Durante and Seggio and Ors
[2012] FMCAfam 1294
•30 November 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DURANTE & SEGGIO & ORS | [2012] FMCAfam 1294 |
| FAMILY LAW – Property – undefended proceedings – conduct of proceedings to date – husband found to have contravened court orders requiring him to disclose financial information to the wife – husband’s omission found to be calculated on his part – assessment of contributions – premature distribution of assets – assessment of section 75(2) factors. |
| Family Law Act 1975, ss.75(2); 79; 79(4); 106B; 117 Federal Magistrates Court Rules, rr.13.1A; 24.03 Federal Proceedings (Costs) Act 1981 s.10(3) |
| Seggio & Durante & Ors [2011] FMCAfam 77 Pierce & Pierce (1999) FLC 92-844 |
| Applicant: | MS DURANTE |
| First Respondent: | MR W SEGGIO |
| Second Respondent: | MR R SEGGIO |
| Third Respondent: | MS BISSI |
| Fourth Respondent: | STATE TRUSTEES LIMITED |
| File Number: | MLC 1121 of 2010 |
| Judgment of: | Brown FM |
| Hearing dates: | 12 & 13 November 2012 |
| Date of Last Submission: | 13 November 2012 |
| Delivered at: | Adelaide |
| Delivered on: | 30 November 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr Grigg |
| Solicitors for the Applicant: | Perry Weston |
| Counsel for the First Respondent: | In Person |
| Counsel for the Second, Third & Fourth Respondents: | No appearance |
ORDERS
In full and final settlement of the wife’s claim for settlement of matrimonial property it is ordered:
Within twenty-eight (28) days of the date of these orders the husband pay to the wife the sum of two hundred and eighty-two thousand dollars ($282,000.00) made up as follows:
(a)The sum of seventy-one thousand dollars ($71,000.00) being the husband’s entitlement in the Estate of his late mother Ms J Seggio currently held by the Fourth Respondent herein, State Trustees.
(b)The balance of two hundred and eleven thousand dollars ($211,000.00) by way of a cash payment.
The husband do all things necessary and execute all necessary deeds, documents and instruments to give effect to order 1(a) hereof including the execution of any necessary disclaimer of his interest in the Estate of Ms J Seggio and to otherwise authorise the Fourth Respondent to comply with this order.
In the event that the husband does not comply with order (2) of these orders a Registrar of this Honourable Court is authorised to sign a withdrawal of the husband’s disclaimer of his interest in the Estate of Ms J Seggio and execute any other necessary deeds, documents or instruments in order to give effect to these orders.
The husband pay the wife’s costs of these proceedings fixed in the sum of twenty-nine thousand dollars ($29,000.00) within twenty-eight (28) days of these orders.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses in action) in the possession of such party as at the date of these orders;
(b)Each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other;
(c)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;
(d)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
Liberty to apply in respect of consequential orders including in respect of enforcement.
IT IS NOTED that publication of this judgment under the pseudonym Durante & Seggio & Ors is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 1121 of 2010
| MS DURANTE |
Applicant
And
| MR W SEGGIO |
First Respondent
| MR R SEGGIO |
Second Respondent
| MS BISSI |
Third Respondent
| STATE TRUSTEES LIMITED |
Fourth Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings relate to the settlement of matrimonial property. The parties to the proceedings are the applicant wife, Ms Durante and the respondent husband, Mr W Seggio.
As I have decided that the proceedings are to be decided on an undefended basis, without any further input from the husband, it is necessary for me to set out what has happened in the matter since the wife commenced these proceedings in February of 2010, a period now approaching three years in duration.
The parties married in [P] in September of 1990. The wife’s mother tongue is Spanish and she speaks limited English. She gave evidence, in these proceedings, with the assistance of an interpreter. The wife is forty-six years of age.
The husband is sixty years of age. He was born in Poland, but migrated to Australia as a young man. The parties met in [P] and lived there until December of 2002, when they came to Australia, living mainly in Queensland.
The wife and husband did not work in the period following their departure from [P]. It is the wife’s understanding that the family’s financial needs, in Australia, were met by interest received from investments controlled by the husband. It has been her position, throughout these proceedings, that the husband has been and continues to be secretive, manipulative and dishonest in respect of his financial management.
The parties are the parents of two children – [Y] born [in] 1992 and [X] born [in] 1997. [Y] is now an adult. [X] has lived predominantly with the mother since the parties finally separated, which was in early January 2010.
Prior to the parties’ separation, the parties’ main financial asset was their former family home, situated at [S], a suburb of Brisbane. There is no dispute between the parties that this property was sold in July of 2009. The wife says the sale was approximately $420,000;[1] the husband that the sale price was $410,000 less $15,000 in sale costs.[2] The sale was a prelude to the parties moving to live in Victoria from December 2009 onwards.
[1] See wife’s affidavit filed 8 February 2010 at paragraph 5
[2] See husband’s affidavit filed 25 February 2010 at paragraph 6
From this date, the parties and their children lived in rented accommodation in Property M. They were living in these premises when they separated.
The wife’s evidence is that the husband behaved violently towards her, causing her to obtain a family violence order, against Mr Seggio, on 6 January 2010. At the time of the order, she and [X] were living in a refuge.
The major factual dispute between the parties concerns what has happened to the proceeds of sale of the [S] property. On its sale the property was not subject to a mortgage. The property had been purchased from the proceeds of sale of a business owned by the parties in [P] and the sale of two pieces of real property, owned by the husband in [D] in Victoria, which he had owned prior to moving to South America.
The wife commenced these proceedings within weeks of the parties’ separation. At the time of her application, her most pressing needs were financial. She was not in paid employment and had no access to any matrimonial funds, particularly the proceeds of sale of the [S] property. Her position, at the time, was that she was essentially destitute.
In these circumstances, she sought interim orders for spousal maintenance and the sole occupation of the Property M property. Importantly, in the context of the current proceedings, she sought orders requiring the husband to provide her with full disclosure of the details surrounding the [S] property, particularly the whereabouts of the proceeds of sale.
In conjunction with such disclosure, she sought an injunction restraining the husband from dealing with or disposing of these proceedings. She asserted her concern that the husband might seek to conceal these moneys from her.
The husband filed and answering affidavit and a statement of his financial circumstances on 25 February 2010, but apparently not an actual response. The statement of financial circumstances indicated that the husband was unemployed and had an income of nil. His major recurrent expenditure was said to be rent of $350.00 per week.
In addition, he deposed to having $2,000 in a Commonwealth bank account; a motor vehicle valued at $1,000; and a piece of real estate at [M] worth $10,000. Under the heading, on the statement of financial circumstances, relating to the disposal of property in the preceding twelve months, Mr Seggio deposed of having disposed of “$200,000+” in cash, which had been “donated to charity”.
