother Mr C Chtibi;
(f)the affidavit of his sister-in-law Ms D Chtibi.
Subsequently, during the trial, the husband informed the Court that the affidavits of Mr C Chtibi and Ms D Chtibi would not be relied on and that the deponents would thus not be available for cross examination. This forensic decision is referred to below.
Background
The wife is presently aged 41 and the husband 53. The husband came to Australia in 1993 when he was 25 years of age. The parties were married in 1998 in Country N. The wife at that time was 18 years of age and the husband was 30 years of age.
The wife came to Australia about one month after the marriage at which time cohabitation commenced.
There are three children of the parties’ marriage now aged 20, 17 and 15.
The husband and wife separated in December 2014 under the one roof with final separation in mid-November 2015.
Upon arriving in Australia the wife obtained employment in a factory at Suburb P where the husband was already employed.
The husband continued to work in the factory at Suburb P until about 2001 and thereafter commenced to work at the markets for his cousin. In about 2008 the husband commenced to rent his own fruit and vegetable stall at the markets and thereafter that provided the primary source of the family income. The husband commenced work at the markets at about 2.00 am each morning. From time to time the husband remitted monies to Country N. Notwithstanding the husband’s asserted modest taxable income from the markets he was able to remit monies overseas and during the course of cohabitation he says he purchased a quantity of gold and retained accumulated cash that he kept in a safe at the matrimonial home. He asserts that the cash and gold were taken by the wife.
The wife worked for about 15 months prior to the birth of their first child in 2000. The wife throughout cohabitation was the primary carer for the parties’ children and primary homemaker within the home.
It is common ground that throughout the period of the relationship the husband controlled the family finances and did not engage with the wife in relation to financial matters at all, to such an extent that the husband held the key for the letterbox at home and maintained a post office box at Suburb BB. As a consequence of the husband opening her mail in about 2006 the wife opened for herself a post office box at Suburb X Post Office.
The husband throughout cohabitation was critical, belittling and abusive including being physically abusive towards the wife, in particular when she questioned him as to family finances. The husband in his primary evidence is disparaging of the wife in her role in caring for the children and as homemaker within the home. Such evidence has little regard to his absences from the home at the markets from the early hours of the morning.
At the commencement of the parties’ cohabitation in Australia they had little by way of assets. The real estate property at S Street, Suburb R was purchased some months after marriage in July 1998 for $246,000 with the title held as tenants-in-common in equal shares with the husband’s brother Mr C Chtibi and his wife Ms D Chtibi. The mortgage advance by the National Australia Bank (Acct: …09) was $250,000. It is the husband’s understanding that his brother provided collateral security to the bank by using his other property. The husband asserts that about $40,000 was expended on improvements to the property after purchase. The property was at all times occupied by the husband and wife as their matrimonial home. At the time of purchase the husband was a factory worker. It may be suggested that the purchase of the home by the husband was assisted by his brother and wife being on title and co borrowers for the mortgage loan. Mortgage payments were paid by the husband.
In August 2001 the property at S Street, Suburb R was sold at a sale price of $315,000. As at August 2001 the mortgage balance outstanding was $227,539. The solicitor’s settlement letter in relation to the sale reveals that on sale the sum of $250,000 was paid to the National Australia Bank. It appears that these funds were held by the bank pending finalisation of the husband’s purchase of a property at K Street, Suburb J in his own name and transfer of the existing mortgage facility to that property.
On 5 September 2001 a payment was made to the NAB mortgage account in the sum of $56,094 that reduced the balance outstanding on the mortgage to $171,444: Exh “C”. The solicitor’s settlement letter reveals that on settlement of the sale the sum of $32,469 was paid to the husband, his brother and his wife with the deposit of $31,500 remaining to be accounted for to them by the selling agent. It appears that the deposit of $56,094 represented those net proceeds of sale after payment of agent’s commission.
