Mighell and Field
[2011] FMCAfam 591
•21 June 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MIGHELL & FIELD | [2011] FMCAfam 591 |
| FAMILY LAW – Property dispute – ten year marriage but lengthy period before proceedings started in Australia – major proceedings in Mexico – enormous child support debt – disputes over value of property in Mexico. |
| Family Law Act 1975, s.75(2) |
| Oqilvie v Adams [1981] VR 1041 Pierce & Pierce (1999) FLC 92-844 In the marriage of Mallett (1984) 156 CLR 605 |
| Applicant: | MR MIGHELL |
| Respondent: | MS FIELD |
| File Number: | MLC 1145 of 2010 |
| Judgment of: | Burchardt FM |
| Hearing dates: | 4, 5 & 6 April and 16 May 2011 |
| Date of Last Submission: | 16 May 2011 |
| Delivered at: | Melbourne |
| Delivered on: | 21 June 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr A. Crozier-Durham |
| Solicitors for the Applicant: | Harding & Co Lawyers |
| Counsel for the Respondent: | Mr Finkelstein (4, 5 & 6 April 2011) and the Respondent in person on 16 May 2011 |
| Solicitors for the Respondent: | FLA Partners |
ORDERS
The proceeding be adjourned for mention on 21 September 2011 at 9.30 am.
The respondent do all acts and things necessary to sell the property owned by the parties at [C] in Mexico (“the Mexican property”) as soon as practicable.
The applicant do all acts and things that may be required to enable the respondent to sell the Mexican property.
The applicant’s solicitors prepare and forward to the Court draft orders to effect a division of the husband’s superannuation with the outcome that the wife receive $32,000 in her nominated superannuation account, with the trustee to be given appropriate notice of the proposed splitting order.
The applicant pay the respondent $20,000 in part property settlement within 90 days of these orders.
Save as ordered above each party retain to the exclusion of the other all chattels presently in their possession and each party retain to their sole benefit any superannuation held on trust for them in any superannuation fund.
IT IS NOTED that publication of this judgment under the pseudonym Mighell & Field is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 1145 of 2010
| MR MIGHELL |
Applicant
And
| MS FIELD |
Respondent
REASONS FOR JUDGMENT
Introductory
This is a property dispute. In addition to the usual prevailing difficulties as to proof, it is further complicated by the fact that the parties spent half the time they lived together in Mexico, where they still own a property. A number of matters about that property and some interrelated Court proceedings in Mexico remain far from clear.
Although the parties are now divorced, they were not so when the proceeding commenced and it is convenient to refer to them still as husband and wife.
The applicant husband seeks that he be the sole owner of a property in [B] with a value of $1,250,000 encumbered by a mortgage of $150,000. He seeks that the wife retain as sole owner a property in [C] in Mexico worth $300,000 (on his valuation – the wife asserts $115,710 – see wife’s affidavit filed 22 March 2011 at paragraph 3.2), that additionally he pay her $110,000, and that there be a superannuation split amounting to half of the sums that accrued during the period of the relationship.
The wife’s position has changed from time to time but what was finally articulated in the Court was, I think, a 60/40 split in her favour, with the property at [B] to be sold and she to reside in it until sale. She further seeks that the husband be required to take the necessary steps to sell the property in Mexico and be compelled also to pay outstanding child support debt owing, pursuant to a Mexican Court decision, in the sum of approximately $385,000.
I have left aside, and will continue largely to do so, relatively minor inconsequential issues to do with the parties’ cars and chattels.
It is not possible in this case to embark upon any consideration of the four stage methodology generally applied to family law property disputes without a detailed recitation of the facts, many of which are in considerable dispute.
Interim ruling in relation to the wife’s application in a case
On 16 May 2011 the wife, who had ceased be legally represented, sought to file an application in a case and an affidavit at the commencement of the day’s proceedings. I refused her leave to do so. I did not give any detailed Reasons at the time.
What the wife sought was the provision by the husband of an enormous amount of documentation together with compelling him to supply an affidavit and that various third parties provide documentation on a wide-ranging basis also.
The affidavit in support sworn on 12 May 2011 raises a number of complaints about non-disclosure on the part of the husband and a variety of those go to support the difficulty she has had preparing her case and thus the necessity for the orders she sought.
