Topp & Topp
[2024] FedCFamC1F 626
•20 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Topp & Topp [2024] FedCFamC1F 626
File number: MLC 4457 of 2020 Judgment of: MCGUIRE J Date of judgment: 20 September 2024 Catchwords: FAMILY LAW – PROPERTY – Where the husband fails to make full and proper disclosure – Where the wife makes a Kennon claim – Where the husband fails to adduce corroborative evidence without explanation – Inference drawn – Contributions and s 75(2) factors following an adjustment to the wife – Small property pool– Holistic approach – Orders that 63.8 per cent net distribution to the wife – 36.2 distribution to the husband – Justice and Equity Legislation: Family Law Act 1975 (Cth) ss 75(2), 79, 79(2) and 79(4)(a)-(g) Cases cited: C & C [1998] FamCA 143
Chang & Su [2002] FamCA 156; (2002) FLC 93-117
Clauson & Clauson [1995] FamCA 10; (1995) FLC 92-595
Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395; (2003) FLC 93-149
In the marriage of Weir & Weir [1992] FamCA 69; (1993) FLC 92-338
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Keating & Keating [2019] FamCAFC 46; (2019) FLC 93-894
Kennon & Kennon [1997] FamCA 27, (1997) FLC 92-757
Mabb & Mabb and Anor [2020] FamCAFC 18
R v Watson: Ex parte Armstrong (1976) 136 CLR 248; [1976] HCA 39
Saunders & Saunders [2019] FamCAFC 94
Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52
Trevi & Trevi [2018] FamCAFC 173
Division: Division 1 First Instance Number of paragraphs: 147 Date of last submissions: 12 August 2024 Date of hearing: 25, 26 and 31 July 2024 Place: Melbourne: Delivered Sydney Counsel for the Applicant: Ms Mariole Solicitor for the Applicant: Coote Family Lawyers Counsel for the Respondent: Mr Goussis Solicitor for the Respondent: Maciel Pizzorno Lawyers ORDERS
MLC 4457 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS TOPP
Applicant
AND: MR TOPP
Respondent
ORDER MADE BY:
MCGUIRE J
DATE OF ORDER:
20 SEPTEMBER 2024
THE COURT ORDERS THAT:
1.These Orders authorise the payment out to the wife of monies held in trust by Coote Family Lawyers on behalf of the parties in a sum of $245,552 plus accrued interest such then to be the property of the wife, Ms Topp, to the exclusion of the husband, Mr Topp.
2.In all other respects each of the parties be entitled to the exclusion of the other to any and all assets held by that party as at the date of these Orders including but not limited to personalty and chattels, balances of bank accounts, motor vehicles, assets of any corporate entities and superannuation entitlements.
3.Each party be solely responsible for and indemnify the other in respect of
(a)any and all liabilities attaching to any asset retained by that party pursuant to these Orders; and
(b)any and all liabilities incurred by that party since separation in either joint names or in that party’s name alone.
4.Pursuant to s 81 of the Family Law Act 1975 (Cth) the parties intend that these Orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.
5.All extant property and financial applications be dismissed except costs applications between the parties, if any, which are to be dealt with in accordance with the Family Law Rules 2021 (Cth).
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym of Topp & Topp has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
McGUIRE J:
INTRODUCTION
These are property proceedings where the property pool, regardless of argument between the parties as to content, is minimal.
An amount of $245,000 is preserved by interlocutory order and being the proceeds of sale of a property at Suburb C in Victoria. The wife seeks payment out to her of the entirety of those monies. The husband’s primary position is that those monies be paid out to him.
The remaining tangible assets are minimal and comprise of a property in Country D currently on the market and where the wife gives an estimated value of $35,000. There are two motor vehicles and some limited cash at bank.
The husband argues that he is indebted to his brother-in-law, Mr B, who is resident in Country D in a sum of $400,000 pursuant to a property development agreement in Australia and where the husband argues that his debt liability to the brother-in-law is secured by a judgment from an Country D court.
The wife disputes the husband’s assertion of indebtedness to his brother-in-law.
The wife seeks an add-back of $116,000 being monies held in a bank account in the husband’s name by him at separation. The husband opposes such an order.
The wife argues that sundry liabilities in her name totalling $75,512 be brought into the property pool as debts of the marriage but where she would anticipate retaining those liabilities.
The parties have limited superannuation entitlements with the wife’s Super Fund 1 having a value of $26,096 and the husband’s Super Fund 2 having value at $13,521. Neither party seeks a splitting order.
ISSUES
There is a major issue of credit in this matter where the husband’s trial affidavit was not filed until 2.00am on the first morning of the trial and despite long standing procedural orders. As such, the wife was denied the opportunity to address some issues raised in that document and/or to obtain rebuttal evidence. The wife did not, however, pursue any adjournment of the trial where the matter had been long standing and any further delays would be prima facie to the detriment of the wife.
The wife argues that the husband has not made full and proper disclosure and again despite numerous interlocutory orders obligating him to do so.
