Madawela and Albert
[2011] FMCAfam 692
•9 September 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MADAWELA & ALBERT | [2011] FMCAfam 692 |
| FAMILY LAW – Property – contributions and disclosure. |
| Family Law Act 1975, ss.72, 75(2) and 79 |
| Todd v Todd (No.2) (1976) FLC 90-008 Hickey & Hickey & Attorney for Commonwealth of Australia (Intervenor) (2003) FLC 93-143 Townsend (1995) FLC 92-569 Wilde [2007] FamCA 1044 Weir (1993) FLC 92-338 |
| Applicant: | MR MADAWELA |
| Respondent: | MS ALBERT |
| File Number: | ADC 3986 of 2008 |
| Judgment of: | Cole FM |
| Hearing dates: | 7 & 8 February and 1 & 17 March 2011 |
| Date of Last Submission: | 17 March 2011 |
| Delivered at: | Adelaide |
| Delivered on: | 9 September 2011 |
REPRESENTATION
| The Applicant: | Self-represented |
| Counsel for the Respondent: | Ms Nelson QC |
| Solicitors for the Respondent: | Di Morosini & Co. |
ORDERS
The wife take such steps as are required to forthwith transfer her interest in the property known as Property R to the husband forthwith;
The husband have liberty to list the property for sale, pending the transfer being effected;
Upon the transfer being effected into the husband’s name, the husband indemnify the wife in respect of all outgoings thereon thereafter;
The husband be responsible for the cost of the preparation and registration of the transfer;
The wife pay to the husband within thirty (30) days of the date of these orders the sum of $31,000.00).
That any interest the wife may have in the following vest in the husband absolutely:
(a)the proceeds of sale of the property known as Property T ($56,000) received by the husband;
(b)the husband’s interest in his mother’s estate including the land at Property K;
(c)all other assets in his possession or control not otherwise specified herein.
That any interest the husband may have in the following vest in the wife absolutely:
(a)Property S;
(b)the wife’s savings and investments, furniture and effects, superannuation entitlements; and
(c)the wife’s interest in the land at Property B.
That the parties take such steps and do such things as are reasonably required to retrieve the safety deposit box in Sri Lanka and have delivered to each party and the children, such jewellery as belongs to each of them that may be contained in the said safety deposit box.
Liberty to the parties to apply as to consequential orders.
That the proceedings be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Madawela & Albert is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC 3986 of 2008
| MR MADAWELA |
Applicant
And
| MS ALBERT |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter concerns the application of the husband for division of the matrimonial assets. Proceedings were commenced on 12 October 2009.
Both parties currently reside in Australia, having migrated from Sri Lanka. The husband has a Bridging A Visa which permits him to remain in Australia whilst his substantive visa application is decided. He has unlimited work rights for this period. (I will refer to this later in my reasons.)
The wife is a permanent resident of Australia. The properties which are the subject of these proceedings are in Sri Lanka and Australia.
Short chronology
The husband was born [in] 1956 and will be aged 55 this year. The bulk of his career was spent [omitted]. He is currently unemployed.
The wife was born [in] 1962 and is aged 49. She is employed as a [omitted]. She has been employed by [omitted] for in excess of six years.
The parties married [in] 1988 in Sri Lanka. They separated according to the wife in July 2007 when she alleges she told the husband the marriage was over.
I also note she served a separation declaration on the husband in November 2007. The husband at the time was still in Sri Lanka. It is this date, when it was clear the wife had formed the intention to separate, acted upon it and communicated her intention to the other party (Todd v Todd (No.2) (1976) FLC 90-008) that I take as the date of separation for the purpose of these proceedings.
They have two children namely [X] who was born [in] 1990 and [Y] who was born [in] 1993. [X] at the age of thirteen was diagnosed with cancer in the fibula of his right leg. In the course of his treatment, he underwent surgery for an above knee amputation. He currently resides with the wife and is studying [omitted] as a full-time student at [university omitted].
[Y] has completed Year 12 and is commencing tertiary education. She resides with the wife.
Orders sought
The wife seeks orders that:
a)she transfer the property at Property R in Sri Lanka to the husband;
b)the husband otherwise retain his interest in the property inherited by him from his mother’s estate in Sri Lanka;
c)the husband retain all other assets in his possession or under his control or otherwise specified herein;
d)the wife pay to the husband within forty-two days of the date of any Court order the sum of $25,000 or such other sum as the Court finds to be fair and equitable under the circumstances; and
e)the wife retain all other assets in her possession or under her control including but not limited to her interest in Property S, her motor vehicle, her savings and investments, her furniture and effects, her superannuation entitlements and her interest with her sister in land at Property B in Sri Lanka.
The husband seeks orders that the matrimonial assets be divided equally between the parties. This is a variation of the orders sought by the husband in his initiating application which sought that:
a)the wife transfer to the husband all of her estate and the non-superannuation assets of the parties;
b)the wife transfer 65 per cent of her superannuation assets to the husband;
c)the wife pay to the husband lump sum spousal maintenance in an amount as the Court shall determine;
d)the wife pay periodic spousal maintenance in an amount as the Court deems just and equitable; and
e)the wife pay the husband’s costs of these proceedings.
Evidence
The husband sought to rely on:
a)his Trial Affidavit filed on 17 November 2010;
b)the financial information contained in his Affidavit and oral evidence; and
c)the written submissions he supplied on 15 March 2011.
The husband gave evidence and was cross-examined.
It should be noted at this stage that the husband’s solicitors ceased acting for him in or about August 2010. From that date, the husband was self-represented and appeared on each occasion with the assistance of an interpreter.
A number of the documents supplied to the Court by the husband would, in the normal course of events, be inadmissible. For example, the husband when ordered to file an Affidavit of Disclosure, filed an Affidavit some two inches thick annexing a number of documents which he submitted complied with the obligation of disclosure.
Objection was taken to a number of the husband’s documents including the documents annexed to his written closing submissions. After some discussion with Counsel, it was confirmed that rather than spend time going through the documentation, any document if relevant, would be given such weight in my reasons as I considered appropriate.
