Ribeiro and Chase
[2013] FMCAfam 46
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| RIBEIRO & CHASE | [2013] FMCAfam 46 |
| FAMILY LAW – Property dispute – very short relationship – very substantial assistance given by father to mother in previous matrimonial proceedings – significantly greater amounts contributed by mother – negative financial outcome for both parties – inadequate evidence from both parties about financial matters – Court taking robust approach to achieve just and equitable outcome. |
| Evidence Act 1995, s.140 Family Law Act 1975, ss.75(2), 79(2), 79(4) |
| Stanford v Stanford [2012] FCA 52 |
| Applicant: | MR RIBEIRO |
| Respondent: | MS CHASE |
| File Number: | MLC 6007 of 2012 |
| Judgment of: | Burchardt FM |
| Hearing dates: | 15, 16 & 20 November 2012 |
| Date of Last Submission: | 20 November 2012 |
| Delivered at: | Melbourne |
| Delivered on: | 30 January 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Mellas |
| Solicitors for the Applicant: | Robinson Gill |
| Counsel for the Respondent: | Ms Gordon |
| Solicitors for the Respondent: | Cinque Oakley Senior |
DRAFT ORDERS
THE COURT ORDERS THAT:
The funds held on trust by the respondent’s solicitors be paid as to 35 per cent to the applicant and 65 per cent to the respondent.
Each party retain, to the exclusion of the other, any chattels in their possession.
The applicant have liberty to collect chattels held by any third party.
Each party retain their superannuation.
IT IS NOTED that publication of this judgment under the pseudonym Ribeiro & Chase is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 6007 of 2012
| MR RIBEIRO |
Applicant
And
| MS CHASE |
Respondent
REASONS FOR JUDGMENT
Introductory
This case started as recently as July 2012 as a parenting dispute about a very young child, [X], born [in] 2011. An Independent Children’s Lawyer was appointed and on 16 November 2012 final parenting orders were made, almost entirely by consent. The appointment of the Independent Children's Lawyer was discharged on that day.
In the interim, and as something of an add-on, the applicant father had filed an amended initiating application on 13 July 2012 which sought property orders including orders seeking the return to him of his personal possessions.
The mother’s response to the amended initiating application, filed
26 September 2012, merely sought that the moneys held in trust in her solicitor’s trust account be distributed in such manner as the Court deemed fit.
It is clear from the materials filed by the parties that their primary focus was on parenting issues. As a result, neither party has set out the facts regarding their property history in any structured or complete way.
As a result, many of the assertions made in the separate hearing as to property matters are very difficult, if not impossible, to properly evaluate.
The history between the parties
The applicant father is 50 years old having been born [in] 1962. To the extent that he is employed, he is employed as a [omitted]. The mother is 38 years old having been born [in] 1974. At the present time she is engaged in home duties.
It appears to be common cause that the parties commenced a relationship in November 2010 and commenced cohabitation in about November 2011. They separated on 18 June 2012. As earlier noted, their child, [X], was born [in] 2011.
The mother has three other children. There is little said about them in affidavits or otherwise, but they appear to be aged 8, 10 and 11 and live predominantly with her. [X] will, from May 2013, pursuant to the consent orders made in this matter, live with her mother and spend time with her father from Sunday to Tuesday for three out of four weeks and each Thursday.
Although the father had much to say of the mother’s health, and it is accepted that she made a suicide attempt while pregnant with [X] for reasons to which she has deposed, it seems in the main that the mother’s health is not such as to significantly impair her.
The father, on the other hand, has significant health difficulties. In his first affidavit filed on 4 July 2012, he deposed to the fact that he has pulmonary embolism and might have as little as six months to live. Very fortunately, his prognosis has not proceeded as badly as first anticipated, but on any view, he suffers significantly from ill health. He is not yet back to the quantum of work that he was performing prior to his ill health.
In his second affidavit (filed 13 July 2012), at paragraph 8, the father deposed that he had sold an investment property and realised $150,000, all of which he effectively says he gave to or has spent on behalf of the mother.
As a result of the conclusion of the bitterly contested family law proceedings with her former husband, the mother obtained a significant property settlement.
The amount of legal fees paid by the father on behalf of the mother has been the subject of various estimates from time to time. In earlier affidavit material, the father put the figure in excess of $100,000. It is now conceded on any view that at least $71,000 was contributed by the father to the mother’s legal costs.
It seems reasonably clear that the mother’s Honda car was bought with funds provided by the father for a sum in excess of $20,000. There is no valuation of this vehicle.
