Kader and Kader - [2013] FMCAfam 208

FEDERAL MAGISTRATES COURT OF AUSTRALIA

KADER & KADER

[2013] FMCAfam 208

FAMILY LAW – Property settlement – undefended – non-disclosure by husband – difficulty in determining nature and value of the property pool – Court may act with less caution in attending to participating party’s entitlement – husband has had benefit of estimated one million dollars in two and a half years since separation.

Family Law Act 1975 (Cth)
Federal Magistrates Court Rules2001
Federal Magistrates Court Regulations
Child Support (Assessment) Act 1989

Stanford & Stanford [2012] HCA 52
Chang v Su (2002) FLC 93-117
Pierce v Pierce (1999) 92/844
Black & Kellner (1992) FLC 92-287; (1992) 15 Fam LR 343
Marriage of Weir (1993) FLC 92-338; (1992) 16 Fam LR 154
Mezzacappa & Mezzacappa (1987) FLC 91-853; 11 Fam LR 957
Giunti & Giunti (1986) FLC 91-759
Briese & Briese (1986) FLC 91-713
Oriolo & Oriolo (1985) FLC 91-653

Applicant:

MR KADER

Respondent:

MS KADER

File Number:

BRC 7288 of 2010

Judgment of:

McGuire FM

Hearing Date:

6 March 2013

Date of Last Submission:

6 March 2013

Delivered at:

Melbourne

Delivered on:

26 March 2013

REPRESENTATION

Solicitor for the Applicant:

Unrepresented – No appearance

Counsel for the Respondent:

Mr Trezise

Solicitors for the Respondent:

M+K Dobson Mitchell Allport

ORDERS

The proceeds of the sale of the property situated at Property C, [C] in the State of Queensland pursuant to orders made in these proceedings on 6 March 2013 be distributed as follows:
(i)To payment of [P] Credit Society Mortgage – Account No. [1] secured by the said property;
(ii)Payment of all reasonable costs and disbursements on the sale;
(iii)Payment of the parties’ personal loan liabilities to [P] Credit Society (Account Number [2]);
(iv)Payment of the wife’s personal loan liabilities to St George Bank;
(v)The balance to the wife.
Should funds from the sale of the property at Property C, [C] not be sufficient to satisfy the loan liability to [P] Credit union and/or St George Bank, then the husband be solely responsible for and indemnify the wife in respect of such liabilities as shall remain.
All monies now and hereafter due and payable by [I] Limited to the Kader Family Trust for dividends (interim or final) and all monies hereafter payable by [I] Limited to the Kader Family Trust following the exercise of pre-emptive rights as prescribed in the constitution of [I] Limited permitting the sale of shareholdings or otherwise be paid to and retained by the wife and for these purposes the wife serve copies of these orders on the registered office of the [I] Limited and on Ms V as Trustee and appointor of the Kader Family Trust.

