Azari and Azari
[2007] FamCA 1265
•25 October 2007
FAMILY COURT OF AUSTRALIA
| AZARI & AZARI | [2007] FamCA 1265 |
| FAMILY LAW – PROPERTY – initial contributions - distribution |
| APPLICANT: | Mrs Azari |
| RESPONDENT: | Mr Azari |
| FILE NUMBER: | SYF | 2327 | of | 2001 |
| DATE DELIVERED: | 25 October 2007 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Watts J |
| HEARING DATE: | 5-7 April 2006; 27-28 June 2007 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Walker Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Anderson |
| SOLICITOR FOR THE RESPONDENT: | Christopher Mackay |
Orders
IT IS ORDERED THAT:
All interim orders relating to financial matters are discharged.
Pursuant to Section 79 Family Law Act, an order be made in the terms of paragraphs 3 – 12.
The parties forthwith do all things and sign all necessary documents to transfer to the wife of the whole of the parties’ right, title and interest in the following properties:-
3.1.104 G Street;
3.2.120 G Street;
3.3.182 G Street;
3.4.D property.
The parties forthwith do all things and sign all necessary documents to transfer to the husband the parties’ right, title and interest in the following properties:-
4.1.W property;
4.2.C property.
The husband shall forthwith do all acts and things and execute all documents, instruments and writings necessary to resign as a director of M Proprietary Limited ABN … and to transfer to the wife or her nominees his shareholding in the said company.
The wife indemnify the husband in respect of all liability whatsoever which the husband may have whether now or in the future and whether alone, jointly or/or severally with the wife and/or any other person and/or company to any creditor of the company M Proprietary Limited ABN … (“the company”) pursuant to any guarantee and/or indemnity and/or in any other manner howsoever arising and without limiting the generality of the foregoing pursuant to any guarantee given by the husband whether alone, jointly and/or severally to any person and/or company in respect of any lease from any such person and/or company of any property to the company.
Other than as herein provided, the husband and wife each remain the sole legal and beneficial owners of all other items of property presently in their respective possession or control including, but not limited to, money, shares, real property, motor vehicles, entitlements to superannuation, furniture, furnishings and personal effects.
Christopher John Mackay, Solicitor, alone be authorised to pay to the parties equally the balance of the amount in the account in the name of Christopher Mackay and Danial Saad Trustees for the husband and the wife with the National Australia Bank, … Branch, BSB … Account No. ….
Contemporaneously with the payment referred to in the previous order, the husband will pay to the wife a sum of $1,048.
The husband indemnify the wife for any tax payable on shares sold as set out in Exhibit 23.
As soon as practicable the husband provide to the wife a letter from Mr A or an accountant nominated by Mr A stating that Mr A or his nominee is of the opinion that there is no outstanding tax liability in relation to the sale of shares in the wife’s name by the husband.
Until the letter referred to in the previous order is provided to the wife then the property at W is charged with any outstanding tax liability in relation to the sale of shares in the wife’s name by the husband and the wife is at liberty to secure that charge by way of caveat on the property at W.
If either party refuses or neglects to sign, within fourteen (14) days of a written request to do so, any documents necessary to effect the terms of these Orders, the Registrar of the Sydney Registry of the Family Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act to execute such documents on behalf of such party.
Either party may apply upon 7 days notice in respect to the implementation of these orders.
IT IS NOTED that publication of this judgment under the pseudonym Azari & Azari is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYF 2327 of 2001
| Mrs Azari |
Applicant
And
| Mr Azari |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
This case is about what alteration should be made between the parties in respect of their property. The husband also sought discharge of child support arrears but did not press that application.
SHORT HISTORY
The husband was born in August 1950 and is currently 57 years of age.
The wife was born in November 1960 and is currently 46 years of age.
The parties met in 1975 and were married in June 1976. They did not live together before marriage.
The parties separated in November 1998 and a decree absolute of their marriage was pronounced in late June 2002. They cohabited for 22 years and 6 months.
There are two children of the marriage H born in October 1980 and N born in June 1992.
ORDERS SOUGHT
Wife
At the commencement of the hearing the wife sought the following orders:-
1.That the husband forthwith do all such acts and things and sign all such documents as may be required to transfer to the wife at the expense of the husband all his right, title and interest in the real properties situated at and known as:-
(a)[H] in the State of New South Wales.
(b)[C] in the State of New South Wales.
(c)[182 G Street] in the State of New South Wales.
(d)[104 G Street] in the State of New South Wales.
2.That the monies currently held on behalf of both parties in controlled monies account (amounting to $435,000) be forthwith distributed as follows:-
(a)$75,000 to the husband.
(b)The balance to the wife.
3.That the husband forthwith indemnify the wife against all payments and liability pursuant to any outstanding debts:
(a)personally owned by him
(b)owned by the company, [M] Pty Limited
(c)owned by any other company which the husband has a controlling interest in.
4.That the wife forthwith indemnify the husband against all payments and liability pursuant to any outstanding debts personally owned by her.
5.That unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money due under these orders or any subsequent orders:-
(a)Each party be solely entitled to the exclusion of the other party’s [sic] to all property (including choses in action) in the possession of such party as at the date of these orders; including but not necessarily limited to:-
(i)The husband’s interest in [W property] in the State of New South Wales;
(ii)The husband’s interest jewellery, shares held in his name, and his Mercedes […];
(iii)The wife’s interest in [120 G Street]
(b)Money standing to the credit of the party in whose name the bank, building society or credit union account or in any financial institution are to become the property of the party in whose name such account is held.
(c)Each party hereby foregoes any claim they may have had to any superannuation benefit belonging to or earned by the other.
(d)All insurance policies become the sole property of the beneficiary named therein.
(e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
(f)Any joint tenancy of the parties in any real property or personal status is hereby expressly severed.
During final submissions, and with different legal representation, the wife did not specifically set out the text of the orders that she sought. She contended herself by indicating that she wanted 90 percent of the overall assts of the parties and indicated that if possible she wished to stay in the H property.
The wife also sought orders that are the reverse of orders set out in paragraphs 11.4 and 11.5, below, as sought by the husband, namely the husband end up with the company and indemnify the wife in relation to any liabilities arising from the activities of the company.
The wife right at the end of final submissions made an application to the effect that $30,000 a year be put aside in a trust account for N until he leaves school and that this amount be used for his school fees and education expenses. I explained that this was a child support order and that it was not appropriate for me to deal with that application given the way the hearing had been conducted to that point.
Husband
During final submissions the husband sought orders in the following terms:-
1.That within 28 days of the date of these orders the husband and wife shall forthwith do all acts and things and execute all deeds, documents, instruments and writings necessary to transfer to the husband free of all encumbrances all the wife’s right title and interest in the properties known as and situate at [W], [C] and [182 G Street].
2.That the wife shall within 28 days of the date of these orders pay to the husband as he may in writing direct the sum of $335,591 and upon such payment the husband shall forthwith transfer to the wife all his right title and interest in the property known as and situate at [H] and execute all deeds, documents, instruments and writings necessary to effect such transfer as may be provided by the wife, and in default of such payment within the time provided earlier in this order that the property be sold in accordance with such machinery provisions as appropriate, and that liberty to apply for such sale orders is granted by this order.
3.That within 28 days of the date of these orders the husband and wife shall forthwith do all acts and things and execute all deeds, documents, instruments and writings necessary to cause the balance of the funds presently invested in the names of Christopher Mackay and Danial Saad as trustees for [the husband] and [the wife] in the National Australia Bank Limited, Sydney being BSB […] and account number […] to be paid in full to the husband as he may in writing direct.
4.That the husband shall forthwith do all acts and things and execute all documents, instruments and writings necessary to resign as a director of [M] Proprietary Limited ABN […] and to transfer to the wife or her nominees his shareholding in the said company.
5.That the wife indemnify the husband in respect of all liability whatsoever which the husband may have whether now or in the future and whether alone, jointly or/or severally with the wife and/or any other person and/or company to any creditor of the company [M] Proprietary Limited ABN […] (“the company”) pursuant to any guarantee and/or indemnity and/or in any other manner howsoever arising and without limiting the generality of the foregoing pursuant to any guarantee given by the husband whether alone, jointly and/or severally to any person and/or company in respect of any lease from any such person and/or company of any property to the company.
6.That within 28 days of the date of these orders the husband and wife forthwith do all acts and things including execution of such deeds, documents, instruments and writings necessary to assign to the husband free of all encumbrances one half of all shares (except shares in the company [M] Proprietary Limited referred to in order 1.5) jointly owned by the husband and the wife, and to assign to the wife free of all encumbrances the other half of all shares (except shares in the company [M] Proprietary Limited referred to in order 1.5) jointly owned by the husband and wife.
7.That other than as herein provided, the husband and wife each remain the sole legal and beneficial owners of all other items of property presently in their respective possession or control including but not limited to money, shares, real property, motor vehicles, entitlements to superannuation, furniture, furnishings and personal effects.
