MACCRACKEN & EVERETT

[2015] FCCA 1740

FEDERAL CIRCUIT COURT OF AUSTRALIA

MACCRACKEN & EVERETT [2015] FCCA 1740

Catchwords:  
FAMILY LAW – Property orders – marriage period of approximately 23 years – two adult children supported by wife – assessment of respective contributions – equal contributions – husband withdrew significant sum of monies post-separation – s.75(2) Family Law Act 1975 (Cth) matters favour the wife – husband’s superior ongoing earning capacity.

Legislation:

Family Law Act 1975 (Cth), s.75(2)

Applicant: MS MACCRACKEN

Respondent: MR EVERETT

File Number: MLC 6490 of 2008

Judgment of: Judge Hartnett

Hearing dates: 9 and 10 April 2015

Delivered at: Melbourne

Delivered on: 26 June 2015

REPRESENTATION

Counsel for the Applicant: Mr Williams

Solicitors for the Applicant: Pearsons Lawyers Pty Ltd

Counsel for the Respondent: Mr Scriva

Solicitors for the Respondent: Alan Shnider & Co

DECLARATION

The monies received by the wife pursuant to these Orders satisfy any requirements that the husband has in respect to the wife’s claims for a dowry in (country omitted) and extinguish any further obligation of the husband.

ORDERS

1. Within 30 days the husband do all such acts and things and sign all such documents as may be required to transfer to the wife at the wife’s expense all of his right title and interest in the real property situate at and known as Property E in the State of Victoria (‘the former matrimonial home’). At that time the wife is to assume liability for the mortgage encumbrance affecting the former matrimonial home and indemnify the husband with respect thereto.

2. Within 12 months of the transfer of ownership of the former matrimonial home from the husband to the wife, the wife refinance the mortgage encumbrance over the former matrimonial home so as to forever release the husband from any and all liability pursuant to the existing mortgage to the (omitted) Bank which currently encumbers the former matrimonial home.

3. Within 14 days of the making of these Orders the wife is to receive the sum of $178,000 together with interest earned on that sum from the monies held in trust and being the remaining proceeds of sale of real property situate at and known as Property E in the State of Victoria. The husband is to receive the balance of those monies in trust.

4. Within 30 days the wife do all such acts and things and sign all documents as may be required to transfer to the husband at the husband’s expense all of her right title and interest in real property situate at and known as Property O in the State of Victoria.

5. In the event the husband neglects, refuses or is unable to sign any document required for the execution of these Orders then a Registrar of the Federal Circuit Court execute the deed or instrument in the name of the husband pursuant to s.106A of the Family Law Act 1975 (Cth).

6. Within 30 days the husband pay the wife’s costs fixed in the sum of $1,800 in relation to the hearing on 31 October 2014 pursuant to Order 8 of the Orders made on 31 October 2014. Such sum is to be paid out of the trust monies referred to in order 3 herein before payment out to the husband.

7. The wife shall retain for her sole and exclusive use, enjoyment and benefit all other items of property (both real and personal and including choses-in-action and financial resources) in her name possession and/or control including her superannuation benefits and entitlements, and the real property in her sole name in (country omitted).

8. The wife shall be solely liable for and indemnify the husband in relation to all debts and liabilities in her name or attaching to any item of property which she is to retain pursuant to these Orders except as provided for by these Orders.

9. The husband shall retain for his sole and exclusive use, enjoyment and benefit all other items of property (both real and personal and including choses-in-action and financial resources) in his name possession and/or control.

10. The husband shall be solely liable for and indemnify the wife in relation to all debts and liabilities in his name and in the company name of ‘(business omitted) Pty Ltd’ or attaching to any item of property which he is to retain pursuant to these Orders.

11. Unless otherwise specified in these Orders and except for the purposes of enforcing the payment of any money due under these or any subsequent Orders:-

    (a)each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in possession of such party as at this date;

    (b)each party hereby forgoes any claim they may have to any superannuation benefits belonging to or earned by the other;

    (c)all insurance policies to become the sole property of the beneficiary named therein;

    (d)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders; and

    (e)any joint tenancy of the parties in any real or personal estate is hereby expressly served.

