F v F

[1995] FamCA 3

[1995] FamCA 3

FAMILY LAW ACT 1975

IN THE FAMILY COURT OF AUSTRALIA
AT MELBOURNE

File No. ML 399/86

IN THE MARRIAGE OF:

Mr F

(Husband)

AND

Ms F

(Wife)

CORAM:  The Honourable Justice Treyvaud

DATE OF HEARING:    16th, 17th, 18th and 19th January 1995.

DATE OF JUDGMENT:25th January 1995.

JUDGMENT OF THE COURT

APPEARANCES:

The husband appeared in person.  C/- Alan Wainwright J. Okno & Co., Solicitors, 2nd Floor, 213 Lonsdale Street, Melbourne, Victoria, 3000.

Mr. Holzer of Counsel, instructed by A.I.F. Lucas & Co., Solicitors, 963 Ferntree Gully Road, Wheelers Hill, Victoria, 3150, DX 15025 Glen Waverley, appeared for the wife.

INTRODUCTION

The husband in these proceedings is a 56 year old United States citizen and resident, an undischarged bankrupt, a former finance professional, now managing properties owned by him in USA.  The wife is a 49 year old Australian citizen and resident, community worker and carer, otherwise engaged in home duties.  The four sons of the marriage live with her.

The current proceedings are the husband's application filed on 25th May 1994, amended on 11th November 1994, and the wife's cross application filed on 8th August 1994.

By his amended application the husband seeks that my order made on 8th August 1990 (in part an order for property settlement, hereafter called the application for alteration of property interests) be set aside or varied pursuant to Section 79A(1) of the Family Law Act 1975, and that paragraph 3 of that order (an order for child maintenance) be discharged, suspended, or varied.

By her cross application the wife seeks a declaration affirming my order of 8th August 1990, an order that paragraph 5 of that order (an order for the payment by the husband of $2,000,000 by way of alteration of property interests) be categorised as a lump-sum maintenance, a variation by way of increase in child maintenance, an order fixing arrears of child maintenance and ordering payment of them.

The husband has attended at this Court and has conducted his own case.  Documents recently filed on the husband's behalf have been filed by Melbourne solicitors, but that firm has not been present at any time during the hearing.  The wife is represented by solicitors and counsel.  The oral evidence has been only that of the husband and wife.  On many occasions I pointed out to the husband the importance of his calling evidence to support some of his contentions.  He did not call such evidence, nor indicate that it was not available.

During the hearing the wife's counsel did not adduce evidence, or make submissions, concerning the quantum of maintenance arrears, save to establish that the husband has paid no moneys to the wife for, inter alia, the support of the children since the end of April 1990.  Counsel made no submissions directed to the issue of the husband's ability, or inability, to pay maintenance over the past almost five years. 

The husband's evidence on that issue was merely that since his bankruptcy, on voluntary petition, in late 1992, he has lived on an allowance of some U.S.$200 per week, being part of the rental received from his United States properties, which, it appears, are under the control or supervision of the United States bankruptcy authorities. 

Accordingly I do not in these proceedings, nor in this judgment, make findings or orders in relation to the quantum of child maintenance arrears.

Further, during the hearing the wife's counsel did not adduce evidence nor make submissions, in support of the wife's application for an increase in child maintenance.  Indeed, I note that the parties' eldest child Mr B turned 18 in 1994 and is now outside the jurisdiction of this Court unless an application be made seeking an order that maintenance for him extend beyond the age of 18 years.  No such application has been made, and no submissions have been advanced on that issue. 

The husband gave no evidence (other than that cited above) as to his current income, and made no submissions, directed to the issue of the discharge, suspension or variation of child maintenance.  He advanced no evidence concerning his inability to gain appropriate gainful employment, or his inability to support his Australian children, all of whom are supported substantially by the Australian tax-payer, and the education of two of whom is made possible by the benefaction of their private school.

Accordingly, I do not in these proceedings, nor in this judgment, make findings or orders in relation to the quantum of child maintenance, and I continue paragraph three of my order of 8th August 1990 (the child maintenance order) in force and effect until varied, suspended or discharged by order or until the relevant children turn 18.

THE ISSUES
It follows therefore that the issues with which this judgment is concerned are, firstly, the husband's application pursuant to Section 79A(1) to set aside or vary such parts of my order of 8th August 1990 as were made pursuant to Section 79 (orders for alteration of property interests); and secondly, the wife's application that the order for payment by the husband of a lump sum of $2,000,000 (made pursuant to Section 79) be categorised as an order for lump-sum maintenance pursuant to Sections 74 and 80(1)(a) of the Family Law Act 1975.

