Embry and Embry
[2009] FMCAfam 851
•14 August 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| EMBRY & EMBRY | [2009] FMCAfam 851 |
| FAMILY LAW – Property – refusal by husband to take part in proceedings – difficulty in ascertaining the pool of property available for division. |
| Family Law Act 1975, ss.75, 79 |
| Black & Kellner (1992) FLC 92-287 |
| Applicant: | MS EMBRY |
| Respondent: | MR EMBRY |
| File Number: | DNC39 of 2009 |
| Judgment of: | Terry FM |
| Hearing date: | 12 August 2009 |
| Date of Last Submission: | 12 August 2009 |
| Delivered at: | Darwin |
| Delivered on: | 14 August 2009 |
REPRESENTATION
| Counsel for the Applicant: | Ms Marris |
| Solicitors for the Applicant: | Marris & Co |
| Respondent | No appearance |
ORDERS
That forthwith upon being requested to do so by the wife’s solicitor the husband sign all documents and do all acts and things required to transfer to the wife at the expense of the wife the whole of his right title and interest in Property M being Lot [2] Town of [P] from Plan [S] and being the whole of the land contained in Certificate of Title Volume [1] Folio [0].
That within 42 days of the date hereof the wife refinance into her sole name the home loan from Bank SA (on the title called State Bank of South Australia) secured by mortgage over the Property M property and the husband do all acts and things and sign all documents required by Bank SA (on the title called State Bank of South Australia) to permit the wife to refinance the home loan.
That the husband give the wife vacant possession of the Property M property by 4.00pm on 11 September 2009.
That the wife is declared the owner to the exclusion of the husband of:
(a)the bed situated at the Property M property used by the wife when residing at the Property M property;
(b)the superannuation in her name;
(c)all other property in her possession or under her control.
That husband is declared the owner to the exclusion of the wife of:
(a)the furniture and whitegoods situated at the Property M property save for the bed referred to in order (4)(a);
(b)the superannuation in his name;
(c)all other property in his possession or under his control.
That in the event that either party refuses or neglects to comply with the provisions of these orders the Registrar of the Federal Magistrates Court of Australia at Darwin is hereby appointed to execute all deeds and documents in the name of the defaulting party.
That the wife arrange for a copy of these orders to be served personally on the husband as soon as reasonably practicable.
That the wife has liberty to apply on short notice in relation to consequential matters.
IT IS NOTED that publication of this judgment under the pseudonym Property M is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES DARWIN |
DNC39 of 2009
| MS EMBRY |
Applicant
And
| MR EMBRY |
Respondent
REASONS FOR JUDGMENT
Introduction
Ms Embry filed an application for a property settlement on 21 January 2009.
The application was served on the husband by a bailiff on 30 January 2009. The husband signed an Acknowledgement of Service.
The husband attended court in person on the first return date of
3 March 2009. Orders were made that he file a response, financial statement and affidavit in support by 24 March 2009, and the proceedings were adjourned to 7 April 2009 for further directions.
The husband did not file any documents and did not attend court on
7 April 2009. The proceedings were further adjourned.
On 21 April 2009 the husband again did not attend at court and the matter was listed for an undefended hearing on 1 July 2009.
On 28 April 2009 the husband was served with a copy of the order made on 21 April 2009 by a bailiff.
At the request of the wife’s solicitors the matter was mentioned on
19 June 2009and the hearing date of 1 July 2009 was vacated. The wife’s application was listed for an undefended hearing on 12 August 2009.
The wife filed an amended application on 23 June 2009. In that application the wife sought an order that the former matrimonial home be transferred to her free of encumbrances and that each party otherwise retain the assets in their possession.
The wife’s amended application, together with the order made on
19 June 2009was served on the husband by a bailiff on 23 June 2009.
The husband did not appear at the hearing on 12 August 2009. He has never filed any documents in the proceedings. A hearing was conducted in the husband’s absence on 12 August 2009.
The evidence
In the wife’s case I read her amended application filed on 23 June 2009, her affidavits filed on 21 January 2009 and 4 August 2009, her financial statement filed on 21 January 2009 and the affidavit of Mr G, a valuer, filed on 31 July 2009.
Background
The husband and wife began living together in August 1987 and married in December 1988. They separated in April 2008 and thus had a relationship of almost twenty one years.
They had no children.
The husband and wife initially lived in Adelaide. In March 1989 they moved to Darwin, a move prompted by the husband’s involvement in a business, [A]. About twelve months later they purchased Property M and this became their home for the remainder of the marriage.
I accept the wife’s evidence that the parties separated under one roof in April 2008. Separation under one roof continued until April 2009 when the wife moved out of the Property M property. The husband still resides there.