8.That the arrears of child support be discharged as and from the date upon which they were last paid.
9.That the wife pay the husband’s costs of and incidental to these proceedings.
10.That the parties be granted liberty to apply for orders to implement the orders made herein by way of final property settlement.
CHRONOLOGY
In 1969 the husband joined the Iranian public service and remained so employed until 1982.
In early 1970 the husband obtained a scholarship which enabled him to undertake a degree at a University in the United States of America. He completed that degree in 1974.
As set out above, the parties met in 1975 and married in June in Iran. The wife was in high school at the time and was 15 years old. She had no assets. The husband says that he had approximately $20,000 in the United States.
In oral evidence before me it became clear that any dowry that might have been payable at the time under Iranian law was not paid by the husband. In 2006 the wife proceeded to pursue two applications in the Iranian Courts which I will refer to later. One of them was for an order that the husband pay a dowry to the wife. The amount said to be owing is equivalent to $10,000 (AUD). This is the original amount with 27 years of inflation and interest added.
In 1978 the wife completed her high school diploma.
The parties lived in the Tehran unit until they came to Australia in 1983.
The parties’ first child H was born in October 1980.
The parties purchased a two bedroom apartment in Tehran some time before the husband resigned from the Iranian public service in 1982. The husband’s evidence is that the purchase monies came from his pre-marriage savings as well as money borrowed from an Iranian bank. The husband does not give evidence as to what the purchase price was for the Tehran unit. The wife in her affidavit gave some evidence as to the source of funds for the purchase of the unit which was objected to. That evidence was rejected and leave was granted to lead further evidence in respect of that source of funds. No further evidence was lead pursuant to the leave which was granted. Accordingly I accept the husband’s evidence as to the source of funds for the acquisition of the Tehran unit but note that at the time of the acquisition the parties had been married six years during which the husband worked and H was by then aged about 2 years. The property was sold in 1985 for $15,000 (AUD).
In 1982 the husband resigned from the Iranian public service and became an engineer.
In 1983 the parties immigrated to Australia from Iran and commenced living in Australia in a Government provided home. The husband worked with N Company as an engineer for approximately two years. The husband was also employed as a taxi driver working nights and weekends. The husband also worked as a fruit picker. The husband continued fruit picking until 1986. The husband continued as a taxi driver up until 1991.
The wife was employed between 1983 to 1985 earning between $600 - $1,200 per week.
Between 1985 and 1992 the wife’s mother lived with the family.
In 1985 the parties purchased a home at W. The purchase price was $76,000 and the parties borrowed $50,000 to assist in that purchase. The apartment in Tehran was sold with net proceeds being $15,000 (AUD). That amount was used to reduce the $50,000 mortgage to St George Bank. The parties resided at W until 1990.
In 1985 the wife commenced work with the Australian public service.
From 1985 onwards the wife’s mother looked after H in the parties’ home. In paragraph 19 of her primary affidavit the wife says that her mother looked after H between 6am and 11pm seven days a week between the years of 1985 and 1992. That assertion was not challenged.
In 1985 the husband commenced work as a teacher earning $60,000 per year. He worked there until 1992.
In 1990 the parties purchased a property at C for $145,000. They had saved the deposit. The balance was borrowed from St George Bank.
The husband took out an owner/builder’s licence and by the efforts of the parties and with the use of subcontractors a home was built. A further $100,000 was borrowed from St George Bank and used to complete the construction of the home.
In 1990 the parties set up a company known as M Pty Ltd (“the company”). They borrowed $75,000 to purchase stock. The main business of the company was a retail shop. It initially ran a business called H Shop at H. The wife ceased employment with the public service. The husband continued to work as a teacher. In addition to the company being involved in the retail business it traded in electronics. The parties were, and still are, the sole directors and shareholders of the company.
Between 1990 and 1995 the parties lived at C. In 1990 the parties rented W property to tenants.
The second child of the marriage, N, was born in June 1992.
Between 1991 and 1996 the parties’ H Shop venture expanded to further outlets being HR Shop, HM Shop as well as the original business of H Shop. A second outlet of the H Shop business was later set up (H2 Shop).
The wife ceased employment with the public service in 1992 and commenced work for the company at the H stores.
On 9 February 1995 there was a home invasion of the parties’ home and the wife claims that $115,000 in cash was stolen from under her bed.
After living at C the parties leased an apartment at H for about a year.
In 1995 the parties purchased H property for $580,000. The parties borrowed $350,000 from Aussie Home Loans. The balance of monies in relation to the purchase price was derived from the joint savings of the parties.
In 1980 the husband’s father died. He owned a property in Tehran. Subsequently the husband’s mother died in 1995. The husband as a result has one eighth share of a property which he estimates to have a value of $15,000 (AUD). It is said therefore that his share is $1,875 (AUD).
In 1996 the parties purchased E property for $550,000. They borrowed $250,000 and paid the balance from savings which had apparently been loaned to the company. E property became the residence of the parties.
In 1996 the ownership of the shopping complex changed from CK Pty Ltd to W Pty Ltd and that company commenced to refurbish the retail premises in which the parties’ company carried on businesses in H. That led to a Supreme Court action between the company owned by the parties and its landlord, W Pty Ltd.
In the late 1990s the company received more than $100,000 in relation to successful proceedings between the parties’ company and W Pty Ltd. Additionally, the parties received a further $200,000 from the management of H2 Shop’s landlord. In return the company surrendered its lease with H2 shop’s landlord.
In the late 1990s the parties also obtained an undertaking from W Pty Ltd that they would bear the costs of the store fitouts of the parties’ three stores. These costs were in excess of $100,000. Shopping centre management also provided a waiver of rent.
In 1998 the parties purchased three apartments numbered 104, 120, and 182 at G St. Each unit was purchased for $120,000. The finance was obtained by savings and borrowing from St George Bank of approximately $330,000.
The parties separated in November 1998. The wife and children moved to rented accommodation and the husband remained at E. Later the wife moved to the H apartment.
At the date of separation the parties had approximately $200,000 in the company account and a $300,000 interest bearing deposit with the ANZ Bank. The parties owned a 1992 Mercedes 180E motor vehicle through the company and the husband also owned a 1998 four wheel drive Pardo. The parties had the properties at W, C, the G Street units, E property and H property.
There were also the shares set out in Exhibit 23 which were sold by the husband after separation (see item 36 on the balance sheet).
In 1999 N was enrolled into S College.
In 2000 each party took $100,000 from the company’s interest bearing deposit with the ANZ Bank.
The husband alleges that he used part of $100,000 received to pay $20,000 to his son H and $20,000 to the wife for N’s school expenses and maintenance.
In 2000 the husband moved from E to live with his brother and his family at S.
In February 2001 the husband went to Iran for two months. The wife caused the company to cease paying the husband fortnightly payments of $1,800 whilst he was overseas but she continued to receive that amount herself from the company.
In April 2001 consent orders were made by this Court that $96,000 of liquid funds from the company be used to pay the shopping centre Management for rents and other business expenses.
The husband says in June 2001 his payments of $1,800 per fortnight from the company resumed.
In 2001 the parties took competing applications against one another for apprehended violence orders at the Local Court. The wife also commenced assault proceedings. The wife’s proceedings for assault and an apprehended violence order against the husband were dismissed. The husband obtained an order against the wife for his protection.
The husband gave evidence that he effectively ceased active day to day involvement with the company at the beginning of 2002. He did not know what happened with the company’s activities after that time. He says the wife remained in possession of the paperwork. She denies this. The company ceased to trade by the beginning of 2003.
In 2001 the wife purchased a new Mercedes and the husband then drove the older Mercedes 180E. His Pardo was transferred to H.
In August or September 2001 the wife travelled to Iran and stayed there for two months.
The wife says in late 2001 the husband returned to E property.
In either January or February 2002 the husband again went to Iran. The wife again caused the company to cease fortnightly payments to him at that time and they have not been resumed. The wife however continued at that time to receive fortnightly payments from the company of $1,800 per fortnight.
On 29 May 2002 a decree nisi for the dissolution of the marriage of the parties was granted.
On 13 November 2002 the parties withdrew $215,000 from the ANZ Bank which was standing to the credit of the company. That money was distributed as to $105,000 to the wife, $70,000 to H and $40,000 to the husband.
In early 2003 W Pty Ltd re-entered the stores at HR Pty Ltd, HM Pty Ltd and H Pty Ltd shops at H. The husband asserts that this resulted in a loss of $500,000 of stock, $700,000 of stock fittings and furnishings and $580,000 in goodwill. The husband alleges that the wife removed from the shops the stock and shop equipment and retained it. The husband also alleges that the wife removed all the company’s books and records.
In late 2003 the husband said that the wife came to the E property whilst the husband was not there and took possession of the furniture and furnishings in that home, including two pieces of Persian carpet which was what the husband said he retained after the wife has taken the rest of the Persian carpets.