In October 2001 the husband exchanged contracts to purchase the parties’ matrimonial home at K Street, Suburb J for the sum of $370,000. Settlement of the purchase was effected on or about 10 December 2001 on which date the bank registered the transferred mortgage security over the Suburb J property. The property at Suburb J was purchased in the husband’s name alone. The National Australia Bank mortgage (Acct: …09) was transferred to the new property with the sum secured being $182,000: Exh “C”. Prior to settlement of the purchase the sum of $10,000 was withdrawn from the mortgage account, presumably mostly to pay stamp duty on the new purchase that was in the sum of $12,140.
The husband asserts that the balance of proceeds of sale of about $200,000 including stamp duty was funded by his brother and wife redrawing about $100,000 from the Suburb R National Australia Bank facility. There is no evidence of any such withdrawal. The available inference is that the sum of $250,000 paid on settlement of the sale of the Suburb R property, paid to the National Australia Bank, was released on settlement of the purchase of the K Street property to substantially fund the balance of the purchase price over and above the mortgage advance of $182,000. No other evidence is adduced on this issue from the husband’s brother and the brother’s wife.
Regular deposits were made to the National Australia Bank mortgage loan account 1 August 2002 with the mortgage being paid out in July 2004. Regular payments were made in the sum of $500 on mostly a weekly basis in addition to which there were lump sums of $5,000 paid 5 August 2003, $50,000 paid 29 September 2003, $5,000 paid 10 November 2003, $28,198 paid 28 November 2003 and a final discharge payment of $54,000 paid 12 July 2004. The husband asserts that these were funded by himself, his brother and his brother’s wife putting the cash together and depositing same to the mortgage account. However, there is no objective evidence to support the husband’s contentions as to the source of these payments. No evidence is adduced on this issue from the husband’s brother and the brother’s wife.
The husband asserts that other funds were expended on the repair and renovation of the property subsequent to purchase.
The wife asserts that the husband regularly remitted funds to Country N to avoid paying tax on cash income and to avoid Centrelink payments coming into the household being reduced and that funds were received back and described as funds from relatives. The Court is satisfied that the husband has failed to make full and frank disclosure as to his financial circumstances, in particular as to the financial history throughout cohabitation. Such history being known only to him.
In June/July 2009 the family travelled to Country N for a summer holiday. The family stayed in a home that the husband described to the wife as his own. The house appeared to be newly built and was fully furnished. The wife took with the family all bed sheets and towels from their home in Australia. The wife asserts that the home in Country N was built by the husband on land owned by his parents. The wife’s evidence is supported by her paternal uncle Mr M who was not required for cross examination. The wife asserts this is not unusual and a common practice in Country N as a consequence of the cost of subdivision.
The parties’ relationship continued to deteriorate to an extent that in December 2014 the wife moved out of the matrimonial bedroom in the matrimonial home. The wife, subsequent to separation, was referred by her general practitioner to a treating psychologist due to concerns around her mental health including high levels of anxiety, depressed mood and adjustment disorder. The wife presented to the psychologist with symptoms of depression and anxiety, reporting to the psychologist low mood, low appetite, difficulty sleeping, lowered self-esteem and confidence. The wife reported that she was fearful of her circumstances in Australia where she had little or no support.
The Wife’s Caveat
Following separation in December 2014 the wife, having concerns as to the husband’s prospective dealings with the matrimonial home, registered a Caveat on the title to the matrimonial home being the whole of the land in folio identifier .... Regrettably, the wife’s address for service in relation to the caveat was stated as the home itself K Street, Suburb J. As at 23 May 2015 the property remained registered in the name of the husband subject to a mortgage to the National Australia Bank and the caveat registered number … by the wife.
The disposition of the property at K Street, Suburb J was facilitated by the husband seeking the issue of a Lapsing Notice by application dated 7 April 2015 in relation to the caveat registered by the wife. The ultimate lapsing of the caveat was supported by a statutory declaration by a Mr T solicitor of Suburb BB who swore on oath that he was the solicitor acting for both the husband and the third respondent H Pty Ltd and that the lapsing notice had been forwarded to the wife by registered post addressed to the wife at the K Street, Suburb J property. The wife denies that the signature on the Australia Post Delivery Record is hers. Otherwise there is simply a tracking record evidencing delivery of the registered post item to the Suburb J property on 30 April 2015.