He expanded upon this statement, in his answering affidavit, as follows:
“I have formed the view that the wife’s main concern was the division of family assets. She has refused or rejected my offers to assist with accommodation and expenses and due to her stance, I felt that as a good Christian I ought to remove temptation and greed from both of us. I have donated all of the funds previously held by me from the sale proceeds of the Brisbane property to various charities including:
a) Unicef
b) Oxfam Community Aid Abroad
c) Green Peace
d) Brotherhood of St Laurence
e) Help Haiti
f) Red Cross Australia
g) RSPCA
h) The Salvation Army
i) Royal Children’s Hospital
j) The Big Issue Australia
k) St Augustine’s Church, Bourke Street, Melbourne
l) St Monica’s Church in Essendon
m) Vision Australia
n) Sacred Heart Mission”[3]
[3] See Mr Seggio’s affidavit filed 25 February 2010
Annexed to his affidavit were what he described as a “recent bank statement” but which actually comprises two separate documents – firstly a list of transactions occurring between 1 February 2010 and 19 February 2010 in respect of a cash management call account held at the [omitted] branch of the Commonwealth Bank and secondly a photocopy of a passbook of a savings account held at the [omitted] branch of the Commonwealth Bank for the period between 2 February 2010 and 18 February 2010.
Both accounts are in the husband’s sole name and each shows a deposit of $200,000 having been made into each respective account, on 5 February 2010. In each case, the sum of $200,000 has been withdrawn in large instalments, in the period shown on the respective statements. The provenance of the deposit into the cash management account is recorded as being Ms Bissi, who is the husband’s sister.
In her initiating affidavit, the wife had deposed as to her concerns that the husband had been uncooperative in detailing his financial circumstances and she feared he might “get rid” of the money from the [S] property to avoid giving any of it to her. She described Mr Seggio as “evasive and deceptive”. It is her case that her concerns are born out by the husband’s dealings with these two bank accounts and his conduct both before and after the accounts were depleted.
On 1 March 2010, the first return date of the wife’s application, Hartnett FM made the following orders:
1. The husband file a response within 7 days hereof.
2. The husband forthwith provide to the wife’s solicitors full details including copies of all documents pertaining to:
a. the sale of the parties property at [S] in the State of Queensland (“the property”) including the name of the estate agent acting and the conveyancing firm’s details;
b. the proceeds of the sale of the parties property;
c. the disposal of the proceeds of the sale of the property;
d. any donations made by the husband to any charity in the past 12 months, including the dates of any donations, the amount of such donation and copies of receipts in relation thereto.
3. Until further order the husband be restrained from dealing with, disposing of or in any way acting with respect to the proceeds of sale of the property.
4. The husband within 48 hours hereof surrender his passport to the Registrar of the Federal Magistrates Court of Australia at Melbourne to be had until further order.
5. The husband within 7 days deliver to the wife’s solicitors all of the wife’s and childrens clothes, personal papers and chattels currently located at the former matrimonial home at Property M in the State of Victoria.
6. The further hearing of this matter be adjourned to 14 April 2010 at 10.00am.”
The husband filed a response on 10 March 2010. The response was silent in respect of property matters, specifying only the orders which Mr Seggio sought in respect of the interim and final parenting arrangements for [Y] and [X].
The husband has not subsequently filed any further response. It is however clear from his conduct, throughout the proceedings, that he opposes any orders being made disposing of marital property, in the wife’s favour, as he has consistently asserted to the court no relevant property exists to which such orders can attach..
On 14 April 2010, an interim order was made that [X] live with the wife. No order was made in respect of the child spending time with his father or in respect of the allocation of parental responsibility for him.
In a procedural sense, the next significant development in the case occurred on 23 April 2010. On this occasion, the wife commenced contravention proceedings against the husband as a result of what she asserted was his non-compliance with Hartnett FM’s orders of 1 March 2010, requiring him to provide disclosure in respect of the sale of the [S] property.
Concurrently with this application, the wife also sought orders in respect of the real property disclosed by the husband in his earlier filed financial statement, at [M]. She sought the immediate sale of the property concerned and the transfer of the proceeds to her.
In response to the orders of 1 March 2010, the husband had provided a short written document dated 5 March 2010. He acknowledged the proceeds of sale of the property were $395,000. The salient details of the document read as follows:
“As I have said I donated it all. I kept no records. I did it in an emotional way as I saw the greed of money is destroying our marriage. I donated it over several weeks, some by direct donation some by mail. Some with random names some without names. I do not remember the dates or how much to each charity.”[4]
[4] See annexure B to the affidavit of the wife filed 23 April 2010
In oral statements to the court, the husband asserted that he had obtained $400,000 in cash and in the space of little over a week purchased three hundred envelopes, which he had filled with money and then dropped off in the letterboxes of various but unspecified charities. The wife rejects this statement as being ludicrously improbable and categorises it as a flagrant contempt of the court’s authority.
In her affidavit filed in support of her contravention application, the wife made other criticisms of the husband’s response to the orders made on 1 March 2010 by Hartnett FM. She asserted that Mr Seggio’s financial statement was not an accurate reflection of his financial position. In particular, she deposed that Mr Seggio had failed to disclose an interest held by him in his deceased parent’s home situated at [A].
The wife also deposed that the husband had failed to disclose other assets controlled by him to both her and the court. She deposed as follows:
“For six years prior to that [the sale of the [S] property] we lived in Brisbane. The respondent did not work. We lived off the proceeds of our investments with the Commonwealth Bank. The respondent often told me that these investments were in the region of $200,000 and provided us with an income on which we lived. He never disclosed to me full details. I note that he has not disclosed any investments in his financial statement. If the respondent had no other funds or investments, how is it that we have survived as a family for the past seven years? I say that this is a further example of the respondent’s contempt for this Honourable Court.”[5]
[5] See wife’s affidavit filed 23 April 2010 at paragraph 5(d)
The wife’s various applications, including the contravention application, were personally served on the husband on 29 April 2010. He had been self represented since 1 March 2010 and continues to be so. He did not formally respond to any of the documents prepared on the wife’s behalf. Given the quasi-criminal nature of the contravention proceedings, he was not obliged to file affidavit material in respect of it.
The date allocated for the first return of the wife’s contravention application and other ancillary applications was 6 May 2010. On this occasion, Hartnett FM put the relevant allegation to Mr Seggio that he had contravened the court’s order in respect of the disclosure of details concerning the sale of the [S] property and the disposal of its proceeds. Mr Seggio denied the allegations.
Accordingly, Hartnett FM commenced the hearing of the wife’s contravention application. During the course of this hearing, Mr Seggio provided oral evidence on oath and was cross-examined by counsel for the wife.
During the course of his evidence, Mr Seggio agreed that the settlement of the [S] property had occurred in July of 2009 and that thereafter the sum of $389,383.15 had been deposited into his account with the Commonwealth Bank on 2 July 2009, followed by a further deposit of $8,230.00 being made into the same account, which also related to the sale of the property.[6]
[6] See transcript of proceedings for 6 May 2010 at page 41
During the course of his evidence, Mr Seggio indicated that he was living at premises situated at Property A, [A]. He indicated that the registered proprietors of this residence were his parents, both of whom were deceased. His father having died in 1982 and his mother in 2001.
Counsel for the wife provided a copy of the late Mrs J Seggio’s Will to the husband, which was subsequently tendered into evidence.[7] This will bequeathed the entirety of the late Ms J Seggio’s estate to her children, in equal shares, in the event that her husband pre-deceased her.
[7] See exhibit NDS1
In cross-examination, Mr Seggio conceded that his mother’s will indicated that her estate was to be divided equally between him, his brother and sister. However, he himself denied having any proprietary interest in the property concerned.
