YASHAL & YASHAL

[2012] FamCA 528

FAMILY COURT OF AUSTRALIA

YASHAL & YASHAL [2012] FamCA 528

FAMILY LAW – PROPERTY – undefended by the Husband

Family Law Act 1975 (Cth)

Townsend (1995) FLC 92-569

APPLICANT: Ms Yahal

RESPONDENT: Mr Yashal

FILE NUMBER: MLC 10458 of 2011

DATE DELIVERED: 28 June 2012

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 28 June 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Babayannis

SOLICITOR FOR THE APPLICANT: Sabelberg Morcos Lawyers

Orders by consent

1. Within 14 days from the date of being served with these orders the Husband do all such acts and things and execute any documents that may be required to transfer all of his right, title and interest in the property situate at and known as … M Street, Suburb H in the State of Victoria more particularly described in Certificate of Title volume … Folio … (“the Suburb H property) to the Wife at her expense.

2. Within 14 days from the date of being served with these orders the Husband do all such acts and things and execute any documents that may be required to transfer the entirety of the funds in the ANZ term deposit account number …22 to the Wife.

3. Within 14 days from the date of being served with these orders the Husband do all such acts and things and execute any documents that may be required to transfer to the Wife, at her expense, the Holden Motor Vehicle Registration … .

4. In the event that the Husband fails to comply with any obligations pursuant to these Orders, pursuant to Section 106A of the Family Law Act 1975 a Registrar of the Family Court of Australia may execute any document for and on behalf of the Husband and to otherwise do all acts and things necessary to give effect to these orders upon the Registrar being satisfied that the Husband has failed to comply with his obligations pursuant to these Orders.

5. Unless otherwise specified in these Orders and save for the purpose of enforcing any monies due under these or any subsequent Orders:

   a.Each party be solely entitled, to the exclusion of the other party, to all property (including choses-in-action) in the possession of that party as at the date of these orders;

   b.Each party remain responsible for any debts or loans in their sole name;

   c. Each party be solely liable for any liability encumbering any item of property to which that party is entitled pursuant to these Orders and any credit card debts and loans in their own name generally; and

   d.Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

6. The Wife’s lawyers serve a copy of these orders on the Husband via email to … within 14 days from the date of these orders.

7. Within 14 days from the date of these orders, the Wife’s lawyers serve a copy of these Orders on the ANZ Bank and the Commonwealth Bank.

8. Upon compliance with orders 1 to 7 hereof all previous orders and injunctions be hereby discharged.

9. The Husband pay the Wife’s costs of and incidental to this proceeding fixed at $45,908 within 21 days from the date of these orders.

10.All applications are otherwise dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Yashal & Yashal (No. 2) 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 10458 of 2011

Ms Yashal

Applicant

And

Mr Yashal

Respondent

REASONS FOR JUDGMENT

1. On 22 November 2011, Ms Yashal filed an application seeking final orders against her husband, Mr Yashal.  For the purposes of these reasons, I shall refer to the applicant wife as “the wife” and to the respondent husband as “the husband”.

2. The application filed sought that the matrimonial assets of the husband and the wife be awarded 75 per cent to the wife and 25 per cent to the husband. In a hearing before me on 8 June, it was agreed that the drafting left a little to be desired and that clearly that did not enable the court to make orders under s 79 of the Family Law Act 1975 (Cth) (“the Act”). The matter was adjourned until today.

3. Today I have heard the application on an undefended basis and have had significant assistance from counsel who has drawn together what has been something of a messy task.  For that I am grateful and I suspect so should the wife. 

4. The first issue relates to the question of the matter proceeding on an undefended basis.  When the application was issued, it was listed for hearing urgently because of injunctive orders that were sought.  A variety of orders were then made and the case may best be described as having limped forward since that time. 

5. A variety of orders were made requiring service on the husband and all of those can be seen to have been satisfied by an affidavit of the wife’s solicitor, and I am told today that that has predominantly been by email.  None of those emails has bounced back, but more importantly, there has been no response from the husband. 

6. On the evidence, there is no reason for me to be other than satisfied that the husband is aware of the proceedings, aware of his obligations under the variety of orders that have been made, and more importantly, aware of his obligation to assist the determination of the division of property as between he and the wife.  He has had every opportunity to attend either personally or by lawyers, and the best expression I can think of is that there has been stony silence. 

