The world's largest property settlement?

Ah, those Russians.

If you saw the news last week you may have seen a story or two about this case.

Dmitry Rybolovlev and Elena Rybolovlev's property settlement has been finalised by a Swiss Court - and the sums involved are staggering.

According to the media reports Mr and Mrs Rybolovlev met as university students in Perm, Russia and married in 1987. Mr Rybolovlev trained as a doctor but made his fortune by developing the potash company Uralkali and transforming it into one of the world's biggest fertiliser producers. Mr Rybolovlev sold his controlling interest in Uralkali for a reported $6,500,000,000.

The couple separated in 2008 and have been contesting their property division in the Swiss courts ever since.

While the Court earlier froze their assets, apparently the proceedings did not stifle Mr Rybolovlev's spending/investing. According to media reports trusts in the name of their eldest daughter, Ekaterina, have purchased items including a 66% share in the Monaco Football Club (which last year spent £146,000,000 on player signings), Skorpios - the private Greek island previously owned by Aristotle Onassis - for $150,000,000, Donald Trump's former mansion in Palm Beach and an US$88,000,000 penthouse apartment in New York. Mr Rybolovlev also apparently has a 9.7% stake in the Bank of Cyprus and lived in a $300,000,000 penthouse in Monaco.

The Court ordered that Mrs Rybolevlev receive $4,500,000,000 - almost half of the couples net worth. The ruling includes ownership of two homes in Cologny, Geneva, a property in Gstaad, and items of art, antique furniture and jewellery.

While Mrs Rybolovlev's lawyer said that the result was "a complete victory" apparently there may be a problem getting the cash portion of the judgement as much of the couple's assets were transferred to Cyprus in 2005 and there are questions surrounding the Swiss Courts ability to order the transfer of funds. 

Indications are that the decision is going to be appealed by Mr Rybolovlev.

Whether it's the largest property settlement or not is debatable - so many property settlements are by their nature private matters not reported on in the media. But this one has to be right up there towards the top.

Use of family law court documents by the ATO

In 2009 the Australian Taxation Office (ATO) commenced an investigation into the activities of a man given the pseudonym of Mr Darling. At that time Mr and Mrs Darling were involved in litigation before the Family Court in relation to their property division dispute.

In December 2010 Mr and Mrs Darling consented to their property division matter being dismissed by the Court without resolution. However, prior to the dismissal of proceedings various documents had been filed with the Court by both parties and the ATO had (without the knowledge of the parties) sought and been given access to the Court file. 

On 3 July 2012 the ATO Commissioner sought an Order that the Commissioner of Taxation by released from the implied obligation not to make use of documents filed in the proceedings for purposes other than those of the proceedings, and to make use of the documents for the administration of the Income Tax Act 1936 and/or the Taxation Administration Act 1953 in relation to Mr Darling and his related entities in respect of the income years ending 30 June 1991 to 30 June 2010 and the determination of any objections to assessments of tax, penalties or interest issued in respect of those tax years.

In March 2013 the ATO's application was rejected by the Court.

The Court held that the Commissioner remained under an implied obligation not to make use of the documents for a purpose not related to the family law litigation.

The Judge said the purpose of the implied obligation was “to preserve the parties’ privacy and to encourage full and frank disclosure”, both of which concepts were “of particular importance and sensitivity in relation to proceedings in this court”.

Her Honour noted that a person may be released from the implied obligation if there are “special circumstances” but that there was "very real force in the submission made on behalf of the husband that the Commissioner has not specified the purpose for which the documents are required and on that basis I could not be satisfied that there [are] “special circumstances” nor whether the release from that obligation is necessary and in the public interest to enable the Commissioner to fulfil his statutory function."

The ATO appealed that decision. Which brings us to the case of the Commissioner of Taxation and Darling [2014] FamCAFC 59.

On appeal the ATO's application succeeded.

The Court held that "In our view the most important consideration is whether or not granting the Commissioner relief from the obligation is likely to discourage litigants from making a frank disclosure. There is already a heavy obligation on litigants in Family Court proceedings to make such a disclosure, and they are required to provide a written undertaking to the court that they have done so. Most importantly, it is vital to recognise that there is already a disincentive to litigants to be frank with the Family Court about tax evasion because it is (or should be) well-known that the Court can and does refer such matters to the authorities for investigation."