The explanation proffered by Mr Seggio, as to why he considered that he did not have any interest in his late mother’s estate, was as follows:
“… my brother indicated that he would challenge my mother’s will in respect that I was away for twenty years, I made no contribution, either to the house or my mother’s wellbeing, and as I’m in this situation, I have no financial assets and cannot challenge him. So I decided not to contest his challenge, in that case I will have no interest.”[8]
[8] Ibid at page 36
From documents tendered by the wife’s counsel, in the contravention proceedings, it became apparent to the court that State Trustees Limited had applied for probate of the will of the late Ms J Seggio in the Supreme Court of Victoria in September of 2009. The estate was confined to the property situated at [A], which was valued at $250,000.[9]
[9] See exhibits NDS2 & NDS3
Mr Seggio also deposed that he had “lent” his sister $200,000, which she had subsequently returned to him. He denied that this purported loan was an attempt to frustrate any claim made by the wife. Rather, he asserted that his sister had “needed the money” and he had lent it to her.
In further cross-examination, Mr Seggio denied owning any shares or having any interests in superannuation. He denied having any significant funds in any other bank accounts. He acknowledged owning a block of land at [M].
In terms of funding the family’s living expenses, whilst the family was living in Brisbane, Mr Seggio deposed that he had relied on the proceeds of sale of two properties owned by him in [D], which he believed had been sold by him for $480,000. The [S] property had been purchased from these proceeds for the sum of $275,000, leaving a balance of approximately $215,000, which Mr Seggio indicated had been the source of the family’s financial support in its Brisbane years.
Under cross-examination, Mr Seggio indicated that this sum had been invested in shares, which he had bought and sold. However, he could not remember the names of the shares and had no records in respect of them. He indicated that he had not used a broker to purchase any of the shares in question. So far as his bank records for the period in question, Mr Seggio said that he had used them to make papier mache.
Mr Seggio, whilst on oath, maintained his account of having donated the proceeds of sale of the [S] property to various charities. He maintained that he had no documentary proof of these various donations. He deposed as follows:
“… on 1 March, I was in a highly emotional state. My advice was, to save the marriage, get rid of the cause of the divorce, or the intent of the divorce and my advice, on religious grounds, was get rid of it as soon as you can. So I said, on 14 March, I bought about three hundred envelopes, I put an unknown amount in each; I went driving around, putting them in donation boxes. I got names and addresses from the telephone book. I put those names and addresses on the envelope. I send them sometimes without return address, sometimes with different return of address, I do not recall, doing that in a state of high emotion, to whom, when, and how much…”[10]
[10] See transcript at page 46
This was the background to Hartnett FM making a raft of further orders dealing with the various disclosure issues arising from the husband’s evidence. The relevant orders were as follows:
“THE COURT ORDERS THAT:
1. Any interest of the husband in the estate of his mother MS J SEGGIO be paid by State Trustees Limited to the solicitors for the wife to be held in an interest bearing account on behalf of the parties until further order.
2. The State Trustees Limited are hereby restrained from paying any monies to the husband or transferring any real property into his name or that of a nominee from the assets of the estate of MS J SEGGIO until further order.
3. The solicitors for the wife serve a sealed copy of these Orders upon Ms J of State Trustees Limited. There is liberty to apply to State Trustees Limited to apply on short notice.
4. The husband within 7 days hereof transfer to the wife all his right title and interest in the real property known as and situate at Lot [omitted] and being in [M] in the State of Victoria and more particularly described as Certificate of Title Volume [omitted]. The Court notes the property is presently unencumbered and the husband is hereby restrained by himself, his servants and/or agents from encumbering the real property, from selling the real property, from diminishing in any way its value and further from dealing with the real property in any way whatsoever save in compliance with this Order. The wife is at liberty to lodge a caveat over the title to the real property.
5. In the event the husband fails to comply with order number 4 herein then pursuant to section 106A of the Family Law Act 1975, the Registrar of the Federal Magistrates Court of Australia at Melbourne be forthwith appointed to execute the Transfer Documents in the name of the husband and do all acts and things necessary to give validity and operation to the transfer and the Transfer Documents.
6. The husband produce to the wife’s solicitor within 21 days hereof:
a. the conveyancing file with respect to the sale of Property [S] in the State of Queensland;
b. a history of all share transactions conducted by him from 1 January 2007 until 6 May 2010;
c. copies of all bank account statements of any and all accounts operated by him since 1 January 2007 to 6 May 2010; and
d. all documents required to be produced pursuant to order number 2 of the Orders made 1 March 2010.”
The contravention proceedings were adjourned to 2 August 2010 at 10:00am. Prior to this date, the husband filed his own contravention application alleging that the wife had failed to attend a dispute resolution process at a family relationship centre.
This was said to be in contravention of an order of Hartnett FM made on 14 April 2010 where she had, following the interim live with order made in respect of [X] ordered as follows:
“In the event a dispute exists with respect to the parenting of a child the parties are to attend upon a dispute resolution provider prior to the seeking of any further parenting orders.”
In addition, on 28 July 2010 the wife filed two further affidavits. The first of these was deposed by Mr L, a land valuer. He deposed that he had valued the [M] property and assessed its value to be $2,500. The meagre value of the property arising because, due to its size, it was unable to be developed.
The second affidavit was deposed by the wife herself. She deposed that view that the husband continued to disregard the various orders requiring him to disclose information to her. She further deposed that Mr Seggio had taken no steps to transfer the [M] to her, as previously ordered, but given Mr L’s view of the land’s value, from her perspective, it was pointless to pursue this aspect of the case further.
More significantly Ms Durante provided correspondence to the court, which her solicitor had received from State Trustees. This indicated that the trustee did not regard the husband as being a beneficiary under his late mother’s estate, as he had disclaimed his interest. In order to protect the wife’s potential interest in this property, her solicitors had lodged a caveat on the title of the [A] property.
In these circumstances, the wife asserted her concern that the husband might collude with his sister and brother to receive his allegedly surrendered share of his mother’s estate after it had been distributed. This was the background to the wife amending her application and particularly to seek the joinder of the husband’s sister, Ms Bissi and brother Mr R Seggio as parties to the proceedings. In addition, the wife sought an order that the husband be compelled to withdraw his purported disclaimer of interest in the estate of his late mother.
On 2 August 2010, Hartnett FM found that the husband had contravened the court’s order as alleged by the wife. She adjourned the question of the penalty to be imposed upon the husband to a later date. In respect of the wife’s amended application, the court directed the applicable documents be served on Mr R Seggio and Ms Bissi. The wife herself was directed to file an affidavit in support of her amended application, to which the husband was directed to respond within a further twenty-one days.
The wife has complied with this direction. In particular, she deposed as follows:
“I am of the view that the husband disclaimed his interest in the estate purely as an endeavour to avoid his entitlement being factored into the asset pool that would become part of matrimonial property negotiations. Had the husband genuinely wished to refuse the gift bequeathed to him, he would have done so immediately and not after the passage of 5 years and more importantly, the breakdown of our marriage.
I firmly believe that the husband’s conduct in disclaiming his interest in the mother’s Estate is a blatant attempt to misguide this Honourable Court and defeat my claim for an equitable property settlement.”[11]
[11] See wife’s affidavit filed 27 September 2010 at paragraphs 10 & 11
Later again, on 28 September 2010, the wife further amended her application and sought to join State Trustees as a party to the proceedings. In this context, she sought injunctions against the Trustee to restrain it from distributing any portion of the late Ms J Seggio’s estate to either Ms Bissi or Mr R Seggio.