The wife sought to rely on:
a)her Response filed on 12 November 2009;
b)her Trial Affidavit filed on 14 September 2010;
c)her Financial Statement filed on 12 November 2009;
d)the Affidavit of Mr R (valuer) filed on 14 September 2010; and
e)the Affidavit of Mr G (valuer) filed on 18 November 2010.
The evidence of Mr G and Mr R was obtained pursuant to the order of this Court dated 23 February 2010, with the valuers being jointly instructed by the parties. Neither party sought to cross-examine them.
The wife gave evidence and was cross-examined by the husband.
The law
In determining what orders should be made for the division of the matrimonial assets I am required to take an approach that involves four inter-related steps, namely to:
a)identify and value the property, liabilities and financial resources of the parties at the date of the hearing (“the asset pool”);
b)identify and assess the contributions of the parties within the meaning of s.79(4)(a), (b) and (c) of the Family Law Act 1975 (“the Act”), and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties (“the contributions”);
c)identify and assess the relevant matters referred to in s.79(4)(d), (e), (f) and (g), including the matters referred to in s.75(2) of the Act so far as they are relevant and determine the adjustment (if any) that should be made to the contributions-based entitlements the parties established at step two (“financial resources and needs”); and
d)consider the effect of these findings and determination and resolve what order is just and equitable in all the circumstances of the case (see Hickey & Hickey & Attorney for Commonwealth of Australia (Intervenor) (2003) FLC 93-143).
I will now consider these matters.
The asset pool
The parties were unable to provide a joint schedule of the Assets and Liabilities as they existed at separation or at the current date.
I have therefore used the table provided by the wife with a column for the husband’s figures where applicable. I have split the table in two so it is possible to see what existed in 2007 and what the current state of the pool is.
I will refer to the evidence of value later in these reasons. At present the purpose of the table is to identify the pool and any value attributed to it by the parties noting the values provided have been provided for this table by the wife.
Assets and Liabilities at Separation (2007)
| ITEM | WIFE | HUSBAND |
| Assets held by wife | ||
| Property R | $120,000 | Nk |
| 50% interest in land at Property B | $30,000 | Nk |
| Commonwealth Cash Investment Account | $92,807 | Nk |
| Commonwealth Award Saver Account (16 June 2007) | $16,865 | Nk |
| Toyota Rav 4 – equity | $5,000 | Nk |
| Superannuation | $49,000 | Nk |
| Sub-total | $313,672 | |
| Less wife’s income tax liability | $90,000 | Nk |
| TOTAL | $223,672 | |
| Assets held by husband | ||
| Proceeds of sale of land at Property T | $56,000 | |
| Land known as Property K (husband’s 50% interest with brother) ((E)$100,000) | $50,000 | |
| Withdrawal from NRFC Seylan Bank | $14,300 |
| ITEM | WIFE | HUSBAND |
| Bank Accounts – Australia and Sri Lanka | Unknown | |
| Toyota motor vehicle (Hiace) | (E)$3,500 | |
| TOTAL – not less than | $123,800 |
Current Assets, Liabilities and Financial Resources
| WIFE | |
| Property R | $120,000 |
| 50% interest in land at Property B | $30,000 |
| Property S $950,000 | |
| Less ANZ Mortgage $807,480 | |
| NETT | $142,520 |
| Toyota Rav 4 motor vehicle | $25,000 |
| Savings – ANZ Offset Account | $5,990 |
| Furniture and effects | $2,000 |
| Superannuation – Super [S] | $101,883 |
| Bank Accounts – Sri Lanka | $5,836 |
| Sub-total | $433,229 |
| Less wife’s Income Tax liability | $84,662 |
| TOTAL | $348,567 |
HUSBAND | |
| Proceeds of sale of land at Property T | $56,000 |
| Property K (husband’s mother’s intestate estate) husband’s 50% interest with brother | $50,000 |
| Property in [M] – gift from husband’s mother and brother Discovery No. 83 | Unknown |
| Withdrawal from NRFC Seylan Bank | $14,300 |
| Toyota motor vehicle (Hiace) | Unknown |
| Toyota motor vehicle [registration omitted] | $5,000 |
| Husband’s bank accounts - Australia and Sri Lanka | Unknown |
| Husband’s ETF and EPF Accounts | Unknown |
| TOTAL | $Not known |
Exchange Rate
For the purposes of the trial, the parties used an exchange rate of 100 Sri Lankan rupee to the Australian dollar. I do not propose to vary this.
Property R
There is no dispute that the wife is the registered proprietor of the land which was acquired in 1995. The parties commenced building a house on the land in 1996, and the building is not finished.
The husband however, does not accept the value adopted by the wife for the land being the sworn valuation of Mr G. He submits the valuation is flawed and the property is worth more. He does not provide a value or evidence to support a value for the property.
Mr G valued this land and the property at Property B.
The valuation was undertaken following orders being made by this Court on 23 February 2010 that, amongst other things, the parties join in seeking a valuation of each of the two properties in Sri Lanka and the Property S property. A valuation was obtained in May 2010.
On the evidence before me, a copy was provided to the husband through his then solicitors. This matter did not proceed to trial until the beginning of 2011.
The husband is critical of the valuations of the properties in Sri Lanka undertaken by Mr G. Regarding this property he says the valuer has chosen not to attach the house plan, plan of the property and deeds for the properties.
It is not apparent that these concerns were raised with Mr G or the wife’s solicitors when the reports were first released. Nor is it apparent that the husband has made any attempt to obtain any alternative valuation or appraisal.
He submits that the valuer has in effect followed the wife’s wishes. There is no evidence to support that the valuer has done anything in respect to the wife’s wishes other than supply a sworn valuation of the property as ordered by the Court following receipt of a joint letter of instructions received from the solicitors for the parties.
The husband states that the valuation of Property R is flawed in that the house plan produced by him shows that the floor area for the house built on the property is 4,606 square feet.
The valuer notes the floor area to be 3,540 square feet. In addition, his report states that the land contains a two-storied residential building which is in an incomplete state of construction and in an abandoned state. He goes on to note that some of the valance boards have perished and it appeared that the construction work has been stopped some three to four years ago. Finally he notes that large open spaces are within the building such as open verandahs, porch, balconies and ventilation areas, which have been excluded (my emphasis) in the computing the useful floor area.