The Full Court concluded that while there is a range of competing considerations discretion should be exercised in favour of the Commissioner having use of the documents for the following reasons including:

1.      The Commissioner is performing an important public duty. The public interest is advanced by ensuring all taxpayers pay their fair share of tax.

2.      The Commissioner is engaged in a substantial, targeted audit. It is not a “random audit”.

3.      Although many of the annexures to the affidavits may be available to the Commissioner from other sources, the parties’ own assertions about the history of acquisition of assets would be available only to the Commissioner by interview with the parties in which they may have an incentive not to be frank.

4.      There are restrictions on the way in which the Commissioner can use the information obtained from the court file which would ensure that the documents do not venture into the public arena, thus ensuring there is no breach of section 121 of the Family Law Act.

5.      The affidavits and financial statements were sworn by the parties for the purposes of the proceedings and therefore in the expectation that they might be read in open court.

6.      Albeit brief, and expressed in general terms, the officer of the ATO sufficiently stated the purpose for which the documents were required.

Despite success in this case it does not necessarily correspond that there will be a flood of applications by the ATO to make use of family court documents. According to an article in the Sydney Morning Herald by Michaela Whitbourn, a spokesman for the ATO said it did not expect an increase in the number of cases in which the Commissioner sought access to Family Court documents.

What is a de facto relationship?

Usually when people come to me for advice about property division, and they aren't married, they acknowledge or assume that they were in a de facto relationship. But occasionally a matter comes along where careful consideration has to be given as to the legal nature of a relationship. 

The Family Law Courts have power to make orders in relation to property division between people who are or were married and those who are or were in a de facto relationship - outside of those circumstances the Court does not have power to makes orders.  It is therefore paramount, if there is any question as to the legal definition of a relationship that you carefully consider the definition of a de facto relationship. 

Section 4AA of the Family Law Act provides the definition of a de facto relationships. 

According to that section a person is in a de facto relationship if:

• the persons are not legally married to each other; and
• the persons are not related by family; and
• having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.

It is important to note that a person can be in a de facto relationship while married to another person or while in a de facto relationship with another person. 

Section 4AA goes on to say that the circumstances of the relationship may include:

• the duration of the relationship;
• the nature and extent of their common residence;
• whether a sexual relationship exists;
• the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
• the ownership, use and acquisition of their property;
• the degree of mutual commitment to a shared life;
• whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
• the care and support of children; and
• the reputation and public aspects of the relationship.

International child abduction

You may remember the sad case involving four sisters – the “Italian case” as it was sometimes referred to in the media.

The case involved a dispute between the parents as to whether their children should live in Italy (where they were born, where they had lived throughout their young lives and where the father was from) or Australia (where the mother was from). The mother had removed the children from Italy to Australia, where she wished for them to remain, without the consent of the father and the father wished for the children to be returned to Italy. The proceedings before the Court involved an application for the children to be returned to Italy – not to determine how much time they should spend with either parent.

Cases such as this – where a child has been removed from one country to another – involve complex issues above and beyond standard family law considerations.

The Hague Convention on the Civil Aspects of International Child Abduction is an international agreement which provides for children abducted or retained in another country to be returned to their former country of residence.

An application under the Convention - made by the Central Authority from each country, not by the parent themselves - can only be made to or from a country that has signed the Convention. 

Australia is a signatory to the Convention. As are 91 other countries:

Albania, Argentina, Austria, Belarus, Belgium, Bosnia and Herzegovina, Brazil, Bulgaria, Burkina Faso, Canada, Chile, China, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Ecuador, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Republic of Korea, Latvia, Lithuania, Luxembourg, Malta, Mauritius, Mexico, Monaco, Montenegro, Morocco, Netherlands, New Zealand, Norway, Panama, Paraguay, Peru, Poland, Portugal, Romania, Russia, Serbia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Macedonia, Turkey, Ukraine, UK and Northern Ireland, USA, Uruguay, and Venezuela.