[I] Limited be and is hereby restrained from paying out any benefits or entitlements due to the Kader Family Trust (the [Kader] Trust) to any person or company or body other than the respondent Ms Kader or her nominee made in writing and authorised by Ms Kader.
The respondent wife, Ms Kader, be solely entitled to the exclusion of the husband or the Kader Family Trust (the [Kader] Trust) to the following:
(i)The instalment payment due and owing by [I] Limited as at 31 January 2013 in the sum of approximately $43,200.00 representing the balance of the final dividend declared of $86,00.00 and payable to the Kader Family Trust;
(ii)The proceeds of sale of shareholidngs by [I] Limited following the exercise of pre-emptive rights prescribed by the constitution of [I] Limited being shares held by or on behalf of the Kader Family Trust (the [Kader] Trust).
The husband forthwith transfer and/or vest all his right, title and interests in the following to the wife, absolutely:
(i)The wife’s BMW motor vehicle;
(ii)All personalty and chattels in the possession or under the control of the wife as of the date of these orders:
(iii)The wife’s superannuation policy and entitlement;
(iv)The balances of any bank accounts or like investments in the name of or to the benefit of the wife as of the date of these orders.
Contemporaneously with the transfer and vesting orders referred to in paragraph 6 hereof, the wife transfer and/or vest all her right, title and interest in the following, to the husband absolutely:
(i)Any motor vehicle in the name of or in the possession or control of the husband as of the date of these orders;
(ii)All personalty and chattels in the possession of or in the control of the husband as of the date of these orders;
(iii)The husband’s superannuation policy and entitlements;
(iv)The balance of any bank accounts or like investments in the name of the husband as of the date of these orders but subject to these orders.
For the purpose of these orders and pursuant to section 106A of the Family Law Act 1975 the Registrar of the Federal Magistrates Court of Australia be enabled and entitled to sign any documents to give effect to the transfers referred herein.
The wife be solely responsible for and indemnify the husband in respect to the following liabilities:
(i)Any and all liabilities attaching to any of the assets to be retained by the wife pursuant to these orders;
(ii)Any and all liabilities incurred by the wife since separation in either her name alone or in joint names.
The husband be solely responsible for and indemnify the wife in respect of the following liabilities:
(i)The liability to St George Finance Limited under hire purchase agreement – Account Number [3];
(ii)Any and all liabilities attaching to any assets to be retained by the husband pursuant to these orders;
(iii)Any and all liabilities incurred by the husband since separation in either his name alone or in joint names.
Within 28 days of the date of these orders, the husband pay to the wife a lump sum of $175,000.00.
Pursuant to Section 81 of the Family Law Act 1975 the parties intend that these orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.

IT IS NOTED that publication of this judgment under the pseudonym Kader & Kader is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