7. I am satisfied in the circumstances that natural justice has been provided to the husband and he is aware of the proceedings today and has chosen not to participate, and on that basis, there is no reason why the wife’s application should not proceed on an undefended basis.  In addition, there is no response from the husband, and as such, the only application I have before me is that sought by the wife. 

8. Counsel for the wife today handed to me a document which sets out the orders that the wife seeks.  That has not been sent to the husband, but having regard to the way the affidavit is drawn, the document seeking the final orders simply reflects what the wife is seeking, so to that extent, the husband has not been prejudiced. 

9. I am asked to determine the matter on the basis of the uncontested evidence.  That evidence is set out in the affidavits of:

   (a)the wife; 

   (b)Ms T, who is a valuer; 

   (c)Ms N, who has given evidence about the parties’ son’s needs;  and

   (d)Mr P in relation to the value of a motor car. 

10. There is no reason for me not to accept that evidence.  In relation to the question of the valuations, each of the deponents has set out their respective position and qualifications and how they have determined the valuation.  On that basis, I am prepared to treat their opinions as expert evidence. 

11. The parties married in Egypt in 1978, and did not live together prior to their marriage.  They migrated to Australia in 1992 and had lived together as a couple until separation, in January 2010, at which point the husband left Australia.  The wife sought a divorce which was granted by the Federal Magistrates Court in February 2012. 

12. The wife is currently 58 years of age and the husband 62 years of age.  This is a very long marriage.  There are two children of the relationship, Mr D, who was born in 1979 and Ms S, who was born in 1987.  The evidence to which I shall refer in a moment about Mr D is that he is afflicted by significant disabilities, and at the age of 33, one can well imagine how difficult a task that is for the wife.  She receives no assistance financially or physically from the husband.  Ms S is still a student in a tertiary course, but no doubt receives assistance from the wife. 

13. The parties were both qualified professionals.  The wife began married life as homemaker and has since that time not worked in her profession.  Having regard to her age, I have concluded that based on her medical condition, it is unlikely that she would earn income from that profession in the future.  The husband, however, seems to have engaged in his profession internationally, and the best evidence that is available at the moment is that he is working for an international organisation.  The precise details remain unclear, but most importantly, he has not bothered to tell the court just exactly what he is doing. 

14. The period between the commencement and conclusion of the marriage is largely uncontroversial.  The wife was the traditional homemaker and parent raising the children, and the husband was the income provider.  It is not asserted significantly in this case that the adult son was any more difficult than one would expect and it is not suggested that the wife should be given any greater credit than the husband for her contribution over his contribution up until the time of separation.

15. On any view of the evidence, with the wife looking after that homemaker role and the husband providing the income for the family, the parties were able to acquire a property in which they lived and which is now the family home.  That property is unencumbered.  The husband seems to have been able to put money aside, perhaps by the use of a corporate entity which is known as E Pty Ltd.  That seems to have been the professional entity, but in any event, the evidence shows from the wife’s diligent searches that there are a variety of bank accounts in Egypt.  Some of those details are out of date, but that is the best evidence the wife has.  

16. On any view, at least around the period immediately after separation, the husband had at his fingertips significant sums of money.  The wife has been able to trace from the Australian bank accounts, the husband has withdrawn a large sum of money from the corporate entity’s account.  On the evidence, I am satisfied that the husband drew $279,000 or thereabouts from the business account, and there is no explanation as to what has happened to it. It may very well have been used for business expenses, but on the other hand, the husband has not told the court just exactly what has happened to it. 

17. By virtue of some orders which froze the company’s accounts, there is currently $115,000 in a term deposit which is in the name of the husband, presumably come from his resources and exertions and that of the company.  There is also $91,000 sitting in a company bank account.  The company is under the control of the husband and has been since separation.

18. Up until separation, it is hard to distinguish between the parties’ contributions.  Subsequent to separation, the husband has not provided any financial support and the wife has been dependent upon the taxpayers of Australia.  True it is that she has had the benefit of an unencumbered home, but she has also had the responsibilities of Mr D. 

