Gull and Gull (No 2)

[2012] FamCA 431

FAMILY COURT OF AUSTRALIA

GULL & GULL (NO. 2) [2012] FamCA 431

FAMILY LAW - CONTRAVENTION - Section 79A(1)(c) - Wife fails to comply with an order to bring money to Australia from banks in India - Husband incurs mortgage payments on his Australian property unnecessarily

FAMILY LAW – COSTS - Wife in default - Costs ordered

Australian Passports Act 2005 (Cth)
Family Law Act 1975 (Cth)

Cawthorn and Cawthorn [1998] FamCA 37
Line & Line (1997) FLC 92-729
Ravascini and Ravascini (1983) FLC 91-312

APPLICANT: Mr Gull

RESPONDENT: Ms Gull

FILE NUMBER: MLC 10581 of 2008

DATE DELIVERED: 8 June 2012

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 30 May 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Weil

SOLICITOR FOR THE APPLICANT: Vernon De Gama & Associates

SOLICITOR FOR THE RESPONDENT: Mr Selimi, Radebe & Associates

Orders

1. That paragraphs 2 and 3 of the orders made 19 March 2008 (as varied by the orders of the Full Court on 30 April 2009) be varied such that, from the wife’s cash entitlement from the funds repatriated from India to Australia, $111,435.00 be paid to the husband being made up as follows:

   (a) $50,000 pursuant to s 79A(1)(c) of the Family Law Act 1975 (Cth);

   (b)       $60,000 by way of costs;

   (c)       $880.00 to discharge the costs order made 28 February 2005; and

   (d)       $555.00 to discharge the costs order made on 6 October 2009.

2. That paragraphs 2 and 3 of the said orders be further varied so that from the said repatriated funds, $22,000 be set aside by solicitors Vernon De Gama and Associates to satisfy any taxation liability arising out of the firm or its principal, acting as trustee for the said repatriated funds.

3. That in the event that there is an excess after the payment of any taxation liability under paragraph 2 of these orders, the excess shall be divided between the parties as to 65 per cent to the wife and 35 per cent to the husband.

4. That paragraphs 2 and 3 of the orders made on 24 November 2004 are discharged AND THE COURT REQUESTS that the Australian Federal Police remove the name of R born … October 1994 from the Airport Watch List.

5. That pursuant to and for the purposes of section 11 of the Australian Passports Act2005 (Cth), the child R born … October 1994 is permitted to travel internationally.

6. All extant applications are otherwise dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Gull & Gull (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 10581  of 2008

Mr Gull

Applicant

And

Ms Gull

Respondent

REASONS FOR JUDGMENT

1. This dispute is about whether the Court should exercise its discretion and alter final property orders because of the circumstances that have occurred since those orders were made.  There is also a significant dispute about legal costs. 

2. This case revolves around s 79A(1)(c) of the Family Law Act 1975 (Cth) (“the Act”) which reads:

   (1)      Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:

   (a)      …

   (b)      …

   c)a person has defaulted in carrying out an obligation imposed on the person 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

   (d)      …

   (e)      …

   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.

3. Mr Gull (“the husband”) and Ms Gull (“the wife”) were married and now have a 17 year old son.  Mixed in with a variety of financial orders, the wife also had an application to have the Court discharge an injunction made many years ago which has the current effect of precluding the 17 year old son from leaving Australia.  On that issue, although the husband formally opposed the discharge, his counsel remained sensibly silent.  For the reasons to which I shall return, I propose to discharge that extant order.

4. On 19 March 2008 after several days of a contested property hearing which took place in late 2007, Mushin J made final orders and published his reasons for judgment.  Those orders defined the divisible assets and his Honour then divided the pool 65 per cent to the wife and 35 per cent to the husband.  The problems then began.

5. In defining the pool of about $750,000 his Honour found there was, inter alia, approximately $502,000 in investment bank accounts in India.  His Honour ordered:

   Both parties sign all documents and do all things necessary to cause the investment monies to be repatriated from India to Australia.

6. In his published reasons for judgment, Mushin J said:

   135.A major area of disagreement between the parties concerned to [sic] question of whether the money in India should first be repatriated to Australia and then divided, that is the husband's submission, or be divided in India which is the wife's submission.  Counsel for the husband submitted that because of the substantial litigation in India, the wife's potential non co-operation and the possibility of further litigation in India, the money should be first repatriated.  The wife submitted that she wanted to use her share of the money in India and funds would be needlessly lost in bringing it to Australia.

   136.In usual circumstances, the wife's submission would undoubtedly find favour.  However, in the particular facts of this matter, the situation is somewhat different.  The issue of repatriation of those monies to Australia has been litigated in this Court on a number of occasions, particularly in the Judicial Duty List when I have been presiding.  At all times, the wife has been totally resistant to any of those monies being brought to Australia.  During this trial, the wife's attitude did not change.  The wife did not adduce any evidence to establish any cost which may be incurred, despite making a submission that such cost would accrue.  Consequently, on those facts the husband's submission is to be preferred. 