The matter returned to court on 26 October 2010. Prior to this date, the husband did not file any responding affidavit material, as he had earlier been directed to do by the court. However, on 25 October 2010 the State Trustees filed material seeking the dismissal of the wife’s claim as it affected its administration of the estate of the late Ms J Seggio. In particular, the State Trustees sought an order compelling the wife to remove her caveat lodged on the [A] property.
In support of its application State Trustees relied on an affidavit of
Ms F, who is a solicitor in the employ of State Trustees. Ms F deposed that the husband had attended the offices of the State Trustees on 11 February 2010 and stated that he wished to disclaim his interest in his late mother’s estate.
This orally conveyed intention was apparently confirmed in writing by a letter from Mr Seggio to State Trustees dated 22 February 2010. Clearly, these potentially significant developments occurred in the period following the parties’ separation and around the time the wife commenced proceedings in this court seeking orders in respect of the division of the parties’ property.
The case returned to court, before FM Hartnett, on 26 October 2010. On this occasion State Trustees argued that the husband’s disclaimer of interest in his late mother’s estate had been effectively made and therefore the court had no jurisdiction to direct Mr Seggio to withdraw his disclaimer, as it was a completed disposition on his part.
At the hearing of 26 October 2010 Ms Bissi and Mr R Seggio were represented by counsel, but chose not to make submissions. They were each subsequently joined as parties and ordered to file affidavit material, particularly to disclose details of any financial transactions between each of them and the husband.
In discrete proceedings regarding the husband’s contravention application against the wife, Hartnett FM dismissed the application filed 22 July 2010.
Ultimately, on 3 February 2011, Hartnett FM rejected the arguments of State Trustees. She held as follows:
“… with the husband having full knowledge of his likely inheritance and in his inaction and silence for a period being unequivocal acceptance, then having so tacitly accepted, the right to disclaim is lost to the husband, whether or not prejudice is occasioned to others even though I have found there is such prejudice.
In addition to, or in the alternative, the order the wife seeks can be made pursuant to s.106B of the Act and/or s.80(1)(k) of the Act. The husband has effectively signed a document notifying of his avoidance of a gift. He has done so voluntarily and alienated his prospective entitlement. He has done so in circumstances where he has sought to deprive the wife of any funds such that he claims to have also disposed of approximately $400,000 of the parties’ assets. His intention is to defeat any order of this court that might provide the wife with monies from whatever source and his disclaimer renders him not entitled to any part of the ultimately administered estate of his mother. This precludes the making of any order in the wife’s favour which can reasonably be anticipated in these proceedings wherein the husband claims to have disposed of $400,000. If indeed he has, there is no other financial resource or asset available to the wife on the evidence as described in these reasons other than the husband’s beneficial entitlement. The court determines it proper to exercise its discretion in this matter and make the order sought by the wife. In order to do justice as between the parties such an order as sought by the wife should be made.”[12]
[12] See Seggio & Durante & Ors [2011] FMCAfam 77 at paragraphs 25-26
In addition Hartnett FM found that the husband had contravened the earlier orders of the court. Initially, by way of penalty, it was proposed that the husband enter a good behaviour bond subject to the condition that he comply with all further orders of the court.
By necessary implication, the intention of such a disposition was to afford Mr Seggio the opportunity to purge his contumacious behaviour and make available the information sought by the wife and those advising her. The proceedings were adjourned to give Mr Seggio an opportunity to consider his position and whether he was prepared to enter the recognisance proposed.
As he was entitled to do, the husband sought to appeal the decision of Hartnett FM, in respect of the disclaimer issue, to the Full Court of the Family Court. The appeal was heard by Strickland J on 8 June 2011 with judgment being delivered on 24 February 2012. The husband’s appeal was dismissed.
Strickland J found that it was open to Hartnett FM to conclude, as she had done, that the husband had lost his right to disclaim his interest in his late mother’s estate. However, more significantly, His Honour endorsed Hartnett FM’s view regarding the application of section 106B of the Family Law Act to the circumstances of the case.
Section 106B grants the court a discretion to set aside any disposition of a party in proceedings under the Act, “which is made or proposed to be made to defeat an existing or anticipated order … which, irrespective of intention, is likely to defeat any such order.” In his judgment dismissing the appeal, Strickland J held as follows:
“… the making of the written disclaimer [by the husband] was clearly made to “defeat” an anticipated order. One only needs to take into account the timing of the husband’s actions and the surrounding circumstances including the disposal of $400,000 to accept that this finding was also open to her Honour.”[13]
[13] See Seggio & Durante And Ors [2012] FamCAFC 27
The applicant sought special leave to the High Court to appeal against the orders of Strickland J dismissing his appeal. Hayne & Crennan JJ declined to grant such special leave on 15 August 2012. Necessarily this process of unsuccessful appeal, instituted by the husband, has significantly delayed the wife’s application for matrimonial property orders. Costs of the appeal were granted in the wife’s favour by the Full Court.
On 28 April 2011, the wife’s contravention application returned before Hartnett FM for penalty. A fine of $2,000, to be paid within sixty days, was imposed upon the husband. It appears to be the case that he declined to enter the good behaviour bond initially offered to him.
Following the conclusion of the appeal process, the matter returned before Hartnett FM on 26 March 2012. On this occasion Her Honour fixed the matter for final hearing and directed the parties attend a conciliation conference. Importantly, each party was directed to file and serve any further affidavit material, for the trial, not less than fourteen days prior to the final hearing.
Prior to the matter returning to court, Ms Bissi and Mr R Seggio had each filed affidavits in the court as had earlier been directed. The effect of Ms Bissi’s evidence was that she had been approached by the husband, who had asked her to hold the sum of $400,000 on his behalf in late July 2009. She held the money for him until early January 2010, when she returned it to him. This account was at odds with the husband’s evidence that he had lent the money to Ms Bissi, as a result of her unsolicited request to him for a loan.
The conciliation conference failed to resolve the issues between the parties. Accordingly, the case returned to court on 24 October 2012, the date scheduled for the final hearing. On this occasion, the husband, who was self represented, made an oral application for Hartnett FM to disqualify herself from the further hearing of the matter.
The grounds for the application were firstly that the wife’s solicitor had attempted to solicit him to commit perjury in the case and secondly that there was an agreement between Hartnett FM and Mr Weston (the wife’s solicitor) to fix the result of the proceedings. Essentially the husband alleged that the court’s processes were corrupt.
The application for her disqualification was dismissed but Hartnett FM determined that to avoid further litigation and uncertainty, particularly in respect of the possible further delay of the wife’s application, it was prudent that the case be determined by a Federal Magistrate other than her.[14] This was the background to my becoming involved in the hearing of the case.
[14] See Durante & Seggio & Ors [2012] FMCAfam 1169
The hearing of 12 November 2012
At the hearing of 12 November 2012, the wife was represented by her counsel, Mr Griggs. The husband appeared on his own behalf. At an earlier hearing of the matter, Mr R Seggio and Ms Bissi, through their solicitor had indicated their desire to be excused from further attendance at court. Each had indicated that they would abide by any order made by the court. State Trustees adopted a similar approach. The Trustees have not recently appeared before the court and will accept its judgment.
