Nott and Nott
[2009] FMCAfam 770
•24 July 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| NOTT & NOTT | [2009] FMCAfam 770 |
| FAMILY LAW – Property – parties of Macedonian background – husband remarried – overseas real property – overseas business – husband suffered serious work injury – compensation received – superannuation – add backs – lack of full and frank disclosure. |
| Family Law Act 1975, ss.75, 79 |
| Bell & Bell [2000] FAMCA 1301 Weir v Weir [1993] FLC 92-338 |
| Applicant: | MR NOTT |
| Respondent: | MS NOTT |
| File Number: | DGC 53 of 2008 |
| Judgment of: | Baker FM |
| Hearing dates: | 26 & 27 May 2009 |
| Date of Last Submission: | 27 May 2009 |
| Delivered at: | Hobart |
| Delivered on: | 24 July 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Davis |
| Solicitors for the Applicant: | Maria Barbayannis, 307 Clayton Road, Clayton, VIC 3168 |
| Counsel for the Respondent: | Mr O’Connell |
| Solicitors for the Respondent: | Westminster Lawyers, Level 9, 91 William Street, Melbourne VIC 3000 |
ORDERS
Within 45 days from the date of this order the wife shall pay to the husband the sum of $42,496.50.
The wife shall assume responsibility for the husband’s debt to the Macedonian Orthodox Church and shall indemnify the husband and keep him indemnified in respect thereof.
Contemporaneously with the payments referred to in paragraph 1 the husband shall transfer to the wife all his right, title and interest in the property situated at Property N, Victoria and the wife shall arrange for the husband to be released from the covenants of the mortgage to the Commonwealth Bank of Australia.
In the event that the wife is not able to obtain finance to pay the sum referred in paragraph 1:
(i)The property situated at Property N, Victoria shall be listed for sale.
(ii)The listing price shall be agreed between the husband and wife and failing agreement as determined by a valuer nominated by the President of the Real Estate Institute of Victoria.
(iii)The property shall be listed for sale by private treaty with an agent to be agreed and failing agreement as determined by an agent nominated by the President of the Real Estate Institute of Victoria.
The husband and wife both forthwith do all acts and things and sign all necessary documents to effect the sale of the property:
(i)To discharge the mortgage and any other encumbrances affecting the property;
(ii)to pay all Real Estate agent’s costs, commissions and expenses of the sale of the property;
(iii)to pay any council rates outstanding in respect of the property;
(iv) to pay the solicitors costs in relation to the property.
(v)The balance to be divided between the husband and wife so as to ensure that each party receives a sum equal to 50% of the net asset pool.
There be liberty to each party to apply in respect of the said sale.
Pending completion of the sale of the property, the wife shall be solely responsible for the payments of the mortgage instalments for the mortgage secured over the property and shall make all payments in relation to it.
Pending completion of the sale of the property the wife will be liable for and indemnify the husband against all payments and liabilities in respect of the former matrimonial home including but limited to all rates, taxes and outgoings of whatsoever nature and kind and indemnify and keep the husband indemnified in respect thereof.
Unless otherwise specified in these orders:
(a)Each party be solely entitled, to the exclusion of the other, all superannuation and other property (including choses-in-action) owned by or in the possession of such party.
(b)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
(c)Each party be solely liable for and indemnify the other against any liability in that person’s name.
Each party sign all such documents and do all such things as may be required to implement the terms of this Order.
IT IS NOTED that publication of this judgment under the pseudonym Nott & Nott is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT HOBART |
DGC 53 of 2008
| MR NOTT |
Applicant
And
| MS NOTT |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for property settlement.
Both the husband and wife are of Macedonian background. Neither party required translation of their affidavits. Both parties gave their evidence with the assistance of an interpreter at the hearing. When I asked Counsel why the affidavits had not been interpreted, I was told that the parties understand English, but in the pressure of a hearing it was appropriate for an interpreter to be used. I am satisfied that during the hearing both parties could understand English.
The husband and wife married in 1984. The husband said that the parties separated on 12 October 2006 but remained living together under the one roof. The wife was unable to say precisely when they separated. She said that they separated in late 2007 although the husband was in Macedonia for much of 2007. The parties’ decree nisi became absolute on 6 April 2008.
The husband is 47 years of age and stated his occupation as unemployed. He suffered a work injury in 2000.
