L and L

[2010] FCWA 42

[2010] FCWA 42

JURISDICTION	:	FAMILY COURT OF WESTERN AUSTRALIA
ACT	:	FAMILY LAW ACT 1975
LOCATION	:	PERTH
CITATION	:	L and L [2010] FCWA 42
CORAM	:	THACKRAY CJ
HEARD	:	28 & 29 MAY & 10 SEPTEMBER 2009
DELIVERED	:	8 APRIL 2010
FILE NO/S	:	PTW 5989 of 2007
BETWEEN	:	L
AND
L
Catchwords:

PROPERTY – Disclosure – husband’s failure to provide full disclosure – possible undeclared assets and income outside Australia – alleged income tax evasion in Australia by husband – insufficient evidence to determine total asset pool

Legislation:

Family Law Act 1975 - s 79

Category: Not Reportable

Representation:

Counsel:

Applicant	:	Self Represented Litigant
Respondent	:	Self Represented Litigant

Solicitors:

Applicant	:	Self Represented Litigant
Respondent	:	Self Represented Litigant

[2010] FCWA 42

Case(s) referred to in judgment(s):

Chang and Su (2002) FLC 93-117
K and K [2002] FamCA 1150
Khademollah and Khademollah (2000) FLC 93-050
Weir and Weir (1993) FLC 92-338

[2010] FCWA 42

1 I am required to determine a property dispute between Mr and Mrs [L].

My task is a difficult one, given that:

• the husband provided no admissible evidence;

• the wife’s evidence concerning the husband’s finances was of dubious value;

• the husband “attended” the trial by telephone from [overseas];

• the husband had no legal representation;

• the wife was not represented during the second stage of the trial; and

• English is not the first language of either party.

Background

2 The wife is 39 years of age. She has occasional employment as a teacher’s assistant. She resides in the former matrimonial home in, a southern suburb of Perth.

3 The husband is 44 years of age. He is a qualified engineer, although he describes himself as an “inventor”. He lives overseas.

4 The husband and wife commenced cohabitation overseas in 1995 and were married in that country in January 1997.

5 There were two children of the marriage; [Fred], born in August 1997 and [Ken],

born in February 2003. The children are therefore now aged 12 and 7 years
respectively.

6 After living overseas for the first part of their relationship, the husband and wife

lived in Australia for six months between October 2001 and March 2002. They came back to Australia to settle in October 2002. The wife obtained Australian citizenship in 2004 and the husband obtained permanent resident status.

7 The relationship came to an end in July 2007. The husband was working overseas at the time. The parties were divorced in November 2008.

8 Since separation the wife and the children have lived in Perth and the husband has lived overseas, save for a short visit to Australia in April 2008.

Orders sought

9 The wife proposed that she receive the husband’s interest in the former

matrimonial home, together with what remains of the parties’ other assets in Australia. At the commencement of the trial, the wife sought leave to amend her application to seek an unspecified sum of spousal maintenance (which would be satisfied by her receiving whatever part of the husband’s interest in the home she did not receive by way of property settlement). I refused the wife leave to amend, given the late notice.

10 The orders proposed by the husband were contained in a Minute received on

29 April 2009. Many of the orders sought were incomprehensible. The Minute also

[2010] FCWA 42

contained much in the way of argument and submissions, as well as requests for punitive action to be taken against various people. No point would be served by replicating all of the orders sought. It is sufficient to say that the order proposed by the husband regarding the home was that the wife should receive a 144/409 share and that he should receive the balance. (This calculation related to the wife having directly contributed $144,000 to the total cost of acquisition, which was $409,000.) The husband also applied for orders that outstanding tax issues “be addressed”.

Relevant history of proceedings

11 The wife commenced proceedings for parenting orders and property settlement

in November 2007. The husband filed a response in March 2008; however, the response did not indicate the relief the husband was seeking. At the same time, the husband filed a statement of financial circumstances. The document on its face suggested it had not been properly sworn, and the husband later acknowledged his signature was not witnessed by an authorised person.

12 On 31 July 2008, Martin J ordered the husband to file (within four weeks)

a document setting out in detail the property settlement orders he proposed. The husband was also ordered to file an affidavit setting out the evidence on which he intended to rely in relation to the property settlement. In addition, the husband was ordered to provide to the wife’s solicitors copies of various documents relating to his income, taxation and terms of employment. He was also ordered to provide various financial statements.

13 On 12 September 2008, an order was made placing the matter in the defended

list with an estimated hearing time at trial of two to three days. There is no indication that the husband had by this time adequately complied with the orders made on 31 July 2008.

14 On 3 December 2008, Martin J included the matter in the February 2009 callover, with an estimated hearing time of one day. She directed the wife to file any affidavits upon which she intended to rely, together with her statement of financial circumstances, by not later than 31 January 2009. The wife did not file her affidavit and statement until 13 March 2009. Later that month the wife also filed affidavits by two witnesses.

15 In the meantime, the matter had been listed for trial on 28 May 2009. On

25 March 2009 there was a directions hearing before Martin J. The husband participated by telephone. An order was made requiring the husband to file (on or before 1 May 2009) “any affidavit material, annexing any documents, on which he intends to rely in these proceedings”, together with a Minute setting out the “exact orders” he proposed seeking at trial.

16 On 7 May 2009 the husband filed a bundle of papers which purported to be an

affidavit. The first item in the bundle was a letter from a psychiatrist from his overseas home, dated 11 December 2007, stating that the husband was able to see his children without supervision. This was followed by a series of bank statements (annotated). These were followed by copies of emails, some of which are in German.

