D and X

[2008] FCWA 34

[2008] FCWA 34

JURISDICTION	:	FAMILY COURT OF WESTERN AUSTRALIA
ACT	:	FAMILY LAW ACT 1975
LOCATION	:	PERTH
CITATION	:	D and X [2008] FCWA 34
CORAM	:	PENNY J
HEARD	:	6 & 7 FEBRUARY 2008
DELIVERED	:	17 MARCH 2008
FILE NO/S	:	PT 5911 of 2005
BETWEEN	:	D
Applicant/Wife
AND
X Respondent/Husband
Catchwords:

Property settlement - lengthy marriage - husband increased mortgage without wife's permission - husband to be responsible for extra mortgage sum - non-disclosure by husband

Legislation:

Family Law Act 1975 - s 75(2), s 79

Category: Not Reportable

Representation:

Counsel:

Applicant	:	Mr R Bannerman
Respondent	:	Ms L Chen

[2008] FCWA 34

Solicitors:

Applicant	:	Bannerman Solicitors
Respondent	:	Lily Chen & Associates

Case(s) referred to in judgment(s):

Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener)s
(2003) FLC 93-143

[2008] FCWA 34

1 The husband and wife had been unable to resolve the manner in which their

property, and in particular the proceeds of a house in [the suburbs], should be divided. Both allege the other during the course of these proceedings failed to make proper disclosure of their financial position, particularly since separation. While the wife might have been slow in providing her documents, the level of disclosure by the husband has been minimal.

2 When cross-examined on the first day of trial, the husband said bank statements

in relation to the mortgage account had been lost, left with the previous solicitor or stolen by the wife and their son. The following day some of the previous “lost” documents appeared, apparently having been found in his car, but many relevant documents were never provided.

3 In general I found the husband evasive in the manner in which he gave his

evidence. He has failed to give proper disclosure, as will be set out later in my
judgment, and he did not tell the truth about a number of matters.

Brief background and history of the parties and the marriage

4 The parties were both born [overseas]. The wife is now aged 57 and the

husband 56 years. They married in 1980 and the only son of the relationship, (known
as [Alan]), was born in December 1981.

5 In April 1990 the husband came to Australia to study and commence

employment. The wife remained [overseas] with [Alan]. In 1996 the husband was granted permanent residency in Australia and around September 1997 the wife and [Alan] arrived in Australia with the husband to live. In May 1998 the parties purchased the property at [the suburban address], which became the former matrimonial home.

6 On 27 January 2004 the parties separated and have not lived together since that

time. In November/December 2004 the husband’s name was placed on the business name extract relating to the purchase of [a business]. The husband alleges [the business] was purchased by his sister-in-law [overseas].

7 In early December 2004 the husband refinanced the former matrimonial home

by extending the mortgage by approximately $100,000. The wife had no notice of the
increase in the mortgage.

8 The wife now lives in rented, modest accommodation. The husband has continued to reside in the former matrimonial home.

The law
9	The approach to be taken in relation to an application for property settlement
pursuant to s 79 of the Family Law Act 1975 is a four step process. Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143. Those steps are:

[2008] FCWA 34

• identify the value of the assets and liabilities of the parties;

• consider the contributions made by the parties within paragraph (a) to (c) of s 79(4);

• consider the s 75(2) factors, together with any matters relevant pursuant to s 79(4)(d)-(g); and

• consider whether the order proposed is just and equitable.

Assets and liabilities of the parties

10 It is hard to know the true state of the husband’s assets given the lack of disclosure by him.

11 In summing up, the wife’s counsel stated that the husband had an insurance

policy with a surrender value of $2,877. Since trial I have been provided by the husband’s solicitors with documentation which proves that there is no such surrender value to that policy, and it has now expired.

12 The main issue for me to determine is whether the sum of $100,000, being the

amount by which the husband increased the mortgage over the family home, should be
regarded as a debt of the parties, and the asset pool reduced accordingly.

13 The former matrimonial home was purchased in the name of the husband only.

At the time the property was purchased the wife thought it was to be placed in her name as well as the husband’s. Neither the husband nor the wife are able to speak English well. In fact, the former matrimonial home was registered in the husband’s name, but the parties were joint borrowers in relation to the mortgage. Despite the fact that the parties were joint borrowers, the husband was able to discharge the existing mortgage over the property at [the suburban address], then held by BankWest, in the sum of approximately $65,000, and take out a new mortgage with the ANZ bank in the sum of around $165,000. The husband acknowledges that he did not obtain the wife’s approval for this transaction, saying that there was a Violence Restraining Order in place and he was unable to contact the wife. The husband acknowledged that at this time he was in close contact with [Alan]. He was aware that [Alan] was in close contact with the wife. He did not make any attempt to advise the wife of the fact that he intended to increased the mortgage.