The husband remarried in Macedonia on 15 March 2009.
The wife is 48 years of age. She works full time as a [omitted]. She has worked there for approximately 20 years. She is in good health.
There are two adult sons of the marriage. They live with the wife in the former matrimonial home at [N] (“the [N] Property”) in Victoria.
Background
The husband and the wife both worked hard in their employment in the early part of their marriage. The wife ceased work for a short period following the birth of the two children, however, she has worked in [omitted] for the past 20 years.
On 10 June 1991 the husband’s father gave him the property at [address omitted], Macedonia (“the Macedonian property”). The property is unencumbered and the husband currently lives in it.
The husband suffered a serious work injury in 2000 and as a result he ceased employment. He received payments from work cover from 2000 until 2005 of $500.00 per week.
In October 2005 the husband received compensation of $220,000.00 gross, and after the deduction of legal costs received $180,000.00.
The husband travelled twice to Macedonia in 2006, from March 2006 until early May 2006, and from 30 May 2006 until 24 November 2006.
On 26 May 2006 the husband deposited $115,000.00 from his compensation monies into the parties’ joint Commonwealth Bank account.
The wife transferred the sum of $107,500.00 to the husband’s account in Macedonia. She transferred $100,000.00 on 5 June 2006 and the sum of $7,500.00 on 18 July 2006. This money was used to purchase a building in Macedonia.
In June 2006 the husband purchased the building in Macedonia for €65,000.00.
The balance sum of $7,500.00 remaining in the parties’ joint Commonwealth Bank account was spent, the sum of $1,050.00 by the husband, and the sum of $3,000.00 by the wife. She gave this sum to the parties’ son [X], to help him buy a car. The balance was used to maintain the home and to meet bills.
The husband transferred to Mr M the sum of $35,000.00 in December 2006 and the sum of $25,367.83 in January 2007.
In July 2006, whilst the husband was in Macedonia, he purchased a 1999 Mercedes motor vehicle.
The husband purchased a motor vehicle for the parties’ nephew in Macedonia for approximately $7,000.00.
In around December 2007, the husband received $50,000.00 from [T] Superannuation, being monies for permanent disablement.
In February 2009 the husband obtained an early release of his superannuation entitlement with Australian Eligible Rollover Fund and received a gross sum of around $28,000.00.
The husband has incurred a debt to the Macedonian Orthodox Church which now totals in excess of $22,500.00.
Evidence
The husband relied on the following:
·Amended initiating application filed 21 May 2009.
·His trial affidavit filed 21 May 2009.
·His financial statement filed 18 April 2008.
Exhibit
·A bundle of photographs of the Macedonian property.
The wife relied on the following:
·Amended response filed 21 May 2009.
·Her affidavit filed 21 May 2009.
·Her financial statement filed 21 May 2009.
Exhibit
·Page from Zaparas Lawyers ledger – undated.
Both parties were cross-examined.
Relevant Law
Section 79(2) of the Family Law Act 1975 requires that any order made under a s.79 application must be just and equitable. Section 79(4) provides the matters which are to be taken into account in considering what order should be made.
Section 79(4) involves a four step exercise namely:
(i)The identification of the property of the parties, their assets and financial resources.
(ii) The valuation of the contributions.
(iii) The valuation of the matters referred to in s.75(2).
(iv)A determination as to whether the result is just and equitable by considering the real impact in money terms of the orders.[1]
[1] Hickey & Hickey 2003 FLC 93-141 and Ferraro & Ferraro 1993 FLC 92-335
The court is not required to undertake a mathematical approach when deciding what orders to make under s.79. The court is required to consider the competing claims and relevant considerations broadly and fairly when making orders that are just and equitable.[2]
[2] Dickey A, Family Law (Law Book Co 5th Addition, 2007) at page 532
Both parties agree that a global approach is appropriate and that the superannuation of the parties should be included in the one property pool. I will adopt this approach.
Assets and liabilities
The wife contends that the sum of $165,000.00 should be included in the asset pool, which represents the building and business in Macedonia. She contends that the husband’s disablement monies from [T] Superannuation of $40,193.00 and his preserved superannuation of $28,490.00 received by him should be added back to the pool.