The difference highlighted by the husband in the floor area between the house plans and the report of the valuer is explained in the valuation report.
In any event, the property, is in an “abandoned state”. Mr G notes in his conclusion to the valuation that:
It also should be noted that the structure has been in a neglected state for a considerable period of time which causes an impact on the marketability which is somewhat restricted caused by fear in the mind of the prospective purchaser as to the cause for such hazard in the construction process and the abandonment of the project.
He then values the property, taking into account the matters referred to in his report and provides a market value of the property of 12,000,000 rupee. This is converted by the wife at 100 rupee to the dollar to $A120,000.
The husband submits, without evidence to support it, that in Sri Lanka the standard practice when valuations are dispatched is to register them and have them authenticated as a true and valid document by the Ministry of Foreign Affairs as they would take responsibility for any discrepancies in the documentation. None of the documents submitted by the Wife had gone through this procedure and should therefore in his submission be ignored.
The husband is not a lawyer. No evidence is produced to support his assertion that this is standard practice. What I have before me is a valuation annexed to an Affidavit sworn by the valuer stating that the valuation is true and correct. There is nothing in the husband’s submissions that would lead me to the conclusion that the valuations are fundamentally flawed. I must accept the best evidence that is available to me and propose to do so.
Property B
The husband is critical of the valuation of Property B referred to above for similar reasons, being the failure to obtain a certified valuation. I do not accept his criticism for the reasons previously given.
The wife produced in support of her valuation of the property, the Affidavit of Mr G filed on 18 November 2010. She accepts his valuation of the property.
The valuation was undertaken following orders being made by this Court on 23 February 2010 that, amongst other things, the parties join in seeking a valuation of each of the two properties in Sri Lanka and the Property S property.
The valuation was obtained in May 2010. On the evidence before me, a copy was provided to the husband through his then solicitors. This matter did not proceed to trial until the beginning of 2011. The husband had many months in which to obtain a separate valuation or market appraisal or in the alternative put his concerns to the valuer. There is no evidence that he did so and I must proceed with what is available.
The land is held by the wife and her sister, Ms W. After considering the identification, location and condition of the land, amongst other things, Mr G values the property at 60,000 rupee per perch providing a total value of 6,720,000 rupee. An undivided half share equated to 3,360,000 rupee. The valuer then placed its value at 3,000,000 rupee or $30,000.
The husband does not propose an alternative value that can be supported by any expert evidence. Furthermore, his criticisms of the valuation do not impact on the value attributed to the land by Mr G.
I accept the evidence of Mr G that the wife’s interest in the property is worth $30,000.
The wife submits that the land should be excluded from the asset pool, the husband having made no contribution. I do not accept the submission. The land was acquired in 1995. Funds have been spent on the preservation and maintenance of the property since that date. There is no evidence on which I can rely to support the exclusion of a property acquired sixteen years ago from the pool.
The husband was critical of the fact that the wife had stated that she received this land as a gift from her father in 1989 in her original Affidavit however, in her subsequent Affidavit filed on 14 September 2010, said it was received in November 1995. The wife’s subsequent correction of the date of transfer does not impact on my consideration of this matter.
A copy of the transfer of land document was shown to the wife who agreed that it showed that the property had been transferred for the sum of 50,000 rupee.
It is the husband’s submission that this inconsistency and the fact that she did not produce the deed to the Court meant that I could draw the conclusion that she had underestimated the current value of the property. It was the wife’s evidence that the sum of 50,000 rupee had been inserted as the value for the property at the time simply for the purposes of stamp duty. This was not, she said, its true value, and reflected common practice in Sri Lanka. Her evidence on this matter is unsatisfactory.
The land was sold to the wife. It is not possible to ascertain whether it was sold at market value. The suggestion that I should accept that it had a greater value (the figure of 50,000 rupee being for stamp duty purposes) does not help. The evidence is this is a block of land acquired for consideration from the wife’s family. There is nothing to support the wife’s claim that a benefit was received from her family.
In any event, the land was acquired twelve years prior to separation and has no doubt been maintained by the parties.
Property S
The house was purchased by the wife in December 2007. The wife having borrowed funds from the ANZ Bank (the current debt being $807,480); paying a deposit of $164,000 (paragraph 113 of the wife’s Trial Affidavit).
Save that the valuation was conducted in May 2010, the husband does not appear to be critical of the value attributed by the wife. He contends that it has risen in value since that date but does not provide any evidence of the new value.
As I have previously noted the husband has been in receipt of the valuation for some time. He has not sought to provide any alternative evidence of the properties value and I would therefore proceed on the basis of the evidence available to me.
I therefore accept that the value to be attributed to the property is $950,000. I note this is less than the $980,000 paid for it in 2007 due to what Mr R describes as the softening of the market.
Property T
The husband, whilst disputing how this land was acquired, does not deny that the land has been sold and that he has received the net proceeds of the sale of the property.
The husband concedes this land was sold by him, however at paragraph 83 of his Trial Affidavit he denies it was sold for $70,000 (referring to the allegation of the wife in her affidavit filed in November 2009) and says “I request her to prove it”.
When cross-examined on this issue however he conceded that he had sold the land and received the proceeds, being some 56 million rupee in June 2008. Using the conversion rate adopted by the parties this equates to $56,000.
The husband, having sold a matrimonial asset has the onus of providing clear particulars of how that money was spent. He did not. His evidence was that the money has now been spent. He was unable however with any precision to say exactly how it had been spent. Some funds had been deposited in the Commonwealth Bank (1 million rupee) while further deposits had been made with the Seylan Bank (2 million rupee), with the balance being spent on Visa expenses, airline tickets and the cost of moving to and setting up in Australia amongst other things.
Whilst he conceded that between 2005 and 2007 he was working in Sri Lanka for a [omitted] company, he submitted that he was unable to obtain employment in Australia until the conditions of his visa changed. He therefore, without corroborative evidence, suggests it was used to meet his expenses. I do not accept this, particularly in view of his failure to provide proper disclosure.
