Falcon and Falcon

[2019] FamCA 795

FAMILY COURT OF AUSTRALIA

FALCON & FALCON [2019] FamCA 795

FAMILY LAW - PROPERTY – undefended hearing – where the Court finds the husband has failed to make full and complete disclosure – making a final order where it appears all substantial property (arising from the husband’s Keno win) is outside the Commonwealth of Australia

Family Law Act 1975 (Cth) ss 75 and 79

Hickey & Hickey (2003) FLC 93-143
Stanford & Stanford (2012) 247 CLR 108
Weir & Weir (1993) FLC 92-338
Black & Kellner (1992) FLC 92-287

APPLICANT: Ms Falcon

RESPONDENT: Mr Falcon

FILE NUMBER: TVC 486 of 2018

DATE DELIVERED: 1 October 2019

PLACE DELIVERED: Townsville

PLACE HEARD: Townsville

JUDGMENT OF: Baumann J

HEARING DATE: 1 October 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr M Fellows

SOLICITOR FOR THE APPLICANT: Beckey Knight & Elliott

THE RESPONDENT: No appearance

Orders

1. That within sixty (60) days of the date of this Order the Respondent husband shall pay to the Applicant wife the sum of $550,000.

2. That otherwise all other assets in the wife’s possession in Australia, including her superannuation, shall be retained by her.

3. That the husband pay to the wife a contribution to her costs, with the wife having leave to make that application with an estimate of costs that she seeks if the wife has been successful within two (2) years from the date of this Order in securing payment from the husband of the amount or any part amount set out in Order 1 hereof.

4. That pursuant to Section 121 of the Family Law Act 1975 the wife have leave to provide a copy of this Order to a person outside the Commonwealth of Australia, person within the Commonwealth of Australia or any authority outside the Commonwealth of Australia in facilitation of any attempt to enforce the order made today against the husband.

5. That the Respondent husband, MR FALCON born … 1959 be restrained from leaving the Commonwealth of Australia.

6. That the Marshal of all officers of the Australian Federal Police and of the police forces of the various States and Territories are requested and empowered to take all necessary steps to give effect to these Orders, including all things necessary to include and retain the Respondent’s name on the Airport Watch List in force at all points of arrival and departure in the Commonwealth of Australia, and to the Respondent’s name on the Watch List until further order of the Court.

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 Falcon & Falcon 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 TOWNSVILLE

FILE NUMBER: TVC 486 of 2018

Ms Falcon

Applicant

And

Mr Falcon

Respondent

EX TEMPORE REASONS FOR JUDGMENT

(Settled from the oral reasons delivered)

Introduction

1. The Applicant wife, Ms Falcon, commenced proceedings in the Federal Circuit Court of Australia on or about 20 April 2018 against the Respondent husband, Mr Falcon.  It is apparent that the catalyst for those proceedings was a win some seven days earlier by the husband of approximately $1.4 million in a gambling game.  Since the Application on 20 April 2018 and despite the best endeavours of the wife through her retained solicitors and retained Counsel, Mr Fellows, who appears before me today, it has been difficult to engage the husband in the proceedings in a genuine way and, further, it has been, it seems to me on the evidence before me, virtually impossible to get any proper disclosure from him as to the use by him and current whereabouts of the winnings.

2. This would be of itself a matter of great concern and tragedy but is exacerbated by the fact that:

   a)the wife, who is now 51 years of age, has been suffering at least since January 2016, with cancer at stage 4 level and, on the evidence of the wife, most likely to be terminal; and

   b)the husband left the jurisdiction finally on 3 July 2019 having, through the use of lawyers no doubt properly instructed (and in no way do I say complicit with his personal actions), to pretend that he was genuinely engaging in the process so as to achieve what might be a just and equitable outcome for these parties.

3. Accordingly, because of the history which will be briefly recounted next, the matter proceeded today by way of undefended hearing.  The case outline relied upon by the Applicant wife filed 24 September 2019 provides a detailed chronology and a asserted somewhat notional balance sheet as well as submissions as to contributions and s 75(2) factors.  I have read and considered that material.  I have had the benefit of exchange and further submissions orally by Mr Fellows today.