Japan is the most recent addition to that list – it only joined on 1 April 2014.

Australia also has bilateral agreements with two other countries: Egypt and Lebanon. The Federal Government will provide assistance to families affected by abduction to those two counties.

Cases involving the Convention are obviously highly emotional and difficult cases – but the Convention’s role is to provide some framework for the dispute and reflects an agreement amongst 92 countries that the “home” country is the correct forum for the dispute to be resolved in.

In cases involving countries that are not signatories to the dispute parties find themselves at the mercy of the laws of the country that the children have been taken to.

Who pays birth expenses?

Almost hidden amongst the 698 sections of the Family Law Act are six little used sections on the father’s liability to contribute towards the child bearing expenses (including wages and medical expenses) if he is not married to the mother of the child.

I say little used as in a database search I could only find 3 reported cases that dealt with the issue at all – and none on this issue specifically.

However, a recent case from the Federal Circuit Court has served as a reminder of the potential of this small part of the Act. The case is Abrahams and Simm [2014].

In that matter the mother made an application to the Court for “childbirth maintenance” in relation to a child who was born in 2012.  The parties separated prior to the birth of the child.

The mother sought a total of $27,061, being $15,610 for maintenance for her and $11,451 being medical expenses in relation to the pregnancy and birth. The mother submitted that she had properly identified and particularised the costs associated with the pregnancy and birth of the child. She further submitted that the costs and expenses claimed were reasonable in all the circumstances.

The father acknowledged that he was the father of the child and proposed that he pay the mother the sum of $7,000. The father also sought that the mother pay his legal costs for the matter. The father submitted that the mother’s evidence was lacking in justifying all of the items claimed (e.g. there were no pay slips), not all of the items claimed were reasonable, his uncommitted income did not enable him to pay and he should be responsible for half of the expenses properly assessed not the whole amount.  The father also claimed that the mother’s entitled to the “Baby Bonus” should be factored in.

The Court ordered that the father pay the mother the sum of $14,000.

The Court found that a number of the medical expenses claimed by the mother were not reasonable, including a “doula” and a “settling swing”. Additionally, the Court agreed with the father that he should not have to pay for the total of the expenses – only half. The Court rejected the father’s claim that the mother’s entitlement to government benefits, including the “Baby Bonus” should be taken into account. This is in line with section 67C of the Family Law Act which expressly states that the Court must disregard any such entitlement.   

It will be interesting to see if more cases appear relying on these sections.

 

Of note, there is also scant cases on obligations to pay child birth expenses for people who are married and separated (which are covered by other parts of the Family Law Act).

The views of a child

The Family Law Act provides that the views of a child can be considered in determining what arrangements are in their best interest following the separation of that child’s parents.

The Courts most often obtain the views of a child with the assistance of an expert counsellor who will meet with the child in an environment far less stilted and foreign than a courtroom and talk to the child about their relationship with both parents and any other concerns they may have about future arrangements. That counsellor then prepares a report for the Court.

A child won’t be required to give evidence in a courtroom. This is due in great part to a concern as to the psychological harm it would do a child to have to sit in front of both parents and state a preference between the two of them. But it is also done this way – through the help of experts – precisely because the counsellor’s are experts – they have the skills to ask trick questions and listen for an answer that may be hidden.

Time and again the view provided by a child to a Court counsellor will be a shock. Not necessarily to the Judge, or even the lawyers, but to the parents themselves.

This shock is somewhat an understandable reaction to a very stressful and emotional situation - by the time a matter has reached final hearing parents are usually entrenched in their dispute. They have formed a firm view on why they are right and why the other parent is wrong.

But central to family law litigation is a child. A child who may have been expressing their view all along.

In a case from late last year, Delahunty & French, the Court went so far as to rebuke both parents for their lack of focus on their child.

In that case, the Court appointed expert, known as Mr P, became aware of a story that the child had written at school. The Court noted that while this piece of writing may not have concerned the teacher or the school, it was certainly of concern to Mr P.

The heading of the document was “children should have a say.” The child wrote that adults buy and build houses and children should at least get an opportunity to decide where they lived and who they wanted to live with.