12. There is liberty to apply in respect of the operation of these Orders.

13. Otherwise all extant applications are dismissed.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 6490 of 2008

MS MACCRACKEN

Applicant

And

MR EVERETT

Respondent

REASONS FOR JUDGMENT

1. Statements of fact in these reasons are findings of fact on the balance of probabilities.

2. In these proceedings the wife relied upon an Amended Application filed by her on 16 March 2015, together with her trial Affidavit filed on 16 March 2015. She also relied upon her Financial Statement filed on 17 February 2014; an Affidavit sworn by her on 14 February 2014; and an Affidavit of her Solicitor, Leanne Abela filed on 16 October 2014.

3. The wife relied further:-

   a)upon an Affidavit sworn by Mr P, Business Valuation Specialist, on 30 October 2014. He provided a valuation of the husband’s business ‘(business omitted) Pty Ltd.’ That valuation assessed the husband’s interest in the company to be $300,293. At trial there was an agreed value of $325,000 as between the parties. The husband is the sole director and shareholder of the corporate business ‘(business omitted) Pty Ltd’;

   b)an Affidavit sworn by Ms B on 29 October 2014. Ms B is a certified practicing valuer who prepared a valuation of the former matrimonial home situate at Property E in the State of Victoria (‘the former matrimonial home’). The valuation was $490,000 as at 19 September 2014. This property is in the joint names of the parties. The value is agreed; and

   c)an Affidavit affirmed by Mr S on the 2 April 2015. Mr S is a certified practicing valuer who prepared a valuation of the property situate at Property P in the State of Victoria. The valuation of this property was $320,000, as at 3 March 2015. This property is registered in the name of ‘(business omitted) Pty Ltd’ and was purchased for $200,000 in November 2013 with income and mortgage funds. The husband lives in an apartment above the factory. This value forms part of the husband’s business valuation, and is not additional thereto.

4. The orders sought by the wife at the commencement of the trial were:-

   “1. That within 30 days the Husband do all such acts and things and sign all such documents as may be required to transfer to the Wife at the Wife’s expense all of his right title and interest in the real property situate at and known as Property E.

   2. That within 30 days the Husband refinance the mortgage over Property E into his sole name and remove the mortgage from Property E leaving it unencumbered.

   3. That within 14 days the Wife receive all of the proceeds (being $224,752.29, plus interest) of sale of the property situate at and known as Property E.

   4. That within 30 days the Husband do all such acts and things and sign all documents as may be required to transfer to the Wife at the Wife’s expense all of his right title and interest in the real property situate at and known as Property O;

   5. That in the event the Husband does not refinance the mortgage over Property E, within 30 days, then the following assets to be sold and the proceeds of sale be applied to discharge the mortgage:

   (a) Property Q;

   (b) Property P;

   (c) (vehicle omitted) truck; and

   (d) (omitted) trailers.

   6. In the event the Husband neglects, refuses or is unable to sign any document required for the execution of these orders then a Registrar of the Federal Circuit Court execute the deed or instrument in the name of the Husband pursuant to section 106A of the Family Law Act 1975.

   7. That within 30 days of the date of these orders the husband give to the wife “(omitted)” so as to effect an (country omitted) divorce.

   8. That within 30 days the Husband pay the Wife’s costs fixed in the sum of $1,800 in relation to the hearing on 31 October 2014 pursuant to order 8 of the orders made 31 October 2014.

   9. That the Wife shall retain for her sole and exclusive use, enjoyment and benefit all other items of property (both real and personal and including choses-in-action and financial resources) in her name possession and/or control including her superannuation benefits and entitlements.

   10. That the Wife shall be solely liable for and indemnify the Husband in relation to all debts and liabilities in her name or attaching to any item of property which she is to retain pursuant to these Orders except as provided for by these orders;

   11. That the Husband shall retain for his sole and exclusive use, enjoyment and benefit all other items of property (both real and personal and including choses-in-action and financial resources) in his name possession and/or control.

