Scott & Munayallan

Case [2021] FedCFamC1F 104

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Scott & Munayallan [2021] FedCFamC1F 104

File number(s): SYC 59 of 2010
Judgment of: HENDERSON J
Date of judgment: 6 October 2021
Catchwords:

FAMILY LAW – PROPERTY – Interim property – Where the wife seeks the sum of $100,000 be paid to her by way of interim property distribution – Where the wife has limited financial means and the husband is in sole control of the matrimonial assets – Application granted.

FAMILY LAW – COSTS – Where the wife seeks her costs of four hearing days be paid on an indemnity basis – Where the final hearing listed since February 2021 was not able to commence in relation to the substantive issues due to the husband’s conduct – Application granted – Order for husband to pay wife’s costs on an indemnity basis.    
Legislation: Family Law Act 1975 (Cth) s 79, s 117
Cases cited:

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225

J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (No 2) [1993] FCA 70

Kohan & Kohan (1993) FLC 92-340

Munday v Bowman (1997) FLC 92-784

Penfold v Penfold (1980) 144 CLR 311

Phillips & Hansford (2020) FLC 93-941

Rankin & Rankin (No. 3) [2019] FamCAFC 133

Sfakianakis & Sfakianakis (2019) Fam LR 419

Smith & Fields (third party costs) [2013] FamCA 505

Strahan & Strahan (Interim property orders) (2011) FLC 93-466

Worth & Worth (No. 2) (2019) FLC 93-910
Division: Division 1 First Instance
Number of paragraphs: 85
Date of hearing: 30 September 2021
Counsel for the Applicant: Mr Duc
Solicitor for the Applicant: Mills Oakley Lawyers
The Respondent: Self-represented litigant

ORDERS

SYC 59 of 2010

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS MUNAYALLAN

Applicant
AND:

MR SCOTT

Respondent

ORDER MADE BY:

HENDERSON J

DATE OF ORDER:

6 OCTOBER 2021

THE COURT ORDERS THAT:

1.The wife’s costs be paid by the husband on an indemnity basis in the sum of $49,820.50 within 14 days of the date of these Orders.

2.The husband pay to the wife the sum of $12,455 being a total of the unpaid costs orders made against the husband in favour of the wife in these proceedings within 14 days of the date of these Orders.

3.The husband pay to the wife the sum of $100,000 by way of interim property distribution within 14 days of the date of these Orders.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings…

Continue reading Scott & Munayallan

Sign in free to access the full text

Details
AGLC
Scott & Munayallan [2021] FedCFamC1F 104
Case
[2021] FedCFamC1F 104
Decision Date

CaseChat Overview and Summary

The case of Scott & Munayallan involved a dispute between the husband and wife regarding the distribution of their matrimonial assets and the wife’s application for interim costs. The matter was heard in the Family Court of Australia, with the wife seeking an adjustment of costs based on her limited income, the husband's significant assets, and his failure to contribute to the family’s expenses. The wife, who works at a preschool and does some accounting, has an income of about $500 per week, supplemented by parenting payments, which together with her expenses, barely cover her needs. The husband, in contrast, controls substantial assets and has removed significant sums from joint accounts, placing them in his mother's name, where their current whereabouts are unknown. The court needed to determine if the wife's request for an interim costs order was justified given her financial circumstances and the husband's ability to pay. The court found that the wife had a strong case for an adjustment under section 79 of the Family Law Act, considering her role as a parent and homemaker, the husband's control over the assets, and his failure to provide child support.

The court addressed several legal issues, including the wife's right to an adjustment of costs based on her limited income and the husband's financial capacity. The wife argued that given her role as a primary caregiver and the husband's significant assets, it was just and equitable to grant her an interim costs order. The husband's absence from court due to a purported medical condition further complicated the matter, as it raised questions about the authenticity of his claimed incapacity. The court also had to consider the husband's failure to comply with previous costs orders and the implications of his actions on the wife’s financial situation. The court found that the wife's financial needs, coupled with the husband's ability to pay, warranted an interim costs order. Additionally, the court noted discrepancies in the husband's medical certificate, which was altered to include reasons for his unavailability to court, further supporting the wife's position.

The court ruled that it was just and equitable to order the husband to pay the wife’s interim costs in the sum of $100,000 within 14 days, along with unpaid costs of $12,455 from previous orders. The court highlighted the wife's financial hardship and the husband's substantial assets, which made the husband’s failure to contribute to the family expenses and provide child support particularly egregious. The court also ordered that evidence from the EE Hospital, LL Medical Centre, and the husband's general practitioner be provided to assess his medical condition. The discrepancies in the medical certificate further undermined the husband's claim of incapacity, reinforcing the court's decision to grant the wife's application for interim costs. The court's decision emphasized the importance of considering the financial circumstances of the parties and the husband's ability to pay in determining interim costs orders.