The there is an issue as to the status of the of the $245,552 held in trust. The husband says that the money should be paid to his brother-in-law and the Court should order accordingly pursuant to the judgment from Country D. The wife says that the alleged debt is a sham and fraud perpetrated by the husband and his brother-in-law and where the judgment is arguable as to its enforceability even in Country D and is not enforceable in Australia. The wife emphasises this argument by noting the failure of the brother-in-law to give evidence in this Court despite opportunities and invitations for him to be joined as a party.
The wife says that the husband has had funds and the benefit of the construction business since separation such that he cannot argue the reasonable expenditure of $116,000 now dissipated from his bank account since separation and that those monies should, therefore, be added-back to the pool.
The wife says that her liabilities obtained since separation were required for the reasonable necessities of living where she receive no support from the husband and where she suffered a period of unemployment.
The wife argues that her contributions during the marriage and post-separation have been made more onerous by reason of the husband’s behaviour notably instances of family violence. She argues, therefore, for a contribution accordingly on her behalf in accordance with the well‑known decision of Kennon & Kennon [1997] FamCA 27, (1997) FLC 92-757.
BACKGROUND
The husband is 53 years of age being born in 1971 in Country D.
The wife is 46 years of age having been born in 1977 in Country D.
The parties married in Country D in 1992 where I calculate the wife to have been 14 years of age and the husband 20 years. The parties commenced living together in 1992 after an arranged marriage.
There are two children of the marriage namely Ms E born in 1995 (aged 29 years) and Mr F born in 2000 (aged 24 years).
The parties relocated to Melbourne in 2013 initially on the husband’s business Visa.
In September 2016, during a visit to Country D, the wife unilaterally obtained a form of Country D divorce after allegations that the husband had physically and sexually abused their daughter, Ms E. There was no argument before me that this Court should recognise the Country D divorce and indeed the parties continued cohabitation on the wife’s return from Country D until the wife and children vacated the former matrimonial home at Suburb G on 1 November 2019.
The parties and the children were granted Australian Permanent Residency in early 2019.
The wife commenced proceedings in this Court on 6 May 2020 seeking orders as to property settlement, urgent spousal maintenance, and restraints on the husband disposing of assets.
The husband filed his Response on 17 July 2020.
On 28 July 2020 orders were made by consent before a registrar inter alia:
(1)that the parties be restrained from selling or disposing of any assets or creating further encumbrances or liabilities; and
(2)the husband provide disclosure.
Intervention order proceedings continued frequently from early 2020 and on applications made by the wife.
On 2 November 2021 the wife received a letter from the Department of Home Affairs giving Notice of Intention to Cancel Visa. The wife was required to engage a migration lawyer and incurred legal fees of E$16,000 to resolve the matter.
In early 2022 the husband was dealt with in the Magistrates Court for breach of an IVO and received a diversion.
In mid-2022 orders were made by consent for mutually Final IVO’s for a period of 12 months.
On 13 June 2022 the wife claims that her father, a resident in Country D, received a telephone call from an unknown number threatening to kill the wife unless she withdrew her claim for property settlement against the husband in Australia. The matter was reported to Police. The husband was served with a Family Violence Safety Notice and secure housing was obtained for the wife.
On 24 August 2022 the husband’s lawyers filed a Notice of Ceasing to Act.
On 28 October 2022 the wife filed an Application in a Proceeding seeking to join Ms Desrosiers as a party to the proceedings.
On 15 December 2022 orders were made for Ms Desrosiers to be joined as the second respondent, to file material, and for the transfer of the matter to Division 1 of this Court.
On 3 March 2023 orders were made by consent providing inter alia:
(1)a property at Suburb C be sold and after payment of the sale costs and a discharge of mortgage, 50 per cent of the balance to be paid to Ms Desrosiers with the remaining 50 per cent to be transferred to the solicitors trust account to be held on trust on behalf of the parties pending agreement between them or an order of this Court; and
(2)the substantive issues were listed for trial commencing 13 November 2023 and removing the second respondent as a party to the proceedings.
On 18 May 2023 the husband’s second firm of solicitors filed a Notice of Ceasing to Act.
On 17 June 2023 the Suburb C property sold for $1,450,000. An amount of $245,552. was deposited into the solicitors’ trust account on behalf of the parties.
On 5 October 2023 the husband advises the Court that he has engaged a solicitor, Mr H, to report the wife to the Department of Home Affairs.
On 6 October 2023 orders were made in Chambers vacating the final hearing listed for 13 November 2023.
On 20 December 2023 further orders were made by a registrar providing:
(1)the wife be granted leave to issue a further five subpoena; and
(2)the husband to provide specific documents by way of disclosure (the husband has not complied with these orders).
On 29 January 2024 Maciel Pizzorno & Co Lawyers and Consultants filed a Notice of Address for Service on behalf the husband.