4. I have also taken into account in these Reasons which I now deliver ex tempore the only documents actually filed in the Court by the husband being:

   a)a Response filed 5 July 2018 in which he sought that the wife’s Application for property adjustment be dismissed;

   b)an Affidavit in support of the Response filed 5 July 2018;

   c)a Financial Statement sworn 2 July 2018 and filed 5 July 2018; and

   d)a further Financial Statement filed 1 March 2019.

5. Although the Court intends to proceed ex parte and undefended today, the Court is conscious that any order I make may be the subject of an application by the husband to seek to set or vary it on the basis that he has not been heard on the application.

6. I am satisfied from the evidence before the Court relied upon by the wife that every reasonable endeavour has been made to keep the husband informed of the progress of these proceedings.  The wife says that she has no knowledge of the whereabouts of the husband other than he is overseas and probably in the United Kingdom, the country of his birth.  She has used her best endeavours to engage with known family members, who have not been of great assistance.  Exhibit 1 tendered today by Mr Fellows are details of flights of the husband procured under subpoena from the Commonwealth Department of Home Affairs, which reveals that on 3 July 2019 the husband left Australia by an Emirates flight.

7. There is no evidence that he has returned to Australia.  I will return to that issue shortly.  In any property case, the principles to be applied are well settled by law.  I refer to cases such as Hickey & Hickey (2003) FLC 93-143. Of course, as a result of the High Court decision in Stanford & Stanford (2012) 247 CLR 108, the Court is required to consider whether it is just and equitable to make an order pursuant to that requirement set out by s 79(2) of the Family Law Act 1975 (“the Act”).  Having identified the pool as best I can and the interests, I am satisfied it is just and equitable to alter the legal and equitable interests which the parties have at this time.

8. Assessing the pool of assets is difficult because of the lack of disclosure by the husband, which I regard as, on the evidence, entirely intentional and, in fact, may even have been to the level of intentional misinformation.  I would have to regard the pool which I am now determining to be available as a notional pool.  The pool, as I find it on the evidence, mostly arising from the husband’s Financial Statement filed 1 March 2019 (as a statement against interest) and the wife’s Financial Statement filed 19 June 2019 to be as follows:

Owner	Item	Value
Husband	Smaller bank accounts	$7,000
Husband	Motor vehicle 1	$12,000
Husband	Rolex watch	$39,000
Husband	Nikon camera	$4,000
Husband	asserted value of gold coins in his possession	$750,000
Husband	B Bank account	$200,000
$1,012,000.00
Wife	Bank accounts	$928
Wife	C Company shares	$1,484
Wife	home contents	$5,000
Wife	D Super superannuation entitlements	$103,740
$111,152
GROSS NOTIONAL POOL		$1,123,677

1. I am satisfied, as I have already indicated, that the husband has failed to make full and complete disclosure.  He, of course, had a duty to do so.  For most of the period from commencement of proceedings in April 2018 until he left Australia on or about 3 July 2019, he had lawyers on the record appearing for him.  The parties had, it seems, after the matters were transferred to the Family Court of Australia by Judge Demack in July 2018, had appearances before Registrar Boyd, including a Conciliation Conference held on or about 8 October 2018.  It is reasonable to infer that before that Conciliation Conference, at least some directions would have been made requiring further disclosure, but I do not have those.  I just make that inference.

2. What is apparent is that on 8 October 2018, the husband failed to appear and, as is the usual practice, Registrar Boyd listed the matter for trial management hearing towards an anticipated undefended hearing before the northern Judge, Tree J.  That hearing took place on 4 February 2019.  The concern the Court has is that there was no explanation for a number of issues that arose initially from the husband’s Financial Statement filed on 5 July 2018 where at Item 59 in that Statement, the husband swears about the disposal of property, namely:

Item	How disposed of	Value/amount received
Car	Sold	$500.00
Boat	Sold	$10,000.00
Money from gambling win	Transferred into a UK bank account	$1,410,243.30
Superannuation	Cashed in	$47,019.19

1. I am sure that the solicitors for the wife continued to press for discovery, but the obfuscation by the husband continued.  Perhaps surprisingly in some ways, when I dealt with the matter on 24 June 2019, the husband’s solicitors on the record and the Counsel and solicitors for the wife agreed to me making an order that the matter be listed for mediation privately before a Brisbane mediator and the date for the mediation was set in the Order (Order 3) for 12 July 2019.  As I say, on that occasion, a solicitor on the record appeared for the husband.  Particularly at Order 1 and 2, the Court made specific orders for discovery to be completed by 10 July 2019 directed to a number of issues.  The Orders speak for themselves.