It is readily apparent, as I think I pointed out to the wife at the time, that to proceed in this way would be to abort the trial and send everything back to start all over again. Given that the applicant husband had already been cross-examined (and in my view very competently so) and that the applicant husband’s case had in effect already closed, it was in my view wholly inappropriate to permit the wife to proceed to file her application in a case and affidavit. It was of course open to her to cross-examine the husband as to the matters about which she complained and she did so, at least in relation to those matters which related to him directly.
Any possible prejudice to the wife was in my view wholly outweighed by the speculative nature of many of the matters the wife sought to agitate, the inevitable and very considerable delay in the proceeding which was already more than half completed and, making every allowance one could, the very late nature of the application. It was an application that could and should have been made while the wife was legally represented.
Accordingly, I did not permit the wife to file the application in a case and affidavit (the filing was strongly resisted by the husband) but I have caused the documents to remain on the Court file lest in any subsequent proceedings there is any issue as to which documents it was that I excluded.
The Facts
The husband is Australian. He was born [in] 1956 and is therefore
54 years old. He now has Mexican citizenship. The wife was born [in] 1958 and is therefore now 52 years old. She has only recently obtained Australian permanent residence.
The parties appear to have met in about September 1990 when the wife was in Australia on what was either a holiday or a preliminary investigation of taking up a master’s degree at [university omitted], or possibly a mixture of both. They married in Mexico [in] 1991, returning to Australia in February 1991.
Their elder son, [X], was born [in] 1991 in Melbourne, and he was followed by [Y], born [in] 1993.
The parties remained living in Australia until about October 1996 when the entire family returned to live in Mexico. There was considerable debate before me as to what their financial position had been during those years.
What is not substantially disputed is that the husband had bought an apartment in Sydney in 1987 for $70,000 and even before that, a house in [S], Melbourne in 1984 for about $104,000. That latter property was the subject of a $35,000 mortgage and a loan from the husband’s mother, which was repaid.
It has become apparent during the course of the proceedings that at the time of the commencement of the relationship, the husband had a total of some $86,000 in savings. The wife’s savings were the subject of the dispute.
The wife said that she brought sums in bank accounts in Florida in US dollars into the relationship. Her account of the amounts seems to me to vary from time to time, but was put in the main as being one account with $40,000 and another account with $10,000. In final submissions, this figure increased to some $60,000 - $65,000 without any explanation. The wife’s evidence in this regard was not supported by any documentation.
The husband only acknowledged a total of US$17,000 in the wife’s bank account at the start of the relationship, and pointed to the fact that there were no financial records to support the figures asserted by the wife.
It should be noted in parenthesis that the husband is certainly an avid hoarder of documents. It appears that he has his MasterCard records going back to 1991 and numerous other documents of similar antiquity. While I accept that he may well have boxed up all his records when he went to Mexico in 1996 (although whether there was a necessity to do so would seem open to question), the fact that he brought them all back to Australia when he left Mexico in 2009 shows a definite tendency to hoarding as I have said.
In my view, it is not in any way surprising that the wife is not able to produce bank records going back to 1991 and I draw no adverse inference against her as a result. Although a number of areas of the wife’s evidence were very unsatisfactory, she has consistently asserted an amount of some US$50,000, and I am prepared to accept that that is the case. On any view, and even if the figure was US$17,000 as the husband asserts, the fact is the wife made some sort of significant financial contribution at the commencement of the relationship.
One area where the wife’s evidence was unsatisfactory was her alleged contribution to the finances of the parties during their period in Australia until 1996. In her affidavit material, she referred to having a scholarship. This in fact proved to be completely incorrect. She received a family allowance in small amounts and she had to pay a HECS debt, but it is quite clear that she did not at any stage have a scholarship as she asserted.
Although I do not have valuations of the husband’s two properties as at the date of the marriage in January 1991, it is common cause (or at least not seriously challenged) that the [S] property was sold for some $267,500 in November 1992. The [B], Melbourne property was bought for $277,000 with a mortgage of $40,000, and some $25,000 was spent on renovations.
It is clear that the husband was a successful businessman during the 1991 to 1996 period. In one year, he made an income of over $140,000. He also maintained that he was very significantly involved with the children and inferred that he was at least as much so during this period as the wife, who of course had to attend to her studies.
I do not accept this aspect of the husband’s evidence. The fact is that the mother was breastfeeding and bringing up these two very young children and I accept that she worked at [omitted], albeit that it is clear that her income was small. I accept that by and large her income went to child support when she was attending her studies. The wife’s evidence that the husband worked long hours is consistent with the large earnings he made, and I find that the mother was the primary carer of the children during these early years, albeit that the father plainly had some measure of involvement.