In delivering judgment the Court noted that much of the evidence was about the parents “even though they may not have seen it that way”. The Judge noted that the child had witnessed many very bitter exchanges between her parents, including on one occasion when the police were called to her school assembly and following one such incident the Court noted "the parties had a dispute about what had happened in emails thereafter and again. it had nothing to with the child."

So how can you spot the views of a child during a dispute without it ever getting to the point that the parties in Delahunty & French did?

I think some clues can be found in the phrases I have seen repeated time and again over the years:

• “Please stop talking badly about each other in front of me. Even though you hate them they are still my parent. It makes me feel bad when you talk about them like that.”
• “Please don’t talk about me as if I need to be managed. If I hear that you would rather go away with the girls on “your weekend” I feel like you don’t want me.”
• “Stop telling me I’m being dramatic. I’m just sad/scared/hurt/frustrated/ disappointed/angry/depressed about what is happening.”
• “When all you talk about is who is getting the house or the car or the fridge I think that all you care about is stuff and not me.”
• “Please don’t throw away a gift I receive from them. It makes me feel like I can’t share happy things with you.”
• “Your new “friend” is not my friend. Sometimes I want to spend time with just you.”
• “Please get on the same page! When you let me get away with stuff just because you want to be fun I get yelled at when I go back. I’m confused.”
• “It’s okay if I do something with them and not you. It’s just because they are better at it/that’s when it was on. I don’t love them more.”
• “You’re supposed to protect me from bullies, now you’re just being one.”
• “Stop acting like a child. Can’t you both find a way to be at my party/sports carnival/concert/game?”
• “Stop saying “I’m just like …” when I do something bad. It hurts me because I know you don’t like them and then I think you don’t like me.

Violent relationships

Today the news again featured a story about a violent relationship – this time, the most tragic of circumstances when a 33 year old mother of four was stabbed to death by her partner in front of one of their children on a busy suburban street in broad daylight.

According to media reports the woman had been at Sunshine Magistrates Court in relation to violent behaviour by her partner, she then went to a nearby women’s refuge and then to her solicitors office. After leaving her solicitors office her partner approached her and stabbed her fatally in the chest.

Victorian Police have confirmed that there was a restraining order protecting the woman from the man and he had a history of domestic violence against her.  

But today is not a one-off. Over the past few months many tragic stories of domestic violence have made the news-headlines.

 

In February Simon Gittnay was sentenced to 18 years in prison having been earlier convicted of murdering his girlfriend Lisa Harnum by throwing her from the balcony of their 15^th floor inner-city apartment – in what the Judge described as a “fit of rage”.

 

On the same day that Simon Gittnay was convicted of the murder of Ms Harnum, 41 year old Keeli Dutton, a mother of three, was stabbed to death in her apartment. According to media reports NSW Police believe that Ms Dutton was killed by her partner David Murray.

 

One month later, in December 2013, Marika Ninness, a 35 year old mother of three died – allegedly at the hands of her boyfriend, Ross Merrick. Apparently, Mr Merrick punched Ms Ninness in the face during a fight – she died two weeks later from serious head injuries.

These are just some of the stories that make the headlines. According to the Australian Institute of Criminology (2005-2006 statistics) more than one person is killed every week in Australia by a current or former partner.

Undoubtedly, these stories of domestic violence can have a significant impact on someone contemplating leaving a violent partner. Marking that decision is difficult enough but in the context of a history of physical violence, economic control, social restriction, emotional violence or verbal abuse where you are worried about the possible behaviour of your partner to the news of the separation, making that decision is even harder.  

But the cases that make the headlines serve as a reminder to all of us that practice in family law to promote the help that is available for people living in situations of domestic violence – and in particular those facing situations of urgency.

Numerous organisations are available to provide emergency assistance – including:

Centrelink – which can assist by providing financial assistance in a crisis – 136 150

Domestic Violence Helpline – 1800 656 463

Housing NSW Temporary Accommodation – 1800 152 152

Lifeline – 13 11 14

National Family Violence and Sexual Assault Counselling Service - 1800 737 732

 

 

 

Information in relaiton to the individual cases for this post was obtained form the Sydney Morning Herald and The Age newspapers.