The court's final orders included the husband paying the wife's interim costs of $100,000 within 14 days and the unpaid costs of $12,455 from previous orders. The court also directed that medical evidence from EE Hospital, LL Medical Centre, and the husband's general practitioner be provided to assess his claimed medical condition. The court's decision underscored the importance of the wife's financial needs and the husband's capacity to pay in granting the interim costs order. The discrepancies in the husband's medical certificate further supported the court's decision, highlighting the husband's failure to provide adequate reasons for his absence from court.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

As their Honours state in Strahan referring to the decision of Zschokke & Zschokke (1996) FLC 92-693, there must be a need for the funds and the financial circumstances of the parties is an important consideration.THE EVIDENCE The wife is on an exceedingly limited income. She works at a preschool and does some accounting work and receives an income of some $500 per week which, together with her parenting payment benefits A & B, enable her to pay for the rent of a modest two-bedroom unit and the entire upkeep not only for herself but her two children amounting to just over $1,000 per week. The husband makes virtually no contribution whatsoever to his children and has not done so since separation. The wife receives the paltry sum of four dollars per week in child support. There is close to $2 million held in the Supreme Court of NSW of which Mr Scott has, if not legal ownership, at least beneficial ownership of. There is clear evidence on bank records from the Commonwealth Bank of Australia and Citibank that Mr Scott removed some $1.3 million from one of the aforementioned companies in June 2021 and placed that money, the wife suspects, in an account in his mother's name, Ms Scott, who has also been joined to these proceedings. The current whereabouts of those monies are unknown. The wife has, by way of a tracing exercise with the various bank accounts she has been able to subpoena of these companies which she asserts are the alter-ego of the husband, established movement in excess of $10 million over a period of time in these companies. Mr Scott boasted during the relationship that he was a man of means and he was able to buy property without obtaining a mortgage such was the availability of funds to him and he did so during the marriage. Mr Scott is in total control of the assets of the marriage and the wife has continued, as was the case during the relationship, to be financially controlled and deprived of access to the wealth of the parties. In light of the fact there is a fund of money available to satisfy the wife's needs, being an amount of $309,000 in the accounts of DD Pty Ltd , that the matrimonial pool has the potential to be in excess of $4 million, that the wife has a strong case for an adjustment under section 79 of the Act having regard to her role as parent and homemaker and effectively sole parent for many years and a strong case that Mr Scott is the alter-ego of these various companies, that Mr Scott has failed to pay child support or maintain his children to the best of his ability and it is unlikely the wife will receive child support from him and that she seeks $100,000 to continue this litigation at the resumed hearing on 7 October 2021 I find it is just and equitable and otherwise proper to make an interim costs order pursuant to my power under section 79 of the Act. I will order the husband pay the wife's interim costs in the sum of $100,000 within 14 days of today's date. In addition, there are some $12,455 of unpaid costs orders that be have been made against Mr Scott in favour of the wife throughout this litigation which he has not paid and I will order those costs orders also be paid in one lump sum.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

On Monday, 27 September 2021 Mr Scott did not appear by way of telephone or Microsoft Teams and the only communication the Court had with him were emails from a person called “Helen Tae” wherein she alleged Mr Scott had had an adverse reaction to a COVID-19 vaccination he had taken the Saturday before this final hearing was due to commence, had been admitted to EE Hospital, had had a suspected heart attack and was too unwell to appear or represent himself at the hearing. A medical certificate was provided from the LL Medical Centre dated 27 September 2021 from a Dr FF, which is as follows:THIS IS TO CERTIFY THATMr Scott has a medical condition and will be unfit for Court Appearance, Preparation, Work from 27/09/2021 to 30/09/2021 inclusive.(Emphasis in original) On 27 September, and in Mr Scott’s absence, I dealt with two groundless reviews he had filed in relation to a Senior Judicial Registrar’s orders concerning service of subpoenae on individuals to give evidence and produce documents at the hearing and subpoenaing of records at various banks which held accounts in the name of companies that the wife asserted were the alter-ego of the husband. I dismissed his reviews. On the basis of the medical certificate, and in the absence of Mr Scott’s appearance, I stood the substantive matter over to the next day, Tuesday 28 September 2021. On Tuesday, 28 September 2021 the Court was able to contact Mr Scott by telephone where he confirmed he had attended EE Hospital on Sunday night, that he had a “mild heart attack”, that there were enzymes in his blood indicative of a mild heart attack, that he was to have an angiogram and was to make further appointments with his GP or other medical practitioner, and that he had had an adverse reaction to the COVID-19 inoculation. On the basis of these somewhat alarming facts I granted leave to the legal representatives for the wife leave to issue subpoenae to the EE Hospital, LL Medical Centre and made orders that those institutions were to provide to the solicitors for the wife all information concerning the medical condition of Mr Scott. I further directed that his general practitioner, whose name he had given to the court on Tuesday, be available to provide evidence in relation to his current medical condition via teams and that Dr FF also be available to give evidence. I adjourned the matter to Wednesday, 30 September 2021 for the information that the wife's representatives were obtaining to be provided to the Court. On Wednesday Mr Scott could not be contacted via telephone or email despite numerous attempts by the Court to do so and I proceeded to hear evidence from his GP and receive the EE Hospital records and LL Medical Centre notes into evidence. I marked wife's Exhibit 1 being the notes from LL Medical Centre and wife's Exhibit 2 being the notes from EE Hospital. I heard submissions from Mr Duc for the wife as to the progress of the matter and the interim orders the wife sought given these turn of events. On reading the LL Medical Centre notes it became apparent that the medical certificate Mr Scott had sent to the Court on 27 September 2021 had been substantially altered, as the medical certificate contained in the files of the LL Medical Centre did not have the words for “court appearance” or “preparation” contained therein and read only:THIS IS TO CERTIFY THATMr Scott has a medical condition and will be unfit for Work from 27/09/2021 to 30/09/2021 inclusive.(Emphasis in original)