MAM and MDJ
[2004] FMCAfam 129
•15 January 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MAM & MDJ | [2004] FMCAfam 129 |
| FAMILY LAW – PROPERTY – Section 79A Family Law Act 1975 – litigant in person – failure of husband to comply with previous final property orders and interim procedural orders – delaying conduct of the husband – failure to provide for inspection – failure to file documents – conduct occasioning disadvantage to wife – lack of evidence – credibility of oral evidence – pragmatic approach adopted by wife – considerations of justice and equity. |
Family Law Act 1975 (Cth)
| Applicant: | MAM |
| Respondent: | MDJ |
| File No: | MLM 5842 of 2002 |
| Delivered on: | 15 January 2004 |
| Delivered at: | Melbourne |
| Hearing Dates: | 14 & 15 January 2004 |
| Judgment of: | Hartnett FM |
REPRESENTATION
| Counsel for the Applicant: | Mr M.J. Wood |
| Solicitors for the Applicant: | Richard Calley Pty Ltd |
| Respondent: | In person |
ORDER
By consent that pursuant to section 79A(1A) of the Family Law Act 1975 the orders made on the 4th day of October 2002 in this Court be set aside and in substitution thereof the following orders made.
The wife retain for her own use and benefit the VW Golf motor vehicle registration number R.
The husband indemnify the wife and keep her forever indemnified with respect to all or any liability that may be or may be said to be due by the parties or either of them to TT Real Estate Agency in A.
The wife as soon as practicable transfer to the husband or his nominee her shareholding if any, in NRS Pty Ltd and the husband indemnify the wife in relation to all and any liability that she may have past present or future with respect to the said Company and any business conducted by the said Company.
The husband pay the wife’s cost of these proceedings fixed in the sum of $8,647.50. There be a stay on such payment of 3 months.
There be liberty to the wife to apply with respect to enforcement of the order as to costs herein.
Until the husband’s compliance with order number 5 herein he is restrained by himself, his servants and/or agents from dealing with in any way whatsoever his superannuation entitlements with Zurich save for the purposes of meeting such costs order.
Each party otherwise retain those items of property and superannuation benefits currently in their respective possession and/or to which they are currently entitled.
Otherwise all extant applications are dismissed.
Pursuant to rule 21.15 of the Federal Magistrates Court Rules2001 the Court certifies that it was reasonable for the parties to employ an advocate.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLM 5842 of 2002
| MAM |
Applicant
and
| MDJ |
Respondent
REASONS FOR JUDGMENT
Preliminary
This is an ex tempore judgment.
On 28 November 2002 the wife filed an application seeking that earlier final orders made as to property settlement between the parties be set aside pursuant to section 79A of the Family Law Act 1975 (“the Act”). In substitution thereof she sought orders as contained in her application. Upon the hearing commencing she sought only order number 2 of those orders namely that she retain for her own use and benefit the VW Golf motor vehicle registration number R. Otherwise she sought each party retain those assets, entitlements and debts currently in their respective possession and sought also certain indemnities. The wife relied upon her affidavit as to evidence-in-chief sworn on 12 November 2003 and filed 17 November; her financial statement sworn and filed 8 January 2004; and an affidavit as to the value of her VW motor vehicle by valuer Mr DN sworn
6 January 2004 and filed 8 January 2004.
There was no opposition by the husband to the wife seeking to set aside the earlier orders. The husband in his response impliedly and in court at the commencement of the proceedings expressly, consented to an order to set aside the earlier orders entered into between the parties on the 4th day of October 2002.
The evidence contained in Mr N's affidavit is unchallenged by the husband. Mr N is a motor vehicle valuer who provided a valuation of the Volkswagen Golf Cabriolet as at 6 January 2003 at $20,000. The parties urged me to adopt this as the value of the asset presently.
The husband relied upon his response filed 11 November 2003 and financial statement filed 14 January 2004. His affidavit as to evidence‑in‑chief was sworn and, with leave, filed at the commencement of the proceedings.
History of proceedings
The earlier final orders were made by consent before Registrar Riddiford on 4 October 2002 in the Federal Magistrates Court at Melbourne. Whilst both parties now agree that those orders should be set aside the wife has however already complied with order number 1 of those orders which was that she pay to the husband the sum of $10,000 on or before 7 October 2002. I shall return to this matter later in these reasons. The balance of those orders provided for the husband to incorporate a company known as VWM Pty Ltd and to arrange for
5 per cent of the equity to be issued in the name of the wife. In addition, before 30 June 2003 the husband was to contribute the sum of $5000 to a superannuation fund in the name of the wife for her benefit. The wife was to, in addition to the payment to the husband of $10,000, take all necessary steps to sell her VW motor vehicle on terms determined by the husband and the sale proceeds were to be paid to him. Following the sale and payment of the proceeds, the husband was to take all necessary steps to facilitate the lease of a motor vehicle up to a retail price of $35,000 for the sole use and benefit of the wife and he was thereafter to pay out any residual of that lease.