BRC 7288 of 2010

MR KADER

Applicant

And

MS KADER

Respondent

REASONS FOR JUDGMENT

The proceedings before me are for property settlement commenced on the husband’s application filed 23 August 2011. Children’s issues between the parties were resolved by orders made in November 2012. Federal Magistrate Roberts made orders on 19 December 2012 listing the matter for trial in respect of property matters on Monday 4 March 2013. The matter came before me on that day and the husband had given notice that he now represented himself. He had corresponded with the court, advising inter alia that he resided in Queensland, that he was impecunious, and that he had ceased instructions to his solicitors. He consequently sought an adjournment. He attended by telephone and made submissions in support of the adjournment application. That application was opposed. The application was refused, with emphasis on the basis of the major asset being the former matrimonial home in Queensland with an equity of $40,000-$50,000, but with the mortgage arrears of some $13,000 and notice from the mortgagee bank that they intended to foreclose as soon as 24 March 2013. Further, the husband was unable to give a duration for his proposed adjournment, which was apparently conditional upon him obtaining new employment. The husband is in possession of the home in Queensland. The wife resides in Tasmania with the parties’ two children. Whilst the indefinite adjournment sought by the husband was refused, the matter was, however, stood over for trial two days later on 6 March 2013, giving the husband some indulgence to travel to Tasmania for the purposes of the trial.
The matter came before me again at 10 am on 6 March 2013. There was no appearance by or on behalf of the husband. He had again corresponded with my chambers by email of 5 March 2013. A copy of that letter was provided to Mr Trezise of counsel for the wife, who agreed that I should read its contents which, leaving aside the personally offensive and gratuitous comments directed to Mr Trezise, added nothing of substance but effectively repeated that the husband would not attend at court.
Consequently, counsel for the wife sought to proceed by way of an undefended hearing. In the circumstances, I gave separate and discreet reasons for determining to do so with such reasons taken out and placed on the court file.
The respondent wife relied on her affidavit filed 13 July 2012, together with an updated financial statement e-filed 6 March 2013 (with a hard copy tendered as an exhibit on the wife’s case).
The husband is 47 years of age. The wife is 48 years old. They commenced co-habitation in about 2002 or 2003, and married in 2004. An order for divorce was made on 11 October 2012, with a finding of the parties separating on 15 June 2010. Consequently, I find that the parties co-habited for a period of seven or eight years.
There are two children of the marriage, being [X] born [in] 2004 (aged 9 years) and [Y] born [in] 2005 (aged 7 years). The orders of 21 November 2012 see the children living in Tasmania with the mother and provide for them to spend time with the father in both Tasmania and Queensland.
Pursuant to a Notice of Decision made under Part 6A of the Child Support (Assessment) Act 1989 on 3 December 2012, the husband’s adjusted taxable income for the purposes of child support was found to be $187,200, resulting in a child support obligation for Mr Kader of $39,832 until 31 December 2012 and thereafter $45,890 per annum. The wife’s evidence is that arrears under the current assessment stand at $13,750.
The parties are joint owners of the former matrimonial home at Property C, [C] in Queensland. The husband and his current wife occupy that property. The wife’s evidence is that the mortgage instalments are approximately $13,000 in arrears and that foreclosure by the mortgagee bank is under way with 24 March 2013 being the operative date.
The wife is a [occupation omitted] who works part-time with a gross salary of $336 per week. Her income is supplemented by Centrelink single parent payment. There is no evidence that she has re-partnered.
The husband in his submissions by telephone for an adjournment stated that he was now unemployed. Mr Kader’s recent employment, at least from 2007, has been as a supervisor with an organisation dealing with disaster relief. The wife deposes in her affidavit at paragraph 13 that Mr Kader commenced employment with a company known as [C] in 2007 in Western Australia. She says:
When the opportunity arose, Mr Kader and I decided to become joint unit shareholders, using joint funds, to purchase units in the [C] Trust. The decision to purchase the unit shares was made jointly, using joint funds financed by our mortgage.
The parties established the Kader trust, through which the services of Mr Kader were employed. The successor of [C] Trust is [I] Limited.
Documents tendered into evidence by the wife show that on 30 January 2013 [I] Limited wrote to the husband as trustee for the Kader Family Trust notifying him that the Board’s discretion had been exercised, resolving that Mr Kader (or the trust) would no longer hold shares in [I]. The Board of [I] further resolved to invite the right of pre-emption pursuant to its constitution to offer all of the husband’s 144,000 shares to other shareholders of [I] at a fixed price of $1 per share. Effectively, therefore, the husband’s employment with [I] was terminated. Evidence adduced by the wife suggests that the husband’s non-compliance with Company Policy and procedures caused the termination. The evidence is that the trust was to receive a final dividend of $86,000, of which $43,200 remains payable as at the date of this trial. I infer from the evidence that the husband has received and retained the first instalment.
Upon hearing submissions of counsel for the wife and given the need to reserve my judgment and reasons in this matter, I was persuaded that there should be interim and injunctive orders effectively to preserve the quantum of the asset pool such as it is. Consequently, such orders were made on 6 March in the following terms:
·This application proceed undefended with reference to the Reasons I have given this day which are to be taken out and placed on the court file.
·The husband and wife forthwith take all steps and sign all documents necessary to cause the property known as Property C, [C] in Queensland (comprised in Lot [omitted]) to be sold by auction by Ray White [omitted] Real Estate or such other agent as authorised by the wife at such time and at a reserve price as recommended by the agent.
·Pursuant to section 106 A of the Family Law Act 1975 the Registrar of the Federal Magistrates Court of Australia is enabled and authorised to sign any document to give effect to the marketing, sale or transfer of the said property known as
Property C, [C] in Queensland (comprised in Lot [omitted]) in the event that either party fails to within reasonable time to execute any relevant documents.
·Liberty be granted to the parties or either of them to apply on short notice to Federal Magistrate McGuire in respect of order 2 herein.
·
[I] Limited be and is hereby restrained from paying out or in any way disbursing on behalf of the Kader Family Trust and/or

Mr Kader any monies payable following the exercise of the pre-emptive rights process prescribed by the Constitution of

