Mighell and Field (No.2) - [2011] FMCAfam 1176

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MIGHELL & FIELD (No.2)

[2011] FMCAfam 1176

FAMILY LAW – Further rulings in the light of submissions received since Judgment – both sides seeking to re-open their cases – re-opening refused – decision best possible in view of inadequate evidence.

Family Law Act 1975
Superannuation Legislation Amendment (Family Law) Act 2004
Family Law (Superannuation) Regulations

Applicant:

MR MIGHELL

Respondent:

MS FIELD

File Number:

MLC 1145 of 2010

Judgment of:

Burchardt FM

Hearing date:

22 September 2011

Date of Last Submission:

27 October 2011

Delivered at:

Melbourne

Delivered on:

10 November 2011

REPRESENTATION

Counsel for the Applicant:

Mr A. Crozier-Durham

Solicitors for the Applicant:

Harding & Co Lawyers

The Respondent:

In person

ORDERS

The husband pay to the wife 35 per cent of the net value of the [B] property of $1,100,000 (being $385,000) within 90 days failing which that property must be sold and the proceeds of the sale be applied:
(a)First to pay all costs, commissions and expenses of the sale;
(b)secondly to discharge the mortgage and any other encumbrance affecting the real property; and
(c)the remaining sum be divided 65 percent to the husband and 35 percent to the wife.
The sum referred to in Order 1 shall be reduced by the $20,000 the husband already paid to the wife pursuant to earlier Orders.
In order to facilitate the sale of property the parties do all such acts and things and sign all such documents as are necessary to properly market and complete the sale of the real property situate at and known as Property B in the State of Victoria and being the whole of the land more particularly described in Certificate of Title Volume [omitted] (“the real property”).
In the event that either party refuses or neglects to execute any document required to give effect to these orders within 14 days of request the Registrar of the Melbourne Registry of the Family Court of Australia is hereby appointed and authorised pursuant to section 106A of the Family Law Act to sign any such document and to otherwise do all acts and things in the name of the husband and/or the wife necessary to give validity and operation to such document.
The property is to be sold at public auction:
(a)By an agent chosen by agreement between the parties and in default of agreement by an agent nominated by the President of the Real Estate Institute of Victoria;
(b)the parties are to engage a solicitor to effect the sale, to be nominated by the agent;
(c)the agent is to nominate the reserve price and the date of sale; and
(d)in default of sale at the auction and the parties are subsequently unable to agree to the sale of the property by private treaty at a reduced price the property is to be again offered for sale within three calendar months without reserve.
Pursuant to s.90MT (1)(a) of the Family Law Act 1975 Mr Mighell a member of the [W] Superannuation Service (the Superannuation Fund) and [W] Limited trustee of the Superannuation Fund (“the Trustee”) do all acts and things, sign all documents and give all consents so that whenever a splittable payment becomes payable to Mr Mighell Superannuation Number [omitted] from his interest in the Superannuation Fund Ms Field is entitled to an amount calculated in accordance with Pt 6 of the Family Law (Superannuation) Regulations 2001 using a base amount of $32,000 (thirty-two thousand dollars) and that there is a corresponding reduction in the entitlement of the said

Mr Mighell had these Orders not been made.
For the purpose of this Order:
(a)The base amount to be allocated to Ms Field in the Superannuation Fund is $32,000 (thirty-two thousand dollars); and
(b)the operative time for this order is four business days after the service of this Order on the Trustee.
Each party keep the chattels in their possession.

THE COURT DECLARES THAT:

The parties own their property in [C] in Mexico in the following proportions:
(a)The husband – 65 per cent; and
(b)the wife – 35 per cent.
Following sale of the [C] property the net proceeds of sale should be divided:
(a)As to the husband – 65 per cent; and
(b)as to the wife – 35 per cent.
These orders and declarations are by way of part-property settlement only.

AND THE COURT NOTES THAT:

This Order and payments made as a result will be affected by the Superannuation Legislation Amendment (Family Law) Act 2004 which came into effect on 18 May 2004 and the Family Law (Superannuation) Regulations which together provide for a separate superannuation interest to be created for the non-member spouse and for consequential effects on payments.

