Senior and Anderson
[2012] FamCA 540
•16 July 2012
FAMILY COURT OF AUSTRALIA
| SENIOR & ANDERSON | [2012] FamCA 540 |
| FAMILY LAW – PROPERTY - Division of property – Seventeen year marriage – No children – Both parties born overseas – Husband no history of employment – Initial financial contributions – Monies given to husband by his extended family prior to marriage – Investment and control of those monies by husband during marriage – Purchase of business – Purchase of two real properties – Standard of proof – Observation of the parties in giving their evidence – Inferences to be drawn from omission of evidence that could have been available – Previous Binding Financial Agreement that had been declared invalid – Payments made pursuant to that agreement – Other superannuation and assets of the parties to be divided – Consideration of a purported investment partnership contract and whether monies were held and invested pursuant to that document – Source and existence of overseas monies paid to the husband – Bank borrowings – Monies repatriated overseas – Previous endeavours to transfer ownership of real property – Prior settlement agreements – Partial property payment – Assessment of s 79(4) contributions – No s 75(2) adjustment – Consideration of just and equitable orders – Monetary value of orders. |
| Evidence Act 1995 (Cth), s 140(1), s 140(2) Family Law Act 1975 (Cth), s 75(2), s 79(1), s 79(2), s 79(4) |
| Bremner and Bremner (1995) FLC 92-560 Heydon JD, Cross on Evidence, 8th ed, Butterworths, Sydney, 2010 |
| APPLICANT: | Ms Senior |
| RESPONDENT: | Mr Anderson |
| FILE NUMBER: | MLC | 9546 | of | 2008 |
| DATE DELIVERED: | 16 July 2012 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Young J |
| HEARING DATE: | 14,15, 19 and 29 June 2012 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | MR Werner |
| SOLICITOR FOR THE APPLICANT: | Gillian Coote Family Law |
| THE RESPONDENT: | In Person |
INDEX
ORDERS
REASONS FOR JUDGMENT
ISSUES
ORDERS SOUGHT
AFFIDAVITS RELIED UPON
BACKGROUND FACTS
PREVIOUS ORDERS
LITIGANT IN PERSON
STANDARD OF PROOF
OBSERVATION OF WITNESSES
FAMILY LAW ACT 1975 (CTH)
SECTION 75(2) FACTORS
ASSETS
LIABILITIES
SUPERANNUATION
PARTIAL PROPERTY SETTLEMENT
WIFE’S FLAT IN EGYPT
CONSOLIDATED POOL OF ASSETS
LEGAL PRINCIPLES - INITIAL CONTRIBUTIONS
INFERENCES
WIFE
HUSBAND
HUSBAND’S ORIGINAL EGYPTIAN PASSPORT
OVERSEAS MONEY
INVESTMENT PARTNERSHIP CONTRACT DATED 5 OCTOBER 1983
B PROPERTY (“THE SHOP”)
W PROPERTY
RETAIL BUSINESS IN C
MONIES SENT BACK TO EGYPT
ANZ BANK ACCOUNT
LIABILITY OF $75,583 TO MR Z
SIGNED TRANSFERS OF LAND
SALE OF SYDNEY ROAD
S 79(4) CONTRIBUTIONS
S 75(2) FACTORS
FOURTH STEP
MONETARY EFFECT OF THE ORDERS
STRUCTURE OF THE ORDERS
ORDERS
IT IS ORDERED:
THAT the wife sign all documents and do all acts and things, at her expense, to transfer to the sole name of the husband all of her right, title and interest in and to the property situate at and known as W Property, in the State of Victoria (“W Property”) and contemporaneously provide in registerable form a discharge of the caveat that she caused to be lodged upon the title to that property.
THAT the husband be solely responsible for the payment of all outstanding rates, taxes and outgoings of and associated with W Property and indemnify the wife in that regard.
THAT the jointly owned shop and residence situate at and known as B Property in the State of Victoria (“B Property”) and its fixtures and fittings be offered for sale by the parties as follows:
(a)the wife is to instruct her solicitors to nominate in writing three (3) firms of real estate agents who operate in B and the husband is to select within fourteen (14) days therefrom one (1) firm of real estate agents and they are then to be jointly engaged by the parties for the purpose of the sale;
(b)the parties are to jointly negotiate and agree upon the fees and commission charged by the agent;
(c)the sale is to be by public auction, to be conducted on or before 1 November 2012 unless it is otherwise recommended by the real estate agent for a good reason that a different process of selling be undertaken and the parties both agree to and jointly accept that advice;
(d)the reserve price is to be no less than $850,000 unless otherwise recommended and mutually agreed;
(e)that if it is recommended by the real estate agent that monies are required to be spent on the repair, renovation or maintenance of this property then the parties are to negotiate and mutually agree to both the work and the quantum to be spent thereon (but it is not to exceed $25,000) and it is only for the purpose of achieving the best possible sale price;
(f)the sale is to be made subject to the current monthly leasing arrangement and the parties must first obtain the written consent and co-operation of the lessee;
(g)the sale is to be conducted on the basis of a cash contract and provide for a settlement period of no more than 120 days, unless otherwise mutually agreed;
(h)an independently appointed solicitor is to act for the parties on the conveyance and is to hold the net sale monies pending agreement between the parties, or court order, and then pay out to each of them the sum calculated and agreed upon pursuant to Order 4(f) hereof;
(i)the wife is to provide, at her expense, an executed document in registrable form to discharge the caveat lodged on title by her solicitors upon her instructions;
(j)otherwise the parties are to have the joint conduct of the sale;
(k)otherwise liberty is reserved to either party upon proper notice and documentation filed and served to apply as to any further term or necessary condition of such sale.
THAT the proceeds of sale of B Property are to be applied in the following manner:
(a)in payment of all proper and agreed costs, charges and commissions of sale, including legal expenses;
(b)in discharge of all monies and interest owing to National Australia Bank pursuant to the registered mortgage;
(c)in repayment of any monies expended on the repair, renovation or maintenance of the property pending sale pursuant to Order 3(e) hereof;
(d)in repayment to the husband of a sum of $8,000 to discharge his HECS debt to the Commonwealth Government;
(e)in further repayment to the husband of a sum of $7,500 to be paid to him to offset the wife’s superannuation entitlements;
(f)the balance is then to be divided between the husband and wife (without regard to the wife retaining the assets in Order 6 hereof and the husband retaining the payment of $7,500) so as to effect an overall property division inclusive of the husband retaining W Property at a value of $640,000:
i.in favour of the wife as to 42%;
ii.in favour of the husband as to 58%.
THAT the husband indemnify and keep indemnified the wife against any claim, financial demand or in legal proceedings which may be brought against her, jointly or severally, by any of the overseas family members of the husband’s family for monies had or received by them, or one of them, during their marriage.
THAT the wife retain her superannuation entitlements of $21,500, the $28,000 sum previously paid to her by the husband and her flat in Egypt.
THAT the husband and wife otherwise retain all furniture, chattels and personal effects that they each now have in their possession.
THAT otherwise all extant applications be dismissed and the proceedings be removed from the docket of Young J.