Having regard to the wife’s uncontradicted assertions as to the husband’s control of mail coming to the property at K Street and her primary evidence, the Court is satisfied that the lapsing notice did not come to the attention of the wife.
The sale of K Street, Suburb J
These proceedings were commenced by the wife in the Federal Circuit Court of Australia in July 2015 and subsequently transferred to this Court.
Subsequent to the wife commencing proceedings, a title search was undertaken of the matrimonial home as at 24 July 2015. That search revealed that the property had been transferred to the company in H Pty Ltd on or about 18 June 2015 for a stated consideration of $600,000. The memorandum of transfer between the husband and the company, the third respondent in these proceedings, reveals that Mr V asserts that he was the sole director and secretary at that time of the company. The husband rejects the suggestion that the initials of the company are those of himself and Mr V or that there is anything other than coincidence that the company was incorporated on 21 January 2015, shortly after the parties’ separation: Exh “Q”. He further rejects the suggestion that plans were hatched between himself and Mr V to facilitate the husband disposing of the property to avoid the wife’s property claim.
The same solicitor acted for both the husband and the company on the sale of the property. The “settlement adjustment sheet” reveals that a total of $500,000 was paid to the husband’s brother Mr C Chtibi and his wife and $50,000 to the husband. The deposit of $50,000 of the sale price is not accounted for.
The husband asserts that the sale of the Suburb J property was prompted by the demand by his brother and his wife for their “two thirds share” of the property and a demand from one of his suppliers in relation to an outstanding debt of about $140,000. There is no evidence of such debt in the financial statements of the husband’s company.
Curiously, the property was sold by private arrangement extraordinarily quickly following the lapsing of the wife’s caveat registered against the title of the property, and the sale was to a purchaser known to the husband and to whom the husband asserts he owed $50,000, resulting in a reduction in the agreed sale price of $650,000 down to $600,000. The sole director and shareholder of the company is Mr V who is known to the husband through the markets and who supplies produce to the husband at the markets. Title searches reveal that there was no incoming mortgage registered on title subsequent to the sale of the property to the third respondent. At all times the wife remained living in the property.
The wife remained in occupation of the property for about three years until April 2018 when it was then occupied by the husband. The husband asserts that he pays weekly rental of $550 to the purchaser company. There is no objective evidence of any rent being paid.
The husband asserts that funds from the sale of the K Street property were disposed of by him in paying to his brother and his wife their “third share” and paying debts that he asserts he owed to a supplier at the markets. Such assertion is at odds with the settlement statement referred to above. Yet the husband adduces no evidence from his brother Mr C Chtibi or his brother’s wife Ms D Chtibi in relation to the related property dealings referred to above and his asserted disposition of funds from the sale of the K Street property. No explanation is given for the absence of their evidence.
Curiously, the financial statements for the husband’s company as at June 2014 reveal that the company had no outstanding liabilities, save primarily for a bank loan of $19,633 and a loan owing to the husband himself of $43,508. The husband did not provide financial statements for the company after June 2014. As at that date the company had recorded gross sales of over $776,000 for the financial year.
On 10 August 2015 interlocutory orders were made by consent in the following terms:
(1)That the First Respondent husband shall continue to maintain the business trading as “L Pty Ltd” as an economically viable entity and is restrained from entering into any financial or business transaction that would cause the company into insolvency.
(2)That the First Respondent husband is restrained from selling, encumbering or transferring his interest in the business trading as “L Pty Ltd” otherwise than in the normal course of business trading.
(3)That the First Respondent husband is restrained pending further order from withdrawing or transferring funds from the following accounts held with the Q Bank:
(a) BSB ... Account …97;
(b) BSB ... Account …48;
(c) BSB ... Account …09; or
(d)Any account that may be held by the First Respondent in the Q Bank.
(4)That the First Respondent husband shall within 7 days order and provide to the Applicant wife, through her legal representative, the last 36 months of bank statements for the following accounts held with the Q Bank:
(a) BSB ... Account …97;
(b) BSB ... Account …48;
(c) BSB ... Account …09; and
(d)Any account that may be held by the First Respondent in the Q Bank.