   There could therefore be no doubt as to what his Honour was ordering.

7. The wife had represented herself in those proceedings.  When cross-examined before me about her understanding of the orders, she said she could read the lines but did not understand the legal ramifications.  Sensibly however, she obtained legal advice after receiving the orders.  I am satisfied on the evidence that she understood exactly what those orders meant.

8. Having received the orders, the wife appealed and subsequently applied to Mushin J for a stay of the orders pending that appeal.  His Honour granted that stay on 16 May 2008 saying in his published reasons:

   3.…There has been considerable discussion this morning about terms and conditions of the stay but ultimately the husband, through his counsel, has conceded that it is appropriate that the stay be granted in respect of all the orders, a position with which I agree because otherwise, there would be a significant risk of depriving the wife of the potential fruits of a successful judgment of the Full Court were she to succeed on the appeal.

   4.In those circumstances, it was only a question of two particular issues which have been submitted should be conditions of the granting of the stay.  The first of those is the usual undertaking as to damages by the wife which, after some discussion, she has agreed to give, and I will be ordering accordingly. 

9. The significance of the wife’s undertaking arises because subsequent to March 2008, there has been an alteration in exchange rates between the Australian dollar and the Indian rupee but also an argument about the loss of interest which might otherwise have been gained by the husband (and to that extent the wife) by the amount of money not being invested in Australia. How that affects s 79A(1)(c) is a matter to which I shall return.

10. The Full Court of this Court heard the appeal on 9 October 2008 and dismissed it on 30 April 2009 although very minor adjustments were made to the mathematical calculations of Mushin J.  Reading their Honours’ judgment, it is clear that the appeal had little or no merit because it was mainly an argument about the exercise of discretion. 

11. The wife then sought special leave of the High Court of Australia.  On 1 October 2009, Gummow and Keiffel JJ ([2009] HCA SL 198) dismissed the application saying that it failed to identify a question of law to be determined. 

12. In February 2005, the wife had commenced injunctive proceedings in India eventually leading to an order being made by the High Court of Judicature.  That order had an effect such that money could not be removed from India from the various bank accounts of the parties.  On that issue is whether the wife deliberately exacerbated her thwarting of the orders of this Court by not agreeing to remove the Indian court order.  The order was not discharged until January 2010.  By that time, the High Court of Australia had rejected the last avenue of appeal by the wife.  On the evidence and in particular the timing, I am satisfied that it was the wife’s intention to thwart the repatriation process.  She could have removed the Indian court’s injunction but she did not do so.

13. After the determination of the High Court of Australia to dismiss the special leave application, the wife still took no action to comply with the orders of this Court.  A contravention application was filed by the husband and also by the wife.  The wife’s application appears to have been summarily dismissed by Mushin J on 25 February 2010. 

14. Mushin J adjourned the husband’s contravention application to the following day to enable the wife to sign the necessary documents that would begin the repatriation of money process.  Those documents were signed but more were required by the Indian banks.  That process too required court orders and it was a subject of a hearing before Mushin J on 13 May 2010.  It was the wife’s evidence that she gave the requisite documents to a solicitor on the day before the hearing.  I am satisfied that those documents were not given to the husband’s solicitor until the actual day of the hearing and only then because of the threat of further proceedings.

15. The question needs to be asked what the husband was doing during all of those three years. 

16. On 7 April 2008, that is, three weeks after the orders were announced the husband’s solicitor wrote to the wife requesting she sign a number of documents to begin the repatriation process which were provided with the letter.  The wife did not comply.

17. After the Full Court appeal, a similar request was made and ignored by the wife.  The wife’s excuse was that she was appealing to the High Court of Australia.  There was certainly no stay of the Full Court’s order.  Accordingly, the order of Mushin J from March 2008 was again alive.

18. On 7 October 2009, the husband’s solicitor wrote again to the wife because the High Court of Australia application had been determined.  When asked why she ignored that request, the wife said she had a reason but did not elaborate.  The husband then activated the contravention process that culminated in the documents being signed. 

19. Around this same time, the wife corresponded with one of the banks in India.  In June 2010, by email, the wife told the O Bank of an impending decision in the Family Court of Australia which was a hearing before Mushin J.  With breathtaking audacity, the wife told the bank to refrain from doing anything because a final hearing was imminent.  The wife’s explanation for that was that it had something to do with protecting the interest rate and not withdrawing the money early.  I reject that as not only implausible but inconsistent with her own words.  She well-knew that the arguments about repatriation process were lost.

20. To compound problems, on 11 January 2010, the wife who had her own lawyers in India wrote to lawyers in India acting for the husband.  Those lawyers made an offer to divide the Indian money but certainly not to repatriate it to Australia.  The letter recognised the entitlement of both parties arising out of the order of Mushin J from March 2008 but the wife wanted to retain her entitlement in India.  Looking back at the judgment of Mushin J to which I have referred, that is exactly what his Honour ordered not happen.  Similarly, looking at the decision of the Full Court, the same issue is clear.