THAT, if after forty-five (45) days there are no further proceedings in this Court then all of the original exhibit documents, and in particular exhibit “W9” being the original but now cancelled Egyptian passport of the husband, are to be returned to the parties by the Court and the parties provide an appropriate receipt upon receiving all such exhibits.
IT IS CERTIFIED
THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Counsel for the wife.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Senior & Anderson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 9546 of 2008
| Ms Senior |
Applicant
And
| Mr Anderson |
Respondent
REASONS FOR JUDGMENT
ISSUES
The Court is asked to divide in a just and equitable manner the property assets of the husband and wife which primarily consist of the current equity in two properties in B and W, a house and a shop with a second storey residence. The central issue in this case was the quantum and source of the initial contribution(s) made by the husband, which the wife said was about $90,000 and which the husband said was no less than $290,000 and perhaps up to $400,000. Specifically there is a question of what monies, if any, were provided to the husband prior to marriage from his extended overseas family and the purpose of that provision, including whether or not he received and was to invest those monies on their behalf pursuant to an investment contract. These are all matters on which I have made findings and which have led to a division of the net assets of the parties in a manner that I have concluded is just and equitable having regard to all contributions, s 75(2) factors and in the reasonable exercise of my discretion.
ORDERS SOUGHT
WIFE
By her Amended Initiating Application filed 15 March 2012 the wife sought orders, in summary, for the sale of the two real properties owned by the parties, and which are registered in their joint names, and for there to be an equal division of the net proceeds of both sales. These properties are situate at and known as:
(a)a shop and residence at B (“B Property”); and
(b)a house at W (“W Property”).
The agreed total valuation of both of these properties was $1,490,000. The W property is unencumbered and was the family home and where the husband still resides. The B property remains encumbered by a National Australia Bank mortgage of approximately $20,000 and is currently tenanted.
Additionally the wife sought to retain the partial property settlement of $28,000 previously paid to her pursuant to a purported Binding Financial Agreement, retain her superannuation entitlements of approximately $21,500 and also to retain the flat which she has recently bought in Egypt at a cost of approximately $40,000 AUD and to which she had contributed the partial property settlement monies.
The wife’s case was initially presented on the basis that she should account only for that $28,000 partial property sum which should be added back to the available net pool of property for division between the parties, but not the balance of the equity in that Egypt flat. That concession for the add back was withdrawn by Mr Werner, the wife’s Counsel, in his final address on the basis that at separation the husband had $56,000 in his ANZ bank account and those monies were effectively split between the parties and thus each of them should therefore retain, without further order of the Court, those monies equally divided from that bank account.
The wife’s Counsel further sought an order to add back to the pool of assets a sum of $11,182 which were monies that the husband had forwarded to Egypt in repayment of monies allegedly owing to his sister in the period immediately before separation and then throughout the balance of that 2006 calendar year.
In his final written submissions, which are marked as exhibit “W12” in the proceedings the wife’s Counsel settled upon an equal division of the net asset pool as being a just and equitable outcome for his client and with her retaining all of her superannuation.
In responding to a question from the Bench Mr Werner conceded that her orders sought could be satisfied by the sale of only B property, which had an agreed current market valuation of $850,000, encumbered by a mortgage of only $20,000 and the payment of a lump sum therefrom. The W property would therefore be transferred to the sole name of the husband and the wife would discharge the caveat that she had caused to be lodged upon its title.
HUSBAND
By his Amended Response filed 18 April 2012 the husband, who represented himself in the proceedings, sought the dismissal of each of the wife’s orders on the basis that she retain the previously paid sum of $28,000, her superannuation entitlements and the flat in Egypt.
The effect of the orders sought by the husband was therefore that the wife’s interest on title in both real properties would be transferred to him and he would assume sole responsibility for the remaining mortgage encumbrance and all other outgoings and indemnify the wife in that regard. The wife would be required to do all acts and things required, at her expense, to uplift the caveats which she had lodged against the title to both properties.
The husband proposed no other payment to the wife and, in effect, his orders largely mirrored the situation that he claimed the parties had agreed to by the terms of the purported Binding Financial Agreement executed by them on 27 July 2009. That agreement had been the subject of an initial defended hearing, and appeal to the Full Court and thereafter, by direction, a further hearing before me, the outcome of which was that the agreement was found not to be valid and binding upon the parties. This present hearing was now to determine a just and equitable division of their property pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
The husband’s case proceeded on the basis that he had received substantial monies from his overseas extended family, his three sisters and his two late brothers, and that he had invested those monies in property in Australia on their behalf, the property being the two real properties jointly owned by his wife and himself and, most likely, a small retail business in C. He argued that, pursuant to the terms of an overseas contract which he and his siblings had entered into in October 1983 in Egypt and before his first trip to Australia, 85 per cent of the net equity in those properties should be found to be held on trust by him collectively for each of those overseas family members, but in varying proportions which he asserted to be:
(a)as to his brother U (who had died in about 2009) – 8 per cent;
(b)as his brother O (who had died in about 1996) – 62 per cent; and
(c)as to each of his three sisters (F, S and R) – a total of 30 per cent jointly between each of them.
In exhibit “H5”, the balance sheet which I had required to be filed at the commencement of the hearing, the husband had actually calculated the dollar value amount that he asserted he owed to each of his five overseas siblings, or their estates, and which sum had been calculated as an outstanding liability based upon the agreed equity in B and W properties, but curiously excluding the loss on the sale of the retail business in C.
In that exhibited document he asserted the outstanding dollar value liability that he had calculated was as follows:
(a)to his sister F sum of $129,219;
(b)to his sister S a sum of $129,219;
(c)to his sister R a sum of $129,219;
(d)to the estate of his brother U a sum of $96,882;
(e)to the estate of his brother O a sum of $802,075.
I record that the husband’s balance sheet tendered at the commencement of the hearing pursuant to my earlier case management order was the first time that any such dollar value had been calculated by him and argued to be owing in that amount to each of his siblings or their estates. It became a matter of some significance in this hearing that the particular dollar value of the liability allegedly owing to the husband’s siblings was not fully documented in the contractual document which the husband annexed to his trial affidavit and which has been substantially considered hereafter in this Judgment.
There had been no prior disclosure by the husband or any case management of this issue, there were no affidavits filed by or on behalf of any of those siblings or their estates and there had been no application on their behalf to intervene or to be joined in the proceedings. These are matters heavily relied upon by the wife’s Counsel in his final submissions where he emphasised the obligation of the husband to have called witnesses and proper evidence to satisfy the onus of proof upon him and to properly prove his case. I have made findings on all of these issues hereafter in this Judgment.
In cross examination it became apparent that the husband had not disclosed to his overseas family members particulars of any of his various investments or commercial dealings in Australia, none of them had visited Australia and likely they had little or no accurate knowledge or financial disclosure of the investments purportedly made on their behalf, at least as to 85 per cent of their current market value. Significantly there were no proper affidavits filed by any of those family members, though the sisters, or one of them had given instructions to other persons to file a statement by them in the form of affidavit on their behalf. These matters are subsequently considered in these Reasons for Judgment.