[I] Limited and/or any monies payable by dividend.
·A copy of these orders be served of the office of [I] Limited by the wife’s solicitors as soon as practicable.
·[I] Limited have liberty to apply in respect of order 5 herein.
·In all other respects the judgment in this matter be reserved.
In addition to her affidavit and financial statement, the wife caused the following documents to be tendered into evidence:
·Letter from [I] to husband dated 30 January 2013
·Share certificates
·Constitution of [I]
·Explanatory notes,
·[Kader] Trust bank statements – 14 May 2001 to 31 July 2012
·Husband’s bank statements (jointly with his wife) – 15 May 2012 to 11 January 2013
·[I] statement 30/12/2011-7/1/2013
·
Minutes of Meeting of Kader Family Trust 29 June 2012 and

29 June 2011
·Child Support Agency Part 6A decisions
·Deed of Retirement 17/10/2012
·Email from Husband – 4/5/2013
·Statement from [S] School – Outstanding School Fees ($9,925.48)
·Statement from [F] Personal Super – Summary Report – 1 January 2012 to 30 June 2012 for Mr Kader
·Copy of email letter from Mr Kader dated 5 March 2013 at 18:24 hours
The wife seeks the following orders:
(1)That the net assets of the parties be divided as to 70 per cent to the wife and 30 per cent to the husband and for these purposes:
(a) That the property at Property C, [C] be sold;
(b) That the proceedings of sale be disbursed as follows:
(i)Payment of the agent’s commission and costs of sale;
(ii)Payment of the mortgage secured by the property and in favour of [P] Credit Society (account number [1]);
(iii)Payment of the parties’ personal loan liability to [P] Credit Society (account number [2]);
(iv)
Payment of the wife’s personal loan liability to

St George Bank;
(v)The balance to the wife.
(2)That any and all moneys now and hereafter due and payable by [I] Limited for the Kader Family Trust for dividends (interim and final) and all moneys hereafter payable by [I] Limited to the Kader Family Trust following the exercise of the pre-emptive rights process prescribed by the constitution of [I] Limited to be paid to and retained by the wife;
(3)That the husband be solely responsible for and indemnify the wife in respect of moneys owing to St George Finance Limited under Hire Purchase Agreement account number [3];
(4)That in all other respects each party be solely entitled to the exclusion of the other to all property in the possession or control of that party as at the date of these orders and that each party be solely liable for and indemnify the other against any liability attaching to or encumbering any of the assets to be retained by that party (pursuant to such an order, the wife would be retaining a BMW motor vehicle which she values at $20,000 but which has an attached liability from BMW Finance of $31,000);
(5)That the wife receive a further cash adjustment from the husband of $250,000.

The law

Section 79 of the Family Law Act 1975 (“the Act”) provides for alteration of property interests between parties to a marriage. Section 79(1) states:
In property settlement proceedings, the court may make such order as it considers appropriate:
(a)     in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property; or
(b)     in the case of proceedings with respect to the bested bankruptcy property in relation to a bankrupt party to the marriage—altering the interests of the bankruptcy trustee in the bested bankruptcy property;
including:
(c)      an order for a settlement of property in substitution for any interest in the property; and
(d)     an order requiring:
(i) either or both of the parties to the marriage; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
(1A) An order made under subsection (1) in property settlement proceedings may, after the death of a party to the marriage, be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)     the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage of either of them; and
(b)     the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)     the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f)     any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.

The recent decision of the High Court in Stanford v Stanford[1] sets out the approach for the court in dealing with applications under section 79 of the Act. The court must decide whether or not it is just and equitable to alter the parties’ rights and interests in their property. The exercise of the power to make a property settlement or adjustment order must be in accordance with the principles laid down in the Act. That is, it is necessary to identify and attribute a value to the property of the parties including assets, liabilities and financial resources. The date of the trial is usually the appropriate date for doing so. The Act stipulates that superannuation is to be “treated as property” for the purposes of this exercise. The court must then evaluate the contributions made by or on behalf of the parties as set out in section 79(4)(a), (b) and (c) of the Act and consider the effect of any proposed order upon the earning capacities of the parties. Finally, the court must then reference the relevant matters as set out in section 75(2) of the Act being the following:
[1] [2012] HCA 52
(a) the age and state of health of each of the parties; and

(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and

(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and

(d) commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and

(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a person. allowance or benefit under:
(i)any law of the Commonwealth, of a Sate or Territory or of another country; or

(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

and the rate of any such pension, allowance or benefit being paid to either party; and

(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and

(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and

(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party’s role as a parent; and
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and

(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i)a party to the marriage; or

(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and

(na) any child support under the Child Support (Assessment)Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstances which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and

(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.