14 Unfortunately, the husband has failed to produce any documents relating to the

discharge of the mortgage to BankWest and the documents relating to the new mortgage taken out with the ANZ Bank. I have no doubt that BankWest would not have discharged the mortgage in the name of both the husband and the wife without the authority of the wife, or someone purporting to be the wife, signing a discharge of the mortgage. We know the wife did not sign the document. In my view, it is highly the husband obtained the signature from someone else and purported to the bank that it was the wife’s.

15 In paragraph 5 of the husband’s affidavit sworn on 1 December 2005, he stated

as follows:

[2008] FCWA 34

“The reasons for re-finance were that I owed my brother and sister-in-law

[overseas] more than $40,000 which they lent to me 2001 or 2002 to assist me to repay the loan. I used the re-finance money to repay my brother and sister-in-law about $50,000 including interest. In August 2004 I went [overseas] to visit my mother was who sick and hospitalised and in total I spent more than $20,000 for my mother and my family members, as I did not go back [overseas] for more than 7 years.”

16 Attached to the husband’s affidavit sworn 10 May 2007 are affidavits from the

husband’s sister-in-law and sister [both from overseas]. Neither of these witnesses were available for cross-examination. The husband's sister [from overseas], whose name is [Ms T] stated that the husband owed her money for rent for the period 1989 to 1997 when the wife resided in an property owned by her [overseas]. She alleges that the rent owed to her for this period was between and $8,000 and $9,000. His sister went on to state that she lent him $3,000 in 1999, $7,000 towards his mortgage and $12,000 in 2001. She also states that on another two or three occasions she left him over $10,000. She says she lent him more than $40,000 and he repaid her the sum of $50,000 in 2005, including interest.

17 The sister-in-law [overseas], whose name is [Ms M], stated that she lent to the

husband $2,000 in 1990, and $2,000 in 1998. She says that in August/September 1999, when the husband flew [overseas], he borrowed $25,000 from her. She says in January 2005 she was repaid about $30,000.

18 It can be seen that the husband's description of how the alleged debts were

incurred and why it was distributed as it was, is quite different to his sister and sister- in-law. The husband said that he owed his brother and sister-in-law [overseas] more than $40,000, which they lent to him in 2001 and 2002. This was not confirmed by [Ms M]. The husband then went on to say that in 2004 he spent more than $20,000 “for my mother and my family members”. He does not say he received that money from his sister-in-law, nor does he say he had any commitment to repay her.

19 I am not satisfied that the husband repaid the $100,000 to his family members

or, if he did, that the payment was made to reduce a legitimate debt. Neither the husband’s sister nor sister-in-law were prepared to make themselves available for cross-examination in relation to their affidavits. While the husband says the funds to purchase the [business] came from his sister-in-law [overseas] it may well have been that she was repaid the funds by the husband upon the refinancing of the mortgage.

20 I do not know whether the $100,000 was used to purchase the [business] but, in

my view, the husband has had the benefit of those funds. The wife should not be responsible for the increased rate of the mortgage. I am told the outstanding amount on the mortgage is approximately $155,000. $55,000 of that should be taken into account as a debt of the parties.

21 At the time the parties separated they both had money in their bank accounts.

The husband had more than $16,000 and the wife more than $15,000. The wife says since separation she purchased a car for their son in the sum of almost $10,000. She said this was to repay the son, [Alan], because his Austudy payments were used by the parties while he was studying to assist to discharge the mortgage.

[2008] FCWA 34

22 Later in evidence the wife provided some disturbing information about events

which occurred shortly before the separation. The wife says that she was approached by the husband at around the end of 2003 and asked to sign a divorce application which stated that the parties separated in June 2002, but they had lived under the same roof since that time. The wife says that the husband wanted the divorce because he was going to be paid $30,000 to marry a woman from [overseas] and sponsor her to come to Australia. The husband’s evidence was that it was the wife’s plan to do this. However, the husband confirmed that it was he who went to see a lawyer in Fremantle, and it was he who signed the divorce application in front of a Justice of the Peace stating it was true. When asked why he signed it and the wife did not, his answer was that she made him. If the wife had been anxious to be part of this lie to misrepresent to the Court the true state of their marriage, I am sure she too would have signed it. The wife says that knowing what the husband was contemplating doing caused her to move funds from her own name into [Alan]’s name.

23 The wife says that funds were also paid to a niece as a family member had forwarded those funds to the parties to hold for the niece’s education expenses.

24 Given the state of the evidence, and the fact that amounts held by the parties

were similar, I am not satisfied that either sums in the wife or the husband's possession
at trial should be added back to the asset pool, and I do not intend to do so.

25 At the time the parties separated the husband owned a [car] and a

[four wheel drive]. The husband had been, both before and after separation, in the business of buying cars, doing them up and selling them. He was assisted in this endeavour at times by [Alan].