It is necessary to record that the husband’s case is founded upon the validity and operation of an Investment Partnership Contract (“Contract”), prepared on 5 October 1983 between himself as the first party and each of his five siblings as the second party and that document is annexure “B3” to the husband’s affidavit filed 5 April 2012. It is asserted by that contract that the husband received foreign currency monies, in American and Kuwaiti currencies, which were thereafter converted into Australian dollars when the husband was a resident of this country. He said that he was required to invest those monies in a commercial business which he would manage, supervise and be personally responsible for. I have hereafter given substantial consideration to that document, its terms, effect, validity and current operation.
Finally in recording the applications and orders sought by the husband he filed written submissions, marked as exhibit “H11” wherein he concluded, in his final submissions at the end of the hearing that he sought a declaration that the Financial Agreement executed 27 July 2009 was fair and reasonable. That of course is not an issue before this Court in this hearing and that purported Agreement has previously been declared invalid and not binding upon the parties. My understanding remained that the husband sought to retain both real properties and to pay no other monies to the wife save for her retaining her partial property settlement, her superannuation and her flat in Egypt and any cash monies that he said that she had transferred to that country.
Thus the financial divide between the parties, as expressed in their orders sought, is indeed vast.
AFFIDAVITS RELIED UPON
WIFE
The wife relied upon:
(a)her trial affidavit and annexures thereto, filed 15 March 2012;
(b)her Financial Statement, filed 15 March 2012; and
(c)the eleven exhibits tendered on her behalf in the hearing.
In support of the wife’s orders sought, her Counsel had prepared and filed an Outline of Case Argument on 28 March 2012 and pursuant to my case management directions had filed a single page balance sheet of assets and liabilities, which document was marked exhibit “W1” in the proceedings.
The wife’s Counsel filed a brief summary of legal submissions at the conclusion of the case, as requested by the Court, and that document was marked as exhibit “W12” in the proceedings.
HUSBAND
The husband relied upon:
(a)his trial affidavit and various annexures thereto, filed 5 April 2012, save for the first three lines of paragraph 6 thereof which I had earlier struck from the affidavit by an order pronounced 28 May 2012;
(b)his Financial Statement filed 5 April 2012; and
(c)the ten exhibits that he tendered in the hearing.
The husband had filed a further substantial affidavit and annexures on 12 June 2012 but I ruled that affidavit to be wholly unhelpful, irrelevant and inadmissible. Its contents did not identify or relate to financial issues in dispute in this hearing but was more a commentary on the Court process of the Full Court appeal hearing, the filing of documents and matters within this Registry. The husband did not object when I determined that the document would not be relied upon and it has not been read in these proceedings.
The husband had earlier filed two further affidavits, with substantial annexures thereto. These affidavits were filed 30 November 2009 and 16 April 2010. Mr Werner elected to cross examine the husband upon some parts of these documents, or their annexures and further the husband also relied upon paragraphs of those affidavits which contained evidence that otherwise was not before me in his final affidavit or annexures, such as “AA3” to his 16 April 2010 filed affidavit.
Accordingly, and mindful that the husband was self represented, and further that his primary language is Arabic, I have read and, to a limited extent, relied upon matters identified and evidence given in those affidavits and annexures.
I raised with the wife’s Counsel the very issue of the husband’s earlier affidavits and it was agreed that in relation to his 16 April 2010 affidavit paragraphs 4 – 6, 18 and 19, 22 – 25, 28 and 32 and related annexures would be in evidence before the Court and in that regard Mr Werner was given leave to re-open his cross examination and further investigate matters by re-questioning the husband.
There were two other affidavits which the husband had previously filed on 3 February 2010 and 28 April 2010. These were briefly identified in the proceedings by Mr Werner but are not documents that I was asked to read and rely upon, save for matters raised by the wife’s Counsel in that regard.
Additionally the husband filed a submission in support of his orders sought on 5 April 2012 and that document detailed considerable financial calculations and adjustments which he submitted were appropriate to be considered and which, in part, sought to re-argue previous outcomes of both the Full Court hearing and the subsequent re-hearing of the trial issues and orders which I pronounced upon the financial agreement.
The husband had also complied with my case management order and filed a balance sheet, marked exhibit “H5” to which I have earlier referred but which I have read and considered in the hearing, including his legal and financial arguments annexed thereto directed to the calculation of the net asset pool and the husband’s present circumstances.
Finally the husband also prepared a written final address, to which he spoke to in summarising his case and orders sought and that document was marked exhibit “H11” in the proceedings.
BACKGROUND FACTS
The following facts were agreed upon by the parties:
(a)the husband was born in Egypt in 1956 and is now 56 years of age;
(b)the wife was born in Egypt in 1971 and is now 41 years of age;
(c)the husband travelled to Australia in 1983 and remained in Australia until returning to Egypt in 1989 to marry the wife;
(d)there are no children of the marriage, though the wife miscarried in 1994;
(e)the parties married in Egypt in 1989 and though it was not strictly an arranged marriage, it was through family introductions and occurred within a few weeks of their meeting. Thereafter the husband returned to Australia and the wife soon followed when her visa and travel documentation was finalised;
(f)the husband and wife have no other family or relatives in Australia and all members of their extended family live in Egypt;
(g)the parties separated after a 17 year marriage in March of 2006 and that date is recorded as the date of separation on the divorce certificate;
(h)the separation date was somewhat of an issue given that they had physically separated and lived in separate bedrooms within the home for some years prior to final separation and also because of agreed evidence that the wife was endeavouring to find a female friend who would conceive and carry the husband’s child and that thereafter she would like to return and live with all of her extended family in Egypt;
(i)the Decree Nisi of dissolution of their marriage became absolute in January 2009, though it was a matter of real significance to the parties that the husband only consented to an Islamic divorce in June 2011;
(j)the parties executed what purported to be a Binding Financial Agreement on 18 July 2009 and pursuant to that agreement the husband paid the wife $28,000. That agreement was later held to be invalid, although the wife retained the $28,000, which was characterised as a partial property settlement.
PREVIOUS ORDERS
A summary of the substantial Court hearings and Orders are contained in paragraphs 15 – 22 (inclusive) of the wife’s trial affidavit. Those proceedings were concerned with the purported validity of a Binding Financial Agreement, drawn and approved by their then solicitors, which the husband and wife executed on 27 July 2009.
After the wife filed an application for the division of property, the husband asserted that the s 79 property division between the parties had been finalised pursuant to the terms of that purported Binding Financial Agreement, but which the wife had argued was not valid and binding and thus property proceedings should properly be heard and determined by this Court.
The matter was first heard before me in May 2010 and I permitted the rectification of certain errors within that Agreement and its Certificates thus making the Agreement binding upon the parties.
Thereafter a Full Court Appeal was lodged and heard. One part thereof was successful and the matter was remitted to me for a further hearing where I finally determined that the purported Binding Financial Agreement should not be and was not binding upon the parties. Thus the wife was not precluded from continuing with her application for a division of property pursuant to s 79 of the Act.
LITIGANT IN PERSON
As the husband was a litigant in person I endeavoured at all times to ensure procedural fairness and that he had a proper understanding of the procedures of trial and his rights in conducting his own case. I am satisfied that the husband had a very substantial factual knowledge of all matters in issue. He was firm and positive in the way he presented his submissions to the Court and asked informed questions of the wife. He conducted himself very appropriately in Court and at all times appeared to be fully informed of the factual issues that were in argument before the Court.