I am satisfied, for the reasons hereafter stated, that it is doubtful that the husband had any intention of satisfying his obligations under those orders, both at the time of making them and at all relevant times thereafter.
On the 9th day of December 2002 these proceedings first came before the court. The husband appeared in person and at his request the matter was adjourned to 16 December 2002. Both parties were restrained from dealing with the Volkswagen motor vehicle. The costs of that day were reserved by the presiding Federal Magistrate. On the 16th day of December 2002 when the matter next came before the court, the husband and wife's costs were reserved. The husband was to file and serve a response and affidavit by 17 January 2003. In the intervening period the husband had taken, without the wife's consent, her Volkswagen motor vehicle and he was ordered to return it that day and until further order was restrained from taking possession of or interfering with the motor vehicle. The matter was listed for a final hearing on 28 July 2003. The husband failed to comply with the order as to the filing of his documents.
On 28 July 2003 Phipps FM gave further time to the husband to file a form 3A response. He was, prior to 18 August 2003, to produce for inspection to the wife's solicitors all relevant documents. The wife was to file and serve an affidavit of evidence-in-chief by 1 September, the husband by 15 September and the matter was listed for a final hearing on 7 January 2004 with costs again being reserved.
The matter then came before the court on 21 October 2003 being a hearing in chambers. The orders made were occasioned pursuant to liberty to apply by way of telephone mention, the matter at that point having been listed for 7 January 2004 but the husband still having failed to comply with earlier orders of the court. As at that date the husband had failed to file a form 3A response. This was a document which had been anticipated since December of the previous year. He had failed to file an affidavit of evidence-in-chief. He had failed to make available for the inspection of the wife and her solicitors all relevant documents.
Phipps FM on that day made orders of a firm nature. He granted the husband yet again time to comply with the earlier orders extending the time for compliance to 11 November 2003. He further extended both the husband and wife's time to file affidavits of evidence-in-chief, the husband to have filed his by 25 November 2003. In order number 4 Phipps FM provided that if the husband failed to comply with paragraphs 1 and 2 of the order of 28 July 2003 as extended by paragraph 1 of his order of 21 October 2003, the husband not be permitted to file any further documents and not be permitted to defend the wife's application other than by cross-examination of the wife and her witnesses and by making submissions. He likewise provided a similar order with respect to the husband's compliance with paragraphs 1 and 2 of the order of 28 July as extended by paragraph 1 but in the instance where the husband had failed to comply with the filing of his affidavit of evidence-in-chief. A costs order was made against the husband on that day fixed in the sum of $750. The husband was to pay it by 18 November and if the husband failed to comply with that order, again he was not permitted to defend the wife's application other than by cross-examination of the wife, her witnesses and by making submissions.
The husband filed a response. The husband filed an affidavit of evidence-in-chief by the due date but I am satisfied that he did not serve that document upon the solicitor for the wife. That document is on the court file. On 14 January 2004 (for the first time) the solicitors for the wife saw that filed document. The husband in opening no longer sought to rely on that document. I accept the submissions made by counsel for the wife that it was not the husband's intention to ever rely on that document. He realised the draconian nature of the orders made on 21 October 2003. He filed a brief and totally inadequate affidavit of evidence-in-chief by 25 November 2003. He did intend to elaborate upon it and did so, forwarding to the solicitor for the wife an unsealed, unsworn copy of a further affidavit which he indicated he would seek the leave of the court to rely upon at the commencement of the proceedings.
The solicitors for the wife indicated that they had difficulty in consenting to the course proposed by the husband, and the husband arranged for a telephone mention of the matter before me in the days leading up to trial indicating his desired course of filing a further affidavit as to his evidence-in-chief. Even at that time that document remained unsworn by him. It was in fact only sworn on the morning of the hearing.
The earlier orders of 28 July 2003 had required the husband to provide to the solicitors for the wife all relevant documents in the proceedings. I find the husband failed to provide for inspection of all relevant documents. He produced odd pages of documents in the running of the trial. He claimed to have made available for inspection a number of documents for the other side but not all of the documents on which he sought to rely. He did not provide all relevant documents at any stage. I am satisfied that he was able, had he so desired, to obtain any necessary documents for this trial.
