T and T

[2002] FMCAfam 213

FEDERAL MAGISTRATES COURT OF AUSTRALIA

T & T [2002] FMCAfam 213

FAMILY LAW – Adjustment of property interests – value of retirement benefits received and spent by the husband – contributions by the parties – wife responsible for care of children – inadequate and untruthful financial disclosure by the husband.

Family Law Act 1975 (Cth), ss.75, 79, 117
Federal Magistrates Court Rules 2001 (Cth)

Giunti and Giunti (1986) FLC ¶91-759
Mezzacappa and Mezzacappa (197) 11 FamLR 957
Russell v Russell (1999) FLC ¶92-877

Applicant: BT

Respondent: HT

File No: ZB7654 of 2001

Delivered on: 29 Jul 2002

Delivered at: Sydney, via telephone link to Brisbane

Hearing Date: 12 Jul 2002

Judgment of: Driver FM

REPRESENTATION

Solicitors for the Applicant: Mr Allan
Whitman & Co Solicitors

Respondent appeared in person

ORDERS

1. The husband is to pay the wife $34,490 within 60 days.

2. The husband is to pay the wife’s costs and disbursements of her application.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
BRISBANE

ZB7654 of 2001

BT

Applicant

And

HT

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an application by BT (“the wife”) for an adjustment of property interests.  The application is opposed by the respondent HT (“the husband”).  The amended application, filed on 25 May 2001, invites the Court to determine itself what adjustment of property interest is appropriate in the circumstances.  The reason for that became apparent at trial, as there was a dearth of material before the Court to assist in determining what the net marital assets are.  The husband simply seeks to maintain the status quo. 

2. The husband is a Vanuatuan man and the wife is a Filipina woman.  The wife speaks Tagalog as her first language and the husband speaks a variety of Pidgin as his first language.  This presented some challenges at trial although it became apparent that both parties had a fair command of English and the proceedings required only partial translation into the parties’ first languages.

Background

1. The parties were married on 8 March 1994 at Brisbane.  They separated on 24 April 1998.  There are two children of the marriage, a son and a daughter aged 6 and 4 respectively, both dependent on the wife.  On 12 November 1998 consent orders were made in the Family Court that the two children of the marriage reside with the wife and have defined contact with the husband. 

2. The wife also has a son from a previous relationship, aged 18, who is partially dependent upon her.

3. During the period of cohabitation the wife assumed the primary role of homemaker and parent and the husband was primarily responsible for earning the family income.  The husband had been employed since 5 May 1977 and retired from that employment on 18 March 1998.

The law

1. The approach to the determination of an application under s.79 of the Family Law Act 1975 (Cth) (“the Family Law Act”) is well established by authority. The process ordinarily involves a three step procedure: first, identifying the property, liabilities and financial resources of the parties at the time of the trial of the matter; secondly, evaluating the contributions made by the parties as defined in s.79(4)(a)-(c); and thirdly, evaluating the matters contained in s.79(4)(d)-(g) insofar as they are relevant (which incorporates the s.75(2) factors).

2. In determining what order the Court should make under s.79 the Court must in addition be satisfied, in all the circumstances, that it is just and equitable to do so: s.79(2).

Consideration and findings

1. The husband was self represented in these proceedings and the material filed by him has been of little assistance.  In particular, the material filed by him was of little assistance in determining his financial circumstances.  Those financial circumstances became somewhat clearer at trial when he was cross-examined by Mr Allan, for the applicant wife. 

Identification and valuation of net property

1. The husband relied upon his financial statement, filed on 1 May 2002.  That discloses income from a Newstart allowance in the sum of $229 per week and fixed weekly expenses of $125.  The husband declares living expenses of $187 per week on average.  The husband declares assets of $2,473 comprising bank savings of $1,973, a 1980 Datsun motor vehicle valued at $300, and household effects of $200.  He declares no liabilities.  He declares an unquantified financial resource in the form of superannuation benefits from his employer. 

2. The wife in her financial statement filed on 12 June 2002 declares weekly income of $191 comprising $186 per week social security payments and $5 per week child support paid by the husband.  Her adult son who lives with her has an average weekly income of $150.  The wife declares fixed weekly expenses of $198 but does not declare average living expenses.  She declares assets of $2,244 comprising bank savings of $144 and personal and household effects valued at $2,100.  She declares no liabilities and no financial resources.