The Full Court in Johnson v Johnson (1997) FLC 92-765 devised a number of guidelines to be used in proceedings where a litigant appears without legal representation. Those guidelines were later modified by the Full Court in Re F: Litigants in Person Guidelines (2001) FLC 93-072, which now form the guidelines to be used today. At para 253 the Full Court in Re F explained the guidelines as follows:
1.A judge should ensure as far as is possible that procedural fairness is afforded to all parties whether represented or appearing in person in order to ensure a fair trial;
2.A judge should inform the litigant in person of the manner in which the trial is to proceed, the order of calling witnesses and the right which he or she has to cross examine the witnesses;
3.A judge should explain to the litigant in person any procedures relevant to the litigation;
4.A judge should generally assist the litigant in person by taking basic information from witnesses called, such as name, address and occupation;
5.If a change in the normal procedure is requested by the other parties such as the calling of witnesses out of turn the judge may, if he/she considers that there is any serious possibility of such a change causing any injustice to a litigant in person, explain to the unrepresented party the effect and perhaps the undesirability of the interposition of witnesses and his or her right to object to that course;
6.A judge may provide general advice to a litigant in person that he or she has the right to object to inadmissible evidence, and to inquire whether he or she so objects. A judge is not obliged to provide advice on each occasion that particular questions or documents arise;
7.If a question is asked, or evidence is sought to be tendered in respect of which the litigant in person has a possible claim of privilege, to inform the litigant of his or her rights;
8.A judge should attempt to clarify the substance of the submissions of the litigant in person, especially in cases where, because of garrulous or misconceived advocacy, the substantive issues are either ignored, given little attention of obfuscated. (Neil v Nott (1994) 121 ALR 148 at 150);
9.Where the interests of justice and the circumstances of the case require it, a judge may:
§ draw attention to the law applied by the Court in determining issues before it;
§ question witnesses;
§ identify applications or submissions which ought to be put to the Court;
§ suggest procedural steps that may be taken by a party;
§ clarify the particulars of the orders sought by a litigant in person or the bases for such orders.
The Full Court noted that the above list was “not intended to be exhaustive and there may well be other interventions that a judge may properly make without giving rise to an apprehension of bias”. This highlighted the discretionary nature of the guidelines, which was explained by the Full Court at para 225 to 229:
(225)…we think it is necessary to appreciate that the imperative to do substantive justice as between the parties requires the conduct of the presiding judge to be assessed by a standard which is properly informed. The informed nature of that standard must, in our view, take account of the responsibility of the Court seized of the family law matter to properly understand the litigant in person’s position within the litigation.
…
(229)With these matters in mind, we think that the giving of such assistance should lie in the discretion of the trial judge and should not be required by mandatory guidelines nor should the nature of the interventions from the bench be rigidly proscribed or prescribed. The exercise of such discretion serves the goal of achieving a fair trial so that the interests of justice can be served. Therefore, the application of the guidelines must depend on the circumstances of the particular case.
The guidelines as set out in Re F, and the discretionary nature of those guidelines, have been affirmed and followed in many subsequent decisions. Most recently, the Full Court set out and referred to the guidelines in Garning & Director-General, Department of Communities (Child Safety Services)[2012] FamCAFC 35.
As I said earlier the trial and the case management hearings were conducted in a manner designed to ensure that the husband understood the court process and his rights. I am wholly satisfied that he was afforded procedural fairness and that he was in an informed position to be able to produce all available and proper evidence. The timetable upon which he disclosed documents, particularly those which were entered into overseas with his extended family members was an issue in the hearing as was the form of overseas documents which purported to be affidavits, and issues of their admissibility.
As the hearing proceeded an issue developed as to the late production by the husband of the alleged overseas contract pursuant to which, if accepted, 85 per cent of the equity in the two real properties would have been removed from the pool of assets available for division between the parties. If the existence of that document had been known, and its consequences understood, then the husband may have been advised to give very careful attention to properly proving all aspects of his case. I record that the husband did not make any application for an adjournment at any time throughout the hearing.
STANDARD OF PROOF
Section140(1) of the Evidence Act 1995 (Cth) provides that a Court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. Sub-paragraph (2) further provides that, without limiting the matters that the Court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence; and
(b) the nature of the subject – matter of the proceeding; and
(c) the gravity of the matters alleged.While Dixon J’s classic discussion in Briginshaw v Briginshaw (1938) 60 CLR 336 of the operation of the civil standard of proof does express the considerations which s 140(2) of the Evidence Act 1995 (Cth) requires a court to take into account, the correct approach, as observed by Branson J (with whom French and Jacobson JJ agreed) in Qantas Airways Ltd v Gama (2008) 247 ALR 273, at para 139 is that :
. . . references to, for example, “the Briginshaw standard” or “the onerous Briginshaw test” . . . have a tendency to lead a trier of facts into error. The correct approach to the standard of proof in a civil proceeding in a federal court is that for which s.140 of the Evidence Act provides.
Similarly, in Johnson & Page (2007) FLC 93-344, at 81,891, the Full Court of this Court expressly agreed with the view “that reference to the Evidence Act”, is proper, I have therefore applied this section in my deliberations.
I have assessed the evidence of both parties on that required standard. I have balanced my findings against the availability of local and overseas witnesses and supporting documents, the explanation of the parties themselves and inferences that could or have been properly drawn. The nature and gravity and importance surrounding the initial financial contributions alleged by the husband from his extended family are matters which I have conscientiously reflected upon at the required standard of proof and what was most probable in all of the circumstances, including the subsequent financial actions and transactions of the parties in Australia.
OBSERVATION OF WITNESSES
I have had the benefit of observing the husband and wife in giving their evidence and being cross examined and also in observing them in the courtroom including their demeanour, behaviour and character. My observations of them have been of real assistance in formulating appropriate orders. Those observations are acutely available to a trial judge and the legal authority for such a position is that part of the judgment of Kirby J in Government Insurance Office of New South Wales v Bailey (1992) 27 NSWLR 304 at page 313 where it is said:
By conventional theory, the observations made by a trial judge of the appearance and demeanour of a witness giving evidence are not only available to be used in the determination of a dispute but amount to important ingredients of the decision-making process. They normally provide the primary decision-maker a distinct advance which controls, and even limits, the exercise by the appellate court of its statutory functions in an appeal by way of re-hearing. … (citations omitted).
I have had the significant benefit of hearing all of the evidence in its entirety, of reading carefully all of the affidavits, the annexures to the affidavits and the other exhibits in the proceedings. I have reflected upon and have carefully weighed all of the evidence prior to delivering these reasons for judgment. I stress that, in this case, my court observations of the parties, and particularly of the husband, were of benefit and importance.
FAMILY LAW ACT 1975 (CTH)
The proper approach to determining a section 79 application is now well established, both by the Act and by case law (see In the Marriage of Davut & Raif (1994) FLC 92-503; In the Marriage of Clauson (1995) FLC 92-595; Mallet v Mallet (1984) FLC 91-507; Hickey & Hickey (2003) FLC 93-143; In the Marriage of Waters & Jurek (1995) FLC 92-635 and Norbis v Norbis (1986) 161 CLR 513).
