Rimac & Rimac

Case [2021] FedCFamC1F 333

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Rimac & Rimac [2021] FedCFamC1F 333

File number(s): SYC 1540 of 2014
Judgment of: MCCLELLAND DCJ
Date of judgment: 21 December 2021
Catchwords: FAMILY LAW – PROPERTY – Settlement in relation to a marriage – Where the parties received significant damages settlements as a result of a motor vehicle accident – Where damages settlements formed part of the matrimonial asset pool – Husband’s financial affairs managed by NSW Trustee & Guardian – Where the wife was engaged as the husband’s full time carer – Where the husband has failed to make full and frank disclosure of assets and liabilities – Husband’s provision of a significant loan to his nephew – Add backs – Husband acted recklessly, negligently and wantonly with matrimonial assets – Where it is just and equitable for a property adjustment to be made – Property adjustment made in wife’s favour with respect to s 75(2) factors
Legislation:

Family Law Act 1975 (Cth) ss 75(2), 79(2), 79(4)

Evidence Act 1995 (Cth) s 140(2)

Cases cited:

Briese and Briese (1986) FLC 91-713

Briginshaw v Briginshaw (1938) 60 CLR 336

Carroll, Robyn and Hugh PK Kopsen, “The Importance of Full and Frank Disclosure in Family Law Financial Proceedings and the Many Consequences of Non-Disclosure” (2017) 45 Federal Law Review 97

Coghlan and Coghlan (2005) FLC 93-220

DJM v JLM (1998) FLC 92-816

Efthimiadis & Efthimiadis (1993) FLC 92-361

Goddard Elliott v Fritsch [2012] VSC 87

Graf-Salzmann & Graf [2015] FCWA 68

Griffiths v Kerkemeyer 139 CLR 161

Hickey and Hickey and Attorney-General (Cth) (2003) FLC 93-143

Kildea v Kildea (2007) 38 Fam LR 347

Kowaliw & Kowaliw (1981) FLC 91-092

Livesey v Jenkins (1985) 1 All ER 106

Manolis v Manolis (No 2) [2011] FamCAFC 105

McKenzie v McKenzie [1970] 3 All ER 1034

Omacini and Omacini (2005) FLC 93-218

Petruski v Balewa (2013) 49 Fam LR 116

Rimac & Rimac [2020] FamCA 675

Rimac & Rimac (No. 2) [2020] FamCA 919

Re R [..] NSWSC

Stanford v Stanford (2012) 247 CLR 108

Townsend & Townsend (1995) FLC 92-569

Trevi & Trevi (2018) FLC 93-858
Division: Division 1 First Instance
Number of paragraphs: 201
Date of hearing: 3–5 May 2021
Place: Sydney (via videolink)
Counsel for the Applicant: Mr Livingstone
Solicitor for the Applicant: Hughes & Taylor
The Respondent: Self-represented litigant with Mr C Rimac (McKenzie friend)

ORDERS

SYC 1540 of 2014

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS RIMAC

Applicant
AND:

MR RIMAC

Respondent

ORDER MADE BY:

MCCLELLAND DCJ

DATE OF ORDER:

21 DECEMBER 2021

THE COURT ORDERS THAT:

1.Within 28 days of the date of these Orders, the Husband shall do all acts and sign all documents necessary to transfer to the Wife the whole of his right, title and interest in the property situated at D Street, Suburb B, being the property contained in Folio Identifier …, at the expense of the Wife.

2.The Husband forthwith deliver up to the Wife's solicitor the original…

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AGLC
Rimac & Rimac [2021] FedCFamC1F 333
Case
[2021] FedCFamC1F 333
Decision Date

CaseChat Overview and Summary

The case of Rimac & Rimac involved a dispute between the wife and husband concerning the distribution of property following the termination of their marriage. The wife sought orders in relation to the division of the parties’ assets, including a property located on D Street. The husband opposed the wife’s orders and expressed a desire to retain the D Street property. The proceedings were heard in the Family Court of Australia.

The legal issues before the court included whether the husband had made financial contributions to the wife during their cohabitation and marriage, and whether the husband had made full and frank disclosure of his financial circumstances as required by the Family Law Act and the Family Law Rules 2004. The court had to determine whether the husband had retained possession of settlement monies from a previous litigation and whether this impacted the division of the parties’ property.

The court found that the wife was a credible witness who had provided documentary evidence to support her assertions. The husband, on the other hand, was found to be an unimpressive witness who gave inconsistent evidence. The court preferred the evidence of the wife and found that the husband had not provided any evidence to support his claim that he had made financial contributions to the wife. The court also found that the husband had not made full and frank disclosure of his financial circumstances, including his retention of settlement monies from a previous litigation. The court drew adverse inferences against the husband for his failure to comply with his obligations of disclosure.