I set out the chronology, in two parts; firstly, the chronology up to and including my judgment of 8th August 1990, and secondly, the chronology thereafter, to the date of this judgment.  The chronologies are taken from documentation filed by the husband and wife, and their oral evidence, in all cases only as and where accepted by me.

THE FIRST CHRONOLOGY
The husband was born in U.S.A. in 1938.  After graduating from university, State F, he entered the finance industry.  He came to Victoria, Australia in about 1970, to establish and run a financial institution.  He continued in the occupation of a finance professional, while the marriage remained on foot.  During his years of working and living in Melbourne he conducted his business activities through three corporate structures, C Pty Ltd, D Pty Ltd and E Pty Ltd.  C Pty Ltd was the significant company, and the vehicle through which all but one of the parties' property dealings were conducted.  As I found, and set out, in my judgment of 8th August 1990, page 14, C Pty Ltd is the alter ego of the husband.

The wife was born in Australia in 1945.  I am unable to make findings concerning her education, or her occupation before she met the husband.  The husband and wife commenced cohabitation in Melbourne in 1970; they intermarried in 1975.  Their four sons were born in the period 1976 to 1984.

In about 1980 the husband's mother died.  In 1980 the husband, wife and children moved to State F, U.S.A., to attend to the husband's mother's affairs.  While there they inspected and bought, in the husband's name, the following properties: G Street, Suburb H, J Street, Suburb K, 1, L Street, Suburb H, 2, L Street, Suburb H, 3, L Street, Suburb H, 4, L Street, Suburb H, M Street, Suburb H, N Street, Suburb O, 1, Q Street, P Street, Suburb H, 2, Q Street, and R Street, Suburb H.

The marriage came to an end when the wife and children left the parties' home in Suburb S, Melbourne, in January 1986.  At that time the parties had acquired the following properties in Melbourne; T Street, Suburb S (the parties' home), registered in the husband's name, 99 year leases in U Street, Suburb V, W Street, Suburb V, AA Street, Suburb BB, CC Street, Suburb DD, and EE Street, Suburb FF.  All these latter properties were registered in the name of C Pty Ltd.

The wife commenced proceedings against the husband in this Court on 29th January 1986.  In all, some 29-30 applications were filed between that day and August 1990.  The wife's application sought orders concerning care of the children, maintenance for the wife and the children, and orders by way of alteration of property interests.  Such applications as remained undetermined were fixed for hearing before Strauss J, in Melbourne, on 22nd January 1990. 

In evidence before me in these proceedings the husband asserts that he and his lawyers were present for the hearing (which I find is correct) and that they wished that the hearing proceed.  He asserts that the proceedings were adjourned (which again I find is correct) on the application of Mr GG for the wife, against the objection of the husband's counsel Mr HH.  The transcript of the proceedings before his Honour on that date is not before me, although the husband has tendered two pages of that transcript (Exhibit E) which do little to assist one to understand what happened on that day.

An affidavit of the wife's solicitor, Mr JJ, dated and filed 22nd January 1990, is on the Court file and was clearly before the trial judge.  That affidavit asserted that the husband and his legal advisers had not then made full disclosure and discovery and therefore they would not be ready for trial for some days.

The order of Strauss J. made 22nd January 1990 which adjourned the proceedings for later hearing, is recited to have been made by consent of counsel for both parties.  Whatever was in fact the position, that is when if at all the parties would have been ready to litigate before Strauss J, and whether there was sufficient court time to enable the trial to commence or conclude (about which matters I am unable to make a finding) it is nevertheless clear that the adjournment ordered by Strauss J. was not opposed by the husband's legal representatives.  I reject any submission suggestion or inference of the husband that the wife engineered the adjournment of 22nd January 1990 as part of some plan to make it difficult for the husband to litigate or compromise the proceedings.

The court file shows that the proceedings were next fixed for hearing, before me, on 21st May 1990.  On that date Mr KK, solicitor of the firm of LL Lawyers, Melbourne, the husband's solicitors, was present and represented the husband, and Mr JJ, solicitor of MM Lawyers, Melbourne, the wife's solicitors, was present and represented the wife.  I made orders on that day, two of which orders are significant.  I recite them:

1. That all applications herein be adjourned for hearing before me, subject to part-heard cases only, on 6th August 1990.

1. That the husband be present in the State of Victoria by no later than 29th July 1990, and that thereafter he remain in the State of Victoria until the conclusion of the hearing of the said application."

Before me, the husband asserted that he was unaware of the terms and effect of that order, and that he did not know of the adjourned date for hearing (6th August 1990), or that he was directed to be in Australia.  I do not accept the husband's assertion.  I find that he knew of the adjourned hearing date and of his obligation to be in Victoria.