21. Ironically, the letter between the lawyers was produced by the wife to show her attempts at resolving the impasse.  It certainly did not reflect an attitude of compliance with the orders of this Court.

22. Counsel for the wife properly conceded that after the wife lost the High Court of Australia application, her failure to sign the documents and act in a way to repatriate the Indian money to Australia was a default in carrying out her obligations under the order.  That, I suspect, is not how the wife saw it.  Counsel’s submission was that there could be no default earlier than the date of the High Court decision because the wife had exercised her legitimate rights and a stay had been granted.  In my view, the stay simply suspended the enforcement of rights and the dismissal of the appeal by the Full Court reactivated the orders.  It does not matter whether or not the appeal was malicious or even without merit.  The fact that the husband had to wait for the fruits of his judgment is the critical question.  It is also clear that the wife made no attempt during the period of time even when the stay was in operation, to prepare for the eventuality that she was unsuccessful.

23. Because of the dispute by the wife on the evidence, what follows is an overview of the applications and the evidence of the parties and my findings each of which is made on the balance of probabilities. 

24. I have already indicated that the wife maintained that she did not understand the orders of Mushin J but obtained advice.  I am satisfied that she is an intelligent and articulate woman who has represented herself consistently throughout the various proceedings until the hearing before me as well as drawn her own documents.  Her counsel before me relied upon an outline of case document that the wife had very skilfully drawn.  I could not say what her capacity was in 2008 but the nature of the orders in March 2008 consequent upon the clear findings of Mushin J, indicate to me that the wife will prevaricate if she sees it as to her advantage.  That is also consistent with the findings of Mushin J who doubted at least the wife’s credibility if not that of both parties.  I have to concede I have a similar reservation about the wife.

The application and evidence of the husband

1. Although it was contained in an application in a case filed 9 May 2012, the husband’s document was treated as an application for final orders bearing in mind that it sought that the Court exercise its jurisdiction under s 79A.  The husband sought the following orders:

   1.Pursuant to s 79A(1)(c) the husband be paid from the trust funds $209,021.05;

   2.That the wife pay the husband $141,008.17 from her entitlements in the said trust funds;

   3.The wife remove the caveat lodged on the property at Suburb B which was to be retained by the husband;

   4.That any tax liability on the income generated from the investment properties as at 31 January 2011 be paid by the parties in proportions as to 35 per cent to the husband and 65 per cent to the wife;

   5.That the wife be restrained from sending any money outside of Australia until she filed her tax returns for the years 2000 to 2011 and the Tax Office and Centrelink be notified of the making of the orders;

   6.That the wife pay the husband’s costs on an indemnity basis and those costs be deducted from the wife’s entitlements held in trust.

2. In addition to those orders, the husband also sought orders under the “Accrued Inherent Jurisdiction” of the Court to enforce its orders in a fair and just manner. Having regard to the fact that I am satisfied that the provisions of s 79A(1)(c) apply, I do not need to consider that alternative further.

3. The husband relied on two affidavits.  The first was filed on 10 January 2011 and the second on 22 March 2011.  It was his evidence that his solicitor had sent the letters earlier mentioned with the relevant bank documents but the wife did not respond positively.  After he received the documents from the wife in February 2010, he went to India and personally delivered them to the relevant banks but each wanted further documents.  As part of his claim for compensation or adjustment to the March 2008 orders, the husband claimed costs of that travel to India.  The wife opposed any such adjustment being made on that basis that the husband did not have to go nor was there any order that he do so. 

4. Upon the husband being advised of the need for further documents, his solicitors contacted solicitors who were then acting for the wife and correspondence followed.  Ultimately in May 2010, the requisite documents were signed by the wife and delivered by a different firm of solicitors those acting for the husband.  The Indian bank required attendance of the signatories on the Indian Consulate and that occurred but not without the Court restraining the wife’s movement from Australia first.  Both parties went to the consulate.

5. By July 2010, the money from India started to filter into Australia. 

6. There is now about $222,000 in the trust after the recent distributions were made consequent upon orders that I made at the start of May when the proceedings had to be adjourned as a result of the change of the husband in bringing the proceedings under s 79A.

7. The husband’s evidence was that after the Full Court appeal, he should have received about $258,000 of which a car, superannuation and other property totalled $52,000 leaving him to receive $205,700 from the Indian money.  He calculated that had the money been immediately repatriated, the $525,000 that was then anticipated would have risen to $620,000.  That was because of a calculation based on 6 per cent interest component which was opposed by the wife who said that the appropriate interest rate was 4.5 per cent.