The father asserted in his evidence that the mother had lived for some months at a property on [address omitted], [B], for which he had bought all the chattels.
He further deposed that the mother had thereafter returned to the matrimonial home although it appears that for some periods of time, the parties lived together at the paternal grandmother’s home.
Following the eviction of the mother when the bank sold the former matrimonial home as mortgagee in what I accept was October 2011, the parties lived at a property in [address omitted]. It is common cause that the paternal grandmother provided the bond and the first month’s rent for that property, but I accept that the mother repaid her.
There was vivid dispute between the parties as to how much time was spent in the [B] property and, given the lack of specificity in their affidavit and oral evidence, I am not able to do more than record that the mother lived there for some time.
There was likewise vivid dispute as to who paid for what throughout the currency of the parties’ relationship. Once again, there is no objective evidence to support either party’s position in any significant way, and I accept only that both must have contributed to an extent. After all, it is clear that the father’s alleged $150,000 had disappeared, and it is clear that only $96,000 of the moneys that the mother received by way of property settlement are still extant.
On any view, the mother paid very substantial amounts of money in legal costs. Exhibit R1, being an account from Hardys Lawyers, shows well over $170,000 in legal charges. It is also clear that Messrs Hardys forwarded what eventually became $159,000 to Cinque Oakley Senior, the mother’s present lawyers, on 2 August 2012. From that money, it is common cause that $40,000 has been received by the father and, so far as exhibit R2 reveals the matter, a total of $21,700 has been received by the mother. I note that the father’s case outline asserts a figure of $30,000 released to the mother, and I note that no issues were raised with the Court about this in submissions by the mother’s counsel. The only actual evidence is exhibit R2.
It should be noted that it was the mother’s case that the $150,000 said to have been advanced by the father was money taken from sale of drugs. The mother gave evidence about the father’s activities that would go to support such an assertion. The father’s initial assertion was that he sold an investment property to raise this money. He did not put in evidence any title search or anything of that order to support his case. He subsequently deposed in his trial affidavit at paragraph 67 that this was “savings”.
The issue was further complicated by the fact that the father asserted, and the mother denied, that the mother has abstracted all his financial records and either destroyed them or improperly withheld them.
The position is yet further complicated by the fact that the father has not filed a tax return since at least 2004, although he apparently now proposes to do so.
The father asserted that he lost a business in 2004 and then returned to live with his mother. His evidence that his mother controlled his finances rigidly, thus effectively siphoning off all but pocket money, was given with a measure of conviction.
Whether or not the father’s money was from drugs or not, I will never be able to say. I am not prepared to make a finding that it was, bearing in mind the relative paucity of evidence about the matter and the terms of s.140 of the Evidence Act 1995.
Whatever its origin, there is no doubt that the father kept an extraordinary amount of money in cash in a large bowl in his mother’s home and that his dealings were done essentially in cash. I also accept that from time to time he required money from the mother to be paid to him and that she did so. The amounts involved were significant on occasion.
I should make it clear that this rather scattergun account flows from the scattergun way in which the information was provided to the Court. Both the parties were called and gave evidence, and I should make it clear that I thought that the mother was probably the better witness, her answers carrying a greater measure of conviction. This is a matter to which I will return under the issue of contribution.
The pool
There is $95,100 presently held upon trust and available for division in the mother’s solicitor’s account.
There is a loan made to a man called Mr G, who the mother asserted without contradiction is the father’s best friend. Mr G still owes that money. It was lent by the mother to repay a favour given to her by Mr G during her own litigation.
The mother has a Honda motor vehicle which the father’s case outline values at $23,500, this apparently being its purchase price. Since it is a 2004 car, that valuation is on any view likely to be grossly excessive, as I suspect is the mother’s estimate in her financial statement of $12,000.
The father’s case outline omits any mention of a BMW allegedly worth $20,000 asserted by the mother. So far as I can recall, neither party was cross-examined about this vehicle. It is given a value of $22,000 in the father’s financial statement.
The parties possess certain furniture and chattels, of which there is no valuation.
One issue raised and strenuously pushed by the father was the matter of his possessions allegedly disposed of by the mother.
I accept that the mother collected those chattels that she thought were hers from storage and that the father collected a number of items himself.
Insofar as complaint is made about the father’s gym equipment, I accept the evidence of the mother that these items are still available for the father to collect. If I am wrong, then the reality is that they have been lost. In either event, it is not possible to put a value on them.