The question is whether these funds should be included in the pool or regarded as monies applied to the support of the husband. His evidence on what was clearly a topic of concern including his challenge to the wife to “prove it” was unsatisfactory.
I cannot be satisfied that this was not a premature distribution of the asset pool that the husband applied to his own benefit. I therefore include it in the pool.
In so finding, I have regard to the following extract from the matter of Townsend (1995) FLC 92-569 where Nicholson CJ, as he then was, with whom Fogarty J and Jordan J agreed said at 81,654:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
The land was purchased in 1991. In June 2008, the husband distributed to himself an asset in which the wife had a legitimate interest. Had it been retained it would have been brought to account as an item of property.
Property K
The husband’s submission is that the land belonged to his mother who died in late 2007. The valuation notes his mother remains as the registered proprietor on the Certificate of Title.
He submits that as his mother died subsequent to the parties separating the land should therefore not be included in the pool.
He submits that the land should be excluded because morally it belongs to his brother. He says his brother took care of his mother who had dementia and it rightly belongs to him.
There is no dispute that the husband’s mother died without leaving a Will. Furthermore, the husband does not dispute that he would be entitled to inherit a share of the property with his brother.
Little or no information is provided in respect of the mother’s Estate and the efforts that have been made to wind it up. The husband from the commencement of these proceedings has pleaded that he has minimal funds. I do not accept that in those circumstances that neither he nor his brother has made any effort to resolve this issue.
I cannot, on the evidence before me, accept his arguments that he has no entitlement to the property. There is a genuine issue as to whether the wife could be said to have made any contribution to this asset. That can be dealt with later in these reasons.
Mr G values the land at 10 million rupee for a forced sale. The land is still in the mother’s name and would need to be transferred. Costs would be incurred and I accept the forced sale valuation. Using the conversion rate adopted for the trial, this equates to $100,000. Save for the criticism of the valuation, being the alleged failure to have it certified, the husband does not dispute the valuation. I therefore bring the property to which he is entitled with his brother to an equal share, to account. Fifty per cent of the value of the property is $50,000.
[M] property
Reference is made in the wife’s Case Outline to property at [M], being a document the husband disclosed in his extensive Affidavit of Discovery (document 83).
The document however, has not been addressed at all in the wife’s Affidavit filed on 14 September 2010.
Furthermore, it is not addressed by the husband in his Affidavit.
There is no evidence as to the value of the property.
The husband’s Affidavit of Documents was filed on 18 November 2010.
He was questioned about the land. His evidence was that the land is no longer in his name. He is unaware as to what it is worth. His evidence was that the person who lived there looked after his father and now by virtue of his residing on the property for a number of years, that unnamed person has what is in effect, a claim over the property, similar to what we would know as adverse possession.
I am therefore left with the position where the husband has disclosed a Deed of Gift showing that his mother and his brother gifted this land to him in 1991 (the Deed being stamped on 5 August 1991). He now says that he no longer has the land. It has not been addressed in the wife’s Trial Affidavit nor the husband’s Trial Affidavit nor in earlier Affidavits filed with this Court. There is no value attributed to the property.
The husband’s evidence on this issue, taking into account his obligation to provide full disclosure, is highly unsatisfactory.
It is not possible from the evidence presented to put a value on the land. At best, the land can be regarded as a financial resource in that on the evidence presently before me, it remains in the husband’s name.
Wife’s tax
The wife now seeks to bring to account a tax debt of $84,662. I have difficulty in seeing why the entire amount should be brought to account as a debt on the evidence before me. In so saying, I refer to any current tax debt that may have been owing when the house was purchased.
At paragraph 108 of the wife’s Trial Affidavit she says that at the date of separation (which she says is 16 July 2007), she had $92,807 in her Commonwealth Bank Cash Investment Account.
At paragraph 109.4 she says:
A significant portion of the money in my Commonwealth Bank Cash Investment Account was earmarked to pay income tax. These funds were subsequently used for this purpose.
At paragraph 113 she says:
The principal acquisition by me post separation has been my home at Property S. The Property S property was purchased in my sole name in December 2007 for $980,000. I paid the deposit of approximately $164,000 from funds in my Commonwealth Bank Account. The balance was raised by mortgages with the ANZ Bank.
At paragraph 114 of her Affidavit she says:
However, a considerable amount of the money in my Commonwealth Bank was required to meet anticipated income tax. Accordingly the amount taken for the deposit had to be replaced by an ANZ loan when the tax assessment needed to be paid. Accordingly much of the purchase price was raised by mortgages with the ANZ Bank.
Save that she claims a current tax debt of approximately $84,000 (at paragraph 111 of her Trial Affidavit) which is inconsistent with the balances shown in her other documents, she does not provide particulars of what is meant by when she says “a considerable amount of money” at paragraph 114 of her Trial Affidavit.
The ANZ Bank mortgage secured against the property is comprised of three loans, one of which is a line of credit which at paragraph 111 of the Trial Affidavit, is shown with a balance of $138,883 (the balance being $85,000 as at 11 November 2009 when the wife swore her first Affidavit). The wife would have paid the tax utilising this line of credit. I therefore have some concern that there may be an element of “double dipping” with the debt on the line of credit and the tax debt being brought to account.
In her Financial Statement filed on 12 November 2009 she allows an amount of $2,953 per week to pay the tax. At paragraph 48 of that document the tax assessment for the current year is $110,642. At paragraph 49, the tax assessed but unpaid for previous years is $52,000.
The wife’s Financial Statement sworn on 2 February 2011 and handed up on 7 February 2011 shows no tax assessed and unpaid. It also shows tax assessed for the current year at $84,662 due quarterly. That is a debt assessed on income being received for which an allowance is made in the weekly income of the wife. There is no evidence to suggest the instalments have not been met.
I do not accept that the current assessment (on which there is nothing owing as at the date of trial), which is being met by way of quarterly instalments for which the wife sets aside $3,110 per week (paragraph 19 of her Financial Statement sworn on 2 February 2011) should be brought to account.