8. In addition to the dispute about the interest rate, with the percentage divisions ordered by Mushin J, the husband calculated that he had lost about $45,000.  That was made up mostly of lost interest rather than a significant change in the exchange rate.  In addition, the husband maintained that he would have paid off his mortgage of $201,000.  In his evidence, he said he believed the gross value of the property to be $340,000.  The foundation for that opinion is questionable but again it was not challenged.  When Mushin J determine the pool in 2008, his Honour found that not only was there no equity in that property but even a shortfall of some $7000.  On the basis of the husband’s own evidence therefore, the property has increased in value over the past four years. 

9. I have already mentioned the husband’s trip to India with the documents and for that purpose, he claimed $2570 for travel expenses.

10. Combined with his losses as he described them, his costs, his travel and the mortgage payments, he said that he was $141,000 worse off.

11. To compound problems, the repatriated funds had been sitting undistributed in the husband’s solicitor’s trust account earning interest but also attracting tax.  I was told and it was not disputed that there is an expected $22,000 or thereabouts tax liability in the hands of the solicitor as trustee and no agreement had been reached about who was to be responsible for that tax. 

12. The only challenge to the husband’s evidence by counsel for the wife in cross-examination was about a police complaint that he had made in India in 2004.  That complaint was not about the wife.  It was about his brother-in-law doing something dishonest.  Having regard to the explanation of the husband that it did not affect the banking requirements in India, I find that it is not relevant to my determination.  As much of what the husband otherwise said was not challenged other than by the wife’s denials to which I refer below, I have no reason to reject his evidence.  Accordingly I accept it.

1. In essence, the husband’s financial position now as compared to that in March 2008 is that his house has increased in value, his mortgage has been maintained, he has lost potential interest and he has incurred costs.  Those are all matters that must be factored into the exercise of discretion if there is a justification for varying the order of March 2008.

The wife’s position

1. The wife’s application was contained in her amended response filed 21 May 2012.  She sought a distribution of the funds such as would reflect the March 2008 orders together with a payment of $13,120 and a further payment of $20,270 being interest incurred on her mortgage as a result of the husband’s dealing with it by way of a draw down.  The wife also sought orders associated with the payment of tax, withdrawal by the husband of complaints that he made to an Indian bank and police in India and finally, a discharge of the injunction about the parties’ son leaving Australia.

2. I have not set those orders out in detail but I shall deal with them more specifically in the conclusions.

3. The wife’s evidence was contained in three affidavits which were filed on 10 February 2010, 24 January 2011 and 12 April 2011. 

4. The wife’s affidavits can be summarised by saying that much amounted to submission, comment and argument.  Much of it was irrelevant to the issue that I have to deal with and in part that may be attributable to the fact that the husband changed his application after the affidavits were all filed.  Indeed, much water had passed under the bridge in respect of the litigation subsequent to the last affidavit being filed.  Each party had been given an opportunity to file further evidence and each declined. 

5. The standard of proof is the balance of probabilities.  The onus of establishing that proof lies with the husband.

6. In her evidence, the wife said she was agreeable to the Indian monies being distributed in India because that would be where she will ultimately live.  That evidence ignores the reality of the orders of March 2008 and the consequent appeals.

7. In respect of her own claims for an adjustment, the wife pointed to the withdrawal by the husband from the mortgage account but that ignored the fact that the orders of March 2008 required her to indemnify the husband regardless of what was outstanding.  There is no basis for me to make such an adjustment in law.  At best, those were matters that should have been the subject of a s 79A application and that was not sought by the wife.

8. Further, there is no power except in s 79A to alter the substantive rights in the March 2008 orders (see Ravascini and Ravascini (1983) FLC 91-312 at 78,126). For me to impose a burden on the husband in these circumstances would alter his substantive rights.

9. Much time in the affidavit was devoted to what might best be described as irrelevant issues about the police complaints.  I consider those were matters contemplated by the Full Court and rejected on the issue of the wife’s application for fresh evidence.  There was no basis put to me that would justify any orders even if there was power to do so.

10. In her long affidavit filed 24 January 2011 through which I have trawled looking for relevant matters, the wife responded to the husband’s affidavit but again she obfuscated.  For example, she referred to the fact that the Indian banks were not bound by the Australian court orders.  On that issue she was correct but she ignored the fact that it was she who was bound by those orders. 

11. In justifying her lack of response to the repatriation issue, the wife only made her position worse.  I find arising from cross-examination that her real position was that she wanted to keep the money in India where she hoped to live and her position was to exercise all of her appellate rights against what could only be described as personal orders.  Further, the wife maintained that it was the husband and his lawyers who, by not keeping her informed about the correspondence with the Indian banks, had been responsible for the delays.  I reject that proposition entirely.  It was the wife who caused the delays.

12. As to the quantum, the wife disputed the exchange rate and interest rate and put her own view as to what those amounts should have been.  I note that neither party cross-examined the other about the finer details but I am satisfied that it does not matter because the discretionary exercise is not necessarily a mathematical one.