Neither prior to 24 October 2012 nor afterwards has the husband filed any additional affidavit material. He has not formally indicated what orders he seeks in respect of the division of the parties’ matrimonial property. The only operative pleading on the court’s file produced by Mr Seggio to date is his response filed on 10 March 2010. This deals exclusively with children’s issues.
On 3 February 2011, Hartnett FM had ordered that a family report be prepared to assist the court and the parties determine appropriate arrangements for the care of [X]. The report was released in April of 2011 and recommended that [X] continue to reside with his mother and contact his father, in his own time, to arrange to spend time with his father.
The parties both apparently accepted this recommendation. Accordingly, it was common ground between the parties that no judicial determination was required in respect of final parenting issues for [X]. The sole issue before the court concerned the division of property.
When the matter was called on, counsel for the wife, Mr Griggs, indicated that he was ready to proceed with the matter on a final basis. He further indicated that his client had recently commenced employment and he wished, in due course, to tender a recent payslip, which she had received. He indicated that he had discussed this matter with Mr Seggio and allowed him to examine the payslip.
Mr Seggio remained self represented. Initially, he indicated to the court that he wished to seek the assistance of the duty solicitor. On this basis, the matter was stood down, without demur from Mr Griggs.
When the matter was recalled, Mr Seggio indicated that the duty solicitor was unable to assist him. At this stage, he further indicated that he wished to seek an adjournment of the proceedings. The reason proffered for the adjournment was that he wished to issue a subpoena to the wife’s employer, which subpoena he asserted would produce documentary evidence that the wife had lied about her employment history. The application for adjournment was opposed by Mr Griggs.
In my view, it was clear that the central evidentiary issue in the case was the extent of the pool of property available to be divided between the parties, particularly how the proceeds of sale of the [S] property should be treated. As I have already indicated, this issue had been the subject of earlier proceedings, which had included the cross-examination of the husband about the matter and which had resulted in adverse credit findings regarding Mr Seggio.
I was also concerned that the proceedings had been on foot for a significant period of time. It also seemed to me that Mr Seggio himself had not engaged particularly constructively with the trial process. Certainly, it was clear that he had not filed any recent affidavit material in respect of his position.
On that basis, I declined Mr Seggio’s application for an adjournment and indicated to him that the matter would proceed. My recollection is that Mr Seggio did not accept this decision particularly graciously. Rather, he reiterated his application for an adjournment.
Following his remonstrations with the court, he appeared to grasp his abdomen and began to moan. Whilst seated, he placed his head on the bar table. Arrangements were made for him to have first aid treatment from the court’s first aid officer. Following this treatment, an ambulance was called and he was taken to the [omitted] Hospital.
I am not qualified to assess what precipitated Mr Seggio’s apparent medical emergency. However, given the history of Mr Seggio’s involvement in the matter, as already outlined and given the temporal proximity of his apparent indisposition to his failed adjournment application, I was inclined to adopt a cautious response to it. In particular, I was of the view that it was desirable that steps be taken to ensure that, if necessary, relevant medical evidence about Mr Seggio’s condition be placed before the court sooner rather than later.
In the event that no such medical evidence materialised, I was anxious to prevent a situation whereby Mr Seggio was able to obtain the deferral of his wife’s application through a process of manipulation emanating from him.
For those reasons, I made the following orders:
“1. The matter is adjourned to 10am on 13 November 2012.
2. The respondent husband is directed to appear on the adjourned date in person, unless he is certified medically unfit to do so by a registered medical practitioner.
3. In the event the husband is certified as medically unfit to attend the hearing on 13 November 2012, he is to provide a medical report in writing to the Court and the legal practitioner for the applicant wife by facsimile, to be received no later than 9.30am on 13 November 2012; such report setting out the full nature of the condition with which the husband is said to be suffering, a diagnosis, and a full prognosis as to his condition; the onus being on the husband to provide complete information as to why he was taken from the Court to hospital this day, what condition, if any, he suffers from and details, if any, as to why it is certified he will not be in a position to pursue the orders specified in his response filed in this Court on 25 October 2010, and when he is likely to be able to pursue same.
4. The wife’s costs of today are reserved.
5. The solicitor’s for the husband are to serve a sealed copy of these orders personally on the husband as soon as practicable.
6. If the husband fails to comply with orders 2 and 3 hereof, the wife has leave to proceed on an undefended basis on the adjourned date.”
I concede that the orders are erroneous in one aspect. Order 3 makes reference to a response dated 25 October 2010. A response was filed on this date but not by the husband. The response in question was filed by State Trustees. The only response document filed by the husband was on 10 March 2010. This error was mine alone.
The order of 12 November 2012 was personally served on Mr Seggio later that day at 4.59pm by a process server, Mr D. Mr D deposed that he handed the order to Mr Seggio at [address of hospital omitted]. Mr Seggio confirmed his identity and indicated that he would not be attending court but rather would “get a certificate from the hospital to cover [him].”[15]
[15] See affidavit of service of Mr D filed 13 November 2012
Mr Seggio did not attend court on 13 November 2012. Nor did he provide any medical evidence, in respect of his non-attendance, as required by order 3 of the orders of 12 November 2012.
Mr Griggs advised me that his instructing solicitor, Mr Weston had spoken to a Dr K of the Emergency Department at the [omitted] Hospital. Later Dr K faxed a brief letter to Mr Weston as follows:
“Mr W Seggio was brought into the Emergency Department at [omitted] Hospital today. He will be unable to attend court tomorrow.”
In my view, this letter in no way complies with what was intended when I made my orders on 12 November 2012. The clear onus was on Mr Seggio to obtain from those attending him explicit medical information regarding his condition. No medical explanation was provided to the court, by Mr Seggio, as to why he had not attended court on 13 November 2012.
In all these circumstances, Mr Griggs applied to have his client’s application dealt with on an undefended basis. Given the circumstances of the matter, up to this stage, I determined to accede to this request.
The legal principles applicable to undefended proceedings
It is a significant thing for proceedings to be determined in the absence of one of the parties. The court has an obligation to ensure that the parties to proceedings before it have an opportunity to participate in those proceedings.
Before a person can be adversely affected by judicial order, he or she must be afforded an adequate opportunity to be heard.[16] I am satisfied that Mr Seggio has been given more than an adequate opportunity to appear in these proceedings and has in any event put his unequivocal position before the court, which has earlier been rejected.
[16] See Taylor v Taylor (1979) 143 CLR 1
It can be inferred, I think, from Mr Seggio’s conduct in the proceedings to date that he is of the view that Ms Durante is not entitled to receive any matrimonial property order, in her favour, from the court. I reach this conclusion for the following reasons:
·Mr Seggio has said to the court, whilst on oath, on several occasions that he has given away the parties’ major matrimonial asset – the proceeds of sale of the former matrimonial home. This alleged alienation of property occurred in the period following the parties’ separation and after Mr Seggio had earlier transferred the sum involved to his sister. This court has found Mr Seggio’s assertion that he donated the sum to various charities to be untrue.
·Mr Seggio attempted to divest himself of another major asset – his interest in his late mother’s estate – only after the parties separated and after the wife commenced proceedings in this court. This court has found that this attempt at alienation of property was designed to defeat Ms Durante’s claim for matrimonial property.
·
By failing to enter into the recognisance, which was offered to him by the court following the court’s finding that he had contravened its order, a condition of which bond was that
Mr Seggio abide by all future directions of the court, Mr Seggio has indicated an unwillingness to cooperate with the court’s processes.