(5)That the First Respondent husband shall within 7 days order and provide to the Applicant wife, through her legal representative, the last 36 months of bank statements for the following accounts held with Westpac Banking Corporation:
(a) BSB … Account …81;
(b) BSB … Account …17; and
(c)Any other account that may be held by the First Respondent with Westpac Banking Corporation.
(6)That the First Respondent husband shall within 7 days order and provide to the Applicant wife, through her legal representative, the last 36 months of bank statements for the following accounts held with the National Australia Bank:
(a) BSB … Account …94; and
(b)Any other account that may be held by the First Respondent with the National Australia Bank.
3.By consent and pending further order, the Applicant wife is entitled to occupy the property known as and situate at K Street, Suburb J in the State of New South Wales being Folio Identifier ....
4. The Second and Third Respondents be joined to the proceedings.
Notwithstanding the interim orders made, the husband now asserts that he has modest assets and has no interest in any property in Country N. He retains one space at the markets, he asserts has a value of $35,000 having previously sold spaces for $100,000 in 2015.
The husband was shown a search for property in Country N (Exh “V”) describing a property in the name of Mr B Chtibi in a District in AA City. The husband asserts that the described owner is his late father. The property he says was the property that was in part realised by way of resumption, ultimately giving rise to funds that were remitted to his Q Bank account in 2013 referred to below. Otherwise, he says that there is a house on the remaining part of the property that is immediately adjacent to a freeway and has little value. The wife asserts no contribution to such property.
The Q Bank Money
In May 2013 the husband opened a Q Bank US dollar account (…97). On 24 May 2013 $480,000 USD was deposited to that account. On about 13 June 2013 the husband opened a Q Bank Australian dollar account (…48). On 19 June 2013 funds from the US dollar account were transferred to the Australian dollar account in the sum of $503,144. On 19 June 2013 the sum of $500,000 was withdrawn from that account and transferred to the Q Bank (…09): Exh “T”.
He asserts the sum of $500,000 paid into his Q bank account on 19 June 2013 represents overseas family funds provided to him for investment purposes and $50,000 of his own money arising from the inheritance from his parents and from his late brother and sister. The husband asserts that he invested those funds in Y Pty Ltd. That company appears to have connections with members of the V family known to the husband: Exh “U”. The company Y Pty Ltd appears to have had its business licence cancelled on 10 July 2020 and as at 19 October 2020 was in external administration.
The husband in his oral evidence asserts that the investment funds were repaid to him about three or four years ago and those monies were paid to his brother’s bank account in Country N. Yet the husband has no documents evidencing repayment of the funds to him or transmission of those funds by him to his brother’s account. He asserts that he received his $50,000 back with those funds being retained by him. Those funds he has paid, he says, to his solicitors for legal fees. However, the husband has no objective evidence of his assertions as to the disposition of those funds notwithstanding his assertion that he received some documentation evidencing the same.
The market stalls
The husband prior to January 2015 had two full-time market stalls at the markets and two stalls that he operated on a part-time basis. The stalls were numbered 2, 5, 7 and 10. He acquired the stalls in about September 2007 for a consideration of $36,500.
The husband asserts that in March 2015 he sold stalls 2, 7 and 10 for $100,000 to a Mr W, his nephew. The sale price he says was paid in cash as to the sum of $50,000 and by way of transfer to his account of $50,000. These sales were not referred to in his primary evidence.
Notwithstanding the husband purported disposition of some of his market stalls in 2015, his gross trading revenue has increased from about $427,000 in the year ended June 2016 to about $914,000 in the year ended June 2018 and was about $733,000 in the year ended June 2019. His taxable income in 2019 of about $70,600 comprised PAYE income from his company and a franked dividend totalling $20,689 from his company.
As at 30 June 2014, about six months before separation the husband was owed $43,508 by his company. As at 30 June 2017 the husband owed to his company $33,248. This evidencing that over this period he has been able to draw from the company in addition to salary and dividends a net sum of about $76,750.