13. Clearly, in the exercise of discretion, the mathematical calculations as exposed by the husband and disputed by the wife, assist as a guide.

14. The wife pointed to the husband’s double counting in respect of the mortgage.  His evidence was about what he had wanted to pay off his mortgage if he had had the funds in Australia.  I agree with the wife’s position save that the imprecise evidence about interest payments would not have affected the capital position.  Clearly, the husband also had the benefit of the occupation of the property whilst at the same time paying the interest on his mortgage.

15. The wife also argued that she had spent money on such things as transcripts for the appeal, had been owed child support and wanted to relitigate contraventions that had already been determined.  None of those matters was of any significance.  She had exercised her rights and lost the appeal.  The child support obligations were aged.

16. In her third affidavit, the wife was largely argumentative justifying her position that she was not in default of the orders of March 2008.  A substantial portion of the affidavit was devoted to complaints about the husband’s solicitor.  No orders were sought against the solicitor and accordingly I propose not to deal with the issues at all.

17. Sadly therefore, despite intricate and careful detail which was obviously personally prepared by the wife, much had little to do with the substantive dispute before me.  Although counsel sensibly did not spend time on that material in the hearing, I have laboriously trawled through the affidavits to find what little I can to assist me. 

18. It is also important to note that the wife’s counsel did not address the issues in detail nor should he have done so having regard to his responsibilities to the Court.  I have also taken into account that the wife’s argument was clearly set out in her outline of argument which she had prepared for that purpose.

Section 79A(1)(c)

1. The words of s 79A require consideration of what principles should guide the exercise of the discretion to vary or set aside the March 2008 orders.  It is pertinent that both parties asked the Court to vary but not set aside those orders completely.

2. In Cawthorn and Cawthorn [1998] FamCA 37, the Full Court described the factual circumstances of that case in part as a series of misfortunes which arose chiefly from the problems created by the husband himself. Of the grounds of appeal, like here, one argument was that it had been impracticable to carry out the order. Another ground was an error of the exercise of discretion. The Full Court said:

   In our view a party cannot successfully seek an order pursuant to s 79A(1) as a result of that party’s own default unless such default was due to circumstances quite beyond that party’s control.  This rests firstly upon the well-established principle of law that no-one should profit by their own wrong doing.  This principle clearly embraces the obligation to carry out the provisions of a court order.  Secondly, it would normally not be just and equitable to grant relief under s 79A(1) in those circumstances.

3. What the Full Court was examining in Cawthorn was a request by the defaulting party for consideration in circumstances where the misfortune was at his own hand.  In the present case, the applicant pleads relief because of the stubborn refusal by the respondent to carry out orders which, had they been executed, would have enabled him to enjoy the fruits of the judgment of 2008. 

4. In Cawthorn, the Full Court went on to refer to the contractual doctrine of frustration of contract but observed that there was also a recognised principle of self-induced frustration.  To an extent, that has occurred here with the wife’s appeals, delays and maintenance of the Indian court’s order.

5. Specifically as to s 79A(1)(c), in that case the Full Court said the facts justified a conclusion that the husband treated the orders of the Court (and indeed the wife) with what might be described as cool contempt.

6. In the present case, the wife’s counsel argued her action was not malicious but simply consistent with exercising her lawful appellate rights.  Whilst that might be so, her conduct in India and her maintenance of the view that the money should not be repatriated but rather divided in India must be seen as persisting with an argument which had no merit.  Her desperate attempts were indeed self-induced frustration of the March 2008 orders. 

7. Of the first step under s 79A(1)(c), there is ample evidence of a default by the wife. Indeed, her counsel conceded at least after the orders of the High Court of Australia that the default was unjustifiable. The extent of the default is irrelevant. All that needs to be proved is the default.

8. The second aspect is that the husband must establish an entitlement to the relief (or any) relief that he seeks.  He must show that it is just and equitable to vary the orders.  One aspect of that is whether he has contributed to his own dilemma or as equity would describe it, does he have clean hands?  Despite all that the wife’s evidence asserted, nothing I could find suggested that the husband exacerbated the problem.  At all times, he consistently sought that the wife comply.  The wife’s hands therefore are far from clean as was shown in cross-examination.

9. The next question is whether it is just and equitable for the husband to simply retain the outcome of the orders unaltered having regard to what Mushin J anticipated four years ago. 

10. In my view, it would not be just and equitable to have the husband in a position worse off than that which was anticipated in 2008.  I am satisfied that all of the limbs of s 79(1)(c) are satisfied and it is therefore necessary to decide what is a just and equitable outcome.

11. In 2008, Mushin J decided that of a pool of $756,000, 65 per cent to the wife and 35 per cent to the husband was appropriate.  In 2012, the pool is different.