19. The evidence before me is that Mr D suffers from severe medical conditions.  He was diagnosed with an intellectual disability.  He has epilepsy and has had an inability to communicate since a child.  He has been further diagnosed with autism.  He required a high level of care for which the wife was mostly responsible. 

20. Before me is an affidavit from Ms N who is the chief financial officer of B Disability Support Services.  This witness was asked to provide an estimate of the likely costs that Mr D will need to have expended if he remains supported by the service.  The witness was unable to be precise about what it would cost because she did not know the figures of Mr D’s expenditure personally.  She has, however, estimated a number of things, including accommodation and other needs.  It is quite clear that on Mr D’s Centrelink benefits, there will be a significant burden either on the community or on the wife.  I am satisfied that he will be a very significant demand on the wife in the years ahead. 

21. The wife’s problems are compounded by the fact that she was treated for cancer in 1995, remained in remission until 2009, and since then has had ongoing cancer treatment, including both chemotherapy and an anti-hormone treatment.  That means, on any view, that her future health situation is uncertain.  That is relevant for two purposes:  first, the fact that I could not expect her to be in an employment situation having regard to her age, but also, the demands on her because of Mr D.  There will be difficulties for her in the future. 

22. In terms of the period since separation, without assistance from the husband and the demands on her for the support of Mr D, a very significant contribution has been made by the wife. 

23. Section 79(4) of the Act requires the court to make an assessment of the whole of that contribution. In my view, the contribution ought to be assessed at 55 per cent to the wife and 45 per cent to the husband.

24. The disparity at 10 per cent, which is reflected in the pool to which I shall refer in a moment, seems to me to be well within the range of probable outcomes in a case if contested, and it seems a fair and just assessment in the circumstances. 

25. If I then turn to the s 75(2) factors, there is a disparity between the parties’ incomes and earning capacities.  For the reasons I have outlined, I am satisfied that the wife is not going to be able to earn the income that the husband could earn, and probably is earning.  It is also clear that the wife is a dependent upon the Australian taxpayers.  Any order I make today is unlikely to remove that burden, and doing the best I can with the evidence available to me, the pension is likely to be an ongoing requirement. 

26. Whilst there are no children under the age of 18 years to whom the Act applies in this case, the wife will have the legal and moral responsibilities for assisting Mr D into the foreseeable future. There is every reason in this case to make an adjustment in favour of the wife. It has been suggested that that assessment should be 10 per cent, and I think that is well within the range. On that basis, an assessment of the two steps brings the total to 65 per cent to the wife and 35 per cent to the husband.

27. What must be just and equitable is the underlying value of what the parties receive.  What must also be assessed is the gap between the parties.  In other words, is 65 per cent versus 35 per cent, and the gap between those figures a just and equitable outcome in the circumstances?  Having regard to all of the evidence that I have been given, there is no reason for me, with this pool of assets, to have any concerns. 

28. I turn then to the pool.  The pool of assets is at best nebulous, having regard to the lack of assistance from the husband, because most of the assets over which he can be presumed to have had control are out of the country. 

29. I have evidence of the value of the home, which is unencumbered, at $650,000, and I know from the evidence that there are bank details in Australia, which are also identifiable.  I know that the company which is controlled exclusively by the husband has a bank account.  I do not know what the balance sheet shows, but presumably if there are creditors, they are going to be chasing the husband rather than the wife.  They do not seem to be claiming at the moment and the balance seems to have remained stagnant in the bank account.  I am aware that the husband has taken $279,000 or more from the account. 

30. Traditionally, money that has gone, and is no longer in existence is money that should be ignored because s 79 requires the court to divide assets. If it no longer exists, it cannot be divided. However, there are circumstances where a court should notionally add back assets which it has evidence of the existence at some particular point in time. In Townsend (1995) FLC 92-569 the Full Court referred to a situation where a party had prematurely taken an asset and disposed of it unilaterally. That is exactly what the husband has done here, and the evidence supports the conclusion that he has taken the $279,000. The evidence also supports the fact that there are international bank accounts, all of which are under the husband’s control.