A word about the evidence
Notwithstanding a case outline proposing to rely on affidavits by his brother and his brother’s wife, during the trial the Court was informed that such affidavits would not be read and that the deponents would not be made available for cross examination.
As can be seen from the evidence referred to above, the actions of the husband’s brother and his wife are inextricably mixed into the property dealings as asserted by the husband. Why their evidence was not adduced is not clear. There is no suggestion that they were in some way not available.
Similarly, no evidence was adduced from Mr V who through his company acquired the K Street property by purchase, notwithstanding the wife remained in exclusive occupation of the same at the time and thereafter for some three years. There was suggestion that he was not available, indeed, he is a business acquaintance of the husband to whom the husband asserts that he pays rent of $550 per week to continue to occupy the property.
The absence of evidence as referred to above is concerning. Such persons clearly were relevant by reason of the husband’s assertions as his actions and the underlying interests of his brother and the brother’s wife in the property.
The absence of evidence gives rise to a consideration of the principles arising from Jones v Dunkel as succinctly summarised by McColl JA in RHG Mortgage Ltd v Rosario Ianni [2015] NSWCA 56:
The rule in Jones v Dunkel is that the “unexplained failure by a party ... to call witnesses ... may in appropriate circumstances lead to an inference that the uncalled evidence ... would not have assisted that party’s case”: Cross on Evidence (“Cross”), LexisNexis (at [1215]). Any “explanation” such as unavailability or absence of recollection for the failure to call the witness must be established by evidence: West v Government Insurance Office (NSW)[1981] HCA 38; (1981) 148 CLR 62 (at 70) per Murphy J; Rowell v Larter(1986) 6 NSWLR 21 (at 24 – 25) per Young J (as his Honour then was). The “rule cannot be applied to the non-calling of a [non-party] witness unless it would be natural for the party to call the witness, or the party might reasonably be expected to call a witness”: Cross (at [1215]); O’Donnell v Reichard (at 729) per Newton and Norris JJ.
The circumstances for drawing a Jones v Dunkel inference are found where the uncalled witness is “a person presumably able to put the true complexion on the facts relied on [by a party] as the ground” for any inference favourable to the plaintiff: Jones v Dunkel (at 308) per Kitto J; Australian Securities and Investments Commission (ASIC) v Hellicar [2012] HCA 17; (2012) 247 CLR 345 (“ASIC v Hellicar”) (at [168]) per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ.
The Iannis bore the burden of proof on the issue of whether the loan agreement and mortgage were unjust. Accordingly, in deciding whether they had discharged that burden of proof, it was relevant for the primary judge to have regard to their “ability to adduce evidence relevant to the issue and any failure on RHGs] part ... to adduce available evidence in response”: G v H[1994] HCA 48; (1994) 181 CLR 387 at (391 – 392) per Brennan and McHugh JJ.
In Payne v Parker[1976] 1 NSWLR 191 (at 201 – 202) Glass JA explained (albeit in a dissenting judgment, but in a passage accepted as correctly stating the relevant principles) when one party rather than the other would be expected to call a missing witness in the following manner:
“(6)Whether the [Jones v Dunkel] principle can or should be applied depends upon whether the conditions for its operation exist. These conditions are three in number: (a) the missing witness would be expected to be called by one party rather than the other, (b) his evidence would elucidate a particular matter, (c) his absence is unexplained.
