FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Morcos & Lindon (No 2) [2025] FedCFamC1F 7
File number(s): MLC 209 of 2020 Judgment of: BENNETT J Date of judgment: 20 January 2025 Catchwords: FAMILY LAW – PROPERTY – alteration of property interests – where proceedings commenced by the husband seven years after separation and the wife contended that no property adjustment should be made – Stanford – where both parties ultimately sought an alteration of property interests at final hearing.
FAMILY LAW – PROPERTY – alteration of property interests – where major issue was identification of property interests, in particular, real property that existed in the name of the husband’s mother – where husband engaged in significant deceptions and forgeries with a view to keeping a property out of the pool of divisible interests – where wife sought declaration that a property was beneficially the husband’s property – where declaration made.
FAMILY LAW – PROPERTY – alteration of property interests – where husband engaged in fraud and forged documents – where s128 certificate granted in relation to forgery – where mortgagee bank and bankruptcy trustees given a copy of the orders – where application must be made in relation to release to any non-party of reasons for decision.
FAMILY LAW – PROPERTY – alteration of property interests – where parties agreed on the value of the properties – where one property must now be sold – where actual proceeds of sale will be taken into account instead of the agreed valuation.
FAMILY LAW – PROPERTY – alteration of property interests – where contributions were held to be 60/40 in favour of the wife and an adjustment of 10% made in favour of the husband pursuant to s 75(2) factors.
FAMILY LAW – PROPERTY – add backs – where adjustment made for wanton and reckless assumption of liabilities on behalf of the husband.
Legislation: Bankruptcy Act 1966 (Cth)
Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Legal Profession Act2004 (Vic)
Cases cited: In the Marriage of V R & N Gould (1993) 17 Fam LR 156
Kennon v Kennon [1997] FamCA 27
Kowaliw and Kowaliw (1981) FLC 91-092
Legal Services Commissioner v Mr M (Legal Practice) [2013] VCAT …
Morcos & Lindon [2023] FedCFamC1F 1010
Robb & Robb (1995) FLC 92-555
Stanford v Stanford [2012] HCA 52
Whisler & Whisler [2010] FamCAFC 18
Division: Division 1 First Instance Number of paragraphs: 304 Date of last submission/s: 23 August 2024 Date of hearing: 18 September 2023, 22 April 2024, 23 April 2024, 26 April 2024, 7 May 2024, 8 May 2024, 29 July 2024, 30 July 2024, 31 July 2024, 1 August 2024 Place: Melbourne Counsel for the Applicant: Litigant in Person Counsel for the First Respondent: Ms Alison James Solicitor for the First Respondent: Zeno Lawyers Counsel for the Second Respondent: The Applicant appearing on behalf of the Estate ORDERS
MLC209 of 2020 FEDERAL CIRCUIT AND…
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- AGLC
- Morcos & Lindon (No 2) [2025] FedCFamC1F 7
- Case
- [2025] FedCFamC1F 7
- Decision Date
CaseChat Overview and Summary
The court’s reasoning involved a thorough examination of the property interests and the contributions made by both parties during the marriage. It was determined that the husband’s deceptive actions warranted a declaration that the D Street property was his beneficial owner. The court also assessed the value of the properties, concluding that the actual proceeds of the sale of D Street would be taken into account instead of the agreed valuation. Contributions were found to be 60/40 in favor of the wife, with an adjustment of 10% made in favor of the husband based on factors under section 75(2). The court further addressed add-backs for wanton and reckless assumption of liabilities on behalf of the husband.
The final orders of the court declared Mr. Morcos as the proprietor and beneficial owner of the D Street property. Ms. Lindon was to retain the G Street property, indemnifying the husband against mortgage repayments and other liabilities. The court mandated the sale of the D Street property under the wife’s conduct to ensure a legitimate sale. The proceeds from the sale were to be allocated with specific considerations for costs, mortgage discharges, and reimbursement of expenses. The court also made orders for the division of the remaining assets and liabilities, ensuring adjustments for the husband’s wanton borrowings and the wife’s legal fees. The court emphasized the importance of each party being solely responsible for their liabilities and maintaining the severance of any joint tenancies. The orders allowed for the provision of copies of the decision to relevant parties and reserved the liberty to apply for costs according to the Rules of Court.