The husband contends that the building and business have been sold and the proceeds expended by him. He contends that he has expended the disablement and superannuation monies. The husband contends that a liability to Zaparas Lawyers of $47,542.00 should be included in the pool.
Value of assets and liabilities agreed
·Macedonian property $32,500.00
·Property N property $360,000.00
·Wife’s Australia Superannuation fund $66,933.00
·Mortgage to Commonwealth Bank
secured over the Property N property $70,000.00
·Debt to Macedonian Orthodox Church $22,500.00
The parties have agreed to exclude the husband’s BMW motor vehicle and the wife’s Ford motor vehicle from the pool, as they are of approximately equal value. The husband agreed not to seek the inclusion of $10,000.00, which he alleged the wife took at separation, as an add back. The husband did not seek the inclusion of the chattels in the former matrimonial home into the pool.
Relevant Law – add backs
The Full Court in AJO v GRO[3] identified three categories of cases where the Court has determined that it is appropriate to notionally add back into the property pool assets that no longer exist. They are:
(i)Where parties have expended money on legal fees (DGM & JLM [1998] FLC 92-816 ;
(ii)Where there has been a premature distribution of matrimonial assets (Townsend & Townsend [1985] FLC 92-569);
(iii)Where one of the parties has embarked on a course of conduct designed to reduce or minimise the effective value or worth of the matrimonial assets or 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 (the circumstances outlined by Baker J in Kowaliw & Kowaliw [1981] FLC 90-097 at 76,644).
[3] [2005] FLC 93-218
The Full Court case of Bell & Bell[4] indicated that notional adjustments are not limited to wasted assets but may also include “identified items of property that have been bona fide disposed of.” It went on to say :
“It may also be appropriate, depending on the circumstances, to notionally include in the pool of assets items of property in respect of which no or no reasonable explanation has been given for the assertion that they no longer exist or never existed: Mezzacappa and Mezzacappa (supra). In other words, it is also possible, in appropriate cases, to have regard to, and notionally include in the list of assets, what is called unascertained property the value of which is capable of some identification and quantification.
In this case, the trial Judge notionally included in the pool of assets items that were capable of identification and quantification. However, he also found that there were other assets the identity of which was not known but for which an adjustment should be made in favour of the wife. There is no doubt that such a finding is open to a trial Judge.”[5]
[4] [2000] FAMCA 1301
[5] paras.75 and 76
Discussion
During the trial much of the time was taken up in identifying the pool of assets available for division.
I was not satisfied that the husband presented his true financial position. The husband’s financial statement was filed on 18 April 2008. He stated that the funds in his bank accounts were minimal. He did not specify that he had any loans from Zaparas Lawyers, whereas the ledger statement as at 19 December 2007 stated that he owed $51,500.00 to Zaparas Lawyers. He did not disclose that he had a superannuation entitlement with Australian Eligible Rollover Fund of about $28,000.00. He did not refer to the business, [M], which was in existence at the time. He indicated that his income was nil notwithstanding that he was running the business. There was no reference to his debt to the Macedonian Orthodox Church. He stated that he received $160,000.00 from his Workcover claim when he had received $180,000.00. He claimed that the funds had all been expended. He made no reference to his Mercedes motor vehicle, or the proceeds which he received from the alleged sale of the vehicle. There is no reference to the sale proceeds of the business premises, which he allegedly sold in December 2007 for €50,000.00.
The husband failed to state in his trial affidavit that he had commenced a new business at the same premises as the old business, the day after the old business was liquidated.
I found the husband’s evidence lacked credibility. He was an unimpressive witness. His oral evidence was different from his affidavit evidence and his answers during cross-examination were self- serving. He was not a witness of truth. The wife, although at times reluctant to make concessions, was a witness of truth. Whenever the evidence of the husband and wife conflict, I prefer the evidence of the wife.
The unsatisfactory nature of the husband’s evidence was indicated in respect of his evidence as to the Mercedes motor vehicle and his assertion that he gave $20,000.00 in cash to the wife. The husband denied that he told his wife that he purchased a Mercedes motor vehicle for the sum of €12,000.00. He said that he purchased it for €8,000.00.
The husband said he flew from Greece to Stuttgart with the previous owner of his building, who paid for his flight. He said that the previous owner of the building intended to buy the car but did not. He took advantage of the situation and bought it. He said that he borrowed €8,000.00 from him.