Section 79(2) requires that any order made by the Court must be just and equitable and provides that:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 79(1) of the Act directs a Court to make such an order as it considers appropriate. As has recently been highlighted by Cronin J in Bulleen v Bulleen (2010) 43 Fam LR 489 at paragraphs 34 – 45 (inclusive), the process by which the Court determines such an order may appear arbitrary and without any particular arithmetical approach but that is the way in which the Act was drawn, proclaimed and has served our community from 1975. It is discretionary and it was observed that “it is also not governed by morality but fairness”.
It is therefore a balanced and properly explained assessment by a trial judge having heard and carefully evaluated all of the admissible facts and evidence of what division of property and what other orders are to be made between the parties to achieve a just and equitable result. That is the process which I have carefully undertaken and explained within these reasons for judgment.
Section 79 involves a four step exercise which I have undertaken in this judgment, namely:
§the identification of the property of the parties, their assets and financial resources and the net of their liabilities;
§the evaluation of the “contributions” and s 79(4) issues;
§the evaluation of the matters referred to in section 75(2);
§a determination as to whether the result is just and equitable by reference to section 79(2) of the Act. In determining whether the outcome is just and equitable it is “the real impact in money terms which is ultimately the critical issue” (JEL v DDF (2001) FLC 93-075 at [140] citing the Full Court In the Marriage of Clauson (1995) FLC 92-595 at 81,911).
In considering the alteration of property interests I have identified the net assets of the parties and then evaluated the very specific contributions, direct and indirect, financial and non-financial, and other contributions including that of homemaker. I have throughout this judgment identified and incorporated within my consideration and evaluation all such issues and findings. The reference point for the just and equitable requirement is clearly emphasised by the decision of the Full Court in Hickey (supra) where it was said:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), (‘the other factors’) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all of the circumstances of the case.
I have emphasised in my approach the overriding obligation upon the Court to evaluate and properly assess all of the evidence for the purpose of pronouncing an order which is just and equitable.
There is a very significant obligation imposed upon the Court, in the exercise of its judicial discretion, to assess, balance and evaluate all contributions under the umbrella of s 79(4) and for the exclusive purpose of concluding a just and equitable order.
It is necessary for courts to assess both the “value” and “the quality with which any particular role was performed” and a very helpful assessment of this concept is developed by Warnick J in SL & EHL [2005] FamCA 132, in particular paragraphs 233 – 290 (inclusive) and by Cronin J in Bulleen (supra).
The mandatory prescription of the Act is to evaluate contributions. In Pierce v Pierce (1999) FLC 92-844 at [30], the Full Court per Ellis, Baker and O’Ryan JJ said:
There is an obligation on the trial judge not only to identify the relevant contributions but also to assess them.
It is not the purpose of the relevant provisions of the Act to “equalise the financial strengths of the parties”, per Wilson J in Mallet (supra). I have carefully safeguarded against utilising the provisions of s 79(4) of the Act as a “source of social engineering or as a means of evening up the financial positions of the parties” per the Full Court in Kennon v Kennon (1997) FLC 92-757 at 84,303.
SECTION 75(2) FACTORS
The relevant factors which I have considered and evaluated throughout this judgment are (in summary):
(a)the age and state of health of each of the parties;
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
(d)commitments of each of the parties that are necessary to enable the party to support :
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain;
(f)subject to subsection (3) the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party;
(g)where the parties have separated or divorced, a standard of living that in all circumstances is reasonable;
(n)the terms of any order made or proposed to be made under section 79 in relation to the property of the parties; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account.
ASSETS
Leaving aside modest amounts of cash and furniture and the personal possessions of the parties, the asset pool comprised of two real properties agreed as follows:
(a)B Property, agreed at $850,000; and
(b)W Property, agreed at $640,000.
LIABILITIES
The parties, or either of them, had the following agreed liabilities at hearing:
(a)a National Australia Bank mortgage encumbering B Property in the agreed sum of $20,000;
(b)the husband’s HECS debt of $8,000.
Both parties have legal expenses and disbursements but it was agreed between them that they should not properly be treated as liabilities for the purposes of the calculation of the net pool of assets. Each party would therefore pay their own past and present legal costs, but subject to any costs application that may hereafter arise from the conduct, length and outcome of this hearing.
The husband, in his summary balance sheet, marked as exhibit “H5”, identified very substantial liabilities which he alleged were owing to his five siblings, or to their estates and the total of this was said to be approximately $1,286,614. For reasons hereafter explained I have not accepted any part of that calculated liability and thus I have not brought that specific sum to account in determining the net available pool of assets for division between the parties. Likewise I have not accepted the alleged liability owing to his brother-in-law, Mr Z, of $73,583. I also do not accept the other miscellaneous debts of the husband in the sum of $2,000.
I have also assessed the wife’s claim that $11,182 be added back to the pool of assets and in so doing that would be a rejection of the husband’s claim that these monies were legally owing to his sister. I do not accept the wife’s claim.
SUPERANNUATION
The husband has no superannuation entitlements and it was agreed that the wife has $21,500 (approximately) in such entitlements, much of which has been accrued by her post separation. There is no evidence as to the actual post separation accumulation of superannuation by the wife and I have determined in the exercise of my discretion that it would be a just and equitable outcome to award to the husband a reasonable but modest sum to partly offset his wife’s financial future security in this regard. I have balanced the fact that as she is only 41 years old and she will not be able to access these entitlements for many years.
PARTIAL PROPERTY SETTLEMENT
Pursuant to the terms of what was found to be an invalid Binding Financial Agreement, the husband had previously paid to the wife $28,000. Those monies were paid after separation from the husband’s then savings account which held a balance of approximately $56,000. The husband retained the balance of monies ($28,000) though he argued that they were partly expended by him upon mortgage repayments, renovations and outgoings to the properties and personal outgoings. I have decided that a just outcome is not to include that sum of $56,000 in the pool of assets. Thus the wife would retain that sum of $28,000. However because of how the husband spent the balance of the monies I have given some very limited weight to these matters in determining the s 79(4) contribution percentages.
WIFE’S FLAT IN EGYPT
The wife used those partial property settlement monies together with further bank borrowings of approximately $13,000 AUD and the sale of her modestly valued motor vehicle to purchase a flat in Egypt, at an agreed purchase price of $40,000 AUD.
I have determined that it would not be a just and equitable scenario to bring to account the balance of the investment in that Egyptian flat. The wife wholly discharged that borrowing from her modest income, post separation.
CONSOLIDATED POOL OF ASSETS
For all of the reasons explained within this Judgment I have concluded that the consolidated pool of assets and liabilities should comprise only the following:
ASSETS
B Property $850,000
W Property $640,000
$1,490,000Additionally the wife’s largely post separation superannuation entitlements of $21,500 must properly be brought to account and whilst the wife will retain this financial benefit to assist with securing her long term future I have balanced that fact by awarding the husband a sum of $7,500 to be paid from the net proceeds of sale of B Property.
LIABILITIES
I have had regard only to the following liabilities:
National Australia Bank mortgage $20,000
Husband’s HECS debt $8,000
$28,000For reasons which I have given in this Judgment I have not ordered the adding back of the payments made by the husband to his sister at and after separation in the sum of $11,182.
