Elkhouri & Amatullah
[2017] FamCA 688
•6 September 2017
FAMILY COURT OF AUSTRALIA
| ELKHOURI & AMATULLAH AND ANOR | [2017] FamCA 688 |
| FAMILY LAW – PROPERTY – property of unknown value – contracts with third-parties to the relationship |
Briese and Briese (1986) FLC ¶91-713
Chang, J v Su, S (2002) FLC ¶93-117
Fraser & Moedt (Unreported, Family Court of Australia, Nicholson CJ, Lindenmayer & May JJ, 13 June 1997)
In theMarriage ofBlack and Kellner (1992) FLC ¶92-287
Stanford v Stanford (2012) FLC ¶93-518
Stein, CM v Stein, M (2000) FLC ¶93-004
Weir and Weir (1993) FLC ¶92-338
Child Support (Assessment) Act 1989 (Cth) ss 5, 123A
Family Law Act 1975 (Cth) ss 75, 79
| APPLICANT: | Ms Elkhouri |
| RESPONDENT: | Mr A Amatullah |
| SECOND RESPONDENT: | Ms B Amatullah |
FILE NUMBER: DATE DELIVERED: | PAC 5098 of 2013 6 September 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Gill J |
| HEARING DATE: | 5, 6 and 7 October 2016 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Cairns |
| SOLICITOR FOR THE APPLICANT: | Farah Lawyers |
| COUNSEL FOR THE RESPONDENT: | Ms Lawson |
| SOLICITOR FOR THE RESPONDENT: | Turner Freeman Lawyers |
| COUNSEL FOR THE SECOND RESPONDENT: | Mr Tockar |
| SOLICITOR FOR THE SECOND RESPONDENT: | John R Quinn & Co. | |
Orders
The parties shall do all such acts and things and sign all such documents as may be necessary to authorise and direct C Lawyers to disperse the moneys held on trust by the solicitors in their controlled money account in relation to the proceeds of sale of the Suburb D property, as follows:
(a)Firstly, payment of 44.4 per cent of the moneys held to the solicitors of the wife on her behalf;
(b)Secondly, the payment of the balance there remaining, being 55.6 per cent of the moneys held in that account, to the solicitors on behalf of the second respondent;
The husband shall indemnify and keep indemnified the wife in respect of any and all liabilities arising in respect of any loan of moneys received by him from the second respondent.
The husband and wife shall be the sole legal and beneficial owners (as between the parties) of all other assets in their respective possession as at the date of these orders, and for that purpose bank accounts are deemed to be in the possession of the person named as the account holder and superannuation entitlements are deemed to be in the possession of the worker.
The husband shall pay to the wife a further sum of $221,000 AUD within a period of six months from the making of these orders, with interest to accrue on the amount in accordance with the Family Law scale from a date 28 days from the date of the making of these orders.
Each party shall be solely liable for and shall indemnify the other against any and all debts attaching or relating to the property in their respective possession, and any debts in their respective sole names.
In the event of any party neglecting or refusing to sign within seven days of a written request to do so, any document necessary to implement the terms of these orders, the Registrar of the Family Court of Australia at Parramatta is empowered to execute such documents on behalf of the parties pursuant to s 106A of the Family Law Act 1975.
All outstanding applications are dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Elkhouri & Amatullah has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: PAC 5098 of 2013
| Ms Elkhouri |
Applicant
And
| Mr A Amatullah |
Respondent
And
Ms B Amatullah
Second Respondent
REASONS FOR JUDGMENT
Property proceedings
The parties to these proceedings are the applicant wife, Ms Elkhouri, the respondent husband, Mr A Amatullah, and the second respondent, the sister of the husband, Ms B Amatullah. The husband and wife married in 2002, and have two children, E, born in 2004, and F, born in 2006. The parties lived the first years of their relationship in the Middle East, relocating to Australia in 2011. The parties subsequently separated in 2012 with the husband moving out of the home in June 2012. In April 2013 the husband obtained a divorce. He has remarried and has a child, born in 2015. He currently lives in the Middle East. The wife and children remain in Australia.
Consent orders were entered into that provide for the children to continue to live with the wife in Australia and for them to spend time with their father both within Australia and overseas.
Much of the trial was focused upon determining what property constitutes the pool and is available for distribution between the husband and wife. The key issues relate to three distinct categories of property.
The first category is the proceeds of the sale of the former matrimonial home at Suburb D in Australia. The proceeds of that property are currently held in a controlled money account. The dispute in relation to those monies arises from the claim made by the second respondent. She claims, and is supported by the husband in the claim, to have an interest in the Suburb D property. She provided funds used in relation to the renovation of that property. Whilst the Suburb D property was held solely in the husband’s name, she relies upon a partnership agreement with the husband in relation to that property reflecting an asserted contribution towards the property and a consequent share in the proceeds.
The second category relates to property owned in Country G in the Middle East, again solely in the name of the husband. This property was acquired during the relationship and the husband and second respondent assert that it is owned effectively by a partnership between the two of them. This partnership arises from contributions made by each of them to the purchase price of the property. It is asserted that the husband has a 27 per cent interest, the sister a 73 per cent interest based upon their initial contributions to the purchase[1].
[1] Annexure C Ms B Amatullah
The third category relates to property that either has previously been, or is currently, owned by the husband in Country H. A dispute arises as to whether or not the husband holds any beneficial interest in this property or whether he holds it on trust for his father who purchased the property and placed it into the husband’s name.