On 6 November 2004 the wife alleges that she had a dizzy spell and that she was hospitalised at St Vincents Hospital.
On 25 November 2004 a settlement was reached between the wife and her former solicitor Michael Connolly. The wife agreed to pay him $40,000 (to be paid on the sale of E property). He had previously obtained a default judgment in relation to his outstanding fees for work done for the wife in the family law matter on 24 July 2003 for a sum of approximately $52,000.
In 2004 the husband alleges that he paid $10,000 to S College on account of N’s school fees.
The husband says that contact between he and N broke down at a date prior to February 2002 and was re-established in March 2005.
On 28 April 2005 the parties entered into partial property consent orders. They agreed that E property be sold. The money was to be used to discharge various mortgages with the balance to be placed in controlled money accounts. N was to receive $250 per week towards his support.
In July 2005 the wife travelled to Iran for several weeks. The husband obtained signature of a transfer on behalf of the wife pursuant to Section 106A of the Family Law Act. The E property was sold for $1.6 million. The wife says the net proceeds of sale were $1,440,226.03.
The wife says that from the balance of proceeds the following amounts were paid:
Westpac Bank $232,446.72
St George Bank 228,468.07
Perpetual Trustees Australia Ltd 296,951.00
Michael Connolly 40,205.80
… Council 3,746.00
The husband says that the balance invested in trust was $632,718.63. At the commencement of the hearing this had been reduced to the sum of $430,785 as a result of each party taking $100,000. During the hearing I made consent orders including interim orders releasing amounts of $75,000 and $20,000 to each party. The amount remaining prior to orders of 20 August 2007 was $194,207.
INTERIM ORDERS
6 April 2006
Orders were made on this day about Exhibits 16 and 17. The use of Exhibit 16 as an Exhibit was limited. Exhibit 16 was admitted for the purposes of providing the basis upon which Exhibit 17 could come into evidence as a summary of what was in Exhibit 16.
7 April 2006
On that day I made orders in the following terms:
1.That Mr [A] of [A] Accountants, […], be appointed joint expert to prepare outstanding taxation returns, company returns for the company [M] Pty Ltd and personal taxation returns for the husband and wife for the tax years ending 30 June 1999 to date.
2.That the parties’ solicitors confer for the purpose of preparing an agreed letter of instructions to the expert.
3.That the parties authorize their accountants to provide to Mr [A], copies of lodged taxation returns, if any, previously prepared by such accountant(s).
4.That the single expert’s fees shall be paid by the parties equally from the funds presently held in trust for the parties by their respective solicitors in the National Australia Bank Ltd BSB […] account number […] estimated to be approximately $15,000.
5.That for the purposes of preparation of the taxation and company returns the Court authorizes the husband’s solicitor in company of the wife’s solicitor to attend the wife’s premises at [H] this afternoon, 7 April 2006, and remove from these premises including the storage cage located beneath the premises, all company business records including but not limited to cheque books, cheque butts, bank records, receipts, purchase orders and folders or files of records relating to the businesses previously conducted by the company and to store these documents and records, whether on computer or computer storage or in documentary form as he shall see fit.
6.That the wife shall provide to the husband’s solicitor a certified copy of any court order issued by the Iranian Court in which she has applied for monies in relation to her dowry and which is due ad payable and that upon provision of that certified order the husband and wife’s solicitor are authorized to release from the monies held in trust payment by the husband to the Iranian Court the sum awarded to the wife, such payment shall be characterized as partial property settlement.
7.That the Court hereby authorizes the solicitors for the husband and the wife to release from the funds held in trust for the parties the sum of $75,000 each forthwith for their use. Such payment shall be characterized as partial property settlement.
8.Each parties’ costs are reserved.
9.That the parties have liberty to approach the list clerk for the further listing of this matter for another one day.
10.That either party has liberty to relist the matter before me on three days notice.
8 February 2007
On 8 February 2007 I made the following interim orders:-
1.The husband and wife shall forthwith do all acts and things and execute all deeds, documents, instruments and writings necessary to pay the single expert Mr [A] accountant his fees for preparation of the financial documents for the parties and related entities from the funds presently invested in the names of Christopher Mackay and Danial Saad as trustees for [the husband] and [the wife] in the National Australia Bank Limited, Sydney, being BSB […] and account number […].
2.The husband and wife shall forthwith do all acts and things and execute all deeds, documents, instruments and writings necessary to cause the transcript of proceedings on 5, 6 and 7 April 2006 to be provided to the solicitors for the parties and the court and that the cost of such transcript shall be paid from funds presently invested in the names of Christopher Mackay and Danial Saad as trustees for [the husband] and [the wife] in the National Australia Bank Limited, Sydney, being BSB […] and account number […].
3.That the responsibility for and apportionment of those expert’s fees and the costs of the transcript be a matter which shall be the subject for final submission at the completion of the hearing of this matter.
4.Pending further order any net rental income from either of the properties situated at [182 G Street] or [W property] be disbursed evenly between the parties.
5.Leave be granted to the husband to file and serve an updating affidavit limited to the issues of tax payable or paid and the use of properties since the matter was part heard.
6.The matter is otherwise adjourned for finalization of the hearing on 20 and 21 March 2007.
14 March 2007
On this date, the dates scheduled for the finalisation of the hearing were vacated and further orders were made aimed at facilitating the completion of the expert’s report.
19 March 2007
A further order was made relating to the payment of expert fees.
4 June 2007
The following notations and orders were made:-
IT IS NOTED THAT:-
1.1Exhibit 17 is an accurate summary of the withdrawals made on the dates recorded and the amounts recorded in each of the respective columns in that Exhibit.
1.2Exhibit 17 is an accurate summary of the documents in Exhibit 16 recording accurately deposits made on the dates referred to in Exhibit 17, but does not contain a summary of all of the deposits made and recorded in Exhibit 16.
1.3On the basis of order 1.1 and 1.2 herein, there is no objection to Exhibit 17 becoming evidence in these proceedings pursuant to Section 50 of the Evidence Act.
IT IS ORDERED THAT:
2.The wife sign the confirmations which are contained in Schedule 1, Schedule 2, Schedule 3 and Schedule 4 to Mr [A’s] letter dated 29 May 2007 and failing the wife signing that document at the conclusion of these proceedings this morning then I appoint the Registrar of this court to sign these documents on the wife’s behalf.
3.Upon signing those authorities the wife is to hand them to the husband’s counsel today.
4.By way of interim property settlement that amounts of $20,000 be withdrawn and paid to each party from joint funds presently invested in the names of Christopher Mackay and Danial Saad as trustees for [the husband] and [the wife] in the National Australia Bank Limited, Sydney, being BSB […] and account number […] on Mr Mackay’s signature and that the parties equally pay from those funds one half of outstanding school fees in respect of the younger child of the marriage and one half of the outstanding amount of $7,424.95 in respect of strata fees for [H property].
IT IS DIRECTED THAT:
5.In the event the wife wants to call her elder son as a witness, she is to prepare a statement from him, and serve a copy on the other side. Whether that evidence is allowed will be considered on the first morning of the hearing. If it is allowed he will need to be available for cross examination.
6.The solicitor for the husband is to obtain from Mr [A] by 20 June 2007 a document which sets out his view as to what the company’s liability is as a result of his finalization of tax returns and/or communication with the Tax Office.
28 June 2007
On 28 June 2007 I made an order for the payment of N’s school fees and for outstanding rates.
1.The following amounts be withdrawn from joint funds presently invested in the names of Christopher Mackay and Daniel Saad as trustees for the [husband] and [the wife] in the National Australia Bank Limited, Sydney, being BSB […], account number […] on Mr Mackay’s signature:
1.1.[N’s] school fees for the next school term;
1.2.Rates and taxes on investment properties;
1.3.$6,215 to Mr. [A], accountant.
20 August 2007
On 20 August 2007 I made the following further orders:
2.That Christopher John Mackay, solicitor, alone be authorised to sign the necessary withdrawal forms to enable the withdrawal of the amounts of:
$57,000.65 payable to the Australian Taxation Office; and
$128,504.14 payable to the Australian Taxation Office
from the account in the name of Christopher Mackay and Danial Saad Trustees for [the husband] and [the wife] with the National Australia Bank, […] Branch, BSB […] Account No. […]
This order was made by consent and represents the parties’ agreement as to company tax payable.
WHICH PARTY DO I BELIEVE?
Wife
The wife did not impress as a witness. The wife gave evidence that she was on depression pills and could not remember things.
The wife failed to disclose in her financial statement the income of $50 per week that she receives in respect of a car parking space at H.
The wife’s evidence that she had no records of the business is not evidence that I could accept. There were records of the business in the storage cages in the basement of the H property.
As discussed more fully later, I do not accept the wife’s evidence about the hours she worked in the business.
