Neubert (deceased) and Neubert & Anor (No. 2)
[2017] FamCA 829
•18 October 2017
FAMILY COURT OF AUSTRALIA
| NEUBERT (DECEASED) & NEUBERT AND ANOR (NO. 2) | [2017] FamCA 829 |
| FAMILY LAW – PROPERTY – Application for a property settlement by the wife – Where wife was killed by the husband after filing but prior to the final hearing – Where wife was substituted as a party to the proceedings by her personal legal representative for her Estate FAMILY LAW – PROPERTY – Where the husband initially sought orders that there be a division of property to the late wife’s Estate whereas he receive 80 per cent and the late wife’s Estate receive 20 per cent but later sought an equal division of the assets – Consideration of s 79(8) of the Family Law Act 1975 (Cth) – Court satisfied that s 79(8) requirements are met in circumstances where to decline to make an order would reward the party who had killed the other party to the proceedings - Orders made where the parties assets should be divided 35 per cent to the Estate of the late wife and 65 per cent as to the husband – Order that the husbands share of the parties assets be paid directly to the intervenor to be set off against the judgment debt arising from the Supreme Court proceedings – Consideration of whether there should be any s 75(2) adjustment – Given the death of the late wife there were no s 75(2) adjustments to be made in her favour | |
| Family Law Act 1975 (Cth) Trustee Act 1898 (Tas) s 7 Crimes Act 1961 (NZ) ss 68, 167, 168. | |
Cooper v Neubert [2017] TASSC 33
In the marriage of Kayes (1999) FLC 92-846
Fisher v Fisher (No. 2) [1986] HCA 61; (1986) 161 CLR 438; (1986) FLC 91-767
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191; (2005) 213 ALR 692; (2005) 79 ALJR 731
Stanford & Stanford [2012] HCA 52
Mena & Mena and Anor [2016] FamCAFC 85
Meddow & Estate of the late Ms Meddow [2015] FamCA 1182
Doyle & Doyle (1989) FLC 92-027
Cornell & Stokes [2008] FMCAfam 774
Finlayson & Finlayson & Gillam [2002] FamCA 898, (2002) FLC 93-121
Charles & Charles [2017] FamCAFC 3
Homsy & Yassa and Yassa; the Public Trustee (1994) FLC 92-442
Pierce & Pierce (1999) FLC 92-844
Grace v Grace [2012] NSWSC 976
Van der Linden & Kordell [2010] FamCAFC 157
Watson & Ling [2013] FamCA 57
Trustee of the Property of Lemnos v Lemnos (2009) 223 FLR 53
Explanatory Memorandum to the Bankruptcy and Family Law Legislation Amendment Bill 2004 (Cth)
Commonwealth, Parliamentary Debates, House of Representatives, 17 February 2005, 30 (Mr Ruddock, Attorney General)
| APPLICANT: | Graeme Bruce Gordon Bradfield As Legal Representative of Olga Baraquio Neubert |
| RESPONDENT: | Klaus Dieter Neubert |
| INTERVENOR: | Josephine Ramos Cooper |
| FILE NUMBER: | HBC | 796 | of | 2014 |
| DATE DELIVERED: | 18 October 2017 |
| PLACE DELIVERED: | Hobart |
| PLACE HEARD: | Hobart |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 14 August 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mrs Mooney with Mr Lewinski |
| SOLICITOR FOR THE APPLICANT: | Butler McIntyre & Butler |
| COUNSEL FOR THE RESPONDENT: | In person |
| SOLICITOR FOR THE RESPONDENT: |
| COUNSEL FOR THE INTERVENOR: | Mr Kendall |
| SOLICITOR FOR THE INTERVENOR: | Phillips Taglieri |
Orders
Pursuant to the provisions of s 79(8)(b) of the Family Law Act 1975 (‘the Act’) the Graeme Bruce Gordon Bradfield (‘the applicant’), who is the legal personal representative of Ms Neubert (‘the late wife’), is permitted to continue these property proceedings commenced by the late wife prior to her death in 2015.
The applicant and Mr Neubert; (‘the respondent’) shall do all acts and sign all documents to transfer to the Ms Cooper (‘the intervenor’) the respondent’s legal and equitable title in the following real properties:-
(a) the whole of D Road, Town M, Tasmania (‘Property M’); and
(b) the respondent’s one half interest in E Street, Town G, New Zealand (‘Property G’).
The intervenor shall:-
a.do all acts to sell Property M at market value and the net proceeds of sale thereof (being the sale price less the legal and real estate agents selling costs and disbursements of and associated with such sale);
b.retain the legal and equitable interest in the net proceeds of such sale which are to be set off against the judgment debt due to her, pursuant to the May 2017 judgment of the Supreme Court of Tasmania and subsequent costs determination and as against first the judgment then the determined costs; and
c.keep the applicant and respondent informed of the details of the transaction and produce documents relating to them as are reasonably requested by one and/or other of them.
The applicant and the intervenor shall do all acts to sell Property G at market value and the net proceeds of sale thereof, being the sale price less the legal and real estate agents selling costs and disbursements of and associated with such sale, shall be disbursed as follows:-
a.pay one half of the net proceeds of sale to be paid to the intervenor to be set off against the debt due to her pursuant to the May 2017 judgment of the Supreme Court of Tasmania and subsequent costs determination and as against first the judgment then the determined costs;
b.one half of the net proceeds of to be paid to the executors of the estate of the late wife or if probate is not granted then hold such funds in trust for her estate pursuant to the provisions of the Legal Profession Act 2007 (Tas) pending the granting of Probate of the late wife’s Will or otherwise the granting of Administration of the late wife’s estate; and
c.keep the respondent informed of the details of the transaction and produce documents relating to them are reasonably requested by him.
The applicant and the intervenor shall do all acts and sign all documents to effect a division of the net total property of the parties so as to pay:-
a.thirty five per cent (35%) to the applicant to account for same to the to the executors of the estate of the late wife or if probate is not granted then hold such funds in trust for her estate pursuant to the provisions of the Legal Profession Act 2007 (Tas) pending the granting of Probate of the late wife’s Will or otherwise the granting of Administration of the late wife estate; and
b.sixty five percent (65%) to the intervenor to be set off against the debt due to her, pursuant to the May 2017 judgment of the Supreme Court of Tasmania and subsequent costs determination and as against first the judgment then the determined costs.
The net assets are declared to include:-
a.the net proceeds of sale of Property M and Property G;
b.the sum of $410,000 paid to the intervenor pursuant to the order made 14 August 2017;
c.the balance, if any, of the trust sum of $34,424.66 held in trust pursuant to the order made 14 August 2017 after payment provided by Order 2 thereof;
d.proceeds of CBA Cash Management account in the name of the respondent and ending in ..89,
e.proceeds of Westpac account ending in ..25 less any income tax payable by the estate of the late wife on her share of the income that such money represents;
f.$75,000 and accumulated interest held by the offices of Butler McIntyre & Butler;
g.all assets held at P Bank less any tax as may be needed to repatriate such assets,
h.the five (5) gold coins held at Butler McIntyre & Butler;
i.the late wife’s entitlement of her superannuation preserved benefits;
j.the timber at Property M, if any;
k.subject to the orders of 14 August 2017, the furniture, chattels, tools and household items at Property M, if any; and
l.the funds received by the applicant pursuant to Court Orders 24 January 2017 and 2 August 2017, and such other assets, if any, as may be owned by the respondent.
It is declared that the following liabilities be and are the sole responsibility of the respondent and the respondent shall indemnify the applicant in respect of any claim in relation thereto;
a.debt to Simmons Wolfhagen; and
b.debt to the intervenor.
For the purposes of giving effect to the provisions these orders:-
a.the applicant shall relinquish in favour of the respondent, through payment to the intervenor in reduction in the quantum of the judgment debt and costs owed by the respondent to the intervenor, any interest that the late wife may have otherwise have to or in the $410,000 paid to the intervenor pursuant to the orders 14 August 2017 and the proceeds of Westpac account ending in ..25 to the intent that the intervenor shall be the sole and absolute legal owner;
b.The respondent shall relinquish in favour of the applicant and where necessary transfer to the applicant any interest that he may have to or in:-
(a)the five (5) gold coins held at Butler McIntyre & Butler;
(b)the late wife’s interest in her superannuation preserved benefit;
(c)the $75,000 held by Butler McIntyre & Butler;
(d)the proceeds of CBA Cash Management account in the name of the respondent, account number ..89;
(e)interest earned as referred to in respect of funds referred to in this order; and
(f)funds paid on to the applicant pursuant to order made on 24 January 2017 and 2 August 2017.
to the intent that the applicant hold such funds in trust for the late wife’s estate pursuant to the provisions of the Legal Profession Act 2007 (Tas) pending the granting of Probate of the late wife’s Will or otherwise the granting of Administration of the late wife estate.
In respect of the timber, furniture, chattels, tools and household items situated at Property M, the applicant and/or his lawyer and/or nominee and the intervenor, her lawyer and/or nominee shall be permitted free and unrestricted access to enter and inspect same from time to time.
The respondent shall within fourteen (14) days of written request relinquish in favour of and where necessary transfer to the applicant all personal items, if any, of the late wife.
In reduction in the quantum of the judgment debt and costs owed by the respondent to the intervenor, the respondent shall within fourteen (14) days of a written request transfer to the intervenor all furniture, tools and other household items and the timber, if any.
In respect of Property G, Orders 1 and 2(a) of the Order made on the 27 April 2017 shall remain in full force and effect, and Orders 2(b) and 2(c) shall be and are revoked.
The monies to be received by Butler McIntyre & Butler, being monies to be repatriated from the European Union pursuant to orders of this Honourable Court made on the 13 October 2016 and the 27 April 2017, shall upon receipt be divided as between the applicant and the intervenor, in reduction in the quantum of the judgment debt and costs owed by the respondent to the intervenor and as against first the judgment then the determined costs, in accordance with the percentages provided in these orders.
INJUNCTIONS
The respondent be and is hereby restrained from dealing with or disposing of or encumbering his interest, if any, in any asset owned or received by him pursuant to court order in these proceedings excluding any monies received by the respondent by way of pension from the date of this order.
The intervenor be and is hereby restrained from dealing with or encumbering or attempting to execute against any asset which it is contemplated will be transferred to the applicant pursuant to these orders.
The parties shall do all acts and things and sign or execute any and all documents that may be required to give effect to the terms and intent of this order.
The process of the sale of any property and the payment of money pursuant to these orders whether by or on behalf of the applicant, respondent and/or the intervenor shall be governed by the provisions of the Trustee Act 1898 (Tas).
SECTION 106A OF THE FAMILY LAW ACT POWER
Pursuant to Section 106A of the Family Law Act 1975, the Registrar of the Family Court of Australia at Hobart is hereby appointed to execute all deeds and documents in the name of the respondent and do all acts and things necessary to give validity and operation to all such deeds and documents so as to effect the implementation of the terms of this order.