[2010] FCWA 42

The next document was another statement from the same psychiatrist, dated 16 November 2007. This advised that the husband “suffers from a major depression” and had been treated as an outpatient on a voluntary basis since 9 August 2007. The next document in the bundle was an airline itinerary relating to travel by the husband between Australia and overseas. There then followed what seems to have been intended to be the body of the husband’s affidavit, with a variety of attachments, some of which are impossible to read and some of which are in German. Within the body of the affidavit were scanned copies of documents or portions of documents, but these are mostly indecipherable.

17 There was considerable confusion when the matter came on for trial before me

on 28 May 2009 as to precisely what issues were listed for determination. It seemed likely only the property settlement matter was formally before the Court. However, for reasons that need not be discussed here, it was considered appropriate to resolve some troublesome issues about the children first. I proceeded to hear that aspect of the matter and made orders largely disposing of the children’s issues.

18 I then turned to consider the financial issues. The husband cross-examined the

wife on her affidavit and he also cross-examined her two witnesses. Attention then turned to the husband’s case. As I have indicated, his “affidavit” was largely incomprehensible. One option was to allow the matter to be determined entirely on the basis of the evidence provided by the wife. However, as the husband had attempted to provide some evidence, it seemed appropriate to give him a further opportunity in which to put his case in order. It was also apparent there was a major issue concerning whether the husband had made a full disclosure of his financial position. Again, it seemed appropriate to give the husband an opportunity to allow the wife to carry out an investigation to establish whether there was any substance in her suspicions about the husband having undeclared assets and income.

19 Having determined it was appropriate to grant these indulgences to the husband,

I adjourned the proceedings until September 2009. In doing so, I made the following orders in the hope the matter might be in some state of readiness when the trial resumed:

22 That on or before 17 July 2009 the husband shall file and serve in proper form the following documents duly sworn or affirmed:

(a)	an affidavit of the husband setting out the facts on which the husband intends to rely at the resumed trial;
(b)	a Form 13 (statement of financial circumstances);
(c)	an affidavit listing each and every document in the possession, power or control of the husband relating to his present and past financial circumstances.

23 That the affidavit of the husband referred to in Order 22(a) above shall not contain any argument, opinion evidence or hearsay evidence. Any document attached to the husband’s affidavit which

[2010] FCWA 42

is in the German language shall be accompanied by a translation of
the document in English.

24 That within 7 days the husband shall provide to the wife’s solicitors a written instruction/letter of authority to the institutions listed below to provide to the wife’s solicitors any information and documentation that the wife’s solicitors request concerning the husband’s income, hours of employment, assets, liabilities and other financial circumstances:

(a)	the UBS bank (and any other bank in which the husband has any funds deposited);
(b)	the husband’s employer;
(c)	the husband’s pension or superannuation fund(s); and
(d)	any insurance company from which the husband is receiving or may be entitled to receive insurance payments.

20 My original order (as pronounced during the hearing on 29 May 2009) had

indicated that the husband’s affidavit had to be sworn before a Notary Public. On 11 June 2009 I caused the Principal Registrar to write to the husband to explain that I had recalled that part of the order, since the range of witnesses qualified to administer an oath/affirmation overseas is wider than was suggested in my original order. The letter from the Principal Registrar set out the full range of qualified witnesses under the Rules.

21 The husband failed to provide to the wife’s solicitors the written

instruction/letter of authority referred to in the orders made on 29 May 2009. In a letter sent directly to me, a copy of which is attached to an affidavit sworn by the wife, the husband said he would not comply with my orders unless he received a proposal from the wife that he could see his children in the “near future”. At the resumed hearing in September 2009 the husband again said he would not provide the written instruction/letter of authority unless the wife was required to send the children overseas to see him (a matter on which I had already ruled against him).

22 In the meantime, the husband had provided a document which purported to be an

affidavit complying with the orders made in May 2009. The document was not sworn/affirmed and, in any event, did not address the evidence needed to determine a property settlement dispute. I therefore ruled the document inadmissible. I then decided to proceed with the hearing on the basis of the only admissible evidence provided – namely that from the wife. The husband had already been provided with a significant indulgence and his blatant refusal to comply with the order concerning disclosure made it inappropriate to provide him with any further indulgences.

23 The wife had by this time filed a supplementary affidavit. This document was

received into evidence with the husband’s consent. The husband then cross-examined the wife on her supplementary affidavit. Each party then provided what might be

[2010] FCWA 42

loosely called a closing address, with the wife largely focusing on the failure of the husband to provide a full disclosure. At the conclusion of the hearing I reserved my decision. I warned the parties of the likelihood of a long delay before I would be in a position to publish my reasons.

24 I should record that at various times the husband has endeavoured to prosecute

his case by correspondence with the Court. The husband was repeatedly advised that his behaviour was inappropriate and that any information contained in such correspondence would not be taken into account.

Credibility

25 As the husband provided no admissible evidence he was not cross-examined. In

that respect, therefore, his credibility is not a matter of any significance. However, the wife’s case is based to a considerable extent on an assertion that the husband has significant assets which he has failed to disclose. To that extent it is important I make some observations on impressions created by the husband during the hearing.

26 My impression, which was informed in part by my acceptance of some of the

wife’s evidence, is that the husband is a somewhat secretive, manipulative and vindictive individual. This is so at least in relation to matters concerning his wife. He may be different in other aspects of his personal and professional life, although on his own admission the husband has also engaged in fairly large scale tax evasion. I am satisfied that following separation he set out to cause as many difficulties for the wife as possible, driven by his belief that she had ended the marriage to pursue another relationship. He has shown no qualms in attempting to ensure the wife (and thereby the children) are removed from the former matrimonial home. This has included inviting the Australian Taxation Office (“the ATO”) to auction the home to pay his taxation liability and claiming to the local council that the home was unsafe for habitation. Failure on the part of the husband to reveal the full extent of his assets would be consistent with the way he has conducted himself after separation (since he would anticipate that it is more likely the home will be sold if he appears to have no other property).