IT IS NOTED that publication of this judgment under the pseudonym Mighell & Filed (No.2) 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

On 21 June 2011 I published Reasons for Judgment in this matter. Inter alia I ordered that:
a)The proceeding be adjourned for mention on 21 September 2011.
b)The respondent do all acts and things necessary to sell the property owned by the parties at [C] in Mexico.
c)The applicant do all things necessary to enable the respondent to do so.
d)The applicant’s solicitors prepare and forward to the Court draft orders to effect a division of the husband’s superannuation.
e)The applicant pay the respondent $20,000 in part property settlement.
As might be apparent, it was my intention to try to sell the Mexico property to finalise and identify the property pool available for division prior to it being divided between the parties.
As will be apparent from the Reasons for Judgment I gave (which should be read in conjunction with these Reasons for Judgment) there were some real practical difficulties with the property issues between the parties. Importantly, their valuations of the property in Mexico which they jointly owned were wildly disparate. The husband’s estimate was some $300,000 and the wife’s was $115,000. Even the husband’s valuation was complicated by the fact that he put in evidence a document showing a lesser purchase price, although he tried to explain this away.
The matter was further complicated by the fact that there was alleged to be a very substantial child support debt in Mexico of the order of $385,000, said by the wife to be encumbered over the property in Mexico, which was further encumbered by a relatively small amount of arrears in local rates and the like.
In the ultimate, I decided that I would exclude the child support in Mexico because it either stood or did not stand according to the outcome of an appeal posited in Mexico by the husband. I also decided that it was appropriate that the property in Mexico should be sold and that it would be better that the wife do so (see paragraphs 105 and 106 of my earlier Reasons).
I decided there should be an adjustment so that the wife received 35 per cent of the total pool. Although I did not say so, it is clear from the Judgment taken as a whole, and it was certainly what I intended, that 35 per cent would be exclusive of superannuation in respect to which a separate determination had in effect been made.
What I had in mind was that between May and September 2011, the wife would sell the property in Mexico and the matter would then be the subject of adjustment. So far as I recall, there was no submission made that the amount of time I provided for this to occur was in any way inadequate.

The matters since the first Reasons for Judgment in June 2011

On 11 July 2011 Mr Finkelstein, a solicitor who had previously acted for the wife, filed an affidavit in which relevantly he deposed that he had a lien over the wife’s share of the [B] property in respect of his fees. It should be noted that although Mr Finkelstein attended the further hearing in September 2011, he expressly disavowed any desire to make any submissions before the Court and accordingly, it is not necessary to deal with this aspect of the matter any further. It remains a matter between him and Ms Field.
On 26 July 2011, the husband filed a further affidavit in which he purported to make a number of corrections to factual assertions made in my original Reasons for Judgment. Those matters were plainly matters only capable of being properly advanced by way of appeal and it is not necessary to refer to them save that at one point he stated:
“This explains the need for the extra mortgage drawdown where in fact the Court stated the need for the mortgage was not clear.”
That phrase was seized upon by the wife in submissions before the Court and I shall return to it.
On 21 September 2011, the wife filed an extensive affidavit. It is not necessary to trawl through the detail of it. It contains extensive remarks about the convoluted legal proceedings in Mexico and the nature of the Mexican Court orders requiring the husband to support his children and the wife. It also raises a HECS debt not previously accentuated.
It also goes on to set out the largely ineffectual endeavours made by the wife to sell the [C] property.
It should be noted, at this stage, that both sides are plainly in breach of the orders I made in June 2011. Despite receiving $20,000 from the husband to assist her in discharging municipal rates and selling the property, the wife has purported to either seek that the husband pay half of the relevant costs on an ongoing basis and/or to seek to suggest that it be him rather than her who sells the property. By the same token the husband has not in his correspondence acted conformably with my orders in that at the very least, he sought to interfere with the process of the appointment of an agent when it was clear that my original orders required that the wife be given sole leave to sell the property. This sort of squabbling is, I regret to say, typical of the parties’ conduct throughout the proceedings generally.
The wife in her affidavit filed 21 September 2011 set out endeavours she had made, apparently post trial and post Judgment, to obtain further relevant information from real estate agents who had looked after the [B] property from time to time.
Likewise she deposed at paragraph 63:
“For the same purpose stated in the previous section, and other aspects of the judgment, I made some more efforts to get information on such loan from the Mortgagee. I finally got the statements around the first days of August by mail.”
The documents concerned were documents from [A] which were designed, as the wife sought to show, that the husband’s evidence had been untrue. This documentation formed part of her endeavour to