On 31 January 2024 the matter was listed for further mention before a registrar and orders were made:
(i)listing the matter for trial commencing on 27 June 2024;
(ii)procedural orders for the filing of trial affidavits 21 days prior to the commencement of the final hearing; and
(iii)any application seeking to join a third party to the proceedings to be filed within 28 days (no application has been filed by either party).
In early 2024 the wife alleges that the husband attended the rooms of her psychologist at a time of her scheduled appointment. She reported the breach of the IVO to police.
On 15 April 2024 orders were made in Chambers relisting the Final Hearing to 25 July 2024.
On 5 July 2024 the wife’s solicitors were notified for the first time of the husband deposing to an Country D judgment debt of $400,000 having been made against him in relation to the proceeds of sale of the Suburb C property.
On 25 July 2024 the matter proceeded to trial.
RELEVANT LAW
Matters of property settlement are dealt with in Part VIII of the Family Law Act 1975 (Cth) (“the Act”) where s 79 provides a broad discretion in the Court to alter the interests of the parties in property. “Property” includes assets and liabilities and amendments to the Act provide that “superannuation may be treated as property” although not usually crystallised in the sense of a tangible asset. The discretion at s 79(1), although a broad one, is limited by the statute itself and as noted by the High Court in R v Watson: Ex parte Armstrong:[1]
…The judge called upon to decide proceedings of that kind is not entitled to do what has been described as “palm tree justice”. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down. …
[1] (1976) 136 CLR 248; [1976] HCA 39.
The initial task for the Court is to identify the legal and equitable interests of the parties in the contents of the property pool and, having done so, the Court must then address s 79(2) which provides that “the Court shall not make any order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”.
Prior to the well-known decision of the High Court in Stanford & Stanford[2] there had evolved a structured process for trial judges following a “four step approach”[3] noting first the determination of the contents and value of the property pool and then turning to consider the contributions by or on behalf of the parties to that pool pursuant to s 79(4)(a)-(d). Contributions could be of a direct or indirect financial type or of a non-financial type including as home maker and parent.
[2] (2012) 247 CLR 108; [2012] HCA 52.
[3] Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395; (2003) FLC 93-149.
The Court then turned to consider whether there be any further adjustment to either of the parties by reason of the matters at s 79(4)(e)-(g) including any relevant matters at s 75(2) of the Act. There was then, and arguably, a requirement for the Court to “stand back” to consider whether the proposed orders themselves emanating from the above process would provide justice and equity.
The High Court in Stanford (supra), however, returned emphasis to s 79(2) where a separate, independent and discrete determination needed be made as to whether it be just and equitable in all the circumstances to make any order altering the property interests of the parties. This consideration was not to be merely conflated with a consideration of contributions at s 79(4).
It is clear, however, that the circumstantial finding at s 79(2) is most often transparently clear as in matters such as that now before me where the parties have separated, the marriage is at an end, and where property remains the subject of the determination as to the justice and equity of distribution.
Where the philosophy of the enactment of property legislation in the Act was one of “no fault”, there is one notable exception where domestic/family violence is not of itself a consideration appearing within the ambit of s 79(4)(a)–(c) but where the Full Court has held that family violence may be taken into account as relevant where the contributions made by a party are made more arduous or onerous by the actions of the other party.
The principle in Kennon has now been enshrined in recent amendments to the Act but where this matter was heard prior to those amendments.
There must be an evidentiary nexus between the conduct complained of and the capacity of the party to make the relevant contributions.[4] Importantly, such a consideration is not to be made independently as an exercise of quantification outside the holistic consideration of contributions and it is not proper, therefore, to simply quantify by percentage or dollar terms.[5]
[4] Saunders & Saunders [2019] FamCAFC 94 at [38].
[5] Keating & Keating [2019] FamCAFC 46; (2019) FLC 93-894.
Such considerations are more commonly addressed to matters of family violence but not necessarily so. The behaviour of a party serving to make contributions by the other party more arduous or onerous are also relevant.[6]
[6] Mabb & Mabb and Anor [2020] FamCAFC 18.
CREDIT
The wife argues that the husband has been deliberately evasive and non-compliant in providing discovery and disclosure of his financial position. As mentioned above, the husband did not file his affidavit with this Court until the early hours of the morning of the commencement of the trial (although he had apparently provided the unsealed copy to the wife’s solicitors). I accept he has not made full and proper disclosure and has offered no explanation. The wife says, therefore, that she prosecutes her case under serious disadvantage. I generally accept this submission.
The authorities and s 75(2)(o) of the Act allow the Court to take a “more robust” approach to determining issues of fact or not to be “unduly cautious” in favour of a party where there has been deliberate non-disclosure by the other party[7] where it is well established that the process of negotiation toward settlement and ultimately trial is prefaced on a strong obligation for the parties to make full and proper disclosure.
THE EVIDENCE
[7] Chang & Su [2002] FamCA 156; (2002) FLC 93-117; In the Marriage of Weir & Weir [1992] FamCA 69; (1993) FLC 92-338 (“Weir & Weir”).