(7)The first condition is also described as existing where it would be natural for one party to produce the witness: Wigmore, par. 286, or the witness would be expected to be available to one party rather than the other: O’Donnell v Reichard [1975] VicRp 89; [1975] VR 916, at p. 921, or where the circumstances excuse one party from calling the witness, but require the other party to call him: ibid. [1975] VicRp 89; [1975] VR 916, at p. 920, or where he might be regarded as in the camp of one party, so as to make it unrealistic for the other party to call him: ibid. [1975] VicRp 89; [1975] VR 916, at p. 920, Regina v Burdett(1820) 4 Barn & Ald 95; 106 ER 873, or where the witness’ knowledge may be regarded as the knowledge of one party rather than the other: Earle v Castlemaine District Community Hospital [1974] VicRp 86; [1974] VR 722, at p. 733, or where his absence should be regarded as adverse to the case of one party rather than the other: ibid. [1974] VicRp 86; [1974] VR 722, at p. 734. It has been observed that the higher the missing witness stands in the confidence of one party, the more reason there will be for thinking that his knowledge is available to that party rather than to his adversary: ibid. [1974] VicRp 86; [1974] VR 722, at p. 728. If the witness is equally available to both parties, for example, a police officer, the condition, generally speaking, stands unsatisfied. There is, however, some judicial opinion that this is not necessarily so: ibid. [1974] VicRp 86; [1974] VR 722, at p. 728. Evidence capable of satisfying this condition has been held to exist in relation to a party’s foreman: Cafe v Australian Portland Cement Pty Ltd (1965) 83 WN (Pt 1) (NSW) 280; his safety officer: Earle v Castlemaine District Community Hospital [1974] VicRp 86; [1974] VR 722; his accountant: Steele v Mirror Newspapers Ltd [1974] 2 NSWLR 348; his treating doctor: O’Donnell v Reichard [1975] VicRp 89; [1975] VR 916, at p. 921.”
If those conditions are satisfied, the tribunal of fact may “infer that that person’s evidence would not have helped that party’s case” and may then use that inference:
“(a)in deciding whether to accept any particular evidence, which has in fact been given, either for or against that party, and which relates to a matter with respect to which the person not called as a witness could have spoken; and
(b)in deciding whether to draw inferences of fact, which are open ... upon evidence which has been given, again in relation to matters with respect to which the person not called as a witness could have spoken”: O’Donnell v Reichard (at 929).
The primary importance of the evidence that may have been called from the absent witnesses cannot be understated. The husband was the registered owner of the K Street property. Yet he asserts that his brother and his brother’s wife had a significant interest in the property. He disposed of all but $50,000 of the proceeds of sale to those persons. He has the onus of establishing their interest, if any, in the property.
The husband failed to call Mr V whose company “purchased” the K Street property in highly unusual circumstances so soon after separation. The husband asserts that he “reduced” the sale price by $50,000 to reflect a debt owing by him to the purchaser.
Final submissions on behalf of the husband provides conjecture as to the evidence that may have been given by the husband’s brother and his wife. Such a submission exposes the folly of them not being called.
The inference clearly arises that the evidence of the absent “witnesses” would not have assisted the husband’s case. As such his assertions as to the interest of his brother and his brother’s wife in the subject property are not accepted. The property was at all times his.
The property pool
The husband contends for orders that provide to the wife one half of property identified.
Considering the discussion above the followings sums are to be particularly considered:
(a)The sale proceeds of the K Street property: $600,000
(b)The sale proceeds of the sold market stalls: $100,000
(c)Funds received from Country N June 2013 $500,000
Otherwise, the husband retains his company that trades from the remaining market stall and continues to gross significant recorded income.
It is contended on behalf of the husband that the “pool” should comprise:
Husband’s share of sale proceeds $ 150,000
Y Pty Ltd funds $ 50,000
Sale proceeds of market stalls $ 100,000
Remaining Market Stall $ 35,000
Husbands Z Superannuation $ 47,000
The wife seeks that the sale proceeds be included to reflect her assertion as to market value together with the $500,000 received by the husband from Country N and his “interest” in the home in Country N. There is no admissible evidence as to the asserted market value and the evidence as to the other funds is at best unsatisfactory. However, where the Court is satisfied that the husband has failed to be open and frank in his evidence, the Court can be more robust in determining issues before it.
By reason of the discussion above the property “pool” for consideration will comprise the following:
Sale proceeds of K Street $ 600,000
Sale proceeds Market Stalls $ 100,000
Remaining Market Stall $ 35,000
Y Pty Ltd funds $ 50,000
Husbands Z Superannuation $ 47,000
$ 832,000
Otherwise, the Court will have some regard to the husband’s unsatisfactory evidence as to the balance of Y Investment funds and property interests in Country N in determining s 75(2) matters.