Once the mother’s qualifications were completed at [university omitted], she discussed returning to Mexico with the husband. They both agreed to go. It was agreed that the wife would set up a business using her qualifications and it was plainly contemplated that she would be the primary earner. The husband said he fully agreed with this as he wished to become the primary carer of the children. One cannot avoid the obvious conclusion that the prospect of living in Mexico must have had some measure of attraction for the husband, for whatever reason.
The parties returned to Mexico and the wife set up her business, which I shall describe as [L]. The evidence about the operation of this company is by no means totally clear. The wife did say that it was at least in the initial years very successful. Her evidence of obtaining a large contract with a [omitted], moreover, had the ring of truth to it. It was not clear, however, quite how many people were employed although it does appear that the wife’s mother acted as some sort of administrator and/or accountant for the business, which was said to employ several people. The wife said that the company had offices in one of the nicest parts of Mexico City, and had to be doing reasonably well to support the rent and associated outgoings.
While the parties were in Mexico, the [B] property was rented out. Once the mortgage payments were made, there was always some measure of surplus. It was the husband’s case that these funds were remitted to Mexico and in large part constituted the moneys whereby the parties were able to live.
The wife’s position was that these funds were never seen by her, that she never had any control over them at all, and that indeed she accused the husband of abstracting them to his own use.
What is clear is that the parties bought the property in [C] in the latter part of 1999. Even the purchase price of the property was in issue. At transcript P27, it was the husband’s evidence that the purchase price was just under 1.7 million pesos. It was his evidence (see husband’s affidavit filed 30 August 2010, paragraph 14) that the Sydney apartment was sold for $204,000, and the [C] property bought for about $180,000 (about 1.7 million pesos). His evidence was that the purchase price was funded from the proceeds of the sale of the Sydney apartment and a $15,000 loan from his mother, who also paid $14,200 for the capital gains tax on the sale of the Sydney apartment. Likewise, the husband deposed that the Sydney apartment had a GIO loan facility of up to a maximum of $150,000 which was then upon sale transferred to the [B] property. It was his case that the loan facility was drawn on from time to time to enable the parties to live in Mexico.
Exhibit R7 is said to be the contract for sale of the [C] property and it bears a date (in Spanish) which I would take to be 22 August 1999. An alleged translation of the relevant part on pages 6 and 7 purports to show that “the price of this operation is the amount of 985,500 pesos”.
This difference was sought to be explained by counsel for the husband as being a deliberate understatement to avoid tax. I was not able to admit that assertion made as it was without evidence in final submissions. Nonetheless, in my view, it does not really matter very much what the purchase price of the Mexican property was.
It was the wife’s case that the Mexican property was essentially funded by payments from her business (see the wife’s affidavit filed
15 October 2010, at paragraph 12). Given the contemporaneous nature of the sale of the Sydney property and the purchase of the Mexican one, it is in my view far more probable than otherwise that the Mexican property was, predominantly at least, funded out of the funds from the sale of the Sydney property.
It should be noted that the exchange rate at the time of the purchase, according to x-rates.com, was 16 pesos to A$1. Thus, the purchase price at that time would have been around about $100,000. It is not clear, therefore, why there would have been need for a mortgage. A net sale price in Sydney in excess of $200,000 would comfortably have covered either version of the cost of the Mexican property, whether it be the higher one asserted by the husband or the lower one asserted by the wife. As with a number of aspects of the evidence in this case, this aspect of the matter is simply not capable of being the subject of any kind of concluded decision. The only thing one can say is that the purchase price of the Mexican property, to the extent that it was made as a direct purchase must have come from the Sydney property and been facilitated by the two loans from the grandmother.
Much of the argument between the parties during the hearing concerned the extent to which moneys were transferred from Australia to Mexico and what happened to them when they arrived. It is clear from the numerous bank documents I have been provided with that the parties had a joint account in Mexico which both could access and that the wife’s account in her own name was also capable of being accessed by the husband.
It was the husband’s case that the financial records showed beyond doubt the transfers to which he referred, and it was the wife’s case that that might or might not be the case, but she had no knowledge of any such transfers in any event. Indeed, she went so far as to say that she was simply unaware at the time of the sale of the Sydney apartment, although it does appear that in the ultimate she accepts that it was sold.
The position of the parties as to who paid what while they were in Mexico could not have been more starkly contrasted. The wife said that her business was at least for a period of time exceptionally successful and that this funded the lifestyle that they had in Mexico, including the purchase of the property. Countervailingly, however, she asserted that the husband handled all the finances and she had really in effect very little knowledge of what was happening. This assertion, as it is immediately apparent, sits very uneasily with her thesis that she was a successful businesswoman.