IT IS NOTED
For the purposes of giving effect to the calculation as contemplated in these Orders, the following amounts are noted as the values:-
a.As to Property M - the net proceeds of sale after usual costs and disbursements of sale are to be calculated after payment of legal costs and disbursements on the sale, real estate and valuation fees, rates, land tax, insurances, Capital Gains Tax and Goods and Services tax (if relevant);
b.as to Property G - the net sale proceeds after usual costs and disbursements of sale are to be calculated after payment of any registered mortgage, legal costs and disbursements on the sale, real estate and valuation fees, rates, land tax, insurances, Capital Gains Tax and Goods and Services tax (if relevant);
c.the proceeds of the CBA Cash Management account ..89, Westpac account ..25 and $75,000 held by the offices of Butler McIntyre & Butler are the actual amount received;
d.the value of the money and assets held at P Bank – is to be calculated as the actual net amount received less any costs and disbursements and taxation, if any, reasonably incurred in repatriating same;
e.the value of the five (5) gold coins held at Butler McIntyre & Butler is $6,725 or if sold, the actual amount received;
f.as to the late wife’s interest in her superannuation preserved benefits - such superannuation preserved benefits as may be received in the approximate sum of $6,932;
g.the value of the timber, if any, is the sale price as may be reasonably agreed between the applicant and the intervenor, less selling costs;
h.the value of the furniture, chattels, tools and household items at Property M, if any, is the sale price as may be reasonably agreed between the applicant and the intervenor, less selling costs;
i.the funds received by the applicant’s solicitor pursuant to the Court Order of 24 January 2017 and 2 August 2017 total $165,000;
j.the funds paid on behalf of respondent on 24 January 2017 and 28 March 2017 total $72,997.73;
k.such other assets, if any, as may be owned by or on behalf of the respondent have a value of their sale price as may be reasonably agreed between the applicant and the intervenor, less selling costs,
l.the accumulated interest on all funds held at Butler McIntyre & Butler are valued at the amount of interest accrued at the date of withdrawal of the monies.
For the avoidance of doubt, it is acknowledged that no order of this Court is intended to preclude the intervenor from enforcing the amount remaining unpaid pursuant to her order obtained in the Supreme Court of Tasmania against the respondent.
For the further avoidance of doubt, it is acknowledged that it is not intended by the intervenor and the intervenor acknowledges that she is restrained from enforcing her order obtained in the Supreme Court of Tasmania against any of the assets which are to remain in the name of or be transferred to the applicant in these proceedings.
IT IS DIRECTED that the intervenor and the applicant forward a copy of these reasons to Messrs Simmons Wolfhagen within seven (7) days of the judgment being handed down.
LIBERTY TO APPLY
For a period of two (2) years from the date of this Order the applicant and the respondent have liberty to apply to the Honourable Court in respect of consequential and/or mechanical orders to give effect to this order upon giving seven (7) days’ written notice to the Registry and to the other parties.
All extant applications, including any applications for costs, are dismissed.
At the end of the appeal period all subpoenaed documents be returned to the persons or institutions from which they emanated and all other exhibits are returned to the person or persons who tendered the same.
IT IS CERTIFIED
Pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth) it was reasonable to engage counsel to attend.
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 Neubert (Deceased) & Neubert and Anor (No. 2) 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 HOBART |
FILE NUMBER: HBC 796 of 2014
| Graeme Bruce Gordon Bradfield as Legal Representative of Olga Baraquio Neubert |
Applicant
And
| Klaus Dieter Neubert |
Respondent
And
Josephine Ramos Cooper
Intervenor
REASONS FOR JUDGMENT
INTRODUCTION
On 14 May 2015 Klaus Neubert (‘the husband’) murdered, his wife, Olga Neubert (‘the late wife’).
These proceedings are about the division of property between the husband and the estate of the late wife. The consequence of the orders I intend to make, combined with a judgment of the Supreme Court of Tasmania, is that the property owned by the husband will be wholly divided between his late wife and her friend, Josephine Ramos Cooper (‘the intervenor’). The husband will be left with no property of any value apart from a small monthly pension from Country Y. Given the circumstances, I am satisfied that such an outcome is just and equitable.
The late wife and the husband had been in a relationship since December 1995 or early 1996, and that relationship had ended in separation on 5 November 2014. This was a relationship which subsisted for almost 19 years.
On 27 October 2014, prior to her death, the late wife had commenced these property proceedings in the Federal Circuit Court against the husband.
On 14 May 2015 the late wife was driving through Hobart with her friend, the intervenor. Driving in the same vicinity, and having armed himself with a shortened firearm, the husband saw the late wife, forced her to stop her car and then shot her dead. At the same time he shot the intervenor, causing permanent and significant injury to her.
The husband was immediately arrested and he has remained in prison since committing that crime. He was charged with the murder of the late wife and offences against the intervenor. In 2017 the husband was convicted of that murder and other offences, and he is now serving a lengthy period of imprisonment. Given his age, the husband is unlikely to live long enough to reach his parole date.
The intervenor commenced civil proceedings against the husband in the Supreme Court of Tasmania and secured a judgment against him in 2017 for $2,312,284.20 plus costs. The intervenors legal costs have now been determined and allowed at $213,435.17. Interest is running on the judgment debt and the current amount outstanding as at 14 August 2017 was $2,567,746.26 (‘the judgment debt’).
The intervenor has not at present sought enforcement of the judgment debt, as she has been awaiting the determination of these family law proceedings.
After the death of the late wife the property proceedings were transferred to the Family Court and were heard by this Court on 15 August 2017.
During the hearing of these proceedings the husband was self-represented. He blamed this Court for that lack of representation, in that it did not release further money to pay for his legal representation. This was a false and disingenuous argument by the husband. It was made clear by the legal personal representative for the wife and intervenor, in previous Court events, that funds for appropriate legal representation would have been made available, provided they were taken from the husband’s funds held by him in Europe. It was to be conditional upon those funds being repatriated to Australia. The husband refused to repatriate those funds, as such he is the author of his own misfortune.
Further, on the first day of the hearing the husband asserted for the first time, that the monies were not his and were held on trust for his grandchildren. For the reasons set out later I have determined that this assertion was a falsehood. The husband’s lack of representation was solely caused by his failure to comply with orders of this Court to repatriate those funds.
On 23 October 2015, Mr Burton was appointed as legal personal representative (‘the representative’) for the late wife pursuant to Rule 6.15(3) of the Family Law Rules 2004 (‘the Rules’) and s 79(8) of the Family Law Act 1975 (‘the Act’).
The representative and the intervenor sought orders that there be a property adjustment between the estate of the late wife and the husband on the basis of payment to the late wife of 35 per cent of the net property and payment of the balance of the net property to the intervenor, having regard to the judgment debt.
In his Response filed 8 December 2014, which was prior to the death of the late wife, the husband had conceded that a property adjustment order ought to be made but on the basis of 80 per cent of the property for him and 20 per cent to the late wife. At the hearing, the husband disassociated himself from that response, blaming his then solicitor. He asserted that at all times he had anticipated and sought an equal division of property between himself and the late wife.
Consequently, at the hearing the husband sought an equal division of property between him and the representative.
This was an unusual situation where the representative for the late wife was arguing for less payment to her, and the husband was arguing for less payment to him and greater payment to the estate of the late wife.
The representative had adopted this approach given the judgment debt owed by the husband to the intervenor. If she had pressed the judgment debt the intervenor, subject to arguments as to priority between the representative and the intervenor, would have extinguished the whole of the property of the husband with the exception of the late wife’s one half interest in in Property G, New Zealand (‘Property G’), which was said to have a value of about $230,000, plus a small superannuation benefit.
The issues to be determined were:-
(a)Whether the proceedings should be allowed to continue to judgment having regard to s 79(8) of the Act;
(b)If so, what constituted the pool of property? There seemed to be three sub-issues in relation to that pool of property. The first was the husband’s late assertion that the amount of approximately half a million dollars held in his name in accounts in Europe were in fact held in trust for his infant grandchildren. The second was that the timber, stored on the property at Town M which was the former matrimonial home (‘Property M’) of the husband and the late wife, was the property of the husband’s son, X. The third was the question of the personal possessions, photographs and the like of the husband at the home. The husband also asserted that there was a small quantity of jewellery owned by the late wife which had gone missing at around the time of her death;
(c)There seemed to be a question of lump sum payments made to or taken by the husband for his legal fees. These fall into two categories. The first was a sum of $72,997.73 which was used by the husband to pay legal fees in respect of the civil proceeding. These funds were taken and used without the consent of the representative and/or the intervenor. The fees were expended over a period of a few days and it was authorised by the husband’s then attorney, Dr S. Dr S refunded the sum of $75,000, which is otherwise included in the pool. Consequently, if there is a debt of $72,997.73 it is between the husband’s attorney and the husband’s then solicitors and it is not relevant to these proceedings. The other funds were money paid to the husband’s lawyers, in respect of the criminal proceeding, of about $55,000 and about $18,000. Neither the representative nor the intervenor sought to add-back those sums;
(d)The representative was paid $165,000 from the husband’s funds in the twelve months before the hearing, and the representative and intervenor sought to have these funds treated as a partial property order to the late wife. I adopted that course. There was a payment of about $10,000 to the late wife from the husband pursuant to order made 11 December 2014 and both the representative and the intervenor acknowledged that it had been used and no credit is sought for that sum. Given those submissions I will adopt that course.
(e)Contribution as between the parties. It was conceded that given the death of the late wife there were no s 75(2) adjustments to be made in her favour. The husband he asserted that he was entitled to 50 per cent where there had been a significant initial contribution. There appeared to be no s 75(2) factors in relation to his claim. To make it clear, I have made a determination, for the reasons set out later, that there would not, in any event and circumstances, be a s 75(2) adjustment in favour of the husband had he sought it;
(f)The overall adjustment of the property between the parties;
(g)The application by the representative and by the intervenor that all monies payable to the husband be paid to the intervenor and that there be put in place machinery provisions to enable the sale of that property, including the collection of property in Europe and the sale of Property G (owned half between the late wife and the husband) in New Zealand;
(h)The admissibility of the evidence of the late wife’s affidavit (albeit it was not objected to);
(i)Consequences of the husband’s murder of the late wife, including the principles outlined in In the marriage of Kowaliw v Kowaliw (1981) FLC ¶91-092.
BACKGROUND
The husband is aged 75. There was no evidence as to his state of health. He resides at Risdon Prison and is likely to remain in custody until his early 90s.
The late wife was born in November 1977 and she was aged 38 years when she died.
The parties met in Asia in about 1994 or 1995. The evidence of the husband, which was not challenged, was that the parties began living together in late 1995 or early 1996. The parties married in December 1997 and separated in September 2014. This was a relationship subsisting over 18 years.
The husband and the late wife came to Australia in late 1996 or early 1997 and initially lived in Brisbane. They moved to Tasmania in about 2000.
On 16 July 2007 the late wife made a Will[1] appointing the husband as executor with the representative and a Mr F as alternative executors. The husband was to receive a bequest and there were some specific gifts to Mr F with the remainder to be distributed as follows:-
(a) one quarter to the late wife’s nieces and nephews, being the children of her brother T;
(b) one quarter to her remaining brothers;
(c) one quarter to the Fred Hollows Foundation and UNICEF; and
(d) one quarter to the husband’s grandchildren, B and C, equally.
[1] Exhibit A2.
The late wife commenced property proceeding in the Federal Circuit Court on 27 October 2014 seeking property, spouse maintenance and costs.
In 2015 the husband murdered the late wife and seriously injured the intervenor. The husband was arrested and placed in custody that day and has remained in custody since that time.
In July 2016 the intervenor joined in these proceedings and on 7 September 2016 these proceedings were transferred to the Family Court by the Federal Circuit Court.
On 14 September 2016 this Court made interim property orders in the sum of $120,000 payable from the husband’s funds to the representative and in a sum of $35,000 to the husband’s then solicitors. On 13 October 2016 the husband was ordered to pay the costs of the intervenor which were later assessed at $17,997.33.