·Mr Seggio has failed to comply with orders requiring him to file affidavit material for the final hearing scheduled in this matter.
·Mr Seggio has failed to provide an adequate explanation as to why he failed to appear at court, as directed, on 13 November 2012.
The Federal Magistrates Court is a court of private law. It determines disputes between parties according to law. In this case, according to the provisions of the Family Law Act 1975, which relate to the division of property following martial breakdown.
The court cannot compel a respondent to engage with litigation. It is however obliged to give a respondent the opportunity to put evidence before the court and if he or she wishes to contest any evidence relied on by the applicant.
For the reasons provided above I am satisfied that Mr Seggio has been given ample opportunity to put his position before the court. As such it would be potentially unfair to Ms Durante to delay the proceedings further, given her application to the court to deal with the proceedings in the absence of Mr Seggio.
A respondent, whether by intransigence, disinterest or manipulation, cannot succeed in denying an applicant a just resolution, according to law, to his or her application, by choosing not to take part in proceedings because they do not proceed in the manner of his or her preference.
I am satisfied, on the basis of the evidence available to me, that
Mr Seggio has behaved capriciously and manipulatively throughout these proceedings. Ultimately there comes a time when this behaviour reaches a point where the court concludes that the interests of justice, including Ms Durante’s entitlement to have her case finally determined, outweigh Mr Seggio’s entitlement to put material before the court.
Rule 13.1A of the Federal Magistrates Court Rules deals with the court’s authority to enter judgment against a respondent if that respondent defaults in complying with a court order or fails to prosecute any proceedings with due diligence. I am satisfied that
Mr Seggio has failed to comply with court orders and has not prosecuted his response to the wife’s application either diligently or appropriately. His attitude has been one of obstruction.
The wife is not entitled, as of right, to the orders which she seeks. Rather, the onus remains on her to establish to the court that the orders which she seeks are just and equitable according to law.
Essentially, Ms Durante must lead sufficient evidence to establish her case to the court and persuade it that the result she proposes is a just and equitable one. Otherwise, the court should impose the result in the case it considers fair according to law and the evidence available to it.
The Evidence
The formal affidavit evidence, on which Ms Durante relies in these proceedings is as follows:
i)Four affidavits of herself filed on 8 February 2010; 23 April 2010; 29 July 2010; and 27 September 2010.
ii)A statement of her financial circumstances filed 25 February 2010.
iii)An affidavit of Arti Chetty, her solicitor, filed 27 April 2011.
In addition, the wife gave evidence on oath on 13 November 2012. This evidence related to her current circumstances. Although she was not subject to any cross examination, I have no reason to doubt her evidence. She appeared to me to be an honest witness.
Mr Seggio’s account of having withdrawn large sums of money, which he donated to charity anonymously, was rejected by Hartnett FM. On 2 August 2010, whilst on oath, Mr Seggio stated that he had been advised to adopt this course by three Catholic priests whom he had consulted. Mr Seggio has not called evidence from any of the priests concerned to corroborate his version of events.
The wife is not in a position herself to call evidence which can irrefutably disprove the husband’s assertions regarding the disposal of the matrimonial assets in question. At this stage, given the attitude which the husband has taken, it is impossible for her to trace where the funds in question might be.
The husband’s position relies solely on his assertion that it is the truth. On balance, his account of events appears inherently improbable. Throughout these proceedings, he has not presented as a witness of candour. The solicitors for the wife have done what can be done to disprove the husband’s evidence. In my view they can reasonably do no more.
Ms Chetty has deposed that she has contacted the various charities identified by the husband in his affidavit of 25 February 2010 as being recipients of his donations. None of the charities can provide evidence in support of the assertions made by the husband that he has donated the moneys in question.
In my view, the proximity of both the husband’s actions in disclaiming his interest in his late mother’s estate and his withdrawal of the moneys from his bank account with the parties’ separation and the institution of these proceedings can be no coincidence. The husband’s assertion that the proceeds of sale of the [S] property were lent to Ms Bissi as a result of her unsolicited request is specifically rebutted by the evidence of Ms Bissi herself.
In all the circumstances of this case, I have come to the view that I am entitled to find that Mr Seggio has been an unreliable witness and has consistently concealed his true financial position from both the court and the wife.
The parties to property proceedings, brought under the Family Law Act 1975, in this court, are under a duty to make a “full and frank disclosure” of their financial circumstances.[17] This duty has been described as being “fundamental to the whole operation of the Family Law Act in financial cases…”.[18]
[17] See Federal Magistrates Court Rules at Rule 24.03
[18] Per Smither J in Briese & Briese (1986) FLC 91-713 cited with approval by the Full Court in Black & Kellner (1992) FLC 92-287 at 79,133
In Weir & Weir the Full Court of the Family Court said as follows:
“…the failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the court is unable to identify the property of the parties, to properly assess contributions, or to properly assess section 75(2) factors.”[19]
[19] Weir & Weir (1993) FLC 92-338
Accordingly, the duty to make a full and frank disclosure, in financial matters brought under the Family Law Act 1975, does not arise merely by virtue of the rules or practice of the court but rather is a fundamental rule of law, which arises because of the necessity for the court, in each property proceeding arising before it, to consider all aspects of the financial circumstances of the parties concerned.[20]
[20] See Luciano & Luciano (unreported) Family Court (O’Ryan J delivered 8 May 2000) at paragraph 373
In appropriate cases, there may be adverse consequences for a party, if it can be shown that he or she has deliberately failed to make a proper disclosure of some material financial fact. Such a non-disclosure may result in the court drawing an adverse inference against the party, who has not made a proper disclosure.
In Weir & Weir[21] the Full Court said as follows:
“It seems to us that once it has been established that there has been a deliberate non-disclosure…then the court should not be unduly cautious about making findings in the favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature…We should have thought that the courts jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.”
[21] See Weir & Weir (supra) at 79,593
In the present case, I am satisfied that the husband has failed, so far, to make a full disclosure of his financial situation, particularly so far as the proceeds of sale of the former family home. In addition, I am satisfied that the husband has both, actively and passively, made it as difficult as possible for the court to deal with Ms Durante’ application.
In those circumstances, I am not inclined to be “unduly cautious” about finalising the proceedings, in the absence of material from the husband following his absence from the court on 13 November 2012, without adequate explanation. In my view, it would be unfair to the wife to allow the husband to dictate both to her and the court how the proceedings are to be managed because of his unacceptable behaviour to date.
Given my rejection of the husband’s evidence, regarding the disposal of the proceeds of the former family home, which follows the earlier rejection of that evidence by Hartnett FM, it must follow that it is the court’s finding that Mr Seggio continues to hold the funds in question and is likely to be the only individual able to give a proper account of them both to the court and the wife. That he has not done so to date, in defiance of numerous directions from the court to do so, is indicative of his attitude to both the wife and the processes of this court.
Mr Seggio’s conduct has created an impasse. Given the court’s finding, it is no solution to that impasse that he continues to maintain his discredited account of what befell the proceeds arising from the sale of the former family home. The only apparent solution to this impasse is for Mr Seggio to provide the truth to the court as to what has happened to the monies in question.