The wife’s assertion that she only had three Persian carpets was clearly incorrect. She made that assertion both in her written evidence and in her oral evidence. That evidence is discussed in more detail when I deal with the value of the carpets and rugs.
The wife’s evidence about her litigation against the husband in Iran and her lack of disclosure in Iran as to interim orders made in Australia did her no credit.
The wife gave somewhat confusing evidence in relation to the opening of bank accounts in Italy and Switzerland. In relation to the Swiss bank account her evidence was that she used $3,000 to open the account. She obtained a PIN for the account. She said she gave the PIN to the husband. She did not keep a record of the PIN so, she asserted the husband thereafter had control of the Swiss bank account. I found the evidence improbable.
The wife asserted that other people used her credit cards so that she could get frequent flyer points and they then gave her cash in return. Mr …, her hairdresser, gave evidence in corroboration saying that he had done this for the wife on an occasion when he wished to travel overseas. He had found this convenient because he had used a travel agent introduced to him by the wife. Whilst these types of activities may raise suspicions, Counsel for the husband made no specific reference to these activities during final submissions.
Husband
As I have said below, given the husband’s work history, I did not accept the husband’s assertion that he has effectively not worked since 2002, nor his explanation as to why that was so.
At times the husband during cross examination was evasive. For example, although the husband agreed in the end, he had trouble in accepting that it was reasonable for the wife to spend the carer’s allowance that she received on her mother.
Conclusion on credit
I had difficulty in accepting parts of each party’s evidence, but the wife was more unreliable than the husband. Where matters are disputed, I will attempt to make findings based on other evidence or which version is inherently more probable. If I need to I will accept a version given by the husband in preference to one given by the wife.
TAX RETURNS
It became clear during the husband’s evidence that he had not filed a tax return since 1999, nor had any company tax returns been filed since that time. The wife had filed personal returns. Mr A from A Accounting was appointed to carry out the task of preparing company tax returns and personal tax returns. It took far longer than anticipated. The order that I made on 20 August 2007 for the payment of tax is based on the result of the work done by Mr A.
THE APPROACH TAKEN IN THESE REASONS FOR JUDGMENT
I have, in endeavouring to arrive at a just and equitable division of their property, formed the view it is appropriate to deal with their assets on a global basis (see Norbis v Norbis (1986) FLC 91-712).
In this matter my task is to:
94.1.Identify and value the property, assets, financial resources and liabilities of the parties;
94.2.Identify relevant contributions and assess them;
94.3.Consider relevant matters referred to in Section 79(4)(d) – (g) FLA;
94.4.Ensure my order adjusting the property assets and liabilities of the parties is just and equitable.
PROPERTY LIABILITIES AND OTHER ASSETS
The parties both agreed that their respective superannuation entitlements would be treated as property for the purposes of looking at the pool of property and other assets.
There has been some agreement in relation to the values to be attributed to those assets and liabilities contained in the pool of assets, which are set out in the table below. In the agreed/determined column, the word “determined” in that table indicates items for which no value has been agreed. A determination has been made in relation to contentious items for the reasons set out after the table.
The asset pool, as agreed or determined by me, is as follows:-
| Assets | ||||||
| Item no. | Title | Description | H value | W value | Agreed/ Determined | Value |
| 1 | J | W property | $290,000 | $290,000 | Agreed | $290,000 |
| 2 | J | C property | $535,000 | $535,000 | Agreed | $535,000 |
| 3 | H | 104 G Street | $160,000 | $160,000 | Agreed | $160,000 |
| 4 | W | 120 G Street | $160,000 | $160,000 | Agreed | $160,000 |
| 5 | J | 182 G Street | $160,000 | $160,000 | Agreed | $160,000 |
| 6 | J | H Property | $735,000 | $735,000 | Agreed | $735,000 |
| 7 | J | Controlled monies in trust | $194,027 | $194,027 | Agreed | $194,027 |
| 8 | J | Loan to H | $140,000 | $140,000 | Agreed | $140,000 |
| 9 | J | M Pty Ltd | $0 | $0 | Agreed | $0 |
| 10 | W | Monies stolen from wife 1995 | $115,000 | $0 | Determined | $0 |
| 11 | W | Victims' Compensation | $15,000 | $15,000 | Agreed | $15,000 |
| 12 | H | Distribution 7/2/2000 | $60,000 | $100,000 | Determined | $80,000 |
| 13 | W | Distribution 7/2/2000 | $120,000 | $100,000 | Determined | $100,000 |
| 14 | H | Distribution 14/11/2002 | $40,000 | $110,000 | Determined | $40,000 |
| 15 | W | Distribution 14/11/2002 | $175,000 | $40,000 | Determined | $105,000 |
| 16 | H | Distribution 7/4/2006 | $75,000 | $75,000 | Agreed | $75,000 |
| 17 | W | Distribution 7/4/2006 | $75,000 | $75,000 | Agreed | $75,000 |
| 18 | H | Distribution 7/6/2007 | $11,006 | $11,006 | Agreed | $11,006 |
| 19 | W | Distribution 7/6/2007 | $11,006 | $11,006 | Agreed | $11,006 |
| 20 | H | Persian carpets (with husband) | $0 | n/k | Determined | $7,650 |
| 21 | W | Persian carpets (with wife) | $46,585 | $0 | Determined | $38,935 |
| 22 | W | Wife's jewellery | $30,000 | $0 | Determined | $10,000 |
| 23 | H | Husband's jewellery | $2,000 | $7,000 | Determined | $7,000 |
| 24 | W | Salary received from company when husband was excluded | $45,000 | $0 | Determined | $0 |
| 25 | W | Monies from HM Shop | $29,200 | $0 | Determined | $29,200 |
| 26 | W | Monies from H Shop | $24,200 | $0 | Determined | $24,200 |
| 27 | W | Monies from HR Shop | $125,900 | $0 | Determined | $125,900 |
| 28 | W | Overseas TT | $21,386 | $0 | Determined | $21,386 |
| 29 | W | Ray White rent | $14,812 | $0 | Determined | $14,812 |
| 30 | W | Rent LH | $1,159 | $0 | Determined | $1,159 |
| 31 | W | Centrelink funds | $27,634 | $0 | Determined | $0 |
| 32 | W | Car space rent | $1,600 | $0 | Determined | $1,600 |
| 33 | W | Stock, plant and equipment | $20,000 | $0 | Determined | $0 |
| 34 | H | Bank accounts | $4,000 | $4,000 | Agreed | $4,000 |
| 35 | W | Bank accounts | n/k | $300 | Determined | $300 |
| 36 | H | Shareholdings | $105,000 | n/k | Determined | $115,192 |
| 37 | H | Husband's share in Iran property | $1,875 | n/k | Determined | $1,875 |
| 38 | J | School fees for N – S College | $19,957 | $10,000 | Determined | $19,957 |
| 39 | J | M College | $11,000 | $11,000 | Agreed | $11,000 |
| 40 | W | Furniture and effects from E property in wife's possession | $10,000 | $0 | Determined | $10,000 |
| 41 | W | 36 payments from the company for new Mercedes | $71,157 | $0 | Determined | $0 |
| 42 | H | Mercedes 180E | $11,000 | $11,000 | Agreed | $11,000 |
| 43 | W | Monies from company cash box | $4,165 | $0 | Determined | $4,165 |
| 44 | W | Monies to maintain the wife's home | $53,253 | $0 | Determined | $0 |
| 45 | W | Rent from 120G Street | $10,343 | $0 | Determined | $0 |
| 46 | W | Rents received by wife in relation to 182G Street | $3,740 | $0 | Determined | $0 |
| 47 | H | MCL the Universal Super Scheme - NAB | $14,235 | n/k | Determined | $14,235 |
| 48 | W | MCL the Universal Super Scheme - NAB | $27,523 | $27,523 | Agreed | $27,523 |
| Total assets | $3,387,128 | |||||
| Liabilities | ||||||
| Item no. | Title | Description | H value | W value | Agreed/ Determined | Value |
| 49 | W | Personal loans | $0 | $125,409 | Determined | $0 |
| 50 | J | Tax | $185,505 | $185,505 | Agreed | $185,505 |
| Total liabilities | $185,505 | |||||
| Total net assets | $3,201,623 | |||||
Item 7 – Controlled monies in trust
It was agreed during final submissions that that figure was $194,207. This amount has been substantially dissipated by the further interim order made on 20 August 2007 for the payment of tax. The liability is taken into account at item 50.
Item 9 – M Pty Ltd
The wife’s case is that she did all the operational matters but none of the paper work, which she left to her husband. She concedes however that she is in possession of a lot of the paperwork. The business is not operating anymore so the parties agree the business has no operational value. The husband conceded in final submissions that the value of this asset was nil.