The wife
The wife relied on her affidavit sworn 5 July 2024. She gave evidence and was cross-examined. I observed the wife to be a direct, responsive, candid and honest witness.
At [14] the wife deposes that two apartments were sold in Country D netting $500,000 and $344,000 she says that the proceeds of the latter sale were initially deposited into her bank account in Country D but were later transferred to the husband’s cousin before being transferred to the husband himself.
The wife says that the husband maintained bank accounts in Country D after moving to Australia and transferred funds to his Australian bank accounts from time to time. His siblings were authorised to transfer funds on his behalf.
At [16] the wife deposes that the husband established a construction business in Melbourne J Pty Ltd in 2014 while continuing to own and operate a similar business in Country D. The husband was the sole director and later the sole shareholder.
The wife’s unchallenged evidence is that the husband managed the family finances and did so without consultation with her.
Relevantly, at [18] the wife deposes that in May 2017 the husband purchased a 50 per cent interest in an investment property at K Street, Suburb C. The purchase price was $1,503,500. Ms Desrosiers was an equal partner and contributed equally. The plan was to develop the property. Council permits could not, however, be obtained.
In May 2017 the husband paid a deposit of $190,000 for the purchase of property located at L Street, Suburb M again with a plan to develop. Ms Desrosiers again was a partner.
At [20] the wife deposes that in 2019 the family were granted permanent residency in Australia upon the husband’s application for a sponsored visa. In support of that application he declared the following assets:
(a)as at 10 January 2017:
(i)personal assets of $210,874; and
(ii)business assets of $176,566.
(b)as of 2018:
(i)personal assets of $378,801; and
(ii)business assets of $129,344.55.
The husband also submitted documents asserting total funds transferred to Victoria since arrival being $366,330.
The wife says that she is aware that the husband asserts no interest in the Suburb C property and claims to act as an agent on behalf of his brother-in-law, Mr B. She says that the husband did not make this assertion until after she had commenced these proceedings and had previously consistently maintained a personal interest in the investment property and consistent with his disclosures to the Department of Home Affairs.
In August 2021 the wife issued subpoenae to Ms Desrosiers, the husband’s business partner in the developments. The following documents were then produced:
(a)Declaration of Trust dated 19 December 2017 purporting to have been entered into between Ms Desrosiers (the Settlor) and the husband (the Beneficiary). The Trust sets out that the property was purchased as a joint investment between Ms Desrosiers and the husband with equal contributions and that they would each be entitled to an equal share in profit and/or rental. Ms Desrosiers, as the sole registered proprietor, deposed to holding a one half interest on trust for the husband.
(b)The contract of sale dated 6 May 2017 noted Ms Desrosiers, the husband and Mr N as purchasers. A Nomination Form nominated Ms Desrosiers as the sole purchaser.
A 10 per cent deposit of $150,350 was paid on 8 May 2017. The bank cheque was drawn from the husband’s company J Pty Ltd. The sum of $76,000 was subsequently repaid to the husband of behalf of Ms Desrosiers in instalments.
In August, the husband deposited instalments of $200,000, $19,000 and $6,000 into Ms Desrosiers’s bank account. The property was otherwise purchased with a mortgage.
The wife says that the husband’s refusal to acknowledge his interest in the Suburb C property caused her to bring an application to this Court joining Ms Desrosiers as a party in October 2022. That order was made by consent of 15 December 2022.
On 3 March 2023 orders were made by consent for the property to be sold. It was sold at auction for $1,450,000 in mid-2023. The sum of $245,552 remaining in trust is asserted by the wife to be the husband’s remaining interest. Ms Desrosiers has since been removed as a party.
The wife asserts that the husband’s contributions to the purchase price of the Suburb C property came from proceeds of sale of his apartment in Country D or his personal and business savings in Australia noted in his declarations to the Department of Home Affairs in his Visa application.
At [55] the wife asserts that the husband had savings of $116,198.61 in his personal CBA account as of the date of separation in November 2019. She says the balance was effectively transferred to other accounts including major withdrawals of $20,000 and $10,000. She says that the husband has refused to make disclosure or provide particulars of the transactions other than to say that they relate to his business activities.
The wife deposes that the husband has failed to comply with court orders for disclosure in respect of his personal bank accounts including in respect of deposits of $147,546 between 1 December 2022 and 9 April 2024.
The wife obtained by subpoena the husband’s rental application with O Real Estate dated 14 December 2020. He disclosed then an annual salary from J Pty Ltd of $340,000 inconsistent with his financial statement filed in this Court on 17 July 2020 deposing to an income of $18,000 per annum.
The wife asserts that the husband continues to own or have interests in properties in Country D. He has made no disclosure.
Mr F
Mr F is the son of the parties. He provided an affidavit for the wife affirmed 7 November 2022. He gave evidence and was briefly cross-examined. Mr F’s evidence corroborates much of the wife’s evidence. In addition, in cross-examination, he confirmed that his father used Mr F’s personal bank account for deposits.
