Murillo and Murillo

[2019] FamCA 680

FAMILY COURT OF AUSTRALIA

MURILLO & MURILLO [2019] FamCA 680

FAMILY LAW – PRACTICE AND PROCEDURE – Where the wife seeks to add the husband’s new partner to proceedings – Where leave is not required for the new partner to be added as a second respondent – Where the wife seeks to alter orders for a partial property settlement – Where the wife alleges the husband has wrongfully provided significant matrimonial funds to his new partner – Where any findings will be made at final trial and adjustments made accordingly – Application dismissed – Proceedings referred to Docket Registrar for case management.

Family Law Rules 2004 (Cth) r 6.03
APPLICANT:	Ms Murillo

RESPONDENT: Mr Murillo

FILE NUMBER: SYC 3325 of 2017

DATE DELIVERED: 20 September 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 26 August 2019

REPRESENTATION

THE APPLICANT: Ms Murillo appearing on her own behalf

SOLICITOR FOR THE RESPONDENT: Ms Sundar

SOLICITORS FOR THE RESPONDENT: Sarah Bevan Family Lawyers

Orders

1. The court notes that the wife does not require leave to join Ms B as a respondent to these proceedings.

2. Paragraph 2 of the wife's Application in a Case filed on 9 April 2019 is dismissed.

3. Order 4 made on 18 June 2019 is discharged.

4. The proceedings are referred to the Docket Registrar for case management.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Murillo & Murillo has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 3325 of 2017

Ms Murillo

Applicant

And

Mr Murillo

Respondent

REASONS FOR JUDGMENT

The proceedings

1. Mr Murillo and Ms Murillo are parties to litigation concerning parenting and financial issues.  On 26 August 2019 the wife's application for interim orders came before me for hearing, pursuant to the following Orders made on 18 June 2019:

   1.The matter is placed into the pool of matters awaiting interim determination and is to be allocated an expedited hearing date on the mother's application to join Ms B and for monies to be paid to the husband pursuant to orders made by Justice Harper and Deputy Chief Justice McClelland to be placed in an interest-bearing account in both parties' names.

   2.The mother is to personally serve Ms B with her application and affidavit immediately, including a cover letting [sic] advising Ms B that she will inform her of the next court date, once it is made available to her.

   3.The Registry is to notify the mother of the listing date as soon as possible.

   4.All future dates before Registrars are vacated.

   5.All represented parties have leave to file more than five subpoenas and any unrepresented litigants have leave to file up to ten subpoenas.

   6.The mother is to forthwith direct and authorise P Business, as managing agents of the parties' property at L Street, Suburb K ("the Suburb K property"), all information requested by him from August 2017 in relation to rental income received and expenses incurred for the Suburb K property.

   THE COURT NOTES THAT:

   a.It is the father's case that the mother is breaching Order 18 of Orders made 12 December 2018.

1. At the interim hearing on 26 August 2019 the husband pressed for orders for the sale of a jointly owned property at L Street, Suburb K.  Similarly he pressed for orders for the appointment of Ms C, a forensic accountant, as an expert valuer in relation to certain corporate interests.  These proposed orders were included in the husband's Amended Response to an Application in a Case filed on 27 February 2019.  Clearly, however, this relief was not listed for hearing before me on 26 August 2019 pursuant to the Orders and directions made on 18 June 2019.

2. I declined to entertain these two applications pressed by the husband.

3. Accordingly, I dealt with the wife's applications for the joinder of Ms B as a respondent to the proceedings and for orders for monies payable to the husband pursuant to orders made on 3 November 2017 to be placed in an interest-bearing account in the joint names of the parties.  On 3 November 2017 the Federal Circuit Court had ordered the sale of a property at Suburb D and for each of the parties to receive the sum of $125,000 from the net proceeds.  These orders provided further that the parties cause the balance of the net sale proceeds to be lodged in an interest-bearing account.

Background

1. The husband and the wife, who are aged 39 and 41 respectively, began to cohabit in November 2005 and married in 2006.  They separated on 16 April 2017 and were divorced by order made in 2018.

2. The parties are the parents of two children, Y and Z, who are aged 10 and 8 respectively.  The children live with their mother and have limited contact with the father.  Regrettably it has been deemed necessary for the children to attend family therapy and orders to that effect were made on 12 December 2018.

3. The husband has re-partnered with Ms B and they have a son, X, who was born in 2018.  They live together at a property M Street, Suburb N.  It appears that Ms B is the sole registered proprietor of this property, which is the subject of considerable dispute and controversy in these proceedings.

4. The wife alleged, in effect, that the husband and Ms B entered into a dishonest scheme to divert matrimonial funds and engaged in "mortgage fraud" in order to acquire this property and conceal its existence from her and the court.  She alleged that they did so in order to deplete the pool of matrimonial assets and to defeat her claim for a just and equitable distribution of matrimonial property.

5. It could fairly be observed that the contents of the wife's affidavits were inflammatory and quite uncontained in nature.  Effectively she accused the husband's current and former solicitors of professional misconduct, which included allegations of misleading of the court.  She levered similar allegations of improper professional conduct against the husband's former accountant.

6. The wife alleged that the husband "forged her signature" on documents which increased a mortgage on the title to the Suburb K property.  These allegations should be considered in the context of the contents of a statement dated 8 May 2019 given to police by Mr F, a Company E Loans franchisee.

7. Mr F stated that he attended the former matrimonial home of the parties on 20 April 2015 in relation to a refinance of a mortgage on the title to the Suburb K property.  He stated that he sighted the wife's Driver Licence and Medicare card and observed her to sign "the original identification form".

8. Mr F stated further that he then emailed the loan application form to the husband and received by return a document purportedly signed by both parties.  Mr F stated clearly that he did not see either party sign this loan application document.