In his affidavit the husband said that the vehicle was purchased for €8,000.00 from some of his compensation monies. When Counsel for the wife referred to the husband’s affidavit evidence in respect of the Mercedes motor vehicle, the husband said he was telling the truth in the witness box, that he missed things in his affidavit and he justified this on this basis of not having an interpreter.
The husband said he sold the Mercedes motor vehicle for €5,000.00 because he needed the money for living expenses. He said he sold the vehicle to repay the loan and other borrowings and to have money for living expenses.
The husband produced a document dated 1 November 2008 which indicated that Mr D nominated and appointed the husband to:
“… drive, have and dispose, as of his own, of my passenger motor vehicle make Mercedes Benz…and undertake all legal actions relating to the said vehicle and compliance with the positive legal regulations on my behalf of my account, in the country and abroad, with a possibility to transfer this power of attorney to a third party at his own choice, and, if necessary, sell the same, i.e. conclude a sales agreement with an interested party or give it as Pledge Manual to be used.”
The husband still drives the motor vehicle, he has driven it on about
10 occasions and three times in May 2009. When Counsel for the wife asked the husband what was in it for the purchaser to give the husband €5,000.00 and not have complete control of the car, the husband said Mr D had the car in his possession that day.
I do not accept the husband’s evidence that he purchased the vehicle for €8,000.00. I accept the wife’s evidence that the husband told her he purchased the vehicle for €12,000.00. The husband did not produce any documents in respect of the purchase price and said “I can get the owner to send me a fax, when I sold him the car I gave him the documents. No one asked me and I have not got them with me.”
I do not accept that the husband has sold the motor vehicle. The power of attorney is an unusual document. Counsel for the husband conceded this, but said that the sting had been taken out of it because the husband voluntarily produced it. In my view, the document is consistent with the husband’s ownership of the car. I am not satisfied that the husband is not the owner of the vehicle. I intend to include the vehicle in the pool.
The husband said he left $20,000.00 cash with the wife in Melbourne after he withdrew it from his account. When asked what advantage it was to the wife to have cash, he answered “I can’t give you a particular answer, we decided to leave some cash in the house.” The wife said that the husband did not give her $20,000.00. She said that he told her that he withdrew $20,000.00 and he was taking the money for the business.
The husband left $7,500.00 in the joint account for the wife for living expenses to which the wife had access. There was no reason why he would leave $20,000.00 in cash for the benefit of the wife. I accept the wife’s evidence that the husband took the money and had the use of it.
This is an appropriate case for the application of the Full Court decision in Weir v Weir[6]. In which the Court said:
“It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour’s findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.”[7]
[6] [1993] FLC 92-338
[7] at page 79,593
I also refer to the decision in Chang & Su[8], in which the Full Court summarised the law to be applied and the approach to be adopted in cases, where through a lack of full and frank disclosure, the Court is unable to fully ascertain the extent of a parties wealth. The Full Court referred to Black & Kellner[9] and referred to what Chief Justice Nicholson said in dismissing the appeal:
[8] [2002]FLC 93-117
[9] [1992] FLC 92-287 at para 69
``As senior counsel for the wife pointed out, the first step in proceedings for a property settlement is for the court to ascertain the wealth of the parties and in this regard it is of interest to note the remarks of the Full Court in the case of Giunti and Giunti (1986) FLC 91-759, particularly at 75,555 where the court commented:
`It is obviously desirable as a general principle that the court should first of all identify the pool of assets available and evaluate it. If each party complies with his or her obligation to make a full and substantive disclosure of their financial affairs – see Briese and Briese (1986) FLC 91-713, affirmed by the Full Court in Oriolo and Oriolo (1985) FLC 91-653, there is no problem, although there may be disputes as to valuation.
However if, as here, one party fails to fulfil that obligation, is it open to that party then to rely on the absence of satisfactory evidence to prevent the making of an order against him or her which otherwise justice and equity would require? It would be simple, if that were the case, to evade the jurisdiction of this court, not by outright refusal which would attract sanctions but by obfuscation and evasion.'