The following facts and factors are relevant in my making such finding.  First, the husband did not call as witnesses either Mr KK, who was present in court on the husband's behalf on 21st May 1990, or any other person from LL Lawyers, his then solicitors, despite repeated offers by me to permit him to do so, and despite my making clear to him that if he did not do so I would more easily accept the evidence that he did know of the hearing date.  Second, the husband's evidence before me was that the Principal Executive Officer of C Pty Ltd, Ms NN, was in court on 21st May 1990; likewise the husband failed to call her as a witness, despite the like invitation and indication.  Third, Exhibit 3 in these proceedings is a photocopy of an affidavit of Ms NN sworn and filed in proceedings in the Supreme Court of Victoria between C Pty Ltd as plaintiff and the wife as defendant.  The affidavit is dated 23rd May 1990.  Paragraph 9 of that affidavit says, inter alia, "I was present at the mention of the Family Court proceedings before Justice Treyvaud on Monday 21st May 1990 where his Honour refixed the hearing date of this matter and postponed it until 6th August 1990."

Fourth, Exhibit 1 in these proceedings is a photocopy of a sales docket from Commonwealth Reporting Service, dated 6th August 1990, wherein the husband ordered a copy of the transcript of the proceedings herein on 6th August 1990.

Shortly after my order of 21st May 1990 the wife filed a further application seeking to obtain security for payments of maintenance which had earlier been ordered but which were in arrears.  On 25th June 1990, when again Mr KK and Mr JJ were present before me, I made orders assigning to the wife the rental of the former matrimonial home, T Street, Suburb S and transferring to the wife all the Melbourne properties registered in the name of C Pty Ltd on trust for sale and disbursement and holding of the proceeds.

On 28 June 1990, when the husband was neither present nor represented, I made orders, inter alia granting to the wife sole use the premises AA Street, Suburb BB, at which premises C Pty Ltd and Ms NN conducted their business affairs.

In evidence before me the husband asserts that these orders, which he categorised in substance as 'draconian', destroyed his Australian property empire and corporate structure.  He says that on becoming aware of these orders he suffered from some form of mental breakdown for which he received hospitalisation.  There is no evidence, other than his assertion, to support this contention.

The husband's evidence before me, which was not always, indeed often, easy to follow, is that during 1990 he and the wife were engaged in discussions to compromise the wife's claim.  His evidence is that he sought to acquire the wife's interest in the relevant corporate structures, especially C Pty Ltd, and that to that end he entered into negotiations with a listed United State's public company, OO Corporation.  His evidence is that in about March to April 1990 he arranged for some hundreds of thousands of dollars to be paid to that United State's company from funds of C Pty Ltd to enable OO Corporation to purchase and complete arrangements to acquire C Pty Ltd, or the wife's interest in it.

The husband's evidence is that he and the wife compromised the proceedings in terms requiring him to pay to the wife slightly in excess of A$1,000,000.  His evidence is that he and the wife initially agreed that the settlement date would be 30th August 1990, and that subsequently the settlement date was changed by the wife to 7th September 1990.

In support of his contention that he and the wife had compromised the wife's claim, the husband tendered documents (described by him as attachment 4A, in fact being document 224 on the court file).  Perusal of those documents shows that, whereas the parties were close to compromise, some matters remained in dispute between them, and the proceedings were never in fact compromised.

The husband asserts before me that there was no mention of the alleged compromise during the hearing in August 1980; that seems to be the fact.  The husband asserts further that the wife's suggestion of the settlement date of 7th September 1990 was a deliberate ploy by her to conceal her intention to proceed before me on 6th August 1990.  I will deal with that contention hereafter.

THE JUDGMENT AND ORDERS OF 8TH AUGUST 1990
The proceedings were heard and determined by me between 6th and 8th August 1990.  The Court file contains transcript of each day of hearing.  The husband was neither present nor represented.  Counsel for the wife, Mr PP, called evidence in support of the wife's applications.  He produced for my benefit an aide-memoire setting out the value of, liabilities affecting, and equity in, the various Victorian and United States properties.  That document was before me, and was referred to, in those proceedings.  Transcript of the proceedings on 7th August 1990, page 51, records Mr PP informing me that Ms NN had left Melbourne and was perhaps then in the United States of America.  On 8th August 1990 I delivered judgment in relation to the applications before me, and I made orders consequent upon, and based upon, that judgment.

THE SECOND CHRONOLOGY
I turn now to the chronology of events following the judgment of 8th August 1990.  To understand this chronology it is necessary to refer briefly to the evidence which I accepted concerning the value of the parties' equity in the Australian and the United State's properties.

In my judgment of 8th August 1990, I accepted the evidence and the aide-memoire that the equity in the Victorian properties was, in round figures, $1,000,000.

Between August and December 1990 all those properties were sold, by or at the instigation of the relevant mortgagees.  The proceeds of sale did not satisfy the mortgages.  From one property the wife received a few thousands dollars which she treated and used as moneys available to maintain herself and the children of the marriage.