Item 10 – The $115,000 said to be stolen in the home invasion
The next item on the husband’s list is monies in the sum of $115,000 said to be stolen from the wife in 1995. The wife in oral evidence said that the $115,000 was saved by her over a ten year period. The husband says that he was not aware that his wife had been keeping cash at home. The wife asserts that she had secreted $115,000 at home, that there had been a robbery and that the money had been stolen. The husband’s case seems to be that this is waste on behalf of the wife because the money should have been properly secured.
Earlier reference has been made to the wife’s claim that $115,000 was under her bed unbeknown to the husband when the home invasion took place on 9 February 1995. The husband wishes to argue that the wife should be believed as to there being $115,000 under the bed and that it should be added back against the wife because to have put that amount of money under the bed without telling him and without otherwise taking proper security precautions in relation to it she had behaved recklessly (in the sense referred to in Kowaliw (1981) FLC 91-092).
Counsel for the husband however vigorously cross examined the wife in relation to inconsistencies between her evidence in this case and what she said in the police statement. Presumably that cross examination was aimed at damaging the wife’s credit. Whilst it did that to some extent it also damaged the husband’s case that there was in fact $115,000 under the bed.
The wife’s police statement dated 9 February 1995 was tendered and formed Exhibit 10. In this statement the says that the parties are still living C property. The wife says that at about 9.10pm when she and the two children were in the C property (but it appears the husband was not), that there was a home invasion involving two persons, one of whom entered the house by smashing glass at the front of the house. The wife told police that at least one of the men had his head covered with a black knitted cover and that this man had pointed a gun at her through a smashed window. The other man had been in her bedroom. After the men left the wife told police that she checked for cash that she kept under the bed. It had been there for about five months and she had been saving the money over a ten year period. The idea was to buy an investment property, an idea which she said was shared with her husband. The wife was specific about the denominations and the amounts that were under the bed - $100,000 (AUD); about $1,200 (US); about $40,000 (Yen) ($600 AUD).
It seems the husband wishes to assert that the $115,000 was indeed there and it had been placed under the bed recklessly by the wife. There are inconsistencies between the wife’s oral evidence and what she said in the police statement. The wife was cross examined about those inconsistencies.
The wife had been working in the retail stores for three years prior to the home invasion. It is possible that she had secreted cash from the turnover of the businesses. It is also possible that she had accumulated some cash from her savings during the time that she was working in the public service and possibly (as put by her Counsel to the husband in cross examination) from savings of her housekeeping money. I am not however convinced on the balance of probability that $115,000 was under the bed.
Even if I am wrong about that and the wife is being truthful about the money under the bed, then the wife was the victim of a serious criminal act. That is why any money that was under the bed was lost. It is difficult to then categorise the wife as acting recklessly.
There was apparently no action taken against the perpetrators of the crime, who were criminally charged, to recover the amount that was allegedly stolen. It is not clear on the evidence before me as to whether or not they were even charged with theft of any sort.
Consequently there will be no add back against the wife of the amount of $115,000.
Item 11 – The wife’s victim compensation payment
As a result of the incident referred to under the previous heading, the wife made a victim’s compensation claim and received $15,000. The husband says that he is unaware as to where that money went and that it is unaccounted for. The wife agrees she received this money.
Items 12 & 13 – Distributions of monies on 7 February 2002
The husband in his case outline document indicated that there was a distribution to both parties totalling $200,000 on 17 February 2000 (it was agreed that that was a typographical error and it was 7 February 2000).
There is no issue that the parties took $100,000 of this money each. The husband at paragraph 32 of his affidavit says that from the $100,000 he paid $20,000 to H which H used to set himself up in a business. H was 19 years old at the time. The husband says that he paid a further $20,000 to the wife to be used for N’s private school expenses and maintenance. Consequently the husband says that of the $100,000 he received he was left with $60,000 and that the wife actually received $120,000. The wife’s oral evidence was that she used some of the monies she received from her distribution for holidays.
The husband submits that the wife should have ascribed to her $120,000 and he should only have $40,000 ascribed to him.
I took it to be the wife’s position that the distribution of the $200,000 should be apportioned as it was distributed, namely $100,000 to each party.
The wife has had a close association with H in the businesses that he has set up. Consistent with the view I have taken in relation to items 14 and 15, below, I do not think that monies that have gone to H should be added back against either of the parties. Consequently the $20,000 which the husband gave to H to set himself up in a business at the age of 19, will not be added back against the husband.
I will add back the remaining $80,000 received by the husband at the first stage. I will take into account when considering contributions the fact that the husband made a contribution of $20,000 towards school fees and maintenance from these funds.
Items 14 & 15 – Distribution on 14 November 2002
At paragraph 44 of the husband’s affidavit the husband indicates that on 14 November 2002 the wife and the husband drew a further amount of $215,000 from their savings account. From that money the wife received $105,000, H received $70,000 and the husband received $40,000. The husband then says “the total received by the wife was $225,000” (that is a reference to the wife receiving $100,000 from the February distribution together with $20,000 by way of school fees and maintenance).
The husband’s case is that in relation to the distribution made on 14 November 2002, he should be credited as receiving $40,000 and the wife should be credited as receiving $175,000 because the effect of the evidence was that H gave the $70,000 to his mother. I am not on balance satisfied that the $70,000 that was given to H as part of the November 2002 distribution ended back with the wife and it will not be added back against her.
Item 20 & 21 – Persian carpets with the wife
There is evidence that 23 Persian carpets were purchased in 1994 for a sum of $46,585 (see Exhibit 3). This was the figure, which the husband said during final submissions, should be counted against the wife (this figure is different from the higher figure placed on the acquisitions by the husband in paragraph 26 of his affidavit sworn 17 August 2005). The wife says that these carpets travelled with the parties between 1994 and when they moved into E property. At the time of the separation when she left E property she says that she took 3 of the 23 Persian carpets with her. When giving oral evidence the wife said the three carpets were stored in a cage in the basement of the H apartment which she current lives. The wife says that so far as she was aware the other 20 Persian carpets were in her husband’s possession and she does not know what happened to them. Photographs of that storage cage are in evidence. It was suggested to the wife in cross examination that those photographs show more than three carpets in that storage cage. The photographs were not decisive.
Exhibit 15 is a statement by the husband’s solicitor and the wife’s former solicitor setting out agreed facts arising from an inspection of the contents of the wire gate enclosure at the wife’s property on 6 April 2006.
The statement agrees that between September 2005 and April 2006 there appeared to be some rearranging or removal of items from the enclosure.
What was agreed in relation to the carpets was that the following carpets were in the storage cages:-
“(a)Five blue carpets, the smallest of which was approximately 1.2 metres x 2.2 metres and the largest of which was approximately 15 square metres;
(b)One deep red “runner” type carpet, 1 metre x (say) 6 metres;
(c)Four red-ish “hallway” rugs approximately 70cm x 1m;
(d)Three “pillow slip type” rugs, devised to contain cushions to form a sort of seat or wall support approximately 70cm x 1m;
(e)One fringed or tasselled “palish” red and blue rug, approximately 1.3 metres x 1.2 metres.”
It therefore appears that rather than having three Persian carpets the wife had six carpets and some other rugs. It is not possible to correlate the descriptions in Exhibit 15 with any of the individual items set out in Exhibit 3. Consequently I am unable to assess any value in relation to the carpets in the wife’s possession (even on 1994 values). Counsel for the husband made no submission that would attempt to correlate the information on Exhibit 3 with the information on Exhibit 15.
I do not place any weight on the submission by the solicitor for the wife that Exhibit 15 does not describe the carpets as “Persian” carpets. I find that the wife was untruthful when she told me she only had three Persian rugs.
There is no current evidence before me as to what the value of these carpets might be and no application was made by the husband to have the carpets at E property valued.
It is reasonable to infer that the carpets and rugs in her possession have some value and there is an onus on the wife to provide some evidence as to that value. The wife in her financial statement filed 20 January 2005 (a statement which she relied upon at the hearing) indicated that her assessment of the value of household contents was “nil” and the assessment of personal property of jewellery, in the husband’s possession, was $7,000. My conclusion in relation to this issue is that it has been demonstrated that the wife has not been honest in relation to her evidence in relation to what happened with the carpets. The husband says that during the marriage they acquired at least 26 carpets. He is inaccurate in relation to those carpets having an average value of $3,000-$4,000. He says he retained two out of the 26 carpets and the wife retained the remaining carpets. The two carpets he said he retained were Lot 67 and 12. The acquisition costs for Lot 12, as per Exhibit 3, was in the sum of $2,800. Lot 67 was $4,850.
The husband’s financial statement sworn 18 April 2005 has nothing for household contents and does not disclose that he currently has any Persian carpets or has disposed of any since separation. It seems clear however from paragraph 26 of his affidavit that the husband concedes that he had carpets which had an acquisition price of $7,650 ($4,850 + $2,800).
The overall acquisition value of the carpets (as per Exhibit 3) is in the sum of $46,585. I accept the husband’s version as to who retained the carpets.