Likewise, I am not in a position to make any finding about the husband’s financial and other records. It is simply not possible to say where they are and/or who last had them in their possession.
I accept that the father’s iPhone has been returned to him minus the sim card, and I note that the mother is prepared to accede to some of the orders that the father seeks in this regard.
I note that the father has received $40,000 and the mother apparently $21,700.
I further note that the mother has superannuation of about $30,000.
In circumstances where the car and/or cars are not the subject of any valuation and are likely in the mother’s case to be of minimal value and in the case of the father, to be of no ascertainable value, it is in my opinion inappropriate to include them in the pool.
The chattels are not valued and are not of such a nature, being essentially home items, to have any significant realisable value. They should also be excluded.
It is not appropriate to include the mother’s superannuation as the relationship was not of sufficient duration to make it appropriate for the father to participate in any way in it. The father did not press for any orders in relation to superannuation in any event.
The father also identified his superannuation in the sum of $8,000 in his financial statement sworn on 12 July 2012 but for the reasons given in relation to the mother’s superannuation, nothing turns on that.
For all practical purposes, the pool is the $95,100 held on trust plus the loan to Mr G together with the add-backs of the $40,000 distributed to the father and the $21,700 to the mother.
The loan to Mr G is impossible to evaluate. Although it is implicit in the parties’ positions that Mr G acknowledges the debt, that is not in fact proved by the evidence. Likewise, it is not in any sense known whether Mr G will actually repay it or whether he has the capacity to do so.
Once again, the state of the evidence is so incomplete that the only proper course, in my view, is to exclude the debt to Mr G from the pool.
Accordingly, at this stage the divisible pool is relevantly:
Amount held by mother’s solicitors on trust $95.100;
Amount paid to father as interim distributions $40,000; and
Amount paid to mother by way of interim distribution $21,700;
Total $156,800.
Contribution
As earlier indicated, this was a very brief relationship. The parties cohabited for only a very short time.
Even though the period of contribution preceded cohabitation, the earliest period asserted is from November 2010 by the father. On any view, this was a very short relationship.
What marks this matter out as extraordinary is the amount of money advanced. I am prepared to accept that, in one way or another, the father advanced over $100,000 to the mother over the course of the relationship. On any view, there was significant contribution to the mother’s legal expenses, and the cost of setting up a new home and buying a car for $23,000 rapidly takes us over the $100,000 mark. Whether it was as high as the father says or not is open to question, but on any view it was a six figure sum.
The father asserted in his affidavit filed 13 July 2012 that the mother received in excess of $385,000 from her former husband by way of matrimonial property settlement, although there were outstanding debts. The mother’s financial statement filed on 24 July 2012 discloses a sum of $159,000 in an ANZ bank, together with her superannuation and a car then valued at $20,000.
The mother’s further financial statement, filed on 26 September 2012, asserts that her superannuation is worth $30,448 and values the car at $12,000. In her affidavit filed on 13 November 2011, the mother deposes at paragraph 21:
“I believe that the majority of the $95,100 (say $80,000) retained in trust should be distributed to me. Given that my contributions were considerably greater than the fathers, such an outcome is warranted. I accept that the father contributed approximately $60,000 towards my legal expenses in the litigation with my estranged husband. However, my contribution was about $250,000 from the sale of the former matrimonial home. Of that amount, $100,000 remained after payment of my legal expenses, our living expenses, a debt to the father’s mother of $10,000; a $25,000 loan to a Mr G (of which $5000 has been repaid) who is a mutual friend, and regular payments I made to the father myself, including $10,000 in cash earlier this year.”
The father’s affidavit filed 13 November 2012 relevantly asserts that the mother’s car was bought on 30 April 2012 for $23,500, and that he still has to pay outstanding legal fees of some $30,000.
In respect of the payments made to him from time to time by the mother, the father’s answers were at times extremely evasive and unconvincing. He seemed well-able to remember small payments but professed no knowledge, for example, of the payment to him of $15,000 in cash. This contrast was somewhat striking.
Little further emerged from the evidence as to the parties’ financial contributions.
Where the relationship was so short and the outcome so unfortunate it, is difficult indeed to do much in calibrating the parties’ contributions. Weight needs to be given to the fact that the father’s contributions to the mother during her legal difficulties would have doubtless not only given her financial assistance but a considerable emotional succour. Likewise, however, it is clear on any view that the mother must have contributed substantially more than the father to the total financial input.