27 The husband was given the opportunity to provide authorities to the wife’s

solicitors which would have allowed them to carry out an appropriate investigation of his financial position. He point-blank refused to comply with orders which would have allowed this investigation to proceed. In these circumstances the husband has no-one but himself to blame for the adverse inferences I intend to draw in relation to matters of non-disclosure.

28 I turn now to the credibility of the wife. The impression I gained was that her

oral evidence was largely reliable. The main difficulty with the wife’s evidence concerned her trial affidavit. It became apparent during the course of cross-examination that a number of the statements she had made in her affidavit, particularly relating to her understanding of the husband’s past income, were not based on any information known to her. Instead they amounted to a reconstruction of portion of the marital history based on snippets of information from second hand sources. This included deductions drawn by the wife (or her former solicitors) from

[2010] FCWA 42

concessions made by the husband which were recorded in the report of the Single
Expert who had been involved in the proceedings concerning the children.

29 In other respects the wife acknowledged that assertions made in her affidavit

were simply inaccurate. I was not, however, persuaded she had set out to mislead. In this regard I note that the wife showed no hesitation in acknowledging that some of her statements were wrong. In assessing her credibility it must be kept in mind that English is not the wife’s first language and that she had entrusted her former solicitors with responsibility for ensuring her case was accurately stated (albeit I accept she must take final responsibility for what she asserted under oath).

30 Importantly, I accepted the wife’s evidence concerning the statements the

husband had made to her about him having substantial funds overseas. Apart from the fact that she seemed to be a reliable witness in relation to these matters, these statements were consistent with other aspects of the evidence and were corroborated by the wife’s witnesses, both of whom I considered reliable.

31 In arriving at my favourable finding concerning the credibility of the wife’s oral

evidence I do not mean to suggest that I necessarily accepted all of her oral evidence was truthful. I was, for example, not entirely convinced of the accuracy of what she said in response to assertions by the husband about her having engaged in some inappropriate activity in accessing social security in Europe. It needs to be stressed, however, that any hesitation I had in accepting that evidence falls well short of making a positive finding that she acted inappropriately. There was simply insufficient evidence to allow me to arrive at a concluded view. In any event, the issue was not material to any matter other than credibility.

Property settlement approach

32 I am required to follow a four-step process in dealing with applications for property settlement pursuant to the Family Law Act 1975 (“the Act”). These are:

• identify and value the assets and liabilities of the parties;

• assess each party’s contributions to the assets;

• assess a range of factors set out in s 79(4)(d) to (g) of the Act, and

• consider whether the proposed order is just and equitable.

Assets and liabilities at date of separation

33 The wife’s affidavit contained a table setting out her understanding of the assets of the parties at the time of separation. The table is replicated below.

Asset Value (AUD) Liability Net Value

[2010] FCWA 42

[FF] Trading account	$7,361.00	Nil	$7,361.00
Husband UBS Bank account	E$673,473.00	Nil	E$673,473.00
[Suburban home]	E$430,000.00	Nil	$430,000.00
Furniture and contents	$2,000.00	Nil	$2,000.00
1997 … caravan	E$12,500.00	Nil	$12,500.00
2002 Holden…	E$9,500.00	Nil	$9,500.00
2007 Ford …	$10,000.00	Nil	$10,000.00
Wife’s [PKL] superannuation	$4,000.00	Nil	$4,000.00

Husband’s Mastercard credit card	$11,000.00	($11,000.00)
Husband’s unpaid tax liability	$100,000.00	($100,000.00)
Remainder of wife’s inheritance in	$3,500.00	$3,500.00
LLB bank account joint account

Total $1,152,334.00 $111,000.00 $1,041,334.00

34 The Holden motor vehicle referred to in the table had been purchased when the

husband and wife settled in Australia in October 2002. The wife claimed that at the time the vehicle was valued at approximately $27,000, which I presume is the price paid for it. The caravan had been purchased at the same time and was said to have been valued at $17,000. During the husband’s visit to Australia in 2008 he sold the Holden for $9,500 and kept the proceeds. He also sold the caravan and retained the proceeds of sale of $12,250.

35 The wife’s assertion that the husband had about $673,000 in his UBS account

was based on her acceptance of assertions made by him about his investments in that institution (and her calculation that $673,000 was the equivalent of CHF500,000). The wife said in her affidavit that the husband had told her shortly prior to separation that he had:

reached his target balance of CHF 500,000.00, which, he said, meant that his European employers would be exempted from making compulsory pension fund contributions for his benefit in the event he returned to work in Europe.

36 Although not mentioned in the table above, the wife referred in her affidavit to

the parties having a Commonwealth Bank account from which she had withdrawn $2,000 shortly after separation. She said she made this withdrawal as she had no other funds with which to support herself and the children. She also had to reinstate insurance cover and services the husband had cancelled. The wife says that at around

[2010] FCWA 42

the same time, without her knowledge or permission, the husband withdrew the remaining CHF3,550 she held in her overseas account (into which an inheritance from her father had been deposited).

37 The [FF] Trading account mentioned in the table was an investment made by the

husband in the wife’s name during the marriage. Following separation she searched through documents in the home and found there was still US$5,500 (AUD$7,361) in the account. She withdrew all those funds, which she used to support herself and the children and to pay some of her legal expenses.