During submissions Exhibit C1 was tendered, being a balance sheet that, subject to submissions from the parties during closing, constituted their positions as to the property of the relationship. Given that the wife declined to assert a position the balance sheet was of limited use, leaving the agreed and not agreed matters as follows:
| Ownership | Description | Wife / de facto partner's value | Husband / de facto partner's value | |
| ASSETS | ||||
| 1 | H | C Lawyers Controlled Monies Account (Sale proceeds from Suburb D property) | 221,205.81 | |
| 2 | H | Country G investment property (27 per cent share) | Not agreed. | E 411,621.52 |
| 3 | H | Westpac Choice (account no. …82) Overdrawn | Don't know. | 936.50 |
| 4 | H | Standard Chartered Bank (account no…01) … | Don't know. | 35,549.82 |
| 5 | H | Westpac eSaver (account no. …06) | Don't know. | 604.07 |
| 6 | W | 4WD Motor Vehicle 1 | 17,000.00 | |
| 7 | W | St George Complete Freedom (account no. ending …85) | Don’t know. | 496.62 |
| 8 | H | 4WD Motor Vehicle 2 | Don't know. | 41,428.00 |
| Total: | Father’s figure: E$736 842.34 Actual calculated figure: $728,842.34 | |||
| ADDBACKS | ||||
| 9 | W | Wife's sale of household goods / furniture at time of vacating Suburb D property | 1,500.00 | |
| Total: | $1,500.00 | |||
| LIABILITIES | ||||
| 11 | H | Standard Chartered Bank, mortgage for Country G investment property (account no. …29) | 185,620.26 | |
| 12 | H | Westpac Low Rate Visa (account no. ending …69) | 2,782.50 | |
| 13 | H | Standard Chartered Bank MasterCard (account no. ending …08) … | 8,555.08 | |
| 14 | H | Credit Card (account no. ending …20) & supplementary card (…04) | 10,267.99 | |
| 15 | H | Loan owing to Ms B Amatullah for Suburb D property ($260,000 plus interest as per agreement) | E284,000.00 | |
| 16 | H | Loan owing to Mr I Amatullah for deposit on J Street, Suburb K | 12,000 | |
| 17 | H | Personal loan to Standard Chartered Bank (account no. …05) | E 143,014.79 | |
| 18 | H | Finance on motor vehicle | 37,482.70 | |
| 19 | W | School fees to L School and M School | 36,000.00 | |
| 20 | W | Wife owing her father and friends | 50,000.00 | |
| Total: | Father’s figure: E$683,722.62 Actual calculated figure: $733,723.32 | |||
| SUPERANNUATION | ||||
| Member | Name of Fund / Type of Interest | Wife / de facto partner's value | Husband / de facto partner's value | |
| 21 | H | Telstra / Accumulation | 37,025.31 | |
| 22 | W | Advance Investigate / Accumulation | 7,000.00 | |
| Total: | $7,000.00 | $37,025.31 | ||
| Total Net Assets (excluding superannuation): | -$4,880.98 |
The Australian property
The history of the Australian property (Suburb D) can be traced from the purchase by the parties of a unit in Suburb K in 2005. This was purchased while the parties were living overseas, for a sum of approximately $187,000. The wife asserts that her father provided to the husband a sum of $12,000 towards the purchase of the property. She says that she was not privy to this agreement but was subsequently told about it by her father. However, she accepted during proceedings that she had not provided any evidence to support this contention. It is not established that such a gift was made. The husband asserts that the $12,000 was paid from his income. If correct, the application of these funds from the combined resources of the parties during the relationship does not act as a matter of distinction as between them. The unit was sold in 2008 for approximately $194,000. It appears that after the payment of expenses associated with the sale, the parties did not profit from this property investment. No purported loan was repaid to the wife’s father. In 2007 a further house was purchased in Suburb K. This was purchased for $336,000. Of that sum, $300,000 was borrowed from the St. George bank and the husband asserts $12,000 was borrowed from his father. The payment of $12,000 was supported by annexure B of the husband’s affidavit (page 33) which shows a transfer of $12,000 from the husband’s father’s account to the husband on 18 December 2006. It is thereby clear that a sum of $12,000 was provided to the husband. It is less clear whether this was provided as a loan or otherwise. The husband’s material concedes that on the sale of that property no proceeds were applied to reimburse such an amount. The parties and the husband’s father have not treated the amount as a loan and it will not be treated as a loan for the purposes of these proceedings. It does, however, constitute a contribution on behalf of the husband, although not one to be given significance in the overall context of the property and relationship.
In 2011 the Suburb K house was sold for $431,000. Approximately $280,000 was owed at that point, leaving proceeds of approximately $140,000.
A purchase was then made of a property at Suburb D for $570,000. A loan of $456,000 was taken out with the Westpac bank. The husband asserts $114,000 was paid towards that property by way of deposit from the proceeds of the sale of the Suburb K house. While the wife asserted that the amount paid from the proceeds of that sale was $57,000, she conceded in her oral evidence that she was uncertain and accepted that it might have been the case that the husband paid a deposit of $114,000. I accept that the proceeds of the Suburb K house were used to pay $114,000.
The background to the purchase of the Suburb D property is that the parties considered initially buying in Suburb N. The wife identified that the prices of property in Suburb N ranged between $900,000 and $1 million.[2] At this amount the parties were unable to borrow a sufficient amount unless they borrowed money from the husband’s family. Annexure D of the wife’s affidavit indicates that this was not a step that she was prepared to take. [3] Any taking of money from the husband’s family involved signing of documents and the wife asserted that she did not want his family’s money and never would want his family’s money.
[2] At [49] in the wife’s affidavit dated 20 September 2016.
[3] At annexure D of the wife’s affidavit dated 20 September 2016.
The wife, in her oral evidence, accepted that once renovations were required in respect of the Suburb D home a similar amount would be required (approximately $900,000) as she had identified in her affidavit as being an amount that would require a loan from the husband’s family.
The wife then sought to qualify the evidence at [49] of her affidavit by asserting that they would also have had to renovate in the Suburb N area. However, the terms of the paragraph indicate that the $900,000 to $1 million price was one that of itself would necessitate borrowing from the husband’s family. Despite the wife’s reluctance to source money from the husband’s family, the renovations made it necessary to do so, and the wife must have understood this.
The sister subsequently provided $260,000 to the husband.
The point sought to be made by the sister is that once it became apparent that money would need to be sourced from the husband’s family the wife must have understood that it would require both indebtedness and signing of documents, and could not be construed to be a gift. The wife’s evidence is that she knew nothing of the transfers at the time they were made (which she accepted amounted to $260,000) that came from the second respondent (albeit on occasion from funds provided by the husband’s father) to the husband.
The husband asserted that this $260,000 was put towards the renovations which took place at the Suburb D home pursuant to an agreement between him and the second respondent. The partnership agreement between the sister and the husband (see husband’s affidavit annexures C, D and E) provides for shares to be provided in accordance with the contributions made by the sister (evidenced by the transfers of the $260,000) and the contribution made otherwise by the husband, incorporating the proceeds of the sale of the Suburb K house. Funds obtained by the loan from the bank are dealt with separately and do not, under the agreement, count as a contribution relevant to the calculation of the shares. Rather, the occupier, the husband is responsible under the agreement for the payment of the mortgage and has the corresponding benefit of occupation.
The wife denied knowledge of the agreements between the sister and the husband. On the sister’s evidence the wife was excluded from discussions between the husband and the sister about the partnership agreement they formed regarding the Suburb D property. On the husband’s evidence the wife was not excluded from the discussions regarding either Suburb D or the Country G property. On balance it appears that she was excluded from the discussions in relation to the agreement.
In consequence of knowing nothing about the transactions, the wife said that the amounts paid by the second respondent were a gift. It is not clear why the wife’s lack of knowledge makes it more likely that the payments were a gift. There is nothing in the dealings or history between the parties that is suggestive that the money was provided as a gift. The agreements between the parties, subject to further discussion later also support the conclusion that the money was not a gift.