I note the ANZ mortgage which was $740,162 in 2009 (paragraph 46 of the wife’s Financial Statement sworn on 12 November 2009) is at February 2011 $807,480 (paragraph 46 of the wife’s Financial Statement sworn on 8 February 2011). There is no evidence led by the wife to suggest the mortgage is in arrears. The increase in the liability is not addressed, save that the sum of $52,000 is no longer owing to the Australian Taxation Office as shown in 2009.
My concern is to avoid the risk of accounting for any outstanding tax debt when it has been brought to account. This could be by way of a draw down on the line of credit secured against the house and/or the reserving of funds from the weekly income stream against the payment of a future instalment.
I accept that in 2007 the wife had set aside funds to pay tax. The funds were used for the deposit on the house. She does not however say how much of those funds were needed to pay the tax. I am therefore unable to quantify the amount if any that should be brought to account. Her evidence would suggest that due to the need to borrow further funds to pay for the tax debt, the equity in the house would have been minimal at the time. I would therefore, on the evidence before me, consider it appropriate to deal with this issue when assessing the wife’s contribution to the acquisition of the matrimonial assets.
$14,300 allegedly withdrawn by the husband
The wife’s evidence at paragraph 42 of her Affidavit is that she opened an account in the parties’ joint names in November 2005. Over the next two years she deposited $20,000 into the account for the support of the husband and the children while they were in Sri Lanka. The wife annexes to her Trial Affidavit (Exhibit 10) a series of statements from the Seylan Bank showing a series of withdrawals from August 2007 to November 2007 totalling $14,309.28. She says these withdrawals were made by the husband.
The wife concedes this money was advanced for the living expenses of the husband and the children. She deposited the last amount of approximately $10,000 in June 2007[1], (the children having returned to Australia to reside with her on 29 March 2007). She served a separation declaration on the husband in November 2007. At the time, she was employed as a [omitted] in South Australia. The husband remained in Sri Lanka due to visa difficulties, having been essentially unemployed, on the wife’s evidence, since his discharge from the [employer omitted] in 1999. In the circumstances, the funds were advanced for the support of the husband.
[1] Exhibit 9 of the wife’s Trial Affidavit
Whilst the husband disputes the wife’s evidence, it is possible that the sum of $14,300.29 was withdrawn by him, particularly once the separation declaration had been served on him. If that occurred however, I do not consider it a premature distribution of property, particularly when the wife saw fit to advance a portion of the funds after the children’s return to her in March 2007. I will not bring this amount to account.
Other items
In addition, the wife seeks to bring to account a Toyota motor vehicle Hiace with an unknown value, another Toyota motor vehicle with an estimated value of $5,000, the husband’s bank accounts in Australia and Sri Lanka, and the husband’s ETF and EPF Accounts. The value of the accounts are unknown.
There is no evidence from which I can attribute a value to those accounts. Consideration can be given to whether or not an inference should be drawn that the husband has an undisclosed resource. I will consider this later in these reasons in that the accounts will be noted but no value attributed to them.
With respect to the Toyota motor vehicle registration number [omitted], there is no evidence that this is owned by the husband. The husband’s evidence is that this is a motor vehicle that he has borrowed from a friend. A copy of the registration for the motor vehicle was not produced. I am not inclined to accept that this is a motor vehicle that belongs to the husband.
With respect to the Toyota Hiace motor vehicle, the evidence is that this is a 1976 Toyota Hiace motor vehicle van in Sri Lanka. It is not suggested that it has a vintage value. It is confirmed that a diesel engine was put into it however I have no doubt that its value would be nominal. In the circumstances, I do not propose to bring that to account.
It should be noted that the parties agreed that the Toyota Rav Vehicle (which the wife says was purchased for the son’s use and modified for his needs) in the wife’s possession is primarily used by the parties’ son and should be excluded from the asset pool.
Safety Deposit Box
It is not disputed that the safety box exists or that it holds assets owned by the parties.
The wife says that the husband has the certificate for the box, and the two keys that are required to access it. The husband says that the wife has the other key (one being in his possession). His evidence is that the box contains a gold necklace given to the wife by him when they married, jewellery that belonged to his mother and some small pieces of jewellery that were purchased by the parties for their infant children.
The wife seeks the return of jewellery which she says was given to her by her father and placed in the box. She estimates the value of the pieces to be $5,000. There is no evidence to support this and the value is not conceded.
In view of the paucity of the evidence in respect of this issue I would not include any value in the pool but instead order that the parties take all reasonable steps to access the items in the safety deposit box and divide the items between them such that the wife will have her jewellery returned to her and the husband will receive his. The children’s items can be delivered up to the children.
The Pool
For the reasons set out above I then find the matrimonial asset pool as follows
Current Assets, Liabilities and Financial Resources
| WIFE | |
| Property R (Joint names of husband and wife) | $120,000 |
| Wife’s 50% interest in land at Property B (Joint names of wife and sister) | $30,000 |
| Property S $950,000 | |
| Less ANZ Mortgage $807,480 | |
| Net value | $142,520 |
| Toyota Rav 4 motor vehicle $25,000 – excluded by agreement – used by son having been modified for his needs | |
| WIFE | |
| Savings – ANZ Offset Account | $5,990 |
| Furniture and effects | $2,000 |
| Superannuation – Super [S] | $101,883 |
| Bank Accounts – Sri Lanka | $5,836 |
| TOTAL | $408,229 |
| HUSBAND | |
| Proceeds of sale of land at Property T | $56,000 |
| Half share in Property D (from the husband’s mother’s intestate estate) | $50,000 |
| Property in [M] – gift from husband’s mother and brother Discovery No. 83 | Unknown financial resource |
| Withdrawal from NRFC Seylan Bank - $14,300 not included | |
| Toyota motor vehicle (Hiace) nominal value | Nominal |
| Toyota motor vehicle ([registration omitted]) – wife’s estimate $5,000 not included | |
| Husband’s bank accounts - Australia and Sri Lanka no value attributed | |
| Husband’s ETF and EPF Accounts no value attributed | |
| TOTAL | $106,000 |
Contributions
The parties married when the wife was working as an [omitted] and the husband was [occupation omitted].