The Full Court in Oriolo and Oriolo, supra, referred with approval to the remarks of Smithers J in Briese and Briese, and it is perhaps worth reiterating a portion of his Honour's statement at 75,181 where he said, after referring to the decision of the House of Lords in Livesey v Jenkins (1985) All ER 106:
`... I believe that the conclusion of the House of Lords in the case of Livesey v Jenkins... is apposite, namely that in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. In that case it was made clear that full and frank disclosure was required as a matter of principle in the light of the fact that it was the duty of the court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of discretion. This is quite different from common law litigation between strangers, in which such a general duty does not exist, and obligations would only exist in so far as statute or court rules required.
In my view it is fundamental to the whole operation of the Family Law Act in financial cases that there is an obligation of the nature to which I have referred.'
Regard also may be had to the decisions of this court in Stein and Stein (1986) FLC 91-779 at 75,676 and Mezzacappa and Mezzacappa (1987) FLC 91-853.”
Assets and Liabilities
Macedonian property and business
The husband in his trial affidavit said that he received $180,000.00 net in late 2005, for damages for his industrial accident. He also said that he had borrowed, during the four years when he was waiting for his matter to settle, the sum of $101,500.00 through his lawyers, Zaparas Lawyers. There was no evidence as to how the damages were calculated in respect of pain and suffering, past and future economic loss. It was not part of the husband’s case that the damages award should be left out of the pool as a result of the circumstances of the award. It was the husband’s case that the monies had been expended.
The husband in his trial affidavit said that he purchased the investment property in Macedonia for $107,500.00. He also borrowed €35,000.00 for the purchase of the property. The cost of purchase of the building was around $165,000.00. The loan agreement was with Mr M. The terms of the loan agreement required repayment of the loan within
6 months from the date of the execution of the agreement, that is by
20 December 2006. Further in his affidavit the husband said he borrowed the €35,000.00 to fit out the building for a [hospitality industry] business.
During cross-examination the husband said again that he had borrowed €35,000.00 to fit out the building for a [hospitality industry] business, which he intended to lease out. The husband said that before he purchased the property he obtained advice from Mr M, who is an astute businessman. He was told by Mr M that the building was a good investment. At that time a business was run from the building and rent was paid to the owner of the building. The purpose of purchasing the building was to obtain rent and the husband agreed that he knew that the business was a good business.
In his trial affidavit the husband said that he sold the investment property at a large loss in December 2007 for €50,000.00. He said he repaid the €35,000.00 loan and was left with €15,000.00, which he said he used for his living expenses over the period that he remained in Macedonia. The only loan he could have been referring to in his affidavit was the loan from Mr M. However, it became apparent that monies were transferred to Mr M in December 2006 and January 2007, and not in December 2007 as indicated in the husband’s affidavit.
The evidence of the wife in her trial affidavit was that the husband transferred to Mr M the sum of $35,000.00 in December 2006 and the sum of $25,367.63 in January 2007. The husband did not mention this in his affidavit. The wife only discovered this because she examined the husband’s papers. The wife in cross-examination agreed that she was aware that $107,500.00 was not a sufficient amount to purchase the building and business and she was aware that the husband would have to borrow funds. She accepted the cost of the building and business was around $160,000.00.
The wife’s evidence in respect of the alleged sale of the building was that the husband provided her with a sale agreement which purported to formalise the sale to Mr P on 14 December 2007 for €50,000.00. An appendix to the sale agreement stated that the husband owed Mr P €35,000.00, and therefore, Mr P would only be required to pay €15,000.00 to finalise the sale.[10]
[10] annexure “8” – wife’s trial affiavit
When asked by the wife’s Counsel how Mr P, who is a van driver, could afford to pay €15,000.00 for the building and lend the husband €35,000.00 in October 2007 without security, the husband said that some truck drivers make a lot of money. The husband said that he did not know where Mr P had obtained the money, but indicated that he was working to earn an income.
In summary, the husband said he sold the property on 14 December 2007 to Mr P for €50,000.00, even though he bought it in mid 2006 for €65,000.00. He only received €15,000.00 after repayment of €35,000.00 to Mr P. The husband said that he did not get a valuation before he sold the property but the purchaser did. The husband did not have a copy of the valuation. The purchaser told him what it was worth and the husband was “happy to take it”. The husband did not employ a broker or an agent.
I do not accept that the husband has sold the building for €50,000.00. He purchased it over one year earlier for €65,000.00. Mr P is a friend of the husband and I am not satisfied that the sale agreement between the husband and Mr P is bona fide.