The renovation to the Suburb D property
Following the purchase of Suburb D the parties decided to undertake renovation work on the property. The husband was cross-examined as to the cost that was incurred in relation to the renovations. It was put to him that ultimately the costs for renovations were about $255,000. He asserted that the cost was probably much more than that. He accepted that as of 19 November 2011 the contracted price, incorporating the original contract for the renovations, variations and an applied discount, along with an adjustment given by the builder, amounted to $247,000.[4] He indicated credit card statements listing charges of $40,000 for framing and tiles (4 October 2011), $40,000 for brickwork (20 October 2011) and $20,000 for plaster and paint (14 November 2011).[5] These charges were incurred before 19 November 2011, and appear to form a part of the $247,000 cost.
[4] Transcript, p 149.
[5] At annexure D of the Husband’s affidavit dated 12 September 2016.
The adjustment from the builder was in the sum of approximately $9,000, an amount the husband asserts that he otherwise paid to provide the materials the subject of the adjustment. On that basis, it was conceded for the wife that the cost of the renovations was $256,000.
The husband however said that the cost had exceeded this amount, due to items such as the kitchen, originally quoted at $12,000 but costing in fact $24,000, floorboard polishing, costing $4,000, and other unidentified matters. The husband asserted in his affidavit at [69] that whilst the kitchen renovation was originally quoted at $12,000, he received an invoice for $24,000. The husband further stated that the wife’s father paid the invoiced amount of $24,000, and that the husband had been required to repay the wife’s father that amount. Evidence of the invoice or of the payment to the wife’s father was not provided.
Criticism was levelled at the wife for failing to call her father to give evidence at the hearing. On this point it was the husband who was asserting that the payments were made by him to her father. No particular inference should be drawn adverse to the wife for failing to call her father.
When asked to identify how much the renovation cost in total he asserted that it had cost $290,000 or $310,000 or $320,000. He then asserted that in order to be fair a sum of $300,000 was appropriate. The amounts justifying this total were not supported by evidence other than this assertion. Considering the lack of evidence to support these further costs and payments over and above the contracted price, the husband has not established that the renovation cost was any greater than the $256,000 conceded by the wife. I do not accept that the renovation costs amounted to more than $256,000.
Turning to the question of how the renovations were funded, a construction loan was applied for from Westpac for $113,000. The husband obtained $260,000 from his sister. Part of this, although not all, was applied to the renovation.[6] The agreement between the husband and the sister provided for shares to be allocated between them on the basis of the husband’s initial contribution to the purchase price (excluding the loan) and the sister’s contribution to the renovations.
[6] Transcript, p 150.
Once the $113,000 construction loan was used to pay for part of the renovation work $143,000 was left to be paid. This amount came from funds provided by the sister.
The sister’s evidence was that she advanced the husband money for the renovation of the Suburb D property, including after the parties had separated. Whatever this money was used for, it has not been established that any more than $143,000 was for the purposes of the renovation. While she asserted, and it was not disputed, that she had provided $260,000 to the husband, only a portion of this was used for the renovation. The balance appears to have been taken by the husband either close to or post separation. It is unclear what the balance was used for. No material was produced to identify how it was spent. The sister’s assertion that the additional money over and above the $143,000 was advanced for the renovation is not made good.
If the agreement between the husband and the sister applies, the sister’s share in the partnership agreement is to be calculated based upon the money advanced by her for the renovation.
This leaves the husband as contributing $114,000, being proceeds of sale from the Suburb K house, and the sister contributing $143,000. Applying the partnership agreement to these amounts equates to the husband having an entitlement to a 44.4 per cent share of the proceeds and the sister to a 55.6 per cent share of the proceeds.
The wife challenged whether the partnership agreement was genuine. This matter will be dealt with later.
The Country G property
The Country G property was purchased on 3 January 2010 for 3,080,581 GD (Country G Dollars)[7] (about $1,122,200 AUD[8]). There is no valuation for this property. The figures provided by the husband and sister move between GD and AUD and so the currency will be specified in this portion of the judgment..
[7] At annexure A of the wife’s affidavit dated 20 September 2016.
[8] At [81] in the husband’s affidavit dated 12 September 2016.
The husband and sister assert that the property was purchased in the husband’s name, with a loan from the Standard Chartered Bank in Country G in the husband’s name[9] for about 2,580,581 GD, and with a contribution by each of them to the purchase price, being 100,000 GD[10] from the husband and 400,000 GD[11] from the sister.
[9] At [81] in the husband’s affidavit dated 12 September 2016.
[10] At annexure A of the second respondent’s affidavit dated 14 September 2016.
[11] At annexure B of the second respondent’s affidavit dated 14 September 2016.
The husband stated that the sister transferred to him a further $27,000 USD (shown as 100,000 GD)[12] in February 2012, to be paid against the outstanding mortgage to Standard Chartered Bank.[13]
[12] At annexure E of the second respondent’s affidavit dated 14 September 2016.
[13] At [83] in the husband’s affidavit dated 12 September 2016.
The husband and sister each rely upon an agreement that divides their interest in this property 27 per cent to the husband, 73 per cent to the sister. They say that this agreement was reduced to writing on 10 September 2010.
The husband’s Updated Financial Statement dated 11 September 2016 states that the value of his interest in the Country G property is currently $414,642 AUD, representing what he asserts to be his 27 per cent interest per the partnership agreement. This equates to an admission that the total value of the property is $1,535,711 AUD.
In the financial statement he further asserts that 27 per cent of the outstanding mortgage to the Standard Chartered Bank is $178,646 AUD, and lists weekly mortgage repayments of $1,161 AUD. This equates to a total outstanding mortgage figure of $661,651 AUD.
This leaves a value for the house, less the mortgage of $874,060 AUD, and the husband’s asserted share at $253,996 AUD. Correspondingly, the sister’s share would be $638,063 AUD.
Although the husband’s counsel asserted that the husband’s current wife may have an equitable interest in the 27 per cent, no evidence was led to support this argument.
Contrary to his position at trial that he holds a 27 per cent share, the husband accepted that in December 2010 he represented to Westpac in a loan application that he had a $680,000 interest in another property, which may have been a reference to a 50 per cent interest in the Country G property.[14] He accepted that he may have told Westpac this in order to secure a loan.
[14] Transcript, p 154.
The wife’s submission was that the husband has a 50 per cent interest in the Country G property. She placed in issue the question of whether the partnership agreement between the husband and the sister was genuine. This will further be dealt with later.