2. What we now know is that a week before the husband was required to make discovery as specifically set out, he left the country, seemingly for good.  A long line of authority such as Weir & Weir (1993) FLC 92-338 and Black & Kellner (1992) FLC 92-287 has indicated in circumstances where there is a failure to make full and complete disclosure as the rules and general principles of Family Law litigation in this country demands, the Court may treat the evidence of the husband less cautiously. It is, in a sense, an attempt to balance up issues which the Court has a concern about but cannot entirely have probative evidence about.

3. In my view, the proper way of, if you like, balancing up such issues is to give consideration to that factor within section 75(2)(o).  There is simply insufficient evidence for me to exercise any real evidence-based determination to notionally “add-back” amounts between the gross winnings and the amounts set out in the husband’s recent financial statement.

Contributions

1. The husband is currently 60 years of age and the wife 51 years of age.  They commenced cohabitation in or about 1998 when the husband was 40 and the wife was 31.  I am satisfied on the evidence that at the commencement of cohabitation, the wife probably had a house of furniture.  She was the primary carer of two of her children from an earlier relationship, X and Y, who also lived with her and the husband for about three years from cohabitation.  A younger child of the wife lived with the father in another part of Australia.  The evidence suggests that the wife paid some form of child support to the father of that child.

2. The wife says, and I accept, that the husband at the time of cohabitation owned a home.  There is no evidence of value of the home at cohabitation, but the wife says, without giving details of the source, that there was a loan of approximately $138,000 owing on the home.  The husband has, it seems, always been involved in the marine industry, although the full extent of his engagement is not clear.  The parties married in 2001.  They remain married at the time of this hearing.

3. Although the relationship did have a character of being “on and off” and there were acknowledged separations and periods where the parties did not live together, I am satisfied that from cohabitation in 1998, the parties were a couple genuinely and for the majority of the time supporting each other, although there were periods of separation referred to in the material.  In 2007, it appears clear that the husband sold the home that he had at the time of cohabitation.  He says he sold it for $254,000 and that a nett amount of $170,000 was received by him.

4. At or about the same time, the husband suffered a serious injury, it seems, at work, where he fractured his left tibia and fibula and has since required three operations and which he says has been an impediment to both his health and working capacity since 2007.  There is a dispute in the material as to what occurred with the $170,000 nett proceeds from the home.  The husband asserts the wife transferred $100,000 into an account in her name.  The husband further says that at a period when they were separated, the wife refunded $40,000 to him but retained the balance of some $60,000 plus interest.

5. I am unable to make any particular findings as to how the funds may have been used during the period of this somewhat chaotic relationship, but certainly I am not satisfied on the evidence that the wife, as the husband I think seeks to assert, effectively just spent and wasted his money.  In 2010, the parties appear to have reconciled again.  There is at least a suggestion that at about this time, the wife was then living in City E and the husband was living in City F.  Certainly the husband was working away a lot and perhaps not long after then, the husband began a sole trader business in City F called G Pty Ltd.

6. The wife says during the course of the relationship she supported the husband’s business; did bookkeeping and other support.  The husband does not deny that the wife did so but, in a sense, minimises both the quality and quantity of her contribution in that regard.  There is so little information to make any assessment but I am prepared to accept the wife’s evidence that she did make a genuine contribution to the business and supported the husband who was, in all respects, the major earner.

7. Although there is very little to indicate the circumstances or events at the time, on 4 July 2014 the wife obtained a family violence order against the husband.  The husband says he saw the obtaining of that order as reflecting the end of the relationship and marriage.  He says they separated and that he regarded the marriage as at an end in or about July 2014.  This is disputed by the wife.  However, it does seem clear that at least after the domestic violence order was obtained, there was a period of further dysfunction in the relationship although the parties remained married.