The court made orders in favour of the wife, including an order that the husband transfer his interest in the D Street property to the wife. The court also made orders in relation to the division of the parties’ other assets. The parties were invited to make written submissions as to costs.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

No further adjournments were granted during the proceedings however, at the conclusion of the proceedings, Mr C Rimac requested time to respond to submissions of the wife and leave was granted for the husband to provide written submissions. By directions made on 5 May 2021, I gave the husband leave to provide written submissions by 4 pm on 5 June 2021 and the wife was given leave to file written submissions in reply within 14 days of receipt of the husband’s written submissions. The parties filed their written submissions in accordance with that timetable.BACKGROUND FACTS The following summary of background facts is substantially based upon the affidavit evidence and oral evidence of the wife. I found the wife to be an impressive witness who answered questions in a direct, forthright and dignified manner. She generally had a sound recall of relevant facts and, where possible, was able to support her assertions with appropriate documentary evidence. The husband was not available for cross examination on his affidavits. Mr C Rimac, who gave evidence on behalf of his brother, was an unimpressive witness who continued to attempt his poor advocacy in the witness box and gave numerous inconsistent answers to direct questions, accepting the reality of specific facts only when they were clearly set out in documents presented to him by counsel for the mother. Where the evidence of the wife is inconsistent with that of the husband and Mr C Rimac, I have preferred the evidence of the wife. In 1946, the wife was born in Country N. The wife goes by the name Ms Rimac, however, was born Ms L. In 1956, the husband was born in Country N. In 1959, the wife relocated to Australia and, in 1970, the wife became an Australian citizen. The wife has three adult children born of a previous relationship. The husband also has three adult children born of a previous relationship. On 8 June 1998, the wife purchased the D Street property for $280,000. The wife demolished the existing dwelling on the property and constructed a new house for the sum of $163,000. On 17 August 1999, the wife constructed a new dwelling on the D Street property for a cost of $173,870. In late 1999, the parties met. In 2000, the parties commenced cohabitation at the D Street property. At the time of cohabitation, the wife was employed in hospitality and the husband was in receipt of a disability pension. On 5 January 2001, the parties established a business registered as “T Company” and operated this business from the D Street property until December 2003. I am satisfied that the husband undertook the manual trade-related work associated with that business and that the wife also contributed to the business, primarily by way of undertaking office administration associated with the business. In 2001, the parties married. On 8 August 2001, the wife transferred half of her interest in the D Street property to the husband for the consideration of $1. Comparatively, the husband contends that he provided a sum of $100,000 to the wife at the commencement of their cohabitation at the D Street property in January 2000 and, from that time to August 2001, contends that he provided a further $150,000 to the wife. Aside from this mere assertion, no evidence has been presented in these proceedings that satisfies me that $250,000 was provided to the wife by the husband during this time period. In circumstances where I prefer the evidence of the wife, I do not accept that such payments were made by the husband to the wife.

Evidence

Evidence Before The Court

Although having many opportunities to file a response document or a Minute of Order, or put forward to the Court on the first day of hearing on 3 May 2021 the orders that he is seeking, the husband only expressed his opposition to the orders sought by the wife and articulated a desire to retain the D Street property.EVIDENCE The wife relies upon the following documents: (a)Affidavit of the wife filed 21 April 2021; (b)Affidavit of Mr S filed 21 April 2021; and (c)Financial Statement of the wife filed 21 April 2021. The husband relies upon the following documents: (a)Response to Initiating Application filed 22 September 2015; (b)Affidavit of the husband filed 24 September 2020 (marked ‘Exhibit 10’); (c)Affidavit of the husband filed 9 September 2020 (marked ‘Exhibit 9’); (d)Affidavit of Mr C Rimac filed 29 April 2021 (marked ‘Exhibit 8’); (e)Financial Statement of the husband filed 29 April 2021 (marked ‘Exhibit 7’); and (f)Financial Statement of the husband filed 24 September 2020 (marked ‘Exhibit 6’). The following further exhibits were relied upon: (g)Annexures to the Affidavit of Mr S filed 21 April 2021 (‘Exhibit 1’); (h)Annexures to the Affidavit of the wife filed 21 April 2021 (‘Exhibit 2’); (i)Minute of Order sought by the wife (‘Exhibit 3’); (j)Excerpt of a bank statement of the wife for account ending #...47 (‘Exhibit 4’); (k)Excerpt of a bank statement of the husband for account ending #...95 (‘Exhibit 5’); (l)Financial Statement of the husband filed 5 October 2018 (‘Exhibit 11’);(m)Excerpt of a bank statement of the husband for account ending #...28 (‘Exhibit 12’); (n)Notice of Address for Service of the husband filed 14 April 2021 (‘Exhibit 13’);(o)Excerpt of a bank statement of the husband for account ending #...28 (‘Exhibit 14’);(p)Income Tax Return of the husband for the 2001 financial year (‘Exhibit 15’);(q)Letter to Centrelink from the husband dated 1 March 2002 (‘Exhibit 16’);(r)Medical Certificate of the husband dated 4 May 2021 (‘Exhibit 17’);(s)Transfer documents of security property executed by the husband’s nephew (‘Exhibit 18’); (t)Excerpts of bank statements of the husband for account ending in #...28 (‘Exhibit 19’);(u)Excerpt of a bank statement of the wife for account ending #...47 (‘Exhibit 20’);(v)Bundle of documents in respect to the husband’s account ending #...95 (‘Exhibit 21’);(w)Amended balance sheet of the wife dated 12 August 2020 (‘MFI 2’).PROCEDURAL HISTORY To understand how these proceedings have been conducted, it is necessary to appreciate the background to the unfortunate history of litigation in this matter which, it must be noted, is due to no fault on the part of the wife and why, ultimately, I acceded to the husband’s request to be represented by his brother, acting as a McKenzie friend.[1][1] Being a reference to the decision of the English Court of Appeal in McKenzie v McKenzie [1970] 3 All ER 1034. On 29 May 2015, the wife filed an Initiating Application in the Family Court of Australia.