In my judgment of 8th August 1990 I accepted that the financial information concerning the United States real property contained in the aide-memoire which was based upon agreement as to the value of that real estate reached by two United States real estate appraisers and which was extracted from the husband's affidavit filed on 19th January 1990, with attachments.  I found therefore that the nett equity in the United States property was almost $3 million.

In the period 1989 to early 1990 the husband's United States property at 2, Q Street was compulsorily acquired.  The husband's evidence to me is that he received approximately $650,000 US, which he utilised to improve the American properties.  I have some difficulty in accepting that that sum was so expended, bearing in mind the fact that at that time, when the proceedings were awaiting trial in Australia, the husband, as he asserts, was attempting to obtain moneys to enable him to compromise the wife's claim.

In 1991 the wife caused the initial order for child maintenance, made in February 1986, and my order for child maintenance made on 8th August 1990, to be registered in the Family Court, State F, and there sought to enforce those orders.  As at mid-1992 the wife was claiming in that court arrears of child maintenance of some $117,000 (including private school fees for the children, whose attendance at that school had been suspended because the husband had failed to pay the school fees).

In late 1992 the husband filed a voluntary petition for bankruptcy in the United States Bankruptcy Court.  In evidence to me the husband said that he entered into that petition to defeat his creditors.  Perusal of the bankruptcy petition shows reference to the wife as the last name on a list of creditors totally unsecured with non-priority claims; the entry reads:

"disputed claim resulting from Australian seizure - amount of claim unknown".

Nothing could be further from the truth.

The petition specifies the husband's United States real property as having a value of U.S.$4,050,000, and lists creditors' totally secured loans on the real property as U.S.$2,176,689. It also shows a surplus of assets over secured and unsecured creditors of approximately U.S.$1,700,000.

The husband's evidence is that the United States Bankruptcy authorities have taken no steps to sell any of his properties, that the rentals received from those properties do not cover the instalments payable pursuant to the relevant mortgages, so that the husband's liabilities have accordingly increased.  He is apparently allowed to manage those properties and collect the rentals, accounting to the bankruptcy authorities.  Either the United States Bankruptcy authorities or ANZ Bank Ltd, a mortgagee of the United States properties, permit the husband to live in one property, rent free, and pay his telephone, electricity, and heating bills.

The wife has continued to attempt to enforce in the United States courts my orders of 8th August 1990, including and/or being the child maintenance orders, but without success.

On 25th May 1994 the husband filed his application the subject of this judgment.  On 16th January 1995 the hearing of these proceedings commenced, the hearing concluded on 19th January last.  This is the judgment arising from those proceedings and that hearing.

SECTION 79A(1)
I turn now to the basis of the husband's application to set aside and/or vary my order of 8th August 1990. The application is based upon the provisions of Section 79A(1)(a)(b) of the Family Law Act 1975. As the wife here seeks an order changing the categorisation of the order for the payment of a lump sum of $2,000,000, and in so doing relies upon the provisions of Section 79A(1)(c) it is necessary now to set out those paragraphs fully:

"79A(1)      [Grounds on which order set aside, varied]  Where, on application by a person affected by an order made by a court under section 79 in proceedings with respect to the property of the parties to a marriage or either of them, the court is satisfied that -

(a)there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence, the giving of false evidence or any other circumstance;

(b)in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out;

(c)a person has defaulted in carrying out an obligation imposed on him by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or

...

the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside."

The husband's assertion is firstly that there has been a miscarriage of justice by reason of fraud, suppression of evidence, and the giving of false evidence; and secondly that circumstances have arisen since the making of the order of 8th August 1990 which make it impracticable for the order, or part of it, to be carried into effect.

I have the greatest difficulty in understanding and appreciating the husband's assertions.  I believe that what the husband asserts is that justice miscarried in relation to my order of 8th August 1990, firstly because the aide-memoire which Mr PP produced to me at the hearing in August 1990 made mathematical errors, in that it over estimated the husband's equity in the United States properties by more than U.S.$500,000; secondly because the aide-memoire understated the liabilities in the United States properties by approximately U.S.$600,000; thirdly because the aide-memoire made no reference to the husband's liability to the ANZ Bank Ltd. in the sum of some U.S.$760,000, being moneys which that bank had advanced to the husband and which was secured against the United States properties; fourthly because the aide-memoire took no account of capital gains tax payable in the U.S.A. on the sale of the United States real property, the sum which the husband asserts is U.S.$488,000.

It is possible to deal with those four matters collectively.  As I said earlier in this judgment, I relied upon the aide-memoire as accurately setting out the contents of the annexures to the husband's affidavit of 19th January 1990.  The aide-memoire did not in fact do so, as I will now demonstrate by reference to the relevant annexures.