re-open the case.
On 21 September 2011, likewise, Mr L, a property consultant and real property valuer, filed an affidavit by which he valued the [B] property at $1,170,000, this contrasting with the figure adopted by agreement at trial of $1,250,000. The wife had no meaningful capacity to respond to the new valuation.
On 21 September 2011, the husband filed a further affidavit. This set out further complaints arising from the Mexican proceedings and exhibited, as indeed had the respondent wife, extensive documentation from Mexico both in the original Spanish and translated.
I will return to what is to be made of the Mexican documentation later.
The husband also set out his version (and complaints) of the events since July 2011 and requested not only that there be a 65/35 split of non-superannuation assets, but that the wife retain the Mexican property at a valuation of $300,000.
He also sought orders that the respondent be required to advise the relevant Court in Mexico of the fact that the children have been in his care since March 2009 and living with him in Australia since January 2010 and living with him in [B] since September 2010. The wife had not been living with the children during any of these periods.
Finally for these purposes Ms B swore an affidavit on 20 September 2011. Relevantly, she had translated various Court documents which are set out as annexures to her affidavit. The originals in Spanish are also said to be appended. Once again they refer to the Mexican proceedings and I shall return to them.
When the matter was before the Court on 22 September 2011, the wife seemed to me well-able to make the submissions she desired to make. She did, however, assert that she had been taken by surprise because the matter was only listed for mention and I agreed to give her until

13 October 2011 to file and serve any written submissions. The wife has filed three tranches of submissions.
In the first written submission filed on 13 October 2011, the wife set out a very detailed series of orders sought which, putting the matter in the round, were designed to enable her to sell the property in Mexico. A budget of some $38,000 to enable this to occur was included (it was her request that the husband pay the same).
The wife also sought the sale of the [B] property, that the husband pay the fees of her former solicitor Mr Finkelstein and that the husband’s counsel and solicitor pay the wife’s costs and expenses, together with a number of ancillary matters including the inclusion in the pool of what is said to be a current HECS debt on her part.
Inter alia the wife said she would not accept the transfer of the [C] property to her at any value higher than that originally asserted by her in the sum of $115,710, notwithstanding that there was reference to higher values in her written submissions.
On 17 October 2011, the wife forwarded a further written submission “as an amendment to the one I filed on 13 October 2011”. She asserted:
“I was incapacitated by the pain caused by a maxillofacial infection (see attached medical certificate) therefore I was not in my right mind at the moment I filed my written submission of

13 October 2011, nor had I consulted with a lawyer on the alternative that I retain ownership of the house in [C]. I had previously strongly opposed this alternative.”
She went on to confirm her previous position that she did not wish to keep with the [C] house.
The medical certificate annexed to her submissions merely states that on 15 October 2011 the wife attended [omitted] Hospital of Melbourne for “Emergency dental treatment – extraction / infection” and noted that “patient states she has been in pain since 12/10/11”.
Accepting that Ms Field was in considerable discomfort at the time of the filing of her written submissions on 13 October 2011, the assertion that she was not in her right mind is, prima facie, hard to sustain. Certainly toothache is extremely distracting and painful, but the written submission filed on 13 October 2011 runs to 58 paragraphs over 9 closely typed pages. The thesis that it was in some fashion automotive or not seriously dictated or meant by the wife is very hard to sustain and I simply am not prepared to accept it.
Notwithstanding this, however, the submissions made on 17 October 2011 resiled from the proposition that she herself receive the [C] house but still sought orders to enable its sale. She continued to desire to sell the house in [B] and sought numerous ancillary orders including one that the caveat placed by Mr Finkelstein to secure payment of his fees over the [B] property be transferred to the mother of the husband’s real property.
The wife then filed without further leave a further written submission on 19 October 2011. Leaving aside questions of alleged correction of earlier material, the wife purported to set out a mechanism to enable the dismissal of the “on-going Mexican support / maintenance dismissal”. In substance, she appears to seek the Mexico property be transferred to the husband, although one has to say that the written submissions are hard to fully understand.