The husband is a litigant in person. The parties desired to set aside the earlier orders hence I determined that so long as counsel for the wife was given an opportunity to obtain instructions from his client, I would allow the husband to file an affidavit of evidence-in-chief on the morning of the hearing together with a financial statement so that the matter could be properly dealt with. I indicated that a costs order might flow because of the husband’s conduct and that his conduct had caused the case to run for a second day.
The husband sought by way of final orders those orders as set out in his response filed 11 November 2003. He sought that the property of the parties be divided as to 70 per cent to the husband and 30 per cent to the wife; that he retain ownership and possession of the Golf motor vehicle; that each of them retain their superannuation and related employee entitlements; that the wife return to the husband his chattels, wine collection, items of art and other personal effects; that the wife be responsible for repayment to the ANZ and National Australia Banks of all moneys withdrawn by her by way of cash advance from those credit card accounts on 15 February 2002; and that the wife contribute one half of all outstanding debts of the parties or either of them accumulated during the relationship, together with assessed personal tax liabilities and all liabilities associated with the company NRS Pty Ltd.
Consideration
The parties commenced their cohabitation in December 1992. They married on the 4th day of November 1996 and they separated in February 2002. They cohabited for a period of approximately nine and a half years, although there was a period of some 13 months when they lived in different States, the husband living in the State of Victoria and the wife in the State of Adelaide. They were not separated at that time and endeavoured to arrange their finances mutually before again residing together in the State of Victoria at the end of 2001 until separation. There are no children of their relationship.
Currently the wife works as a consultant with E. Her income is $961 a week or $49,972 gross per annum. She resides in rental accommodation and has minimal assets. In the main, they are comprised of her ownership of the VW motor vehicle; her superannuation which is modest being approximately $14,512; and her liabilities as stated in her statement of financial circumstances in the sum of $17,500. The husband is unemployed. He receives $200 each week by way of unemployment benefit and resides in rental accommodation. He has minimum assets to which he deposes and superannuation entitlements of approximately $25,000. He claims liabilities of $96,700 in his statement of financial circumstances.
I find the asset pool of the parties comprised the following:
a)The net proceeds of sale of the former matrimonial home in South Australia paid to each of the husband and wife: $25,000 (total $50,000);
b)the Golf motor vehicle currently registered in the wife's name and in her possession:
value $20,000;
c)the wife's Telstra shareholding:
value $4,800;
d)moneys paid by the wife to the husband pursuant to the October 2002 orders:
$10,000;
e)cash advance retained by the wife:
$10,000;
f)ANZ E*Trade account retained by the husband:
approximately $41,000;
g)joint account accessed solely by the husband:
amount unknown;
h)husband's taxation refund:
$13,500;
i)CBA shares allegedly sold by the husband:
$3,300;
j)Brighton Cement shares allegedly sold by the husband:
$13,000;
k)wife's superannuation entitlements:
approximately $12,700;
l)husband's superannuation entitlements:
approximately $25,000;
m)cash advance received by the husband on his superannuation entitlements:
$10,000.
I find the liabilities of the parties is as follows:
a)credit cards of husband by two:
$26,364.50 in total;
b)other sundry debt of husband:
$8,000 approximately.
TOTAL:$34,364.
Other liabilities alleged by the husband
In addition to the above liabilities, the husband gave evidence that there is currently outstanding an amount to TT of $2,967.88; an amount to DP of $440; an amount to R Management of $152.35; and an amount to JPR of $6,684.66. In relation to these debts, I note that the sum of $8000 included above as other sundry debts included the JPR. The racing debt was included by the husband in his 2002 financial documents. I am satisfied that the wife did not have any interest in the acquisition of the racehorse, nor was she interested in the ongoing maintenance and costs associated with the ownership of a racehorse. Despite her lack of interest and lack of desire to purchase an interest in a racehorse, the husband proceeded with this purchase and now seeks reimbursement from the wife. He has failed to provide her with any proof of this alleged debt nor any means by which she could be satisfied as to its quantification. Given the husband's conduct in the preparation of the matter, his demeanour and evidence given in the witness box I find he is not a witness of credit. It is difficult to ascertain what precisely, if any, debt would be owing. However, for the purposes of these proceedings, I have included that amount in the liabilities of the parties for present purposes as inclusion does not alter the outcome.
A debt to TT of $2,967.88 I find is not a debt of the parties. The husband provided no documentary evidence concerning same to the court. The husband has never provided any to the wife. The husband did not previously note this as a liability in the proceedings in 2002. The husband's evidence is that he received a letter of demand in relation to this money in early 2003 but that he has had no further communications from the real estate agency. The wife does not accept any liability owed by her to that agency and she has not been approached by the agency for payment of any outstanding account.