3. In accordance with an order made by me on 12 July 2002 the wife has filed income tax returns for the financial years ended 30 June 1998 – 2001.  The wife was not required to lodge a tax return for the financial year ended 30 June 2002 as her income for the year was derived from her social security benefits.  The husband has not complied with the order.

4. The major marital asset is the retirement benefits received by the husband shortly before the parties separated.  The husband did not declare what those benefits were in his financial statement or affidavits.  It emerged when he was cross-examined that he was employed for approximately 23 years and on retirement he received approximately $134,000, including approximately $74,000 superannuation benefits as a lump sum.  It also emerged under cross-examination that almost all of that money has been withdrawn from his Australian bank accounts by the husband since separation.  It emerged that the husband purchased at least two motor vehicles in addition to the motor vehicle he declared ownership of and that he spent approximately $8,000 on those motor vehicles, which he still owns.  I will take into account these assets.

5. The husband’s banking records were put in evidence.  A significant number of relatively small withdrawals were made by him, indicating that he was drawing on his savings to meet ordinary living expenses.  He could not remember what most of those sums were spent on.  I believe him.  He also gave evidence that he withdrew funds in mid 1998 in order to purchase a wife for a relative in Vanuatu.  That is an unusual expense but I am prepared to accept the husband’s explanation.  He claims to be a Chief in Vanuatu and in that role he would have traditional responsibilities.

6. It also emerged that the husband withdrew $60,250 on 29 September 2000 and 4 October 2000.  He claimed that he spent this money on gambling and alcohol.  I do not believe him.  I find that the husband still has access to that money.  He admitted withdrawing it from his bank account in order to prevent his wife gaining any part of it.  There is contemporaneous documentary evidence (exhibit A12) that the husband informed the bank that he intended to purchase real estate.  I find that the husband either still has access to those funds withdrawn or that he has purchased real estate with it, probably in Vanuatu.  I will add the sum of $60,250 back into the asset pool.

7. The husband also admitted under cross-examination that he owns inherited real estate in Vanuatu (or, alternatively, real estate purchased in 1981) worth approximately $42,000.  That asset also needs to be taken into account.

8. I accept the wife’s evidence about her financial position, which was unchallenged at trial. 

9. Accordingly, I find that the assets, liabilities and financial resources of the parties are as follows:

   Wife’s Assets

   Savings  $144
            Furniture  $1,500
            Personal effects  $600

   Liabilities  nil

   Net assets  $2,244

   Husband’s Assets

   Real estate in Vanuatu  $42,000
            Motor vehicles (3)  $8,300
            Funds derived from retirement savings       $60,250
            Bank savings  $1,973
            Household effects  $200

   Liabilities  nil

   Net Assets  $112,723

   Net Marital Assets  $114,967

10. It follows that at the time of the trial of this matter the husband owned virtually all the net marital assets. 

Contributions of the parties

1. This was a short marriage.  The evidence of the parties establishes that the husband made effectively all the financial contributions during the period of cohabitation while the wife made by far the greater non financial contribution as a homemaker and mother.  The relationship between the parties could only be described as highly traditional.  Since separation the wife has continued to play the principal role of homemaker and carer of the dependent children.

2. The assessment of contributions is not a meticulous mathematical exercise.  It needs to be dealt with broadly in order to achieve an end result that is just and equitable.  The husband contributed almost all of the marital assets during the period of cohabitation and since then and retains effectively all of those assets.  While the husband has been the dominant financial contributor the wife has been the dominant contributor in non financial terms.  The greatest contribution made by the husband was his lump sum retirement benefits, most of which were earned before cohabitation commenced.  The husband has had the enjoyment of that money since it was received and has been responsible for the dissipation of a substantial part of that money. 

3. I find that 80 per cent of the net marital assets were acquired before the marriage by the husband, in the form of his accumulating retirement benefits and real estate.  The parties contributed equally to the accumulation of the remaining 20 per cent of the assets since then.

4. Having regard to all of the matters outlined in s.79(4)(a)-(c) I conclude that the contribution of the parties should be taken to be 90 per cent to the husband and 10 per cent to the wife.