On 7 April 2017 orders were made in this Court for:-
(a)the jointly owned property at Town G in New Zealand to be sold and for the proceeds placed in joint interest-bearing account;
(b)the husband’s yacht to be sold and the proceeds placed in interest-bearing account;
(c)the husband’s monies held by his solicitors in trust be placed by estate’s lawyers in a joint interest-bearing account;
(d)overseas gold, silver and funds to be repatriated and the proceeds placed in an interest-bearing account; and
(e)some gold coins to be surrendered to the solicitors for the estate to be stored.
It is not in issue that the husband was found guilty of the crime of murdering his wife. In 2017 he was sentenced to 25 years imprisonment effective from 2015. He is not eligible for parole for a period of 15 years, viz May 2030. In addition, he was found guilty and convicted of the crime of causing grievous bodily harm to the intervenor. He was sentenced to a term of three years imprisonment, which will be served cumulatively upon the sentence imposed for murder. He is not eligible for parole until he has served one half of that sentence. This means the husband is not to be released until about November 2031. At that date the husband will be aged almost 90 years.
The civil proceedings were heard in the Supreme Court of Tasmania and judgment was delivered on 26 May 2017. The husband was ordered to pay the intervenor $2,312,284.20 plus costs. Those costs were subsequently determined at $213,435.17.[2] The affidavit of Mr Q referred to the reasons for judgment; I accept Mr Q’s evidence as being reliable. As to the circumstances the Supreme Court trial judge observed:-[3]
1. On 14 May 2015 the [intervenor], who was 53 years old, was a passenger in a silver Peugeot hatchback being driven by her friend [the wife]. At approximately 3.30pm they were driving in a north easterly direction along Risdon Road in New Town. As they approached the intersection of Risdon Road and the Brooker Highway the traffic lights at that intersection were red and [the late wife’s] vehicle was stopped on Risdon Road approximately 10m before the intersection of that road with Albert Road.
2. While they were waiting for the traffic to start moving again a black vehicle being driven in the south west bound lane of Risdon Road cut across in front of the vehicle in which the [intervenor] and [the late wife] were seated. The [husband], who the [intervenor] did not know at that time, got out of the driver's side door of the black vehicle and walked around the back of [the late wife’s] vehicle towards the driver's side door. The [intervenor] noticed that the [husband] had a gun and she began screaming and shouting.
3. The [husband] then pointed the gun at [the late wife] through the closed window of her vehicle and shot her, causing the window to smash and showering the [intervenor] with glass. The [intervenor] then saw blood coming from the right side of [the late wife’s] head. She reached over and with the back of her right hand tried to stop [the late wife] bleeding and to attempt to protect her from being attacked further. The [husband] then pushed the barrel of his gun against the palm of the [the intervenor’s] right hand. She looked the [husband] in the eye and he returned her gaze. She said to him, "stop" but he said nothing in response and fired the gun.
4. The [the intervenor] saw flame coming out of the barrel of the gun, heard a very loud bang and felt instant pain in her right hand. She looked at her right hand and saw that it was, in her words, "now mush". When this happened, with [the late wife] being shot a second time through the [the intervenor’s] hand, the vehicle lurched forward and onto the footpath, colliding with the safety barrier over a creek below. As the [the intervenor] opened the passenger door and escaped from the vehicle she fell down into the creek.
5. Because the bank of the creek was very steep the [the intervenor] could not get out. She was in cold water for some time before enough people came over from the incident scene to assist her. She was suffering agonising pain in her right hand, was bleeding and had fingers missing or hanging off her right hand and an injury to her left hand. She had to wait some minutes for an ambulance to arrive and take her to hospital.
[2] Certificate of Taxation dated 10 August 2017 – Exhibit I1.
[3] Written reasons of Estcourt J, Cooper v Neubert [2017] TASSC 33.
Any statement of fact in these reasons is to be regarded as a finding of fact except if the contrary is clear from the context.
THE EVIDENCE
The representative relied upon the following:-
(a) an application initiating proceedings filed 27 October 2014;
(b) an affidavit of John Thomas Lewinski filed 8 August 2017, which was read into evidence and there was no requirement for him to be cross-examined. The substance of the affidavit was, in any event, of a non-contentious nature;
(c) an affidavit of the late wife filed 27 October 2014;
(d) a financial statement of the late wife filed 27 October 2014; and
(e) an affidavit of Ms K sworn and filed 7 August 2017.
During the course of the hearing counsel for the late wife tendered the following documents:-
(a) the late wife’s case outline.[4] This was treated as to the submission not as to proof of the material contained in that outline; and
[4] Exhibit A1.
(b) a copy of Will of the late wife dated 16 July 2007.[5]
[5] Exhibit A2.
(c) an affidavit of the husband filed in the Supreme Court proceedings and dated 7 September 2015 when he asserted the following:-
16.I have the following bank accounts …
(c)Account held with P Bank… which holds approximately €300,000.00.
(d)Account held with N Bank of about $200,000.[6]
The husband disassociated himself from the assertions that he was the legal and equitable owner of those accounts as set out in that affidavit. He blamed his solicitors.
(d) The late wife’s written submissions.[7] This was as to the submissions and not as to the facts asserted in those submissions. They also set out the orders that both the representative and the intervenor sought; and
(e) The intervenor also sought to and did rely upon the two financial statements of the husband filed in these proceedings on 27 August 2014 and 28 June 2016. This was in terms of the husband’s failure to disclose the money held in the European bank accounts and then later disclosing the European money as being legally and beneficially owned by him (the husband).
[6] Exhibit A3.
[7] Exhibit A4.
The intervenor relied upon the following:-
(a) an application in a case filed 24 May 2017;
(b) an affidavit of Mr Dean Cooper filed 24 May 2017;
(c) an affidavit of Mr U filed 31 July 2017;
Counsel for the intervenor tendered a certificate of taxation in relation to the Supreme Court proceedings between the husband and the intervenor dated 10 August 2017 which provided that the costs of the intervenor in those proceedings were $213,435.17 plus a taxing fee of $500. Counsel for the intervenor submitted that they wholly supported the opening address and submissions made by counsel for the representative.
Counsel for the intervenor made it clear, as had been the case throughout these proceedings, that they sought an order, if the Court accepted it had jurisdiction, that all of the money that would otherwise be paid to the husband, after allowing the amount payable to the estate of the wife, be paid directly to the intervenor, and that there be put in place machinery provisions to enable the orderly sale of property and collection of funds to reduce the overall costs of that undertaking.
As to the husband, he relied upon the following documents:-
(a) his response to initiating application with the exception of the orders he sought, he now seeks an order for equality as indicated above; and
(b) his affidavit of 8 December 2014.
There was an objection to part of that affidavit, namely paragraphs 30(p), (q) and (r).[8] Those paragraphs were struck out and ex tempore reasons were given. The husband was offered the opportunity to give oral evidence, notwithstanding that he had not complied with any orders to file affidavits at this hearing. The husband gave oral evidence including that he had, in essence, declared the money held by him in Europe totalling about $500,000 was for his grandchildren.
[8] Pages 7, 8 and 9
The husband was then cross-examined about a number of other matters which I will deal with later in these reasons.
In relation to the evidence of the late wife, the husband agreed to its admission into evidence. He was not aware of the law regarding tested and untested evidence and the death of a witness. Counsel for the representative submitted that given the provisions of s 63 and s 67 of the Evidence Act 1995 (Cth) (‘the Evidence Act’) and notice having been given to the husband the evidence of the late wife should be admitted. Only short notice was given to the unrepresented husband of the use of this material. I find that such notice was not reasonable notice.
However, given the circumstances of the late wife being unavailable and that the husband had known of the wife’s affidavit for many years and had responded to it, I exercise my discretion and admit the evidence. In that determination I had regard to the comments of the Full Court comprising Finn, Kay & Dawe JJ in In the marriage of Kayes (1999) FLC 92-846 said:-
61. ... Any discretion being exercised under s67(4) should have, as its starting point at least, a consideration of any prejudice (or lack of prejudice) caused by the failure to give the notice required.
62. The provisions of s67 do not provide any specific guidance for the exercise of discretion but s192 provides assistance for the exercise of discretion generally. Subsections 192(2)(b) and (c) are relevant. That section provides:
"Leave, permission or direction may be given on terms:
(1) If, because of this Act, a court may give any leave, permission or direction, the leave, permission or direction may be given on such terms as the court thinks fit.
(2) Without limiting the matters that the court may take into account in deciding whether to give the leave, permission or direction, it is to take into account:
(a) the extent to which to do so would be likely to add unduly to, or to shorten, the length of the hearing; and
(b) the extent to which to do so would be unfair to a party or to a witness; and
(c) the importance of the evidence in relation to which the leave, permission or direction is sought; and
(d) the nature of the proceeding; and
(e) the power (if any) of the court to adjourn the hearing or to make another order or to give a direction in relation to the evidence.
The Full Court went on to point out that s 192 of the Evidence Act provides a guide to the exercise of discretion. I have had regard to those factors.
The affidavit of the late wife was made six months prior to her death, and it is both timely and relevant. It is important as it is her only opportunity to give direct evidence in these proceedings.
I accept that this affidavit, while not a detailed factual exposition, did summarise her evidence to the relevant contribution factors. In many ways it was corroborated by the evidence of Ms K.
Given that the husband has had the affidavit for a number of years and was given leave to give his evidence orally, the husband failing to file material in accordance with the courts directions, there is little prejudice to him.
Finally and significantly, the inability of the late wife to be available to give evidence arose solely out of her death at the hands of the husband. It would be an affront to public policy and any notion of justice that a murderer would gain a forensic advantage in civil proceeding as a consequence of his criminal behaviour.
As such the affidavit is read into evidence as is the late wife’s statement of financial circumstances.
Evidence of Mr Lewinski
Mr Lewinski gave evidence in relation to these proceedings contained in his affidavit sworn and filed 8 August 2017. He provided a summary of assets and liabilities. They were generally not challenged, but for some issues to which I will address later.
Mr Lewinski provided evidence as to how he ascertained those valuations. A number of them were unable to be ascertained precisely, but would be determined once they had been sold.
The husband raised an issue about the value of the gold coins however there was no contrary evidence as to the value of those coins.[9]
[9] Mr Lewinski’s affidavit paragraph 9
There was an issue about the late wife’s jewellery and I will deal with that later. Mr Lewinski had no knowledge as to where the jewellery was after the death of the late wife.
There was an issue about the timber, to which I have earlier alluded, which was subject to an injunction made in the Federal Circuit Court on 17 November 2014. Otherwise his evidence was uncontentious.
The wife’s affidavit and financial statement both filed 27 October 2014
The late wife had filed an affidavit in the proceedings before her death which set out details of contributions. She was not available to be cross-examined, however I had allowed that affidavit into evidence and I have given it significant weight.
The late wife’s affidavit filed 27 October 2014 was in support of interlocutory orders and provided a brief history of her relationship with the husband. She provided evidence that the husband had significant assets when she met him and that she had no assets.
The late wife gave evidence that throughout the relationship she would carry out almost all of the cooking, washing, house cleaning, gardening and the like. In addition she said she undertook physical labour to renovate the house.
Little money was allocated to the late wife and she needed to obtain casual employment during berry picking season to earn $4,000 to $8,000 per year to assist in her upkeep.
She sent part of that money back to her family in Asia.
She said that the husband would not allow her to have a permanent job. The late wife had no particular skills, but clearly worked hard during the relationship. She set out the need for urgent spouse maintenance and provided details of the financial circumstances as she understood them.
Her financial statement also filed 27 October 2014 showed that the late wife had an interest in the G property, no income and an unknown amount in superannuation.