The best I can say is that the father’s contributions exceeded $100,000, but I cannot say by how much more. The mother’s contributions appear to have been approximately $250,000. I note that the global sum received by her was asserted to be substantially greater by the father, but the figure of $250,000 is the best I can do on the materials.
It is important to remember that the father’s assistance to the mother not only enabled her to conduct her litigation in a practical way but also no doubt fortified her capacity to do so. It is not possible to speculate with any measure of precision whatsoever what the outcome in that litigation would have been without his help. One can, I think, reasonably infer that the mother’s chances of achieving the relatively significant net outcome that she did were improved as a result.
Against this, however, the mother’s input in terms of total cash was clearly far greater. While most unfortunately the parties dissipated most of their funds in one way or another, and substantially I suspect in legal fees, the fact is that doing the best I can against a very uncertain backdrop, I think the mother would receive a 20 per cent loading in terms of contribution.
Section 75(2) factors
Here the matter is complicated by the uncertain employment future and health of the father. In his most recent affidavit, he deposes at paragraph 15 that his health has stabilised with the emboli that previously caused such concern now dissolved. He is having three monthly reviews with the cardiothoracic department and will have MRI scans for tumours; he was due to have such a scan shortly. No evidence was given as to the result of that scan.
On any view, the father’s capacity for work is limited because he is prohibited from engaging in physical exercise and I note that he has been able to return to work on a limited basis seeing the majority of his clients on Saturdays until about 2.00pm.
I note that he had a number of [omitted] which caused him injury and it is not clear to me whether or not this will also impact upon his health in the future.
In his favour, however, he has the devoted assistance of his mother with whom he lives and as I infer, she will continue to provide him with extensive support both financially and otherwise.
On the other hand, however, the mother cannot presently work as she has to attend for the vast majority of the time to the needs of a very young child. She will not be able to work, at least full time, for a long time, and will have to provide the bulk of the living expenses and costs of the child. Although the father has offered to pay $120 per month in Child Support, this being as he put it over twice what he would be assessed to pay, the fact is that this is not a substantial amount of money, albeit that it would be a lot for the father in his current circumstances.
In all the circumstances, in my opinion, the s.75(2) matters balance out.
Just and equitable
It has been made clear in the recent decision of the High Court in Stanford v Stanford [2012] FCA 52 that the requirement that the Court make orders that are just and equitable, contained in s.79(2) of the Family Law Act 1975, is not to be conflated with the matters set out in s.79(4).
In this case the difficulties that arose in Stanford as to the enquiry as to whether it would be just and equitable to make an order pursuant to s.79(2) of the Act simply did not obtain. The relationship between the parties has sundered completely. Interim amounts distributed to the parties are not equal. Their contributions to what is left to be divided are also clearly unequal as I have already indicated. While this finding runs the superficial risk of looking to the s.79(4) matters before s.79(2) matters, I make it clear that I approach this aspect of the decision with the separate enquiry required in relation to s.79(2) well in mind.
Having determined that it is just and equitable that there should be a property settlement between the parties, I turn to s.79(4) matters. I have already done the spade work for these matters in dealing with the three-step methodology above.
In the particular circumstances of this case, it seems clear to me that the Court will have to take a robust approach in order to determine the matter. For reasons already expressed, the evidentiary landscape is obscure and clouded. In reality, there is only the $95,100 to be divided.
The first three stages of the conventional methodology would appear to give rise to a 70/30 split in the mother’s favour. The father’s position is essentially that he should get back most of the legal costs he advanced, but that is self-evidently an unsound proposition.
The reality is that the contribution made by the mother was somewhere between one and a half and two times greater than that of the father. The fact that substantial funds have been dissipated in the meantime does not obscure this reality.
In circumstances where the contribution made by the mother to the finances of the parties is so much greater, in my view it is appropriate that the remaining funds be apportioned 65 per cent to the mother and 35 per cent to the father. This does not exactly reflect the methodology up to this point but in my view, it gives appropriate weight to the fact that the father’s contributions, most particularly to the mother’s legal costs at a time of great need on her part, also played a part in enabling her to achieve the beneficent result that she did in the proceedings against her former husband. The ultimate outcome of the proceeding should reflect this fact.
I have drawn up draft orders to give effect to these conclusions and will give counsel an opportunity to be heard before making them final.
I certify that the preceding seventy-three (73) paragraphs are a true copy of the reasons for judgment of Burchardt FM
Date: 30 January 2013
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