Orders
Orders of the court
MLC209 of 2020
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:
MR MORCOS
Applicant
AND:
MS LINDON
First Respondent
EXECUTOR OF THE ESTATE OF THE LATE MS B
Second Respondent
ORDER MADE BY:
BENNETT J
DATE OF ORDER:
20 JANUARY 2025
Amended pursuant to rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) on 21 March 2025.
THE COURT ORDERS THAT:
1. Pursuant to section 78 of the Family Law Act 1975 (Cth) (“the Act”), the Court declares MR MORCOS as the proprietor and legal and beneficial owner of the property situated at D Street, Suburb E in the State of Victoria (the “[D Street] property”).
2. The wife retain the property situated at G Street, Suburb H in the State of Victoria (the “[G Street] property”) for her sole benefit, and indemnify the husband against all past and current mortgage repayments, outstanding council rates, land tax liabilities, in respect of the G Street property.
3. The parties do all acts and things necessary to place the D Street property on the market for sale, as follows:
(a) With the wife having conduct of the sale subject to any right by the mortgagor bank to exercise a power of sale over its security;
(b) To list the D Street property for sale with a selling agent of the wife’s choice (“the Agent”);
(c) With a legal practitioner chosen by the wife to prepare all documents and act on the sale (“the conveyancer”), such conveyancer to provide copy documents and correspondence to the husband as well as the wife;
(d) To be sold by way of auction to be held in not more than 45 days or by such other method as is recommended by the Agent and the parties agree to adopt;
(e) For a reserve price of $2,850,000 or as otherwise recommended by the Agent; and
(f) With the date for settlement of the sale to be as agreed and, failing agreement, 30 days from the date of sale.
4. The husband co-operate in every way with the Agent including (without limiting the generality of the foregoing):
(a) Making the keys available to the Agent and ensuring that no rooms or areas are locked or are otherwise inaccessible;
(b) Allowing inspection of the property at all reasonable times requested by the Agent;
(c) Ensuring the property, including the grounds are in a neat and clean condition at the time of inspection by the Agent and prospective purchasers; and
(d) Signing all documents as required by the Agent in relation to the listing for sale of the property.
5. The wife do all acts and things necessary to engage a conveyancer to have the conduct of the sale on behalf of both parties at the sole expense of the wife in the first instance and thereafter be recoverable by the wife from the proceeds of sale.
6. If any party fails or refuses to comply with the requirement to execute documents and such failure or refusal continues for a period of seven (7) days, the solicitor for the wife be appointed pursuant to section 106A of the Act and authorised to do all acts and things necessary to give validity and operation thereto.
7. Immediately prior to settlement, the wife do all such acts and things and sign all such documents as may be required, at her own expense, to withdraw all caveats lodged by her or on her behalf over D Street, Suburb E.
7. Within 28 days of the Orders the Husband do all acts and things and sign all documents required, at his own expense, to withdraw all caveats lodged by him or on his behalf over G Street Suburb H including but not limited to caveat ….
8. On completion of the sale of the D Street property, the proceeds be paid in the following manner and priority:
(a) First, in payment of all costs, commissions, adjustments due to the purchaser and expenses of sale;
(b) Second, in payment and discharge of any amount due under the mortgage(s) encumbering the property; inclusive of penalties, interest and default charges
(c) Third, to the wife for reimbursement of any conveyancing expenses in relation to the sale paid by her;
(d) Fourth, 50% be allocated to the wife (“the wife’s allocated amount”) ; and the balance to be distributed in the following order:
(i) First, the Wife shall receive a lump sum payment equating to the value of F, in accordance with the formula at paragraph 9 below, less ($1,644,000 (the total of items A, B and C) (“the Wife's allocated amount”).
(ii) Second, the Husband shall receive the balance (“the Husband’s allocated amount”), subject to Order 10.
(e) 50% be allocated to the husband (“the husband’s allocated amount”).