Given the evidence of Ms K and the concerns I have as to the reliability of the evidence of the husband, I have treated the evidence of the late wife as generally reliable.
Ms K
Ms K is a friend of the late wife and she provided evidence in accordance with her affidavit filed and sworn 7 August 2017. It related to the significant contributions made by the late wife, which this witness had observed since approximately 2003.
Given the history of the husband’s violence, the evidence of this witness was given by video-link and cross-examination questions by the husband were asked through me. Ms K was challenged in relation to the jewellery of the late wife and in relation to an alleged diamond engagement ring.
Ms K gave evidence frankly and carefully and, given my views as to the quality of the husband’s evidence and my observations of Ms K when giving evidence, I am satisfied that her evidence is reliable and I accept it.
The husband
The husband gave evidence in accordance with his affidavit filed 8 December 2014 in the Federal Circuit Court, which was prior to the death of the late wife. As I indicated earlier, part of that affidavit evidence was struck out. As to the remainder, there were significant differences in terms of his evidence and that of the late wife. There are also differences in his affidavit between his evidence and that of Ms K.
Given that the husband has been in prison and did not have the assistance of a legal practitioner, I gave him leave to give oral evidence. The husband gave evidence as to the money held by him in Europe. The husband has at all relevant times had investment property to the extent of about $500,000 in two banks in Europe. He said, for the first time, that the money was held on trust for his grandchildren.
In his financial statement of October 2014 the husband did not disclose these European assets. His explanation for not doing so was that he intentionally excluded it from the financial statement at the request of the late wife. I accept that he excluded that information. However, his evidence that after separation, where the late wife was seeking an order for her personal protection and seeking a property settlement, his claim the wife asked him to hide assets, essentially from herself, is plainly fanciful. I reject that assertion.
In his 28 June 2016 financial statement the husband then disclosed all or parts of that money, saying that this money was owned absolutely by him. Similarly, in an affidavit filed by him in the Supreme Court of Tasmania[10] the husband asserted that he had monies in bank accounts in Europe. He made no assertion at that time that these monies were held other than as his property.
[10] Exhibit A3.
The husband then gave oral evidence that he held the money on trust for his three grandchildren who are aged 15, seven and five. He adduced no documents to support that assertion, nor did he adduce any other material or call other witnesses. It flies in the face of his sworn testimony in his 2016 financial statement filed in this Court and in his affidavit filed in the Supreme Court of Tasmania.
The husband has declined to comply with an order of this Court to repatriate these funds to Australia and as such is unrepresented. His evidence in respect of this alleged trust was rambling and unsatisfactory. I acknowledge that he was unrepresented, however, I find that his evidence in this regard is a fabrication. It was recent invention.
In her October 2014 affidavit the wife asserted that the husband owned timber.[11] In response to this the husband deposed in his affidavit at:-[12]
30.(j) Paragraph 15(e). The […] wood, of which there is approximately 5 cubic metres, has been for sale for a period of approximately 8 years. There has been little to no interest or demand for this wood.
[11] Late wife’s affidavit - paragraph 15(e).
[12] Husband’s affidavit filed 8 December 2014 – paragraph 30(j) on page 7.
The husband asserted that the timber was not his property as it was property of his son, X. The husband did not make that disclosure to the Supreme Court.
The husband’s oral evidence as to the ownership of this wood was wholly unsatisfactory. He adduced no documents of the alleged payments nor did he call his son to corroborate this claim. I find that the husband’s claim that the timber was sold to his son was a fabrication.
The husband was cross-examined in relation to the interim application for the payment of funds to the intervenor. He would not acknowledge the veracity of the Supreme Court civil judgment nor would he acknowledge the impact of his actions upon the intervenor.
In hearing his evidence, reading his material and watching the demeanour of the husband in giving evidence, I am satisfied that the husband fabricates evidence to suit his perceived needs. His evidence is unreliable and self-serving. Where his evidence contradicts that of the late wife, Ms K, Mr Cooper or Mr Lewinski, I prefer the evidence of those witnesses.
Mr Dean Cooper
Mr Cooper is one of the solicitors for the intervenor and he provided evidence in his affidavit sworn 23 May 2017 and filed 24 May 2017. His evidence was read in without objection and set out the financial circumstances of the intervenor.
This included evidence that the intervenor is unable to work, does not have family that are able to support her financially, and that she has substantial personal liabilities, including mortgage repayments. She is in receipt of a Disability Support Pension. Mr Cooper’s evidence is that she needs to make repayments on her mortgage, and payments to the Tasmanian Health Service, Medicare, Cominsure, and legal costs. I have read the civil judgment referred to earlier and I am satisfied that she has significant financial needs.
I accept the evidence of Mr Cooper as being reliable.
Should the late wife be given permission to continue proceedings given the provisions of s79(8)(b)(i) and (ii) of the Act
The Court needs to consider and determine if permission should be given to the representative to continue the late wife’s proceedings pursuant to s 79(8) of the Act.
The husband was at times inconsistent in his submissions in this area.[13] The husband said he opposed the continuation of the proceedings, but at the same time said the late wife was entitled to 50 per cent of the property. For the purpose of this issue, I will treat the husband as opposing leave for the continuation.
[13] Transcript of Proceedings dated 14 August 2017 – page 23 commencing line 39.
The intervenor supported the submissions of the representative.
Section 79(8) of the Act relevantly provides:-
(8)Where, before property settlement proceedings are completed, a party to the marriage dies:
(a)the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings;
(b)if the court is of the opinion:
(i)that it would have made an order with respect to property if the deceased party had not died; and
(ii)that it is still appropriate to make an order with respect to property;
the court may make such order as it considers appropriate with respect to:
(iii)any of the property of the parties to the marriage or either of them; or
(iv)any of the vested bankruptcy property in relation to a bankrupt party to the marriage; and
(c)an order made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
When s 79(8) of the Act was first introduced in 1983 there was a questions as to its constitutional validity. That question was resolved by the High Court in Fisher v Fisher (No. 2) [1986] HCA 61; (1986) 161 CLR 438; (1986) FLC 91-767. In that decision Brennan J stated at 457-458:-
Section 79(8) does not confer jurisdiction on the Family Court to entertain proceedings commenced after the death of one of the parties to the marriage. The proceedings to which it relates are proceedings commenced between the parties to a marriage with respect to the property of those parties or either of them arising out of the marital relationship or otherwise falling within par.(ca) of the definition of "matrimonial cause" in s.4(1) of the Act. The proceedings must have been a matrimonial cause commenced pursuant to s.79(1). The death of a spouse will not always extinguish or satisfy the moral claims of the surviving spouse and children to which effect would have been given if the proceedings had been completed. Section 79(8) empowers the Family Court to give effect to the moral claims made in respect of the property of the spouses which was made available to answer those claims by the commencement of the proceedings, provided "it is still appropriate to make an order with respect to property" (s.79(8)(b)(ii)). That qualification on the power, coupled with par.(ca)(i) of the definition of "matrimonial cause", ensure that the jurisdiction is exercised only in cases where the moral obligations arising out of the marriage remain unsatisfied. (emphasis added).
Section 79(8) provides machinery for the discharge of those moral obligations in priority to any rights in the property of a party to a marriage which arise by testamentary disposition of that party's property or by any other devolution of that property on that party's death. That is a law which governs an incident of marriage in that it provides the machinery for enforcing the moral obligations with respect to property arising from a spouse's marital relationship. It is a law with respect to marriage.
The question of a ‘moral obligation’ arising out of marriage as discussed by Dean J over thirty years ago was perhaps language of another time or referable to the reasoning of Gummow and Hayne JJ in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191; (2005) 213 ALR 692; (2005) 79 ALJR 731 where they said at paragraph 69:-
69Thereafter, in their joint judgment in Singer[14], Mason CJ, Deane and McHugh JJ, after referring to the statement by Salmond J in Allen and to the comments of Murphy J in Goodman and Hughes, said
“For our part, we doubt that this statement provides useful assistance in elucidating the statutory provisions. Indeed, references to 'moral duty' or 'moral obligation ' may well be understood as amounting to a gloss on the statutory language”.
70.It is apparent that their Honours were not using the term "gloss" in its milder sense of a comment or explanation. Rather, they were using it in the same sense as Williams J had done in Coates[15], that is to say, of a paraphrase which is apt to mislead
[14] Singer v Berghouse (1994) 181 CLR 201.
[15] (1956) 95 CLR 494 at 512.
Rights created under the Act are sometimes said to be a ‘moral obligation’ or a ‘moral duty’. However, these rights are entitlements arising under the Act. The task of a court is to understand and analyse such legal entitlements when applied to the facts of an intimate partnership through marriage and/or de facto relationship. It is not some moral claim or moral obligation, but recognition of the joint contributions and circumstances of a same sex or heterosexual couple who live as a family, albeit at times optimistically.
I am comforted in this thinking and approach by the comments of the High Court in Stanford v Stanford [2012] HCA 52 where French CJ, Hayne, Kiefel and Bell JJ said:-
52. Whether it was just and equitable to make a property settlement order in this case was not answered by pointing to moral obligations. Reference to "moral" claims or obligations is at the very least apt to mislead. First, such references appear to invite circular reasoning. On its face, the invocation of moral claims or obligations assumes rather than demonstrates the existence of a legal right to a property settlement order and further assumes that the extent of that claim or obligation can and should be measured by reference to the several matters identified in s 79(4). Second, the term "moral" might be used to refer to a claim or obligation that is based on the kind of contribution described in s 79(4)(b) – "the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage ... to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them". But nothing is gained by describing such a contribution as founding a "moral" claim or obligation. Moreover, if the word "moral" was being used in this context with some wider meaning or application, it is important to recognise that it is used in a way that finds no legal foundation in the Act or elsewhere. It is, therefore, a term that may, and in this case did, mislead. The rights of the parties were to be determined according to law, not by reference to other, non-legal considerations. The references by Brennan J in Fisher v Fisher [38] to moral claims should not be misunderstood as suggesting otherwise.
The Full Court touched upon this in Mena & Mena and Anor [2016] FamCAFC 85 where Bryant CJ, Strickland and Watts J said:-
88. If what her Honour was referring to at [25] and [73] was a moral obligation on the part of the husband, then his case was not presented in that way. But even if her Honour had in mind some moral obligation, that was a matter between the husband and his mother and should not result in any further adjustment between the husband and the wife, her Honour having already adjusted between them by the generous assessment of the husband’s initial contribution. In other words, an adjustment had been made as between the husband and the wife and any potential adjustment between the husband and his mother, arising from a moral obligation , should not have played any further part in the calculation of the division of the assets of the parties once the adjustment for the husband’s initial contribution had been made. This is the “double counting” submission (described at [51] above) made by the wife and we accept that submission. The wife has, in effect, paid twice, and been unfairly disadvantaged. We accordingly find merit in Grounds 2 and 3. (emphasis added)
There being in effect no moral obligation, it is now for the Court to determine if these proceedings should continue.
In Meddow & Estate of the late Ms Meddow [2015] FamCA 1182 Le Poer Trench J quoted Lindenmeyer J in Doyle & Doyle (1989) FLC 92-027 who said at paragraph 5:-
5.It must be presumed, from the enactment of sec. 79(8), that the legislature intended that one party to a marriage which has broken down to the point that proceedings have been commenced for orders altering the interests of the parties in property should not profit by the fortuitous death of the other party prior to the determination of those proceedings.
This clear intent of the legislature is very much the circumstance that overshadows these proceedings. Given that the late wife was murdered by the husband, it must not be that he takes any advantage from the death of the wife. However, the provisions of the section must be considered.
