Property – Court erred in double counting premature distribution of matrimonial property – Transfer from joint account to wife’s personal account was of historical interest only, whereas her dissipation of amounts transferred to her account were of critical importance
In Zao & Lee [2023] FedCFamC1A 232 (20 December 2023), the Full Court (McClelland DCJ, Jarrett & Riethmuller JJ) heard a wife’s appeal against property orders made by Altobelli J that included notional add-backs totalling $636,712 ([5]).
The $636,712 was comprised of withdrawals made by the wife from a joint account, a deposit for a real property and an add-back for gambling ([7]). The wife appealed and argued that the add-backs included $403,930 of funds already on the balance sheet – that the Court had “double-dipped” ([5]).
The respondent husband agreed that the adding back of the deposit ($57,330) was sourced from the withdrawals made by the wife from the joint account, such that the inclusion of both in the balance sheet was an error.
As to $145,570 of the controversial withdrawals, the Court said (from [11]):
“As to the balance of $145,570, the evidence was that the [wife] transferred these funds from [a joint account] … to her own account … excluding the [husband] from the use of these funds … The [husband] also accepts that this amount has been included twice in the balance sheet. It should only be included once. However, the concession that this amount ought to be an ‘add-back’ at all is curious. The balance of the [wife’s] … account as at the date of the trial was in the balance sheet as found by the primary judge … The transaction simply moved the funds from one account (a joint account) to another in the [wife’s] sole name. The funds were not otherwise dissipated by that transaction and without subsequent transactions dissipating them, they would have been available for distribution in these proceedings as part of the balance of that account. It is not so much the transaction moving the $145,570 from one account to another which is objectionable, but rather it is any subsequent disbursal of those funds for the [wife’s] own purposes, rendering them unavailable for division between the parties that is the evil. ( … )
( … )
[13] … [T]he concession that $145,570 ought to be ‘added-back’ to the pool simply because it was a transfer from the parties’ joint account to the [wife’s] own account without more, was probably erroneous. … [T]he fact of the transfer from the joint account to the [wife’s] account is of historical interest only. What is of critical importance is the reason for the dissipation of amounts subsequently withdrawn from the [wife’s] account.
[14] … [The wife’s] case is that [amounts included as add-backs] … were made using the $145,570 transferred to her account from the joint account – an amount already taken up … This is a question of fact which depends upon the evidence led before the primary judge.
( … )
[25] … [T]he [wife] submits before us that the evidence before the primary judge was that the source fund for the transactions … were ‘a myriad of transactions spanning over some three years including the deposit of the amount of $145,570’ … Yet, save for the transactions forming the relevant items, the primary judge was given no assistance to identify how those statements and the myriad of transactions demonstrated what the [wife] now argues. Neither could the [wife] take us to any evidence or explanation other than that which we have set out above on this issue to demonstrate the fact of double counting.
[26] The question of whether the add-back items … were double counted is a question of fact to be determined on the evidence presented at the trial. The evidence to which we have been taken does not persuade us that the primary judge [erred] …”
The Court adjusted the sum payable by the wife to the husband to reflect the double-dip that was agreed. The wife’s appeal was otherwise dismissed. She was ordered to pay the husband’s costs of the appeal, fixed at $13,000.