The agreements between the husband and second respondent
The husband at Annexure I of his affidavit led evidence of an agreement between he and his sister in relation to the purchase of the husband’s Country G property, the agreement having purportedly being entered into on 10 September 2010. The sister’s evidence was that this reflected an agreement they had arrived at in December 2009. There was no particular reason she could advance as to why the formal agreement was not entered into until a year later.
The husband at Annexure C of his affidavit led evidence of an agreement entered into between himself and his sister in relation to the sister contributing money towards the Suburb D property in New South Wales. The purported date of that document is Monday 26 September 2011.
The effect of each of these agreements is to create a partnership between the husband and his sister in relation to the ownership of each of those properties. Although each of the properties is held solely in the name of the husband, the second respondent is said to have gained rights in respect of the property by virtue of the partnership that she has entered into and based upon the money that she has provided.
The wife asserted that she thought that the documents that accompanied the husband’s explanation for payments from his sister may be a fraud.
The husband conceded that prior to 2011 he had understood that there were difficulties in the relationship with the wife. He had thought prior to their move to Australia at the end of 2009, start of 2010, that he wanted to file for divorce in Country G and that there was no future in the relationship. He however said that he did not remain of that view and in 2010 made the decision to make a fresh start. However, by 2011 he had concerns regarding the relationship. He was asked whether by 26 September 2011, he knew that there would be an argument between himself and the wife regarding the property. He denied that this was the case although accepted that as of September 2011 he had concerns about whether or not the relationship would continue. At this point it must have been within his contemplation that the marriage may end, with consequences for the property of the relationship.
The September 2011 agreement with his sister was said to have been entered into during a trip to Country H. The wife did not attend the lawyer’s office with the husband and the sister, nor was she invited to. The husband accepted that at that time he was aware that his wife was not on the title of the New South Wales property, although she had an interest in the property. He explained that she was not on the title because she had indicated to him that she did not want to live in Suburb D and had further indicated, although she was not questioned about this, that if the marriage did not work out then she would be seeking a payout because she did not wish to live in that area. If true, this reinforces the insecure nature of the relationship at the time of the purchase of Suburb D. If true it reinforces the husband’s knowledge at that time that the wife may make a claim upon their property and that he was anticipating her doing so.
Aside from the agreement regarding Suburb D coinciding with the uncertain nature of the relationship, a number of other matters were pointed to in order to challenge the veracity of the documents.
Firstly, when applying to Westpac to obtain a loan to purchase the Suburb D property the husband provided details of assets that he then owned. Amongst those figures was an assertion that he held $180,000 at the bank on deposit. He was not clear whether or not these funds were attributable to a payout that he had received from Company O, who he had previously worked for or whether they were the proceeds of the sale of the Suburb K property. He also told the bank that he had a $669,000 interest in other property. He accepted that that could be a reference to a 50 per cent interest in the Country G property. He denied that he had a view at that point that he had a half interest in the Country G property but accepted that he must have included that in the list of assets. He indicated that he may have done this in order to secure the loan from the bank but disagreed that at that point he had a 50 per cent rather than a 27 per cent interest as set out in the agreement with his sister. That is, his representation to Westpac conflicted with what he says the agreement with his sister was.
Secondly, Exhibit W1 (accompanied by exhibit H6) was a draft financial statement prepared for the husband by his former solicitor Ms P, recording the husband as having a 50 per cent interest in the Country G property. The husband stated that this document did not properly reflect the instructions that he had given to his solicitor. It is noteworthy that it was not a document that was signed by him or filed on his behalf. It was under cover of a letter which indicated that it was in draft and required settling. No weight can be placed on that document.
Thirdly, he was questioned about whether or not he had complied with the terms of the agreement in relation to the Suburb D property. That agreement specified that he was to note on the Certificate of Title the sister’s interest. He had not done so. He did not know if he had the capacity to do so and further indicated that he had not done so because shortly after, litigation had commenced in the matter. It was the husband who commenced litigation in the Supreme Court of New South Wales in proceedings designed to remove the wife from the house prior to the wife’s commencement of proceedings in the Family Court of Australia. No explanation was given as to why this prevented the registration.
Fourthly, and most importantly, it was put to the husband that the documents evidencing the agreements with the sister had both been prepared on September 2011 or on some date after that, and shortly prior to the date at which they were translated, rather than in accord with the dates on the documents. That is, the Country G agreement did not date from 2010. The husband denied that this was the case. It was put to the husband that they were documents entered into in order to diminish the wife’s potential interest in the property. He denied that this was the case.
Crucial to the assessment of issues relating to these agreements are the terms of the tenth provision of the Suburb D agreement and the eighth provision of the Country G agreement. The Suburb D agreement purports to have been signed on 26 September 2011. The tenth provision reads as follows:
This agreement was arranged between the two parties on Monday 26 September 2011 on three original copies, as each party keeps a copy of this agreement and the third copy to be kept at the office of lawyer [Mr Q] to follow its provisions when needed.
For the Country G agreement, purportedly entered into on 10 September 2010, the eighth provision is as follows:
This agreement was arranged between the two parties on Monday 26 September 2011 on three original copies, as each party keeps a copy of this agreement and the third copy to be kept at the office of lawyer [Mr Q] to follow its provisions when needed.
No explanation was advanced by the husband as to why the internal text in relation to Country G reflected the same date as Suburb D. The coincidence of the two dates leads to the inescapable conclusion that the Country G agreement was not entered into on 10 September 2010. That is, it was a document created at the same time as the Suburb D agreement, potentially as late as 26 September 2011, a time when there was considerable doubt as to whether the marriage would continue.
This means that the Country G document was prepared well after both the provision of monies by the sister for Country G.
While this detracts from the reliability of this document as a representation of the agreement between the parties, it does not detract from the fact that the sister contributed 400,000 GD to the initial purchase of the Country G property.
While the sister was challenged as to the partnership document, no challenge was made to the sister’s assertion that the money was paid as part of a joint contribution to the purchase price, pursuant to an agreement to act in partnership with the brother. It was suggested that the sister had entered into the arrangement to protect her interest from the wife, but not that it was other than a joint contribution to the purchase.
The father of the husband and sister was also questioned about the circumstances surrounding the transfer of the monies. He confirms that the discussion was in terms of it being a partnership and a desirable investment because the property market in Country G was then down. It was seen as a good opportunity to invest. He was not challenged as to this account.
Despite finding that the Country G partnership document was not entered into until immediately before the end of the marriage, rather than in 2010 as it purported to be, the monies were still provided as part of a joint contribution to the purchase price. Whilst the partnership agreement was not entered into until September 2011, that does not necessarily mean that it did not reflect the earlier agreement between the husband and the sister.