31. The evidence of those bank accounts relates to dates that have long passed, but I see no reason why, as he has had exclusive and unilateral control of those accounts, I should not presume that he has done what he wanted to do with them.  In any event, it seems to me that all of those are assets that I should add back, because he has retained them and made a premature distribution to himself, to the exclusion of the wife.  I am comfortable, therefore, in adding back the value of the money drawn by the husband, together with what is known to have existed, in respect of the HSB account as of 30 September 2010.  The Commercial International Bank of Egypt also had $111,000 or thereabouts at that time. 

32. The other assets in the pool relate to the furniture and chattels in the former matrimonial home.  In a pool of an assessment of around $1.4 million, the chattels are put by the wife on the basis of an admission against interest of about $10,000, and that is hard to dispute. 

33. There is also a Holden motorcar.  The wife has gone to the trouble of getting that valued, and I accept the expert’s value at $11,600.  All in all, there is clearly a pool of about $1.4 million.  Sixty five per cent of that would mean that the wife would be entitled to more than the equity in the home, the ANZ bank term deposit, the Holden motor vehicle and the chattels. 

34. Counsel for the wife said to me that his client acknowledged that the recovery of 65 per cent of that pool would be an academic exercise and she is content to take the assets that she has asked for today, which in reality amount to about 56 per cent of that pool. 

35. Section 79(2) requires the court not to make an order, unless it is satisfied that it is just and equitable to do so. Having regard to the concession by the wife that she is content to take those assets and leave the husband to his own devices in respect of the balance – he having not given any clear indication of what the evidence is about his assets, I am satisfied that it is a just and equitable determination to provide the wife with the house, the term deposit, the car and the chattels.

36. Having made that determination, the wife then seeks her costs. Costs pursued by her total $45,908. Section 117 of the Act provides that each party to litigation shall bear their own costs. The exception to that rule is if the court is satisfied that there are justifiable circumstances to depart from the principle, and if the court is contemplating so doing, it must take into account the matters set out in s 117(2A) of the Act. The first question, therefore, is whether or not there ought to be an order for costs made against the husband. I cannot think of a better example of a situation where someone refuses to comply with court orders, puts the wife to the trouble of proving things, such as the value of her motor car, making her prove every issue associated with the contribution, including the contribution to a disabled adult son.

37. There are justifiable circumstances, therefore, to make an order for costs. Taking into account s 117(2A), the husband has at his fingertips about 44 per cent of a pool of $1.4 million. I can conclude that he is not impecunious. On the best evidence of the wife, he is professionally qualified and working for an international organisation. It seems unlikely that he is struggling. There are also considerations about whether he has complied with court orders. Orders were made that he provide necessary documents that would enable the assessments that I have just done, to be done much more expeditiously. He has failed to comply with court orders. There are no legal aid considerations here.

38. On that basis, I am satisfied that it is appropriate to make an order for costs. The $45,908 sought by the wife is an indemnity costs order. The wife’s solicitor is not in a position to produce the agreement as she would be required to do, but it seems clear from what counsel told me that the wife agreed that she was paying costs in the vicinity of $350 per hour plus, no doubt, extras. $350 per hour is a significant sum over and above the scale set out to the schedule to the Family Law Rules 2004. However, having regard to the document that I have been given, setting out step by step all of the things for which the wife has been charged, it seems not unreasonable to look at those costs in the light of what had to be done.

1. The question is whether or not the court should depart from the principle that parties’ costs be fixed according to the schedule, rather than an indemnity cost basis.  This is a case where the husband has done nothing to assist and the wife has chosen to go to a lawyer who has done her best to try and sort the matter out.  The lawyer is entitled to charge more than the scale, having regard to the complexities of the matter and the wife is content to pay it.  That particularly applies in respect of counsel’s fees in this case, which are higher than the scale.  The categories of cases in which indemnity costs could be considered are not closed.  This is an example where an indemnity should be made.  I am satisfied under the circumstances that even if an indemnity costs order is made, the sum of $45,908 is one which is reasonable, having regard to what the wife had to do to get this far.  Costs are not intended as a punishment.  They are intended to compensate the party who has had to do something to get the result that they have ultimately received and to which they are entitled. 

I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 28 June 2012.

Associate: 

Date:  11 July 2012