Dr P
Dr P swore an affidavit on 8 November 2022 for the wife. He gave evidence was cross‑examined. He deposes to being a family friend of both the husband and the wife of some eight years.
Dr P deposes to being approached by the husband in respect of investing in the property development at Suburb C. The husband advised that he held a 50 per cent interest. Dr P was also approached as to a development at Suburb M. The development did not proceed and Dr P deposes to losing approximately $100,000.
At [10] Dr P’s unchallenged evidence is:
On several occasions, the precise dates I do not recall, [the husband] said to me words to the effect; “I am very wealthy in [Country D] as I own many properties there”. He told me he owns a few apartments, an office and a very expensive shop of which he owns a considerable share.
At [12] Dr P deposes engaging J Pty Ltd in May 2019 to undertake renovations to his own property. He deposes that the husband asked him not to transfer any funds into his business account but instead to pay in cash. He says he received an invoice from J Pty Ltd dated 2 June 2020 in the sum of $113,639.79 far exceeding the quote. He deposes:
… [The husband] provided me with details of two new accounts to transfer the payments to. The account details did not match the business account which I had previously transferred funds to. I paid the balance of around $62,000 to an account which [the husband] later told me belonged to his son, [Mr F].
The husband
The husband’s affidavit was sworn or affirmed on 4 July 2024 but not filed until 7:32 am on 25 July 2024 being the first day of the trial in this matter.
The husband was cross-examined with the assistance of an interpreter. Even accounting for the requirement for an interpreter, I found the husband’s evidence to be often non-responsive and evasive and consistent with the wife’s assertion of nondisclosure throughout these proceedings.
The husband’s credit was further and seriously compromised by it becoming apparent during his evidence that he was receiving text messages from three women associates sitting in the back of the Court. Some of those messages were retrieved. The messages included advice to the husband how to answer questions in respect of his disbursement of significant funds as alleged by the wife. The demeanour of both the husband and the woman called to the bar table to account for what might amount to tampering with a witness and/or contempt of court and/or perverting the course of justice was notable by a lack of contrition on the part of both.
The husband’s affidavit is flimsy in content and unsupported in many of its assertions. For example, he asserts that the property owned by the wife in Country D which she says has been on the market since 2021 and has a value of E$35,000 is, according to the husband, valued at E$700,000. He asserts that the wife retains jewellery, gold and furniture which the wife asserts have been retained by the husband with some corroborative evidence from Mr F.
The husband, for the first time, in his affidavit filed on the morning of the trial asserts that the wife retained “about $470,000” from the sale of an apartment in Country D.
The husband says that he was injured at the workplace in 2022 sustaining a serious injury and now receives WorkCover payments of $1,700 per week.
The husband at [59] and following references the purchase of the Suburb C property. He says that he made no contribution personally to the purchase but deposes at [67]:
About three weeks after the auction, as Tawab did not want to take part in the property development, I agreed with [Ms Desrosiers], inter alia, that:
(a) the [Suburb C] property would be purchased in her name;
(b) we would each contribute $250,000 towards the purchase;
(c) the balance of the purchase price would be borrowed;
(d) mortgage re-payments and other associated costs would be shared equally;
(e) I would manage the property development; and
(f) any profit or loss would be divided equally between us
At [69] the husband deposes to holding his 50 per cent share in the project development on trust at all times for Mr B.
Despite the wife commencing these proceedings on 6 May 2020 and despite subsequent orders for the joinder of interested parties, the said Mr B was not joined as a party where the husband asserts that the $245,000 is held on trust for him. Nor has Mr B provided an affidavit in support of the husband’s assertions. Mr B is the husband’s brother-in-law. Rather, the husband at [78] of his affidavit deposes that in about mid 2020 (presumably after the wife commenced proceedings in this Court):
… [Mr B] commenced proceedings against me in [Country D] in the [City Q Court] seeking to terminate the Contract and recover the monies being about $420,000 plus interest, that he had invested in the [Suburb C] property.
Similarly, the husband did not adduce evidence from Ms Desrosiers to corroborate his assertions in respect of the ownership and contributions for the Suburb C property.
At [88] the husband asserts that Mr B made instalment payments totalling $412,600 into his CBA account such to be applied to the Suburb C purchase.
Neither the husband’s affidavit nor his evidence in court address the wife’s claim that the husband has retained or disbursed for his own purposes the sum of $116,000 held in a personal bank account by him since separation.
THE PROPERTY POOL
The parties effectively agree the content of the property pool but subject, of course, to argument as to the following:
(1)whether the amount of $245,552 should properly be paid to the husband’s brother-in-law?
(2)whether the wife’s asserted six separate liabilities are properly debts of the marriage?
(3)whether an amount of $116,000 be added-back to the pool being the balance of the husband’s bank account at separation but now dissipated; and
(4)the status of the Country D judgment and the husband’s asserted liability to his brother-in-law.