The parties worked in their respective endeavours through the course of the marriage with their children [X] being born [in] 1990 and [Y] being born [in] 1993.
Each party attempts to make significant capital out of how their first block of land was purchased at [O] in 1993 for a cost of approximately $3,200. The difficulty I have with this is that this is a marriage which on the parties’ evidence lasted for nearly twenty years. If one party contributed funds to the acquisition of the asset then those funds were not available to meet the expenses of the family. I do not accept that the acquisition of the land was anything other than a joint endeavour.
There are two children of the relationship and throughout the period of the relationship, it is fair to surmise that the parties each contributed in their way to the joint endeavours of the partnership including arrangements for the care and welfare of the children and the family.
There is no significant dispute that in 1991, the land at Property T was acquired. There is some dispute as to how it was funded, however it needs to be remembered that this was in 1991 and the amount is relatively small.
In 1995, the parties acquired a block of land at Property B being land transferred by the wife’s father to the wife and her sister. The wife alleges this was a gift however; the husband has produced evidence to show that it was transferred for consideration in the sum of 50,000 rupee. Fifty thousand rupee on current conversion rates amounts to $5,000.
Again there is no dispute that the land at Property R was purchased in 1995 and that in 1996 the parties commenced to build a house on that land. That construction remains incomplete as at 2011.
In 1997, the [employer omitted] commenced court [omitted] proceedings against the husband. The husband borrowed funds of some $6,800 to repay a liability to the [employer] which he says was in respect of land. In 1999, the husband was dishonourably discharged from the [employer].
In 2002, the wife graduated with a post-graduate degree in [omitted], having commenced that degree in 1998.
Funds and efforts that would have been directed to the benefit of the family were diverted to assist the husband with his court martial proceedings and to assist the wife with her studies.
In 2003, the Sri Lankan Court of Appeal quashed the husband’s court martial verdict and ordered a re-trial.
In that same year, the parties sold their land at [O].
In 2003, their son [X] was unfortunately diagnosed with bone cancer in his right leg. As a consequence, the parties travelled to Australia to obtain treatment for their son. In December 2003, he underwent a knee amputation.
In December 2003, the wife commenced work as a [omitted].
From December 2003 to November 2005, the husband remained in Australia, unemployed. With the wife working, some of the role of caring for the children fell to him.
In November 2005, the husband and the children returned to Sri Lanka with the wife remaining in Australia. The husband was unable to or did not obtain employment in Sri Lanka according to the wife although he did concede in cross-examination that he did some work for a [omitted] company, the exact details of which were not clear.
The family were supported with funds sent by the wife to Sri Lanka to assist them. Her evidence is that she sent some $20,000.
The wife’s evidence is that the parties were concerned that:
a)the parties’ position in Australia was not clear until the wife obtained her [omitted] accreditation;
b)if the children did not return to Sri Lanka they would lose their place in their schools; and
c)the husband and the children would return to Sri Lanka while the wife would remain in Australia to get her accreditation.
The wife obtained accreditation in April 2006 and was appointed as a [omitted] in September 2007.
The wife started the visa process in October 2006 and requested it be expedited so the children could commence school in 2007.
There were complications with the husband’s visa due to him not meeting the English proficiency requirements.
It was agreed she says (although there is some dispute about this) to exclude his name from the Application.
The husband signed documents agreeing to the children coming to Australia. As a consequence, he remained in Sri Lanka.
The wife annexes to her Affidavit a decision of the Department of Immigration regarding the husband’s visa application (Annexure 8). Reference is made in that to the applicant choosing not to leave Sri Lanka in 2007 because he could not obtain an English language test before April 2007 and goes on to say most spouses of applicants in this position pay a fee to have this waived.
Neither party addressed this to explain why it did not occur.
On 29 March 2007, the children returned to Australia with the husband remaining in Sri Lanka because of visa difficulties. The children lived with the wife from this date.
On 20 September 2007, the husband’s mother died. The wife submits that one half of her Estate passed on intestacy to the husband including the land known as Property K.
In November 2007, the husband was served with a separation declaration. I accept this date when the wife clearly acted on and communicated her intention to separate, as the date of separation.
In December 2007, the wife purchased her residence at Property S.
The husband has not resumed his [omitted] career. The re-trial of the charges has to date not occurred.
In June 2008, the husband sold the land at Property T and retained the proceeds of approximately $56,000.
In June 2008, the husband returned to Australia and resided in the Property S residence for approximately four weeks.
In July 2008, the husband left the Property S residence to reside elsewhere in Adelaide and has remained living in Australia since.
The wife remains employed as a [omitted]. The husband is unemployed.
On 27 May 2010, the husband was advised by the Australian Government that he had been granted a Bridging A Visa[2].
[2] Exhibit 1
Under a heading of Work Permission, the letter states that:
There are no work conditions attached to your bridging A visa. This means that you have unlimited work rights for the period that your bridging A visa is in effect. Note, however, that your bridging A visa will not come into effect until any current substantive visa ceases.
Each party attempts to take credit for separate financial transactions during the course of the marriage which they say point to a greater contribution on their behalf. Whilst each has presented voluminous evidence, I have found the documentation provided either difficult to understand, or vague to the point that to rely on it would be a risk that I am not prepared to take. Furthermore, any funds applied to purchase an asset were funds acquired during the course of the relationship.
The issue of disclosure was raised by each party in the course of these proceedings. I refer to this matter in a number of places in these reasons. I am conscious of the authorities including the matter of Wilde (2007) FamCA 1044, where the Court noted at paragraph 51:
The need for parties in financial matters to make full disclosure is not in doubt.
They went on to say however at paragraph 83:
we have already noted that the exercise to be conducted by a Trial Judge under s 79 is a broad adjustive exercise, and whilst that exercise requires careful evaluation of the evidence, and appropriate assessment of contribution, it is not to be equated with an accounting audit.
There is nothing in the evidence of the parties despite their focus on their individual contributions that would justify a departure from that process.
The wife may have contributed more financially however, the significant increase in her income only appeared in the latter years of the marriage when she was able to obtain a position as a [omitted] in Australia.