The husband’s case was that the business earned but little, albeit that he once again inconsistently asserted that he was paid a wage for doing some [omitted] work. The evidence as to whether he was, so to speak, on the books as an employee for income-splitting purposes was by no means clear but I note that in a contemporaneous document, exhibit A7, sent by the husband to the wife on 8 January 2002, he asserted, inter alia:
“1. I was not paid my salary in December by [L].
2. I was notified on 22 December that i was fired, with no Xmas bonus or termination package.
3. Remember my salary was $7000 per month - which not even covered the school fees and the maid - there was no other income.
4. Despite this I paid one school fee in cash in December and used my australian credit card for the other.
5. The credit card will be due to be paid in January the school fees was about $3000 pesos – about $600AUS - also, I have used the credit card often since December to cover food expenses etc as I had no other income as you know.”
Accepting, as I do, that the husband has a tendency to self-serving correspondence, nonetheless, that document does strongly suggest that the husband was being paid a regular wage. I would say that I think it is more probable than otherwise that the $7,000 figure, in the context of the document as a whole, really meant 7,000 pesos salary on a monthly basis. That seems more consistent with the figures in this case generally.
If the business was making enough to pay the husband a wage, it was obviously doing better than he had suggested it otherwise might have been.
In the end, the difficulty with all the numerous documents provided to the Court about money transfers and the like is that they are not conclusive. I accept that net rental received from the [B] property was transferred to Mexico and applied to the parties’ living costs. It is only conformable with common sense that this was the case.
I also accept, because the MasterCard records appear to support this, that the Australian credit card of the husband was used from time to time for the same purpose, and it is probable that some drawdowns were made on the GIO account also. The difficulty, however, is that that does not mean that the business of the wife was not making a decent amount of money. There is no detailed evidence before me as to the costs of living engendered by the parties in Mexico, other than the school fees to which reference has been made in paragraph 39.
In evidence before the Court, the husband, whom it appears paid the school fees, said that private school fees in Mexico were of the order of school fees in Australia. From that I would infer that the Mexican school fees (for the two children) must have amounted to something of the order in total being in excess of A$20,000 per year. That would comfortably have taken up the net rental and the husband’s wage, and possibly would have necessitated a drawdown.
As I say, the wife denied any detailed knowledge of the household budget and her evidence was consistent with her having applied her energies diligently in Mexico to the expansion of her business.
As to exactly who contributed how much in Mexico, this is another area in which it is not, in my view, possible to arrive at a satisfactory and definite conclusion. Once again, I can only say that the husband’s evidence appears to be supported by documentation and that in my view it is more probable than otherwise that at least for some period after the return to Mexico in late 1996 until around about 2000, the wife must have contributed significantly through her business.
Unfortunately, after moving into the [C] home in 1999 things went downhill for the parties in their relationship fairly quickly. It appears that by late 2001, the wife became aware in some fashion that the husband was moving to establish what she regarded as a competor business with hers. As explained by exhibit A7, the husband’s employment with [L] was brought to an end and he was, in effect, kicked out of the matrimonial home shortly thereafter.
The husband’s evidence was that he was thus reduced to dire straits. It was not, according to him, lawful for him to be in employment in Mexico and he had of course lost his salary (these two assertions of course are mutually inconsistent). He still of course had available to him the net rental from the [B] property and presumably a capacity to drawdown on the mortgage facility with GIO. It is not clear that these would have been removed from him in any way. His mother also held the wife’s enduring Power of Attorney in Australia should there have been any other difficulties.
It is, however, clear that by April 2002, the husband was in touch with Mr M, who was a good client of [L]. Exhibit A5 is a reply from Mr M to the husband dated 9 April 2002 in which, amongst other things, he states, “What would the new price be? What would I have to do? I would seriously consider changing to you. Not that I have anything against [Ms Field]; I like her, but I always felt you were the one doing [work omitted].”
In oral evidence on 6 April 2011, having tendered exhibit A5, the husband was asked:
“And had you been communicating with Mr M before that? - - Yes, and I imagine a month before, okay, I would have approached him and said, “Would there be a chance you would like to move over to me?”
