Noma and Noma and Ors

[2015] FamCA 114

FAMILY COURT OF AUSTRALIA

NOMA & NOMA AND ORS [2015] FamCA 114

FAMILY LAW – PROPERTY – Interim property application by wife – Where significant issue as to the husband’s non-disclosure – Where wife contends for significant add backs that ultimately allowed would increase the asset pool – Where consideration to relevant principles – Where interim orders sought by wife well within range of outcomes contemplated by the husband – Where appropriate to make an order for interim distribution to the wife – Where not appropriate to make similar order in favour of the husband by reason of his non-disclosure and other issues.

Family Law Act 1975 (Cth) s 79

Harris & Harris (1993) FLC 92-378
Strahan & Strahan [2009] FamCAFC 166

APPLICANT: Ms A Noma

1st RESPONDENT: Mr B Noma

2nd RESPONDENT: Mr C Noma

3rd RESPONDENT: Mr D Noma

4th RESPONDENT: Ms E Noma

5th RESPONDENT: F Pty Ltd

FILE NUMBER: PAC 6 of 2013

DATE DELIVERED: 27 February 2015

PLACE DELIVERED: Parramatta

PLACE HEARD: Sydney

JUDGMENT OF: Foster J

HEARING DATE: 4 February 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Campton SC

SOLICITOR FOR THE APPLICANT: Matthews Folbigg Pty Ltd

COUNSEL FOR THE 1ST RESPONDENT: Mr Dura

SOLICITOR FOR THE 1ST RESPONDENT: McAuley Hawach Lawyers

COUNSEL FOR THE 2ND, 3RD AND 4TH

RESPONDENTS:

Mr Rosic

SOLICITOR FOR THE 2ND, 3RD AND 4TH

RESPONDENTS:

Rowlandson & Co Solicitors

SOLICITOR FOR THE 3RD RESPONDENT:

Orders

1. That by way of interim property orders pursuant to section 79 of the Family Law Act1975 (Cth) the husband and wife do all acts and things and sign all necessary documents to authorise and direct Matthews Folbigg, Solicitors to pay to the wife or as she may otherwise direct those solicitors in writing the sum of $200,000 within 7 days from the date of these orders.

2. That in default of the husband doing all acts and things and signing all necessary documents as required in the previous order this order of itself shall be sufficient authority for Matthews Folbigg, Solicitors to pay the said funds to the wife or as she may otherwise direct those solicitors in writing.

3. That the costs of the wife in respect to the present application be reserved.

4. That otherwise all pending interim applications before the Court be dismissed.

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

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 6  of 2013

Ms A Noma

Applicant

And

Mr B Noma
1st Respondent

Mr C Noma
2nd Respondent

Mr D Noma
3rd Respondent

Ms E Noma
4th Respondent

F Pty Ltd

5^th Respondent

REASONS FOR JUDGMENT

1. The dispute for determination relates to the issue of interim property distribution as between the husband and wife.

2. In her amended application in a case filed on 7 January 2015 the applicant wife sought in summary the following orders:

   a)That by way of interim property orders pursuant to section 79 of the Family Law Act 1975 (Cth) (“the Act”) funds representing the net proceeds of sale of the property at G Street, Suburb H is be paid:

   i)As to the sum of $85,000 to a solicitor’s trust account in relation to future capital gains tax;

   ii)Payment to the Australian Taxation Office of the sum of $20 000 for GST;

   iii)Payment of the then balance to the wife.

3. In her amended application in a case the wife sought a raft of other orders, the majority of which were resolved by the parties by agreement or otherwise not pressed.

4. For his part the respondent husband essentially sought an order that the wife’s application in a case be dismissed or if funds were distributed to her from the proceeds of sale of the property that he receive a similar amount.

5. Both parties were in agreement that jurisdiction existed for the Court to make the order sought by the wife subject to the considerations set out in Strahan [2009] FamCAFC 166.

Background

1. The wife is presently 40 years of age and the husband 47.

2. The parties married in Country I in 1991 and separated on 27 October 2012. Prior to final separation in 2012, the parties were separated for two other periods, firstly from December 2008 until October 2009 and then from late October 2011 until mid-December 2011. During each period of separation the parties were physically separated with the husband moving out of the then matrimonial home.

3. There are three children are of the marriage presently aged 21, 17 and almost 12. The children presently live with the husband.