The husband’s [omitted] career whether it was as a result of his actions or as a result of a series of unfortunate events, came to an end and the husband has had difficulty re-establishing himself since that time.
Each party has received gifts or benefits from their respective families. The husband seeks to quarantine his inheritance saying that it is rightfully the property of his brother. I have not accepted this.
In addition, he seeks to suggest that land gifted to him is now rightfully the property of a third party through that party’s possession of the property over the years. His evidence in respect to these matters is vague and unacceptable.
The wife on the other hand attempts to quarantine a “gift” that was made to her in 1995, some twelve years before the marriage came to an end. The evidence is that the property was transferred for consideration. Her argument is that the husband has made no contribution to this. If the wife has paid funds for the care and maintenance of this property then it is a payment that has been diverted from the family. The argument to quarantine that asset has been rejected, and the value brought to account. There is no independent evidence other than the land being bought from her family from which I can draw the conclusion that this is an additional contribution by the wife through her family.
The wife at the date of separation had a significant sum of money saved in the bank. She was able to use those funds to assist her with the purchase of the property at Property S.
Following the trail of funds into the purchase of that property, I can see no reason to exclude that asset from the matrimonial pool. Some consideration however can be given to the fact that the equity in the property appears to have increased. However it is not possible to quantify that amount on the available evidence.
The parties have each made financial contributions to the acquisition, conservation and improvement of the matrimonial assets. The husband’s contributions clearly diminished once he was discharged from the [employer] and family funds and resources needed to be applied to support him and his efforts to clear himself from the charges laid by the [employer] (the proceedings being successfully appealed).
The wife’s financial contributions increased markedly when she moved to Australia to the point where she was, in addition to financially supporting the family, able to set aside funds which she used for the deposit for the purchase of the property at Property S.
The evidence in respect of the parties’ non-financial contributions and contributions to the welfare of the family is not clear. The husband has not been in full-time employment since his discharge from the [employer]. He was available to contribute although the wife would not concede that he did.
The children were with the husband from November 2005 to March 2007 when the children returned to Australia. The husband was responsible for them for this period however there is an issue as to how much help he had from domestic servants. The evidence is not satisfactory on this issue but the point remains that for this period he was responsible for their day to day care and management.
The wife since the date of March 2007 has been caring for the children without the support of the husband. She continues to support each of them with their tertiary education and there is no suggestion that she should not.
The asset pool, including the superannuation is approximately $514,229. Of that some $244,433, being the equity in Property S ($142,550) and Super [S] ($101,883) has been accumulated since the wife has been in Australia through her endeavours.
The equity in the Property S property is currently less ($142,500) than the deposit paid by the wife ($164,000) for the purchase of the property some three and a half years ago.
The wife’s superannuation however, has increased by some $43,000 since the date of separation (being $59,000 in 2007 and currently $101,883).
In addition, I have found that the husband has an interest in the land received from his mother’s Estate and have brought that amount, being $50,000, to account. The mother died just prior to the husband being served with the Separation Declaration.
Some credit must be given to the fact that between 2005 and 2007, the husband had the children with him in Sri Lanka. The wife’s evidence is that the parties agreed the children needed to return to secure their place at their schools. The husband went with them with the wife remaining in Australia to work and study.
The wife in spite of the tragic circumstances of the son’s battle with cancer has been able to turn those circumstances to the advantage of herself and the family.
During her time in Australia in addition to caring for her son, she has obtained further qualifications and subsequently permanent residence for herself and her children.
She was in part able to do that because the husband was available to return to Sri Lanka with the children in 2005.
Credit however, must also be given for the wife’s continued care of the children without support from the husband after their return to Australia in 2007. This has now been ongoing for four years and I note the schedule of expenses the wife has met, annexed to her Affidavit.
I would therefore assess the contributions of the parties to be 60 per cent in favour of the wife and 40 per cent to the husband.
Financial resources and needs
The wife, through Counsel, has correctly pointed to a number of flaws with the husband’s evidence. He was not as forthcoming as he could have been in respect of a number of matters including:
a)the disbursement of the funds received from the sale of the land in Sri Lanka;
b)the provision of bank documents from Sri Lanka saying he did not have a password for internet access and subsequently disclosing one;
c)his employment and his ability to be employed in Australia denying all knowledge of [L] and then when confronted with the DVD suggesting that it was job training;
d)the possible receipt of a pension from the [employer omitted]; and
e)the receipt of land from his mother’s Estate and the land gifted to him by his father.
The husband is aged 54 years and save for some concerns set out when he sought to vacate the trial in October, there is no evidence on which I can rely to suggest he is not in reasonable health. The wife is aged 49 years and is in reasonable health.
The wife is employed as a [omitted] and has an income in excess of $400,000. The income disparity with the husband is significant.
The husband is currently unemployed. In his Trial Affidavit at paragraph 80.1, he refers to the Bridging Visa being granted with no work conditions. He does not say when, nor does he provide any particulars of the efforts he has made to obtain employment.
He was questioned about working for a business known as [L]. He denied doing so. He was shown a film which featured him in a fluorescent safety vest walking into [L]. The distinct impression was that he was about to start work.
His explanation was that he attended to observe and to train. He produced no documents to support this. (I note that a letter that purported to be from the proprietor of [L] was annexed to his closing submission. The evidence had closed, the author was not available for cross-examination and in any event, it was the husband’s answers to the questions put to him by Counsel for the wife and his subsequent recanting of his evidence that caused me to question his credibility on this issue.) His evidence regarding his working capacity and his attempts to find work was unsatisfactory and unacceptable.
The husband is capable of obtaining employment but he is not capable of obtaining any employment at this stage that will provide him with remuneration that would be in the vicinity of that received by the wife.
Having said that I note that both children have attained the age of 18 years. Both remain dependent on the wife for support for their tertiary education. Neither can look to the husband for financial support due to his current circumstances.
Neither party is eligible for a pension or benefit; the husband being ineligible due to his current visa status. The husband’s evidence is that he is not eligible for a pension from the [employer omitted]. Whilst the wife did not concede this, there is no evidence to suggest that he is. Nor is there evidence as to the amount that may be received, once it has been converted to Australian dollars. The husband’s position with the [employer omitted] is far from clear and I do not propose to bring this factor to account.