Counsel for the husband objected to the tender of Exhibit 3 if it was to be used as evidence of the current value of the carpets. I overrule that objection given that the wife during the trial did not bring any evidence of the value of the carpets and rugs in her possession.
The best evidence I have of their value is their acquisition costs in 1994. I found that the wife retained the carpets to a value of $38,935 ($46,585 - $7,650) and the husband retained carpets to the value of $7,650.
Item 22 – The Wife’s jewellery
The husband asserted during submissions and in his case outline that the wife’s jewellery had a purchase price of $30,000. The wife asserted in her financial statement that there was $7,000 of her jewellery in the husband’s possession (see item 43 of the wife’s financial statement sworn 18 January 2005). The husband’s Counsel when tested during submissions indicated that the only “evidence” of the value of jewellery in the possession of the wife was paragraph 101(b) on page 18 of the husband’s affidavit. There the husband asserted the value of the jewellery in the wife’s possession was $10,000.
Exhibit 2 contains the following statement by the solicitor then acting for the wife:-
“As your client is well aware our client’s jewellery, items of which had been given to her and purchased by her prior to the marriage and during the course of the marriage, were stolen when the parties were at […] Resort at […]. The jewellery at the time was uninsured. Since the robbery your client purchased for our client one gold ring. Our client recently purchased a gold chain and gold ordament [sic] attached. Both the ring and gold chain and ordanment [sic] have been taken to [L Company] by our client for the purposes of valuation. A gold chain which was purchased by our client’s mother for our client after the robbery was left by our client in the safe in the [E] property when our client vacated the property. Our client believes this gold chain is still in the safe.”
The wife agreed that the letter written by her solicitor accurately represented the instructions she gave her solicitor. She also was unable to give any coherent response when asked whether or not the gold chain and ornament had been taken to L Company for the purpose of valuation.
The wife is silent as to the value of the gold ring and gold chain and gold ornament in her possession. There is no indication that L Company have in fact valued those items. There is an onus on the wife to have provided the Court with the value of those items. The only evidence I am left with in relation to the value of the wife’s jewellery is the estimate placed upon it by the husband in the sum of $10,000. It is clear the wife has jewellery in her possession. The best evidence I have is the husband’s estimate which I accept in the sum of $10,000.
Item 23 – The Husband’s jewellery
The husband says his jewellery is worth $2,000. The wife estimates it is worth $7,000. Again there was an onus in relation to this disputed item for the husband to provide proper evidence as to its value. Given that he has failed to do so I accept the wife’s estimate as to the value of the husband’s jewellery in the sum of $7,000.
Item 24 – Salary received from the company when the husband was excluded
On two occasions when the husband went overseas the wife stopped the company paying the husband regular drawings. She continued to take regular drawings. The husband has calculated that the drawings that the wife took that exceeded the drawings that he took were in the total sum of $45,000. This is a calculation of 50 weeks at $900 per week.
Counsel for the husband conceded that given that he was requesting the Court to make adjustments against the wife in relation to the monies she actually took from the company there must be some element of double counting in this claim by the husband. Counsel for the husband asserted that he thought there wasn’t a complete overlap (I did not understand why there is not a complete overlap) but he conceded it would be too hard to extract any element that he asserted was not an overlap. Consequently, I will not allow this claim against the wife by the husband.
Items 26 to 33 – Monies received by the wife
In a summary of argument handed up at the commencement of the trial and in final submissions, the husband asserted that the wife had taken funds to the exclusion of the husband and details those additional funds are as follows:
HM Shop $29,200
H Shop $24,200
HR Shop $125,900
Overseas telegraphic transfers ($9,980 + $11,406) $21,386
Rent received from Ray White Real Estate $14,812
Rent received from LH $1,159
Centrelink funds from her mother and for N $27,634$244,291
These claims were based upon Exhibits 16 and 17. In final submissions Counsel for the husband indicated that he had omitted from this list the amount for the car space rent of $1,600 which appears on Exhibit 17.
Exhibit 17 is a document prepared as a summary of Exhibit 16 pursuant to the provisions of s.50 Evidence Act (Cth) 1995. I am satisfied that Exhibits 16 and 17 establish that the wife received the amounts that have been asserted.
The funds have been received by the wife in a period between 9 April 2001 and 31 October 2005.
During that approximate period, the wife said that she travelled to the United States about nine times, although she could not be precise. She also travelled to Canada. She did not dispute that she travelled to New Zealand three times and travelled to Iran four times. She agreed she travelled to Thailand, to Hong Kong, Saudi Arabia, Egypt, the United Arabic Emirates and to Bali.
Counsel who appeared for the wife in the first part of the trial, commented that Exhibit 17 cannot be looked at without looking at the expenses that were incurred by the wife. Whilst the break in the hearing had taken place because of the need to attend to matters involving the Australian Taxation Office, the wife ceased to engage her solicitor and Counsel. Without in any way being critical of the wife’s new lawyers (who were engaged at very late notice), no analysis was done of Exhibit 16 on behalf of the wife to set out expenses that she paid from monies received between 2001 and 2005. Given there is no detailed analysis of payments made out by the wife, once the husband had established the monies that the wife had received from the company it is a matter for the wife to account for how that money was spent and whether there is any expenditure from the monies for which she should be given credit. She has not done so. Exhibit 16 is an extensive bundle of financial records. The order that I made on 6 April 2006 made it clear that the use to which Exhibit 16 could be put as evidence was limited. Exhibit 16 was only to provide the source documentation for the purposes of the creation of Exhibit 17 which was a summary which then became evidence. I made it clear during the trial that I was not prepared to allow Exhibit 16 to be tendered as evidence from which I would myself have to do extensive calculations. It would be unsafe for me to attempt to embark on any analysis of Exhibit 16 and work out whether or not any credit should be given to the wife in circumstances where she has made no attempt to carry out that analysis and where there has not been any testing of that type of analysis.
Consequently, apart from the amount for Centrelink funds, I accept that items 25, 26, 27, 28, 29, 30 and 32 should be added back against the wife on the balance sheet.
Item 31 – Centrelink funds
The wife’s evidence is that monies that she has received from Centrelink have been paid to her so far as she is aware as a carer allowance in respect of her mother. Given that the wife’s bank account shows that she regularly receives two payments at the same time each fortnight, I infer that the other payment is in all likelihood a payment in respect of N but that is not confirmed in the wife’s evidence. The wife’s evidence is that the funds that she received from Centrelink from time to time have been entirely expended on the costs she incurs in maintaining her mother.
The wife was asked a number of questions about income received by her from Centrelink on behalf of her mother. The wife’s mother is in a nursing home at L. I accept that the wife substantially uses the income she receives on behalf of her mother for the purposes of supporting her mother.
Consequently, as I have said, I do not allow the add-back against the wife of Centrelink funds in the sum of $27,634 as claimed by the husband.
Item 33 – Stock, plant and equipment
The husband alleges that the wife ended up with $20,000 worth of stock, plant and equipment from the company. Counsel for the husband could not during submissions direct me to where the husband had made an estimate of $20,000. This stock, plant and equipment was originally owned by the corporate entity and all parties agreed that that company which was no longer trading had no value. The stock, plant and equipment were said in final submission by Counsel for the husband to be in the wife’s possession in the storage cage at her property. The submission was that the husband did not know what it was worth and it was up to her to get a valuation. It was submitted that an inference should be drawn against the wife because of her failure to comply with a positive obligation to disclose the value of these items.
I am unable to find that any stock, plant and equipment that the wife may currently still retain as a remnant of the business activities has any value as trading stock. I do not accept the husband’s submission in relation to the amount to be added back for stock, plant and equipment.
Item 35 – Bank account of the Wife
The wife in opening submissions through her Counsel said she did not have any money in a bank account. That was amended and in her evidence she said that she has currently about $300 in a bank account.
Item 36 – Shares disposed of by the husband
In his affidavit sworn 27 June 2007 the husband indicates (at paragraph 20) that:
“based on the information gathered by Mr [A], accountant, it would appear that the total from shares sold by me between 2001 and 2003 inclusive is in the sum of $109,939”.
In final submissions, Counsel for the husband referred to Exhibit 23. The final page of that document sets out shares sold between 2001 and 2003.
Counsel for the husband asserted that on his calculation the total of shares sold was about $105,000 (his original document in final submissions said $103,000).
A closer examination of Exhibit 23 however will indicate that Counsel for the husband has probably misread one of the figures in the summary and has read “$68,187.22” as “$58,187.22”.
Exhibit 23 shows the following sale of shares:-
Shares
Date
Amount
NC
2001
$9,082.00
Woolies 2001 6,504.00 NAB 2002 32,177.00 NAB 2003 6,726.00 Qantas 2002 24,684.00 Qantas 2003 17,142.00 BHP 2002 11,326.00 2003 1,690.00 LLC 5,861.00 $115,192.00
This is the amount I shall add to the balance sheet against the husband.