After the husband purchased the building, he said he did not receive rent from the owners of the business, as they left the building when told the rent was to increase. As a result the husband managed and worked in the business. In June 2007, when the husband’s son visited him, he said the business was “not bad”. In October 2008 he said that the business was bankrupt, some two and a half years after he purchased it.
The business closed on 27 October 2008. The wife obtained a document which showed a new business, called [M], was registered in [B] on 28 October 2008. The business was registered in the name of the husband and was established one day after the previous business was made bankrupt. The name of the new business is almost identical to the name of the previous business.
When the husband was asked why he did not mention in his affidavit that he had opened a new business, he answered “because I am on medication I can’t remember a lot of things, I didn’t mean to leave it out.” He admitted that the address of the business is the same as the previous business. He said that his new wife was employed for the last three years in the business and admitted that she owned it over the last few months. The husband said he transferred the business name to his wife. He said that his wife then transferred the business name to a woman called Ms J. When asked how much she paid for it, he said “nothing, the agreement was that she was to pay for all outgoings and liabilities and she would retain the furniture.”
The husband said when he owned the business, he employed a book keeper and a book was kept of the income and expenditure of the business. He did not have it because he said he has forgotten a lot of things.
I do not accept the husband’s evidence that he has sold the business. He did not disclose that he closed the business on 27 October 2008, and he did not disclose that he had opened another business on the following day, in his name and at the same premises. I am of the view that the husband still owns the business and works in it.
If I am wrong about that and the husband has sold both the building and the business, I find that he has been reckless or negligent in wasting these assets in a very short period of time and reducing the size of the asset pool.
I intend to include the building and business in the pool at the figure which the wife’s Counsel submitted was appropriate, $165,000.00, which represents the purchase price of the building and business or cost of refit of the building.
Although this sum has been derived from the husband’s compensation, there is no general presumption that an award of damages for pain, suffering and loss of amenities should be left out of account in determining what orders should be made under s.79 of the Family Law Act 1975.[11]
Loan from Zaparas Lawyers, Husband’s disablement monies from [T] Superannuation and early release of preserved superannuation
[11] Williams & William [1985] FLC 91-628
The one page of the ledger from Zaparas Lawyers indicated that the husband borrowed $23,000.00 between March 2006 and August 2006. The husband said he possibly used this money for renovations and also for living expenses.
On 4 December 2006 there was a debit on the ledger of $35,000.00. On 9 January 2007 there was a debit of $25,000.00. These sums coincide with the amount of money transferred to Mr M.
In March 2007 he borrowed $3,000.00 and in April 2007 he borrowed $4,000.00, which he said he used for living expenses. In November 2007 he borrowed $4,000.00 twice and he said he used this money for his return air tickets to Australia. In December 2007 he borrowed $6,000.00 which he said was for living expenses and expenses for his car. He said he always had problems with his car.
In December 2007 the husband’s claim for a release of his superannuation against [T] Superannuation was settled for $50,000.00 all in. There were no details produced by the husband as to how his claim was quantified. It is described in the letter from Zaparas Lawyers dated 1 July 2008 as a “total and permanent disablement claim.” The letter referred to a copy of a release, however the release was not produced. It is not clear when the husband instituted a claim.
I infer from the letter of Zaparas Lawyers dated 1 July 2008 that the claim was commenced around early 2006.
The Australian Eligible Rollover Fund statement[12] indicated that the husband joined the fund on 4 April 2003. The account balance at 1 July 2007 was $31,215.70. The majority of the fund therefore accumulated during the marriage.
[12] Annexure D to the wife’s trial affidavit
As at 19 December 2007 the husband owed Zaparas Lawyers $101,500.00. There was a credit entry in the ledger on 19 December 2007 of $50,000.00 for his superannuation claim which reduced the debt to $51,500.00. The husband said that the amount of the legal costs to settle the claim was $9,685.80 which meant that he owed Zaparas Lawyers $61,185.80.The last entry on the ledger is dated
19 December 2007.
A settlement statement from Zaparas Lawyers indicated the sum of $22,093.91 was the husband’s preserved superannuation benefit on the basis of permanent incapacity from Australian Eligible Rollover Fund. This sum reduced the debt to $47,541.79. There is no date on the settlement statement to indicate when the husband received this money. The date of the statement has been whited out. There is a date in the body of the statement which said the husband owed Zaparas Lawyers $58,189.90 at 1 February 2009 and the total owing was $68,755.70. The preserved superannuation was credited to arrive at a balance of $47,541.79 owing, so I infer that he received the money around February 2009.