For context, I set out the wife’s view of the property pool subject to the above:
PROPERTY Description Value 1. Balance of proceeds of sale of Suburb C (held on trust by Coote Family Lawyers) $245,552 2. Country D properties (husband) Not known 3. Country D property (wife) (on market for sale) E$35,000 4. J Pty Ltd (husband) $1,549 5. Motor Vehicle 1 (husband) $25,000 6. Motor Vehicle 2 (husband) $8,500 7. Cash in bank (husband) $8,030 Subtotal of Property $323,631
LIABILITIES Description Value 1. ANZ personal loan (wife) $10,150 2. Loan owing to Ms R (wife) $30,200 3. S Finance personal loan (wife) $24,242 4. U Finance loan (wife) $1,077 5. Credit Card (CBA MasterCard) (wife) $4,939 6. Centrelink debt (wife) $4,904 7. Country D judgment (husband) $400,000 Subtotal of liabilities $475,512
SUPERANNUATION Description Value 1. Super Fund 1 (wife) $26,096 2. Super Fund 2 (husband) $13,521 Subtotal of superannuation $39,617
Property and superannuation less liabilities Subtotal of property and superannuation $363,248 Subtotal of liabilities -$475,512 Total Net property -$112,264 PROPERTY POOL ISSUES
(i) The status of the monies held in trust $245,552
It is undisputed that these monies are held following the sale of the Suburb C property and prima facie being the husband’s 50 per cent share. The husband says that the monies are held in “trust” for his brother-in-law, Mr B. The husband says that his assertions are supported by a judgment of an Country D Public Court.
The husband relies on a judgment from the Country D Public Court. The translation of that judgment makes relevant reading. Firstly, the claims against the husband were threefold being:
(1)Proof of the Partnership;
(2)Claim of Share of the Partnership; and
(3)Claim for Litigation Costs.
The text of the judgment discloses that the claim for Share of the Partnership was abandoned effectively therefore seeking only a declaration as to the Proof of the Partnership. The husband gives no reason for the abandonment of the monetary claim by his brother-in-law.
Secondly, it is not disputed that this Court is not bound by the decision of the Country D Court nor is this Court a forum for enforcement of any such order albeit noting again that the claim for a Share of the Partnership was abandoned.
Notably, Mr B did not give evidence to this Court despite the specific orders inviting third party intervention and despite the wife’s long-term dispute as to whether Mr B’s claim is legitimate. Further, there is no evidence that Mr B has pursued or enforced his asserted entitlement in this Court or elsewhere. As such, I accept the submission of counsel for the wife that the principle in Jones v Dunkel[8] would be available to the Court being to take an inference that the honest evidence of the Mr B, if given to this Court, would not have assisted the husband’s case. In this respect, I note that the wife has long asserted contrary to the husband’s claim that Mr B is entitled to the monies held in trust and hence the husband has been on notice with a consequent onus to prove his case on the balance of probabilities.
[8] (1959) 101 CLR 298; [1959] HCA 8.
I do not accept the submission of the husband’s counsel that the only possible source of funds contributed by the husband to the purchase of the Suburb C property was from Mr B. To the contrary, the husband’s own documentary assertions to O Real Estate and the Department of Home Affairs give alternate sources for such funds.
Consequently, on the balance of probabilities, I do not accept that the husband is indebted to Mr B in the sum of $400,000 or at all.
(ii) $116,000 - bank account balance of the husband at separation
The husband’s affidavit is completely silent as to this issue.
The husband’s only explanation, put by his counsel in final submissions, was that the $116,000 was transferred from the husband’s personal account to his business account.
The parties separated finally on 1 November 2019. In December 2020 the husband asserted on an application for residential tenancy an annual salary of $340,000. The husband does not assert his workplace accident happening until 2022. He has since received workers compensation.
Whilst on notice as to the wife’s challenge as to reasonable expenditure in the sum of $116,000, the husband gives no evidence of any probity as to the particulars or reasonableness of the dissemination of the $116,000.
In all of the circumstances, it should be “added-back” to the property pool. In making this finding the Court again is mindful of the lack of disclosure made by the husband together with his lack of timeliness in filing affidavit material.[9]
[9] In the Marriage ofWier & Weir [1992] FamCA 69; (1993) FLC 92-338.
The Court is also mindful of the tenor of Full Court authority [10] that property of the parties or either of them that has been dissipated prior to the trial may be taken into account pursuant to either s 79(4) or s 75(2)(o) of the Act although such “add-back” may be exceptional.[11] Effectively, the test will be the reasonableness of the dissipation of the asset.
[10] Trevi & Trevi [2018] FamCAFC 173.
[11] C & C [1998] FamCA 143.
(iii) The wife’s claimed liabilities
The wife urges the Court to include in the property pool her personal liabilities totalling $75,512. The husband opposes this course.
The wife in her affidavit references these liabilities at [61]. First, it is clear that the liabilities have been incurred post separation. Second, the loan from Ms R has been obtained, at least in part, to meet legal fees in relation to both migration and family law matters. Third, a loan from T Finance is to assist the parties adult daughter with her university fees. There is no evidence that the husband was consulted. The other liability relates to a Centrelink debt incurred following separation.