In Doyle (supra) Lindenmeyer J said:-[16]
The Act itself gives no clear guidance as to how the Court should determine [the s.79(8)(b)(ii)] question. It apparently leaves the matter entirely to the discretion of the Court.
...
This much is therefore clear, that the intention of the legislature was that the discretion of the Court under s.79(8) should be no more fettered than its discretion under s.79(1) which, as Gibbs, C.J. said in Mallet and Mallet [1984] HCA 21; (1984) FLC 91-507 at p 79,111, is "largely unfettered". When the legislature gives the Court an unfettered discretion, the Court should not seek to limit that discretion by imposing upon itself rules for the exercise of it. All that the Court is required to do in exercising the discretion is to act judicially, and not arbitrarily or capriciously.
[16] At 77,398.
Counsel for the representative referred me to a decision of Wilson FM (as he then was), in Cornell & Stokes [2008] FMCAfam 774. His Honour reviewed relevant authorities, including the Full Court in Bourke v Bourke [1998] FamCA 69. Wilson FM summarised the approach to proceedings involving section 79(8) in the following terms:-
23.From the above authorities, I conclude that the appropriate way in which to deal with a case where one of the parties has died since the commencement of proceedings is as follows:
(a)The party representing the deceased party to the marriage must demonstrate that, at the time of the death of the party so represented, the court would have made an order in favour of that party. In so doing, the party is not limited to the state of evidence at the date of death;
(b)In reaching an opinion about that first prerequisite imposed by s.79(8)(b)(i) of the Act, the Court is not required to determine precisely what orders would have been made in that deceased party’s favour, just that an order would have been made in that party’s favour;
(c)To reach that opinion, the Court must embark upon the exercise in s.79(4) of the Act;
(d)Having determined that it would have made an order in the deceased party’s favour had he or she survived, the Court must then consider whether it is still appropriate to make an order;
(e)In that regard, the Court’s discretion should not be exercised lightly, and should only be exercised in limited circumstances, so as to satisfy moral obligations that remain unsatisfied;
(f)The deceased party to the marriage has a prima facie moral entitlement to his or her contributions based entitlements to matrimonial property;
(g)The size of the pool and the needs of the surviving spouse, including s.75(2) factors must be taken into account in formulating any orders.
24.In this process, the onus of establishing the appropriateness of making a property order post mortem rests on the representative of the deceased party: Tasmanian Trustees Ltd (Administrators of Estate of Gleeson, B J) & Gleeson, D W (1990) FLC 92-156, applied by Carmody J in Rutter [2004] FamCA 424; and by Boland J in Ford & Marchant [2001] Fam CA 1585.
I accept the approach that exercising discretion to permit the continuation of proceedings is to be undertaken in ‘limited circumstances’ and ‘not lightly’, having regard to the obiter of Gibbs CJ in Fisher v Fisher (supra) where he said:-[17]
…but clearly the discretionary power to make an order under s.79(8)(b) should not be exercised lightly.
[17] At page 448.
Whilst I deal with this aspect in this part of the reasons, my thinking was not linear and I had regard to the pool of property and the parties’ respective contributions, to which I have referred later in this judgment.
The representative has demonstrated that at the date of the late wife’s death the Court would have made an order in the late wife’s favour. The intervenor does not cavil with this assertion, nor does the husband.
In reaching an opinion about that first prerequisite imposed by s 79(8)(b)(i) of the Act, the Court is not required to determine precisely what orders would have been made in that deceased party’s favour, just that an order would have been made in that party’s favour.
The parties had cohabited for over 18 years and during that time the evidence establishes that the late wife made significant contributions, of a direct and indirect nature and of a financial and non-financial nature, to the acquisition, conservation and improvement of property and to the welfare of the family. There was some property in her sole name, including a small superannuation interest[18] and her half interest in the Property G property.
[18] During the wife’s lifetime the G house was held as a joint tenancy; and the yacht had been transferred to the husband’s sole name post separation.
The husband both now and when he filed his response in late 2014 acknowledged that the late wife had an entitlement. But for her death there would have been an adjustment of property having regard to the late wife’s significant contributions over the period of the relationship.
Having determined that this Court would have made an order in the late wife’s favour had she survived, I considered whether it is still appropriate to make an order.
Clearly ss 79(4)(d) and (e), the future needs factors, would likely have resulted in an adjustment of the legal interests of the parties in property and the Court would properly have made an adjustment in favour of the late wife with reference to the factors enumerated in s 75(2). That is no longer the case, and so the late wife’s estate is not entitled to such an adjustment. Nor, given his present circumstances, would there be an adjustment in favour of the husband.
In regard to whether the estate of the late wife would be entitled to an adjustment of property, I have not exercised that discretion lightly. I have determined there should be an adjustment of property in the light of the findings as to the parties’ respective contributions, including the husband’s significant initial contributions. I have not considered it in the context of some moral obligations, given my earlier comments. I have had regard to the size of the pool and the respective property of the late wife’s estate and the husband.
There are no s 75(2) factors for either party to be taken into account by the Court in formulating any orders.
Counsel for the representative submitted, and I accept, that the late wife and the husband had been in a relationship for many years. The late wife made significant direct and indirect contributions of a financial and non-financial nature to the acquisition, conservation and improvement of property and to the welfare of the family. I accept on the evidence of the late wife and Ms K that that contention is established.
The late wife had no significant property apart from her interest in Property G and a small superannuation fund. The husband conceded in his late 2014 response that the late wife was entitled to 20 per cent of the property and during the trial he submitted that her entitlements were such that she ought to have 50 per cent.
I am comfortably satisfied that s 79(2) has been and continues to be enlivened and that an alteration property should be made.
Consequently, I will give leave for the continuation of the proceedings pursuant to s 79(8) of the Act.
Approach
In this matter my task is to:-
(a)identify according to ordinary common law and equitable principles and then value the property, assets, financial resources and liabilities of the parties;
(b)determine whether it is just and equitable to make an order altering those interests; and if so
(c)identify relevant contributions and assess them;
(d)consider relevant matters referred to in s 79(4)(d)-(g) of the Family Law Act 1975 (Cth) (“the Act”); and
(e)determine what order adjusting the property, assets and liabilities of the parties is just and equitable.
In Stanford v Stanford (supra) the High Court left in place the first step requiring the identification of the existing legal and equitable interests in the property of the parties.
Thereafter the Court must determine whether it is or is not just and equitable to make an order altering the parties’ property interests. Often, given the circumstances of the parties that step will be uncontroversial; as is the case where these parties separated in September 2014 and given the property applications of both parties. Consequently, I have no difficulty in concluding that it would be just and equitable to make a property settlement order as between these parties and I find that it is just and equitable to make a property settlement order.
The pool of property
As to the pool of property, I wonder if courts exercising jurisdiction under the Act to adjust property sometimes conflate the task of determining the equitable rights of parties, such as those that were recognised in constructive and resulting trusts, with the processes under s 79 of the Act. However, it seems to me that s 79 of the Act, or s 90SM if a defacto relationship, codifies those rights and amplifies them to give and acknowledge real meaning to contributions, including the non-financial, homemaking and parenting.
The property is:-
| Property M - owned by husband | $600,000.00 |
| Property G, New Zealand – owned by the husband and late wife as joint tenants. | $220,000.00 |
| Balance of sale proceeds of yacht – husband’s property | $444,424.66 |
| CBA Cash Management Account ..89 as per Commonwealth Bank subpoenaed documents at 2 April 2017 – husband’s property. | $85,207.51 |
| Westpac New Zealand account ..25 – husband and wife’s property | $28,000.00 |
| Monies repaid by Dr S held at L Group by Butler McIntyre & Butler – the husband’s property | $75,000.00 |
| Gold Bars at P Bank at 12 June 2017 Euro 145,456 – husband’s property | $215,187.00 |
| Silver (Country Y) at P Bank at 12 June 2017 Euro 131,490 – husband’s property | $194,526.00 |
| Cash (Country Y) P Bank at 12 June 2017 Euro 85,948.26– husband’s property | $127,151.00 |
| Five gold coins – held by Butler McIntyre & Butler – late wife’s property | $6,725.00 |
| Superannuation Preserved Benefit at 3 November 2014 – late wife’s property | $6,932.00 |
| Jewellery (location unknown) - late wife’s property | $0.00 |
| Timber – husband’s property | $0.00 |
| Furniture, chattels, tools and household items - – husband’s property | $0.00 |
| Partial property orders – late wife’s property | $165,000.00 |
| Total | $2,168,153.17 |
Property M
Property M is owned by the husband. The evidence of its value was by way of a valuation report prepared by the T Group on 2 August 2017 attached to the affidavit of Mr Lewinski. That valuation report was admitted into evidence without objection. There was otherwise no agreement as to Property M’s value.
The husband says its value may be less than $600,000 given the publicity surrounding his conviction. In his December 2014 affidavit, his December 2014 and August 2016 Financial Statements the husband said the property’s value was $530,000. In his 7 September 2016 affidavit filed in the Supreme Court of Tasmania he asserts it has a value of $450,000.[19] I am not overly fussed about its precise value as the market will determine that figure when the property is sold.
[19] Exhibit A3 – paragraph 5.
Given that I propose to order the sale of this and other property by the representative and the intervenor as trustees, the provisions of the Trustee Act 1898 (Tas) apply, including s 7 as to the duty of trustee which provides:-
(1) Subject to any provision to the contrary in an instrument creating a trust, a trustee, in exercising a power of investment –
(a) if the trustee's profession, business or employment is or includes acting as a trustee or investing money on behalf of other persons, must exercise the care, diligence and skill that a prudent person engaged in that profession, business or employment would exercise in managing the affairs of another person; or
(b) if the trustee is not engaged in such a profession, business or employment, must exercise the care, diligence and skill that a prudent person of business would exercise in managing the affairs of another person.
(2) A trustee, in exercising a power of investment, must comply with any provision of the instrument creating the trust that is binding on the trustee and requires the obtaining of a consent or an approval or a compliance with any direction with respect to trust investments.
(3) Subject to the instrument creating the trust, a trustee must, at least once in each year, review the performance, individually and as a whole, of the trust investments.
The late wife and the intervenor asserted that this property ought to be transferred to the intervenor and applied against the judgment debt. Its net value would then be used in the calculation of the share to which the husband is entitled and which should be paid directly to the intervenor.
I will adopt that course.
Property M has been unoccupied since the events of May 2015. An application was made by counsel for the representative and counsel for the intervenor for access to the property to enable an inventory of the contents to be obtained and to enable the sale of the property.
If the representative’s application for probate of the estate of the late wife is allowed, it is, and was, reasonable that they have access to the property to enable the orderly disposal of the matrimonial home and its contents. This is having regard to the fact that the property was unsecured and given the responsibility of the representative to the beneficiaries of the wife’s estate and need of both the estate and the intervenor to secure property without further wastage. This is in the context that the assets of the husband are unlikely to meet the whole of the judgment debt due by him to the intervenor and the proceeds of sale will be required to meet this debt. Consequently, I made that order at the conclusion of the evidence and submissions to allow that inventory to occur in a timely manner, and I will confirm that order in these orders.
Property G
This property was owned as joint tenants between the husband and the late wife.
There is no clear evidence of its value. Mr Lewinski assets its value at $220,000 each, with a total value of $440,000. He was unable to obtain an up to date valuation.
The husband says its value is $300,000 in his December 2014 affidavit and financial statement. In his affidavit filed in the Supreme Court of Tasmania the husband said its value was NZ$445,000 and in his August 2016 financial statement he said its value was NZ$220,000.
