Porto and Porto

[2009] FamCA 508

FAMILY COURT OF AUSTRALIA

PORTO & PORTO [2009] FamCA 508

FAMILY LAW – PROPERTY – Funds sent overseas

APPLICANT: Ms Porto

RESPONDENT: Mr Porto

FILE NUMBER: MLC 3219 of 2007

DATE DELIVERED: 25 March 2009

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Dessau J

HEARING DATE: 25 March 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms G. Costello

SOLICITOR FOR THE APPLICANT: Westminster Lawyers

COUNSEL FOR THE RESPONDENT: Mr M. Lipschutz

SOLICITOR FOR THE RESPONDENT: Berry Family Law

Orders

1. $100,000 of the funds held by Birch Ross & Barlow Lawyers on trust for the husband and the wife shall be forthwith paid to the wife. 

1. Within thirty days of the date of these orders the husband shall provide to the wife’s solicitors copies of all documents in his possession and control relating to the following cheques:

2.1       M Bank cheque number …5.

2.2       M Bank cheque number …9.

2.3       M Bank cheque number …6.

2.4       M Bank cheque number …2.

1. Upon the wife's Spanish lawyers producing a Spanish Power of Attorney to the husband, the Husband shall forthwith sign the Power of Attorney and return it to the Wife's solicitors.  The ambit of the Power of Attorney shall be to enable the wife’s solicitors to investigate the disposition of the cheques referred to in the Wife's Affidavit filed 17 March 2009, together with any other funds in which the Husband, the Wife or both of them have an interest in Spain.

2. Pursuant to the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters the Registry Manager of the Family Court of Australia, Melbourne Registry shall arrange for the following documents to be sent to the Administrative Law and Civil Procedure Branch, Civil Justice Division, Australian Government Attorney-General’s Department:

   (a)The Letter of Request in the form attached to these orders.

   (b)A copy of the Letter of Request translated in to Spanish accompanied by an affidavit of correct translation by a NAATI accredited translator; and

   (c)A copy of my reasons for judgement given this day.

3. The husband shall pay the wife’s costs of and incidental to today’s hearing, such costs fixed at $4,178.

4. The husband’s Response to An Application in a Case filed 23 March 2009 be dismissed.

5. The trial date of this matter (listed for 29 June 2009) be vacated.

6. Leave is granted for the wife’s solicitor to file the affidavit of Mr S sworn 24 March 2009.

7. Leave is granted to further amend the wife’s Application filed 17 March 2009 to include an application for the taking of evidence abroad in Spain.

8. Leave for the wife’s solicitor to inspect and copy any subpoenaed material held by the Court in this case.

9. The mention of 14 May 2009 be conducted as a telephone mention by Registrar Field at a time to be notified to the parties.

10. That my reasons for judgement given this day shall be transcribed, retained on the Court file and a copy made available to each party.

IT IS NOTED that publication of this judgment under the pseudonym Porto & Porto is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:  MLC 3219 of 2007

MS PORTO

Applicant

And

MR PORTO

Respondent

REASONS FOR JUDGMENT

1. I have given reasons for judgment previously in this case in relation to various interim steps or hearings.  On a number of occasions I have recounted the central issue arising from a more than 30-year marriage, the receipt by the parties from the sale of the real estate of, on the husband's version, $4.5 million, on the wife's version, $7 million, its transfer by the husband offshore to Portugal, and then on his version, it being lost when he gave it to a man identified only as Mr D, for whom he had no contact details and from whom he received no receipt, or on the wife's version, its secretion somewhere by the husband, somewhere known to him but unknown to her.

2. The case is fixed for hearing before me in June.  The husband, through his legal representative, says he is very keen not to lose that hearing date and he emphasises that the case has dragged on long enough.  It is impossible not to note the irony in that, given that much of the delay has in fact been caused by the husband’s lack of cooperation when it comes to disclosure and efforts by the wife to locate the money in Portugal.

3. The wife's application today, insofar as it seeks further steps to track down the money, would inevitably lead to a delay in the trial date.  That is agreed.  As information obtained by her when she went to Portugal herself in August last year has led to this new line of inquiry in Spain, it is surprising that, despite delay, either party would be other than delighted that there are some new leads in tracking the money that the husband swears he has genuinely lost.

4. I have also heard argument today about a small sum of money held on trust for the parties.  The wife seeks its release to her primarily to meet legal fees and secondarily for a small sum for living expenses.  The husband also seeks that money be released to him for legal fees and for living expenses.

5. I shall deal first with the issue of further information.  The wife in her amended application filed on 17 March 2009, amended further today with the inclusion of an oral application, seeks three things, summarised as follows.  She seeks that the husband provide to her solicitors copies of all documents in his possession or in his control relating to four specified bank cheques.  The relevance of those particular bank cheques is that they are the cheques that she has now been able to obtain from the authorities in Portugal and they have certain relevant endorsements to which I will come.

6. She seeks that he sign a power of attorney so that the lawyers she has now retained in Spain can obtain further details from the banks relevant to those endorsed cheques. 

7. She seeks orders for foreign evidence to be obtained in Spain through a process used previously by her in relation to Portugal under the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters. 

8. The husband resists each of those applications. 

9. I am satisfied they should be granted.  As to any documents in his possession or his control relating to the specified cheques – and I have said this a number of times in this case – full and frank disclosure is essential.  Although Mr Lipschutz for the husband has tried to raise various niceties and nuances as to previous versions given by the husband, it obfuscates what is really quite straightforward.  The husabnd has consistently claimed that he endorsed cheques to Mr D.  It was only upon the wife's trip to Portugal that she finally uncovered that the cheques were endorsed not to Mr D but specifically to a bank or banks in Spain.  As I said, she has now retained lawyers in Spain and what she seeks is for the husband to sign a Spanish power of attorney to enable her Spanish solicitor to investigate the disposition of these cheques.