Thus for the purposes of this Judgment I have determined that the consolidated pool of net assets should be approximately $1,462,000, but with the unknown being the actual sale price, and the costs of sale, of B Property. For that reason I have determined an appropriate percentage division of the net proceeds of sale of B Property rather than any specific lump sum cash payment to be made to either party therefrom.
LEGAL PRINCIPLES - INITIAL CONTRIBUTIONS
One of the important legal issue in this case is the weight to be placed on the initial financial contributions of the husband, in light of the subsequent and significant non-financial and other ongoing financial contributions made by both parties during a seventeen year marriage. The approach to be taken in relation to initial contributions to matrimonial property has been considered and developed over the years by the Full Court and other superior courts.
In the past, there was a focus on whether the subsequent contributions during the marriage off-set the initial contribution. This approach was taken by the Full Court (Fogarty, Maxwell and Nygh JJ) in In the Marriage of Lee Steere (1985) FLC 91-626, where at page 80,078 it was stated that:
the strength of a contribution made at the inception of a marriage is eroded, not by the passage of time but by the off-setting contribution of the other spouse…
This approach was thereafter followed in the dissenting judgment of Fogarty J in Money and Money (1994) FLC 92-485, where at page 81,054 His Honour stated that:
an initial substantial contribution by one party may be “eroded” to a greater or lesser extent by the later contributions of the other party even though those later contributions do not necessarily at any particular point outstrip those of the other party.
Fogarty J’s statement was subsequently approved by the Full Court in Bremner and Bremner (1995) FLC 92-560 and in Way and Way (1996) FLC 92-702.
A somewhat different approach later emerged in the Full Court decision of Pierce and Pierce (1999) FLC 92-844 (Ellis, Baker and O’Ryan JJ), which moved the focus away from the erosion of the initial contribution and instead placed the focus on the weight that should be attached to the initial contribution . At page 85,881 the Full Court made the following, now oft cited, statement:
In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home…
Pierce is now accepted and has been cited with approval in many subsequent cases. The Full Court (Finn, Kay and Burr JJ) in the unreported case of Q and Q [1999] FamCA 1314 emphasised that initial contributions must be assessed in all of the circumstances of the case. At para 39, the Full Court stated that:
There is no principle that the length of the marriage leads to a likelihood that other contributions will outweigh or weigh equally with ‘a particular contribution’. It is a matter of assessing the contributions of all relevant kinds in each case to arrive at an outcome which is both appropriate and just and equitable. In some cases particular contributions may be outweighed or equalled by other ones. In other cases particular contributions may be so disproportionate to other contributions as to merit special recognition.
It is also clear from Pierce that consideration must be given to the use that the parties made of the initial contribution. This was an important consideration in Verley & Verley (No 2) [2008] FamCA 326 where Cronin J said that the initial contribution by the husband “was clearly the catalyst for a significant portion of the parties’ income and lifestyle as well as the current asset pool”.
I have accepted that the initial contribution by the husband in this case was significant and that it also was the catalyst for the parties’ financial ability to acquire B Property, W Property and assisted with the retail business.
Following Pierce I have therefore evaluated the weight and the monetary value that should be attached to that initial contribution. I have also assessed the weight of the initial contribution in the context of the use that the parties made of that contribution in their acquisition of property. For that purpose it was both substantial and essential.
INFERENCES
The principle authority supporting the appropriateness of the Court, in the exercise of its discretion, drawing an inference from the failure of a party to call a relevant witness is Jones v Dunkel (1959) 101 CLR 298. The so called “Jones v Dunkel rule” was recently explained by the Full Court of the Family Court in GWR v VAR [2006] FamCA 894 at para 29:
The decision of the High Court in Jones v Dunkel does little more than confirm what common sense suggests would be the case, namely that where it would be reasonable to expect a party to have called evidence from a witness in relation to an issue, the unexplained failure to do so can justify drawing the inference that the evidence of that witness would not have assisted that party’s cause.
In considering the circumstances when such an inference may be drawn, the Federal Court in Cubillo v Commonwealth of Australia (2000) 103 FCR 1 highlighted the necessity to consider the application of the rule on a case by case basis. It therefore follows that there are some circumstances where the inference may not be available, despite the failure of a party to call a relevant witness. At para 353 to 357, O’Loughlin J stated that:
(353) A party who, without explanation, fails to call, as a witness, a person whom he or she might reasonably be expected to call, can attract the application of the principle enunciated by Windeyer J in Jones v Dunkel…While it is possible to state the rule in general terms, its application must be considered with regard to each situation in which a witness is alleged to be absent; the rule is not to be used to complete gaps in the evidence or to convert conjecture into inference. The rule is that the unexplained failure of a party to give evidence may, in appropriate circumstances, lead to an inference that the uncalled evidence would not have assisted that party’s case, so entitling a court the more readily to draw an inference against that party which might otherwise fairly be drawn from the evidence which was adduced. In essence, an inference may be drawn contrary to the interests of a party who, although having it within his or her power to provide or give evidence on some issue, declines to do so.
…
(356) The rule cannot be applied to the non calling of a witness unless it would be natural for the party to call the witness, or the party might reasonably be expected to call the witness...However, the rule has no application if the failure to call the witness is explained. For example a reasonable explanation for non-attendance is illness or other unavailability, or by loss of memory or refusal to waive privilege…Any explanation must be established by evidence and is not merely to be presumed from the passage of time…Furthermore, the onus of establishing unavailability is on the party against whom the rule in Jones v Dunkel operates…
(357) The unexplained failure by a party to call witnesses may, not must, in appropriate circumstances, lead to an inference that the uncalled evidence would not have assisted that party’s case…But such failure would rarely give rise to a positive inference that any evidence would necessarily have been adverse to the party failing to call that evidence. The appropriate inference to draw is a question of fact to be answered by reference to all the circumstances of the case and perhaps no adverse inference at all may be appropriate… [emphasis added and citations omitted]
Some of the circumstances in which the failure of a witness to be called may be explained were considered by Mahoney JA in Fabre v Arenales (1992) 27 NSWLR 437 at pages 449-450:
But there are circumstances in which it has been recognised that such an inference is not available or, if available, is of little significance. The party may not be in a position to call the witness. He may not be sufficiently aware of what the witness would to warrant the inference that, in the relevant sense, he feared to call him. The reason why the witness is not called may have no relevant relationship with the fact in issue: it may be related to, for example, the fact that the party simply does not know what the witness will say. A party is not, under pain of a detrimental inference, required to call a witness “blind”.
…A Jones v Dunkel inference may not arise if, for example, the witness has a reason for not telling the truth or refusing to assist and the party who may well call him is aware of this.
In the 8th edition, Cross on Evidence (J D Heydon, 2010, Sydney: Butterworths) at paragraph 1215 there is a comprehensive examination of the so called Jones v Dunkel rule. It is there noted that the inference is easier to apply to a party who fails to give evidence themself, as was the case in Jones v Dunkel. However, in this case there is a failure to call a non-party witness. Where that is the case, it is recorded in Cross on Evidence that “the rule cannot be applied to the non-calling of a witness unless it would be natural for the party to call the witness, or the party might reasonably be expected to call a witness” (citations omitted). This point was considered by Glass JA in Payne v Parker [1976] 1 NSWLR 191 at pages 201-202 where it was noted that:
(6) Whether the principle [Jones v Dunkell] can or should be applied depends upon whether the conditions for its operation exist. These conditions are three in number: (a) the missing witness would be expected to be called by one party rather than the other, (b) his evidence would elucidate a particular matter, (c) his absence is unexplained.
