Monte & Monte

[1986] FamCA 1

In the marriage of MONTE, F.J.A. and MONTE, E.P.

(1986) FLC ¶91-757

Full Court of the Family Court of Australia at Sydney.

Judgment delivered 28 February 1986.

Before: Simpson, Murray and Frederico JJ.

Simpson, Murray and Frederico JJ.: This is an appeal by the husband from the decree pronounced by Maxwell J. on 20 June 1985.

On that date her Honour ordered as follows:

``1. That within one month from this date the husband do all things and sign all documents necessary to assign to the wife all of his right title and interest in and to the fund of thirty-six thousand three hundred and ninety nine dollars ($36,399.00) which sums represents the proceeds of sale of the former matrimonial home situate at... St Ives in the State of New South Wales and that until such payment order number 2 made herein on the 13th day of December 1984 be continued.

2. That on or before the 20th day of June 1986 the husband pay to the wife the sum of twenty thousand dollars ($20,000) and a further sum of twenty thousand dollars ($20,000.00) on or before the 20th day of June 1987 and that such sums or the balance of such sums remaining unpaid bear interest at the rate of 10% per annum to be calculated from the 20th day of September 1985 until the date of payment in full.''

The relevant financial history is canvassed extensively in the learned trial Judge's reasons for judgment and we will endeavour to confine our statement of the facts to those matters which are of relevance in the appeal.

The parties were married on 8 July 1967 and finally separated in 1983. There were two children of the marriage, A born on 7 July 1970 and J born on 27 May 1971. Since shortly after the separation the children have been living with the husband.

During most of the marriage the husband followed the occupation of a private enquiry agent and for the majority of that time conducted his own business. At the time of the hearing the wife was unemployed although she acknowledged that once the proceedings had been concluded she would not have any difficulty in obtaining employment. Until shortly before the trial the wife had been employed as a perfume/beauty consultant.

At an early stage of her reasons the trial Judge made the following general comments concerning the circumstances of the hearing:

``The hearing of this case took five days and for about half of that time the husband was in the witness box. Notwithstanding the length of time that he gave evidence and was questioned, it was not possible to establish what his assets and financial circumstances were. I have never encountered a case where it was more difficult to establish the financial detail relevant and necessary to make a decision in a property application. It was not wholly clear whether the husband in fact went out of his way to deliberately make his evidence as confusing as possible, nor was it totally clear as to whether he was deliberately prevaricating and evasive, or suffering some degree of memory loss associated with his alleged nervous state. Whichever of those possibilities is correct, the effect was the same in that I was unable to attach any weight to Mr Monte's evidence, other than where it was adequately supported by documentary evidence. Similarly, it was impossible to be confident of the extent of Mr Monte's ability or otherwise to earn income through his business and otherwise, and I am reasonably satisfied that that capacity will not be fully realised until his wife's application for property settlement is finally disposed of.''

Later, in the course of making some further general comments, the trial Judge said:

``This case had many very unusual aspects. Firstly, it was, as I have already indicated, almost impossible to establish the husband's financial circumstances including his present assets. It was the nature of these assets that was also unusual.

The assets for consideration could be summarised as follows:

1. The proceeds of sale of the former matrimonial home at St Ives.
2. The furniture and personal effects of the parties.
3. The jewellery of the parties.
4. The private enquiry agents business conducted by the husband.
5. Moneys on deposit which could be separated into moneys in Australia and moneys overseas.
6. The husband's interest in various actions relating to insurance claims.
7. The husband's interest and shareholding in the following companies:

(a) Nobema Pty. Limited.
(b) Venturid Pty. Limited.
(c) The Monte Security Company Pty. Limited.
(d) The Monte Security Company Pty. Limited. [sic]
(e) Takanna Pty. Limited; and
(f) Other companies and entities with which the husband/wife have been associated including Philjur Pty. Limited and Shimajur Pty. Limited.

8. Motor vehicles.
9. Moneys owed to the husband by other persons and against which may or may not be offset the moneys owed by or on behalf of the husband and/or companies under his control.''

The husband conceded that the above-mentioned companies were under his control and in addition that he was the de facto beneficial owner of those companies.

Both the Court and the wife were placed at a serious disadvantage by reason of the husband's failure to disclose his interest in Venturid Pty. Ltd. and Takanna Pty. Ltd. until the filing of the husband's further Statement of Financial Circumstances on the first day of the hearing.