Section 81 of the Act obligates the court, insofar as it can, to make orders which finally determine the financial relationship between parties to a marriage.
In the matter now before me the husband initiated the application for property settlement. The respondent wife also seeks an alteration of property interests. The parties have been separated and are now divorced. They jointly own the former matrimonial home and have joint liabilities. I am satisfied that it is just and equitable as between these parties for there to be a property settlement.

Assets and superannuation

·Home at Property C, [C], Queensland (to be sold) E $550,000[2]
[2] Wife’s estimate of value from paragraph 35 of her financial statement and supported by husband’s comments in an email 4 March 2013 from husband to Michael Trazise, solicitor, and tendered as an exhibit.
·Assets of Kader Family Trust compromising:
i)Shares held in [I] Limited ($144,000)[3]
[3] See exhibit being Letter from [I] to Mr Kader as trustee for the Kader Family Trust dated 30 January 2013
ii)Final dividend paid by [I] ($43,200)[4]

·Wife’s [F] superannuation entitlement $20,000[5]
·Husband’s [F] superannuation interest $27,000 E[6]
·Wife’s BMW motor vehicle $20,000 E[7]
·Husband’s bank account balances (not known)
·[Kader] Trust bank balances – National Australia Bank (not known)
·Chattels, personally, motor vehicles in the possession or control of the husband and not valued for the purposes of these proceedings.

[4] See exhibited “Explanatory notes provided by [I] under subpoena”

[5] See paragraph 45 of wife’s sworn financial statement

[6] See exhibit – [F] Personal Super – Summary Report – Mr Kader – 1 January 2012 to 30 June 2012.

[7] See paragraph 40 of wife’s financial statement

Liabilities

·Mortgage loan $487,190[8]
·[P] Credit Society personal loan (husband and wife) $19,115[9]
·St George Bank personal loan (wife) $18,000[10]
·Wife’s BMW Finance liability $31,000[11]
·[S] School liability for fees $9,925[12]
[8] See paragraph 46 of wife’s financial statement
[9] See paragraph 53 of wife’s financial statement
[10] See paragraph 50 of wife’s financial statement
[11] See paragraph 52 of wife’s financial statement
[12] See exhibit – Tax Invoice Statement from [S] School dated 25/2/2013

I am satisfied on the wife’s evidence that the property pool is composed as above. The unknowns are the husband’s bank account balances and those of the Kader Family Trust together with assets in his possession. These are relevant and important given the documentation tendered by the wife suggests that the husband received income or distributions from [I] Limited of $487,463.42 for the financial year ending 30 June 2011 and $473,922 for the financial year ending 30 June 2012. Those documents evidence the husband or the trust receiving $146,880 from [I] Limited for the period 6 July 2012 to 7 January 2013. The wife has tendered minutes of meetings of Kader Family Trust held 29 June 2012 and 29 June 2011 showing that 100 per cent distributions from the trust were made to the husband in each year. Except for some child support payments, there is no accounting of the husband’s use and disbursement of these moneys. It is difficult, if not impossible, therefore, to determine the property pool with any precision although I am satisfied that through the above-mentioned documentation the husband has had the benefit of these substantial sums of money since the parties’ separation in 2010. The lack of participation by the husband has obviously hindered the ability of the wife to prosecute her case in this regard.