I do not accept that this debt is owing and is a debt capable of enforcement on the evidence that I have before me. Further, the husband provides no documentary proof of “DP” or “RM” debts as alleged by him. They are unknown to the wife and were not referred to in 2002 in any of the husband’s material. I do not accept the sums claimed by the husband to be liabilities of the wife.
The husband described company debt in relation to NRS Pty Ltd of which he is the sole director. The wife resigned her directorship in May 2002. She has never had any effective control of this company. She has never been involved in its daily operations. It is a company which is solely the creature of the husband. The husband has in his statement of financial circumstances listed a number of company debts. Those debts, he conceded, relate to the period post the parties' separation save for the Telstra debts that total approximately $2,200. The husband has made no requests of the wife in relation to payment of these amounts. He has provided her with no appropriate documentary information which indicates a debt is owing; for what period; nor that it is a debt reasonably anticipated that should be met by her. However again, even were I to include the Telstra debts as liabilities of the parties, it would not change the outcome of these proceedings.
With respect to any tax liability of the company, the husband put at the commencement of the trial "to be advised". He had no idea as to whether there were any, and if so what, taxation debt owed by the company. He alleged that he had a personal taxation debt of approximately $24,700 but failed to provide prior to the proceedings or during the currency of the proceedings any documentary evidence pertaining to this liability. He was asked to produce tax returns; he failed to do so. He was asked to produce documents which might go some way to clarifying if he indeed had any liability and how it accrued - he failed to provide such documents. The wife is unaware of any activities of the husband which would have resulted in such a liability during the period the parties were together. It is unclear for what precise period the husband says he accrued any personal and/or company taxation liability. The husband comes to court with no documents and otherwise provides no probative evidence supportive of his claims. He is vague when asked about those claims and not a witness of credit on this issue.
Other matters
The husband provided only financial records that suited his purpose in the running of the proceedings. A single page out of the joint bank account was provided indicating a redundancy payment which he received, having been placed in that account, of approximately $41,000 in July 2001. He provided one page of the E*Trade account with no subsequent nor preceding statements. Both the joint account and the E*Trade account were highly relevant documents. The husband's lack of provision of relevant documents and the husband's demeanour in the witness box and conflicting answers to various matters asked of him made it impossible to precisely define the asset pool. What moneys were in the joint account which he controlled and used at the time of separation and the history of that account is completely unknown to the court.
I accept that the husband made a threat to the wife to deny receipt by him of the payment of $10,000 by her. He conceded this in evidence saying the threat was as a result of extreme frustration on his part. I am satisfied that the husband's behaviour toward the wife has been vengeful. He has caused the wife to incur substantial legal costs; the proceedings to be considerably delayed; and occasioned to the wife ongoing litigation which has been stressful and economically disadvantageous to her. Part of his actions were resultant upon the wife calling an end to the marriage.
The wife has had throughout a diligent practitioner. The orders initially sought by the wife were no less than that to which she is entitled. I accept that she has now adopted a pragmatic approach to her application. I accept that she has been harassed by the husband in the manner described in her affidavit material which was unchallenged by the husband. I do not believe that the property orders which I shall make necessarily achieve justice and equity between the parties but I accept there is justice and equity in concluding proceedings that are onerous to the wife and economically disadvantage her. Justice and equity can also only be considered in relation to the asset pool available which is now extremely limited.
Contribution and section 75(2) factors
I am satisfied that at the commencement of the parties' cohabitation:
a)the wife had an amount of $5,000 cash. She had a motor vehicle and a HECS debt in an amount unknown to me. That HECS debt was paid off over a lengthy period of time. The husband traded in the motor vehicle for $733 upon the purchase of another vehicle at a cost of approximately $18,000 some two months before the parties commenced their cohabitation;
b)the husband had superannuation entitlements of approximately $12,000. His affidavit evidence put that entitlement at $20,000 which was simply untrue. I accept that the husband might have had $18,000 approximately by way of property settlement from his former wife. In documents sworn by him on 14 January 2004 he asserted that those funds were applied toward the deposit of the parties' first home. In evidence given on the following day, he asserted that those funds were applied toward the purchase of the new vehicle which was purchased with the trade-in moneys received from the wife's old vehicle and his other funds. I accept this latter evidence because the evidence then given by him was that the parties worked and saved and such savings were applied by them to the deposit on their first home. This accorded with the wife’s evidence and I accept that evidence.