Although the trial Judge referred to some unsatisfactory conduct on the part of the wife relating to complaints made by her to the police, nevertheless her Honour said: ``so little weight was I able to attach to the husband's evidence that even given this matter where there is conflict between the parties, the wife's evidence must be preferred.''

Before dealing with the assets of the parties which the trial Judge had summarised as before-mentioned, her Honour again referred to the difficulties that faced her in determining the wife's application for property settlement when she said:

``Unfortunately this is not a case where the assets of the parties even assuming they could be clearly established, can be dealt with separately and distinctly. The facts and circumstances in relation to one, overlap and are confused with and intermingled with the facts (so far as they can be established) in relation to other matters.''

The first item of property of the parties which was considered by the trial Judge in detail was the balance of the proceeds arising from the sale of the former matrimonial home. In the event, that was the only property of the parties, or either of them, in respect of which the trial Judge considered she was in a position to express a concluded view as to identity or quantum.

The learned trial Judge reviewed the history of the acquisition of the parties' properties that were utilised for their occupation as matrimonial homes and then found that the net proceeds of the sale of the last of those properties amounting to approximately $33,500 ``eventually found their way into a Building Society account which is said to be held in trust for the husband and wife pending the determination of these proceedings''. It is that fund to which para. 1 of the order of 20 June 1985 is directed.

In addition to recording the relevant direct and indirect financial contributions the parties made to the purchase of the properties used as matrimonial homes the trial Judge concluded her review of that item of property by saying:

``I am satisfied that the wife, as well as making further contributions to other assets of the parties, made a significant contribution in her role as parent and homemaker during the course of the marriage and that that contribution should be recognised in relation to the fund representing the proceeds of sale of the last matrimonial home.''

Although the trial Judge did not deal with the assets in the order in which she had enumerated them as above-mentioned, we will consider them in that order.

In relation to furniture, personal effects and jewellery her Honour found that the wife retained and had the benefit of certain cash, personal effects, jewellery and furniture and that the husband had also retained jewellery, furniture and personal effects of an indeterminate value.

In relation to the private enquiry agent's business conducted by the husband the trial Judge came to the conclusion that the wife ``made some indirect contribution to the husband's business and it was not a situation where she was totally removed from the enterprise''. At a subsequent stage of her review of this item of property the trial Judge said:

``Whilst I am satisfied that the wife made both a direct and indirect contribution to the husband's business, her role was clearly not nearly as significant as that of the husband.

The difficulty is, of course, that it is impossible to establish the value of the husband's interest in his business which would seem in part to be a personal one, although it involves on the husband's claim at one part of his evidence, only contract labour.''

Also in the course of her consideration of that business her Honour said:

``As I have already indicated, I am satisfied that Mr Monte said exactly what suited him at the moment to put the optimum cloud over his financial affairs and that of the business.

... I have therefore formed the view that the wife's contribution to the husband's business represented, inter alia, in the assets of the Monte Security Company Pty. Limited must be recognised from some other more tangible source.''

In relation to the moneys on deposit the trial Judge was satisfied that the very substantial funds which the wife alleged the husband had in Hong Kong had never existed and that the husband did not have any substantial credit in the United States of America. In concluding her comments in relation to any deposits that may have been available to the husband her Honour said:

``This was just another unsatisfactory aspect of this case, and the evidence was not such as to enable me to make any specific finding on the matter.''

In relation to the husband's interest in various actions relating to insurance claims, her Honour was presented with most confused and complex evidence by the husband in respect of a number of unresolved claims for indemnity in very substantial sums. Although in his affidavit and oral evidence-in-chief the husband apparently claimed he was owed a significant amount of money by a number of insurance companies. The husband during the course of cross-examination referred to difficulties in establishing the claims and his intention not to pursue certain of the claims for several reasons including allegations that his wife had made statements to the insurers which prejudiced the husband's prospects of a successful recovery.

In the result her Honour did not make any finding as to any specific sum due or likely to be due to the husband arising out of the insurance claims.

In relation to the husband's interest and shareholding in the companies previously particularised, the trial Judge made reference to the Monte Security Company Pty. Ltd. during her review of the husband's business of a private enquiry agent. Her Honour said:

``In addition to Monte Security Company Pty. Limited which acted as Trustee for the Monte Trust as the vehicle, inter alia, through which the husband conducted the private enquiry agent's business, the husband and/or wife had interests in a number of other companies.

There was such intermingling of the Monte assets and interests, that it was extremely difficult to categorise and deal clearly with the wife's contribution, if any, to each.''