I am satisfied that Mr Seggio has deliberately fabricated his account of anonymously donating the money to various charities. Apart from the apparent absence of the money, there is no compelling circumstantial evidence to support his account. It has been demonstrated, particularly in regards to his account of how the monies came to be in the control of Ms Bissi, that he is capable of being dishonest and deceptive towards the court’s processes. None of the priests who allegedly counselled him in respect of his purported donations has been produced.
To allow Mr Seggio to maintain his version of events, without consequences for him, would be a situation, in my view, calculated to bring the court’s processes into disrespect. Certainly it would be a situation which would cause the general community some level of disquiet. In the words of the Full Court, it would undermine the community’s confidence in the process of the court’s adjudication of property disputes arising under the Family Law Act and be tantamount to a “charter for fraud”. The court cannot stand idly by, whilst deceptions of this character occur during the processes administered by it.
The orders sought by the wife
The wife seeks the following orders:
“Order 5 of the Orders of this Honourable Court made 3rd day of February 2011 remain in all full force and effect and the parties do all things necessary to facilitate payment to the Wife by State Trustees of the Husband’s entitlement in the estate of Ms J Seggio and for that interest to be retained by her for her own use and benefit absolutely.
In the event the Husband does not comply with order 5 of the Orders of this Honourable Court made 3rd February 2011 within 7 days of the date of this Order, a Registrar of this Honourable Court be authorised to sign a Withdrawal of the Husband’s Disclaimer of his interest in the Estate of Ms J Seggio on his behalf in compliance with that Order.
That the Husband within 60 days of the date of this Order, pay the Wife’s costs of and incidental to these proceedings fixed in the sum of $26,586.12.
That the Husband pay to the Wife within 14 days the sum of $200,000.
That unless otherwise specified in these Orders and save for the purpose of enforcing any monies due under these or any subsequent Orders:
a) Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at the date of these Orders;
b) Each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other;
c) 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;
d) Any joint tenancy of the parties in any real or personal estate is hereby expressed severed.”
The rationale of these orders is that the pool of the parties’ matrimonial assets should be deemed to include the proceeds of sale of the [S] property and the husband’s interest in his late mother’s estate. Thereafter, the wife’s position is that the court should find that the parties made equal, albeit different, contributions to the acquisition and preservation of those assets.
It is further the wife’s position that her limited English skills and lack of work experience and professional qualifications warrant a further distribution of property in her favour in the region of 10% of the nominated value of the pool. Accordingly, at the end of the process it is her submission that a 60/40% division of the pool, in her favour, would represent a just and equitable outcome of these proceedings.
The orders of February 2011 and of May 2010 referred to above relate to earlier orders made by the court relating to the preservation of the husband’s interest in the estate of his late mother.
The legal principles applicable to the division of matrimonial property
The process to be followed for the division of the parties’ property is well established by law.[22] The relevant legal principles are primarily contained in sections 79 and 75(2) of the Family Law Act 1975. I am required to follow a number of specific steps.
[22] See Lee Steere v Lee Steere (1998) FLC 91-626; Ferraro v Ferraro (1993) FLC 92-335;
Firstly, I must ascertain what are the parties’ assets and liabilities as at the date of trial.[23] This is because there is only one exercise by the court of the power conferred on it by section 79 to make a matrimonial property order.
[23] See Wardman & Hudson (1978) FLC 90-466; and Biltoft & Biltoft (1995) FLC 92-614
The second step involves the court ascertaining the contributions which party each has made towards the assets identified following the first step. Contributions fall into two broad categories.
The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage, including any contribution made in the capacity of home maker or parent.”[24]
[24] See Family Law Act s79(4)(c)
It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 75(2) of the Family Law Act 1975. Pursuant to section 75(2)(o), the court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
Finally in determining what order the court should make under section 79, the court must be satisfied that in all the circumstances, it is just and equitable to make the relevant orders. Overall, it is the justice and equity of the actual orders that the court must consider.[25]
[25] See Russell v Russell (1999) FamCA 187
Step One – the pool of assets
I am satisfied that the husband’s conduct, in respect of the full and frank disclosure of his financial position, has placed the wife in a significant position of disadvantage in these proceedings, particularly so far as the accurate identification of the property pool is concerned.
It seems clear the husband traded shares during the marriage and the family itself lived off the income produced by investments controlled by the husband but not as yet fully disclosed to by him. What is the extent of those assets must be conjecture.
What is currently known is what were the proceeds of sale of the [S] property. They are in an amount of approximately $400,000.00. This is the amount I propose to adopt for the purposes of finalising the parties’ pool of property. I will return to the rationale of this approach in due course.
On the basis of the evidence available to me, in the form of a letter from State Trustees, I find that the husband’s late mother left property to the value of $270,000.00. State Trustees have incurred costs in administering the estate in an amount of $56,000.00. Accordingly, the husband’s net third share in his mother’s estate can be valued in a sum of $71,000.00 in round terms.
The difficulty in this case can be easily stated. The wife is not in position to point to the current location of the larger proportion of these funds as the husband has claimed to have disbursed them. In this sense, the proceeds of sale of the [S] property must be regarded as property in a notional sense.
The Full Court of the Family Court[26] has identified three areas where it is appropriate to notionally “add back”, into a pool of matrimonial property, assets which do not exist or cannot be categorically proved to be still existing. The circumstances are as follows:
·Where matrimonial assets have been utilised to pay the parties’ legal fees, thus diminishing the pool of assets available to be distributed between them and so creating a situation where the normal rule whereby each party should bear his or her own costs is defeated.[27]
·Where there has been a premature distribution of matrimonial assets.[28]
·Where one of the parties has embarked on a course of conduct, either recklessly or with the direct intent to reduce or minimise the effective value of some item of matrimonial property.[29]
[26] See AJO v GRO (2005) 33 Fam LR 134 at 144
[27] See In the Marriage of DJM and JLM (1998) 23 Fam LR 396
[28] See In the Marriage of Townsend (1994) 18 Fam LR 505
[29] See In the Marriage of Kowaliw (1981) FLC 91-092 at 76,644
In regards to the third of these categories, it has been pointed out by the Full Court that this principle represents a guideline for the court rather than a fixed code, bearing in mind the discretionary nature of the jurisdiction created by section 79 of the Family Law Act.[30]
[30] See In the marriage of Browne & Green (1999) 25 Fam LR 482
In my view, the proceeds of sale of the [S] property can be easily said to fall into both the second and third of these categories. However, given my finding that Mr Seggio is lying in respect of his account of having disbursed the funds to various charities, I prefer to categories the sum concerned as being a premature distribution of assets in his favour in the sense that he has determined that he alone can know where they are currently located.
The parties do not have any significant debts to speak of, other than the wife has incurred legal costs to date in an amount of at least $26,000.00. Neither party has any future entitlement to superannuation. On this basis, I find that the parties’ pool of assets, available to be divided between them, amounts to somewhere in the vicinity of $471,000.00.
In my view, this is a conservative estimate, given my finding that
Mr Seggio has not made a full and frank disclosure of his financial position and it is probable that he has access to other financial resources and assets in the form of his share portfolio, which funded the parties’ needs in the period prior to their separation.
Step Two – assessment of contributions – section 79(4)(a) – (c)
I now turn to the second of the steps in the exercise under section 79, namely an assessment of the parties’ contributions within the context of section 79(4)(a) to (c). These provisions are as follows:
“Section 79(4) In considering what order (if any) should be made under this section in proceedings with respect to any property of the parties to a marriage or either of them, the court shall take into account –
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of home maker or parent.”