26 After separation the husband sold the [car] for $6,000 and the [four wheel drive]

for $6,300. In my view, both those sums should be added back to the asset pool as they relate to assets purchased during the course of the relationship and sold afterwards.

27 The parties have agreed that the [former matrimonial home] should be sold and are hoping to sell it for around $600,000.

Assets and liabilities of the parties

Wife’s bank account	$200
Wife’s house contents	2,000
Wife’s Westscheme Superannuation	2,354
Husband’s Challenge Bank bonus saver account	1,700
Husband’s contents of former matrimonial home	2,000
[The former matrimonial home]	600,000 (est)

[2008] FCWA 34

Add-backs:

Funds received by husband for sale of [the car] and the [four wheel drive] 12,300

$620,554

Less mortgage $55,000

$565,554

Contributions

28 When the parties lived [overseas] the wife was employed. When the husband

came to Australia in 1990 he came with the parties’ savings. The wife continued to work [overseas] and support [Alan]. The husband says that he sent back [overseas] funds of around $20,000 for the support of the wife and [Alan]. The wife says that the husband did not send back funds except in the sums of US$1,000 and another in the sum of HK$5,000. As I have stated previously, I did not find the husband to be a witness of truth. He could not prove that he had forwarded sums [overseas]. When the parties returned to Australia from [overseas] in 1997, the husband had saved a sum of $19,000 existing then in his bank account in Australia. I do not accept that the husband sent back $20,000 in excess of that sum, and accept the evidence of the wife on this issue.

29 The husband went back [overseas] in 1996 and did not work until the parties left

in approximately 1997 to live in Australia. Upon arriving in Australia the husband had funds in a bank account of approximately $19,000. The wife obtained work very shortly after arriving in Australia. The settlement for [the former matrimonial home] was about seven months later. The wife says by that time she had saved the sum of $7,000 and the parties used those funds to deposit into the bank account. The records show that around the time of settlement $27,000 was placed into the bank account. I am satisfied that the money was made up of $20,000 from the husband and $7,000 from the wife.

30 The wife says that during the time in Australia the husband was in and out of

work, often unemployed and at times not able to work because of injuries. The mortgage was generally to be met by the husband, but for lengthy periods he did not pay the mortgage. The wife was responsible for the living expenses. When the husband was injured the mortgage statements show that the wife was meeting the mortgage payments on a fortnightly basis.

31 The husband was buying, renovating and selling cars. He appears to have

earned an income from this. His bank records show that he was deducting quite large sums for himself over the course of the marriage. The husband's family members did pay monies into the parties’ bank account, which were used to discharge the mortgage. The wife says that these were to meet various expenses of family members who came to Perth or were to be educated in Perth. I accept this evidence.

[2008] FCWA 34

Non-financial contributions

32 The wife says that she was the major care-giver to [Alan] during the course of

the marriage and was mainly responsible for the household duties. The wife worked
as well as completing the home duties.

33 The husband says that he too was responsible for home duties, particularly when the wife was working and he was injured. I do not accept that was the case.

Contributions since separation

34 The husband has not always paid the mortgage payments in a timely fashion. In

addition, he has had the benefit of living in the former matrimonial home since
separation, a benefit denied to the wife.

Conclusions on contributions

35 In my view, on contributions alone the assets should be apportioned equally. This was a lengthy marriage, the parties both contributed in their own way.

Section 75(2) factors

36 The husband and wife are aged 56 and 57 respectively. The wife is not in good

health and has been out of work for some significant time. The husband has a capacity to work, which he is now exercising. He works when required for a cash payment with a friend. I am satisfied there is no reason why he cannot continue to work. His English is better than the wife’s and, in my view, he has a greater ability to earn in the future than she does.

37 The former matrimonial home will have to be sold and the funds divided

between the parties. In my view, there should be a further cash allowance to the wife to make up for the fact that her ability to earn, given her age, medical condition and lack of English, is limited. There should be an apportionment of 5% to the wife to take into account this factor.

Proposed orders

1 The former matrimonial home situate at [the address], being Portion of [named] Location xxx and being Lot x on Diagram xxxxx and being the whole of the land more particularly described as Certificate of Title volume xxxx Folio xxx (hereinafter known as the former matrimonial home) be sold.

2 Upon the sale of the former matrimonial home the proceeds be applied as follows:

(a)	in payment of costs, commission and expenses relating to the sale;
(b)	in payment of any outstanding council and water rates;
(c)	the husband is to be responsible for the first $100,000 owing on the mortgage to the ANZ Bank;

[2008] FCWA 34

(d)	the parties are to be liable for the remaining funds owing;
(e)	the balance of the proceeds be divided so the wife retains 55% of the parties’ assets and the husband 45%.

3 Each party is to retain any assets in the care and possession, including any superannuation entitlements.

4 The application and response otherwise be dismissed.

I certify that the preceding [37] paragraphs are a true copy of the reasons for

judgment delivered by this Honourable Court

Associate