38 The wife was also later able to obtain a lump sum payment of $11,000 from

Centrelink. This represented unclaimed family tax benefit to which she was apparently entitled. The wife used those monies to meet some of her legal expenses.

Assets and liabilities at trial

39 By the time of trial the parties had only modest assets remaining in Australia, save for the home in the suburbs of Perth.

40 The home was assessed by a licensed valuer in May 2009 as being worth

$420,000. The husband accepted this valuation on the first day of trial. He had previously written to the local council drawing attention to what he claimed were many defects in the property. It seems he did not seek to draw these defects to the attention of the valuer. In any event, the wife also accepted the assessment of the valuer. The property is unencumbered.

41 The wife has retained the Ford which the parties had acquired in June 2007 at a

cost of $15,880. The wife estimates this vehicle to be now worth between $9,000 and $10,000. I presume the husband would dispute this since he estimated it was worth $12,000 in his (unsworn) statement of financial circumstances filed in August 2009. In the absence of any evidence concerning the value I propose to accept the lower estimate: Khademollah and Khademollah (2000) FLC 93-050 at [32] per Finn J.

42 The wife also had $8,000 in her BankWest account, or at least she had this much invested in March 2009 and her evidence on that point was not updated.

43 The wife has possession of the household contents which she valued at $2,000. The husband claimed in his August 2009 statement of financial circumstances that a half interest in the contents would be worth $10,000, but in the absence of any expert evidence I accept the lower estimate.

44 The wife also has $4,000 in superannuation overseas. This was the superannuation fund she had at the time she met the husband.

45 After the first part of the trial in May 2009, and prior to its resumption in

September 2009, the wife received an inheritance from her mother of $86,026. The husband claimed that the wife should also have an entitlement to an interest in property he asserted had been owned by the wife’s mother in [Europe]. I accepted the wife’s evidence that she had no such entitlement, even assuming the wife’s mother owned such a property when she died.

[2010] FCWA 42

46 I therefore find that the wife had an interest in the following assets at the date of trial (she has no liabilities save for debts associated with this litigation).

Assets $

Suburban home	420,000
2007 Ford ….	9,000
Bank Account	8,000
Household contents	2,000
Overseas superannuation	4,000
Inheritance	86,026
Total	529,026

47 For reasons already mentioned, it is impossible to determine the extent of the

husband’s assets. In his (unsworn) statement of financial circumstances of August 2009 the husband disclosed having $1,400 in accounts in Australia and $2,000 in an overseas account. He also disclosed an interest in a business known as [OS], the address of which was said to be the matrimonial home and which he said was worth $10,000. Apart from claiming an interest in the household contents, the husband’s statement also disclosed ownership of property said to be worth $3,000, which was described as “cloth, business suites etc. hold back from spouse”. I understand these are personal items in the home which he considers the wife should provide to him. The husband also disclosed having superannuation of $3,000 in an ASGA Fund. He disclosed no liabilities, save for unpaid income taxation, the extent of which was stated as being “unknown”.

48 The husband did not disclose ownership of a motor vehicle. The wife produced

an email sent by the husband to their son in which he claimed to have a vehicle. A photograph was exhibited to the wife’s affidavit. The husband claimed in his cross- examination of the wife that he only had the use of the vehicle. He said he had told their son he owned it only because he wanted to impress him and show he was not a “loser”.

Taxation debt

49 The husband acknowledged to the Single Expert that he had habitually

underestimated his income to the ATO after the family moved to Australia. He said he had declared earnings of $20,000 or less per annum, when in fact he earned much more. The wife had said in her affidavit that she understood the husband’s tax liability might be $100,000; however, in his cross-examination of the wife the husband

[2010] FCWA 42

indicated that he believed the debt could be much more, perhaps in the region of
$200,000 to $300,000.

50 I had very little evidence concerning issues associated with the husband’s

alleged income tax evasion. The wife did produce a copy of the husband’s application for a private ruling from the ATO (dated Christmas Day 2007) in which the husband said:

I think my and my spouses assets should be auctioned to pay any liabilities but no sentence should be applied because I was automatically, passively put into the scheme and later my spouse pressured me of maintaining the scheme although I often told her of feeling bad because of questions asked at arriving Perth airport. My spouse will claim of having no knowledge about the income or tax evasion, but one evidence is the bank statement of the Commonwealth bank account and the money she used. Having said that every time I returned to Australia I had to support her with cash I brought with on the plan. Having said that she pressured me to evade tax and we agreed when caught I should take full responsibility for but now as I disagreed paying for a sailboat because of her secret relationship to [Tom] circumstances have changed for me. I also told [Tom] and [Nancy] about not paying Tax and [Mr Clews] and [Max] and I told them that I did not feel good when questions at customs were asked. Thus will proof my spouse knew about. In addition she called my client at [a business] asking for money and she has informed the CSA what I earn. In addition she used power against me, she always said she will leave me, if I don’t buy a house, a car or last a sailing boat. Her SMS communication from my Handy at AAPT to [Tom] will show evidence if the content can be secured.

51 I am not persuaded the wife was implicated in any income taxation evasion, as

claimed by the husband in the passage above. There is no admissible evidence to support the assertion. I am satisfied that during the relationship the husband would have done precisely what he wanted in relation to such matters without regard to any views the wife might have had. In any event, the obligation was on the husband, as the taxpayer, to make a proper disclosure of his income. In making these observations I accept it is likely the wife had the benefit of the husband’s tax fraud, although it is impossible to determine what proportion of the tax saved was used in Australia and what proportion found its way into overseas accounts.