Some observations about the materials filed

From the materials filed by the parties since June 2011 the following relevant points emerge:
a)Both parties have legal representation, at least to a degree, in Mexico. The husband has lawyers acting for him and the wife’s [relative omitted] is a lawyer admitted both in the United States and in Mexico, and has the capacity to assist her.
b)
Both sides have used that representation in an endeavour to improve their situation. The husband has sought the removal of a so-called “seizure” apparently effected by the municipal authorities in Mexico in support of unpaid rates and the like and the wife has likewise agitated matters in Mexico through her father. From annexure A to the wife’s affidavit filed on

21 September 2011, it appears that the seizure of the Mexico property by the municipal authorities took place on 6 July 2009 and the same was registered (whatever that means) on 16 July 2010.
c)From paragraph 14 of her affidavit filed on 21 September 2011, it is apparent that what the wife is really saying is that the husband should pay his child support debt and that this will release the property in Mexico for sale. That position has become more opaque in her more recent written submissions.
d)In paragraph 30 of the same affidavit the wife asserts that what the husband is required to pay of this debt is not in fact child support, as it is known in Australia, but rather a sort of “superannuation scheme but without the old age requirement to use the fund when required”.
e)The wife has attached yet another valuation of the Mexico property being annexure O by [name omitted] showing a lower value than that provided by earlier valuations.
f)From annexure E to the wife’s affidavit (which appears to translate only part of the antecedent documents in Spanish) it appears that the husband has an ongoing appeal in Mexico against what I will continue to describe as the child support orders.
g)Annexure Q to the wife’s affidavit are emails to [S] Real Estate showing exchanges from Ms Field to [S] Real Estate in August 2011. What this shows amongst other things is that the information provided by [S] was readily available and there is no obvious reason why it should not have been available prior to trial.
h)Material from [A] (apparently part of annexure Q) shows an opening balance in July 1999 of $0 and then substantial further draw-downs from 2003 onwards, following a deposit of $148,812.55 on 1 December 2003.
i)Annexure S shows what appears to be a statement following the sale of the Sydney property. While it shows a payment to [omitted] of $80,000 it also shows a net balance of funds of $125,000 in 1999.

The parties’ submissions before the Court

Counsel for the husband asserted that the conclusion of the various proceedings in Mexico could take 18 months, a submission that seems all too probably correct given the fact that the parties have been embroiled in litigation it seems since 2003 in that country.
Counsel sought the transfer to the wife of the Mexico property at the value asserted in the affidavit material before trial. He then sought an adjustment whereby the wife would get 35 per cent of non-superannuation assets, and given the $20,000 already paid and the diminution in the value of the [B] property, the resultant figure would be $146,000 payable by the husband to the wife.
Ms Field sought to reopen her case on the basis that the Mexico property was overvalued and the earlier affidavits were, to use her phraseology, void. She also sought to reopen the issue of the husband’s evidence at the trial and in particular to assert, based in large part upon the materials from [S] Real Estate and from [A] and in part from the statement referred to in paragraph 9, that the husband’s evidence had been in large part untruthful.

As previously mentioned, the wife at a later stage in her submissions asserted that she had not understood that the matter was in effect listed for further hearing (an assertion difficult to sustain in view of my earlier Reasons for Judgment and orders made), but in order to avoid any possibility of unfairness to the wife, I allowed three weeks in which to put in any written submissions.
It should be noted in passing that by letter dated 22 July 2011, the superannuation trustee of the husband has indicated consent to the orders that have been sought in respect to the husband’s superannuation.