The agreement provides for the husband to hold a 27 per cent share and the sister a 73 per cent share, despite the fact that their relative contributions appear to be 100,000 GD for the husband and 400,000 to the sister (disregarding the later payment made by the sister). This equates to a 20 per cent - 80 per cent contribution.
That is, there is a relative advantage to the wife in confirming to the division argued for by the husband and the sister. This advantage to the wife is supportive of the notion that, despite problems with its provenance, the partnership document reflected the actual agreement between the parties. Against this it was suggested that the husband’s assertion of a 50 per cent interest to Westpac more truly reflected the ownership. However, this is so far removed from the contributions as to render this unlikely.
Accordingly, the value of the husband’s interest in the Country G property can be assessed as $253,996 AUD.
As for the agreement in relation to the Suburb D property, a strong argument in support of that agreement was mounted by the sister in that the agreement does not have the effect of defeating a claim by the wife. That is, under circumstances where the money from the sister cannot be inferred to be a gift, it is then either a loan or a contribution pursuant to the partnership agreement. Treating it as a loan is relatively disadvantageous to the wife. Treating it as a contribution pursuant to the agreement leaves the wife in a stronger position as less of the proceeds of the sale of the Suburb D property are then referable to the sister.
The advance of funds by the sister is what enabled the renovations to be completed on a property that the parties could not otherwise afford. The agreement secures the sister’s interest rather than defeats the wife’s interest.
Pursuant to that agreement, the contributions by the husband and the sister to the Suburb D property must be reckoned. These contributions do not include the amount borrowed by the husband from the bank. While under the agreement the husband was obliged to make the loan repayments, he was also given the right of occupation of the property. As previously indicated they are in the proportion $114,000 (husband - from the proceeds of sale of the previous home), $143,000 (sister – funds used for the renovation of the property), which means that the husband is entitled to 44.4 per cent, and the sister to 55.6 per cent, of the retained proceeds of the sale of the Suburb D property. This would mean that the division of the $221,205.81 proceeds of the sale would be $98,215 to the husband and $122,990 to the sister.
However, an additional claim was made by the sister upon the proceeds of the sale, being a claim said to flow from the terms of the partnership agreement. The agreement provided as follows:
Seventh provision:
In case the property is sold both parties have to determine the rights of each party from the sale according to their share of the property. As soon as the first party receives the money from the sale he has to transfer, without delay, the share of the second party. In case of delay the first party has to pay the second party a compulsory fine of one hundred Australian dollars for every day of delay.
If the above clause is valid and becomes operative, the receipt of the proceeds of the Suburb D property on 5 April 2016 would result in the sister being entitled to the balance of the proceeds. While the question arose as to whether this is an unenforceable penalty provision the matter may be more simply resolved, as the clause has not become operative. The clause is dependent upon the husband receiving the proceeds of the sale. It is the receipt of the proceeds that imposes the obligation to pay the sister. Until that obligation arises, the above clause has no effect. In this case the husband has not received the proceeds as they have been the subject of consent orders made by Registrar Tran on 12 February 2014 restraining the husband from receiving the proceeds. Accordingly, the above clause has not become operative and there is no “compulsory fine” payable to the sister.
On receipt of the proceeds by the husband the sister is entitled to a sum equalling 55.6 per cent of $221,205.81, being $122,990, the husband to 44.4 per cent being $98,215.
The Country H properties
At the commencement of his evidence the husband made a correction to his affidavit material where he asserted that he had no ownership since 2005 of properties he had previously held in Country H. His correction was that there are eleven properties held in his name in Country H.[15] These are properties that he asserts are held in his name but beneficially for his father. In support of the assertion that what was contained in his affidavit was a simple error rather than a deliberate misrepresentation, exhibit H3 was tendered which contained two covering documents indicating disclosure of material in the property proceedings. The husband asserted that the documents disclosed under each of those letters included the Certificates of Title for the properties in Country H. He was not challenged as to this proposition.
[15] Transcript, p 138.
The eleven properties in Country H are set out in his father’s affidavit material that indicate that, of those properties, one was placed into the husband’s name when he was seven years old, two when he was eighteen years old, two when he was twenty-two and four when he was twenty-three years old. That is, over a significant period of time the husband’s father has transferred properties into the husband’s name, for the purpose, the father says, of the husband having the appearance of a person of financial substance. A number of the properties are working farms, and there is no evidence that the proceeds go to either the husband or the father. The father has not visited any for some time. The husband visited one of the properties with the notion of building, however the father disagreed and no construction took place.
The husband’s evidence is that on 6 May 2005 he gave to his father and mother a Power of Attorney document, which empowered the parents to sell the properties, pay out the mortgages and retain the proceeds of sale.[16] The husband further states that on or about 27 April 2006 he entered into a further Power of Attorney document that empowered his father to transfer the properties into the father’s name.[17] He asserts that he did this at the request of the father. Despite this having occurred more than a decade ago, it is not a power that has been acted upon by the husband’s father. That is, no steps have been taken to transfer the properties into the father’s name. The husband concedes that they are all still held in his name, although he maintains that his father holds the beneficial interest.
[16] At [19] of the husband’s affidavit dated 9 September 2016.
[17] At [19] of the husband’s affidavit dated 9 September 2016.
The properties are held in the husband’s name. Despite assertions by both the husband and his father that the father holds a beneficial interest, no evidence was led as to the nature of this interest, nor to what restraints it may impose upon the capacity of the husband to deal with or utilise the properties. In the absence of evidence beyond mere assertion, it has not been established that the husband’s rights to the Country H properties are somehow qualified by an interest held by his father.
The husband has provided little or no evidence as to the nature of these properties or as to their values. It was suggested to him that the properties are worth millions of Australian dollars. He responded that he doubted that this was the case. It cannot be suggested that he has provided evidence within the proceedings that would enable the Court to place a value in relation to these properties.
Other balance sheet items
The husband conceded by the balance sheet at items 3-5 that he holds amounts in various bank accounts totalling approximately $36,000.
Each party is in possession of a motor vehicle. Although there was no evidence of value, each asserted a value for the vehicle held by that party. To the extent that constitutes an admission against interest, the wife may be considered to have the 4WD1 worth $17,000, the husband the 4WD2 with a net worth of $3,946.
At item 16 of the balance sheet the husband asserted that the parties received a $12,000 loan to assist in the purchase of one of the Suburb K properties. This was due to be repaid on the sale of that property. The amount was not repaid. It has not been treated as a loan by the parties and should not be considered to be an outstanding liability. The husband accepted that it could not be sustained to be a loan.