9. From the wife’s allocated amount, the sum of $1,644,000 be allocated to the husband’s allocated amount (representing the sum of $1,484,000 being the agreed net value of 228 G Street plus $12,000 for the wife’s car and $148,000 for the wife’s paid legal fees);
9. The following formula shall be adopted for the purposes of Order 8(d) above: A ($1,484,000 G Street) + B ($12,000 Wife's motor vehicle) + C ($148,000 Paid Legal Fees) + D (net sale proceeds from the sale of D Street Suburb E) = E. Thereafter E divided by 2 = F (one half of the net asset pool).
10. From the husband’s allocated amount, the sum representing 50% of the husband’s wanton borrowings and penalties, interest and charges for all borrowings be allocated to the wife’s allocated amount. The amount of wanton borrowings and penalties, default charges and arrears be calculated by subtracting from all monies required by the bank at settlement the sum of $540,000 (being the original borrowings described in [119] to [120] of the reasons).
11. When the sale process of the D Street property and the allocation of funds has been concluded the wife do all acts and things as may be necessary to:
(a) Pay to the husband the whole of the husband’s allocated amount as calculated pursuant to these Orders; and
(b) Pay to herself the whole of the wife’s allocated amount as calculated pursuant to these Orders;
12. Pending the settlement of the sale;
(a) Subject to further order of the Court, the husband have sole right to use and occupy the D Street property; and
(b) During such occupation the husband be liable to pay, as and when they fall due all instalments payable pursuant to the mortgages encumbering the property; and all rates and taxes and other outgoings on the property.
13. That there be no adjustment to the superannuation interests of the parties.
14. Unless otherwise specified in these Orders and save for the purposes of enforcing the payment of any monies due pursuant to these Orders:
(a) Each party retain and be solely entitled to the exclusion of the other to all real and personal property (including choses-in-action and superannuation benefits) in their respective legal or beneficial ownership or possession;
(b) All insurance policies remain the sole property of the owner named thereon;
(c) Each party be solely liable for and indemnify the other against any liability;
(d) Each party be restrained from encumbering any item of property to which that party is entitled pursuant to these orders save for the purpose of compliance with this Order; and
(e) Each party be solely responsible, as between the parties, for any liabilities in that party’s name including but not limited to credit cards, loans and lease agreements; and
(f) Any joint tenancy of the parties in any real or personal property is hereby expressly severed.
15. All parties are at liberty to provide a copy of this Order to the Proper Officer of Westpac Bank and the bankruptcy trustee of the husband’s second bankruptcy.
16. I reserve liberty to the parties to apply urgently in relation to:
(a) Implementation of this Order including any application pursuant to s 106A of the Act;
(b) For matters allegedly requiring correction under the slip rule, and
(c) For permission to provide a copy of these reasons for decision to Westpac Bank, the husband’s trustee in bankruptcy or any other person.
17. Anyone wishing to make an application for costs may do so in accordance with the Rules of court. Any application for costs be supported by an estimate of costs drawn in accordance with the Court’s scale of costs without prejudice to claim that costs be calculated on any other basis.