8. In January 2016, the wife was diagnosed with ovarian cancer.  The husband at paragraph 52 of his Affidavit indicates that when he became aware of this serious medical condition, he regarded it as appropriate that he would reconcile with his wife but says that he did not cohabitate with her.  That is disputed by the wife.  The husband at paragraphs 58 and 62 of his Affidavit talks about the number of overseas trips thereafter they undertook.  The wife confirms these trips, paid for by the husband who was working at the time in his business, occurred.

9. The wife says and the husband does not seem to dispute that they entered into some form of travel club subscription for a period, the wife says, of some 15 years.  The wife, I suspect, indicates and would ask me to infer that by taking such a subscription for such a long period of time, I should see this as a continuance of their relationship and the likelihood that the relationship would continue.  Certainly that is not the position taken by the husband.

10. On or about 13 April 2018, the husband, with a ticket he says (and it is not disputed) he purchased with funds available to him at that stage in a gambling game, won approximately $1.4 million.

11. The wife says effectively a day later, they separated.  She immediately brought proceedings on 20 April 2018 in the Federal Circuit Court of Australia.  In circumstances where the husband had not responded to the proceedings until July 2018, I am a little uncertain what, if any, steps were taken in April 2018 when proceedings first came before the Federal Circuit Court of Australia, to seek to restrain the funds transferring to some other jurisdiction.  Because of the failure by the husband to make any proper disclosure, I do not know how soon after he received the funds for his winnings he transferred the money overseas as Item 59 in his earlier Financial Statement indicated.

12. Nonetheless, I think it is reasonable to infer that at least since before July 2018, the majority of the funds, in whatever form they are or however they were used to purchase, for example gold coins, have been out of the jurisdiction.

13. I have already indicated the totally unsatisfactory behaviour and conduct of the husband in relation to this engagement in the proceedings.  This history, in my view, supports the findings that during the course of the relationship from 1998 to, I will find, approximately April 2018 (a period of over 20 years), there were periods of separation but also the majority of time was spent as a couple, even though work may have meant that they did not live under the same roof every day.

14. Frankly, without the winnings in the game, the assets available for distribution were extremely modest.  The authorities that deal with winnings of this nature make it clear that when the parties were in a relationship, then it really does not make any difference who bought the ticket.  The purchase of a ticket is inferred to be with funds available to the couple.  The cases where there is a significant financial benefit that comes into the relationship towards the end of that relationship and, on the wife’s case, a day before the relationship came to an end; in the husband’s case, four years after the relationship came to an end, then depending on the nature of the financial windfall, it will depend how the parties contributions should be assessed.  In my view, accepting as I do that, although at times dysfunctional, the relationship did continue until after the gambling win, I find the contributions on all factors to be equal.

15. I do not ignore the fact that the husband says he brought into the relationship the home, but it was a long time ago, and in my view this initial contribution must be seen within the context of other contributions during the course of the long relationship.  The winnings could not be, and should not be, seen as something entirely contributed by the husband in circumstances where I am satisfied, on the evidence, the relationship was still intact at that time and that the ticket was purchased effectively with what should be as joint funds.

Section 75(2) factors

1. In the absence of any probative evidence from the wife’s treating oncologist or health professionals – and in that extent I am not critical of the solicitors for the wife for that absence of evidence in the circumstances – a critical factor which the Court might need to take into consideration in determining the relative comparison on the future earning capacities and needs of the parties is, sadly and without seeking to be insensitive, the likely lifespan of the wife.  The wife was excused from attendance today as Mr Fellows says, and I accept, the wife is recovering from the effects of recent chemotherapy.

1. A further difficulty in the s 75(2) adjustment area is having no real knowledge of the husband’s current financial circumstances and his earning capacity and/or his income.  On a contribution-based assessment of equality, a further adjustment under s 75(2) is not proper – save for a consideration of s 75(2)(o) which I deal with below.  At their respective ages, the wife, who is on a disability benefit, is unlikely, in any event, to recover sufficiently to obtain gainful employment, even though she is only a relatively young woman at 51 years.

2. However, the factor that I think needs to be taken into account is the one earlier alluded to, namely the failure by the husband to make proper and full disclosure.  In my view, an adjustment to the wife arising from this lack of explanation and the likelihood that the husband has other funds that he has not disclosed means that it is a factor to be borne into account.  I do so in the final analysis.

What orders do justice and equity?