The applicable law
Pursuant to s.79 of the Family Law Act, a court can make such orders as it considers appropriate altering the parties’ interests in property. s.79 (2) provides that the court shall not make an order under this section unless the court considers that it is just and equitable to do so.
The procedure usually adopted in resolving applications for property settlement is:
a)to identify and value the assets and liabilities of the parties;
b)to assess the contributions of the parties under s.79(4)(a), (b) and (c) and to express those contributions as a percentage;
c)to consider the matters set out in s.79(4)(d),(e),(f) and (g), which include the matters in s.75(2), so far as they are relevant, and to determine whether any adjustment should be made as a result to the contribution based entitlements;
d)to consider whether it is just and equitable to make the relevant orders.
To the extent to which it is possible to do so I intend to follow this procedure in this case.
The assets and liabilities
During their relationship the husband and wife kept their finances separate. They did not have a joint bank account. The wife said that she had little knowledge about the husband’s financial circumstances.
The only jointly owned asset is the Property M property. On 7 July 2009 Mr G, a licensed valuer employed by McGees, valued the property at $450,000.00. It was the wife’s evidence that about $48,000.00 was owing on the mortgage, and the net equity in the Property M property is therefore $402,000.00.
The wife owns a 2006 Ford Falcon motor vehicle which she said was worth $23,000.00. The wife did not provide any expert evidence to establish the value of the vehicle. She said in oral evidence that the vehicle was purchased in July 2008 at a government auction for $15,500.00. The wife said that she considered that the vehicle was worth $23,000.00 because it was insured for that amount.
It seems more likely than not that the wife has overestimated the value of the vehicle. I therefore accept the evidence she gave about its value as an admission against interest and I intend to include the vehicle in the pool at $23,000.00.
The wife said that she had superannuation with AMP which was currently worth $6,160.56.
The wife did not provide a document to corroborate this evidence. However the figure of $6160.56 was higher than the figure given by the wife in her financial statement filed in January 2009. The wife has only been in the workforce as an employee for twenty months and her current base salary is $32,000.00 per annum. Prior to that the wife was ill for several years and prior to that she was self employed for many years. The wife impressed me as a witness who was bent on telling the truth and her evidence about her superannuation is consistent with the evidence about her working history. I accept the wife’s evidence about the value of her superannuation.
The wife has savings of about $2,300.00 in the ANZ Bank and $1,000.00 in the Australian Central Credit Union.
There is furniture in the Property M property. The wife said that most of the furniture was already owned by the husband when cohabitation commenced. She said that she was happy for the husband to keep the furniture, save for her bed, which she would like to retain. The wife did not provide any evidence about the value of the furniture.
As to the husband’s assets otherwise, the wife said that it was her recollection that when the husband came to court on 3 March 2009 he admitted to having superannuation worth about $180,000.00.
The wife also gave evidence that she believed that the husband might own shares in a business. The husband is a [occupation omitted] and it was the wife’s evidence that he came to Darwin in 1989 to work for [A]. The wife’s evidence was that for the first seven years the business operated from the parties’ home and stock was delivered there while the husband was on the road. After that the husband operated the business from rented premises. The wife said that she had visited the husband at his business premises as recently as last Saturday. The wife said that the husband was a hard working man.
The wife’s evidence was that some years ago the husband talked to her about the fact that six people who had years of experience (of which he was one) had bought [A] from its American owners. The wife said that the husband had talked about having shares in the business.
The wife caused her solicitor to conduct some searches and conceded that her solicitor had been unable to find any evidence that the husband owned any company shares or any interest in a business.
The wife said that the husband owned and drove a Ford XT Station Wagon purchased in about 2004 and also owned an old vehicle with the [A] logo on it which was parked in the carport at the Property M property. The wife did not provide any evidence about the value of these vehicles.
As a result of the failure by the husband to file any documents or attend at the hearing, it is impossible to ascertain whether the husband has superannuation and if so the value of it, whether the husband has an interest in a business or shares in a company and if so the value of those assets, and whether the husband has any other assets or any other liabilities.
The known property pool consists of the following:
Description Ownership Value Property M net Joint 402,000.00 2006 Ford Falcon Wife 23,000.00 Ford XT Husband Not known Old Motor Vehicle Husband Not known Savings Wife 3,300.00 Furniture at Property M Husband Not known Bed at Property M Wife Not known Superannuation Wife 6,160.56 TOTAL $434,460.56
Contributions
At the commencement of cohabitation the wife had no assets. The husband owned a unit in Adelaide. The wife said that she understood that the husband received about $35,000.00 when the unit was sold. She did not say when the sale took place.
The wife did not give any evidence about how the sale proceeds of the unit were used. However she did say that the husband paid “whatever deposit was put down” when the Property M property was purchased for $114,000.00 in 1990.