Section 79(4) requires that the court look at the entirety of the contributions, both financial and non-financial, to the welfare of the family, as well as to the acquisition, conservation and improvement of those assets. Contributions are not required to be tied to the acquisition, conservation and improvement of any particular asset and maybe taken into account generally as contributions in a total sense.
The marriage between the parties was one of approximately twenty years in duration. As such, it is to be regarded as a long marriage. It produced two children, now aged nineteen and fifteen respectively. The wife gave evidence, which I accept, that she provided the major component of the children’s parenting, both in [P] and Australia. I also accept that she was the family’s main homemaker.
In [P], the parties operated a business which [omitted]. The husband was the principal person who ran this business, which provided financial support for the family. However the wife was also involved in its administration. When the family moved to Australia, the proceeds of sale of the business funded the relocation.
Neither party has been regularly in the paid workforce since the family arrived in Australia. The husband renovated the [S] property, whilst the wife remained the family’s prime homemaker. The family seems to have lived in modest circumstances. Given the extreme level of the husband’s non disclosure, it is not possible to ascertain definitively how the family’s lifestyle, albeit what I have described as a modest one, was financed.
It is clear that the husband had significant assets, given the parties’ current circumstances, at the outset of their marriage. He owned some two real properties at [D], which were sold to finance the purchase of the parties’ former family home. Given the length of the marriage between the parties and what has occurred in the period since, I do not think that this initial contribution is one which requires “special recognition” at this point of the court’s deliberations.[31] In my view, it would not be just and equitable to proceed on such a basis, given the significance of the wife’s contributions over the many years of the marriage.
[31] See Pierce & Pierce (1999) FLC 92-844 at 85,811
In my view, at the end of the second step in the court’s deliberations, the parties various and disparate contributions, during their lengthy marriage, are to be regarded as being essentially equal.
Step Three – section 75(2) factors – the prospective needs of the parties
I am now required to consider the various matters set out in section 75(2) and in particular to consider whether any further adjustment should be made in favour of either party.
Given the nature of the hearing before me, it is difficult to assess the applicability of the various section 75(2) factors to the husband’s circumstances. On the other hand, the wife has given recent oral evidence, which I accept, of her current circumstances. The section 75(2) factors are as follows:
(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 divorced, 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 adequate income;
(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; and
(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:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party;
(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 other 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 is 47 years of age. She enjoys good health. I accept her evidence that her first language is Spanish and her English skills are limited. More significantly, I accept that she does not have any specific employment qualifications or skills. Accordingly, at present, her options in the workplace are limited to unskilled positions.
The wife’s evidence is that she has recently commenced employment, on 20 September 2012, as a casual [omitted]. Her base rate of pay is $17.05 per hour, which increases if she works at night or on weekends. As at 1 November 2012, she had earned just under $4000.00 gross for the financial year to date. In the pay period between 24 and 30 October 2012, she earned $813.37 prior to tax. In these circumstances, I accept that she is likely, at best, to remain a modest income earner for the foreseeable future.
Ms Durante continues to receive a supporting parent benefit. She lives in rented accommodation. Her major weekly expenditure is her rent of $475.00 per fortnight. [X] remains financially dependent upon her. Mr Seggio pays her no child support whatsoever.
Mr Seggio is 60 years of age. He has not been employed, in Australia, for a significant period of time. I have no proper evidence regarding his state of health. It seems likely to me that he is not currently a particularly attractive employment prospect. Given the husband’s conduct in the proceedings to date, when coupled with his non payment of child support, it does not seem unreasonable for the court to reach the conclusion that Mr Seggio is disinclined to seek employment if it means any portion of his income is diverted to the wife.
In my view, a proper analysis of the applicable section 75(2) factors dealing with employability, care of children under eighteen and amenability to payment of child support favour the wife. In these circumstances, I assess that it is proper to make a further allowance of 10% in the wife’s favour by reason of these factors at the third stage.
Conclusions
The pool of the parties’ matrimonial property, as I have calculated it, amounts to $471,000.00. 60% of this sum amounts to $282,600.00. Of this amount, only the monies held by State Trustees are readily identifiable and so receivable by the wife. They stand at $71,000.00 or approximately 25% of the sum to which I have determined the wife is entitled.
If the husband is able to continue with his deceit in respect of the proceeds of sale of the former matrimonial home and maintain with impunity that the monies concerned have gone beyond his control it will constitute a grave injustice to the wife. A collateral aspect of such an outcome will be that the proper system of adjudication of matrimonial property disputes will be brought into disrepute in the eyes of the community.
The manner in which this matter has proceeded has been both unsatisfactory and unfortunate. The case has been on foot for well over two years. The delay is in no way attributable to any conduct originating with the wife. The interests of justice demand that the case be finalised as best it can be at this stage.
If I had not acceded to the wife’s application to deal with the case on an undefended basis, I have grave reservations that the matter would ever have been finalised, even on a provisional basis. Certainly Mr Seggio, through his conduct, has indicated that he will do whatever is within his power to frustrate the wife’s application.
Ms Durante has been represented throughout. She has been ready to proceed at each time the matter has been listed for hearing. She is entitled to an end to the stress inherent in the proceedings. In addition, the interests of justice demand that that the court act decisively in the face of Mr Seggio’s intransigence and obstinacy.
I am satisfied that, in all the circumstances of this case, the outcome I propose represents a just and equitable one. I am well aware that potentially these proceedings are far from concluded. What happens next is likely to depend on the husband.
Costs
Section 117(1), abolishes, for the purposes of Family Law Act proceedings the general rule that in civil proceedings costs follow the event. Section 117(2) then provides the court with a general discretion to make costs orders if it is of the opinion that there are circumstances that justify it in so doing. The court may make such order for costs as it “considers just”.
Section 117(2)(A) sets out the matters that the court shall have regard to in exercising this discretion. They include the following: the financial circumstances of the parties concerned; the receipt of legal aid by the parties; the conduct of the parties to the proceedings; whether the proceedings were necessitated by the failure of a party to comply with previous court orders; whether one of the parties to the proceedings have been wholly unsuccessful in them; any offers to settle the proceedings; and any other relevant matter.
In this matter, given the findings I have made about Mr Seggio’s conduct in these proceedings, I am satisfied that it is proper to make an award of costs in the wife’s favour. The amount sought by the wife is $26,000.00. I will make an award, in her favour, in this amount.
Costs in the sum of $3,000.00 were reserved following the aborted hearing of 12 November 2012. As the husband has not provided an adequate explanation as to why the hearing was unable to proceed, it is appropriate that he pay this sum also. In my view, this is not a situation to which section 10(3) of the Federal Proceedings (Costs) Act 1981 is applicable. The proceedings have been neither discontinued nor can it be said that the deferral of the proceedings of 12 November was not due to neglect, default or improper act of any party to the proceeding. To the contrary, in my view, the deferral was solely due to the conduct of Mr Seggio.
I will order that he pay the wife’s costs fixed in the sum of $29,000.00.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and seventy (170) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate:
Date: 30 November 2012
and Clauson v Clauson (1995) FLC 92-595; Hickey v Hickey & Attorney General of the Commonwealth of Australia (Intervenor) 2003 FLC 93-143
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