Topp & Topp

Case [2024] FedCFamC1F 626

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…

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AGLC
Topp & Topp [2024] FedCFamC1F 626
Case
[2024] FedCFamC1F 626
Decision Date

CaseChat Overview and Summary

The case of Ms Topp versus Mr Topp involved a dispute over property settlement following the separation of the parties. Ms Topp sought a fair distribution of the marital assets, arguing that her contributions to the marriage and post-separation were disproportionately burdensome due to the husband's conduct, including instances of family violence. The primary legal issues before the court were whether the husband had made full and proper disclosure of the assets and liabilities, and what adjustment should be made to the wife's contributions and s 75(2) factors in light of the husband's non-disclosure and the family violence.

The court found that the husband had failed to make a full and proper disclosure of the assets and liabilities. This failure, combined with his evasiveness and lack of explanation regarding certain financial transactions, justified the court in taking a less cautious approach in evaluating the evidence. The court accepted Ms Topp's evidence regarding the family violence and its impact on her contributions to the marriage. Additionally, the court held that certain post-separation liabilities incurred by Ms Topp were not reasonable and thus should not be included in the property pool.

In making the final orders, the court applied a holistic approach to the distribution of the assets, considering both the contributions of the parties and the s 75(2) factors. Given the minimal value of the property pool and the husband's failure to provide proper disclosure, the court ordered that Ms Topp retain 63.8% of the net property, while Mr Topp retained 36.2%. This distribution was deemed just and equitable considering the circumstances of the case.

The final orders of the court directed that certain assets be distributed to Ms Topp, including the balance of proceeds from the sale of a property and her superannuation. The husband retained other specified assets, including his superannuation and certain properties. Each party was to be solely responsible for any liabilities attaching to the assets they retained or incurred post-separation. The court also noted that the orders were intended to finally determine the financial relationship between the parties, avoiding further proceedings.

Orders

Orders of the court

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.

Background

Background to the litigation

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.

Evidence

Evidence Before The Court

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.

Decision

Reasons for decision

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.

Ratio Decidendi

Legal Principle Established

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: 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