Item 37 – The Husband’s share in property in Iran
The wife asserted that the husband had one parcel of substantial real estate (a high rise) in Iran. She connected this with the evidence that she gave about her attendance in 1998 with the husband at the bank where she alleged that she saw safety deposit boxes “stuffed” with cash of various denominations. This allegation is connected with the wife’s other allegation about the husband marrying the wife’s brother’s wife and that the wife had observed on a trip to Iran that her sister-in-law is living a life of luxury in Iran. I find that there is insufficient evidence to establish any of these assertions.
The husband denied that he had a multi-storey office building in Iran.
The husband did not seek to make clear in evidence what happened to any cash that might have been in a locked box in 1998. There was nothing in his cross examination which helped me to know the correct position about alleged money in a box or boxes at the bank.
The wife has not led any credible evidence to demonstrate that the husband has property in Iran more than that which he has disclosed. Notwithstanding comments I have made in relation to not accepting the husband’s evidence as to his exercising his earning capacity since separation, there is no basis upon which I could ascribe any value to assets that the husband may or may not hold overseas more than the amount that he has conceded.
Item 38 – Private school fees for N
The assertion that the wife only received $10,000 towards school fees is contained in paragraph 42 of the wife’s affidavit sworn on 20 January 2005. When given the opportunity to amend her evidence she refused to do so. The husband in his original summary of argument included school fees in the figure of $19,957. In the document handed up during submissions by Counsel for the husband, school fees paid for N at S College were excluded. Counsel for the husband said it was really an off balance sheet item and that both parties had contributed to that schooling. On reflection however Counsel for the husband said that strictly speaking on a mathematical basis the amount should be added back in as notional property since the money came from the proceeds of the E property. I accept the husband’s figure of $19,957. This is a joint payment made by the parties.
Item 40 – Furniture & effects from E property in wife’s possession
The husband asserts that the wife has $10,000 worth of furniture and effects from E property in her possession. The wife’s evidence was that when she moved from E property she did not take very much with her because she moved with her mother and her two children to rented accommodation which was not very spacious.
The wife in her financial statement does not indicate that she has any furniture at all. That is clearly an incorrect assertion in her financial statement. The husband at paragraph 101(e) of his affidavit estimates that the furniture which is in the wife’s possession from the E property had an estimated value of $10,000. Given that the alternative evidence is that the wife has furniture of no value, then the husband’s estimate is the best evidence I have got. I accept the figure of $10,000 in relation to furniture in the wife’s possession from E property.
Item 41 – Thirty six payments from the company for the new Mercedes
It was agreed that $71,000 was expended on payments for this motor vehicle which was driven by the wife.
The husband’s position is that the company gave no authorisation to make those payments and it is said that there is evidence that the husband expressed his displeasure after it had occurred. What happened at this time however was that upon the purchase of the new Mercedes by the wife the husband commenced driving the old Mercedes and the Prada motor vehicle which was previously driven by him was given to the elder child to drive. The wife’s Mercedes was ultimately repossessed.
I accept the submissions by the solicitor for the wife that the payments on the Mercedes were lease payments during a period of time when the company was leasing that motor vehicle for the wife. I do not add in those payments to the balance sheet against the wife.
Item 43 – Monies from company cash box
The husband asserted that there was money in the company cash box which the wife retained in the sum of $4,165. The wife did not place this matter in issue except in final submissions where the solicitor for the wife submitted that significant doubt had been brought on who had money in the cash box. I accept the husband’s evidence over the wife’s in relation to this figure.
Item 44 – Monies to maintain wife’s home
The husband at paragraph 10 of his affidavit sworn 27 June 2007 asserts that sums totalling $53,253.33 have been paid in relation to the H property from May 2006 until June 2007. The wife lived at the H property rent free to the exclusion of the husband from 14 December 2005 to 7 June 2007. Of course the child of the marriage lived in that accommodation during that period at the same time.
The affidavit incorrectly sets out the dates upon which those payments have been made but they are as follows:-
21.8.06 Outstanding strata levies $28,238
12.9.06 Unpaid council rates $7,315
7.6.07 Body corporate fees $7,424
In addition there is a further payment of $10,273 which was said to be paid on 9 December 2007 (which is clearly an incorrect piece of evidence by the husband). Counsel for the husband attempted to correct that from the bar table to say that the payment was made on 14 December 2005 but I have no evidence that that is so. The solicitor for the wife however did not dispute the amounts. What she did say was that the monies to maintain the wife’s home should not be put solely against the wife, particularly given that the property at H was the registered office of the company.
In order to maintain the jointly owned asset at H it is ordinarily necessary for outgoings such as Council rates and strata levies to be paid from time to time. I do not accept in the circumstances of this case that it would be appropriate to add these payments back against the wife and I do not intend to do so.
Item 45 – Rent from 120 G Street
In paragraph 18 of the husband’s affidavit sworn 27 June 2007 he annexes a copy of a Residential Tenancy Agreement in the wife’s name in relation to the property at 120 G Street. The lease was for two years commencing on 10 August 2006. The weekly payment was $220 per week. The wife also received a four week bond. The husband’s calculation is that the wife received to the date of the affidavit $10,340.
In final submissions the solicitor for the wife did not dispute that the wife may have received these funds. She says however that the husband solely received rents from the date of separation in November 1998 through to the date that an order was made that rents be shared in April 2005. The husband accepted in fact that he received net rent from the three properties at G Street, C and W. The gravamen of the wife’s submission was given that no figure was being brought to account in relation to rents received by the husband after separation then this amount and the amount in the next item should not be taken into account against the wife. I accept there is force in that submission and I do not think it appropriate to take into account rents received by the wife in the circumstances where there has been no accounting for rents received by the husband after separation.
Item 47 – Rents received by the wife in relation to 182 G Street
The husband in paragraph 19 of his most recent affidavit annexes the Residential Tenancy Agreement for this property and carries out a calculation that indicates rental received by the wife to 19 June 2007 pursuant to that lease in the sum of $3,740.
Again a similar argument applies to these monies received by the wife as set out in the previous item and for the same reasons I do not add this amount back against the wife
Item 47
The husband’s evidence is that he has $14,235 in an MLC universal superannuation scheme. The wife did not accept that figure but did not dispute it either and I accept the husband’s evidence in that regard.
Item 49 – Debts owed by the wife
The wife says that she has $115,409 in personal debts. They are made up as follows:-
SA $30,000
RR $15,000
EI $11,414MB (US$20,000 conversion rate as at 26.4.04) $28,995
MB (for mortgage payments) $40,000
$125,409
Debt to AR of $30,000
In her original financial statement sworn on 18 January 2005 the wife listed her debt to AR in the sum of $20,000. The wife gave oral evidence that as a result of a conversation with Ms AR a couple of weeks ago she now said she owed $30,000. The wife’s evidence is to the effect that in January 2005 she simply forgot the amount of money that AR had provided to her.
Ms AR in her affidavit sworn on 2 April 2006 gives evidence that the amount was $30,000. She asserts in that document that she provided her with two cheques, one on 11 March 2004 for $10,000 and one on 13 March 2004 for $4,140. The remaining $15,000 was paid in cash. The actual amount was not $30,000 but $29,140. The amount of $30,000 is what Ms AR says the wife originally asked her to provide.
AR said in relation to the cash that she gave she had a record of it. She wrote it in her diary but she did have the diary with her. She was only asked to swear an affidavit within a couple of weeks of the final hearing. Ms AR had not been told by the wife the E property was sold and was unaware of the wife’s recent overseas travel. She said all the money that she gave was given to the wife in March 2004.
Ms AR’s evidence was substantially unshaken during cross examination and I accept that she has paid the money to the wife as alleged (totalling $29,140). I also accept that the wife is required by Ms AR to repay money to her.
No evidence was lead from RR or EI.
Absent sworn evidence from those to whom it is alleged debts are owed, I do not have enough confidence in the wife’s evidence, absent corroboration, to except these amounts as legitimate debts.
The debts to Mr MB
Mr MB could have given evidence in these proceedings by electronic means. No attempt was made to arrange for that to happen. The wife’s evidence in relation to cash received from Mr MB is entirely unsatisfactory and I am not prepared on the evidence to find that that debt exists.
Annexure N purports to be a copy of an email dated Friday 2 December 2005. Annexure N to the wife’s affidavit sworn 5 April 2006 is in the following terms:
“To whom it may concern:
I [MB] (citizen of Amer..) that I have loan (sic) $70,000 to [the wife] has to pay me back as soon as possible.
If you have any questions or if you may need further informa.. feel free to contact me at …
Sincerely
[MB]
PS remind if email was received”
The wife gave evidence that Mr MB had given her more than $70,000 in cash to assist her and her son and that she had not repaid him. Initially when she was giving her evidence she said that that included fees that he paid for travel. Later in her evidence it became less clear as to whether or not she was saying that the $70,000 included money that he paid to assist her for many of her air fares to the United States. She said that she used part of the $70,000 to assist in the mortgage payments of E property and H property and also to help pay for N’s school fees.