In relation to Takanna Pty. Ltd. her Honour said:

``Another company used as a vehicle for transactions by the husband was Takanna Pty. Limited. That company was apparently incorporated in late 1981 and in October 1982, acquired real estate for $190,000, inter alia, by raising a mortgage loan of $142,500. The property was sold on 4th April 1984 for $210,000. The only income tax return in evidence was its first return for the year ending 30th June 1983 which referred to Mr Frank Monte as the public officer of the company for the purpose of the Income Tax Assessment Act and the directors as being Mr Schmid and Mrs Rose Montanari (the husband's mother).

I have already referred to the alleged payment to Mr Schmid of the net proceeds of sale of that property.

Mr Monte is shown in the 1983 accounts as being a creditor of the company in an amount of $50,153 and that loan appears in the 1984 balance sheet as standing at $50,829.66. Mr Schmid is shown as a debtor to the company in the sum of $50,447.22. Although Mr Glaser, the Accountant, believed that he had been told by Mr Monte that the indebtedness had been reduced in the current year.''

In relation to Venturid Pty. Ltd., her Honour, inter alia, referred to the pending litigation in relation to the real estate registered in the name of that company and the financial position of that company generally. In the result her Honour said:

``The precise financial implications of the dealing are, of course, impossible to determine until at least finalisation of the equity proceedings.''

In relation to Nobema Pty. Ltd., Shimajur Pty. Ltd. and Philjur Pty. Ltd. her Honour's comments were in essence confined to a commentary on their purposes, the limited financial statements made available and their liabilities. There were no findings as to the worth of the husband's interests in those companies.

In relation to the motor vehicles her Honour referred to the vehicles used by both the husband and the wife but there was no finding indicating that either party had a motor vehicle which would fall within the description of ``property of the parties''. However in relation to the vehicle the husband was then using it is obvious that the trial Judge was not impressed by the husband's evidence and cited that evidence as giving ``some indication of the difficulty in establishing the facts of the husband's financial circumstances with any degree of accuracy''.

In relation to the item, ``Moneys owed to the husband by other persons and against which may or may not be offset the moneys owed by or on behalf of the husband and/or companies under his control'', the trial Judge referred to the husband's evidence about his need to borrow funds to provide living expenses for himself and the children, alleged loans from the husband's father and other third parties including a Mr Schmid who was a business associate of the husband. At the conclusion of that portion of her judgment her Honour said:

``Whilst Mr Monte was not certain whether he had borrowed further substantial amounts of money, I am not certain that Mr Monte did in fact borrow to the extent that he claimed. I say that, conscious of the document purporting to evidence the loan from Mr Bonisch. Indeed, I am not able to make any satisfactory finding about Mr Monte's present means and/or income earning capacity.''

In addition to the assets in the trial Judge's summary her Honour dealt with the allegations by the wife that the husband had or was likely to have on hand large amounts of cash. In that connection her Honour said:

``As well as retaining the items of personalty to which I have referred, the wife also obtained cash from the husband's safe custody box. She denied taking as much as the husband claimed, but admitted taking some $7,800.

There was no doubt that during the marriage the parties, particularly the husband, did have access to cash funds secreted in various places. As I have said the husband claimed that he kept moneys readily available because of the possible needs in his business.''

The conclusion reached by her Honour is recorded in the following way:

``Clearly, the husband denied that he presently had any such funds available, but as I have observed elsewhere, I did not find myself able to attach any weight to the husband's evidence that was not supported by documents. But there was, of course, no evidence to assist me to make any finding about the amount (if any) presently available from such a source.''

Further during the course of assessing the parties' assets, and after concluding her review thereof, the trial Judge made various comments of a general nature both in relation to the unsatisfactory state of the husband's evidence, the difficulties her Honour faced in consequence thereof and — which is of more importance for our purposes — her view as to the financial resources available to the husband. Without attempting to quote every comment of that nature we would draw attention to the following:

``I have already referred to the intermingling and interconnection of funds and assets controlled and/or connected with the husband. I have referred to the difficulty in establishing facts to assist in the determination of these proceedings, and I am satisfied that Mr Monte, despite his emotional problems to which I shall refer later, intended the picture to be as confused as possible;

Having regard to all the evidence on these matters, I find myself unable to do more than indicate that given history such as this, I am reasonably satisfied that Mr Monte has financial resources available to him which are incapable of precise determination; and

The difficulty is, of course, as I have emphasised throughout these reasons, what is the extent of his income, financial resources and assets or their proper value. I cannot say even after five days hearing and lengthy cross-examination of the husband.''