4. The present litigation between the parties has had a long history.

5. On 19 February 2013, interim parenting orders were made in respect to the parties’ youngest child J. Otherwise the parties were restrained from removing the two younger children from the Commonwealth of Australia and the children were placed on the airport watchlist.

6. An interim hearing in relation to parenting issues listed for April 2013 was vacated with the family to attend family therapy and thereafter on 11 July 2013 proceedings as to parenting and property were transferred to this Court.

7. The property issues were before a Registrar on 20 September 2013 with the Registrar noting:

   Primary issue is the property in [Country I] – H says it was sold and paid back the debt to his brother – W says that it should be included in the pool. W obtained a valuation which gave it a value of $1,156,000 – there was also an issue of a debt to H’s brother of $190,000… Parties shall in the adjournment attempt to resolve the [Country I] property issue with further disclosure and H obtaining a valuation of the property.

8. The parties thereafter attended the child responsive program and a Children’s and Parenting Intake Assessment report dated 15 November 2013 was provided to the parties.

9. The matter was again before a Registrar on 12 May 2014 as to property. It was noted that there were pending proceedings in Country I and proceedings were adjourned to 14 July 2014 for possible interim hearing.

10. On 14 July 2014 proceedings were listed in a judicial directions list. Proceedings were listed for interim hearing as to financial issues on 22 August 2014 with directions made for the filing and service of documents by both parties. Otherwise, there were orders made by consent for the wife to serve upon the husband a request for disclosure of documents and information and for the husband to reply thereto on oath. It was otherwise noted that the parties were in agreement as to the sale of the former matrimonial home at G Street, Suburb H.

11. On 22 August 2014 further orders were made by consent that in summary provided for the sale of the investment property at G Street with the net proceeds of sale to be paid into a controlled monies account opened by the solicitors for the parties. Otherwise, the husband’s time for compliance with the wife’s request for answers to specific questions was extended and the husband was given leave to administer a request to answers to specific questions. It was noted that the adjournment of the interim applications was to facilitate clarification of money secured against the G Street property in favour of Westpac Banking Corporation so as to clarify the equity in that property and available equity in other partnership properties.

12. The matter was stood over to 6 November 2014 and on that date the second, third and fourth respondents were joined in the proceedings. The wife was ordered to file and serve any further amended application seeking final orders, any amended application in a case and any further affidavit upon which she seeks to rely for the purposes of the interim hearing. The husband and the second to fourth respondents were ordered to file and serve documents in reply and proceedings were adjourned to 4 February 2015 for interim hearing. Relevantly, the husband filed an amended response to the application a case seeking an interim distribution of $50,000 each to he and the wife.

13. On 4 February 2015 the parties relevantly agreed to various consent orders in relation to the wife relying on adversarial expert evidence as to the value of the husband’s sold property in Country I and the value of the husbands alleged interests in two corporate entities, one being the now fifth respondent F Pty Ltd (“F”). Otherwise orders were made by consent as to disclosure of pertinent financial documents and instructions to the single expert real estate valuer.

14. Significant issues have arisen in the context of the property proceedings between the parties, in particular as to the alleged funds historically held by the husband in Country I, the acquisition and subsequent sale by him of a property in Country I and the “cancellation” of his shares in F during cohabitation.

The present circumstances

1. At the time of marriage the wife was 17 years of age. She moved to Australia with the husband in January 1992. On arrival both were initially unemployed and they received social security benefits to pay rent and other expenses. The husband contends that he had about $50,000 in savings at the time of cohabitation.

2. The parties purchased a home in K Street, Suburb H in mid-1993. The cottage property was purchased for $102,000 with monies for a deposit borrowed from various family members and the balance raised by way of a first mortgage advance from the Westpac Banking Corporation.

3. In 1993 the husband set up a business trading as “F” selling car spare parts. It is this business that is now the subject of much dispute between the parties. The husband contends that in September 2008 he came to an arrangement with his brother, Mr C Noma that he would take over the husband’s share of the business and in return would look after the husband and the husband’s family, presumably financially. Yet on 28 June 2011 in proceedings in the Supreme Court of New South Wales, the husband swore on oath that he was the owner of the business and had been for the last 20 years. Clearly a perplexing dichotomy.