   12. That the Husband shall be solely liable for and indemnify the Wife in relation to all debts and liabilities in his name or attaching to any item of property which he is to retain pursuant to these orders.

   13. That unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money due under these or any subsequent orders:

   (a) each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in possession of such party as at this date.

   (b) each party hereby forgoes any claim they may have to any superannuation benefits belonging to or earned by the other.

   (c) That within 30 days of the date of these orders the parties close any joint bank account and divide the proceeds equally.

   (d) all insurance policies to become the sole property of the beneficiary named therein.

   (e) each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.

   (f) any joint tenancy of the parties in any real or personal estate is hereby expressly served.

   14. Such further and/or other Orders as this Honourable Court deems just and equitable in the circumstances.”

5. On the second day of the trial hearing, the wife submitted to the Court that what she then sought by way of property orders represented a division of 60 per cent to the wife and 40 per cent to the husband of the asset pool in Australia. That pool has a current value of $680,000 of which 60 per cent is $408,000 to the wife. The percentage adjustment sought by the wife was argued on the basis of s.75(2) of the Family Law Act 1975 (Cth) matters favouring the wife, in particular the disparate income and earning capacity of the parties, and to a far lesser extent, the support of the parties child Y. The wife claimed contribution as equal. The wife sought a transfer of the former matrimonial home, subject to the mortgage and a cash payment to her of $178,000. In addition the wife sought to retain those assets in her name in (country omitted). Otherwise she sought each party would retain their respective motor vehicles of similar value (approximately $12,000), albeit the husband’s two vehicles were owned by the company, and the wife to retain her superannuation of about $11,000. This represented a significant reduction in the apportionment quantum earlier sought by the wife, and was a far more realistic approach, her earlier claim being something of an ambit claim.

6. The husband relied upon his Financial Statement filed on 2 April 2015, and his affidavits affirmed on 30 October 2014 and 30 March 2015. The orders sought by the husband were to the effect that there be an equal apportionment of the total asset pool between the parties, but his material raised issues as to what at trial the value of that asset pool was and what was to be included in it, and excluded from it. The husband included a property in (country omitted) in the wife’s name and excluded the sum of $280,000 withdrawn from the parties’ home mortgage account, matters I shall come to hereafter.

History

1. The Applicant wife lives in the former matrimonial home. She is aged 50 years. Although qualified as a (occupation omitted), she is currently employed as a (occupation omitted) earning $2,600 gross per month for a 30 hour week worked. She is in good health.

2. The Respondent husband also lives in (omitted). He is aged 53 years. He is historically self employed as a (occupation omitted). On 8 January 2014, the husband was involved in a traffic accident. He suffered a very badly broken leg. He was required to cease (employment omitted) and commenced to receive Transport Accident Commission payments. He was still in receipt of such payments at trial. His income receipts have significantly exceeded that of the wife’s during the relationship, and his income earning capacity remains far greater than that of the wife in the ongoing operations of his business ‘(business omitted) Pty Ltd.’ He currently generates income by engaging casual workers to (business omitted). He has attended upon Slater and Gordon to pursue a claim in relation to his injuries.

3. The parties married on (omitted) 1989 in (country omitted). In 1996 the husband emigrated from (country omitted) to (country omitted) on a humanitarian visa. He remained there for three years. In 1999 he returned to (country omitted) and the family. The family then travelled to Australia claiming, and ultimately gaining, refugee status. They became Australian citizens.

4. The parties separated under the one roof in August 2013, and in December 2013 the husband departed the former matrimonial home and took up residence in the parties’ factory at Property P in the State of Victoria. This property is owned by ‘(business omitted) Pty Ltd.’ The parties had previously separated in 2009 for more than one year. Their marriage period was thus approximately 23 years. The parties have two adult children both of whom live with the wife and are supported by her, although X born (omitted) 1991 and now aged 23 years, is working at least four days per week. Y, who was born on (omitted) 1993 and now aged 21 years, suffers from depression and is in receipt of a disability pension. The husband has continued to pay the mortgage on the former matrimonial home with his superior income receipt, save for a period when he obtained from the bank a cessation of such payments, consequent upon his injury as described in paragraph 8 above.