Similarly to Property M, I am not overly fussed about its precise value as the market will determine that figure when the property is sold. The precise figure will be determined on its sale.
Property G was owned by the late wife and husband as joint tenants, however, this property did not pass by survivorship to the husband. This arises by the application of s 8 of the Succession Homicide Act 2007 (NZ) which provides:-
8 Disentitlement of killer to victim’s non-probate assets
(1) A killer is not entitled to any property interest in any non-probate assets of the killer’s victim which, but for this subsection, would have passed to the killer on the death of the victim.
(2) Any property interest that a killer is not entitled to under subsection (1) is to pass or be distributed as if the killer had died before the victim
(3) Despite subsection (2), property that is owned in joint tenancy by the victim, the victim’s killer, and any other person (if any) devolves at the death of the victim as if the property were owned by each of them as tenants in common in equal shares.
The husband is a ‘killer’ within the meaning ascribed to it under s 4 of the Succession Homicide Act 2007 (NZ). Having regard to ss 68, 167 and 168 of the Crimes Act 1961 (NZ), I am satisfied that the husband’s murder of the late wife in the State of Tasmania would have been an offence under New Zealand law had it occurred in New Zealand.
Having regard to those provisions, I am satisfied that the husband is the person who killed the late wife. As a consequence of the application of that Act Property G is owned by the husband as to one half share and the late wife as to the other half share as tenants in common in equal shares, given the husband’s murder of the wife.
Counsel for the late wife and the intervenor asserts that the husband’s one half interest in this property ought to be transferred to the intervenor and applied against the judgment debt and its net value used in the calculation of the share to which the husband is entitled and which should be paid directly to the intervenor.
Proceeds of sale of yacht
Mr Lewinski deposes and it was not challenged that the husband owned a yacht which was sold in 29 August 2016 for $676,442.08. There have been payments from this sum. In January 2017 $55,000 was distributed each to the husband’s then solicitor and the solicitor for the representative. In March 2017, $17,997.33 was paid to the intervenor’s solicitor.
This left a balance of $444,424.66 of which I directed a sum of $410,000 to be paid the intervenor, as against the judgment debt, and the balance of about $34,424.66 to a trust for recovery of property.
CBA Cash Management Account ..89
Mr Lewinski’s unchallenged evidence was that about $85,207.51 was held in this account.
Westpac New Zealand Account ..71
Mr Lewinski deposed that there should be about NZ$28,000 in this account. He said that this is the account into which the rental money from Property G is transferred. Further, that subpoenaed documents from the real estate agent suggest that as at 1 July 2016, the sum of $13,757 stood to the credit of that account. A review of those documents also suggested that there was ongoing gross rental of $300 per week being paid into that account.
I accept that it is an estimate and that the sum could be considerably lower. Given that it is to be paid as between the representative as trustee for the late wife’s estate and the intervenor, the precise figure is not necessary at this time.
The S money
The husband asked his attorney Dr S to take $75,000 from an account in contravention of an injunction and apply them to legal costs in the husband’s civil proceeding against the intervenor. When discovered, Dr S repaid that sum and it is now held at the L Group by Butler McIntyre & Butler in joint names of the parties pursuant to an undertaking. It is the husband’s property.
Property at P Bank
The husband has gold bars, silver and euros banked with P Bank in Country Y. I have discussed earlier the assertion by the husband that this was trust property and I rejected that assertion. It is the husband’s property and is available for adjustment pursuant to these proceedings.
The status of those assets is set out in the documentation annexed to Mr Lewinski’s affidavit. There are proceedings taking place in Country Y under the Convention of 19 October 1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children. Australia and Country Y have both ratified that Convention.
Gold Coins
Mr Lewinski has possession of five gold coins which were provided to the wife pursuant to orders made in the Federal Circuit Court on 17 November 2014. Those coins are valued at $6,725.
Superannuation of the wife
It is common ground that the wife has a superannuation benefit of about $6,932.
Jewellery
The husband also asserted that there was a small quantity of jewellery owned by the late wife which had gone missing at around the time of her death. This was in the late wife’s possession prior to her death. The husband said it had a value of $50,000, but no objective evidence was provided as to this assertion. The representative said it was valued at about $2,000, which I accept, but he had been unable to find it[20]since the death of the late wife. The witness Ms K had no knowledge of the jewellery. Consequently, I infer that it was lost and as such has no value.
[20]Affidavit of Mr Lewinski filed 8 August 2017 – paragraph 10.
Timber
The husband has timber at Property M, the ownership of which I have already discussed. It is the husband’s property and I will make orders for the sale of that timber and the distribution of its value between the representative and the intervenor. Mr Lewinski has no knowledge about the whereabouts or its value. The husband was restrained from selling or encumbering that timber by order made in the Federal Circuit Court on 17 November 2014.
Furniture, Chattels and Tools
Mr Lewinski was not able to obtain access to Property M and was unable to comment on the existence or value of furniture, chattels, tools and household items at that property. That problem was resolved by orders made 14 August 2017. This property is to be sold and the proceeds divided in accordance with the orders I propose.
Personal effects
There was some discussion concerned by the husband as to his personal effects such as photographs and the like, and counsel for the representative and the intervenor made it clear that they would make these personal items available to the husband. I have made an order in that respect on 14 August 2017.
Property orders 24 January 2017 and 2 August 2017
Orders were made on 24 January 2017 and 2 August 2017 requiring the husband to pay the representative of a total of $165,000. I have treated these as a partial property order and included that sum in the property pool, having regard to that approach being the joint submission by counsel for each of the representative and the intervenor. Given the judgment debt the views of the husband in this respect was irrelevant.
Miscellaneous
There was an interim payment of $10,000 made to the late wife pursuant to order made 11 December 2014. Neither the intervenor nor the representative seek an add-back of that sum as it was applied towards living expenses and legal fees of the late wife prior to her passing.
The husband used about $75,000 for his legal fees in the civil proceedings in about March 2017. That has been repaid. There is a claim against the husband’s then solicitor of about $72,997.73. If that claim is successful it will be the property of Mr S given the payment of $75,000 referred to earlier. It is not property for the purpose of this determination.
Liabilities
There are two liabilities of the husband. The first is a debt to his former solicitors, Simmons Wolfhagen, totalling $50,900. The other being the judgment debt. These liabilities arise out of the husband’s criminal behaviour against the late wife and the intervenor.
There is a caveat on Property M claiming an interest in Property M to secure the debt to Simmons Wolfhagen. I accept and adopt the submission by Counsel for the representative that the mere lodging of a caveat does not change the nature of an unsecured debt into a secured debt. In Hall & Richards [1959] Tas SR 58, Burbury CJ held that a judgment creditor was not by virtue of his judgment a secured creditor under bankruptcy legislation and that it did not give him a "charge or lien on the property of the debtor". He further held that a caveat lodged by the judgment creditor only protected existing rights and did not enlarge or add to the proprietary rights of the caveat or. The caveat was nothing but a statutory injunction. The High Court on appeal upheld the decision of Burbury CJ.[21] Since that time the Real Property Acts[22] have been repealed and replaced by the Land Titles Act 1980, but there seems no change which is significant in terms of Caveats and their nature. The Full Court in Finlayson & Finlayson & Gillam [2002] FamCA 898, (2002) FLC 93-121 when dealing with South Australian legislation, underscored this point when their Honours said:-
9.It would be an absurd result if the lodging of a caveat claiming an interest in land, adverse to the title of the registered proprietor, and a notation on the Certificate of Title of the fact and time of the lodgement of that caveat, could have the effect of creating the very interest which the caveat claims. …
[21] Hall v Richards[1961] HCA 34; (1961) 108 CLR 84.
[22] Real Property Act 1862, Real Property Act 1878, Real Property Act 1886, Real Property Act 1893, Real Property (Commonwealth Titles) Act 1933, Real Property (Special Vesting Orders) Act 1973, Real Property Act 1976 and Real Property (Special Vesting Orders) Act 1978 repealed by section 173 (schedule 2) of the Land titles Act 1980 (Tas).
The husband’s former solicitors are aware of these proceedings and have not sought to intervene in relation to that debt. It is apparent that they have secured the debt over the former matrimonial home. I am not being asked to make any orders which would impact upon the rights that the solicitors may have against the husband’s estate. That will be a matter for them in accordance with the ordinary civil law of the Commonwealth and the State of Tasmania.
Counsel for the representative submitted that these debts ought not from part of the calculations when adjusting property in this matter. This submission was supported by the intervenor.
The factual basis for this submission was that up to 15 May 2015 there was no liability to the intervenor by the husband. I accept that the judgment debt to the intervenor arose solely from the husband’s criminal behaviour. Further, the debt to Simmons Wolfhagen is likely to have arisen in the same circumstances.
The Full Court comprising Bryant CJ, Thackray and Bennett JJ in Charles & Charles [2017] FamCAFC 3 observed:-
51.In Kowaliw[23] Baker J enunciated the general rule that financial losses incurred by the parties throughout the course of the marriage, whether jointly or otherwise should be shared by them, although not necessarily equally. Adding back is the exception, not the rule and the exception arises where a party, has by a “deliberate act or by economic recklessness reduced the value of assets available for distribution” (at 76,644-5).
52.Baker J held (at 76,644):
… financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
53.The Full Court in Omacini and Omacini (2005) FLC 93-218 accepted Baker J’s analysis and, in addition, noted the court’s discretion to add back necessarily extends to circumstances where there has been a premature, although not always wanton or negligent distribution of marital assets.
54.Clearly, her Honour did not consider that the husband had been wanton, negligent or reckless in his failure to renegotiate the mortgage payments and that finding was open to her.
[23] Kowaliw and Kowaliw (1981) FLC 91-092
In this case I find that the husband embarking upon a course of conduct, which by its very nature reduced and minimised the value of the matrimonial assets. The debt to the intervenor is greater than the value of his interest in the matrimonial property. He likewise incurred these debts by reason of his reckless and wanton criminal behaviour.
Consequently, these debts will not be visited upon the late wife in the calculations I make in adjusting property between the husband and the late wife’s estate.
Taxation
There was a submission made in relation to tax. There are likely to be tax implications in respect of the sale of the husband’s yacht, the sale of Property G and income accrued in bank accounts here and in Country Y.
In Homsy & Yassa and Yassa; the Public Trustee (1994) FLC 92-442, another case in which the husband had killed the wife after commencement of proceedings but before hearing, Coleman J said of potential taxation liabilities to the Australian Taxation Office:-[24]
…The parties cannot have it both ways ... the Public Trustee as the administrator of the estate of the deceased and the applicant in his own right should be responsible for the payment of such tax as the interest attracts inclusive of fines and penalties, in proportion to the beneficial entitlement of the parties as determined by me. …
[24] At page 80-,613.
From Rosati & Rosati (1998) FLC 92-804 counsel for the representative asserted, and I accept, that the following principles can be drawn:-[25]
(a)Whether the incidence of capital gains tax should be taken into account in valuing a particular asset varies according to the circumstances of the case, including the method of valuation applied to the particular asset, the likelihood or otherwise of that asset being realised in the foreseeable future, the circumstances of its acquisition and the evidence of the parties as to their intentions in relation to that asset;[26]
(b)If the Court orders the sale of an asset, or is satisfied that a sale of it is inevitable, or would probably occur in the near future, or if the asset is one which was acquired solely as an investment and with a view to its ultimate sale for profit, then, generally, allowance should be made for any capital gains tax payable upon such a sale in determining the value of that asset for the purpose of the proceedings;[27] and
(c)If none of the circumstances referred to in (2) applies to a particular asset, but the Court is satisfied that there is a significant risk that the asset will have to be sold in the short to mid term, then the court, whilst no making allowance for the capital gains tax payable on such a sale in determining the value of the asset, may take that risk into account as a relevant s.75(2) factor, the weight to be attributed to that factor varying according to the degree of the risk and the length of the period within which the sale may occur.