Where I note that the wife is and has habitually been in employment albeit with limited income, I cannot be satisfied on the material provided that the wife has shown these loans to be “reasonable” expenses for the day-to-day needs of life. I am not persuaded, therefore, that these post separation debts personal to the wife should be included in the property pool.
The property pool for my determination, therefore, and where the parties do not seek any orders as to a superannuation split, comprises of the following:
PROPERTY Description Value 1. Balance of proceeds of sale of K Street, Suburb C $245,552 2. Country D properties (husband) Not Known 3. Country D property (wife) (on market for sale) E$35,000 4. J Pty Ltd (husband) $1,549 5. Motor Vehicle 1 (husband) $25,000 6. Motor Vehicle 2 (husband) $8,500 7. Add-back – cash in bank at separation (husband) $116,000 8. Cash in bank (husband) $8,030 Total property $439,631
SUPERANNUATION Description Value 1. Super Fund 1 (wife) $26,096 2. Super Fund 2 (husband) $13,521 Subtotal of superannuation $39,617
The total assets of the parties including superannuation is $479,248. In the context of the limited value of the pool and the minimal superannuation entitlements, it is proper to consider this matter on a “one-pool” basis.
CONTRIBUTIONS
The husband claims that neither he nor the wife had any assets or liabilities of significant value at the commencement of cohabitation.
The wife says that she owned a property in Country D the commencement of cohabitation. Oddly, the husband references that same property being gifted to him by his father, but registered in the name of the wife, in about 2006. He adduces no corroboration. The wife was not challenged on her evidence in cross-examination.
The marriage was essentially a traditional one with the husband working in his own business both in Country D and in Melbourne. The wife was primarily responsible for the children in the home but also was employed as a healthcare assistant in Australia and operated her own business in Country D.
The husband’s own affidavit references the losses made by him in property development and particularly in a property at Suburb M where he lost a deposit of $190,000. Where I accept the wife’s evidence that the husband was solely responsible for family finances and did so without consultation with her then this is a significant loss given the quantum of the property pool.
The husband concedes that he lost a further $65,000 in respect of work done and fees paid on the unsuccessful development of the Suburb M property.
The husband claims that he made non-financial contributions to renovations or improvements on the former matrimonial home in making and installing kitchen cabinets; renovating a bathroom; preparing for and painting the whole of the apartment. I can only assume that the wife was engaged in the care of the children at the time so as to allow the husband to carry out these renovations.
The wife says that since separation she has been responsible for the care of the children including as young adults. The wife said she received no financial support from the husband during the period she was stood down from her casual employment during Covid-19 when the husband’s bank account statement shows a balance of $133,217.65 as of 26 January 2020 the wife says that this was the period in which she was required to take personal loans or make borrowings albeit post separation for her basic living expenses.
The force of the wife’s claim for an adjustment by reason of contributions rest with her Kennon (supra) claim.
It is well established that allegations of family violence by themselves will not fall within the ambit of the Kennon consideration at s 79(4)(a)-(c) rather, the impact of the family violence may be relevant under s 75(2) should there be a resulted incapacity for employment or need for ongoing medical attention where there is obviously a consequent direct financial impact.
The issue addressed in Kennon, however, was where there is no obvious direct financial impact of the behaviour asserted. The Full Court in Kennon held at 84,290:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s.79. …
That is there must be an evidentiary nexus between the conduct of one party and the capacity of the other.[12]
[12] Saunders & Saunders [2019] FamCAFC 94.
However, in circumstances where direct and corroborative evidence might not be available due to the circumstantial nature of family domestic violence, the Court may take inferences of such a nexus. Again, in this matter where the Court prefers the credit of the wife over that of the husband and the husband’s affidavit is silent to such matters then generally, I accept the particulars of family violence set out in the wife’s affidavit at [23] and following.[13]
[13] Keating & Keating [2019] FamCAFC 46; (2019) FLC 93-894.
The wife in her affidavit deposes to violence of abusive and threatening types. She accuses the husband of controlling tendencies. She references physical violence. She references financial control in discouraging her from working or undertaking a tertiary degree. Her allegations are for the most part highly particularised including complaints to Victoria Police as for instance where she says at [25(b)]:
In [late] 2017, [the husband] and I had an argument. [The husband] hit me in the face with the back of his hand, breaking [my] teeth. He was wearing a watch at the time. [The husband] also grabbed my arms causing bruising and minor scratches. This incident occurred in our home. I attended upon [a dentist] to receive dental treatment.
At [26] the wife complains of sexual violence at the hands of the husband. At [28] - [29] the wife complains of stalking by the husband.
At [30] and following the wife deposes that in 2016 she had travelled to Country D. She received advice from her daughter Ms E, who had remained in Australia, of physical, emotional and sexual abuse perpetrated on her by the husband. The wife’s affidavit particularises those claims. The wife deposes that upon her return to Australia she continued to live at the Suburb G former matrimonial home. She says that she received threats from the husband to cancel her Visa and that he would not permit her to see the children if she separated. She says that she was subjected to further sexual assault.