Contributions

The wife deposes that she contributed an initial cash deposit of $36,000 to the purchase of a home at [omitted]. Her evidence is that the husband had minimal assets but brought liabilities, including significant credit card liabilities, into the relationship.
The wife worked substantially as a [omitted] during the relationship. The husband was employed initially as a [omitted] although, on the wife’s evidence, he could not work for about a year due to a serious motorcycle accident. The husband’s most recent and very remunerative employment commenced in 2007.
At paragraph 23 of her affidavit, the wife refers to her primary role in caring for the parties’ children in part due to the husband being required to travel interstate for his employment. Consequently, whilst the husband’s employment during the latter stages of the relationship brought substantial returns, the nature of that employment increased the onus on the wife in respect of homemaker and parenting roles.
The children have lived with the wife since separation. Whilst child support has been paid at times in accordance with assessments subject to at least two reviews, the evidence is that the husband is in substantial arrears in respect of his child support obligation and thereby increasing the burden on the wife, and the contribution by her, for financial support of the children.
On the evidence before me, the wife’s contributions have been significant and should be given substantial weight. I note that the relationship was not a long one and that the wife’s initial contribution is, on the evidence, traceable in the assets of the parties as they now stand. For example, the purchase of unit shares in [C] Trust and then [I] Limited was enabled by the equity in the parties’ home which came directly as a result of the wife’s initial contribution. The authorities make it clear that such an initial contribution should be given appropriate weight[13].
[13] Pierce v Pierce (1999) 92/844

Relevant factors under section 75(2) of the Act

The wife works part-time as a [omitted]. Her earning capacity is impacted by her responsibilities for care of the parties’ two children. In addition, the wife deposes in her affidavit at paragraph 56 that her earning capacity has been impacted by the marriage itself and, in particular, that the husband would not allow the wife to work to her full capacity.
The husband lives in Queensland and the wife has care of the children in Tasmania without the normal respite of them spending regular time with the father.
The husband is substantially in arrears of child support in quantum in excess of $13,000. As such, and given the evidence as to his recent income, the court can have little confidence that he will voluntarily continue to provide appropriate support for the children. In any event, during his submissions on the adjournment application, the husband deposed that his employment has been terminated. Documents tendered by the wife in evidence corroborate this fact. It is likely therefore that the wife will also bear the primary financial responsibility for the children.