(7) The first condition is also described as existing where it would be natural for one party to produce the witness…or the witness would be expected to be available to one party rather than the other…or where the circumstances excuse one party from calling the witness, but require the other party to call him…or where he might be regarded as in the camp of one party, so as to make it unrealistic for the other party to call him…or where the witness' knowledge may be regarded as the knowledge of one party rather than the other…or where his absence should be regarded as adverse to the case of one party rather than the other…It has been observed that the higher the missing witness stands in the confidence of one party, the more reason there will be for thinking that his knowledge is available to that party rather than to his adversary…If the witness is equally available to both parties, for example, a police officer, the condition, generally speaking, stands unsatisfied…(citations omitted).
The submissions of the wife’s Counsel focused upon the failure of the husband to call appropriate family and other witnesses both in support of the initial financial contributions as he alleged and otherwise to support the terms of the Investment Partnership Contract. I have considered those submissions in the context of the particular facts of this case, the husband being self represented and from a non-English speaking background. I do find that more substantial and detailed verbal and affidavit evidence from the husband’s extended family members would and should have been of significance. This evidence was not available to the wife to call. In any event she did not know of the particulars of the husband’s case as was contained in his trial affidavit and exhibit “H5” until close to the commencement of this trial.
As an overview I have drawn certain inferences against the husband’s case in respect of that Investment Partnership Contract by his failure to call witnesses or better prove his case and that has assisted me in cancelling out the specific liabilities therefore which he claimed in his exhibit “H5”. As to the existence of the overseas money and the husband’s transferring those monies to Australia I have balanced what could have been available evidence to be called by the husband against his actual evidence and all of the other documents and facts before the Court. On this issue I have no drawn the various inferences sought on behalf of the wife.
I do not accept the husband’s evidence and the way in which he sought to financially benefit himself. In his reply to questions he said that these documents were dated in January and March of 2001 because that was when the wife had purportedly requested an Islamic divorce from him and, notwithstanding his future conduct to the contrary, he said he had agreed and that religious divorce formed the basis of this forged settlement agreement.
Likewise as to the confession that again was a blank piece of paper signed by the wife upon which the husband drafted a confession which he thought would assist him in any future legal or financial proceedings. It was countersigned by him and verified by him and it is a false document upon which obviously no reliance could ever be placed.
The explanation of the husband as to the preparation of the confession document was that it accorded with his wife’s instructions which were that he could write whatever he liked subject to the granting of both divorces and her being able to return to her homeland.
The significance of the confession document is embodied in paragraph 2 where it was asserted that the wife had taken the initiative to contact Mr Zucco to organise the transfer of legal ownership into the sole name of the husband in both properties. I reject that assertion and I have no hesitation in wholly accepting that the husband both devised and implemented the production of the false documents and the intended legal transfer to his sole name of the two properties.
For completeness I record that in paragraph 16 of the husband’s trial affidavit, and in reply to the wife’s evidence in her affidavit, he deposed that:
I state that my ex wife was the one to initiate the proceedings of transferring the land. She rang the solicitor, Davis Zucco, and arranged everything regarding transferring the land. I did not have any idea about it at that time as I was busy and looking after my physiotherapy training. I was not prepared financially to do it (that is to complete the transfers) and for that reason I asked the solicitor to do the transfer of land at the minimum cost. I did not have enough money to register them. I did not expect my ex wife would create a legal turmoil in my future. I knew Davis Zucco through my ex wife and she did the transfer of land because she was totally convinced that all of the money invested in the properties was my family’s money.
Whilst I have wholly rejected and heavily criticised the husband’s actions and evidence in relation to these intended transfers of ownership and his concoction of the false documents there is curiously a degree of truth in the above quoted paragraph. That is that the husband, having orchestrated the signed transfers simply did not go through with the remaining part of the registration process, that is to save money or because of his over-confidence that the wife would abide by his instructions and not renege on her agreement, and he simply failed to complete the lodgement and registration process. It did create a legal turmoil in his life but it has otherwise avoided the issues of setting aside transfers of title that would have arisen.
I conclude therefore that it was the husband who developed the idea, the documents and the process to transfer both titles to his sole name.
I have rejected the husband’s evidence and the other matter of significance is that the husband’s improper actions and deceit on this topic cast a significant shadow upon his other evidence and his credibility. These are matters upon which I have carefully and fully reflected.
SALE OF SYDNEY ROAD
I have determined that to effect a just and equitable division of property pursuant to s 79 of the Act it is necessary for this property to be sold. Neither party have made submissions upon the particular terms and conditions of the sale and thus I have endeavoured to structure both a reasonable and a just and effective procedure for an orderly sale.
I require the wife, through her solicitors, to nominate three firms of local real estate agents who are experienced in the sale of such properties in B. The husband should then within fourteen days select one only firm from those nominated by the wife and that firm shall have the conduct of the marketing campaign to be negotiated and costed with the parties and then the sale process.
I have ordered that the sale of the B property be conducted by public auction, but reserve to the parties the right to negotiate with the real estate agent appointed, to take advice and if necessary to agree to any other recommended mode of sale, but it must be mutually agreed. The auction, or other mode of sale, should occur before 1 November 2012.
The agreed value of B property was $850,000 and I have set that sum as the reserve price unless the parties, on advice from the real estate agent, mutually agree to a different amount.
It may be that monies need to be spent on the upstairs residence or otherwise generally on this property and thus the parties should negotiate and take advice on any sums that could be expended to increase their potential return. I have ordered that no more than $25,000 be jointly spent in such manner on this property and most likely those monies will have to be borrowed against the property and then repaid as a priority on settlement.
As there is a tenant in the shop, though there is no fixed term lease but rather it is now occupied on a rolling monthly basis, both parties must obtain all necessary consents of the lessee to the sale and obtain his co-operation in the sale process.
The sale must be completed on a cash contract basis and the settlement period should be no more than 120 days, unless otherwise mutually agreed.
Otherwise I have ordered that the parties have the joint conduct of the sale of this property. The wife has been ordered to remove the caveat upon settlement. I have endeavoured to pronounce specific orders on the usual issues which otherwise would have been negotiated between the parties but likely other legal, conveyancing or other matters will arise and the parties are equally empowered to act jointly on such issues.
As an overview I reserve to both parties, upon proper documentation filed and served, leave to approach a Registrar or Judge of this Court for any other order as to the terms and conditions of sale or, on the advise of their real estate agent, to vary by consent the orders that I have pronounced.
S 79(4) CONTRIBUTIONS
I have endeavoured to carefully evaluate the evidence of all of the contributions made by both parties to the acquisition, conservation or improvement of their property.