52 The documents provided suggest that the husband’s request for a private ruling

has not been the only effort made by him to have the revenue authorities take action which would have seen the assets owned by the parties in Australia targeted for the recovery of unpaid tax. The wife has also personally responded to enquiries made by the ATO prompted by the husband’s “confession”. In all of the circumstances I do not consider it would be appropriate to proceed on the basis that the ATO will ever take action to seek to recover any unpaid income taxation, given it seems nothing of any substance has been done since the husband decided to alert the authorities to his malfeasance. There is no indication, for example, that the arrears of tax have even been quantified.

[2010] FCWA 42

53 I have given consideration to whether I should again adjourn these proceedings

to allow notice to be given to the ATO of the various claims being made. I do not consider any useful purpose would ultimately be served by this. The husband has already alerted the ATO to his wrongdoing. He will only give such information and assistance as will assist the ATO to proceed against assets that the wife wishes to retain. He will not volunteer information concerning assets outside Australia in which he has an interest and he will certainly not make them available to meet any arrears. In circumstances where there is not even a hint that the ATO has taken any steps to quantify, let alone enforce, the husband’s liability, I have determined that in the interests of justice it is unnecessary to delay matters further by giving notice to the ATO.

Contributions

54 I turn now to the assessment of contributions, albeit it is a somewhat academic exercise in a case where the size of the pool of assets cannot be determined.

55 The wife submitted that contributions should be assessed as having been made

equally by the husband and wife. The husband does not understand the way in which contributions are assessed under the law in Australia and made no useful submissions on this topic.

56 The contributions that need to be assessed comprise the assets each party

introduced at the commencement of cohabitation, the two inheritances received by the wife (one of which was post-separation) and the various contributions each party made during the relationship. The latter includes not only financial contributions from income earning activities but also includes direct or indirect contributions to the acquisition, conservation or improvement of any property. I must also consider the parties’ contributions to the welfare of the family, including contributions made in the capacity of homemaker or parent.

Assets at commencement of cohabitation

57 The wife claimed, and I accept, that at the commencement of cohabitation she had the following assets, free of encumbrance:

Volkswagen motor vehicle	$4,000
Savings	$10,000
Furniture and contents	$2,000
Superannuation	$3,000
Total	$19,000

[2010] FCWA 42

58 The wife claimed that at the commencement of cohabitation the husband had the

following assets:

Toyota motor vehicle	$5,000
UBS… portfolio – estimated	$200,000
Furniture and contents	Not Known
Superannuation from 9 years employment	Not Known
Total	Not Known

59 In cross-examination the wife acknowledged that the husband also had two motor bikes when they commenced their relationship.

60 I accept the wife’s evidence that the husband informed her at around the

commencement of cohabitation that the UBS investment was a joint portfolio with his father. She said it comprised shareholdings, bonds and cash reserves and that the husband had told her that his share was worth in the region of CHF200,000 to CHF300,000 (which she claimed was then equivalent to about $200,000 to $300,000). The wife said the husband had told her that his father’s entitlement in the portfolio was significantly greater than his. The wife also claims she overheard discussions between the husband and his father soon after the commencement of cohabitation that confirmed what the husband had told her about the value of his share of the UBS account.

61 The wife did acknowledge in cross-examination that the UBS portfolio may

have been held in the husband’s father’s name alone, as she seemed to accept the husband’s proposition that portfolios such as the one in question cannot be held overseas in joint names. Nevertheless, the fact the portfolio may have been held by the father does not necessarily mean that the husband had no claim to a share of it.

62 In all of these circumstances it is impossible to determine what assets the

husband really owned at the commencement of cohabitation. The only information available to the court is the second hand information provided by the wife. The obligation to provide a full disclosure concerning the extent of assets the husband introduced into the marriage fell upon the husband, since it is only he (and his father) who could have provided accurate evidence on the topic.

The wife’s inheritances

63 In 1998, about three years after the commencement of cohabitation, the wife

inherited money (or received the proceeds of an insurance policy) when her father died. In her affidavit she said the amount was $144,000, but in her oral evidence she said it was CHF144,000. The money was placed in an overseas account. The wife

[2010] FCWA 42

says the investment did not perform well and did not increase in value. The husband disputes this; however, if he is correct the wife’s contribution is arguably increased. This money was later used to assist in acquiring the former matrimonial home.

64 I have already recorded that the wife received a second inheritance of $86,026, long after the parties separated. There is no suggestion that the husband made any contribution to either of the amounts the wife received following the deaths of her parents.

Contributions during cohabitation

65 When the parties commenced their relationship the husband was self employed

as a [Project Manager], operating from offices provided by the university from which he had gained his engineering qualifications. The wife claims that the husband informed her that in 1995 he received a lump sum grant in the region of CHF300,000 to run the project; however, in her oral evidence she was unsure whether this was the amount he had received. The wife believed that the amount of CHF300,000 included the husband’s salary and project costs for the three years the project was scheduled to run.

66 The research project concluded in 1998 and the husband then took up a position

with an engineering business located overseas, which is the firm for which the husband still works. The evidence given by the wife suggests that the husband received a very good income, increasing to CHF108,000 per annum by the time the parties left that country to settle permanently in Australia. However, as I have already indicated, the wife’s evidence about the real extent of the husband’s income cannot be relied upon.

67 It seems the husband’s employer was anxious to retain his skills and offered him

an employment package whereby he could continue to work from home in Australia when the family migrated here. In return, the husband agreed to return overseas periodically to collect work and visit clients. This arrangement was duly put in place, with the husband travelling overseas about three or four times a year. The wife estimates that the husband spent about two or three months a year overseas, whilst she stayed in Australia with the children. This arrangement was in place at the time of separation.