4. The parties sold their first home in about 1997 and purchased land at Suburb L. The Suburb L property was purchased for the sum of $160,000. The parties rented for about 18 months while a cottage was built on the land. The parties moved into the Suburb L property in 1998. This property was sold on 25 January 2013 for $1.1 million. Net proceeds of sale after discharge of various mortgages secured against the property, was    $16,680 which after payment of joint valuation fees was distributed equally between the parties.

5. In about 2000 the parties purchased an investment and commercial property at G Street, Suburb H. The property was tenanted after purchase with the husband receiving rents paid. The wife asserts that she has no knowledge as to how rental payments were disbursed by the husband.

6. The wife asserts that in about 2003 the husband set up a business called M Pty Ltd. The wife contends that the husband in about 2008/2009 resigned as a director of the company and in some way disposed of the shareholding notwithstanding that to her observation the husband continues to be actively involved in the business.

7. The parties either together or in the name of the husband bought and sold various properties during the relationship and the wife contends that at separation in October 2012 the real estate properties in relation to which they had an interest were as follows:

   a)N Street, Suburb L, the property now having been sold for $1.1 million with minimal funds available for distribution where there is an issue as to the nature of the debt secured against the property.

   b)G Street, Suburb H jointly owned by the husband and wife. By agreement this property has now been sold for $680,000. From the proceeds of sale Westpac loan (5627) of about $286,000 was to be discharged. Net proceeds, after payment of an ATO debt, outstanding school fees and a refund of insurance payments to the wife, held on behalf of the parties are $344,000 with the parties agreeing that $85,000 will remain separate to meet expected CGT liabilities arising from the sale. Thus available funds are about $260,000.

   c)O Town, Country I owned by the husband. In March 2011 the husband travelled to Country I and the wife asserts purchased a multilevel house in O Town. The husband contends that he has now sold this property and paid the whole of the proceeds of sale to his brother in repayment of an alleged debt. On 3 November 2011 the husband withdrew from the parties joint bank bill business loan (2078) $360,000 and has yet to explain the application of those funds. In January 2013 the wife became aware that the husband was in the process of transferring this property. A title search of the property in Country I disclosed that the property had been acquired on 1 June 2011 in the name of Mr B Noma (the husband) and that a sale transaction dated 18 January 2013 had occurred but had not yet been registered on title. The husband asserted that he had sold the property to a Mr P, a person known to the wife. The wife, seeking to protect her interest in the property by reason of what she asserted were matrimonial funds applied to the purchase, lodged a “caveat” on the title to the property. To be able to pursue her enquiries in Country I as to the transactions relating to this property the wife requested the husband to provide her or her nominee with a power of attorney effective in Country I. Initially the husband agreed to do so but he has since resiled from that agreement.

   Proceedings have been commenced in Country I against the husband and Mr P in relation to the O Town property. Mr P is represented in the proceedings by a lawyer and documents in response have been filed by Mr P in the proceedings. It appears to be the husband’s contention that he has not been served with initiating process in relation to the proceedings in Country I and he is not as yet engaged in those proceedings.

   The wife is seeking orders in Country I to effect substituted service on the husband. In part, the wife is also seeking an order that she or her representative be able to inspect “Notary Public” records that may reveal an underlying agreement between the husband and Mr P in relation to the property. Otherwise the wife has contended in other proceedings the existence of a fraudulent arrangement between the husband and Mr P to prevent her receiving a share of the O Town property.

   d)O Town, Country I being land valued at about $10,000.

   e)2 Q Street, Suburb R owned by the husband and his brother Ms E Noma in equal shares.

   f)3 Q Street, Suburb R owned by the husband and his brother Ms E Noma in equal shares.

   g)4 Q Street, Suburb R owned by the husband and wife as joint tenants as to one half and by Mr C Noma and Mr D Noma as joint tenants as to the other half.

   h)S Street, Suburb R owned by the husband and wife as joint tenants as to one half and by Mr C Noma and Mr D Noma as joint tenants as to the other half.

8. The business F trades from or utilises the Suburb R properties in the conduct of its business. The wife asserts that notwithstanding the properties being occupied by F, no rent is being paid by the business to the husband, wife and co-owners.

9. Prior to separation and in April 2009, the husband sold his 50 percent interest in a property at 1 Q Street, Suburb R, owned by the husband with his brother Ms E Noma in equal shares, to Mr T for $220,000. The wife has no knowledge as to how the proceeds of sale were applied.