Section 75(2) factors

1. The wife is aged 42 years and appears to be in good health.  The husband is aged 59 years and also appears to enjoy good health.  The husband has minimal capacity to earn income due to his age and limited command of English.  He is nevertheless receiving Newstart allowance which indicates that he is being assisted to enhance his income earning capacity.  The wife has some income earning capacity but this is limited by her responsibility for the care of her infant children and her limited command of English.  She is only qualified to do unskilled work.

2. The wife is responsible for the care of the two children of the marriage.  Those children will be dependent upon her for at least another 10 years.  I also take into account that the wife partially supports her adult son who still lives at home. 

3. Both parties receive social security benefits which meet their basic living expenses.

4. The wife receives only $5 per week from the husband in the form of child support.  Having regard, in particular, to her ongoing long term responsibility for the upbringing of the two children of the marriage and her continuing partial support for her adult child I am of the view that there should be an adjustment of property interests in favour of the wife of 10 per cent. 

Is this just and equitable?

1. The level of financial disclosure by the husband was disgraceful, even taking into account his poor command of English and the fact that he was self represented.  He gave evidence under cross-examination that he had purchased the wife in the Philippines and that she was entitled to nothing from him.  He gave evidence that the wife had stolen money from him during the period of cohabitation, either by forging his signature or by altering the amount on withdrawal slips pre-signed by him.  It is entirely possible that the wife took money from the husband surreptitiously during the period of their cohabitation, having regard to her own evidence that the husband exercised an iron fisted control over finances, providing her with only the bare minimum for living expenses.  It is apparent from the evidence that the wife was treated by the husband as no more than a chattel and upon separation, when the husband had no further use for her, he gave her nothing.  The husband has sought to conceal his financial circumstances in these proceedings in order to prevent the wife gaining access to any part of his substantial retirement benefits.  At a pre-hearing conference on 26 July 2001 the husband was ordered to file and serve an affidavit of documents by 31 August 2001 and to give inspection of documents by 17 September 2001.  Neither was done.  The husband has also failed to comply with my order that he file tax returns for the three most recent financial years in which a tax return has been filed.  The husband has attempted to conceal his true financial circumstances.

2. In Russell v Russell (1999) FLC ¶92-877 the Full Court of the Family Court made clear that in determining whether an order is just and equitable pursuant to s.79(2) I must have regard not simply to the proportionate contribution to the net marital assets but also the justice and equity of the actual orders made by the Court. In considering the question of justice and equity I am entitled to take into account the lack of full and frank disclosure by the husband: Giunti and Giunti (1986) FLC ¶91-759 and Mezzacappa and Mezzacappa (1987) 11 FamLR 957. I am also entitled to take into account the facts that it is the husband who has been enjoying the net marital assets to date and that he has been seeking to dissipate or conceal those assets in order to disadvantage the wife. In a case such as the present where there has been deliberate non disclosure the Court should not be too cautious about making findings in favour of the innocent party so as to justice between the parties and so as to discourage such an approach to litigation in the future.

3. The attitude of the husband has forced me to operate substantially in the dark in these proceedings.  Some financial discoveries were made.  Others may well have escaped detection.  The husband should not be permitted to enjoy the fruits, if any, of his non disclosure.  I am of the view that in order to do justice and equity to the applicant in these proceedings a further adjustment of 10 per cent in property interest to her is necessary.  This will require a payment by the husband to the wife of $34,490.  It appears that the husband has sent money and assets to Vanuatu and he may not pay that amount.  If he does not then the outcome of these proceedings may lead ultimately to bankruptcy proceedings against him.  It may ultimately be left to a trustee in bankruptcy to attempt to get in property for the benefit of creditors, which would in those circumstances include the wife.  It is just and equitable that in those potential circumstances she should be put in the position of a substantial creditor. 

4. The husband should also pay the wife’s legal costs. An order for costs against the husband is fully justified pursuant to s.117(2) of the Family Law Act, having regard, in particular to the conduct of the husband in relation to the proceedings. He has failed to comply with the Court’s orders in relation to production of documents and inspection. He has in addition flagrantly breached rule 24.03 of the Federal Magistrates Court Rules 2001 (Cth).

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Driver FM

Associate: 

Date:  29 July 2002