68 The evidence concerning the extent to which the husband worked whilst he was

in Australia was sketchy. Between 2003 and 2006 the husband completed a Master of Business Administration at a West Australian University.. He undertook his studies in addition to working. The wife claimed in her affidavit that the husband worked in the region of 42 hours per week on average; however, his income remained constant regardless of the hours worked.

69 At the commencement of cohabitation the wife was working as a dental assistant. She recalls she was earning the equivalent of $46,800 per annum.

70 Before the children were born the husband and wife shared household duties,

with the wife being somewhat more involved than the husband. The wife worked up until May 1997, which was about three months before the birth of the first child. The

[2010] FCWA 42

husband and wife agreed that she would not return to work after the baby was born and the wife then took over responsibility for the great majority of household tasks and was primarily responsible for the care and supervision of the children. On occasions the wife had no assistance at all as the husband was working in Asia or Europe.

71 Between 2005 and 2007 the wife undertook part-time study and obtained a

[certificated qualification]. The wife’s studies were structured around the children’s routine, although there were some occasions when the husband was overseas that the wife had to pay for friends to look after the children whilst she pursued her studies.

72 The parties did not acquire property overseas or in Australia until they purchased

the former matrimonial home at a cost of $409,000 in 2006. The wife contributed $144,000 from the account into which her first inheritance/insurance payment had been deposited. The husband supplied the balance of $265,000. The wife said she did not know where this additional money came from but suspected it may have been from savings accumulated from the husband’s salary. The wife had CHF3,500 left from her inheritance after paying out the funds to acquire the home.

73 Soon after the former matrimonial home was purchased, the husband opened an

account in the wife’s name with [FF] Trading. The wife understood this was an organisation based in the USA. The wife authorised the husband to operate the account on her behalf. Examination of a document attached to the wife’s affidavit indicates that the group was involved in the trading of futures and options. The wife says the husband told her that he had invested an initial amount of $7,000 in this organisation and that he then commenced trading on the internet.

74 After the parties separated the wife had sole responsibility for the care and

supervision of the children. The husband has had almost no involvement in their lives. Apart from making some minor contribution in the early days of the separation, when the husband perhaps hoped for a reconciliation, he has provided no financial support to the wife and the children. The husband has, nevertheless, continued to be in employment, although the details of what he has earned in this period are unclear.

Assessment of contributions

75 The wife made a substantial contribution in the form of her two inheritances.

The first of these provided a significant proportion of the cost of the former matrimonial home. It seems the husband too made a significant contribution in the form of the assets he owned at the commencement of cohabitation; however, it is impossible to compare this with the wife’s initial contributions and inheritances since the necessary information has not been provided. Overall, apart from these contributions, it would seem that the contributions during the period of cohabitation should be regarded as being of equal value. The husband worked in what appears likely to have been well paid employment. The wife worked and later took on the main responsibility for the care of the home and the family.

76 Following separation the husband has made no contribution to the known assets.

The wife and children have been left to fend for themselves. The wife has had the benefit of living in the former matrimonial home, which is free of encumbrance, but

[2010] FCWA 42

she has also had sole responsibility for care of the home and the children. It seems the husband has continued to work, but the extent to which he has worked and the extent of the income he has earned is unknown.

77 Given the absence of evidence it would be unsafe to express any concluded view concerning the overall assessment of contributions.

Section 75(2) factors

78 The husband’s position concerning assessment of the s 75(2) factors is unclear.

The wife’s position formerly was that having been found to be entitled to 50% of the assets based on contributions, there should be a 30% adjustment in her favour on account of the s 75(2) factors. However, the wife considers that the husband has not disclosed all of the assets under his control and in those circumstances seeks 100% of the assets in Australia.

79 I will now consider each of the relevant s 75(2) factors.

(a)	the age and state of health of each of the parties
(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

80 Both parties are still fairly young.

81 The wife left school at age 16 but then obtained a qualification as a dental

assistant. She is in reasonable health, although she has a back problem which prevents her from working full-time as a dental assistant. She has the capacity to engage in less physically demanding work, but has had little paid employment in Australia. She is likely to work on only a part-time basis as a teacher’s assistant. She has no family support in Australia to assist her with the care of the children. She is not likely to earn anything other than a modest income and will be largely dependent on social security.

82 Although the husband claims he has suffered from depression which precludes

him from working on a full-time basis (and has spent some time in a clinic), I am not persuaded that he is not working full-time. His failure to provide the authority to his employer which would potentially have allowed the wife to investigate his claims concerning his employment status further heightened my suspicions. The husband has an engineering qualification. He must be well regarded by his employer given the lengths to which the employer has gone to retain his services. It is likely he will earn a good income in the future, certainly much more than the wife is likely to earn.

83 The parties’ property and financial resources (or at least portion thereof) have been set out above.

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

[2010] FCWA 42

84 The wife has responsibility for the care of the two children, both of whom are still relatively young.

(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;

(e)

the responsibilities of either party to support any other person

85 Neither party has any commitment to support any other person apart from themselves and the children.

(f)

… the eligibility of either party for a pension, allowance or benefit under:

(i)	any law of the Commonwealth, of a State 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

86 The wife has an entitlement to social security payments in Australia. She has a

very modest superannuation entitlement held overseas. She is unable to access this
entitlement and must maintain it by making the minimum quarterly payment of $70.

87 The full extent of the husband’s superannuation/pension entitlements is not

known. The husband failed to provide the authority which would have allowed the
wife to seek information concerning the extent of his entitlements.