The Approach to Property cases
The approach to the determination of an application under s 79 of the Family Law Act 1975 (Cth) (“the Act”) is set out in Stanford v Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19 and Chapman & Chapman [2014] FamCAFC 91.
In Stanford the majority [at 120] said as to ss 79(2) and 79(4):
... the requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. ... while the power given by s 79 is not “to be exercised in accordance with fixed rules”, nevertheless, three fundamental propositions must not be obscured.
The first of these propositions is for the Court to identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.
The second is that although s 79 confers a broad power on the Court, it is not a power that is to be exercised according to an unguided judicial discretion. It must be exercised in accordance with legal principles, including the principles which the Act itself lays down.
The third is that the question of whether the order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters set out in s 79(4). To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2) would be to “conflate” the statutory requirements and ignore the principles laid down by the Act.
The majority then said [at 122]:
... The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.
Thus the process ordinarily involves a staged process.
The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4) (Stanford supra). This consideration addresses the prohibition in s 79(2) of the Act.
The Court needs to conclude that it would be unjust or unfair to leave property rights intact.
In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
In particular, such a circumstance arises where both parties seek adjustive orders but are unable to agree as to same.
In Chapman the plurality, Murphy and Strickland JJ, observed at [19-22]:
Section 79 demands a consideration, separately, of all of its requirements without conflation. Provided a trial judge has done so, and the reasons demonstrate that this has been done, no error is demonstrated by a failure to follow a particular order in doing so. Further, the breadth and depth of the consideration of the s 79(2) issue, and the extent of an adequate exposition of it in the reasons, will vary from case to case. In that respect, the plurality in Bevan said, at [82], that the separate s 79(2) issue will, “…in many cases … [be] … effectively answered in the affirmative by the way the parties present their cases.”
Each of those conclusions conforms entirely with what was said about those issues by the High Court in Stanford v Stanford (2012) 247 CLR 108.
First, it is “…not possible to chart [the] metes and bounds” of the relevant discretion. Just as importantly, it was recognised specifically that the characteristics of individual marriage unions, in so far as they acquire, hold and deal with property, differ. In “many cases”, the union is underpinned by “…stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of the husband and wife during the continuance of their marriage” (Stanford, at [41]). And, in “many cases”, (but, not all) the “…just and equitable requirement is readily satisfied…” by the fact of separation: “[i]t will be just and equitable to make a property settlement order … because there is not and will not thereafter be the common use of property by the husband and wife” (Stanford at [42]).
“Ready satisfaction” of the s 79(2) requirement “in many cases” by reference to separation and its consequences brings with it a necessary further consequence; in those “many cases” the parameters, breadth and depth of the s 79(2) inquiry will be curtailed accordingly. It is those who lived within the “stated and unstated assumptions” who understand them best. As a result, satisfaction of the s 79(2) requirement can be inferred, at least in part, from the issues joined and, importantly, not joined, between the parties.
In this matter the matrimonial wealth such as it was, reposed in the husband. He has dealt with it in such a way that it is appropriate that there be an adjustive order in favour of the wife.
Once the s 79(2) issue is determined, the Court then considers the contributions made by the parties as defined in s 79(4)(a) to (c).
The Court must then consider the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant. Such a consideration can include arguments as to asserted add backs, alleged waste by a party or other financial resources that it is contended should be added to the actual pool as notional property or liabilities.
In the light of the reconsideration of the role of s 79(2) as a threshold question, it would be appropriate for the Court then to consider the “justice and equity” of the actual orders to be made (see Russell and Russell (1999) FLC 92-877, Teal & Teal [2010] FamCAFC 120) in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
Contributions
In Kessey and Kessey (1994) FLC 92-495 (Full Court) at 89,151 the Full Court made clear that ultimately all that is necessary is to evaluate the weight that should be given to each party’s contributions relative to the contributions of the other party:
“... In many – indeed probably in most – property settlement cases the Court has to evaluate and assess contributions to property in the absence of precise valuations of the contributions in question. Indeed, where the contributions to property are indirect or non-financial, precise valuation is impossible, and even where the contributions are direct or financial so that a valuation might be provided, other factors (not capable of precise mathematical statement) may well have eroded the initial value of such contributions. In a case such as the present, it is not necessary to arrive at precise mathematical valuations of the parties’ contributions - all that is necessary is to evaluate the weight that should be given to each party’s contributions relative to the contributions of the other party.”