Despite his denials, it seems clear that the husband must have been moving to set up the business he now operates, [A]. The wife sacked him from her company and cut off his income of some $500 per month. It is not probable that she did so as a matter of caprice. Somehow or other, she must have discovered some of the steps that the husband was taking to compete. Separation took place in March 2002 and it is clear that by or about then, the husband was actively seeking to suborn one of the wife’s biggest clients away from her.
Indeed, it appears that the husband continues to receive income from Mexico. In his oral evidence he said that his income this year is likely to be in the order of $50,000. It was never made clear whether all of this is generated in this country but seeing that he left Mexico as recently as October 2009, it seems more probable to me than otherwise that he still has business over there.
The wife’s evidence is that her business had effectively become extremely unprofitable by 2005 or thereabouts. That this is so arose in part, according to her, because of the legal onslaught that has affected the parties in Mexico since 2003.
The husband applied for divorce in Mexico in 2003, but it appears that the parties rapidly got embroiled in what would in Australia be called child support proceedings. According to the wife, the husband made numerous applications to Mexican Courts seeking to deny or evade his obligation to support her and the children. What is clear is that the net result of that is that the husband has been ordered to pay an amount of some $385,000 to the wife, together with ongoing payments until the children turn 25, which I gather from the evidence of both parties is consistent with the law of Mexico.
The father complains bitterly of the mother’s conduct in the child support proceedings in Mexico. He says that he had the children about 40 per cent of the time in any event, a matter he asserts was not made clear to the Mexican Court. He also asserts that the Court assessed child support for him on the basis of his gross earnings in Mexico, rather than his net earnings after expenses. He also asserts in effect that the wife perjured herself by denying, on oath, that he had ever been an employee of her company and indeed by denying that she was herself a director or person with an interest in the company.
It is said by the husband, and it does seem clear on the materials that are exhibited, that the husband is in the process of appealing the final orders of the Court in Mexico, but it is not known when that will be heard or determined.
Some observations about the witnesses and the evidence as a whole
The above relatively extensive recitation does not for one instant canvass each and every matter raised by the parties. The intensity of their positions is well-illustrated by the determination of the husband to file exhibit A12, being a contract for the purchase of a car in Australia for $19,066 entered into in May 1991. The car is, I would assume, long gone. It is of no relevance whatever, save to show that the parties had that possession at that time. Numerous other issues which are now in my view sufficiently historical to be of no moment were also raised, such as the assertion by the husband that he forwarded some $4,800 to the wife’s mother in Mexico relatively early in the relationship. These are just examples.
In circumstances where we are looking at contributions that go back in the main to 1991 and where separation itself occurred nine years ago, these matters are in my view correctly viewed as irrelevant minutiae.
This conclusion is all the more fortified by the inadequacy of the evidence presented by both the primary parties.
The husband was by no means an impressive witness. An examination of the transcript shows that he had a very pronounced tendency to answer even relatively straightforward questions indirectly by reference to documents, rather than by straightforward answers. His determination to diminish and indeed wholly deny the contribution that the wife must have made to the general wellbeing of the family was extremely unimpressive. His demeanour was assertive and somewhat combative, and I regret to say that I did not generally find him a satisfactory witness. Nonetheless, it must be said that a number of his assertions were plainly correct. The proposition that the house in Mexico was bought with moneys from the sale of the apartment in Sydney is self-evidently sound. The wife’s endeavours to deny or plead ignorance about these matters are little short of absurd.
Likewise, the husband’s description of the way in which funds were transferred from Australia to Mexico and into accounts, at least jointly owned if not solely owned by the wife, is consistent with the financial documents exhibited, as indeed are the expenditures on his MasterCard while the parties were in Mexico.
He made much of the fact that the parties had, upon the occasion of their civil marriage, opted for separate assets. In this regard, I accept the explanation of the wife that this was done because she was setting up her business.
The husband’s assertion at transcript P3 on 6 May 2011 that he did not remember whether he had chequebook access or not was thoroughly unsatisfactory and unbelievable.
The husband admitted keeping his return to Australia secret from the wife until it was able to be presented as a fait accompli. He returned to Australia in 2009 having gained what appears to have been a temporary custody order in March 2009.
The children have lived with the husband since March 2009 and returned to Australia with him in October 2009. The wife initially accused the husband of doing this in some way that was underhand and expressed a complete lack of understanding as to how he could have done so. It emerged conclusively in my view, however, under cross-examination that the children had expressed a desire to return to Australia with their father and that the wife acceded to it.
This brings us to the evidence of the wife.