9. It seems that the husband and Ms B were charged by police with offences relating to fraud.  There was no evidence as to the outcome of these criminal proceedings.  The Outline of Case document submitted on behalf of the husband, however, stated that he pleaded guilty to offences of "false and misleading document" on … July  2019 and received a fine.  This Case Outline stated that the remaining charges against the husband were withdrawn by the prosecution on 20 May 2019.

10. In evidence was a statement given to police by Ms G on 25 June 2019 (Exhibit 1).  Ms G is a solicitor who acts for Ms B in relation to the criminal charges.  She stated that she was present in the Local Court with Ms B in … June 2019, which was the day of the defended hearing of these charges.  She stated that a police senior constable approached Ms B in the courtroom and asked her to accept service of documents, to which reference was made in the Orders of 18 June 2019.

11. Ms G's statement recorded that she said to this officer "you should receive legal advice before attempting to serve my client inside a courtroom where she is sitting as a defendant and her matter is about to start and where you are the [officer in charge]."  Ms G stated that she told the officer that Ms B would not take the documents, as the presiding magistrate was about to enter the courtroom.

12. A purported "Affidavit of Service" sworn by this police officer, Senior Constable H, on 24 June 2019 indicated that Ms B declined to accept the documents when he asked her to do so on the same date.  This affidavit set out that these documents were the wife's Amended Application in a Case dated 18 March 2019 and her affidavits of 18 March 2019 and 26 March 2019.

13. The situation in relation to the sale of the Suburb D property was very far from clear, on the basis of the evidence offered by the parties on 26 August 2019.  The Orders of 12 December 2018 appointed the husband trustee for sale and he deposed on 26 February 2019 that he had appointed Q Group in Suburb R as the selling agent.  There was no evidence that any contract for sale has been exchanged or as to any anticipated date of settlement.

14. The husband tendered in evidence (Exhibit 1) ATO documents which indicated that he has a tax debt which stood at $118,284 on 1 April 2019.  His legal representative submitted that he requires $125,000 from the sale proceeds of the Suburb D property to meet this debt.

Consideration

Joinder of Ms B as a respondent

1. In my view, this issue can be dealt with simply by reference to Rule 6.03 of the Family Law Rules.  This Rule provides as follows:

   6.03    Adding a party

   (2)A party may add another party after a case has started by amending the application or response to add the name of the party.

   (3)      A party who relies on subrule (2) must:

   (a)file an affidavit setting out the facts relied on to support the addition of the new party, including a statement of the new party’s relationship (if any) to the other parties; and

   (b)      serve on the new party:

   (i)a copy of the application, amended application, response or amended response; and

   (ii)      the affidavit mentioned in paragraph (a); and

   (iii)any other relevant document filed in the case.

1. This procedure is open to the wife in relation to Ms B. Insofar as I was made aware on 26 August 2019, the wife has yet to file an Amended Application in which Ms B is named as a respondent. Once she takes that step she must comply with the requirements of Rule 6(3)(b). In my view, the questionable attempt at service upon Ms B by the police officer on 20 June 2019 has no impact upon the wife's right to utilise the procedure open to her pursuant to Rule 6.03.

2. I would note that the wife holds a degree in law and is presently undertaking post-graduate legal studies.  It is a matter for her to satisfy herself that she has a valid cause of action against Ms B, which would justify her joinder as a respondent to the proceedings.

Restraint upon payment to the husband of $125,000 from the sale proceeds of the Suburb D property

1. The wife did not prosecute an appeal against the Orders of 3 November 2017, which provided that each party receive a sum of $125,000 from the proceeds of sale of the Suburb D property.  It appears that she now relies upon allegations that the husband has wrongfully provided significant matrimonial funds to Ms B, for the purpose of defeating her claim for a just and equitable property settlement, to justify this proposed relief.

2. The wife tendered in evidence copies of bank, credit card and mortgage statements in relation to accounts held by Ms B (Exhibit 2).  She asserted that these documents established that substantial funds have been transferred to Ms B by the husband.  In the context of these interim proceedings, I cannot determine whether or not there is substance to that submission.

3. The only indication in the evidence as to the net amount which the parties may receive from the sale of the Suburb D property came from the husband's Financial Statement of 1 November 2018 and the wife's affidavit of 26 March 2018.  The wife deposed that "there is now a $720,000 debt on [the Suburb K] property" and "Shortly before separation, [the husband] redrew $740,000.00 from the mortgage redraw facility of J Street, Suburb D without my knowledge or consent".

4. In his Financial Statement of 1 November 2018 the husband indicated that the Suburb D property has a value of $1.6 million.  He indicated further in this Financial Statement that the parties have total mortgage indebtedness of approximately $1,468,000, which would appear to be referable approximately equally to the Suburb K and Suburb D property.

5. On the basis of this rather unsatisfactory evidence, it seems that the parties have a net equity of about $660,000 in the Suburb D property.  For present purposes, I will assume that they will receive a sum in the order of $600,000 as net sale proceeds.  If each party takes a sum of $125,000, approximately $350,000 should be available for investment in an interest-bearing account, pending final resolution of the proceedings.

6. On this scenario, a payment of $125,000 to the husband from these funds is capable of reversal or other appropriate adjustment at a final trial, if the wife ultimately is able to establish a case in the terms which she advanced at the interim hearing.  In these circumstances, I decline to interfere with the Orders of 3 November 2017.

The future conduct of the proceedings

1. I will order that the proceedings be referred to the Docket Registrar for further case management.  Accordingly, I will vacate Order 4 made on 18 June 2019 which stated that "All future dates before Registrars are vacated".  I can see no reason why these proceedings should be dealt with other than in accordance with the usual practice of case management by Registrars.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 20 September 2019.

Associate:

Date:  20 September 2019