In Farmer & Bramley[2000] FamCA 1615; (2000) FLC 93-060, Kay J clearly stated two things, namely:
“68.The Court’s task is to evaluate all of the contributions from the time of the commencement of the parties’ relationship until the time of the hearing and to give such weight to such contributions as the Court thinks is appropriate in the circumstance.
69.There is nothing in the legislation that requires s 79(4)(a)(b) and (c) contributions to be measured only in terms of what either party contributed to the assets of which the parties are presently possessed.
As the Full Court recently said in Horrigan & Horrigan [2020] FamCAFC 25:
[35]It is well established that an assessment of contributions is not a mathematical exercise, but rather involves the identification and assessment of all of the parties’ respective contributions, in a holistic way across the course of the relationship and in the post separation period to the point of assessment. (Pierce v Pierce (1999) FLC 92-844; Singerson & Joans [2014] FamCAFC 238; Dickons v Dickons (2012) 50 Fam LR 244 and Marsh & Marsh (2014) FLC 93-576; Lovine & Connor and Anor (2012) FLC 93-515 at [39]-[42]).
The husband contends that the wife should be entitled to “45 per cent or less” of the net pool: Submissions 8 February 2021.
The wife contends for a contribution determination as to equality.
In the circumstances of this matter, by reason of the discussion above, it is just and equitable to find that the parties’ entitlements by reason of contributions should be equal.
Section 75(2)
The consideration of the relevant matters referred to in s 75(2) of the Act, pursuant to s 79(4), like the assessment of contributions, is holistic. Also, like the assessment of contributions, it is not an accounting exercise.
A trial judge is obliged to “…consider the effect of the findings as to contribution on the respective positions of the parties, before proceeding to determine whether any adjustment was warranted pursuant to section 75(2)” (Willis & Willis [2007] FamCA 819, at [50]).
The Court is to have regard to the various relevant factors set out below in s 75(2) of the Act:
(a) the age and state of health of each of the parties;
(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;
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
(f)subject to subsection (3) the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)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;
(g)where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
(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;
(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;
(l) the need to protect a party who wishes to continue that party's role as a parent;
(m)if either party is cohabiting with another person the financial circumstances relating to the cohabitation;
(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
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties.
The wife contends that by reason of the respective financial circumstances of the parties that there should be a further adjustment of five per cent to the wife. The wife is on Centrelink benefits and is 42 years of age. She has little work skills, not having been in the workforce for many years and suffers from some psychological difficulties referred to above.
Otherwise, the wife has been out of the workforce for many years in her role within the household and has no formal training.
The husband continues to operate his market stall, more recently with a gross disclosed turnover of $733,399 in the 2019 year and $914,733 in the 2018 year. He asserts a salary of $50,000 per annum from the business. In previous years he has in addition paid himself a dividend from profits of the company.
He resides with one child still under 18.
The husband has modest accumulated superannuation and may accumulate more into the future. The wife has no superannuation.
The husband’s evidence is unsatisfactory and the Court is readily satisfied that he has failed to be open and frank with the Court as to the financial history of the marriage especially as to factual matters within his personal knowledge and as to documents supporting his various assertions. The Court is not satisfied that he has been frank with the Court in relation to the Y Investment funds and his interest in property in Country N.
By reason of the above considerations, there will be a further adjustment in favour of the wife of 10 per cent thus overall creating a disparity of 20 per cent between the parties of the “pool” as found above.
The “pool” has a notional value of $832,000. The wife is entitled to a payment from the husband of 60 per cent thereof being the sum of $499,200.
How he funds that payment will be a matter for him to determine.
I certify that the preceding one hundred and thirteen (113) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Foster. Associate:
Dated: 29 April 2021
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