Contribution

1. At the commencement of cohabitation upon marriage in (country omitted) the wife had no assets of any significance. The husband claimed to have an interest in both real property and a (business omitted), jointly with his parents. He variously, in evidence, described his interest as in a 60/40 percentage ownership in his parents favour; as a two thirds/one third ownership in his parents favour; and as a 60/40 ownership in the real property, in his parents favour, and a 50/50 ownership position of equality between he and his parents in respect of the (business omitted). He further claimed in his earlier affidavit evidence 100 per cent ownership of a real property and a one half interest in a (business omitted) with his father. The husband produced no documents and no corroborative evidence as to these matters. The husband claimed that in 2001 he returned to (country omitted) and sold his real property and (business omitted) interest. The funds from the sales, being approximately $180,000 as claimed by him, were then applied by him to purchase his first (business omitted) in Australia for approximately $65,000. In addition, the husband claimed that $110,000 from the sale of the property owned by him in (country omitted) prior to marriage was used toward the purchase of the parties’ first family home. That home in Property M, in the State of Victoria was purchased in 2001 and sold some six years later.

2. The wife denies the husband made any such sole initial contributions. The wife’s evidence is that following the parties marriage they purchased a house and (business omitted) in (country omitted) with the husband’s parents. The ownership of that total property was apportioned approximately 33 per cent to the parties and 66 per cent to the husband’s parents. The wife also described this apportionment as being 40 per cent to the parties and 60 per cent to the husband’s parents. Funding of the parties’ interest in these assets was by way of some savings of the husband, the sale of some jewellery by the wife, and overwhelmingly the borrowing of monies from the wife’s parents and the husband’s family. Upon sale of that property in approximately 2001, the parties applied their share of the funds to the purchase of their first home in Property M in the State of Victoria in the sum of approximately $215,000 (with the assistance of borrowings) and to the purchase of (business omitted) for the husband. The wife’s evidence was that approximately $95,000 was brought by the parties from (country omitted) to Australia. The home in Property M was sold in August 2007 and the net proceeds of sale were $40,000.

3. The Court prefers the evidence of the wife as to contribution for the following reasons:-

   a)neither party had any documentary or other proof; and

   b)the wife was a witness of credit throughout whilst the husband often gave contradictory and implausible evidence, including in relation to the pre-marriage contribution. His evidence that he “could easily” obtain documents to corroborate his claims but then failed to do so, also went to the Court’s inability to make a finding in his favour. The husband further accepted when cross-examined by Counsel for the wife that the parties accumulated wealth during their 11 years of marriage in (country omitted), and that their wealth increased significantly over that time. For three of those years the husband was not present in (country omitted).

4. The Court considers the commencement of cohabitation and early marriage contribution of the parties to be equal. Throughout their long marriage, both parties further contributed equally, in both a direct and indirect way to the accumulation of their assets, and to the welfare of the family. The only matter of particular consideration is the wife’s receipt of an inheritance in late 2008/2009 from her deceased father of $28,000. At around this time the wife also gave to the husband the sum of $10,000 separately from her personal savings. The monies were to be applied to a reduction of the mortgage on the former matrimonial home. The husband did not apply them in that manner, and it is not clear to what he did apply such funds, save that he did not send them to (country omitted) as claimed by him. The Court is satisfied however his application of the funds was for the benefit of the parties given his acquisition of assets for the benefit of the family, and with the knowledge of the wife, at that time.