10. The wife further asserts that the husband has an interest in F, M Pty Ltd and F2 Pty Ltd, notwithstanding the husband’s assertions to the contrary.

11. Subsequent to separation the wife has sought disclosure from the husband and undertakings not to deal with any of the parties’ bank loans or assets. She received no response.

12. Concerningly, the wife’s father Mr U, who resides in Country I, gives evidence that in late 2000 the husband travelled to Country I and they both attended at the V Bank. The husband at the bank signed a bank power of attorney limited to the bank account operated by the husband with the V Bank. It appears that the account had two subaccounts: one in US dollars and the other in Country I (Dollars).

13. Mr U contends that the power of attorney gave him an authority to receive, collect and deposit money on the husband’s behalf and gave him access to bank statements in relation to the account. The account was set up by the husband in the name of Mr B Noma. Mr U says that over a period of years from late 2000 to mid-2008 he collected or received various monies in cash in Australian currency on behalf of the husband and deposited those monies to the account. Funds were also transferred by the husband to Country I. In 2007 and 2008 Mr U estimates that the husband remitted approximately $400,000 to Country I.

14. Mr U alerted his daughter to his concerns in relation to these funds.

15. Mr U on four occasions withdrew funds totalling US$200,000 from the account and was directed by the husband to give these funds to the husband’s brothers Mr W Noma and Mr X Noma. At the time of these funds being provided Mr U observed that the husband’s brother Mr X was building a house in the O Town area.

16. In 2008 Mr U observed that there were problems in the marriage between his daughter and the husband when they visited Country I. He subsequently became aware that the husband had transferred about US$600,000 from the V Bank in City Y to the Bank in O Town on 28 July 2008.

17. Bank statements for the accounts reveal the following significant withdrawals:

    a)Country I Dollars:     10.07.2007               188 000 000

    28.07.2008               900 000 000

    b)US Dollars                11.08.2009   105 000

18. It is common ground that the parties’ interest in the Suburb R properties has a value of about $1.151 million with mortgages secured of about $340,000. With the available G Street funds of $260,000 and the parties’ superannuation of about $126,000 and leaving aside the add-back issue contended by the wife of funds lent to the parties’ son Mr Z, the alleged interest of the husband in F, the O Town property issue, unpaid rent by F, the issue of debt secured against the parties Suburb L home and the issue of the husband’s funds in Country I then the available identifiable pool is about $1.197 million.

19. It was submitted on behalf of the wife that to date she had about $100,000 in unpaid legal fees, much of which have been incurred in relation to the parties’ asset pool in Australia and the asserted assets of the husband in Country I  unnecessarily if the husband had complied with his disclosure obligations.

20. It was submitted on behalf of the husband that any monies paid to the wife by way of interim property could not be recovered in the event that her entitlement ultimately was found to be less than the monies provided to her by way of interim order. It was ultimately contended on behalf of the husband that if funds were to be released there should be a payment equally to the husband and wife of $100,000. It was further contended that in the event that no funds were released to the husband he would have difficulty meeting his legal fees in relation to these proceedings and those in Country I.

21. In his amended response filed on 4 February 2015 to the wife’s amended initiating application the husband seeks final property orders that provide for a sale of the Suburb R properties referred to above.

22. As to the properties at S Street and 3 Q Street he seeks an order that 75 per cent of the net proceeds of sale be paid to the second respondent in these proceedings, his brother Mr C Noma, with the balance to form part of the asset pool for division. The husband provides no evidence in the context of the present application suggestive of why such an order should be made where the parties have a 50 per cent interest.

1. As to the properties at 3 Q Street and 2 Q Street he seeks orders that 50 per cent of the net proceeds of sale form part of the property pool for division together with the net proceeds of sale of the G Street property.

2. Thereafter the husband seeks payment of any capital gains tax payable on the sale of the properties, the quantum of which at present is only a matter of conjecture, that his prospective liability as to costs in respect to unrelated Supreme Court proceedings be paid and that he repay to the estate of his late brother Mr X Noma the sum of $190,000 and to Mr AA Noma the sum of    $68,150.90. The basis for his liability for the familial debts is not found in any evidence presently before the Court.