The husband asserted at item 17 in the balance sheet a personal loan from the Standard Chartered Bank in the sum of $143,014.79. In submissions it was conceded for the husband that the amount referable to the marriage was $40,000. That is, the husband was indebted to the full amount, but only a portion of that ought to be regarded as from the marriage. However, there was no evidence to as to this indebtedness. It was a mere assertion recorded on the balance sheet. The assertion of a debt in the husband’s name is not an admission against interest. The debt has not been established.
Various other bank related debts were asserted at items 12-14 of the balance sheet by the husband. No evidence was led as to these.
While on the balance sheet the wife asserted a debt in relation to school fees of $36,000, it was put on her behalf, and accepted by the husband, as being likely to be a debt of $16,000. While Annexure I of the wife’s affidavit dated 20 September 2016 shows fees owing of $22,113.81 for F’s tuition at M School; it is unclear whether that debt is current. The wife further stated that F has moved to R School, and E has moved to S School. The wife’s evidence consisted of an account from January 2015 and an assertion that it was the subject of payment by instalments. The debt in relation to school fees is to be taken as $16,000.
The wife asserted that she owed to her father and friends an amount of $50,000. No evidence was led from the wife to support these debts. The height of the material was an assertion. Absent some support for the assertion the debts have not been established.
While only a portion of the money advanced from the sister was used for the renovation, it is still the case that she advanced $260,000 in total to the husband, with the transfers happening around the date of separation. For the wife it was argued that the post separation money taken by the husband should not be reckoned as deductible from the pool, but rather as the responsibility of the husband. The husband is entitled to structure and engage in his own affairs, in general terms, as he chooses following separation. He, like the wife, is entitled to get on with his life. To the extent that he has incurred a debt to his sister, while that matter may be relevant under s 75(2), the debt itself should not be taken as a joint debt of the relationship, particularly in the absence of evidence establishing what the expenditure was for.
The amounts of superannuation recorded on the balance sheet for each party were either agreed or unchallenged, and each constituted an admission against interest, leaving the husband an accumulation fund with Telstra of $37,025.31 and the wife an accumulation fund with Advance Investigate of $7,000.
In total, the pool may be considered as follows:
Assets:
Husband’s share of proceeds from Suburb D
$98, 215
Husband’s 27 per cent interest in the Country G property
$253,996 AUD
The husband’s properties in Country H
Unknown
Money in the husband’s accounts
$36,000
Wife’s 4WD1 motor vehicle
$17,000
Husband’s 4WD2 (net)
$3,946
Wife’s receipt of sale proceeds for the household goods
$1,500
Total (gross):
$410,657 plus unknown
Liabilities:
School fees
$16,000
Total:
$16,000
Total assets (net): | $394,657 plus unknown |
Superannuation:
Wife’s superannuation
$7,000
Husband’s superannuation
$37,025
Total:
$44,025.00
Contributions
The properties in Country H have been given to the husband over a number of years. Having come from the husband’s father to the husband they must be seen as a contribution on the part of the husband. While they derive income through olive production (to an unknown extent) that income does not appear to have come to the husband or wife. At the same time, there is no suggestion that the husband and wife have been required to pay any expenses in relation to the properties. Aside from an occasional visit by the husband and wife, and some consideration as to whether to build on one, the Country H properties have, as far as the husband and wife are concerned, simply sat there.
Through the relationship the husband was the primary income provider. The wife has been the primary carer for the children. She was cross-examined as to the domestic arrangements in place while the parties were in Country G. It was put to her that the parties’ children entered into preschool at a young age and that a maid was provided who worked 12 to 14 hours per day. The wife disputed this and asserted that the maid would work 4, 5 – 7 hours per day, her hours varying. The wife denied that the maid put the children to bed and asserted that the house work was shared between herself and the maid. It is unclear how the use of a maid lessens the wife’s contributions as opposed to benefitting the parties together. It was put to her that she had engaged in a lot of socialising and time at the gym. The wife acknowledged that she spent a significant amount of time in the gym but asserted that as the gym was in the building she would often be accompanied by the children to the gym. Given the wife’s explanation it is again unclear how this leads to a conclusion of a diminished contribution. Whatever the domestic arrangements might have been, the wife bore the primary responsibility for the children and the home. While different, no distinction should be drawn between them in terms of what they qualitatively provided to the family and property of the family.
Post-separation it was put to the wife that the husband had the children with him for four to five nights per week. She denied that this was so, indicating that following separation there was a period of six to seven months where the husband said he needed time, during which he spent little time with the children and that following that time he spent approximately every second weekend with the children. I am unable to resolve this dispute and unable to distinguish between their contributions on this point.
Importantly however, the husband moved to Country G on 28 April 2014. The wife has had primary care, with the husband to spend time with the children in accordance with the orders made on 15 September 2014 by Justice Foster, being on occasions when the husband is in Sydney for business reasons, provided that sufficient notice is given, and via telephone and visual electronic communication on a scheduled basis.
The husband initially did not pay child support.
The husband presently earns $260,000 AUD per year, working in Country G. He expected to be made redundant at the end of the 2016 year. He understands that child support is unenforceable against him while he remains in Country G. He accepts that he has a moral obligation, if not an enforceable obligation, to pay child support. He commenced to pay child support in August 2015. Since about this time, although the exact commencement of regular payments is in dispute, the husband has been paying approximately $1,500 per month. The husband explained that the amount that he pays is the amount that was suggested by the Child Support Agency.
The husband says that the delay in payments was due to him not being able to afford to pay child support for a period and, secondly, that there had been no application for child support.
After leaving Australia in April 2014 the husband commenced employment in June 2014. Since that time there had been a period of only about six weeks where he was not in employment. He indicated that the payment of child support did not occur before August 2015 due to his need to service an Australian debt which related to some pre and post separation debts held on credit cards. He subsequently consolidated these debts into a loan while in Country G. He has not provided evidence to the Court as to the extent of these debts such as to indicate why it was that he was unable to prioritise providing financial support for his children. He asserts that post separation he continued to pay the mortgage (having converted payments to interest only following the separation) although he asserts that some of these were paid by means of the monies that had been obtained from his sister.
The wife has had the primary role of caring for the children at least since the husband returned to Country G. This marks out a strong contribution on her part, the differential being made stronger by the period in which child support was not paid, a period in excess of eighteen months.
Future income earning potential of the wife and the husband
The husband is 47 years of age and the wife is 40 years of age.
The wife worked until approximately six months before the hearing. This work was between three to four days per week, but was work that she said she did not enjoy. The wife said that she wanted a real job and to start her life again once the Court proceedings had completed. In her estimation a real job would involve a greater income then she was receiving from her previous position. The wife said that she has been offered positions in banks, having used an employment agency. The offers for employment were at a starting salary point at $50,000 per year. She understood that there was potential for the income to increase from there, however she has not taken up these positions. She has not looked on-line for work.