The husband made a significant and direct financial contribution to the deposit paid and the purchase of B property, W property and the retail business. He paid substantial sums from his invested savings, received from his extended overseas family, without which these parties would never have been able to purchase the retail business and thereafter both real properties. I am satisfied of the husband’s financial contribution in that regard and likewise I find the wife made no direct financial contribution to the initial deposit sums paid on the respective purchases and most likely to the other capital sums contributed at that time.
Both parties have made an indirect financial contribution towards servicing and reducing the mortgage liability secured over the respective properties and the business and I have separately reflected upon and assessed each of their level of work and contribution to that business.
Likely both parties made a contribution as a homemaker though in the traditional sense of this marriage I find that the wife would have been primarily responsible for household and related duties and that, in itself, is a matter which I have taken into account pursuant to s 79(4)(c). I have also reflected upon the work and renovations that the husband said he undertook to the B property, often without the assistance of paid contractors. I conclude that he made a very modest contribution in that regard.
I have further considered the relevant s 75(2) factors such as the employment history of the parties, their income and their financial needs and circumstances insofar as they are relevant to a consideration pursuant to s 79(4)(e). I have not adjusted my division of the property pursuant to this sub-paragraph.
I have again reflected upon the timetable of the initial financial contributions and the fact that almost all of those monies were received by the husband from his extended family in the period 1983 – 1989 (inclusive) and thus prior to marriage. What I have endeavoured to carefully evaluate is the particular contributions made by the parties, and primarily by the husband at the point of purchase of each of the real properties and the business. The husband’s financial contributions do very significantly outweigh any such contributions by the wife. Those monies then variously invested in his name were indeed the catalyst for the parties to have the financial ability to purchase, and to satisfy banking borrowing requirements for the purposes of acquiring, B property, W property and the retail business.
I conclude therefore that there does need to be a proper and significant loading in favour of the husband for his direct financial contributions though I re-emphasise that I have carefully evaluated all of the contributions made by each of the parties throughout their seventeen year marriage.
On the basis of all of the s 79(4) contributions as I have evaluated, I conclude that a just and equitable order is to divide the net assets of the parties as to 58 per cent to the husband and the remaining 42 per cent to the wife.
S 75(2) FACTORS
In paragraph 17 of the wife’s Outline of Case her Counsel argued that the only s 75(2) factor which appeared to have any potential relevance on the face of the material filed is the disparity in the ages of the parties. Her case was therefore presented on the basis that any s 75(2) factor is unlikely to have a material bearing on the exercise of the Court’s discretion assuming that each party would receive a substantial division of property.
In his final written submissions the wife’s Counsel emphasised that the husband had chosen not to exercise his employment capacity and that should not operate to the prejudice of the wife. He further asserted that the husband had not proved his alleged health problems and any likely impact they may have upon his earning capacity.
In those written submissions Counsel for the wife concluded that, on the assumption (that is his assumption) that each party would receive a very substantial settlement (somewhere he estimated at between $700,000 and $750,000) then s 75(2) factors should have no material bearing on the exercise of the Court’s discretion.
For his part the husband relied upon the age difference between the parties and how his age would impact upon his ability to obtain employment. He also emphasised his poor state of health and the obvious fact that he has no recent experience of working or employment record in Australia.
I have decided that I am not able to rely upon the husband’s assertions of his poor health which have only been supported by copy documents annexed to his affidavit and thus there was no opportunity for the wife’s legal practitioners to investigate or thereafter cross examine the husband or his medical witnesses on matters that could have been in dispute.
It is proper that I have general regard to the difference in ages between the parties and the husband’s period of long term unemployment, at least from the date of the settlement of the sale of the retail business. I do not expect that the husband could or would find gainful employment. However, and on balance, I have decided that there should be no further adjustment or loading in favour of the husband because of these particular issues. In part that is because the wife earns only a modest salary for her 7 days per week and long hours of employment. She receives no government financial assistance though she does have the benefit of a long term modest superannuation entitlement.
Both parties have a responsibility to support themselves, and no other person. I have considered the standard of living enjoyed throughout their marriage and also of the duration of the marriage.
I have determined that it would be inappropriate to make any further adjustment to the division of property which I have determined on a contribution basis pursuant to s 79(4) of the Act. That division affords to the parties a just and equitable division of property and there is, I find, no proper or just reason for it to be further adjusted.
FOURTH STEP
As is required in the determination of a just and equitable division of property I have paused to reflect upon the proposed division of the pool of assets as to 58 per cent to the husband and 42 per cent to the wife. I have further considered those assets and liabilities which I have determined not to bring to account such as the wife’s $28,000 payment, her flat in Egypt, the husband’s repayment of lump sum(s) to his sister and other like matters discussed in the Judgment.
On a net pool of approximately $1,450,000 that percentage would mean that the husband would receive approximately $218,000 more than the wife, but always subject to their other retained assets as I have explained herein.
I conclude that the s 79 orders that I have determined do conclude a just and equitable division of property between these parties.
MONETARY EFFECT OF THE ORDERS
The financial outcome of the orders in dollar terms is that the husband will have an unencumbered home in which to live and which will be transferred to his sole name together with a lump sum calculated subject to both the sale price and the cost of sale of the B property. He has no superannuation but he is to be paid a sum of $7,500 to address that situation and likely his future income will be from whatever limited employment he may be able to obtain and realistically from a form of government pension or payments. The husband will have no liabilities save for past legal fees and disbursements which are his sole responsibility and any other outgoings and payments of and associated with his ownership and occupation of the W property.
The wife will own no real property and have no secured liabilities save for all of her legal costs and disbursements. Again subject to the actual sale price and costs of sale of the B property she will be paid a calculated lump sum which should enable her to purchase a flat or apartment convenient to her employment and invest any surplus funds to assist with her future financial security. She otherwise has the option, which she had earlier expressed to the husband, of returning to live in Egypt where she is now the owner of a modest flat. Whilst she is working she will continue to contribute to her superannuation and that sum will thereby increase and provide further financial security for her future. This is an entitlement which the husband does not have available to him.
STRUCTURE OF THE ORDERS
Whilst I have ordered the sale of the B property, and this was raised with the parties during the hearing, I have no evidence of the likely costs of sale including estate agent’s commission and the like. Whatever costs are incurred must be negotiated in advance by the parties and they must be jointly agreed.
I have set a reserve price for the B property, but that can be varied by mutual consent, and the intent is that the parties appropriately share in any actual sale price which is greater than, or lesser than the anticipated reserve price. It is for that reason that I have ordered a percentage division of the property of the parties rather than any particular dollar division between the parties of the net proceeds of sale of the B property.
For hopefully what is complete clarity the final percentage division between the parties is to be calculated upon the agreed value of the W property, the net proceeds of sale of the B property after the payment of the liabilities which I have ordered and the further adjustment in favour of the husband in the sum of $7,500 to partly offset the wife’s current superannuation entitlements. Otherwise there is no adjustment for the $28,000 sum paid to the wife or her ownership of the flat in Egypt or the monies which the husband had transferred overseas to his sister or which he retained at separation.
The parties have requested that I do not consider and pronounce any orders for costs of and incidental to this hearing without giving to each of them an opportunity to make oral submissions. I will therefore list the matter before me at an appropriate date and time for that purpose.
I certify that the preceding three hundred and seventy seven (377) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young delivered on 16 July 2012.
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