Annexure HF1 is a statement of the husband's assets, financial resources and liabilities as at 30th June 1988.  Annexure HF2 is described as "an update of Annexure [HF]1".  Annexure HF3 is a statement of the assets and liabilities of C Pty Ltd as at 30th June 1988.  The aide-memoire was prepared using Annexure HF1 - the 1988 information.  To be accurate, the aide-memoire ought to have used the information contained in Annexure HF2 - the updated information, as it was in fact the husband's only statement against interest in these proceedings.  Page 27 of that affidavit, being portion of Annexure HF2 sets out the husband's nett equity in the United States properties at U.S.$1,060,492:  Adding to that sum the value of the husband's personal property, his total assets are shown as $1,489,720 US.  The husband's liabilities, which the husband conceded in evidence to me included his liability to the ANZ Bank Ltd, in the sum of U.S.$725,669; reduce his nett asset position to U.S.$764,051.

The husband's affidavit of 19th January 1990 is an admission by the husband against interest; if it is to be treated as a full and frank disclosure by him of his financial position (which I question, when I compare it with the real property information set out in his bankruptcy petition) then the nett value of the husband's United States properties as at the date of the hearing before me was U.S.$764,000.  By reference to Exhibit 7, the Australian dollar exchange rate as at 8th August 1990, the Australian equivalent of that sum is approximately $970,000.  That sum is markedly less than the sum of $3,000,000 which I placed on the United States assets based upon the information contained in the aide-memoire.

I find that the over-valuation of the husband's United States assets was simply a mis-reading of his affidavit of 19th January 1990 and of the three annexures referred to.  The over-valuation was not a result of fraud by the wife or by any of her legal representatives; no evidence available to be called on behalf of the wife was suppressed; none of the evidence given on behalf of the wife, or by her, was false.

I turn now to consider whether the over-valuation of the husband's United States assets by about A$2,000,000 ought to be treated as a miscarriage of justice.

MISCARRIAGE OF JUSTICE
Section 79A(1)(a) provides that a court hearing the relevant application must first be satisfied that there has been a miscarriage of justice by reason of one of four named circumstances - fraud, duress, suppression of evidence, or the giving of false evidence, or by reason of any other circumstance.  The words "or any other circumstance" are not to be read eiusdem generis with the other four named circumstances.  A relatively recent, and significant, decision of a Full Court in the marriage of Suiker 17 Fam.LR 236, (1993) FLC 92-436, cites with approval earlier decisions of a Full Court in the marriage of Holland (1982) 8 Fam.LR 233, (1982) FLC 91-243, and in the marriage of Gebert (1990) 14 Fam.LR 62, (1990) FLC 92-137. Portion of the cited passages from Gebert's case are as follows:

We consider that the words "any other circumstance" appearing in s.79A(1)(a) whilst not to be read ejusdem generis with fraud, duress, suppression of evidence or the giving of false evidence, are intended to cover other situations where, for one reason or another, a miscarriage of justice has occurred...

The important matter that must be established for an application under this part of the section to succeed is that there has been a miscarriage of justice.  It is, we think, clear, as counsel for the appellant argued, that the words "miscarriage of justice" should not be given a restrictive meaning, particularly when coupled with the words "any other circumstance" and that justice means justice according to law.

In Suiker's case the Full Court gave what is, I consider, a properly wide and generous description of the expression "miscarriage of justice" as not only relating to the integrity of the judicial process, but as referring to a variety of matters and circumstances which had an influence on the outcome of the litigation.

I hold that the wife's reliance upon an aide-memoir, which inadvertently overestimated the value of the husband's U.S. property by approximately $2 million, here resulted in a miscarriage of justice by reason of any other circumstance.

A further contention of the husband that there had been a miscarriage of justice was based on his assertion that the wife deliberately changed the proposed date for payment of moneys pursuant to the proposed compromise of the wife's claim to a date approximately one month after the date fixed for the August 1990 hearing, and that she thereby misled the husband about her intention to proceed to trial in August 1990.  I have already found that the husband knew of the trial date.  There is no evidence to support the husband's contention.

IMPRACTICABILITY OF COMPLIANCE
The husband's remaining submission, based upon the provisions of Section 79A(1)(b), was that circumstances have arisen to make it impracticable to carry out part or all of the order of 8th August 1990.  Again, I have difficulty in understanding what are the circumstances upon which the husband relies.  As my August 1990 order requires payment of moneys by the husband to the wife, I assume that the husband contends that his circumstances have changed, for the worse, so that he cannot pay the moneys ordered, or any part of them.