Discussion and conclusions

It is difficult to determine the exact nature and value of the asset pool. There is evidence that [I] Limited have terminated the relationship with Mr Kader through the Kader Family Trust. On the evidence before me this should result in at least a further lump sum instalment dividend of approximately $43,200 into the pool. The trust, or effectively the parties, have 144 shares valued at $1 each in [I]. The evidence suggests that [I] will attempt a sale at that value.
Nevertheless, the difficulty in determining the pool comes about as a result of the husband’s lack of participation. Subpoena issued by the wife have assisted in some ways. I note, however, that the wife’s affidavit makes reference to other assets in the possession or control of the husband. At paragraph 52(e) of her affidavit the wife deposes:
Mr Kader has not mentioned his Ducati motorcycle, his expensive guitars (9) and sound equipment, the household furniture and the new Range Rover which he purports is owned by his girlfriend, Ms V.
The greater unknown, however, is the whereabouts of the significant cash funds coming to the husband since separation and through the trust and in respect of his employment. There is no evidence before me of a nexus of disbursement in the form of visible assets save the chattels and motor vehicle referred to above. The quantum of the earnings were of such a magnitude that they could not be explained simply by “normal costs of living expenses”. I am aware, as mentioned in the wife’s affidavit, that the husband claims substantial tax liabilities. Whilst it is reasonable to expect that taxation liabilities will attach to earnings, I simply have no evidence and it appears that those responsible for the trust, in particular the husband himself, have not complied with the law in respect of lodgement of taxation returns. I do, however, glean some assistance from historical authorities in situations where courts are confronted with a lack of disclosure and an inability to determine the asset pool with any precision.
I am satisfied on the evidence before me that within the context of this short marriage the wife has made significant contributions. They have been by way of a greater initial financial contribution and by reason of her significant role as homemaker and parent.
I am also satisfied that there should be an appropriate adjustment, after consideration of contributions, for the wife on account of the factors under section 75(2) of the Act. The wife has primary care of the parties’ children and will do for some time to come. The husband’s contributions, both actually and financially, are irregular and unreliable at best. Whilst the husband might have terminated his relationship with [I] Limited, the evidence before me suggests that the husband has had, and therefore has experience in, employment which can be potentially very remunerative.
I note that submissions by counsel for the wife suggested a 70/30 division of the property pool. With and given the reservations as to the exact nature and quantum of that pool, I respectfully suggest that such a claim is conservative. I am satisfied that the wife should receive an adjustment of 12.5 per cent on account of the contributions set out above. I am satisfied that the wife should receive an adjustment of 17.5 per cent in respect of the relevant factors under section 75(2) of the Act. As such, it follows on a course of reasoning that the wife would receive 80 per cent of the property pool. However, the exercise is not so straightforward and I note that the orders that the wife seeks, on my reading of them, would see her retaining the following:
(i)The balance proceeds of sale of the former matrimonial home, if any, and in reality likely to be minimal;
(ii)Retaining her BMW motor vehicle but also the liability which attaches to that and results in a “negative value” of approximately $15,000;
(iii)The last instalment of dividends from [I] Limited at $43,2000;
(iv)Proceeds of sale of shares held in [I] Limited (144,000 shares at $1 each which is $144,000);
(v)Wife’s superannuation entitlement of $20,000.
The husband would retain his superannuation entitlement ($27,000) together with the chattels and motor vehicles referred to in the wife’s affidavit but for which I am unable to be specific in respect of either nature or value.
Given my reasoning and findings as to contribution and the section 75(2) factors, I am satisfied that such a distribution of the property would be reasonable but does not do justice to the wife given the income of approximately $100,000,000 received by the husband since separation, or more particularly received by the company/trust and paid on to the husband. The wife seeks a further order for a cash adjustment of $250,000. The difficulty, of course, is that the evidence before me does not go so far as to isolate an asset or assets from which such an alteration or distribution can be made. I do though have the following relevant materials:
(i)Financial statements obtained on subpoena showing distributions to the Kader Family Trust for the year ending 30 June 2011 of $487,463.42 and $26,858.72;
(ii)Bank statements showing credits to the [Kader] Trust totalling $473,922 for the financial year ending 30 June 2012 and $146,880 for the current financial year until 7 January 2013;
(iii)A document titled “Deed of Retirement and Appointment” to the [Kader] Trust dated 17 October 2012 whereby Mr Kader retires as the appointor and trustee in favour of his current partner, Ms V.
The difficulty for the court in attending to the orders sought by the wife remains in that there is no evidence in any certain form that there is an asset or assets that can be attached or altered so as to ground such a lump sum payment.
The courts are occasionally confronted with a situation where a party does not participate in proceedings and/or does not give a full disclosure of assets or resources. It often follows, as in the matter now before me, where even the best efforts of the other party in the use of subpoena cannot rectify the gaps in the evidence It does not follow as a matter of logic or justice, however, that the non-participating or non-disclosing party should benefit by their inaction or, more properly, that the participating party should be prejudiced or their rights and entitlements suffer as a result. The Full Court in Chang v Su[14] at p.89,187 quoting from her Honour at first instance, observed in this respect:
Of course, it is the obligation of parties to make a full and proper disclosure of the financial circumstances, either as to assets, liabilities or income (Marriage of Black & Kellner [(1992) FLC 92-287]; (1992) 15 Fam LR 343 and Marriage of Weir [(1993) FLC 92-338]; (1992) 16 Fam LR 154). As the latter cases make clear, where there has been non-disclosure by one party, the Court should not be “unduly cautious” about making findings in favour of the other party.
[14] (2002) FLC 93-117
And the Full Court, in their judgment stated, in Chang v Su (supra) at p.89,195, paragraph 59:
Counsel acknowledge that there exists a class of cases where the court cannot be satisfied as to the extent of the property and can thus be less cautious than might otherwise be the position when making an order. Particular references was made to Mezzacappa & Mezzacappa (1987) FLC 91-853; 11 Fam LR 957. In that case, the trial judge held that the husband had failed to adequately account for $200,000 which had been in his possession some 15 months earlier. The trial judge said:
“I can only conclude that the husband has the vast bulk of that money and has invested it wisely over the last two years since he removed it from the parties’ bank accounts”.
As long ago as 1986, in Giunti & Giunti[15], the Full Court commented:
“It is obviously desirable, as a general principle, that the court should first of all identify the pool of assets available and evaluate it. If each party complies with his or her obligation to make a full and substantive disclosure of their financial affairs - see Briese & Briese (1986) FLC 91-713, affirmed by the Full Court in Oriolo & Oriolo (1985) FLC 91-653, there is no problem, although there may be disputes as to valuation.
However if, as here, one party fails to fulfil that obligation, is it open to that party then to rely on the absence of satisfactory evidence to prevent the making of an order against him or her which otherwise justice and equity would require? It would be simple, if that were the case, to evade the jurisdiction of this court, not by outright refusal which would attract sanctions but by obfuscation and evasion.”
[15] (1986) FLC 91-759