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

88 Both parties would desirably have a reasonable standard of living. The wife has

been left dependent on social security and the small amount of income that she has been able to earn. She has, however, had the substantial benefit of rent-free accommodation in the former matrimonial home. The husband has been able to continue earning an income, although there is no reliable information concerning the standard of living that he has enjoyed since the parties separated.

(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

[2010] FCWA 42

a course of education or training or to establish himself or herself
in a business or otherwise to obtain an adequate income

89 The husband was a qualified engineer at the time the parties met. The wife

believes he obtained his qualification in 1988. He has been able to continue working as an engineer as the wife has taken on responsibility for caring for the children (including while he travelled back and forward overseas to retain his position with the company. He has also undertaken and completed a Master of Business Administration during the period of the relationship.

90 The husband has not made any contribution to the wife’s earning capacity,

although it is noted that she did study part-time in the last couple of years of the relationship, during which time she obtained a Certificate IV at a cost of $5,000. There is no indication that the wife is likely to earn income as a result of obtaining this qualification although it may be of some value to her in the future.

(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

91 The marriage has not affected the earning capacity of the husband but it has

affected the wife’s earning capacity as she now has the responsibility for the care of
the two children of the marriage.

(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

92 This factor is relevant to assessment of maintenance entitlements. I have noted

already that the wife’s application to amend to seek lump sum spousal maintenance
was refused.

(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

93 Portion of the history of payment (or more correctly non-payment) of child

support is contained in the wife’s trial affidavit (paragraphs 237 et seq). The husband paid the wife $53.26 on 20 November 2007 and $279.72 on 22 November 2007. He has paid nothing since, notwithstanding that he has been assessed at times to pay as much as $12,612 per annum. The wife had to resort to sending unpaid bills to the husband care of his parents and to his employer when her efforts to obtain child support from the husband were unsuccessful.

94 The husband’s track record and statements made by him during the course of the

hearing make it clear that he will never pay child support if he can possibly avoid it

[2010] FCWA 42

(unless perhaps the wife brings the children back to live in Europe and allows him to

spend time with them).

(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account

95 The husband’s failure to provide a full and frank disclosure is a matter of utmost

importance. I have already noted the husband’s failure to provide proper evidence of his financial position and his refusal to comply with orders of the court designed to assist the wife to carry out her own investigation. I have accepted the wife’s evidence about statements the husband made to her concerning having large amounts of money invested overseas. I also accepted her evidence relating to the husband’s otherwise secretive behaviour, especially concerning his UBS account.

96 I also accepted the wife’s evidence that the husband had at one stage offered to

let her retain the former matrimonial home as he would be keeping the money he had invested in Europe. It was of some interest that his attack on the wife’s evidence on this point focussed on inconsistencies in her evidence as to whether he had said he had $500,000 or CHF500,000 invested in his account in Europe. In this regard it is noteworthy that during the hearing both parties regularly confused dollars and francs.

97 The husband has himself acknowledged large scale tax evasion and has recorded

his practice of moving large amounts of cash between Europe and Australia, which in turn was used to purchase assets without the need to borrow money. He also admitted in cross-examination that he had codes and UBS cards in the former matrimonial home, although he claimed that these had been given to him by friends so he could access their accounts. These friends were not called to corroborate the story.

98 The wife’s evidence/suspicions were corroborated by the evidence of

[Mr Clews], who has known the husband and wife for a number of years. Like the husband, Mr Clews is an engineer. He said that in the first year the husband and wife spent in Australia the husband informed him how little money he was making in Australia compared to what he had been making overseas (whilst at the same time claiming to be earning over $100,000 a year in Australia). Mr Clews said that he had responded by asking the husband where all the money was. His affidavit went on to say that:

the husband took great pleasure in telling me that the company he worked for only paid him a portion of his earnings directly – enough to live on – and directed the rest to his father.

99 Mr Clews also said that the husband claimed that he could:

essentially eliminate his personal tax in this way and had managed to accrue the equivalent of many hundreds of thousands of dollars back overseas.

100 Mr Clews also gave evidence that in April 2008 the husband arrived at his home

unannounced, during what Mr Clews believed was a visit to participate in court proceedings. He said that during the course of the conversation (in which the husband

[2010] FCWA 42

discussed the breakdown of the marriage and denigrated the wife) the husband had also been “quite frank as to his strategy”. Mr Clews asserted that the husband told him that he was “spending all the money he personally had so that the wife would get nothing if she divorced him”. He also claimed that the husband said:

he had gotten the four wheel drive and the caravan and would sell them before he left and that the wife would get none of it. He said that he was not looking for work because he didn’t want to pay her anything. This strategy was, he said the advice of his lawyers.

101 Mr Clews concluded his affidavit by saying:

I asked after the kids and he said that since he cannot have them to himself that he disowns them and that they are the wife’s problem – he would pay nothing for their upkeep despite being their father.

102 Mr Clews, who I found to be a most impressive witness, was not successfully

challenged in cross-examination, save to say that he accepted that in giving his evidence about conversations with the husband he had not used the precise words the husband had used, but had stated the effect of the words.

103 Further corroboration of the wife’s concerns about the husband’s failure to

provide a full disclosure was given by her friend, [Doris Frayne]. Ms Frayne claimed that she had a discussion with the husband in May 2007 at the suburban home. She said that the husband told her that when he had been overseas and he had been checking up on his “investment portfolio”. He told her that he had made CHF60,000 from trading with shares. Ms Frayne said that she expressed surprise about this and asked how he had managed it. She said that “he then opened up some sites on his computer and started explaining to me what he had set up on his computer and how the procedure works”. She went on to say that the husband informed her that his total investment was of an approximate value of CHF500,000 and that this money was for his retirement.