Consideration of the wife’s application to reopen the case

I am not prepared to allow the wife to reopen the case to further cross-examine the husband about the documents she has now received from [S] Real Estate and the [A]. There are two reasons for this.
First, parties are not generally permitted to reopen a case if the evidence which is sought to be adduced was reasonably available and foreseeable before trial. These sorts of considerations most commonly arise on appeal but are equally applicable in my view to trials at first instance.
In this instance it appears that the wife was quite readily able to obtain the further materials which she has now received. All she had to do was write to [S] Real Estate and it would appear also to the [A].
The fact is that the husband’s contributions and the measure of the various draw-downs on the [A] account and the amounts of rent received in respect of the [B] property were matters clearly in issue before the original proceeding. At the latest they would have been readily apparent during that proceeding. No application for adjournment to enable these materials to be obtained was made.
In the circumstances it is therefore in my view inappropriate to reopen the case. There has to be an end to litigation. This applies also in my view to the husband’s attempt to resile from the agreed value of the [B] property and the wife’s endeavour to include her HECS debt. The valuation was agreed up to the last day of hearing on 16 May 2011 and there has been, in the scheme of things, small delay thereafter. Both the question of any decline in property value and the wife’s HECS liability should have been raised before Judgment if they were to be pressed. Parties are bound by their conduct at trial.
Furthermore, the materials from [A] insofar as they indicate anything at all, show a zero loan in 1999 which is entirely consistent with the husband’s position.
The documentation showing the sale proceeds of the Sydney property is likewise not significantly inconsistent with the husband’s position. While it shows that there was a mortgage on the property which had to be discharged at the time of the sale of the Sydney property, the sum thereby released was on any view a substantial one. In my earlier Reasons for Decision I noted that it was curious that there had to have been any additional funds from the Sydney property to enable the Mexico property to be bought. All that the new documentation shows is that that is why it may have been necessary for such funds to be made available. That is so only, it should be noted, on the more expensive price asserted as the purchase price. The wife’s position that the property was purchased for a substantially lesser sum would be conformable with the net proceeds of sale of Sydney in any event.
Furthermore, the documents received from [S] Real Estate do not in my opinion show any great likelihood that any different outcome in the trial would be obtained even if the wife was permitted further to cross-examine the husband as to their contents.
For these reasons I have declined the wife’s application to reopen the case. Furthermore, the documentation does not lead to any different conclusion as to the appropriate outcome in the proceeding.
I have already determined that there should be a split of 65/35 in the husband’s favour of all non-superannuation assets. I remain of the view that that is so and as I say, that is so notwithstanding the new materials that both parties have sought to file.
This trial has become somewhat convoluted by virtue of the way in which the parties have sought in effect to reopen their cases when that was not something that the Court had envisaged or desired in the original Reasons for Judgment.
In order to avoid doubt I would make the following findings which emerge from consideration of all the materials filed including the materials filed post-June 2011:
a)Notwithstanding the translated documents now provided to the Court it is all but impossible to work out exactly what is going on in Mexico in relation both to the Court proceedings and to the various encumbrances on the Mexico property owned by the parties.
b)Notwithstanding (a) it does seem reasonably clear that:
i)The husband is the subject of a very substantial liability to the wife of some $365,000 for what, for these purposes, can be called Mexican child support proceedings.
ii)The result in that case was no doubt regularly arrived at by the curial authorities in Mexico but that sits very uneasily with the fact that the children have lived with the father since 2009 and with him in Australia since 2010 and not with the wife.
iii)It appears more probable than otherwise that the child support debt is in some fashion an encumbrance upon the sale of the Mexico property.
c)The Mexico property is further encumbered by a relatively small (around about $6,000-$7,000) liability to the municipal authorities or some similar entity.