Two circumstances may be relied upon; firstly the husband's bankruptcy, secondly the alleged drop in value in the U.S. property market.  On that latter matter there is a dispute between two U.S. real estate appraisers.  As neither gave evidence before me, and there was no other evidence adduced, I am unable to make any finding as to the state of the U.S. real property market now or as at August 1990.

The husband's bankruptcy was voluntary.  It is not appropriate to permit such an action by the husband to be used to defeat the course of justice.  I agree with the approach of Gee J in the marriage of Rhode 10 Fam.LR 56, (1984) FLC 91-592, that it is not in the public interest that parties who contribute to their own financial troubles ought to be allowed to relitigate to extricate themselves from that trouble.

DISCRETION, AND SECTION 79A
That leads logically to the next issue, namely whether, as here I am asked to find, that one of the grounds permitting a court to set aside or vary a Section 79 order has been established, whether in the exercise of my discretion, judicially exercised, I ought either to set aside or to vary the order of 8th August 1990.  I cite, and follow, the following passage from the judgment of Mason J (as he then was) in Taylor v. Taylor (1979) 25 A.L.R. 418 at 429.

What s.79A(1) does is to give the court a discretion to set aside an order when it has been obtained by false evidence. In such a case the court will be extremely reluctant to exercise its discretion in favour of setting aside the order unless something more appears than that false evidence has been given and has procured the making of the order. The importance of bringing an end to litigation and the evil of allowing cases to be retried on the same evidence are powerful deterrents against setting aside a judgment whenever it appears that it has been obtained by false evidence without more.  Where, however, more appears, as e.g. that the judgment was obtained ex parte without the benefit of the evidence to be given by one of the parties, then the court will the more readily exercise its discretion in favour of setting aside the judgment.  Then the setting aside of the judgment will not result in a retrial on the same evidence but a trial on the evidence given by both parties.

(The italics are mine.)

I hold that the miscarriage of justice which I have here found established "is of such a serious nature and results in such inequity that it can only be rectified by the extreme step of setting aside or varying" my order of 8th August 1990.  See Simpson v. Hamlin 9 Fam.LR 1040 at 1,047, (1984) FLC 91-576.

In applying Section 79A(1) I may set aside or vary the order or I may, if I consider it appropriate, make another order under Section 79 in substitution for the order so set aside. There is no proper basis, I find, why I ought to set aside the whole of the order. I find that justice will be done if I proceed to make findings concerning the property of the parties as at August 1990, the value of that property, the ownership of that property, the liabilities of the parties, the existence of any other order under this Act. I will then consider the nature and form of the orders to be made, and I will categorize them.
THE SECTION 79 APPROACH
I deal first with the property of the parties in Australia, and place a value upon it.  In my judgment of 8th August 1990 I identified, and placed a nett value of $980,000 on, the parties' property in Australia.  I identified C Pty Ltd’s interests in two items of personal property in the United States, which I valued at $197,000.  I found the possibility of the wife recouping any of the items of that personal property was non-existent.  I valued the total Australian property at approximately $1,150,000. 

Three matters require consideration.  First, the sale of the real property realized virtually nothing to the wife.  That fact is regrettable, but relevant only to the wife's application pursuant to Section 79A(1)(c).

Second, the husband asserts that the wife took over the assets and operation of the three Australian companies, especially C Pty Ltd, and the premises from which those companies operated.  He asserts and contends that in the August 1990 proceedings the wife placed no value upon that company.  He asserts that C Pty Ltd had a substantial income - he drew $96,000 at the rate of $8,000 per month until April 1990.  He seeks to rely upon an affidavit of Mr QQ, finance professional of State F, sworn 23rd June 1992, to the effect that if C Pty Ltd was sold as a going concern it had a value of between A$750,000 and A$1,000,000.  Mr. QQ was not called as a witness in these proceedings.

By my orders made 25th June 1990 I effectively gave to the wife the right to receive income from the Australian properties, the obligation to pay the outgoings and the responsibility to pay out the mortgages and to account for the balance.

By my order of 28th June 1990 I gave to the wife sole use of the premises where C Pty Ltd conducted its business.

I am satisfied that these orders did not bring about the destruction of C Pty Ltd, or the husband's Australian empire, as the husband asserts, nor did they cause C Pty Ltd to cease trading successfully.  On the contrary, I accept the evidence of the wife that, despite my order of 28th June 1990, it was not until October 1990 that the wife gained control of the day-to-day affairs of C Pty Ltd.  I accept her evidence that she did not become a Director of C Pty Ltd, despite the fact that her case before me in August 1990 was that she would wish to take over the control of C Pty Ltd and attempt to trade out of trouble.  I accept that she made such decision somewhere in September/October 1990.  I accept that that decision was made because C Pty Ltd had been stripped of assets, and had only liabilities.  Likewise, there were no assets of, and only liabilities in respect of, D Pty Ltd and E Pty Ltd.