The settlement statement indicated that after December 2007 the husband has continued to borrow funds from Zaparas Lawyers. At
1 February 2009he owed $58,189.90 together with costs of $9,685.80. There is no evidence as to the reason why he has obtained further funds.
The payments to Mr M coincided with the date of the loans from Zaparas Lawyers amounting to $60,000.00, and it appears that this sum was used to either purchase the building and business or to refit the building.
Apart from the payments to Mr M, I am not satisfied of the husband’s explanation for the purpose of the loans, how they were expended and whether they were expended reasonably.
The Zaparas loans are unsecured. In the circumstances of this case, I am of the view that it is just and equitable to disregard the balance outstanding of the loans. The loans have been obtained by the husband without any consultation with the wife. The husband has not produced any documentation to satisfy the Court how he expended the monies and to satisfy the Court that the expenditure has been reasonable. I will not include the sum of $47,541.79 as a liability in the pool.
I will not add back the husband’s disablement and preserved superannuation monies, as they have been used to repay Zaparas Lawyers for the loans obtained by the husband to pay Mr M for either the purchase of the building and business or a refit of the building.
Summary of husband’s expenditure
The husband has received the following sums of money:
·In October 2005 $220,000.00
less legal costs $40,000.00 $180,000.00
·In December 2007 $50,000.00 for the disablement claim
less legal costs of $9,685.80 $40,014.20
·In about 2009 preserved superannuation $22,093.00
Total$242,107.00
The monies received by the husband have been expended as follows:
·Purchase of building $107,500.00
·Purchase of building or business or refit$60,000.00
·Car for husband’s nephew $7,000.00
·Car for the parties’ son $3,000.00
·Retained by the wife for household bills $3,450.00
·Retained by husband $1,050.00
·Husband’s Mercedes motor vehicle $22,000.00
Total $204,000.00
This leaves a balance of around $38,000.00. The wife accepted that the husband made at least four trips to Macedonia at the cost of approximately of $2,000.00 for each trip. I am of the view that it is appropriate to add back the sum of $30,000.00, the expenditure of which the husband has not satisfactorily explained.
I do not accept the husband’s evidence that he gave $8,500.00 to the wife’s sister. There was no evidence apart from what the husband said. There was no independent evidence or any documentation to prove the payment. I have found that I do not accept the husband’s evidence that he gave $20,000.00 cash to the wife.
Debt to Macedonian Orthodox Church $22,500.00
In 2001 the husband was sued by the local Macedonian Orthodox Church following a dispute over missing funds from the church. The husband was the first named defendant and he and four other defendants were ordered to pay in excess of $25,000.00. The husband failed to pay his share of the amount ordered by the Supreme Court of Victoria. The wife was unaware of the Court proceedings and the husband’s breach of the Court orders until she was served with a Warrant of Seizure and Sale over the Melbourne property.
In 2002 the amount owed by the husband was approximately $5,066.00 with over eight years of interest and fees, the amount owing is in excess of $22,500.00. The husband has not paid the debt despite having received his compensation monies.
Assets and liabilities
The assets and liabilities are as follows:
·Melbourne property $360,000.00
·Macedonian property $32,500.00
·Husband’s funds added back $30,000.00
·Building and business in Macedonia $165,000.00
·Husband’s Mercedes motor vehicle $22,000.00
·Wife’s superannuation $66,993.00
Total $676,493.00
·Mortgage to Commonwealth Bank $70,000.00
·Judgment debt to
Macedonian Orthodox Church $22,500.00
Total $92,500.00
Net pool $583,993.00
Contributions
Both parties worked and earned an income during the marriage. The wife worked in [omitted] on a full-time basis for around 20 years. The wife was the primary carer of the parties’ two children who are now over the age of 18 years. Since the parties separated in 2007, the wife has remained living in the former matrimonial home in Property N with two adult children of the marriage. The husband worked until 2000 when he was injured. He obtained a settlement for damages for personal injury of $180,000.00 in 2006.