It is important to make every allowance in the wife’s favour. She was giving evidence in a language she speaks – as she described it herself – about 90 per cent. She was fluent but not by any means bilingual. She is also giving evidence in a Court in which the law is radically different to that in her own country.
The proceedings were obviously stressful for the wife and she indeed became labile when making her final submissions.
Notwithstanding these concessions, it has to be said that the wife was a very poor witness. I have already referred to her evidence about the return of the children to Australia. This is only one instance of the hyperbole which tended to affect her evidence. Another instance which I would cite was her assertion that she in effect had no knowledge of her husband’s financial dealings in Mexico whatever, notwithstanding that substantial amounts of money were clearly coming into accounts in her name or in their joint names. I am afraid to say that this assertion is completely contrary to common sense. The wife is a well-educated, highly intelligent woman with a master’s degree and who was, for at least a while, a successful businesswoman. Those qualities, in my view, preclude the sort of ignorance to which she professes. It should be emphasised further that this conclusion, which derives from common sense, was fully supported by the evasive demeanour of the wife when she gave her evidence. Her evidence in response to cross-examination about answers given to the Mexican Court was given in a palpably evasive way, which the transcript does not perhaps fully reveal. I regret to say that she was not a witness who I found believable. Her assertion that she was unaware of the sale of the Sydney property once again beggars common sense. In any kind of relationship that is working (and it was working at the time the Sydney property was sold) matters of that moment are necessarily discussed.
In short, both of these witnesses were unsatisfactory. It is difficult to form conclusions as to what occurred in the face of such absolutely disparate accounts in circumstances where the documents, while being helpful to an extent, do not provide in each and every instance a conclusive answer. I have done my best as set out above to make findings about those aspects of the evidence that in my view require findings, and those findings reflect an amalgam of the inherent probabilities of the matters concerned, together with an appreciation of the demeanour of the witnesses and the documents they provided.
The husband returned to Australia, as I have said, in 2009 and since October 2010, has lived in the [B] property with the children. The younger boy will turn 18 shortly, in June, and the application by the wife that she have custody of him and that she live in the [B] property pending sale was only faintly pressed.
Little, if anything, was said about [Y]’s wishes, but given that he and his brother have lived with their father in Australia since 2009, I infer, as I think I must, that that arrangement is satisfactory to them and should not be disturbed.
The Pool
The wife’s application in part seeks that the husband pay her half of the current market value of the household furniture, domestic appliances and other household chattels that were formerly contained in the home in [B] when the parties left to go to Mexico in October 1996. The husband has deposed that almost everything in the [B] property was his before they met, in any event. The current value of chattels owned in 1996 would be negligible, and this is part of the historical ephemera to which I have referred.
The husband has a car and the wife has a car through her business in Mexico. In my view, there is no evidence to support any particular value for these cars and they should also be excised from the pool.
The husband’s superannuation was worth $17,000 at the time of the commencement of the relationship, and $81,000 when it finished. It is now worth about $109,000. The husband proposed that the proportion engendered during the relationship, namely $64,000, simply be divided fifty-fifty.
The only other assets, apart from clothes and the like, are the parties’ two businesses, neither of which have been the subject of any evidence whatever as to value, and the two properties.
As I have indicated, the valuation in the sum of $300,000 for the Mexican property is in issue and the [B] property and the mortgage are agreed.
Accordingly, for these purposes, the pool represents:
[B] property, $1,250,000
[C] property, $300,000 - $115,000
Husband’s Superannuation, $109,000.
Liabilities:
Mortgage on [B] property, $150,000
Rates apparently owing on the [C] property, approximately $6,000
This then leads to consideration of the child support debt in Mexico.
The wife’s position, if I understood it, was in the ultimate that the Court should order the husband to pay the amounts of money owing pursuant to Mexican Court order, and that the parties could then inform the Mexican Court of this. That would have the net effect of freeing the Mexican property from what I think I understand to be some sort of restraint of sale because of the arrears. The wife tendered to the Court a document I marked as MFI-1 which purports to be an “International Letter Rogatory” executed by a Judge in Mexico. The document is by no means easy to follow but it appears to be a request that this Court in effect execute the orders of the Mexican Court. I note that the identity and address of the receiving authority is the Principal Legal Officer Australian Government, Attorney-General’s Department in Canberra.
I suspect this is a document that might be sought normally to be served pursuant to the Hague Convention on Service of Extra Judicial Documents through the consular channel as indeed is practicable pursuant to Australian Law.