The wife was employed in a number of different positions in the first three or so years of the relationship. After that and until 2004 the wife earned an income selling [craft omitted].
In about 2004 the wife was diagnosed with Graves Disease which affected her eyes. She could not [craft omitted] and had a series of operations. The wife is now recovered but she has not returned to [craft omitted]. After she recovered she trained as a [omitted] and has worked in that occupation for the last twenty months.
The only information I have about the husband’s employment during the marriage is from the wife. She said that the husband was a [omitted] who came to Darwin to work for [A]. The husband has worked consistently since the parties came to Darwin.
The wife did not provide any historical information about either her income or the husband’s income and I can make no comparison of their respective incomes during the marriage.
The wife conceded that during the relationship the husband paid the mortgage and other household accounts. I infer that the husband has continued to pay the mortgage and outgoings on the Property M property to the present time.
It was the wife’s unchallenged evidence that throughout the relationship she was the primary homemaker and also looked after the garden. The wife said that during the first seven years when the husband conducted [A] from home, she took delivery of stock when he was on the road. It was effectively the wife’s case that the husband’s contribution to the day to day upkeep and running of the home was minimal.
On the above evidence I am satisfied that contributions during the relationship were equal. The husband’s contribution of about $35,000.00 from sale of a unit owned prior to cohabitation cannot be ignored, but in the absence of any evidence from the husband about how the money was used it is impossible for me to make any proper assessment of how the introduction of this sum should affect the assessment of contributions.
Section 75(2) factors
As required by s.74(4) (e) I now turn to consider the matters in s.75(2). Section 74(4) (f) and (g) have no relevance to these proceedings and there is nothing to suggest that the orders proposed by the wife will affect the husband’s income earning capacity.
The wife is 54. She has recovered from Graves Disease and did not suggest that she had any current health problems. She is employed as a [omitted] on a base salary of $32,000.00 per annum. She conceded that there were opportunities for overtime and in her financial statement said that her average weekly income was $1,100.00 per week which would equate to $57,200.00 per annum.
The wife is living in rented premises and is in a new relationship. She said that she did not know how durable that relationship would be.
There are no children of the marriage nor is the wife supporting any other adult or child.
The husband is 62. He is a [omitted] with considerable experience. The wife said that the husband had never missed a day’s work because of illness and did not have a general practitioner. I am not able to make any other findings about the husband’s situation because of the husband’s failure to take part in the proceedings.
The fact that there are no dependent children, that the wife has recovered from her illness and is able to earn an income adequate to support herself and that she has been able to maintain a reasonable standard of living since separation, makes it somewhat unlikely that an adjustment in the wife’s favour for s.75(2) factors could be justified. However in the absence of evidence from the husband I am unable to come to any concluded finding about whether an adjustment in favour of either party for s.75 (2) factors is warranted.
Whether it is just and equitable to make the orders sought by the wife
In the wife’s amended application she proposed that she receive the Property M property free of encumbrances. There would be practical difficulties in enforcing such an order, given that the wife is unable to identify any assets owned by the husband. The wife is keen to have property matters resolved without further delay. The wife’s Counsel in final submissions said that the wife would be content with an order that the husband transfer the former matrimonial home to her and that she refinance the mortgage. The wife proposed that she also keep the other assets in her possession, and her bed which is still in the Property M property.
An order to this effect would on its face give the wife assets to the value of $434,460.56 and would leave the husband with two motor vehicles of unknown value the bulk of the furniture at Property M.
While at first glance this may seem unjust the true extent of the asset pool cannot be known because of the husband’s failure to take part in the proceedings and to comply with his obligations concerning disclosure.
I accept the wife’s evidence that the husband is a hard working man who has worked steadily in the same business since he arrived in Darwin in 1989. It is entirely reasonable to assume that the husband may have assets in addition to his interest in the former matrimonial home, the furniture and the two motor vehicles.
The husband was on notice that it was the wife’s contention that he had superannuation and an interest in a business. In her affidavit filed on
21 January 2009the wife stated that:
“I do not know what the value of [Mr Embry’s] superannuation is nor do I know what his business interest is worth.”