In addition to the earlier comments of the trial Judge in relation to the contributions of the parties to their property, her Honour also said:

``Of even more importance is the value of those assets to which the wife made contribution and I refer in particular to the private enquiry agent's business to which I am satisfied the wife made both a direct and indirect contribution in the manner already outlined. I do also take into account her contribution as parent and homemaker in relation to those assets. Of course, given the intermingling of the private enquiry agent's business with other matters such as the personal effects of the parties, proceeds of insurance claims and the various companies, that contribution has further implications.

The great difficulty I have had in this case is in determining how these various contributions clearly established by the wife can be given appropriate financial recognition, given the state of confusion about the husband's assets and financial resources but giving appropriate recognition to the standard of living enjoyed by the parties during the marriage, particularly as epitomised by the furniture, jewellery, furs and overseas trips.''

In the result the trial Judge expressed the view that it was:

``... comparatively simple to determine that in all the circumstances the wife should receive the whole of the fund which presently represents the proceeds of sale of the former matrimonial home. She has already received and had the benefit of cash, jewellery, personal effects and furniture to which I have referred; although of course I am conscious that the husband also retained jewellery, furniture and personal effects of an indeterminate value because I did not accept his evidence that his wife stripped the house bare of furniture etc. The most difficult question is what further sum, if any, should she receive.

I have emphasised that it is impossible to determine what the husband's assets and financial resources really are and where they are. I am, however, satisfied that he has assets and financial resources which were not disclosed to this Court for the purpose of these proceedings, but which are somewhere available to meet an order.

I think the proper course is to adopt the proposal contained in the wife's counsel's submissions and make provision for payment of `a periodic capital sum' and therefore propose ordering that the husband pay the sum of forty thousand dollars to the wife over the next two years — that sum to bear interest at a reasonable rate until payment.''

The principal grounds of appeal pursued by the appellant were those set out in grounds 1, 2, 5 and 6. They may be summarised as being a submission that on the determination of a property application the Court is limited to making orders out of, and in respect of, the known assets only and that a finding that a party has other financial resources does not justify the Court making an order beyond identified, identifiable or quantified assets.

It is necessary to bear in mind the nature of this appeal. Orders under sec. 79 are discretionary orders and it is accepted that the traditional principles to be applied in respect of appeals against discretionary orders apply to appeals against orders under that section. The principles to be applied on such an appeal are not really the subject of doubt or uncertainty. There are a number of authoritative cases which set out those principles in some detail. It is sufficient for present purposes to cite the references to three of those cases, namely House v. The King (1936) 55 C.L.R. 499 at p. 505; Australian Coal and Shale Employees' Federation v. The Commonwealth (1955-56) 94 C.L.R. 621 at p. 627 and in the marriage of Mallet v. Mallet (1984) FLC ¶91-507.

The argument advanced in support of those grounds involves an interpretation of sec. 79(1) of the Family Law Act which reads as follows:

``(1) In proceedings with respect to the property of the parties to a marriage or either of them, the court may make such order as it thinks fit altering the interests of the parties in the property, including an order for a settlement of property in substitution for any interest in the property and including an order requiring either or both of the parties to make, for the benefit of either or both of the parties of a child of the marriage, such settlement or transfer of property as the court determines.''

It must be remembered that under the Act, unless the contrary intention appears, ```property', in relation to the parties of a marriage or either of them, means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion;''.

It was submitted that the Court has firstly to identify the property of the parties and that the Court's power is limited to dealing with that property, there being no general power given to the Court to make an order for the payment, or an award, of money.

It was conceded that instead of altering the interests of the parties in their property the Court was entitled to award a lump sum by way of settlement of property. It was also conceded on behalf of the husband that the financial resources of a party — in contrast to the property of that party — may justify the awarding of the whole of the property of the parties to the other party. However it was argued that the upper limit of what can be ordered by reason of the financial resources of one party is an award to the other party of the whole of the ascertained property of the parties.

It must be emphasised that in this matter there was no claim for maintenance by the wife nor did she assert any entitlement thereto. It was conceded on behalf of the husband that if there had been such a claim or entitlement on the part of the wife then the Court's powers would not be restricted to altering property interests to the limited extent asserted on behalf of the husband.