1. Whilst it might be said that there are some significant possible difficulties in the wife enforcing any order I make, she is entitled to finality.  This has been, no doubt, an issue which has probably exacerbated through the stress and anxiety of the circumstances the wife’s health.  Sadly, in my view, the husband’s behaviour has caused much of the delays and lack of certainty.  However, in determining what order is just and equitable, the Court cannot apply some form of penalty or penal sanction upon a person who may not have made the full disclosure other than within the realm of the discussion I have already had.

2. Before any adjustment for the s 75(2)(o) factor above, my estimate on the basis of the current pool would require the husband to pay to the wife $450,000 approximately, calculated as follows:

   total pool = $1,123,677

   50% of total pool = $561,800

   less property of wife - $111,152;

   = a payment due by husband of $450,700.

3. There is a degree of arbitrariness involved in what further adjustment would be appropriate under s 75(2)(o).  The issues I take into account are as follows:

   a)The best evidence is, from the husband’s Financial Statement filed in July 2018, that he had available to him the whole of the funds transferred only weeks prior, perhaps, to the United Kingdom of $1,410,243.30;

   b)By March 2019, the husband deposed on oath that the whole of his property and financial interests totalled $1,012,525; and

   c)The difference between just those factors is approximately $400,000.

4. I have significant concerns that the husband’s estimate of the value of gold coins (see Item 43) at $750,000 is accurate.  No source was given for that valuation or any understanding of where the gold coins may have been.  I also note in this respect that, although the husband set out the balance of his B Bank account at that stage to be an estimated $200,000, he, I think, deliberately failed to give any details of the account holder or number.

5. It would be fair to allow the husband to use funds available to him for his own lifestyle and living expenses, but it is impossible to know what they may be.  We know, at least, some of the funds were used for a business class airfare from Australia, probably to the United Kingdom, on 3 July 2019.

6. Considering these factors, I have formed the view it would be just and equitable that the sum which the husband should be ordered to pay the wife be increased by $100,000.

7. Although the wife has, in the usual way, as most of applicants do, maintained from day one that there should be an order for costs in her favour, the Court is conscious of the statutory mandate in s 117 of the Act that each party shall bear their own costs. In this case, I am absolutely certain that the wife’s costs that she has been charged are probably significantly less than they could have been charged – probably through the good services of her solicitor Mr McLachlan and retained counsel Mr Fellows – and the husband should not be the beneficiary of that largesse, in my view. There is sufficient evidence referred to in these Reasons to indicate that a proper application of the principles in s 117(2A) of the Act and the conduct of the husband would be circumstances justifying a costs order in the wife’s favour. However, on the evidence before me, I am unable to quantify that costs amount.

8. Rather than just effectively make an arbitrary decision as to costs, and perhaps in the unusual circumstances of this matter, the order which I propose to make does not totally deal with finality.  I propose to make an order in the terms set out at the commencement of these Reasons.

Injunction

1. On 12 July 2019 in Brisbane, Mr Fellows of Counsel, accompanied by his solicitor, appeared before me to make an oral application for an injunction.  They did so because, on that day, they had travelled to Brisbane for the private mediation and the husband had not appeared.  It is noted that the solicitors on the record for the husband had earlier filed a Notice of Ceasing to Act.  For the reasons delivered at the time, I gave leave to the wife to make an oral application for an injunction and made an injunction on an ex parte interim basis restraining the husband from leaving the Commonwealth of Australia.

2. Mr Fellows, whilst acknowledging that the husband, on the best evidence available, has left the Commonwealth of Australia, says that if the husband does return to Australia, there should be an injunction that can be activated after his return to Australia preventing him from leaving Australia again.  I accept that is a significant impediment upon the liberty of Mr Falcon.  I think the likelihood of Mr Falcon returning to Australia with that impediment hanging over him is remote.  However, in the unusual circumstances of this case and in the exercise of my discretion, I am prepared to make an order as per paragraphs 3 and 4 of the orders made on 12 July 2019.

3. Because I have made final orders in respect of property, it would not be, in my view, in the current state of the evidence, appropriate to make orders restraining the husband from dealing with assets which are overseas and I choose not to make order 5.

I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Baumann delivered on 1 October 2019.

Associate: 

Date:  1 November 2019