I find that as at August 1990 none of the three companies had any value.  I verify my finding that as at 8th August 1990 the parties' Australian assets were fixed in the sum of $980,000 real property and $197,000 personal property of C Pty Ltd, non-collectible. 

Third, I deal with the wife's affidavit of 28th October 1994, confirmed by her in evidence before me.  In paragraph 9 of this affidavit she deposes to enquiries which she made of the ANZ Bank in about June 1993, which enquiries, she asserts, produced documentation establishing that in 1989 withdrawals from C Pty Ltd in the ANZ Bank Common Fund were authorized by Ms NN and totalled $811,676.23.  Exhibit WF 11 to that affidavit is a letter from the bank to the wife, dated 22nd June 1993, showing moneys in that account being drawn from that account, in the name of C Pty Ltd.

The husband was cross-examined as to those moneys.  He asserted that they were transferred to the U.S.A., used in part to fund the proposed compromise, and were used in part in Australia.  Whatever be the explanation, and I do not accept the husband's explanation without corroboration, which was not forthcoming, I find that none of those moneys were used by the wife or for her benefit, or for family purposes, but were used solely for the husband's purposes.  Thus, I find, the husband reduced the assets in Australia by about $800,000.  This sum must here be taken into account.

Thus I add to the sum of $1,177,000 Australian assets, the sum of $800,000.  Accordingly, I make the total of the Australian assets $1,977,000.

I turn to the property in the United States of America.  Earlier in this judgment I dealt with the husband's contention of miscarriage of justice based upon overvaluation of the U.S. assets.  I there concluded, on the basis of the husband's affidavit sworn 19th January 1990 and the exhibits thereto, that the actual nett value of the husband's U.S. real property, in Australian dollars as of August 1990, was approximately $970,000.  I repeat those findings, and that figure, without further comment.

Accordingly, I find that the total value of the property which was property the subject of my order on 8th August 1990 is $2,947,000, made up as follows:

Australian property   $1,977,000.00
         U.S. property   $970,000.00
         TOTAL  $2,947,000.00

I turn to consider the factors relevant to alteration of the interests of the husband, or of C Pty Ltd, his alter ego.  In my judgment 8th August 1990 I altered the parties' interests to 75/25 in favour of the wife in the Australian assets, and to 25/75 in the wife's favour in the U.S. assets.  I do not intend or imply that the wife is entitled to only one quarter of the husband's U.S. property.  Rather, I indicate the mathematics whereby I arrive at a lump sum payable by the husband to the wife as a result of the orders which I will hereafter make.  Using the formulae above specified, I find that of the total pool of $2,947,000 the wife is entitled to $1,725,250 and the husband is entitled to $1,221,750.  I will, accordingly, order payment to the wife, by lump sum, of the sum of $1,725,250. 

There are no assets of the husband, or under his control, in Australia to which the wife may have recourse to satisfy my orders.  I have no evidence as to the current value of the husband's U.S. assets.  I am not satisfied that it is impracticable for my order to be carried into effect.  I leave to the wife and her legal advisers the difficult task of attempting to enforce this order in the U.S.A.

LUMP SUM MAINTENANCE?
Mr. Holzer, appearing for the wife, seeks to overcome the effect of the husband's U.S. bankruptcy, and its possible discharge, by seeking, pursuant to the wife's cross application, an order that the moneys payable to the wife be categorized as lump sum maintenance.  He makes that application pursuant to Section 79A(1)(c), to the wording of which I have referred earlier in this judgment.  I now deal with that application.

I approach the categorisation of the lump sum(s) payable to the wife pursuant to my orders by having regard to, and taking into account, two significant and basic factors or matters.  Firstly, an order of a court, regularly made, ought to be complied with, therefore, when making orders, a judge ought to assume that compliance will occur and a successful party to civil litigation will obtain the benefits of that judgment.  Secondly, when, however, a judge, on reasonable grounds, has reason to anticipate that compliance will not occur, then the judge ought so to frame the orders as to ensure that the successful party in fact obtains the fruits of the judgment.

The wife's application that the moneys to which she is entitled ought to be categorized as lump sum maintenance is made, counsel informs me, because the husband is an undischarged bankrupt, so that, unless this court otherwise now orders, when the husband is discharged from that bankruptcy, the wife as an unsecured judgment creditor will lose totally the benefit of this judgment, and the judgment debt will be extinguished.  That is certainly the effect of Australian bankruptcy law.

Counsel advises that this will not occur if the lump sum be categorized as maintenance, as in the U.S.A. the bankrupt's obligation to pay maintenance continues even after a bankrupt receives a discharge from the bankruptcy.