We agree that the power of the Court under sec. 79 is limited in the manner submitted by counsel for the husband.

It is clear that the trial Judge formed the view (which her Honour was quite entitled to do) that the husband had undisclosed financial resources available to him. It will also be noted that on one occasion in her judgment the trial Judge said that in addition to undisclosed and unidentified financial resources she was satisfied that the husband had ``assets and financial resources which were not disclosed to this Court for the purpose of these proceedings but which are somewhere available to meet an order''. However the trial Judge did not identify or quantify those assets. In the absence of such a finding we do not consider that it was proper in those circumstances to make an order on the basis that there was property of the husband (other than the fund) available to be dealt with under sec. 79.

We are of the opinion that the trial Judge in the particular circumstances of this matter properly exercised her discretion in awarding to the wife the whole of the fund which represents the net proceeds arising from the sale of the former matrimonial home.

However we consider her Honour fell into error in ordering the husband to pay the further sum of $40,000 to the wife.

In our view the finding that the husband had ``assets... which are somewhere available to meet an order'' cannot stand in the light of the trial Judge's earlier findings and comments in regard to the financial position of the husband and the state of the evidence before the trial Judge in that regard. To found jurisdiction under sec. 79 in relation to property, other than the fund, her Honour was obliged to make a finding as to the existence and value of that other property even though the unsatisfactory nature of the evidence made it necessary to express that finding in the most general terms both as to identity and value.

Accordingly we consider that the appeal should be allowed in part and that para. 2 of the order of 20 June 1985 should be set aside.

In the circumstances it is not necessary for us to deal in any detail with all the other grounds of appeal argued on behalf of the husband, including a submission that the husband should have received some part of the fund. We have already expressed the view that the balance of her Honour's order represents a proper exercise of discretion in view of the findings of the trial Judge in relation to the undisclosed financial resources of the husband.

However we will mention briefly two of the grounds of appeal urged on behalf of the husband.

Firstly, it was submitted that the trial Judge has misunderstood the effect, or wrongly applied the ratio decidendi, of the New South Wales Court of Appeal in the unreported decision of St. John v. St. John.

We do not agree that any error arose in that way. After quoting extensively from the judgment of Hutley J.A. in that case her Honour said:

``The facts in this case were relatively simple and the assets of the parties readily ascertainable. In the subject case it has been impossible to determine the present assets and financial resources and/or their relevant value and it is thus almost impossible to determine what is the just and equitable order.''

It seems to us that the trial Judge correctly distinguished the facts in the proceedings before her from the facts in St. John v. St. John. In our opinion her Honour was indicating that the decision in the latter case was not of any real assistance in determining the proceedings before her.

Secondly, it was submitted that her Honour failed to give any reasons of substance for reaching her decision to award the wife $40,000 in addition to the fund and that, in itself, was an error of law — Pettitt v. Dunkley (1971) 1 N.S.W.L.R. 376 and Brazel and Brazel (1984) FLC ¶91-568. That argument was based on the proposition that any amount — for example, $4,000 or $400,000 — could be substituted for the amount determined by the trial Judge and her Honour's reasoning would be just as apt to support such awards as the quantum ordered by the trial Judge.

Although that proposition is not without some substance nevertheless it seems to us to involve a misunderstanding of the ratio decidendi in Pettitt v. Dunkley. In Housing Commission of New South Wales v. Tatmar Pastoral Co. Pty. Ltd. & Anor (1983) 3 N.S.W.L.R. 378 the New South Wales Court of Appeal was at pains to explain the limited scope of its decision in Pettitt v. Dunkley. At p. 381 Hutley J.A. said:

``It was submitted that the appellant had the right to have findings so explicit that it would know whether the decision was based on fact or law. This is an extension of the principles enunciated in Pettitt v. Dunkley and, in my opinion, that case should be confined to the special case where there are no reasons, or a mere caricature of reasons, on an issue depending upon a view of the law.''

We heard submissions in relation to the costs of the appeal. We were informed that the wife is legally assisted but that the husband is not in receipt of legal aid. In the event of the appeal being successful the husband sought a certificate under the Federal Proceedings (Costs) Act in respect of his costs of the appeal. It does not seem to us that it would be proper to grant such a certificate to the husband in the circumstances of this matter in view of his lack of candour.

Accordingly the orders of the Court are as follows:

1. That the appeal be allowed in part.
2. That paragraph 2 of the order of her Honour Justice Maxwell dated the 20th day of June 1985 be set aside.