Decision

Reasons for decision

Comparatively, the husband has attested that his interests are being well looked after by his brother and his nephew, who is holding funds on his behalf and applying those funds for the benefit of the husband and, specifically, to provide for his day to day needs, which he has attested to being to his satisfaction.CONCLUSION For all these reasons, I make orders as sought by the wife. I will invite the parties to make such written submissions as to costs as they deem appropriate.

Ratio Decidendi

Legal Principle Established

His Honour further stated at 75,181: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. Livesey v Jenkins makes it clear that mere compliance with rules of court or practice directions does not alter the basic principle of the need for full and frank disclosure by the parties.(Emphasis added) In terms of the parties’ statutory obligation of disclosure, the following rules of the then applicable Family Law Rules 2004 (“the Rules”) are relevant. Rule 13.01(1) of the Rules relevantly provided that:Subject to subrule (3), each party to a case has a duty to the court and to each other party to give full and frank disclosure of all information relevant to the case, in a timely manner. Further, Rule 13.04(1)(a) provided that “[a] party to a financial case must make full and frank disclosure of the party's financial circumstances.” Clause 1 of Part 1 of Schedule 1 of the Rules relevantly provided that:(1)Each prospective party to a case in the Family Court of Australia is required to make a genuine effort to resolve the dispute before starting a case by:…(c) complying, as far as practicable, with the duty of disclosure. Further, clause 6 of Part 1 of Schedule 1 of the Rules relevantly provided that:(6) At all stages during the pre-action negotiations and, if a case is started, during the conduct of the case itself, the parties must have regard to: …(i) the duty to make full and frank disclosure of all material facts, documents and other information relevant to the dispute. Note: The duty of disclosure extends to the requirement to disclose any significant changes (see clause 4 of this Part). (Emphasis added) The fact that the obligation of disclosure exists as a duty to the Court, as well as to the other party, is significant. It is also significant that the obligation is in respect to the disclosure of “information relevant to the dispute”, not simply one that attaches to the production of documents. Of significance in the context of these proceedings is that the obligation of disclosure included an obligation to disclose “any disposal of property” that may “affect, defeat or deplete a claim”: Rule 13.04(1)(g). In this matter, as a result of the inadequacy of the husband’s disclosure, I infer that he retains possession and control of the substantial portion of settlement monies he received from the litigation he commenced in respect to personal injuries he sustained a motor vehicle accident. In so inferring, I note that the authorities confirm that there can be evidentiary findings made as a result of a party’s failure to comply with their obligations of disclosure. Robyn Carroll and Hugh PK Kopsen, “The Importance of Full and Frank Disclosure in Family Law Financial Proceedings and the Many Consequences of Non-Disclosure” (2017) 45 Federal Law Review 97, usefully summarised some of the relevant authorities dealing with that issue at pages 109–110, as follows:As a consequence of the rule, the Full Court of the Family Court has found that the failure by a party to disclose relevant financial information may lead the court to draw adverse inferences against that party, provided there was material upon which such an inference could be based. Many instances exist where such inferences have been drawn by the court. In Hall v Hall, for instance, an adverse inference was drawn from the failure of a wife to lead evidence to explain why she had not received financial support once she was aware it was available to her at the discretion of the executor of her late father’s will.(Footnotes omitted)