10. The husband’s resistance is based on the fact that there is no specific evidence from her Spanish lawyer to say that the power of attorney is needed.  Commonsense, as well as experience in this case this far, persuades me that such a power of attorney is the obvious first step for the wife's lawyer to obtain any information at all from a Spanish bank about cheques, dealings or accounts in which the wife has no direct involvement by name.

11. To refuse her request on the basis that she should first ask the bank for information undermines the husband's claim that he is sincere in his desire to locate the parties' lost fortune, and that he wants to avoid delay.  One would expect that he would be as relieved as the wife as she discovers leads to the money. It is a nonsense to insist on obviously arid steps before a power of attorney is issued. 

12. I am satisfied that an order should also be made for the taking of the evidence overseas.  It would be an unnecessary expense for the parties to again return to court if that process is required.  The Portuguese experience suggests that it probably will be.  I cannot be sure about that but it is a base that should sensibly be covered at this point.

13. As to the monies held in trust, with an awful twist of fate, it appears that what was the comparatively meagre remaining funds of just over $150,000 has somehow collapsed with a failed investment.  Only about $15,000 remains.  It seems that this is new news and the solicitors are as yet unclear as to what claim or claims can be made on the parties' behalf.  In any event, the wife seeks all the funds, whatever they are, as a partial property settlement, primarily to meet legal expenses, currently over $57,000.  She has already paid more than $95,000.  According to her solicitor's evidence, she can expect to pay up to another $25,000.

14. The husband argues first that she has already received some $110,000 and another small sum in euros.  That is true, but it is equally true that even on his own version, he has retained substantially more than that, retaining 120,000-odd euros for his own living expenses from the millions that were transferred by him to Portugal.

15. The husband tries to describe his financial position as more parlous than the wife’s.  He claims ill health and that he cannot work, although she is working part-time as a cleaner.  He refers to the fact that his adult children are supportive of her and not him.  He seeks $40,000 from the trust fund to pay his outstanding fees and $20,000 for living expenses.

16. What is clear is that whatever sum of money can be redeemed from this $150,000-odd held in trust in Australia, even assuming it is the whole amount, it represents an absolutely tiny percentage of the monies taken to Portugal by the husband, about 3.5% on his figures, or just over 2% on hers.

17. Mr Lipschutz for the husband argued that if I accede to the wife's application for monies to be released to her alone, it could actually predetermine the case.  In my view, I am fully entitled to proceed on the basis that even putting the husband's case at its highest, the meagre monies in trust or the majority of them, are unlikely to be awarded to him.  On his case, he has lost the parties' fortune by handing them over in the most reckless of circumstances.  Even if he could persuade a court that in this 30-year marriage he made some special contribution, as suggested by Mr Lipschutz, such that he made a higher contribution and/or that of these two ageing impecunious parties, his needs are higher than the wife's, the wife on any view would still be entitled to up to millions of dollars that he has wasted.  I should add if Mr Lipschutz was suggesting some sort of special contribution, that would certainly have to be considered in light of the lack of skill and acumen in losing the monies in the way outlined by him.  That recklessness, and a claimed special contribution are hard to marry, but that is something about which I have not had sufficient evidence to make any final findings.

18. In any event, putting the husband’s case at its highest and taking into account that he has already used more funds than the wife for his own living expenses, it seems almost certain that she would be entitled to the small existing sum or the majority of it, depending how much it ultimately is.  Further, given what has been and continues to be a lack of cooperation on his part in trying to locate the monies, it is essential that the wife have funds for legal assistance.  There is nothing in the proceedings or the material this far to persuade me that if the husband had part of these funds, his level of cooperation or assistance or disclosure would increase.

19. I am satisfied that at this stage the wife should receive $100,000 of the monies if they can be recovered, or any sum recovered up to that amount, as a partial property settlement.  That will provide her legal fees and a small sum towards living expenses.  If the overseas monies are not located, I am satisfied she would easily obtain at least that share.  If they are, the sum can be taken into account as a partial property settlement.

20. In the circumstances, I shall not order monies for the husband at this point.  I am satisfied that if the  monies are not located and he has either secreted them, as the wife claims, or lost them as he claims, it is unlikely that he would receive more.  That is not a prejudgment, it is an assessment that I am required to make before making any partial property settlement.  In any event, at this point, with luck, there may be up to $50,000 more in trust in the future. 

21. That determines the issues that I have dealt with so far.  It leaves an issue in relation to the wife's documents.  In the husband’s response, he seeks an affidavit, not documents as such, but an affidavit in which the wife sets out the various investigations made by her. 

DISCUSSION

1. There is no reason to order a special affidavit at this point.  At trial each party will file material.

COSTS

1. I have heard the costs argument. Costs are determined under s 117 of the Family Law Act.  Each party bears their own costs unless in the court's discretion an order is made for one party to pay another party's costs.  There are a number of factors under the Act that I must take into account in deciding whether to order costs.  There are two particularly significant ones in this case, given that I am satisfied that, at least in Australia, both parties are suffering with a lack of funds.

2. First, the wife has been almost wholly successful in her application.  The husband has been unsuccessful in his.  Secondly, I am quite satisfied that despite the nuance or the nicety, since December the wife has sought that the husband sign a power of attorney.  Through her solicitors she made it clear that it would be one that specified the sorts of details that were required in relation to the bank and the actual matters to which the power of attorney would pertain, but the husband has not co-operated towards that in any way.  I am satisfied that the application was necessitated by his conduct and that she should obtain costs against him.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dessau

Associate: 

Date:  25 March 2009