Whatever its provenance or standing, it is clear that the document has not been served on this Court by the Attorney-General’s Department and I am not in a position, therefore, to accede to the matters in it even if I were satisfied that it was regularly executed in Mexico.
This puts to one side what appears to be an endeavour by the relevant municipal authorities in Mexico to sell the [C] property to realise the outstanding rates and the like.
The husband’s position was that, in effect, I should make a sort of holding order whereby the Mexican property is transferred to the wife and the house in [B] remains that of the husband, with an adjustment until the appeal in Mexico is determined.
I have given earnest thought to what is the proper way to proceed with this aspect of the dispute. I am bound to assume, and do, that the proceedings in Mexico have been regularly conducted. I appreciate that the husband asserts fraud on the wife’s part, but that is a matter for the Mexican curial authorities.
In the ultimate, if the husband has a liability under Mexican law as a result of failure by him to do what he is lawfully required to do, then that is his difficulty. By the same token, if in the ultimate he is not required to pay any moneys pursuant to the Mexican Court orders, then so be it. While clearly the outcome of the Mexican proceedings will alter, and radically at that, the parties’ financial positions, the reality is that a child support debt is either owing or it is not. It should not, in my view, properly be taken into account in the pool. I am troubled by the fact that the husband appears to be under an ongoing obligation to pay child support of approximately either $1,600 or up to $1,900 per fortnight pursuant to the Mexican orders (depending upon which exchange rate is applied). This seems wholly counterintuitive given that the children have been living fulltime with the husband since early 2009. Nonetheless, it will not be possible for me to make any orders that countervail or off-set the orders made in Mexico, and while it is proper to take the father’s contribution as primary carer since 2009 into account (and I will do so) notwithstanding the extraordinary situation that obtains, namely that the husband is under curial order in Mexico to pay child support for children who are living with him and not with the wife, this is ultimately a matter for the Mexican authorities and not for me. I have no power to do anything about it.
Contribution Issues
As I have indicated, the parties’ initial contributions were clearly wildly disparate. The husband owned two properties in which there was already significant equity, and it is quite clear that those properties have been the springboard for the two major assets that the parties presently have. The wife’s assertion that she had US$50,000 must be taken with some caution because she said in transcript that the US$10,000 (additional to the US$40,000) was a guess as, after all, this was over 20 years ago. Whatever the wife’s savings were, the husband’s were $86,000 and on any view, his was far the greater contribution at the commencement of the relationship.
I have not dealt with the evidence of the husband’s mother, but I should interpolate and say it is clear that she did indeed lend the sums asserted to have been lent at the time the Sydney property was sold. Nonetheless, those loans are now well over 12 years old and, in my view, they fall foul of the decision of the Victorian Supreme Court in Oqilvie v Adams [1981] VR 1041.
Where, as is clearly the case here, there was never any term set for the repayment of these loans which, according to the husband, were to be repaid “as and when we were able”, they ceased to be enforceable after six years. Given that the husband’s mother has waited for some
12 years without complaint, it seems far more probable than otherwise she will never press her son to repay those moneys.
Nonetheless, the husband, and to an extent his mother, plainly made a very significant contribution to the assets of the relationship. Equally, however, the mother played the role as the primary carer of the children from their birth until 1996. Even if one were to accept the husband’s assertion that he had the children for some 40 per cent of the time after separation in Mexico, the wife was still clearly the primary carer from the date of separation in 2002 until 2009. The husband was the primary carer of course from 1996 until 2002. He has also been the primary carer since 2009.
These are simply not areas of precise evaluation. In Pierce & Pierce (1999) FLC 92-844, the Full Court of the Family Court analysed at [26]-[28] the weight to be given to initial contributions and concluded at [28]:
“In our opinion, it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home.”
That case involved a ten year relationship and because of the much greater contribution of the husband, the Full Court gave a 20 per cent loading in the husband’s favour.
Against that, however, the High Court made it clear in In the marriage of Mallett (1984) 156 CLR 605, that the contribution of a homemaker should be given proper weight. Indeed, this was against the backdrop of an approach by the Full Court of the Family Court that in a long marriage, equality is a convenient starting point. While various members of the Court made observations to this effect, I would refer to the judgment of Mason J, as his Honour then was, at p.623 in these terms:
“The significance of the concept that equality is a convenient starting point in the case of a long marriage has been expounded in a series of decisions in the Family Court. The Family Court has stated – and in my view correctly stated – that the purpose of s79(4)(b) is to give recognition to the position of the housewife who, by her attention to the home and the children, frees her husband to earn income and acquire assets (authorities omitted). And it has been held, again correctly in my view, that the Act intends that the wife’s contribution as homemaker should be recognised in a substantial and not merely in a token way.”