In 1991 the husband’s father gave the husband the Macedonian property, which is unencumbered. The husband lives there with his new wife.
The wife gave evidence that the parties expended $5,000.00 in repairing the roof of the property in 1999. The husband organised the tradesmen to complete the work. I accept the wife’s evidence that funds were expended on the repairs to the roof.
The property was given to the husband by his father and I attach some weight to it as a contribution made by the husband. The wife has made an indirect contribution to the property by contributing funds to repair the roof.
The husband incurred the debt of $5,000.00 to the Macedonian Orthodox Church which he did not repay and it has accrued interest and is now around $22,500.00. The debt was accrued as a result of missing funds from the Church. The level of the debt is a result of the husband not paying it.
Both parties made financial contributions throughout the marriage and the wife was the primary carer of the children.
Both parties contributed to superannuation during the marriage.
The wife paid the mortgage instalments to the Commonwealth Bank of Australia from 2000 to date. She has had the benefit of living in the home since separation.
The husband has received compensation monies for a serious work injury. There is no evidence as to the components of the compensation, such as pain and suffering or past and future economic loss. I am unable to determine how the claim was quantified. He has also received permanent disablement monies. There is no evidence as to how this sum was calculated.
The husband has had the benefit of his balance funds of $30,000.00. He has expended the preserved superannuation of $22,093.00 and the disablement monies from [T] Superannuation of $40,014.00 either purchasing the building and business or in refitting the building. The wife has superannuation of $66,993.00 which she will receive upon retirement.
I find that having regard to all the contributions of the parties that they have made equal contributions.
Each party will receive assets to a value of $291,996.50 as a result of my findings.
Relevant s.75(2) matters
The husband and wife are 47 and 48 years old respectively. The wife is in good health. The husband suffered a work place injury in 2000. He said that he had a heart attack in 2007. The husband did not produce any medical evidence to indicate his current capacity or otherwise for employment. Whilst he received monies for permanent incapacity from [T] superannuation and obtained his preserved superannuation due to permanent incapacity, the husband was capable of working in the business in 2007. I am not satisfied that he is not capable of continuing to work in the business.
The wife’s annual income is approximately $36,400.00 per annum. The husband does not disclose any income, however I am of the view that he continues to work in his business in Macedonia. I am unable to find the amount of his income. The husband receives Centrelink payments of approximately $564.00 per fortnight or $14,664.00 per annum.
The wife has a total weekly expenditure of $688.00. The husband did not disclose the amount of his weekly expenditure.
The husband indicated in his oral evidence that he has now remarried. He failed to disclose this in his affidavit and has not disclosed the benefit of the financial circumstances of the marriage.
In my view there should not be any adjustment for s.75(2) factors.
Is the order just and equitable
To make an order under section 79 the court must be satisfied that in all the circumstances it is just and equitable to do so. I must stand back and look at the overall result to ensure that it is just and equitable.
My findings result in an equal division of the assets, which means that each party will retain assets to the value of $291,996.50.
The wife will retain the following assets:
·Melbourne property $360,000.00
·Australian Superannuation fund $66,993.00
Total $426,993.00
Less mortgage loan $70,000.00
Less amount to pay judgment debt $22,500.00
Less amount to pay husband $42,496.50
Total $134,996.50
Net Total $291,996.50
The husband will receive the following assets:
·Building and business in Macedonia $165,000.00
·Husband’s funds added back $30,000.00
·Husband’s Mercedes motor vehicle $22,000.00
·Macedonian property $32,500.00
·Cash payment from wife $42,496.50
Total $291,996.50
The debt to the Macedonian Orthodox Church is a judgment debt which is secured against the Melbourne property. The wife will assume responsibility for payment of it.
As a result of my findings each party will have real estate. The wife will need to increase the mortgage to pay the husband and repay the husband’s debt to the Macedonian Church. There is no evidence that she does not have the capacity to increase her mortgage.
I will give the wife 45 days to ascertain whether she can obtain finance to pay the husband. If she cannot, the property will need to be sold.
Overall, I am satisfied that this result is a just and equitable one between the parties.
I certify that the preceding one hundred and eleven (111) paragraphs are a true copy of the reasons for judgment of Baker FM
Associate: Sita Buick
Date: 24 July 2009
0