ABADI & SAFAR

In the Family Court of Australia, Judge Brown presided over property proceedings between Mr. Safar (husband) and Ms. Abadi (wife). The dispute concerned the division of a small net asset pool following a marriage of five years, during which the parties had been separated for five years. The asset pool primarily comprised negatively geared properties rented to tenants, which had operated at a loss. These losses had been used by the husband to reduce his taxation liability and generate tax refunds. The wife, however, retained liability for a debt used to provide a deposit for one of the properties.

The court was required to determine how to assess contributions, consider prospective needs, and achieve a just and equitable outcome in the property settlement. Key issues included the treatment of the negatively geared properties, the husband's utilisation of losses for tax benefits, and the wife's continued liability for a significant debt. The court also had to consider the substitution of a debtor for this particular liability.

Judge Brown reasoned that while the husband had maintained the properties and retained the rents, the properties had consistently operated at a loss. The court acknowledged the wife's retention of liability for the debt used for the property deposit. Applying principles of property adjustment under the *Family Law Act 1975*, the court ordered the husband to be substituted as the sole debtor for the wife's indebtedness to Company 1 Pty Ltd, amounting to approximately $50,853.97 plus accrued interest.

In settlement of the matrimonial property claims, the husband was ordered to pay the wife $27,000 within forty days of the debt substitution order. Furthermore, pursuant to section 90MT(1)(a) of the *Family Law Act 1975*, a splitting order was made in the wife's favour for $25,000 from the husband's Super Fund D, to be rolled over to the wife's nominated superannuation fund. The husband was to retain specific assets, including real properties at Property A, Property B, and Property C, provided he paid the wife the $27,000. The wife was to retain all other property in her possession. The proceedings were adjourned for directions and to ensure procedural fairness to the third party, Company 1 Pty Ltd.