Asset Pool

1. The asset pool is as follows:-

   a)the property at Property E in the State of Victoria    $490,000

   less mortgage encumbrance   -$260,000

   net equity      $230,000

   b)vacant land at Property O in the State of Victoria in the joint names of the parties                  $125,000

   c)the Business ‘(business omitted) Pty Ltd’                 $325,000

   i)this includes the remaining proceeds of sale of Property E in the State of Victoria in the sum of $224,752.29 and the monies already paid to the parties from the sale and being $25,000, paid to each party pursuant to the Orders made on 31 October 2014, with such payment to be characterised  by the trial judge; and

   ii)vacant land at Property Q in the State of Victoria; and

   iii)the factory at Property P in the State of Victoria; and

   iv)plant and equipment including trucks, vehicles and trailers; and

   v)offsetting debt.

1. In respect of the above described asset pool the following facts are relevant:-

   a)following separation the husband purchased the real property at Property E for the sum of $278,000. That property has since been sold and settlement of the sale occurred in November 2014. The net balance of sale proceeds is invested with the (omitted) Bank, and in the sum of $224,752.29. The husband claimed his sister was owed $50,000 from these funds in repayment of monies advanced by her to assist him in his arrears of mortgage, or alternatively the purchase. No evidence was put before the Court by the husband’s sister, nor any other evidence that could satisfactorily support that claim in the face of the wife’s denial of the claim. The Court cannot find that any monies were owed to the husband’s sister;

   b)the parties’ purchased in the husband’s name, and then subsequently transferred into joint names, a vacant block of land at Property O in the State of Victoria in approximately 2004. The purchase price of $70,000 was sourced from savings and income;

   c)the husband’s company, ‘(business omitted) Pty Ltd,’ purchased a property at Property Q in the State of Victoria in 2012 for $160,000 with a 10 per cent deposit paid from income and the balance by the application of mortgage funds. This is a vacant block of land. The property at Property P was purchased by the company shortly after separation;

   d)following separation and in November 2013, the husband drew down $220,000 from the (omitted) Bank mortgage home loan account and transferred such monies into the (omitted) Bank business account of his company ‘(business omitted) Pty Ltd.’ Such account was under his sole control. In the month prior to his withdrawal, the husband had deposited the sum of $165,000 into the (omitted) Bank mortgage account, being the proceeds of the sale of a (vehicle omitted) truck and (omitted) trailer. This reduced the monies owing on the former matrimonial home to approximately $25,000. The husband claims to have used $55,000 of the monies drawn down by him for necessary repairs to his truck. Again he provided no evidence as to this claim when challenged. Such expense was not claimed in his company taxation returns. No invoice or receipt was produced by him, nor anything of any description to assist the Court in making a finding in support of his claim. The wife throughout the proceedings has sought relevant discovery from the husband. The husband has failed to fulfil his obligation of disclosure and thereby frustrated the proceedings with respect to this matter and the many others referred to in these Reasons;

   e)following separation and on 28 October 2013, an amount of $40,000 was withdrawn from the (omitted) Bank home loan account. Thereafter, a further sum of $20,000 was withdrawn on the 6 November 2013. The wife claimed these monies were withdrawn by the husband. The husband denied he withdrew such sums. When the husband thereafter withdrew a further $220,000 from the account, the wife determined, and advised she had done so immediately, to withdraw the remaining money available to the parties in their redraw facility of $8,769. The wife applied these funds to part payment of legal costs. At trial, and not before, the husband claimed that the wife may have withdrawn the unaccounted for sums totalling $60,000. He did not assert that the wife did so as a fact, but rather suggested she may have. Otherwise, the husband proposed some unknown third party may have accessed the parties account. He provided no evidence as to this allegation. His evidence was simply he had “no explanation” as to the withdrawal of the funds. He made no report to the police or his bank manager of any alleged theft of the $60,000. His evidence as to this matter was unconvincing and implausible. Indeed it was bizarre. The Court prefers the evidence of the wife and finds the husband withdrew, in addition to the sum of $220,000 admitted by him, the further sum of $60,000 from the parties home loan account. What the husband did with the sum of $280,000 is unknown to the wife and the Court. There is no evidence those monies were needed to be injected into the husband’s company ‘(business omitted) Pty Ltd’ and indeed contrary evidence in the valuation. The husband simply withdrew the funds from the company account at will and applied same in a manner not before the Court; and