(d)There may be special circumstances in a particular case which, despite the absence of any certainty or even likelihood of a sale of an asset in the foreseeable future, make it appropriate to take the incidence of capital gains tax into account in valuing that asset. In such a case, it may be appropriate to take the capital gains tax into account at its full rate, or at some discounted rate, having regard to the degree of risk of a sale occurring and/or the length of time which is likely to elapse before that occurs.
[25] Exhibit A4 - page 14 of the Representatives written submissions dated 14 August 2017.
[26] In this case the market will determine value and the representative and the intervenor will be responsible for ascertaining and paying taxes, whether income tax or capital gains tax and whether in Australia, New Zealand or Country Y.
[27] The orders are structured so that the net amount is divided between the representative and the intervenor.
In the circumstances of this case, any income tax payable on the accrued rental on Property G by the late wife must be ascertained and paid by the late wife’s estate. The husband will be liable for his own income tax on that income, but has made no claim about it. Any goods and services tax and capital gains tax on the sale of Property G ought to be calculated and paid out of the proceeds of sale of that property by the estate of the late wife and the intervenor, before distribution.
If a claim is made by the Country Y revenue authorities about the investments in Country Y then such tax should be paid out of the proceeds of those investments by the estate of the late wife and the intervenor before distribution.
The husband has not been in a position to earn income from personal exertion since May 2015.
There is likely to be tax payable in Australia in relation to the funds held in trust and likely tax payable on the sale of Property G. The representative and the intervenor as trustees will be obliged to make enquiries regarding taxes and given their responsibilities under the Trustee Act 1898 (Tas) will ensure that such taxes are paid before distribution to the estate of the late wife and/or the intervenor.
As a consequence of the above, I am satisfied that the pool of assets is substantially as set in the earlier schedule.
Contributions
In relation to contributions, I have had regard to the evidence to which I referred earlier.
The husband made very significant initial contributions. In his 2014 affidavit he says and I accept, given the submissions to that effect made by counsel for the representative and counsel for the intervenor, that he had the following property at the commencement of cohabitation:-
(a) two blocks of land in Queensland, which were sold several years after marriage for $590,000;
(b) savings of about $100,000;
(c) shares worth about $300,000; and
(d) no liabilities and no superannuation interest.
I accept and adopt the submission by counsel for the representative that the approach to be taken to the assessment of initial contributions is now well-settled by the Full Court in Pierce & Pierce (1999) FLC 92-844,[28] where it said:-
In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all the other relevant contributions of both the husband and wife. …
[28] At 85,881.
The late wife conceded this in her 2014 affidavit. As to her contributions, she said:-
8.[The husband] had significant assets when I met him and I had nothing. He had owned his own business in [Country O] however he sold all his assets in [Country O] at about the time that he met me. He had previously been married and has two adult children in [Country O]. I do not believe that he has anything to do with his ex-wife or children.
9.Throughout the relationship I would carry out almost all of the cooking, all of the washing, house cleaning, most of the gardening and lawn mowing. In addition I carried out significant physical labour to renovate our house. In all regards I was supportive of [the husband] and his requirements.
10.Whilst we did have some enjoyable times [the husband] was very controlling of me to the extent that if I went shopping for groceries I would have to account to him for every last cent. He would choose and buy my clothes and my requirements. He would allocate $100.00 per month to me for my personal expenses (although he would be reluctant to pay that money to me on those occasions when I was able to obtain regular casual work picking berries during the berry season. I did that for about seven or eight years and my income from that source fluctuated between $4,000.00 and $8,000.00 per annum. I worked very hard at that work).
11.I used to send a significant proportion of the money that I earned from my berry picking to support my family in [Asia].
12.I wanted a permanent job but [the husband] would not allow me to have a permanent job. I believe he wanted to curtail my independence.
13.I had almost no say in the financial decisions associated with the relationship as [the husband] would not involve me in them. My role was effectively to be a good and obedient wife.
14.I have no training and no particular skills. Prior to meeting [the husband] I carried out some waitressing and was an umbrella girl (caddy) at a golf course.
I prefer the late wife’s evidence to that of the husband where there is a conflict and I conclude that during the relationship she made greater contributions in terms of indirect financial contributions, non-financial contributions and homemaker.
I do not believe the husband’s claim that he and the wife made overall equal contributions. In his initial application the husband sought that the late wife receives 20 per cent of the property and at the hearing he said she was entitled to 50 per cent of the matrimonial property. In her Will[29] the late wife appointed the husband as executor and made provision for him. That gift failed as a consequence of the husband’s murder of the late wife. As a consequence the representative was one of the alternate executors with the other being John F. Probate has been lodged with the Supreme Court of Tasmania, but has not yet been granted. The late wife then left a small bequest of personal property to Mr F and divided the remainder of her estate in four ways:-
(a) as to one quarter to her nephews and nieces (being the children of her brother, T;
(b) a quarter to her remaining brothers;
(c) a quarter to the Hollows Foundation and UNICEF; and
(d) the final quarter to named grandchildren of the husband.
[29] Exhibit A2 – Will of the late wife.
The late wife named two of the husband’s three grandchildren in the Will. It is not for me to make comment as to whether that gift was for two or three of the grandchildren. However, it is clear that two or possible three of the grandchildren of the husband will benefit under the estate of the late wife.
His change from a payment of 20 per cent to the late wife to 50 per cent is to be considered in the light of the late wife’s Will and its terms, his murder of the late wife, the judgment debt to the intervenor and the husband’s assertion at trial that the money in Europe was held in trust for his three grandchildren and the timber was his son’s property.
I am conscious that more money paid to the estate of the late wife will be, in part, the more money is gifted to the husband’s grandchildren, and his submissions should be seen in that light and my view as to the reliability of the husband’s evidence. I find that this approach by him is designed to minimise the amount of the judgment debt that would and should be paid to the intervenor and increase the amount to be paid to his grandchildren under the late wife’s Will.
I accept that there is little evidence as to post separation contributions. For that short period the husband resided at Property M and the late wife was reliant on friends for accommodation and financial support.
I have had regard to the husband’s maintenance and the improvement of his financial position, his providing for the family financially and acquiring, conserving and improving the home.
Further, I had regard to the wife undertaking home duties and contributing to the welfare of the family for 18 to 19 years, her work in Queensland, her berry picking, her growing of vegetables and maintaining the large grounds and her work in maintaining and renovating the home.
The approach by the representative and his advisors and by the intervenor and her advisors is both pragmatic and sensible. The only parties to receive funds from the pool of property are the intervenor and the beneficiaries of the late wife’s estate. The effect of the joint submission is that the estate of the late wife possibly eschews a larger pool of property that may fall within the range of discretion to the husband and thus to the intervenor. However, any other approach would have put these parties in conflict with each other which in turn would add to the cost of the litigation and the cost and complexity in securing and liquidating property. I have taken this into account pursuant to s 75(2)(o) of the Act in terms of the considerations and determination under s 79(4) of the Act.
Having considered all of those factors, I accept the submissions by counsel for the representative and counsel for the intervenor that the property ought to be adjusted on the basis of contributions and the s 75(2)(o) factors as to 35 per cent to the late wife and 65 per cent to the husband. This of course with the husband’s share to be paid directly to the intervenor and set off against the judgment debt.
The other factors including the remaining s 75(2) of the Act considerations
The representative seeks no adjustment for the s 75(2) factors given the death of the wife as she has no future needs. There are a number of cases which have considered the impact of death of a spouse on this stage of the exercise (eg. Lawrie v Lawrie (1981) FLC 91-102 (per Asche, Fogarty and Gee JJ); Menzies v Evans (1988) FLC 91-969 (Smithers J); Tasmanian Trustees Limited v Gleeson (1990) FLC 92-156 (Strauss, Baker and Nygh JJ); Parrott v Public Trustee of NSW (1994) FLC 92-473 (Nicholson CJ, Lindenmayer and McGovern JJ); Homsy v Yassa; Public Trustee (1994) FLC 92-442 (Coleman J); Mason v Mason & Mason-King (1994) FLC 92-446 (per Baker, Lindenmayer and Bell JJ); W & W [1999] FamCA 1765 (Jordan J); G v The Public Trustee of the Australian Capital Territory (as Legal Representative of N) [2002] FamCA 751 (Finn J); and K & P [2003] FamCA 1491 (Collier J)).
The underlying principle in all of these cases is that the death of a spouse is likely to have a significant impact on the application of s 75(2) factors. This is handily summed up by Brereton J Grace v Grace [2012] NSWSC 976 where he said at 290 Brereton J said:-
290.… Secondly, a deceased spouse has no future needs, and thus no s 75(2) factors operating in her or his favour [Tasmanian Trustees Limited v Gleeson (1990) FLC ¶92-156]; thus the death of a party can have a profound effect on the balance of the s 75(2) factors [Parrott v Public Trustee of NSW (1994) FLC ¶92-473], although that will depend on the means and needs of the surviving spouse and the adequacy of his or her contribution-based entitlement to provide for them.
In Van der Linden & Kordell [2010] FamCAFC 157 the Full Court said:-
83.… although it is clear that when a spouse dies there are generally no s. 75(2) factors that can be taken into account in favour of the estate, and that that should highlight the needs of the surviving spouse and the fact that they have to be met, it is equally apparent that that should not detract from the need to recognise the entitlement of the deceased spouse (which devolves onto that spouse’s estate) arising from a consideration of the respective contributions of the parties.
There was no evidence of the needs of the beneficiaries of the late wife given the state of the law outlined in Watson & Ling [2013] FamCA 57 where Murphy J said:-
8. The reference in the quoted passage to the interest deriving from the deceased party has been emphasised in other authorities:
The court does not take into account the claims or financial circumstances of the beneficiaries of the deceased spouse’s estate.
…
The claim of or against the surviving spouse is to be considered essentially as between husband and wife before the claims of other beneficiaries are taken into account. (Per Brereton J in Grace v Grace [2012] NSWSC 976 at [243] citing Menzies & Evans (1988) FLC 91-969; Berry & Berry (1990) FLC 92-118; Mason v Hannaford; Mason-King (1993) FLC 92-398.)
Having regard to the evidence I am satisfied that the late wife would have been entitled to a substantial adjustment had she not have died.
The husband is unable to obtain any alteration in his favour pursuant to section 75(2) factors. As Coleman J said in Homsy v Yassa and Yassa; the Public Trustee (1994)(supra):-[30]
In determining what order should now be made, Section 75 needs to be considered. It is artificial to have regard to Section 75(2) operating in favour as of the deceased. It is rather in this case, the operation of Section 75(2) as raised by the applicant to increase his entitlement which must be considered. In essence, though not put this way by his counsel, the applicant maintains that he has needs for accommodation, that he has health problems, that he has limited or no capacity to be employed for a variety of reasons relating to health and his criminal record, and that, in all the circumstances, Section 75 (2) should operate to increase his entitlement beyond that which he achieves by contribution. I do not accept that this is so. In my view, the applicant having terminated the life of the deceased, and thereby rendering inappropriate Section 75(2) factors which previously significantly favoured the deceased, cannot himself have the benefit of those factors. To do so would be offensive to justice and equity, whether that is considered in the context of Section 79(2) and Section 75(2)(0) of the Act.