12. There is disputed evidence about the real properties that each party retained.  The husband said his house was now worth $340,000 and it was encumbered by a mortgage of $201,000.  If that were accepted, the husband’s entitlement from the March 2008 orders shows an increase of $140,000 on what Mushin J said he was to receive.  The husband said that the wife’s house was now worth $450,000 with a mortgage of $56,000 or in similar terms, that there had been a $200,000 increase on what she was to receive in that asset from the 2008 pool.  In respect of both statements, the wife denied the truth but also argued that only the 2008 agreed figures should be used because they were found by the trial judge.  Neither party produced any expert evidence as to value and the precise amounts are not relevant as this is not a damages claim nor should it be approached simply as a mathematical calculation.  I am satisfied however that there has been an increase in value since 2008 for both parties.  Of that, I can take judicial notice of the increases in Melbourne house prices.  In my view, the extent of the increase is not important other than it can act as a guide for what is a just and equitable outcome for both parties if the orders are varied.  Suffice to say, counsel for the wife did not challenge the husband’s approach to the method of calculation of what was seen by him as a just and equitable outcome.  I however have some difficulties with the approach for the reasons that follow.

13. The husband’s mortgage in 2008 was $207,000.  What Mushin J was anticipating was that the husband would receive $175,000 in cash the husband would not have been able to completely discharge his mortgage.  If the husband had paid the capital into the mortgage, he would not have earned the interest to which he referred in paragraph 7 of his affidavit.  There is also no evidence as to what the interest component was on the mortgage payments but I am satisfied that on a mortgage of $207,000 in 2008, there would have been a substantial component of interest.  That is supported by the husband’s evidence that the mortgage was $201,000 in 2011.  Thus, the capital debt had barely come down from what it was in 2008.  The husband has been substantially disadvantaged by the wife’s default.

14. I would not be prepared to make any adjustment because of the loss of interest on invested money because the husband said that he would have paid out that money into the mortgage in any event.  In my view, the husband’s disadvantage lies in the interest unnecessarily paid even if there had not been sufficient capital to pay out the whole of the mortgage.

15. It was the husband’s evidence that he paid $42,800 in mortgage payments up until 22 January 2011.  I am unsure about whether the whole of the mortgage debt remains outstanding having regard to the orders that I made on 1 May 2012 for a partial distribution of the cash funds.  Even so, more than another year has past since the affidavit was filed and despite the wife’s denial of the husband’s evidence, no questions were asked of the husband as to whether or not the mortgage was any different and whether he had continued to make the payments.  I have little doubt having regard to the fact that his evidence was that his costs had increased and they remained unpaid, that his financial position had not altered.  The wife cleverly pointed to the fact that the March 2008 orders required her to pay her mortgage and the husband to pay his but that just highlighted how her default restricted the husband’s freedom to reduce his debt. 

16. Based on the evidence, I am satisfied that the interest component of the mortgage unnecessarily paid exceeds $50,000 but the extent of that excess is unquantifiable.  The husband should be entitled to an adjustment to take into account that disadvantage.

17. The husband also said that he lost $49,000 in costs having to chase enforcement of the 2008 orders and that those costs remained unpaid. He also pointed to unpaid costs of $2430 and his travel costs in going to India of $1235. His legal fees were said to be now something in the vicinity of $60,000 but having regard to the provisions of s 117 of the Act, those should not be included in this just and equitable adjustment. If an order for costs is appropriate, it should follow the outcome of the proceedings.

18. I am not prepared to make any adjustment for the Indian travel costs in the general exercise of my discretion having regard to the fact that I do not know what else occurred in India although it is quite clear that the trip expedited the conclusion of these proceedings.  To that extent, the husband’s expenditure mitigated his losses but also helped him bring home the money to Australia.

The tax liability

1. Mushin J ordered the repatriated money to be held in trust by the husband’s solicitor until it was divided.  The Court had therefore appointed the husband’s solicitor as a trustee and with the impasse, the trustee could not only not pay out the money but was also encumbered with the individual liability for tax.  No administration costs or expenses were sought by the solicitor which could have otherwise been claimed.  The parties did not come forth with a solution which might have otherwise resolved the tax dilemma.  As I understand the wife’s position, the responsibility should not be hers.  If the parties are able to reach a compromise, they can alter the obligations I propose to make under the order which is that the tax be paid from money that I propose to quarantine to the extent of $22,000 but if there is any money left over, the balance can be divided in the proportions as to 65 per cent to the wife and 35 per cent to the husband.

What is just and equitable

1. In my view, from the money to be retained by the wife, a sum of $50,000 should be paid to the husband for reasons set out above as a just and equitable adjustment to put him in a similar position that he would have been in had the orders been expeditiously executed.

Further injunctions

1. The husband also sought orders that the wife be excluded from further travel pending issues associated with tax and Centrelink being resolved.  I have earlier removed those restrictions and do not propose revisiting the issue.  I do not propose to notify the Tax Office or Centrelink about these issues because in my view, this Court ought not be the conscience of the revenue collectors.