The husband, at the time of the trial, anticipated a redundancy. His earning capacity far outweighs that of the wife, as set out above. Even if he has been made redundant, his previous work history, with limited periods between work, demonstrates that he is highly employable.
Combined application for lump sum child support and lump sum spousal maintenance
The wife sought the payment of $200,000 by way of lump sum child support and spousal maintenance.
As identified by counsel for the father, this aspect of the wife’s application suffers from significant deficiencies. It is unclear what part is supposed to relate to Child Support, or what part relates to spousal maintenance.
In order to make an order for lump sum Child Support it is necessary that there be a liable parent,[18] that is, a parent subject to an administrative assessment.[19] Both the husband’s and the wife’s affidavits agree on the value of the child support that the husband has been paying, being $1,528.50. Both parties agree that this amount was as assessed by the Child Support Agency.[20]
[18] Child Support (Assessment) Act 1989 s 123A.
[19] Child Support (Assessment) Act 1989 s 5.
[20] At [88] of the wife’s affidavit dated 20 September 2016; At [99] of the husband’s affidavit dated 9 September 2016.
The order to be made must specify the amount of the lump sum payment and its crediting against the administrative assessment. The application identifies neither of these. No argument or explanation was put during the hearing of the matter dealing with these fundamental issues. These deficiencies in the application do not enable a lump sum order for Child Support to be made in this case.
The application in relation to lump sum spousal maintenance again fails to identify the amount sought. The preconditions for the making of a spousal maintenance order are the inability of the applicant for the maintenance to self-support and the reasonable ability of the other party to support.
In relation to a capacity to self-support, the wife was previously employed, but resigned. She has received job offers that she has not taken up. She has previous work experience and has tertiary qualifications. While not currently employed, she has prospects for employment.
Further, in relation to her requirements for self-support the wife completed a financial statement and was cross examined in relation to it. She claimed $1,575 per week in expenses. While the claim dealt with expenses relating to the children (which is not a matter that can be taken into account on a spousal maintenance claim[21]) as well as the wife’s expenses, the claim proved to be unreliable, with particular challenge being made to a number of her assertions:
a) Education expenses: The wife asserted education expenses at $365 per week ($18,980 per year) for the children. Leaving aside the question of whether this properly to be taken into account as the support of the wife, the amount in the financial statement did not match the school fees that she asserted she was currently paying. For her son at S School fees were a base amount of approximately $4,000 but also additional amounts which meant that they had already amounted to $4,900 at the time of the hearing. For her daughter who is attending the R School, the school fees she asserts are in excess of $2,000. The difference between the amounts for these schools and the amount asserted in the financial statement are significant. To the extent that the amount was attributed to a previous debt, it does not equate to an ongoing expense;
b) Entertainment and hobbies and activities: Together these amounted to $235 per week. When tested the wife indicated that the activities undertaken by the children were tennis lessons for her son and swimming lessons for her daughter, the swimming lessons for her daughter cost approximately $185 for a six week period. This appeared to be a grossly inflated figure;
c) Home repairs: The wife asserted this was $100 per week but accepted under cross examination that it could not be right;
d) A number of other matters were also challenged, but were not the subject of further concessions.
[21] Stein, CM v Stein, M (2000) FLC ¶93-004.
The husband also pointed to the fact that the wife’s assertions of indebtedness had reduced, despite a purported lack of income to meet expenses. Under those circumstances there was no explanation how, if the figures put forward by the wife were correct, that she was able to reduce her indebtedness.
The extent to which she may be unable to support herself was not identified in the case. It was accepted that her claims of what was necessary for self-support were not made out,[22] but no particular case was put as to either the content of what is required to maintain her, nor what the shortfall might be, taking into account her prospects for employment. While there is evidence that establishes that the husband has some capacity to provide maintenance for the wife, there is no identification of the lump sum sought, nor how it relates to an incapacity to maintain herself, nor the extent to which the wife is unable to support herself.
[22] Transcript, p 220.
The deficiencies in the wife’s case do not permit an order for spousal maintenance to be made.
Outcomes
The wife sought orders that would provide for her to receive the husband’s share of the controlled monies, that he would pay a fee to her father for storage (even if a sustainable claim under the Family Law Act, such a debt, was not established), to receive 30 per cent of the value of the overseas properties, plus an amount equal to his superannuation, plus lump sum spousal maintenance and child support.
The husband was taken to the effect of the orders that he seeks in relation to the wife. He accepted that they would result in the wife receiving a $7,000 superannuation interest, outstanding debts in relation to the children’s schooling and the ownership of a motor vehicle. He asserted that he did not wish this to be the outcome but wanted a fair outcome that would reflect the pool and the contributions of the parties.
The sister sought orders for the payment of the controlled monies to her plus costs.
Given the findings as to the operation of the partnership agreement, and the relative contributions to the Suburb D property, the share of the controlled monies attributable to the sister is $122,990 (along with any interest on that share accumulated by the controlled monies). Orders will be made reflective of this interest. No order for the wife to pay the costs of the sister will be made. The starting point in these proceedings is that each party bears his or her own costs. A justification for departure from this position has not been established.
On the question of whether there should be an adjustment of interests under s79, this case falls within the same category as the majority of cases before this court, where, as described in Stanford[23]:
It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship.
[23] Stanford v Stanford (2012) FLC ¶93-518 at 86 642.
In determining the adjustment of interests, different considerations apply to different parts of the pool. Superannuation should be acknowledged as different in character to property that is available immediately, although the relatively small part the superannuation plays in this pool means that no particular allowance needs to be made here for that difference in achieving an overall just and equitable result.
More significant is the manner in which the properties in Country H are to be considered. In large part they were acquired by the husband prior to the commencement of the relationship. Unlike the other property of the marriage, they have not required contributions or effort on the part of the parties to maintain or to retain. No contribution made by either party, in either a financial or a non-financial sense, has led to the retention of these properties. Here, the properties have come into the relationship on behalf of the husband as a gift from his father and appear to have remained separate from the parties’ other finances. While it is not necessary to connect a particular contribution with a particular item of property, and while a contribution to the welfare of the family may connect to no item of property at all and remain significant to the exercise of the discretion, in this case the characteristics of the property lead to it being appropriate to treat it differently to other items of property, at least in terms of the application of ss 79(4)(a) to (c).
Additionally, there is a question as to how to deal with the Country H properties in the absence of evidence allowing a value to be assigned to them.
These two factors mean that it is appropriate to deal with the Country H properties separately within the overall exercise of the discretion, in recognition of the manner of acquisition and in recognition of the uncertainty that accompanies them.