In the circumstances described, it is no surprise that each of the parties has submitted at one time or another that the other should become seized of the Mexico property (although the most recent submission suggests sale may now be contemplated). It is all too obvious that both of them regard the Mexico property as something of a forlorn cause. They see the property in [B] as the real tangible, obtainable asset of the relationship as things now stand. That conclusion seems to me to be an accurate one. Notwithstanding the wife’s most recent submission, I am quite unable to understand what needs to be done to effect a sale.
Both these parties are by no means wholly honest and I have already made adverse credit findings against them in my earlier Reasons for Judgment. Their entire conduct as evidenced by the materials they have subsequently filed only goes to fortify my view that both of these parties are conniving and keen to advance their interests in whatever way they can.
In my view the position in Mexico is so complicated, and the nature of the Court proceedings in that country so alien to the understanding of a common law lawyer, that it is impossible to decipher exactly what is going on. It is even more difficult to establish what the likely outcome of the Mexican proceedings will be and when it may occur.
If the husband’s appeals are successful it may well be that the amount of child support debt owed to the wife in Mexico is either very substantially reduced or removed in total. It is not clear whether this would mean that any process of encumbrance on the Mexico property would be removed or otherwise. The rates and the like can surely be paid by either party relatively readily.
Nothing I have heard alters my conclusion that the just and equitable division of the parties’ non-superannuation assets should be 65 per cent to the husband and 35 per cent to the wife.
This finding, as indeed was the case in my earlier Judgment, necessarily puts aside the child support debt in Mexico. It is self-evidently utterly unsatisfactory that such a significant liability should not be included in the pool of assets and liabilities of the parties, but in circumstances where it is vividly contested and the outcome of that contest remains wholly unclear, there is simply no other alternative than to delay the final outcome of these proceedings on an indefinite basis until the Mexican proceedings are finally concluded.
Given that it is common cause that the Mexican proceedings in one form or another have been underway for at least eight years already and that there is at least 18 months or so to go, it would be plainly unconscionable not to deal with the matter as best one can now.
In the circumstances in my opinion the orders that will do the best one can to provide a just and equitable outcome in circumstances that are self-evidently unsatisfactory, are as follows:
a)I will order that the husband pay to the wife 35 per cent of the value of the [B] property of $1,250,000 within 90 days failing which that property must be sold and the proceeds of the sale be divided following the usual deductions in the proportions of 65/35.
b)Plainly the husband should have credit for the $20,000 he has already paid to the wife pursuant to my earlier orders.
c)So far as the property in Mexico is concerned I will declare that the parties own that property in the proportions of 65/35 per cent in favour of the husband and order that the property be sold and the net proceeds be divided in that way. This order is self-evidently unenforceable in the sense that it is proposed to operate extra-territorially. Nonetheless, it is not incapable of having operation. That is because both the parties are in effect permanent residents in Australia and the Court is, in my view, obliged to do the best it can to produce finality to the parties’ affairs.
d)I will make these orders part-property settlement only. Thus, when the famous day comes and the Mexican proceedings are finally resolved, in the event that the child support obligation is sustained it will doubtless take up the whole of the value of the Mexican property. In the event that it does not the parties will be in a position to sell it. If the wife simply sells it and keeps all the money to herself, then it will be open to the husband to seek an adjustment in his favour in Australia. By the same token, if the husband sells and the wife acts, as she ought to, in a sensible and lawful way, the husband will at that time, as will the wife, receive the due proceeds of the sale in Mexico.

Conclusion

These orders are not in any way entirely satisfactory. They represent the best the Court can do. The forensic task imposed on the Court in this case by the inadequate and conflicting materials filed by the parties is enormous. It is all but insuperable. It is further complicated by the fact that I have no great confidence that either of the parties is particularly truthful.
To the extent that these orders may visit some element of injustice upon the parties, in my opinion they have no-one but themselves to blame.
I have prepared draft orders and declarations and will hear from the parties before making final orders. I note that my orders of 21 June 2011 require the husband’s solicitors to forward orders in respect of my decision about superannuation.

I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of Burchardt FM

Date: 10 November 2011