AND THE COURT NOTES THAT:
A. Section 114Q of the Family Law Act 1975 (Cth) provides that it is an offence punishable by imprisonment for up to one year to communicate to the public an account of family law proceedings which identifies a party to the proceedings, a witness in the proceedings, a person related to, or associated with, a party to the proceedings, or a person who is, or alleged to be, in any other way concerned in the matter to which the proceedings relate, unless specifically authorised by the court.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
The proposed orders do not affect the wife’s income earning capacity. Considerations under s 75(2) Section 79(4)(e) requires the Court to take into account matters referred to in s75(2) so far as they are relevant. This is the prospective element of the determination of the application for an alteration of property interests. The assessment of contributions during the marriage is the retrospective element. The wife asserts no adjustment needed for s 75(2) factors save to the extent that she seeks to bring the D Street property into account as owned by the husband.[57] However, the wife does seek addbacks which I consider appropriate to deal with under s75(2) rather than on the identification of legal and equitable interests. The age and state of health of each of the parties (s 75(2)(a)) and the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment (s 75(2)(b))[57] Transcript of proceedings, 1 August 2024, page 478, line 8. The wife is 68 years old. She is employed as a manager receiving $140,000 per annum. This is by far the most remunerative employment the wife has had. There was no mention of impending retirement. She is in reasonably good health. The husband is 76 years old. He says that he suffers from a range of medical conditions. In June 2024 he suffered a medical episode for which he was hospitalised. Thereafter, he suffered another medical episode in July which left no lasting impact except for restricted mobility of one hand. The husband in his Financial Statement asserts that he earns about $80 a week by way of income or wages before tax, presumably from rental income paid to the C Pty Ltd business by lodgers. He says:[I] live on nothing. I have no expenses in general. I am a very – I don’t smoke, don’t drink, I don’t do drugs, I don’t go for prostitutes, I don’t go for anything. A family man .... my mistake.[58] [58] Transcript of proceedings, 22 April 2024, page 32, line 5. The husband was asked simple questions about which bank account he used for day to day purchases. He said he did not have any money or any expenses. He testified that he lives on nothing:[59][59] Transcript of proceedings, 26 April 2024, page 26, line 3. MS JAMES: It is the Commonwealth Bank […] account, isn’t it?THE HUSBAND: Yes. MS JAMES: And it’s the account number that ends in […12].THE HUSBAND: I can’t recall.MS JAMES: You have not produced any statements, have you?THE HUSBAND: Nobody has requested of me, and Ms Zeno [wife’s solicitor] has subpoenaed all the banks.MS JAMES: Your Centrelink payments are deposited into that bank account.THE HUSBAND: Yes.MS JAMES: And your living expenses are paid from that account. THE HUSBAND: I am living, actually, on nothing. Until yesterday, my friend came over to me and he brought me food from his own house. From day to day, he comes over and brings me the – he has children and he brings to me what’s left over.MS JAMES: [Mr Morcos], please answer my question. Do you pay for your living expenses from your Commonwealth Bank […] account?THE HUSBAND: I haven’t got expenses.THE HUSBAND: I have the same clothes.MS JAMES: If - - -THE HUSBAND: I eat little. I take medicine, get it from the pharmacy, and that’s it.MS JAMES: And you pay for your medicine from the pharmacy from that account, don’t you?THE HUSBAND: I don’t withdraw money from the account. MS JAMES: How do you pay for money – how do you pay for the medicine from the pharmacy?THE HUSBAND: There are some helps. MS JAMES: It is not free, though, is it?INTERPRETER: Which is?MS JAMES: The medicine from the pharmacy is not free.THE HUSBAND: I know that’s not free. MS JAMES: How do you pay for it?THE HUSBAND: As I mentioned, I receive some help.MS JAMES: So you pay cash?THE HUSBAND: My friends actually – my friends actually do bring to me. I don’t depart from the [business premises].MS JAMES: And you pay cash for your living expenses, then?THE HUSBAND: I don’t have expenses. I got – I have been receiving food, and just I live in the [business premises] and that’s it.MS JAMES: You have not got any debts to your friends for your living expenses, do you?THE HUSBAND: These people are doing charity work.MS JAMES: You are a proud man, [Mr Morcos]. You would not accept charity, would you?THE HUSBAND: “Yes, I understand,” he has told me.MS JAMES: You pay for your living expenses, as small as they may be, by cash?THE HUSBAND: I live in the [business premises] and I don’t get out.MS JAMES: Could you please answer the question. You pay for your living expenses in cash?THE HUSBAND: I don’t have expenses, because I haven’t got an income. So I don’t get out, nor spend, nor go anywhere, because I haven’t got money in order to get out. I’m supposed to have surgery in my eyes. I didn’t go, because I haven’t got money.MS JAMES: How did you come to court today, [Mr Morcos]?THE HUSBAND: Using the metro card. MS JAMES: And how do you pay for the metro card?THE HUSBAND: Yesterday, one of my friends – no. On Wednesday, my friend took me from the [business premises] – took me to Westpac in […], and then we did bring the last statement for the account, and then on our way back there has been a 7-Eleven. He did get into it and he did buy for me a voucher and a card that – I utilise it, actually, to ride the tram today. MS JAMES: And how did you pay for the metro card? THE HUSBAND: He is the one who paid.