3. Thereafter the husband seeks that the balance then available be divided as to 60 per cent to him and 40 per cent to the wife.

4. As referred to above as best can be understood at present the available matrimonial pool is $1.197 million. Leaving aside the question of capital gains tax even allowing for the husband’s assertion as to his familial debts totalling $258,150.90, the balance of the pool would be about $938,850. Of that sum the wife’s 40 per cent as contended for by the husband would be $375,540.

5. The wife seeks a distribution to her of $260,000. There remains the issue of the order sought by the husband as to the disparate distribution from the proceeds of sale of the properties at S Street and 4 Q Street, the assessment of outstanding capital gains tax if the subject properties are sold at all and the question of his costs of his Supreme Court proceedings.

6. The principles as to applications for interim property provision are well settled, (Strahan & Strahan [2009] FamCAFC 166) and require a two-step process.

7. Firstly, there must be circumstances enlivening the power to make an interim order. The test is not limited to “compelling circumstances” but whether it would be “appropriate” to make an interim order, with the “overarching consideration” being the interests of justice. In Strahan (supra), the Full Court said:

   132. In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

8. Secondly, the Court is to have regard to relevant matters in s 79 of the Act.

9. It needs to be kept in mind that the final outcome of property settlement should not be compromised by an interim property order. Either the remaining property needs to be adequate to meet the legitimate expectations of both parties at the final hearing or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.

10. It is important to have regard to an overall caution. In Harris & Harris (1993) FLC 92-378, the Full Court said:

    As a generality, the interests of the parties and the Court are better served by there being one final hearing of s 79 proceedings. …

    and in Strahan (supra), the Full Court said at [132]:

    … regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

11. The husband has had notice of the wife’s interim application for property division for some time. He has been on notice of the nature of the wife’s evidence as to the financial history of the relationship and in particular the evidence of her father, Mr U, as to the husband’s funds in Country I for some months.

12. Yet in response to the wife’s application he adduces no evidence as to the financial history of the marriage or any evidence as to the source of funding for the Suburb R properties and the mortgage transactions relating to those properties. Otherwise, he adduces no evidence as to why in relation to the sale of the Suburb L property, the property was in effect fully encumbered by various mortgages relating not only to its acquisition but to his business interests and the affairs of he and his brothers.

13. The evidence before the Court at its highest reveals the husband coming into the relationship with some savings but that thereafter a relationship of over 20 years with three children with no unusual outside contributions asserted by the husband.

14. Clearly there is a strong inference that the ultimate available asset pool will on a contribution-based finding see the wife have a significant interest, with perhaps some adjustment to the husband in relation to the only child who will be under 18 at the time of trial.

15. Such an approach appears to be reflected in the husband’s assertion as to the wife’s entitlement as to 40 per cent of the available pool.

16. Real and substantial dispute exists between the husband and wife in relation to parts of the balance sheet. A resolution of many of the issues may well see the available asset pool for division substantially increased.

17. Counsel for the wife contends that any modicum of discretion that may have fallen in favour of the husband when consideration is undertaken as to the interim property application falls away in circumstances where the husband has engaged in deliberate and calculated disclosure failures in an effort to conceal his true financial circumstances from both the wife and the Court. That perhaps is putting the wife’s position as to the husband’s conduct at its highest.

18. However the husband has simply failed to provide evidence on his part as to the acquisition of the present property pool in circumstances where he alone it is to be inferred has the available information and documents to substantiate his assertions.

19. As contended by counsel for the wife: “it cannot be the subject of contest the husband’s disclosure failures on fundamental matters going to the balance sheet have caused the wife to generate very substantive unnecessary additional costs. He has complicated the evidentiary landscape for the purposes of the substantive proceedings. She does not have direct access to any of the documents or information they go to the husband’s financial circumstances – only he does, and he will not provide it.”

20. In the circumstances of this matter and doing the best the Court can in relation to the absence of relevant evidence from the husband it is appropriate that there be an interim property distribution to the wife of $200,000.

21. In the circumstances, where there are significant reservations as to whether there has been appropriate disclosure and discovery by the husband and the absence of evidence by him to meet the wife’s case for interim property division notwithstanding he has been possessed of that evidence for some months it is inappropriate to facilitate any capital distribution to the husband.

22. Orders will be made accordingly.

I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 27 February 2015.

Legal Associate:

Date:  27 February 2015