In the context of this consideration I take into account the wife’s evidence that in November 2021 she received advice from the Department of Home Affairs of Notice of Intention to consider cancelling her Visa. I am satisfied on the balance of probabilities that the information provided to the Department came from the husband. I accept that the wife incurred legal fees of $16,000 to resolve the matter. In all the circumstances of the relationship as deposed by the wife, I consider this a further example of the husband’s controlling and coercive behaviour and hence an episode of family violence albeit one with direct financial consequences to the wife.
In all the circumstances, I am of the view that there should be a loading to the wife on account of contributions with emphasis placed on the matters considered in respect of the Kennon (supra) argument and post separation contributions.
SECTION 75(2) FACTORS
The wife is 46 years of age and in good physical health although she suffers from anxiety and depression which I accept results from the husband’s abuse. She has not re-partnered.
The husband is 52 years of age and appears to have re-partnered to one of the women present in court during the trial and as mentioned above.
The husband says he suffered a workplace accident and has ongoing WorkCover payments of $1,700 per week which I calculate to be roughly equivalent to the wife’s income. Again, the husband has made no proper or adequate discovery in respect of his business interests but where I accept that the business continues in some form or has the potential to do so. The husband has previously made assertions that the business once gave him an income of some $340,000 per annum. The husband’s bank account statements for the period 1 December 2022 to 9 April 2024 record deposits from his insurer totalling $147,546. The husband’s failure to make full disclosure does not enable me to find, whether or not he has continuing business interests in Country D although the wife asserts this to be the case.
The parties adult daughter Ms E continues to live with the wife. I accept the wife’s evidence that both Ms E and Mr F experience significant mental health issues and each have made attempts to take their own lives. I accept that the wife continues to provide both children with emotional and financial support.
I am of the view that in all the circumstances there should be an adjustment to the wife in respect of s 75(2) factors with emphasis on the husband’s failure to disclose his business interests and for the wife’s continued emotional and financial support of the two adult children together with evidence of potential income discrepancy between the husband and the wife.
The property pool is of minimal value, I am referred to the authority of the Full Court in Clauson & Clauson[14] where any adjustment pursuant to s 75(2) of the Act and more broadly s 79(e)-(g) need not necessarily be accommodated by a percentage adjustment but should be given a sense of circumstantial reality. As such, where the property pool has a net value of $479,248 then an adjustment of five – 10 per cent would give the wife only $23,962.40 or $47,924.80 which does not serve the intent of the adjustment process in the circumstances of this matter. I intend therefore to take a more holistic approach to the alteration of the parties property in respect of both their contributions and s 75(2) factors with emphasis on the husband’s failure to make proper disclosure and the less cautions approach available to me.
[14] [1995] FamCA 10; (1995) FLC 92-595.
FINDINGS AND CONCLUSIONS
I find that the husband has been evasive in his evidence both in court and by way of disclosure and as such I am able to take a less cautious approach in respect of the process under s 79 of the Act.
I accept the wife’s evidence generally and, in particular, as to the matters of family violence raised by her.
I take the inferences available to me that the family violence perpetrated on the wife has made her contributions to this relationship more arduous not least by the traditional nature of the relationship with its Country D origins and where the husband assumed sole financial responsibility without consultation with the wife.
I do not find on the balance of probabilities that the husband is indebted to his brother-in-law, Mr B in the sum of $400,000 or at all.
I find that the husband has not given reasonable or any explanation as to his disbursement of the $116,000 present in his bank account at the time of separation.
I find that the wife has made a superior contribution to the adult children of the relationship where those children continue to have special needs.
I do not include in the property pool the wife’s asserted liabilities obtained by her post separation. I propose to settle the property pool by the wife retaining the following: the balance of proceeds of sale of Suburb C $245,552 and the Country D property (on the market) $35,000. The wife would also retain her superannuation of $26,096.
The husband will retain the following: Country D properties in his name (not known); J Pty Ltd $1,549; Motor Vehicle 1 $25,000; Motor Vehicle 2 $8,500; cash in bank $8,030 and an add-back of $116,000 (bank account balance at separation) making a total of $159,079 value of assets to be retained by the husband. The husband would also retain his superannuation of $13,521.
I calculate, therefore, the wife would retain $280,552 (plus her superannuation) or about 63.8 per cent of the tangible property pool whilst the husband would retain assets of value $159,079 (plus his superannuation) or about 36.2 per cent of the property. Given my findings as to the husband’s evasiveness in disclosure of evidence together with my findings of contributions and giving reality to the relevant s 75(2) factors I am of the view that such a distribution of the assets of the parties would be just and equitable.
I repeat that neither party seeks a superannuation split and note that the parties respective entitlements are of minimal value in any event.
I will order accordingly.
I certify that the preceding one hundred and forty-seven (147) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McGuire. Associate:
Dated: 20 September 2024
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