Those observations require some qualification when they are applied to the facts of this case. As I have found, the wife was the primary homemaker and child-carer when the parties were in Australia from 1991 to 1996, but the husband fulfilled that role from 1996 until separation in 2002.
Thereafter as I find, the wife was the primary carer (albeit perhaps to a limited extent) until 2009 when the children returned to Australia, since when they have been solely in their father’s care, again albeit that one of the children is now adult and the other almost so.
The post-separation care of the children of course is not a contribution made during the currency of the marriage but rather, self-evidently, a post-separation contribution.
The husband, as I have indicated, paid school fees while the children were in Mexico and further, has looked after the children entirely from the return to Australia until now, and I infer from March 1999 when the children came into his care. The wife has not asserted that she made any financial contributions to the children’s wellbeing during that time.
It thus becomes a matter of discretion and judgment as to what weight should be given to the husband’s contribution, bearing in mind that it was a significant one which has, in large part, engendered the assets that the parties now have. Assessing the parties’ day-to-day contributions, if I could so describe them, in terms of income-generation and childcare and the like as being approximately equal, the fact is that it was the husband’s pre-acquired wealth which made the springboard for their position today. In all the circumstances, I think the husband should receive a loading of 20 per cent in this regard.
The Section 75(2) Factors
The parties are roughly similar in age and despite an earlier prostate cancer scare, the husband is in as unexceptional good health as the wife.
The difference between the parties is that the husband already has a business which is making a passable income, worth something slightly less this year than average weekly earnings but which is likely, given his energy and experience, to increase.
The wife, by way of contrast, has to re-establish herself (as she clearly intends to) in a country where she has not lived for a considerable period of time and where her qualifications are, if not out of date, at least unused for a long time. She will get some work with [omitted], but that is not her long-term intention. Her capacity to earn a living is uncertain, although I would suspect that she will achieve employment in due course.
The future care of the children is itself not entirely clear. I would infer that they are likely to go on living with the father for some period of time. The mother’s assertion that they wish to return to Mexico seems to me to be entirely speculative, but I can have no idea as to the state of their independence. They may wish to live with their father for some time. I note that he charges them for their share of the utilities and the like and the suggestion, therefore, that they are costing him considerable amounts of money must be open to some doubt.
In all the circumstances, and bearing in mind the uncertainty of the wife’s future employment prospects in Australia, I would make an adjustment in her favour of some 5 per cent.
Just and Equitable
The husband’s proposal is that the superannuation engendered during the relationship should be split 50/50, and I agree with that. There will be a superannuation splitting order in the wife’s favour to produce a result in her favour of some $32,000.
This fourth stage is a matter of the Court taking a step back, as it were, to see if the outcome to be proposed is going to be just and equitable. One difficulty in making this assessment is the practical problems associated with the Mexico property. As I have said, I have excluded the child support debt in Mexico because it either stands or does not stand according to the outcome of the appeal in Mexico.
This leaves the question of what is to actually occur. In my view, it is clear that the Mexico property should be sold. It seems to me more probable than otherwise that the wife would be in a much better position to do so than the husband. It is her own land, she has relatives living there, she can far more readily find and appoint agents should they be required. She will readily understand any legal issues that may emerge, whereas the husband’s confusion in this regard seems palpable and understandable.
The Mexico property should therefore be sold and once its value is ascertained, there should be an appropriate adjustment to ensure that the wife receives 35 per cent of the total pool. On one view, this may seem a poor return for such a long period of involvement but the fact is that the parties were only married for some ten years, even though it has taken 20 years for this case to come to Court. The wife’s initial contribution was simply nowhere near as great as that of the husband and it was that initial contribution which, on the facts of this case, generated most of such property as they have available for division.
It was part of the husband’s proposal that he pay the wife an additional $110,000 over and above the settlement of the Mexico property. In my view, he should make a payment of $100,000 now as part property settlement which will have the desirable effect of enabling the wife to discharge any taxes due upon the Mexican property and causing its sale at a more advantageous price.
I have prepared draft orders to give effect to these conclusions but in view of the complexities of the matter and the practical difficulties that may obtain, I will give the parties an opportunity to study them and comment and make further submissions before I make the orders final.
I certify that the preceding one hundred and nine (109) paragraphs are a true copy of the reasons for judgment of Burchardt FM
Date: 21 June 2011