The travel injunction relating to the child

1. In every case involving a child and even one of 17 years of age, the decision has to be made with the best interests of the child in mind.

2. Part VII of the Act provides that each of the parents of a child who has not attained the age of 18 years has parental responsibility for that child. Parental responsibility about decisions for the future of a child means all the duties, powers and authority which by law parents have in relation to a child. It therefore includes questions such as international travel because s 61C(3) provides that parental responsibility is subject to any order of the Court.

3. Section 64B(2) provides that a parenting order may deal with any aspect of parental responsibility for a child not otherwise covered by the section. The objects and principles from which the provisions of Part VII are to be applied are set out in s 60B, which relevantly provides that the best interests of children are met by ensuring that children have the benefit of both of their parents having a meaningful involvement in their lives, to the maximum extent consistent with the best interests of the child.

4. Sadly, and despite the age of the parties’ son, there is no existing relationship between father and child.  The issue of endeavouring to do something to resolve that problem was not canvassed in these proceedings.

5. The principles underlying the objects provide amongst other things that children have a right to enjoy their culture (including the right to enjoy their culture with other people who share that culture). Fundamental to my decision in this case is s 60CA which says:

   In deciding whether to make a particular parenting order in relation to a child, a court must regard the best interests of the child as the paramount consideration. 

6. In determining what is in a child’s best interests, s 60CC provides that the Court must consider the following matters in determining what is in the child’s best interests.

7. None of those issues was canvassed nor was the issue of parental responsibility a matter that I could or should be concerned about.

8. This case is about the assessment of risk to the child if he travels internationally.

9. The factors to be considered in the assessment of that risk, that is of non‑return of the child, were set out by the Full Court in Line & Line (1997) FLC 92-729.

10. The factors were said to be as follows:

    (a)The existence or otherwise of continuing ties between the departing parent and Australia (such as the ownership of real estate, the existence of business interests, or the residence of close family or friends here);

    (b)The existence and strength of possible motives not to return (including the level of conflict between the parents, particularly over child related issues); and

    (c)The existence and strength of possible motives to remain in the other nominated country (such as the ownership of real estate, the existence of business interests, or the residence of close family and/or personal friends there); and

    (d)Whether the country of travel is a signatory to the Hague convention.

11. In my view, taking into account the child’s age, the absence of any relationship with his father and the almost non-existent risk issue, it is in the best interests of R that I discharge the injunction that would otherwise preclude his international travel.

1. The wife also sought an order that the Court direct that a passport be issued and that the wife be permitted to apply for the passport for the child of the marriage. The application is misconceived. The function of the Court under s 11 of the Australian Passports Act 2005 (Cth) is to waive the consent of a person who might otherwise be entitled as a parent to be concerned about a child under 18 years of age travelling internationally. The provision in the legislation requires the Minister not to issue a passport without that order. In this case, having regard to the age of R, I am satisfied that it is appropriate that he be permitted to travel internationally and that the Minister does not need the permission of the husband for that purpose.

Costs

1. The husband opened his evidence by indicating that he had spent almost $200,000 in the proceedings since they began.  His evidence relating to the enforcement of the March 2008 orders was that he had spent $49,500 up to January 2011.  Counsel for the husband in final address indicated that the costs were in the vicinity of $60,000. 

2. Attached to the husband’s affidavit is a tax invoice from his solicitor indicating that the costs billed were on the basis of a cost agreement.  It is difficult therefore for me to work out just exactly what costs apply even though the husband has provided a schedule indicating the items for which he was charged specific sums.  Normally, if a costs order was made, the parties would be given an opportunity to reach agreement failing which, an assessment would follow.  Having regard to the litigious pathway that this case has followed and the wife’s propensity to deflect argument from issues that are relevant, in my view, not to determine the costs issue with certainty, would almost certainly require the parties to embark upon further litigation which would ultimately involve the Court in being required to provide resources which are already scarce.

3. Accordingly, the application of the husband is that I make an order for costs roughly in the terms of what was submitted by his counsel to be $60,000.  Any order for costs was opposed by the wife.

4. Section 117 of the Act provides that each party in proceedings before the Court shall bear their own costs unless there are circumstances that justify a departure from that principle and if the Court is considering such a departure, it must take into account the factors set out in s 117(2A) of the Act. No-one suggested in this case that there was a basis for any order for costs under s 117AB.

5. The very fact that the Court had to embark upon enforcement proceedings of orders is a circumstance normally which would justify an order for costs being made if the breach is found proved. In this case it has been. However, it is important in this case to look at the justice and equity of the situation having regard to the matters set out in s 117(2A).

6. The financial circumstances of the parties are now well-known to me.  Each party has a house and each party will have some cash as a result of the repatriation of the funds from India.  Neither party could be seen to be impecunious.  I am satisfied that there are no financial circumstances in this case which would preclude an order for costs being made against the wife.  Conversely, a large portion of the husband’s assets have been spent on seeking justice, some of it, unnecessarily because of the wife’s conduct.