104 Ms Frayne’s affidavit concluded by noting that the husband had sent a registered

letter to her dated 5 June 2008 in which she said he had threatened legal action against her “should I inform any one of what I know”. The letter was attached to Ms Frayne’s affidavit, but it was in German and a translation was not provided.

105 Ms Frayne is clearly now aligned with the wife; however, she and the husband

were once on sufficiently close enough terms for him to speak with her about his
financial affairs. I accepted her evidence.

The outcome

106 Given the various matters to which I have referred it is difficult to determine

definitively what orders would be just and equitable. I have not been provided with even the most basic assistance in understanding the facts upon which to base my decision. The husband must accept primary responsibility for this state of affairs.

107 In Weir and Weir (1993) FLC 92-338 at 79,593 – 79,594 the Full Court said:

[2010] FCWA 42

This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black and Kellner (1992) FLC 92 -287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti and Giunti (1986) FLC 91-759, and Mezzacappa and Mezzacappa (1987) 11 Fam LR 957; (1987) FLC 91-853. It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.

It seems to us that once it has been established that there has been a deliberate non disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.

It is true that in the case of Monte and Monte (1986) FLC 91-757, the Full Court said that to found jurisdiction under s79 in relation to property other than that which had been identified, the trial judge was obliged to make a finding as to the existence and value of other undisclosed property, even though the unsatisfactory nature of the evidence made it necessary to express that finding in the most general terms both as to identity and value.

We confess to some difficulty with this proposition. We should have thought that the Court's jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.

The difficulty then arises as to what order should be made. However we are troubled by the proposition which seems to arise from Monte and Monte that if a party is either cunning enough or vague enough to cover his or her tracks sufficiently to prevent a Court making a finding as to the amount that has not been disclosed, then the other party fails. We do not believe this to be the law and in so far as the decision in Monte and Monte supports such a proposition, we do not believe that it should be followed.

108 In Chang v Su (2002) FLC 93-117, the Full Court upheld a decision by Moore J to allow the wife to retain all of the parties’ property in Australia in circumstances where the husband had failed to make a proper disclosure of assets held overseas. After considering the relevant authorities, including Weir and Weir, Kay and Dawe JJ concluded:

71. It was clearly open to Moore J to apply these principles to the matter before her. Her Honour concluded that the extent of the husband's wealth, whatever it might have been, was sufficient to justify the order she was proposing to make. This is not an appeal based upon the lack of reasons why her Honour concluded it would be just and equitable to put the wife in a position of having an unencumbered home. It is an appeal

[2010] FCWA 42

which is based upon the inability of the trial Judge to make any order
under s 79 without first ascertaining the pool of assets.

72. For reasons which we have explained, we conclude that her Honour made findings sufficient to indicate that the husband was a man of substantial wealth and well able in the circumstances to meet the order made and still retain for himself adequate assets so as to make the outcome in the proceedings just and equitable, having regard to the matters highlighted by her Honour that she was obliged to give consideration to under s 79. These were issues of contribution and factors that could be identified under s 75(2). She was extremely hampered in the exercise of that discretion by the non-disclosure by the husband of his financial position and in those circumstances was entitled to take the more robust view that she did. …

109 In coming to my decision I have not overlooked the difficulties the husband had

in presenting his case. English is not his first language. He did not have legal representation, although at stages in the process he has had legal advice. He was not able (or willing) to attend the trial in person. Although I am satisfied his failure to disclosure his financial position was deliberate, it would not have mattered were it not. In K and K [2002] FamCA 1150, the Full Court said this in relation to a suggestion that the non-disclosure must be deliberate before the “Weir and Weir principle” is invoked:

50. Mr Ackman submitted that the cases discussed above were authority for the proposition that where there was a finding of deliberate non-disclosure the Court could act more robustly in making findings adverse to the party who had actively misled it. We do not see that the principle should be so confined.

51. Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances it may be appropriate to err on the side of generosity to the party who might otherwise be seen to be disadvantaged by the lack of complete candour. This is the course the trial Judge adopted. It was a course clearly open to him and one that does not merit appellate interference.

110 The husband in these proceedings has failed miserably to provide anything

approaching a proper disclosure of his financial position. I consider there is good reason to accept that he does have significant assets which have not been disclosed to the Court. At least as importantly, however, the wife now finds herself in the position where she is in Australia caring for two relatively young children with no realistic prospect of receiving any support from the husband. In my view the most just and equitable result is to make orders as sought by the wife whereby she will receive the home unencumbered, together with the other very modest assets she has in Australia.

[2010] FCWA 42

The husband will retain the benefit of whatever assets he might have in his possession at the present time and will also retain his significant income earning capacity.

Orders

111 For these reasons I propose to make the following orders:

1. The husband shall within 30 days transfer to the wife all of his right, title and interest in the property at the address in the suburbs in the State of Western Australia, more particularly described as [Lot 111] on [Plan 1111] and being the land comprised in Certificate of Title [Volume 1111 Folio 111] (“the property);

2. In the event that the husband refuses or neglects to comply with the above order, a Registrar of the Family Court of Western Australia be and is hereby appointed to execute the documents required to give effect to the order.

3. The husband shall forthwith transfer and assign to the wife all of his right, title, estate and interest (if any) in the following:

a.	the wife’s superannuation entitlements with [PKL];
b.	the 2007 Ford …, registration number [1ABC 111];
c.	the furniture and contents in the wife’s possession; and
d.	all bank accounts in the wife’s name or control.

4. The husband shall retain the assets he has in his possession, power or control.

5. The application and response be otherwise dismissed.

I certify that the preceding [111] paragraphs are a true copy of the reasons for

judgment delivered by this Honourable Court

Associate