Dealing firstly with the non-Country H property, being property acquired during the marriage, the relative contributions of the parties, encompassing their financial and non-financial contributions and their contributions to the welfare of the family, can be assessed as equivalent up to the point at which the husband moved back to Country G. From there the contributions made by the wife, particularly to the care and financial support of the children, heavily outweigh those made by the husband. These would justify an adjustment in that portion of the pool such that the wife would be entitled to a 55 per cent to 45 per cent split in her favour.
Again disregarding for the moment the Country H properties, the s 75(2) factors strongly favour the wife. Without ignoring the husband’s obligations to support the child of his more recent relationship, the wife has the responsibility for the ongoing primary care of the children of their relationship with little non-financial support from the husband. While she has good prospects to retain employment in the future, her capacity for appropriate gainful employment pales in comparison with the husband’s. These two factors call for an adjustment such that the wife receives a 65 per cent to 35 per cent split in her favour.
The Country H properties present two different challenges as to the role they are to play in the exercise of the discretion. The first relates to acknowledging the manner in which they were acquired as constituting a strong contribution on the part of the husband.
The second relates to a complete absence of evidence as to their value. The husband has disclosed nothing to the court that enables a value to be assigned to these properties. While the husband’s interest in the properties has been identified, the value has not.
Moore J dealt with a similar issue at first instance in Chang, J v Su, S (2002) FLC 93-117, determining “that the size of the pool was unascertainable”.[24] On appeal the Full Court reviewed the case law dealing with such a gap in the evidence. The court accepted that it is desirable that a court “identify the pool of assets available and evaluate it”[25] but accepted that this step is vulnerable to frustration through a party’s non-compliance with obligations to disclose to the court.
[24] Chang, J v Su, S (2002) FLC ¶93-117 at 89 188.
[25] Ibid [69] citing from Nicholson CJ In theMarriage ofBlack and Kellner (1992) FLC ¶92-287.
In such circumstances the Full Court found that “the only imperative that (Moore J) could fall back upon was that the order be just and equitable”[26]. This recognises that, from first to last, the s 79 discretion is governed by the principle that the exercise be just and equitable, both as to whether any order is made and as to whether a particular order is made.
[26] Ibid [66].
The obligations to disclose are “required as a matter of principle”[27] due to the nature of the discretion, a discretion exercised in the context that the litigation is not between strangers and that one party may exclusively hold information as to property that the other party legitimately has a claim upon. In Weir[28] the Full Court further recognised that failure to disclose, such that the court cannot determine the content or value of the pool should not result in the other party failing in his or her case on the basis that the pool cannot be fully ascertained. To deal with this:
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from His Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
[27] Ibid [69] citing from Smithers J in Briese and Briese (1986) FLC ¶91-713.
[28] Ibid [70] citing from Weir and Weir (1993) FLC ¶92-338.
Weir goes further to recognise that the scope of such a finding may mean an “order going beyond the identified property…once there is sufficient evidence to support a finding that the party has not made full disclosure.”[29] That is, the non-disclosure may require orders as to unidentified property in order to reach a just and equitable outcome.
[29] Weir and Weir (1993) FLC 92-338 at 79 593.
In Stanford the High Court stated:
As has already been emphasised, nothing in these reasons should be understood as attempting to chart the metes and bounds of what is "just and equitable". Nor is anything that is said in these reasons intended to deny the importance of considering any countervailing factors which may bear upon what, in all the circumstances of the particular case, is just and equitable.[30]
[30] Stanford v Stanford (2012) FLC ¶93-518 at 86 642.
What is required to achieve a just and equitable outcome is that allowance be made, that is not unduly cautious, for the Country H properties in the absence of disclosure sufficient to make findings as to value.
The adjustments referred to above deal only with the certain property of the relationship. They do not, as yet, deal with what additionally lies in the hands of the husband. In Fraser & Moedt, another case dealing with non-disclosure, the Full Court recognised that “it is one thing to award a wife 40 per cent of a sum certain but quite another to award 40 per cent of a sum when it is reasonably clear, as it was here, that it was a lesser percentage of the real sum in the husband’s hand. Had His Honour awarded a more substantial sum on this basis (that is, that the wife had made contributions to the whole rather than merely to the established pool), it would have been difficult for the husband to argue against it”.[31] In that case at first instance Hilton J dealt with the non-disclosure as a factor under s 75(o). While the Full Court stated a preference for the matter in that case to have been taken into account under s 79(4), it did not find error in the matter being dealt with under s 75(o). There appears to be no statutory restriction preventing such a matter being taken into account under s 75.
[31] Fraser & Moedt (Unreported, Family Court of Australia, Nicholson CJ, Lindenmayer & May JJ, 13 June 1997) 18.
Having given recognition to the previous assessment under s 79 of the manner in which this property was acquired and retained, which should not result in the wife receiving any significant adjustment on the basis of contribution, it is convenient in the particular circumstances of this case of non-disclosure to deal with the Country H properties primarily as a further aspect of the property and financial resources of the husband under s79(4)(e) and s 75(2)(b). While their value cannot be determined, they present a source of property that he will be able to draw upon into the future, over and above the other s 75(2) matters already identified, and over and above the other property of the parties identified. The manner of accommodating this into a just and equitable resolution of the whole case in the context of the non-disclosure is to make a further 10 per cent adjustment to the wife of the non-Country H property.
This will mean that the wife will be entitled to a 75 per cent-25 per cent split of the net non-Country H property in her favour, an amount of $329,000 to the wife with the husband to retain just under $110,000 (including his Australian superannuation interest) along with the 11 Country H properties. A consequence of this approach is that the amounts referred to in the orders will only be directed to the value of the property of the parties to the marriage that is known as to both identity and value, and will not exceed that portion of the property.
By their evidence, none of the parties raised any significant issue with compliance with an order directing a party to make a payment when that party’s property is located overseas. The orders to be made will be in personam in nature.
At present the wife holds a debt of $16,000 for school fees. She also holds superannuation and assets (including notionally from the value of the furniture sold) of $25,500, a net figure of $9,500. In Australia the husband holds the proceeds from Suburb D and superannuation together of $135,240. Excluding the Country H properties he otherwise holds $293,942.
Orders will be made to see a transfer of the Australian-based property (other than the husband’s superannuation) to the wife, which, taking into account the school debt, constitutes 24.6 per cent of the non-Country H pool and requires a further payment of $221,000 (rounded down) to make up the 75 per cent of the non-Country H pool.
As it is unclear what mechanism the husband will use to make this payment it is appropriate to give him a reasonable period of time to comply with the component of the order that does not relate to the Australian property, provided the wife is entitled to interest on the outstanding amount.
I certify that the preceding one hundred and thirty-one (131) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 6 September 2017.
Associate:
Date: 6 September 2017
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