The husband's contribution at the commencement of the cohabitation period was thus in excess of that of the wife. He acquired a car with that extra contribution. That car was subsequently sold and leased vehicles were driven by the parties throughout the major part of their cohabitation period. I do not, at the time of trial, give any percentage adjustment to the husband for this contribution.
Both parties whilst they were married worked hard and both parties contributed to the marriage. The parties relocated to South Australia because the husband had an advancement in his employment. I find that the wife performed the majority of household chores during that period of time in South Australia and that she also worked full-time. She applied all of her efforts and all of her moneys to the benefit of the family. The husband worked hard and applied his earnings generally to the marriage. I do not give any percentage adjustment to the wife for her as I find it, greater contribution as homemaker.
Any order which this court makes will not affect the earning capacity of either party to the marriage. The husband is presently on unemployment benefits. There is nothing before me to suggest that he could not be gainfully employed. He is of an age that one would expect him to be gainfully employed. He has no dependant children. There was before me no obvious reason why he is not in receipt of income save he gave evidence that he was suffering from depression and on medication. There is no medical evidence before me and his affidavit sworn at the commencement of the proceedings contained no reference to any ill health from which he may be suffering. I find that each of the parties are capable of being gainfully employed; that neither need to support the other and that each of them are not otherwise precluded from being gainfully employed.
The court pursuant to section 79(2) of the Act must not make an order under section 79 unless it is satisfied that in all the circumstances it is just and equitable to make the order. As I have indicated, I accept that the wife's approach to the resolution of these proceedings is a pragmatic one and I accept that part of justice and equity in all the circumstances is enabling parties to get on with their lives.
The husband since July 2001 has had available to him in a joint account $41,000 by way of his redundancy funds; $4,000 placed into that account in late 2001 and the balance of sale of the net proceeds of the home which I find to be $25,000. The husband sought late in the day on the second day of the trial to suggest that he had not received $25,000. The wife's evidence was previously unchallenged. The husband then indicated that he did not know the amount he had received from the sale but that the intention of the parties was that there would be an equal distribution. I am satisfied there was an equal distribution of the net proceeds as between the parties and I accept the evidence of the wife that the sum was $25,000.
The husband received from the wife $10,000 pursuant to the orders of October 2002. He received a taxation return late in 2001 of $13,500. He sold Cement shares and received $13,000 and CBA shares and received $3,300. Thus the husband had available to him from July 2001 through to the end of 2002 an amount of $84,800 together with the $25,000 proceeds of sale. Despite having available to him $109,800 the husband gave evidence that he determined he would not pay out the credit card debt and nor would he service any part of the credit card debt with those funds. Instead he sought to make the wife responsible for the interest that had accrued on the cash advances made by her at around the time of separation. I am satisfied that the husband has had available to him funds from time to time in which he could have retired the credit card debt in its entirety but that he declined to do so and to this day continues to decline to do so.
When the husband was made redundant in his employment in A, he was then unemployed for a period of time before returning to pursue employment in Melbourne. I accept that upon his return to Melbourne he obtained employment in differing jobs but that that employment and his own endeavours to set up a business did not engage him in employment long term. The wife has throughout always been employed until her return to Melbourne and she has applied her funds to the support of herself and the expenses of herself and her husband and some expenses of her husband in that period of time.
The overall apportionment of property in these proceedings by allowing the wife to retain the property in her possession and the husband that in his possession together with the known liabilities which each of them have provides a result which gives the husband a greater than 50 per cent share of the asset pool. In my view, this is a case that does not warrant the husband receiving a greater than
50 per cent share of the asset pool. However as I have said, I accept that the wife has adopted a pragmatic approach and propose to accede to her application. There is justice and equity in the making of orders sought by the wife which end the cost of litigation which is a cost for which she shall not be reimbursed by the husband to any sufficient degree.
Costs
I have determined that a costs order as calculated in accordance with Schedule 1 of the Federal Magistrates Court Rules 2001 should be made and I have calculated that sum as $8,647.50. I am mindful of section 117(2A)(b) of the Family Law Act 1975. The amount claimed by the wife in respect of her costs was $23,800. The amount of $8647.50 awarded is calculated on the wife paying her costs for one day of this hearing and the husband paying for the second day as a result of his conduct in failing to provide documentary material at a far earlier time or at all and because of his filing of material yesterday morning and earlier non-compliance with court orders. In addition to the $3412.50, the additional amount to total $8647.50 is my apportionment of that part of the wife's costs which I determine the husband should pay and which takes into account his financial position including his current state of unemployment.
Otherwise the matter is concluded.
I, Sophie Killen, certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of Hartnett FM
Associate: Sophie Killen
Date: 23 March 2004
0
0
0