The husband was required, upon being served with the wife’s application, to file a financial statement. Rule 24.03 of the Federal Magistrates Court Rules provides as follows:
(1) A party required under this Part to file a financial statement or affidavit of financial circumstances must make in the statement or affidavit a full and frank disclosure of his or her financial circumstances, including details of:
(a) any vested or contingent interest in property (including real or personal property, superannuation and legal and equitable interests); and
(b) income from all sources, including any benefit received in relation to, or in connection with, the party's employment or business interests; and
(c) the party's other financial resources; and
(d) any trust:
(i) of which the party is, or has been since the separation of the parties, the appointor or trustee; or
(ii) of which the party, or the party's child, spouse or de facto spouse is, or has been since the separation of the parties, an eligible beneficiary as to capital or income; or
(iii) of which a corporation is an eligible beneficiary as to capital or income if the party, or the party's child, spouse or de facto spouse is, or has been since the separation of the parties, a shareholder or director of the corporation; or
(iv) over which the party has, or has had since the separation of the parties, any direct or indirect power or control; or
(v) of which the party has, or has had since the separation of the parties, the direct or indirect power to remove or appoint a trustee; or
(vi) of which the party has, or has had since the separation of the parties, the power (whether subject to the concurrence of another person or not) to amend the terms; or
(vii) of which the party has, or has had since the separation of the parties, the power to disapprove a proposed amendment of the terms or the appointment or removal of a trustee; or
(viii) over which a corporation has, or has had since the separation of the parties, a power mentioned in subparagraphs (iv) to (vii), if the party is a director or shareholder of the corporation; and
(e) any gift or other disposition of property made by the party since the separation of the parties; and
(f) if there is a partnership, trust or company (except a public company) in which the party has an interest, copies of the 3 most recent financial statements and the last 4 business activity statements lodged by the partnership, trust or company.
The husband has never filed a financial statement or indeed any other document in the proceedings.
In Black and Kellner[1], the Full Court of the Family Court were dealing with an appeal by a husband against a decision which saw him receive $40,000.00. This represented 6.3% of the only agreed asset, land valued at $612,500.00. The husband said that it was plainly unjust that he should receive such a small percentage of the pool of assets.
[1] Black & Kellner (1992)FLC 92-287
In dismissing the appeal the Full Court said as follows:
“Senior Counsel for the wife did not attempt to argue that if that was all there was to it, the figure allowed was appropriate. What he relied on, were a number of adverse findings which his Honour made concerning the credit of the husband, which in turn led to his Honour being unable to ascertain the extent of the husband's assets or income.”
The Full Court went on to say as follows:
“For the applicant to succeed in this appeal he must show that his Honour's decision to award $40,000 was plainly unjust. In my view this is something that he has not succeeded in doing and cannot do.
As Senior Counsel for the wife pointed out, the first step in proceedings for a property settlement is for the court to ascertain the wealth of the parties and in this regard it is of interest to note the remarks of the Full Court in the case of Guinti and Giunti (1986) 11 Fam LR 160; [1986] FLC 91-759, particularly at Fam LR 165; FLC 75,555 where the court commented:
"It is obviously desirable as a general principle that the court should first of all identify the pool of assets available and evaluate it. If each party complies with his or her obligation to make a full and substantive disclosure of their financial affairs: see In the Marriage of Briese (1985) 10 Fam LR 642; [1986] FLC 91-713, affirmed by the Full Court in Oriolo v Oriolo (1985) 10 Fam LR 665; [1985] FLC 91-653, there is no problem, although there may be disputes as to valuation.
However if, as here, one party fails to fulfil that obligation, is it open to that party then to rely on the absence of satisfactory evidence to prevent the making of an order against him or her which otherwise justice and equity would require? It would be simple, if that were the case, to evade the jurisdiction of this court, not by outright refusal which would attract sanctions but by obfuscation and evasion."
Nicholson CJ observed that speaking for himself he would have been inclined to find that the husband was entitled to nothing.
In the case before me it seems highly likely that the husband has other assets. I am entitled to be suspicious that those assets may be substantial, given the husband’s refusal to reveal them. Indeed given that the husband failed to reveal anything about his assets even after becoming aware that the wife was seeking to retain the Property M property unencumbered, the possibility that the wife is being short-changed cannot be excluded.
It is in my view just and equitable that I make an order that the Property M property be transferred to the wife subject to the existing mortgage, that the wife receive her bed, and that the parties otherwise retain the assets in their possession.
The husband has remained in occupation of the Property M property since the wife moved out in April 2008. I intend to make an order requiring the husband to vacate the premises. I am unable to make any proper assessment of what would be a reasonable period to allow for the husband to find other accommodation. Doing the best I can I intend to order that the husband give the wife vacant possession of the property by no later than 4.00pm on 11 September 2009.
Although the wife has not made any inquiries about refinancing, the home loan balance is $48,000.00 and the wife has been earning a reasonable income for twenty months. It is unlikely that the wife will experience any difficulty refinancing the home loan.
I will give the wife liberty to apply for consequential orders in case any difficulties arise for example difficulties with the husband vacating the former matrimonial home.
For all of the above reasons the orders of the court shall be as set out at the beginning of this judgment.
I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of Terry FM
Associate: Barbara Cameron
Date: 14 August 2009
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