   f)the husband’s company, ‘(business omitted) Pty Ltd,’ has two trucks, and not one as deposed to by the husband in his Affidavit sworn on 30 March 2015. The husband’s company has a (vehicle omitted) prime mover truck included in its valuation. This truck was purchased in 2011 for approximately $254,000 (together with a trailer) subject to (omitted) Bank finance at a cost of approximately $4,259.93 per month. The financing contract finishes in 2016 with a balloon payment to be made of $76,000 and not $85,000 as claimed by the husband. The husband continues to meet his monthly commitment out of income. The husband’s company has a further (vehicle omitted) truck purchased for $267,737.36 and not $220,000 as claimed by the husband, which is also under finance. The monthly commitment of the husband’s company is $5,000 approximately a month, in respect of this purchase. This purchase was completed on 30 December 2014, following the husband’s motor accident and not before it, as claimed by him. The purchase was fully financed by (omitted). The husband continues to meet this payment out of income.

2. The parties agree the wife is the sole registered proprietor of property in (country omitted). That property is described as being situate in (country omitted). The husband’s evidence was contradictory as to the funding of this purchase. He claimed variously that the wife transferred her inheritance and other monies to the rebuilding of the home on this property; that he provided $25,000 from the monies withdrawn by him of $220,000 in November 2013 to purchase the property, when in fact the property was not purchased at the time, nor is there any evidence of a transfer of such funds to (country omitted); that the property was purchased on the parties behalf by the wife’s nephew Mr R, the husband sent monies to (country omitted) to Mr R. The husband did not call Mr R to give evidence as to these matters, albeit that Mr R resides in Victoria and has done so for at least two years. The husband was made aware that the Court may draw an adverse inference as to the evidence of the husband in the absence of that witness. The husband remained firm that he would not call the witness. What is agreed between the parties is that on the 19 December 2011 the husband transferred the sum of $144,100 to his sister in (country omitted) to build an apartment on the real property in (country omitted). The purchase price on the 14 June 2012 was $271,000. A further sum of approximately $50,000 was paid by the husband toward the purchase from a source unknown. The balance remaining to be paid pursuant to the contract is dependent on the exchange rate, but is currently approximately $40,000. In early July 2013 the wife transferred her interest in the contract, but not the title to the property, to her sister. The wife says as to this property that the Court should leave the property with her and/or her sister, in addition to the monies taken by her to pay her legal fees in part, and set this total sum off against the $280,000 of funds taken by the husband. This would represent something approaching an equal division of these two assets of the parties.

3. The husband claimed the wife has an entitlement to claim in (country omitted) a dowry payment from him. Should he fail to pay this amount, he could be imprisoned. Accordingly, I shall declare that the cash monies received by the wife pursuant to the orders I shall make in these proceedings satisfy any requirements that the husband has in respect of the wife’s claims for a dowry in (country omitted), and extinguishes any further obligation.

4. The application of the wife, in its orally amended form, will be acceded to by the Court. Given the findings of the Court as described above, the Court considers that orders which would be just and equitable in the circumstances of this case are those sought by the wife. On the discovered asset pool in Australia, the 60 per cent adjustment represents an allowance to the wife on a consideration of the s.75(2) matters in the Act. The wife has already received $25,000 pursuant to an earlier Order of the Court. The husband has significant ongoing monthly repayment commitments in respect of his company business that are met by him out of earnings. He has worked very hard throughout the marriage and built up through the operation of his businesses, the assets of the parties. The wife has indirectly contributed to this. The husband’s ongoing income and his earning capacity, with the ability to employ others is significantly superior to that of the wife. Unfortunately, the husband’s obfuscation in these proceedings caused the wife to incur further costs unnecessarily. It is a factor I take into account but in a small way. It is the basis for the making of the costs Order earlier reserved.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of Judge Hartnett

Associate: 

Date:  26 June 2015