Neither presented evidence on which I could rely to consider the parties’ standard of living and whether it is in the circumstances, reasonable.
It is however, relevant to note that there is some evidence to support the husband’s argument that his role in caring for the children in Sri Lanka in the period of 2005 to 2007 did enable the wife to further her career in Australia. The wife’s evidence is that during this period she continued her in service training at [omitted] (paragraph 90 of her Trial Affidavit). In April 2006, she passed her [omitted] examinations in [omitted] (UK) and [omitted] (Australia) and in September 2007 accepted a permanent job as a [omitted].
The wife is now in a position where her income is far superior to that of the husband. Any allowance for the income disparity must be set off against the wife’s obligation to support the two children through their tertiary education.
The wife’s evidence of their expenses to date and the ongoing expense of maintaining the adult children is relevant and not challenged. Furthermore, I would find there is little prospect of any meaningful contribution from the husband while they remain dependant.
In addition, the husband’s unsatisfactory evidence in respect of his financial circumstances and his work capacity have mitigated against increasing any adjustment beyond 10 per cent.
For these reasons set out above, I consider that when factors such as the income disparity between the parties, the lack of financial support for the adult children (who are still dependent) and the imbalance between the wife’s training and that of the husband, set off against my concerns about the evidence given by the husband, there should be an adjustment of 10 per cent in the husband’s favour.
Is the division of the assets Just and Equitable?
There are a number of concerns that I have discussed about whether I have a complete accounting of the parties’ assets, and in particular the husband’s. At the same time, the wife is unable to point to any source of income, or bequest, that would significantly effect the outcome (the husband, on the wife’s evidence, save for casual jobs, having been unemployed since he left the [employer]).
I therefore do not consider it appropriate to make a further adjustment.
This would then mean that the asset pool of $514,229 should be divided with 50 per cent to the husband and 50 per cent to the wife.
The husband’s share would then be $257,114.50. The husband has received assets to the value of $106,000. The husband should therefore receive a further $151,114.50 from the asset pool. For the purposes of this matter, I round this to $151,000.
The wife’s capacity to borrow may be limited by the equity she currently has in her home.
Obviously, the quickest and most effective way to conclude this matter would be for the wife to make a cash payment to the husband.
I am reluctant to order that on the evidence before me and would leave that to the parties to communicate on this issue.
The orders I will make will be that that there be a part payment to the husband with the remainder being met by transferring the parties’ land known as Property R in Sri Lanka to him.
The land in Sri Lanka is valued at $120,000. The husband argues it is worth more. It is up to him as to how and for what price he chooses to sell the property.
Spousal maintenance
The husband did not seek to press his application for spousal maintenance at the trial.
When asked what orders he sought, his response was an equal division of the assets. I have taken this to mean that the Application for Spousal Maintenance can be dismissed.
In the event that I am wrong, I do not consider an order for spousal maintenance is warranted.
Section 72 of the Family Law Act1975 states that:
72(1) A party to a marriage is liable to maintain the other party to the extent that the first mentioned party is reasonable able to do so, if and only if, that party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c)for any other adequate reason having regard to any relevant matter referred to in sub-section 75(2).
The husband does not have the care of a child under the age of eighteen years.
I have already found his evidence in respect of his working capacity to be highly unsatisfactory. Having regard to his age and circumstances, I consider that he does have the capacity for gainful employment. His training and skills are set out in his documents lodged with the Immigration Department. While the remuneration will not be in the vicinity of the wife’s, he is capable of working.
Furthermore, his evidence in respect of the assets in Sri Lanka was vague and unreliable. He presented as a person who had been unable to obtain a permanent job since his discharge from the [employer]. Finances would be critical to someone in his position and any assets would not be relinquished lightly. I therefore could not accept that the land received from his father had been informally allowed to go to someone who had looked after him(the late father) nor could I accept that his brother would receive his share of his mother’s Estate.
The issue of his disclosure during the course of these proceedings was a live one. I was referred by Counsel for the wife to the decision of Weir (1993) FLC 92-338 where the Court held, interalia:
1. It is the duty of a party involved in property proceedings in the Family Court to make a full disclosure of his or her financial affairs.
2. Once it has been established that there has been a deliberate non-disclosure, the Court should not be unduly cautious about making findings in favour of the innocent party.
The proceedings have been on foot for a long time. The trial was vacated on two occasions. There has been ample opportunity to provide proper disclosure and yet it was apparent at trial that it had not occurred. His failure to do so has been reflected in my assessment of his resources and needs.
The husband is able to obtain employment and is capable of doing so.
The husband has resources in Sri Lanka including, amongst other things, his interest in the land gifted to him and his interest in his mother’s Estate.
It is unclear whether the husband has an entitlement to a pension from the [employer omitted] although the current evidence would suggest that he does not.
The husband will receive a significant portion of the asset pool from which he will be able to support himself.
I am not convinced the wife, once the costs of the adult children are brought to account, will have the capacity to pay spousal support.
I do not consider the husband has made out his case for spousal maintenance and would dismiss that part of the proceedings.
Conclusion
This is a 19 year marriage. Over that period the parties have been affected by events that have made an impact on their ability to contribute either financially, by way of a non-financial contribution, or through their contribution to the welfare of the family. They include:
a)the husband’s discharge from the [employer] in 1999. He has not secured permanent employment since;
b)the parties’ son being diagnosed with cancer in 2003;
c)the parties’ move to Australia for his treatment;
d)the wife’s subsequent securing of employment in Australia, her remaining in Australia to study and advance her career whilst the husband and children returned to Sri Lanka and her subsequent promotion culminating in her current position and income; and
e)the husband’s move to Australia in 2008.
The culmination of those events has meant that the wife, in difficult circumstances, has prospered while the husband has not.
I therefore make the orders as set out at the commencement of these reasons.
I certify that the preceding two hundred and fourteen (214) paragraphs are a true copy of the reasons for judgment of Cole FM
Date: 9 September 2011
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