My research into Australian bankruptcy law in general supports that proposition.  Section 123(6) of the Commonwealth Bankruptcy Act 1966 (as amended) has the effect of continuing the obligation of a bankrupt judgment debtor existing by reason of a maintenance order made before the debtor was made bankrupt.  I am entitled to assume that U.S. bankruptcy law is to the same effect, there being no evidence or indication to the contrary.  See Brown v. Gracey (1821) 1 Dow & Ry (N.P.) 41, Dynamit Actien Gesellschaft v. Rio Tinto Co. (1918) A.C. 292, per Lord Dunedin.

The wife's application filed 24th May 1990, poorly and ambiguously drafted, sought orders pursuant to Section 74 (Spousal Maintenance) and Section 79 (Property Settlement).  The application sought, inter alia "the payment of $1,500,000 lump sum maintenance in settlement of property.  The hearing in August 1990 and the judgment and the orders did not consider nor deal with the wife's application for spousal maintenance; only property settlement was considered.  However, I am, I find, entitled at this stage to consider and deal with the wife's application for spousal maintenance, by reason of the fact that the husband's 1992 bankruptcy was designed to defeat the claims of his creditors, including the wife, and that any order in the wife's favour for property settlement will be extinguished when the husband is discharged from bankruptcy.  It is proper, therefore, to deal with the wife's application for lump sum spousal maintenance, so as to enable the wife to obtain benefits under my order.  This is essential as husband's bankruptcy petition shows a surplus of assets over liabilities of more than U.S.$2 million.

I am satisfied therefore that the husband has in the U.S.A. assets available to satisfy an order for lump sum spousal maintenance.  I am satisfied that the husband has failed to pay to the wife any moneys, whether child maintenance, costs, or otherwise, in compliance with my order of 8th August 1990, and that he has no intention of so complying hereafter.  I find that it is therefore proper to order the husband to pay to the wife lump sum maintenance.

I now consider the quantum of lump sum maintenance.  The evidence satisfies me that the wife has lived for many years in the Suburb S/Suburb RR area.  She lives with the parties' four sons, in rented accommodation; she drives a 10 year old motor vehicle.  I am satisfied that she has a need to purchase a suitable home in the area where she currently lives, to have it comfortably furnished, and to drive a new motor vehicle.  She is unable to support herself adequately because she has the responsibility for the four children of the marriage.  I take judicial notice that the cost of a 5 bedroom home in the area where the wife currently lives is about $600,000 to $650,000, that a replacement car, and suitable furniture, will involve further expenditure of about $100,000.  I find that the wife is entitled to a lump sum capitalising periodic spousal maintenance of $250,000.  I will, therefore, order lump sum spousal maintenance of $1,000,000.

Had application been made to me in August 1990 to make an order for lump sum spousal maintenance, and therefore defeat the husband's attempts by bankruptcy to deny the wife the benefit of the judgment in her favour, I would have unhesitatingly made such an order.  As I will hereafter reduce the order for alteration of property interests by reason of my having made an order for lump sum spousal maintenance, it is proper - essential - that the lump sum maintenance order be retrospective to, operative from, and deemed to have been made at, the date of the August 1990 judgment and orders.  I will so order.

ALTERATION OF PROPERTY INTERESTS
I next consider what order, if any, I should make for alteration of property interests.  I have earlier assessed the wife's financial entitlement at $1,725,250.  I have now ordered the husband to pay $1,000,000 lump sum spousal maintenance.  Before I make an order for property settlement I am required to take into account and consider the order for spousal maintenance.  Accordingly, I reduce the wife's entitlement to property settlement by the amount of the maintenance order, and order that she be paid by way of alteration of property interests the sum of $725,250.

THE ORDERS
For those reasons I make the following orders.

1. I set aside paragraph 5 of my order made 8th August 1990, and order in lieu thereof:

(a)That the husband forthwith pay to the wife by way of alteration of property interests the sum of $725,250.00.

(b)That the husband forthwith pay to the wife lump sum spousal maintenance of $1,000,000.00.  I order that this order be retrospective to, operative from, and deemed to have been made on, the 8th of August 1990, and take effect accordingly.

1. I vary paragraph 8 of my said order by substituting for the words "$2,000,000.00", wherever appearing, the words "the said sums of $1,000,000.00 and $725,250.00".

1. I dismiss the husband's application filed 25th May 1994 and his amended application filed 7th November 1994.

1. I adjourn to a date to be fixed by the Listings Registrar paragraphs 4 and 5 of the wife's cross application filed 8th August 1994.

1. I reserve to the wife liberty to apply to bring those applications on for hearing on giving reasonable notice to the husband.

1. I make no order as to costs.

1. I certify that this was a matter proper for the attendance of Counsel on behalf of the wife.