In the matter now before me, a precise accounting of the property pool cannot be achieved because of the non-participation and non-disclosure by the husband. Full and frank disclosure by the parties is required by the Act so as to allow the court to properly discharge its obligations. Given the inaction by the husband, therefore, I take the view that I need not be unduly cautious in considering the wife’s application. I must, however, consider the evidence as it is and not simply acquiesce to the orders that the wife seeks without consideration of all of the evidence and attribute weight pursuant to the considerations in s.79(4) of the Act.
Consequently, in this matter, I note the following:
a)that the husband is the applicant;
b)that in arguing an adjournment just two days before the hearing in this matter proceeded undefended, the husband claimed that he was impecunious and no longer had employment. He offered no particulars of either circumstance, although I am aware of the following from the evidence of the wife:
i)that the contract for Kader Family Trust with [I] Limited has been terminated;
ii)a motor vehicle of the husband was repossessed;
iii)that the husband has not made instalment payments on the mortgage, thereby activating foreclosure by the mortgagee with arrears in excess of $13,000;
iv)that the husband has accrued arrears of child support of in excess of $13,000;
v)that by a Deed of Retirement of 17 October 2012, the husband effectively replaced himself as appointor and trustee of the Kader Family Trust in favour of his current wife;
vi)that minutes of annual meetings of the Kader Family Trust show that the husband received 100 per cent distributions of income into that trust for the financial years ended 30 June 2011 and 30 June 2012;
vii)that documents tendered into evidence by the wife show that the trust (and therefore the husband as the sole beneficiary) received gross income as follows:
1.   $487,463.42 for financial year ended 30 June 2011;
2.   $473,922 for financial year ended 30 June 2012; and
3.   $146,880 for the period 6 July 2012 to 7 January 2013.
viii)that the wife acknowledges in her affidavit material that the husband contends that he has outstanding taxation liabilities. There is no evidence that the taxation returns have been lodged. I can, however, accept that the income received by the trust, and hence the husband, would be subject to taxation.
Given the authorities above, it is open for me to find, and I am persuaded that the husband has had the sole use and benefit of funds of approximately $1 million gross in the last two and a half financial years. He has had occupation of the former matrimonial home and not met all the mortgage instalments. He has paid some child support but is in arrears. There is otherwise no evidence of his disbursement of these monies.
I take into account the distribution of the known assets and liabilities as set out above and my reasoning on the contributions and section 75(2) factors which persuaded me to make those distributions. I also take into account that these monies have been achieved from the husband’s own labours post-separation although payment has been made to the Trust.
Consequently, so as to give justice and recognition to the wife’s contributions and the relevant section 75(2) factors, I am satisfied that there should be a further cash adjustment to the wife of $175,000 paid by the husband. In doing so, I note the gross funds achieved by the husband through the trust in the last two and one half years, the likelihood of taxation liability attaching to that gross income, the distribution of the known assets and the relevant contribution of section 75(2) factors.

I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of McGuire FM

Date: 26 March 2013