[30] Page 80,617.
His Honour then carefully analysed the relevant authorities and literature in respect of the Forfeiture Rule and concluded:-[31]
… Accordingly, on what would appear a favourable view of the forfeiture rule so far as the applicant is concerned, I can see no basis for finding that the rule, whether it be expressed in those terms, or in terms of unconscionability would not apply.
Having regard to the English authorities, I feel well fortified in the approach I have indicated that I take to Section 75(2) factors in the present proceedings. The nexus between the authorities to which I have referred and the proceedings in this Court is one of substantial justice, however that be expressed in the articles and authorities.
[31] Page 80,620.
His Honour went further and in the context of the husband seeking a delayed sale of the house, a primary asset of the parties, and said:-[32]
It is evident from the above that I reject the submission on behalf of the applicant that the sale of Concord be postponed until April 1997. To grant such an indulgence to the applicant would in my view be unconscionable as it would represent a benefit which could only be seen as applicable to Section 75(2) of the Act, and in turn sustainable on the basis that, as the deceased will not in any way benefit from any order made in these proceedings, whether it be effective immediately or postponed indefinitely, to grant this indulgence would be to permit the applicant to profit from his unlawful killing of the deceased. Having regard to the matters set out above, I will not make orders which, directly or indirectly confer upon the applicant a benefit for that unlawful killing.
[32] Page 80,621.
I reiterate the comments of Coleman J that the husband, having murdered the late wife, cannot have the benefit of the s 75(2) factors. If I am wrong in this regard I would not have made an adjustment for such factors because the husband is retired and his earning capacity is irrelevant, furthermore he was sentenced to a 28 year term of imprisonment with a minimum time of 16 and a half years. As such he will be aged over 90 before he can be considered for parole. He will be in the care of the State of Tasmania for most of the rest of the life. He has a financial resource in the form of a Country O pension totalling about $625 per month.[33]
[33] Husband’s affidavit filed 8 December 2014 – paragraph 25
I find that the husband has no entitlement to adjustment in his favour pursuant to s 75(4)(d) or (e) of the Act.
The representative and the intervenor made submissions pursuant to s 75(2)(ha) of the Act, which provides:-
75(2) the matters to be so taken into account are;
…
(ha)The effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant.
I accept the submission by counsel for the representative that:-[34]
whilst this provision does not provide a basis for enlarging the entitlement of a party so as to satisfy obligations to a creditor, it does require a balancing of the entitlements of the Estate against those of the intervenor where by orders sought by the Estate, or proposed to be entered by the Court, would have the effect, as they do here, of diminishing the ability of the intervenor to recover that owed to her.
[34][34] Exhibit A4 – pages 26 and 27 of the applicant’s written submissions
In Worsnop & Worsnop (No. 2) [2007] FamCA 1315 (unsuccessfully appealed) ; Trustee of the Property of Lemnos v Lemnos (2009) 223 FLR 53; Bilftoft & Bilftoft (1995) FLC 92–614 and the principles arising from these are:-
(a)A Court may properly determine not to take into account or to discount the value of an unsecured liability in certain circumstances;[35] and
(b)There is nothing in the Act which prevents a court from making an award to a party which may hamper a creditor’s ability to recover debt.
[35] As I have done by wholly disregarding the judgment debt and the debt to Simmons Wolfhagen.
In this case the intervenor, as an unsecured creditor, has asked the Court to divide property between the husband and the estate of the late wife before making the property adjustment. I have adopted that course, this because of the circumstances set out in these reasons, including the husband’s refusal to repatriate the Country Y funds to Australia.
Neither the intervenor nor the representative have raised any issue of priority as between them. The intervenor and representative submit that once property has been adjusted the balance due to the husband should be paid directly to the intervenor and the estate of the late wife should otherwise take its share.
I accept that effect of the insertion of s 75(2)(ha) and the other 2005 amendments into the Act is that the interests of unsecured creditors do not automatically prevail, and are not necessarily to be preferred, over the interests of the other spouse. The Explanatory Memorandum, Bankruptcy and Family Law Legislation Amendment Bill 2004 (‘the Bill’), which amended the Act in 2005, says at page 10, Item 24: After paragraph 75(2)(h):-
49. Item 24 would insert a new paragraph (ha) after paragraph 75(2)(h). This provides that a court making an order under section 74 (relating to spousal maintenance) must consider the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debts. This is intended to require the court specifically to consider any monies owed by a party to a creditor that the party has disclosed to the court in the proceedings, and the impact of any proposed spousal maintenance order on the ability of the creditor to recover any such debt.
The legislation requires the Court to balance their competing claims in the exercise of the wide discretion conferred by s 79 of the Act.
As Coleman J said in Trustee of the Property of G Lemnos, a Bankrupt & Lemnos and Anor (supra):-
97. Accordingly, in cases where there is “property” of the parties to the marriage or either of them, the effect of the 2005 amendments is that the Court has jurisdiction to make orders which have an adverse impact upon unsecured creditors. In this regard the term “property” includes property vested in the trustee of a bankrupt spouse.
The then Attorney General Phillip Ruddock said in the House of Representatives Second Reading Speech for the Bill:-[36]
… Schedule 1 contains amendments to clarify the rights of bankruptcy trustee and the non-bankrupt spouse, and to offer certainty as to the competing claims of creditors and the non-bankrupt spouse.
The amendments in schedule 1 will enable concurrent bankruptcy and family law proceedings to be brought together in a court exercising family law jurisdiction, to ensure that all issues are dealt with at the same time. This is achieved by giving courts exercising family law jurisdiction additional jurisdiction to deal with bankruptcy matters that are run concurrently with a family law financial matter, and by facilitating the bankruptcy trustees' and third party creditors' involvement in family law proceedings. By merging the courts' jurisdiction on bankruptcy and family law matters in cases where these areas interact, the amendments will allow the courts exercising family law jurisdiction to consider the non-financial contributions of a non-bankrupt spouse to the acquisition of family property.
Under the schedule 1 amendments, the trustee in bankruptcy can be a party to property or spousal maintenance proceedings under the Family Law Act 1975, and the court will have jurisdiction over property that has become vested bankruptcy property. The court will be able to make an order against the relevant bankruptcy trustee as part of the property adjustment order, allowing the trustee effectively to stand in the shoes of the bankrupt spouse.
The effect of these amendments will be to offer procedures and protections to the non-bankrupt spouse that were not previously available. At the same time, the court can be on notice about the interests of creditors of a bankrupt spouse and can take those interests into account in determining family property or spousal maintenance orders
[36] Commonwealth, Parliamentary Debates, House of Representatives, 17 February 2005, 30 (Mr Ruddock, Attorney General).
I accept both that the Court may make orders in favour of the other spouse even if the combined liabilities exceed the total value of the property and that the Court has jurisdiction to make orders which have an adverse impact upon unsecured creditors.
Sometimes a spouse could be disadvantaged by the claims of a creditor and sometimes the creditor could be disadvantaged by the claims of a spouse, turning on the facts of each case. Nothing suggests that the exercise of discretion requires that the interests of unsecured creditors, of the bankrupt, or the non-bankrupt spouse, be afforded any particular weight, or approached in any particular fashion. The reconciliation of the conflicting rights of unsecured creditors and the rights of the spouse involves the exercise of discretion.
It was submitted and I accept that the cost of recovering the funds through the Supreme Court of Tasmania would be time consuming and costly. I am satisfied there is no reason why it ought not be done in these proceedings rather than putting the parties to the additional cost of such material.
Given the circumstances of this particular case I have determined that payment to the husband is to be directed to the intervenor in partial satisfaction of the judgment debt. I accept that there have been examples of the husband using monies contrary to orders of the Court exercising jurisdiction under the Act and that, given the evidence of the husband and despite his convictions in the Supreme Court of Tasmania, he has little or no regard or sympathy for the intervenor.
Just and equitable
The approach by the representative and the intervenor in terms of their submissions as to division of property has operated in a principled way.
The intervenor has refrained for seeking enforcement of the judgment debt pending the outcome of these proceedings.
As I have said earlier the husband’s approach to offer 50 per cent of the property to the wife was not made out of any sense of obligation or generosity to her. I infer that this approach was to seek to maximise a transfer of assets to his grandchildren through the Will of the late wife.
There was an interim payment of $10,000 made to the late wife pursuant to an order made 11 December 2014. Neither the intervenor nor the representative seeks an add-back of that sum as it was applied towards living expenses and legal fees of the late wife prior to her passing. I have considered this and the payments made to the husband for legal costs in the overall determination of the property issues.
There were two other items referred to as add-back which were the husband’s legal fees paid from the assets of the parties on 24 January 2017 and 28 March 2017. These have effectively been paid back by Dr S. These are not funds to which the estate or the husband have any claim. It is a matter between Dr S and the lawyers.
The overall effect of the division of approximately $2,168,153.17 will mean that the estate of the late wife will be paid about $758,853.61. The husband will be paid about $1,409,299.56, all of which will be paid to the intervenor in partial satisfaction of the judgment debt.
All in all I am satisfied that in the circumstances of this case this outcome is just and equitable. I will make orders that division of property.
Interim Orders and Miscellaneous
I made interim orders on the day of hearing.
One was payment of $410,000 to the intervenor. In terms of that payment I refer to the comments made elsewhere in these reasons.
The intervenor is owed approximately $2.5 million dollars by the husband and that judgment debt is accruing non-compounding interest of $519.09 per day. Given those circumstances and the approach adopted by the representative and the intervenor in these proceedings, I was satisfied, on the day of the hearing, that it was appropriate for a payment to be made to the intervenor in that sum of $410,000 by way of partial property order to the husband which was then, for the reasons set out earlier, paid directly to the intervenor as his primary creditor.
Further, the intervenor was gravely injured through the criminal behaviour of the husband and has incurred significant expenses, including over $200,000 in legal costs in the civil proceedings. She is in receipt of the Disability Support Pension of approximately $900 per fortnight and is unable to undertake paid work in any capacity.
She has significant liabilities, which are set out in the affidavit of Mr Cooper and in the civil judgment of the Supreme Court of Tasmania.
Significant assets of the husband are contained in the house at Property M and Property G. In addition there are funds in Europe; efforts have been made to repatriate those funds to Australia. It was put to me by counsel for the intervenor and counsel for the representative that the sum of approximately $34,000 ought to be put aside to enable the collection of these funds for distribution to the representative and intervenor. I accept that this is the least expensive way to convert the property to funds so as to pay the late wife’s estate her proportion of the parties’ property and to pay the husband’s share to the intervenor in partial satisfaction of the judgment debt.
That circumstance was clear at the date of the hearing and I have determined to make that partial property order to the husband, albeit paid directly to the intervenor, rather than force the intervenor and the representative to await the publication of more fulsome reasons.
The intervenor and the representative sought injunctions to preserve the pool of assets. Given that none of the property will be paid to the husband and given the circumstances outlined in these reasons, in particular the husband using funds and accessing funds without reference to the representative and the intervenor, I am satisfied that the injunctions I made ought to be made and remain in place as final orders.
I also made an order giving access to the house at Property M to the intervenor, the representative and their legal representatives. The house has been vacant since 14 May 2015 and a proper inventory needs to be taken and the property needs to be secured to enable sale, which was clearly inevitable at the conclusion of evidence and submissions.
Finally, I will direct that a copy of these reasons be forwarded to Simmons Wolfhagen.
I certify that the preceding two hundred and thirteen (213) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on .
Associate:
Date: 18 October 2017
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