7. Another issue relates to the conduct of the proceedings.  The conduct is not just associated with a defiance of court orders but also associated with the compliance with directions so that the hearing can be undertaken in an expeditious way.  Having examined the affidavit material of each party, I am satisfied that the husband was focussed upon the issue that had to be proved for the purposes of s 79A.  However, it was only around the time that I listed the matter for final hearing that his focus turned to those issues because prior to that, there were all sorts of issues associated with damages and losses.  Fortunately for the husband, as I pointed out to the wife on 1 May 2012, none of the evidence was different for the purposes of the new application which the husband filed very late.  The wife however spent significant amounts of energy and time drawing affidavits which required scrutiny and consideration by the husband.  Much of the evidence as I have earlier said, was irrelevant to the issue because the wife was endeavouring to justify her position about not repatriating the costs to Australia but also blaming the husband’s solicitor for the problems.  I am satisfied therefore that the wife largely caused the problem.

8. I am also obliged to take into account where or not a party has been wholly unsuccessful.  Although the husband sought over $140,000 which include costs generally, he has been successful whereas the wife has been wholly unsuccessful.

9. Default in complying with court orders is a serious issue.  No-one argues with a litigant’s right to exercise their rights of appeal but if those appeals fail, it must be seen that the appeal was without merit if the original decisions are upheld.  Once those rights are exercised, the original order must be complied with expeditiously.  That did not happen here and the evidence shows that the wife continued to obfuscate and avoid her obligations. 

10. I am satisfied in the circumstances that it is appropriate to make an order for costs against the wife.

11. Having regard to the examination of the schedule annexed to the husband’s affidavit and understanding the variety of hearings, documents, perusals and copying, together with counsel’s fees, I am quite satisfied that the figure of $49,500 asserted by the husband in paragraph 51 of his affidavit is reasonable. Subsequent to that time, documents were required to be drawn and counsel appeared. Counsel appeared on the 1 May 2012 hearing when the case was adjourned and again on 30 May 2012. Having regard to the top scale in the schedule to the Family Law Rules 2004, the sum of $60,000 is reasonable factoring in that on each of the two hearing dates in May, counsel’s instructing solicitor was present. The wife should pay the sum of $60,000.

12. Three orders were also sought by the husband in paragraph 52 of his affidavit.  The wife’s response to the affidavit was that she denied liability for those saying that in the trial orders of March 2008, no orders were made for those sums.  That ignores the fact that they were judgment debts for which the wife was responsible even though they may not have been factored into the proceedings as liabilities in the orders of March 2008.  Accordingly, the wife should pay those liabilities.  One thousand dollars of that sum claimed relates to an order of the Magistrates’ Court of 20 August 2004.  I do not consider that it is appropriate for this Court to be enforcing that order and therefore I propose only to make an order for $880 for the order of 28 February 2005 and $555 for the order of 6 October 2009 but not the interest included thereon.

Caveat

1. On 1 May 2012, I made an order that the wife withdraw the caveat on the property at M Street, Suburb B and otherwise comply with her obligations concerning transfers of property as required by the orders of 19 March 2008. I do not propose to make orders again. To the extent that those orders have not been complied with and that was the inference to be drawn from the amended application in a case filed 9 May 2012, should the husband apply by application in a case supported by an affidavit seeking that orders be made under s 106A of the Act, the wife would be vulnerable having regard to the 1 May orders.

2. I otherwise propose to dismiss all outstanding proceedings and to certify that it was appropriate in the circumstances for counsel to attend on behalf of both parties.

Claims by the wife

1. The wife claimed $13,120 against the husband relating to the redraw made on 28 July 2008.  She also sought an order that the husband pay $20,270 but those matters were not justified on any legitimate basis and counsel did not argue the power of the Court to make such an order.

2. Even if there was power to make the order, in March 2008, the order provided for the wife to indemnify the husband in relation to past, present and future liabilities for that mortgage.

The complaints

1. The wife sought orders that the husband sign documents that might amount to a withdrawal of his complaints to an Indian bank and an Indian police station. It was obviously the wife’s case that this had something to do with precluding the repatriation of the money from India. I have already rejected that as the basis upon which the money could not be returned. More importantly, no legislative basis under the Family Law Act was shown to me nor was any argument put that I could make such an order. I appreciate that the wife drew the documents herself and was concerned about the issue but she appeared by counsel instructed by a solicitor and no suggestion was put to me that the Court had power to make such order. I have contemplated whether it fell within s 114 of the Act as an injunctive power but even if there was some connection between the facts and a matrimonial cause as defined by s 4 of the Act, I could not find it was proper to make such an order having regard to the fact that the husband’s complaint related to something to do with the wife’s brother. Accordingly, I would decline to make such an order.

I certify that the preceding One Hundred and Five (105) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 8 June 2012.

Associate: 

Date:  8 June 2012