The wife gave evidence that she had no records of the money that had been paid to her in cash by Mr MB. She said that he had given her the cash in US dollars and she had brought it back with her on her trips.
She said he was now asking for the money back and that he had sent her an email to that effect. She had also had a number of telephone conversations with him where he had made the request. She did not think Mr MB had any records of what he had paid her because he had destroyed those documents for fear he might get into trouble with his wife for having made the advances. The payments were never more than $7,000 and never less than $3,500.
That evidence does not fit comfortably with the fact that the wife did not make in excess of ten trips to the United States and so it is unclear as to how in excess of $70,000 in cash was collected from Mr MB.
Counsel for the husband also points out that the husband had personal loans of $20,000, credit cards debts of $3,010 and a car repair bill of $4,600. His position is that these are all personal post separation liabilities incurred by the parties and should be taken off the balance sheet. Coincidently, the amount of debt proved by the wife, namely $30,000, and the amounts claimed by the husband are approximately similar. I accept the submission by Counsel for the husband that the parties have had distributions by way of interim property orders and have utilised those distributions at their discretion. I also bear in mind the findings I have made elsewhere in relation to the earning capacity of both the parties. Accordingly I do not think it is appropriate in this case for post separation borrowings for personal expenses to be added back as liabilities in the balance sheet.
Item 50 – Taxation
The parties on 20 August 2007 agreed that an order should be made for the payment of two amounts to the Australian Tax Office. The total of these two amounts are slightly less than the amount predicted by Mr A in a letter dated 18 July 2007 (I have included this document in the list of Exhibits and marked it Exhibit 32). The tax payments totalling $185,505 relate to GST, PAYG amounts and superannuation guarantee charge for M Pty Ltd.
CONTRIBUTIONS
Counsel for the husband agitated for a 55-60 percent adjustment in the husband’s favour based on contributions.
The solicitor for the wife originally submitted that there should be a 50/50 division of the assets based on the contributions of the parties.
The solicitor for the wife later in her submissions however amended her position so that she sought a 70/30 split based on contributions, in favour of the wife.
The wife asserts that given that this was a long marriage of over 20 years duration, neither party made a particularly significant contribution that would relate to any special contribution or in the nature of an independent lump sum payment such as inheritances and windfalls and therefore at the date of separation the contributions should be 50/50.
The wife goes on to say that in respect of post separation contributions that given the parties separated in November 1998 there has been well over eight years where the wife has had the almost all the responsibility for the younger child N. N was 6 years old when the parties separated and is now aged 15.
The wife asserts that the husband has been away from Australia for about half the time since separation and asserts that post separation contributions should favour the wife by way of a 5 percent adjustment.
On the other hand the husband says that at the commencement of cohabitation he had savings of $20,000 (US). Although he asserts those savings were put towards the purchase of the original residential property in Tehran, as previously mentioned, by the time that unit was purchased the parties had been living together for six years and H was about 2 years old. The property was sold in 1985 for $15,000 (AUD). At the commencement of the cohabitation the husband had qualifications as an engineer. In his summary of argument the husband asserted that he paid a dowry of $10,000 (US) for the wife. The wife has recently taken legal proceedings in the Iranian Family Court on the basis that the dowry was not paid and hearsay evidence of the husband is that an order was made that he pay a dowry. He did not in oral evidence before me assert that he had paid the dowry and he gave evidence that he had not defended the Iranian proceedings with any vigour.
The proceeds of the sale of the unit in Tehran were used to reduce the mortgage over the property that the parties purchased in Australia at W.
The husband asserts that both parties worked hard but that his education and qualifications meant that the H businesses were able to be established. There is no real evidence to connect the husband’s qualifications as an engineer with his setting up of the businesses at H and I am satisfied on the evidence before me that both parties, to their own rights, equally contributed towards the development of those businesses.
The wife received an amount of $15,000 from the Victim’s Compensation Tribunal by way of compensation to her as a victim of the home invasion. I treat that as a contribution made by the wife.
It is unclear what each party did in the businesses. The wife in her affidavit gives the following evidence at paragraph 29:
I was the supervisor of all three businesses located at [H]. I commenced work at 7am and concluded at midnight seven days per week. I even opened all three stores on Christmas Day. I was the only shop in the premises to be opened on Christmas Day. It was my role to supervise over all three shops and I therefore had no set time for each shop. I would attend whichever shop I was required to at the time but my main role was to supervise over all three of the shops located within the [H] premises. The shops were open from 9am to 10pm six days a week and from 9am to 7pm on Sundays. I worked every hour that the shops were open and would always stay back after the shops were closed to prepare for the next morning and count the day’s takings.
In oral evidence the wife said that from 1992 she would be working 16 – 17 hours per day. She would work 6 – 7 days with the Australian Public Service as well as working in the business.
The husband denied that the wife worked up to 17 hours a day. I accept his evidence and find the wife did not work the hours which she suggested.
In oral evidence the husband said that he played an overall supervisory role in the business. He was involved in the preparation of at least two BAS returns after GST was introduced in June 2000.
Clearly the parties did very well in the businesses around the time of the Sydney Olympics.
The husband said he was at the businesses on and off during 2001. Staff were employed to attend to the bookkeeping. The records were kept in a central location in a backroom at the HR store. All the computer records were kept there.
At paragraph 72 of the husband’s affidavit, he says that from February/March 2001 the wife conducted the day to day operations of the business. From May 2001 to February 2002 he conducted the majority of the day to day operations, although the wife was called in at various times (although for some months later in 2001 she did not do so because she was overseas). And in paragraph 73 he says from February 2002 to at least June 2002 the wife had the day to day running of the business.
So the husband asserted he was not active in the business during 2002 and the business stopped trading at the end of 2002 with the landlord re-entering in January 2003. I accept that is so.
The husband generally asserts that the wife wasted assets of the company after he had ceased to be actively involved in the business. At the end of the day what happened to the company after the Sydney Olympics is very murky. The businesses seemed to spiral into disarray at that time. I am unable to find that either of the parties recklessly or negligently wasted the assets. The husband at some point in early 2002 walked away from the business. He cannot complain in my view that the wife in some way did not properly attend to the nurturing of the business after that time. The evidence is that the company’s landlord took advantage of the dysfunctional relationship between the parties and the difficulties that that was causing in the day to day operations of the business
The husband asserted that the company lost a large amount of money after he left. The husband leads no evidence which would prove the amount of the alleged loss.
The husband has not made out a case against the wife that she wasted company assets.
The wife actually worked in the businesses for over a year after the husband abandoned them. Whilst she received income from the businesses in that time, all of that income has been brought to account at the first stage on the balance sheet and consequently there has been no accounting for any contribution she made by way of personal exertion in the business in its last year.
I accept that the husband made non-financial contributions by becoming an owner builder and supervising subcontractors for the construction of the parties’ home at W. I accept the husband used his qualifications and physical labour to improve that property and to help establish the surrounding garden and retaining walls.
The husband also became an owner-builder at the C property. He supervised contractors and performed a lot of the labour himself to build the home on the land. He improved the property and gardens by his labour whilst working as a full time teacher.
I accept that the husband was primarily responsible for subdividing the E property after the parties had purchased it.
The husband argues that the wife received greater benefit from the companies than he did after the separation. I have to be careful however not to double count. The wife has already had a substantial sum added back against her on the balance sheet for monies that she received from the business post separation (see items 26, 27, 28 and 32 on the balance sheet).
A significant contribution was made on the wife’s behalf by her mother. Her mother minded the children in a substantial way, freeing both parties to involve themselves for long hours in the four retail businesses. In answer to the assertion that some adjustment should be made because of the wife’s mother’s involvement, the husband says that he supported the wife’s mother, by giving her food and board. This does not in my view diminish an important contribution which should not be overlooked.
The husband says he contributed in a minor way to domestic tasks which means the bulk of domestic tasks were done by the wife or on her behalf by her mother.
Mr …, the wife’s hairdresser and friend, confirmed that the wife was a very good cook.
Child support
The wife denied that she received $20,000 from the husband for N’s maintenance.
I find that the husband in 2000 did in fact provide $20,000 to the wife towards N’s school fees and maintenance. The wife in her evidence says the husband contributed $10,000 in school fees for N to attend S College. I find the amount she asserts is unreliable. I prefer the evidence of the husband and I accept his assertion that those monies were paid to the wife in 2000.
It seems however the husband has provided little ongoing periodic support for N apart from one or two payments of lump sums up until the consent order made on 28 April 2005 when the wife received $250 per week from rental monies (half of which was the husband’s money) for N’s maintenance.
The husband has had minimal assessment of periodic child support during periods of time when he has not fully exercised his earning capacity. There are arrears even in relation to the assessments that the husband has received.
There is a child support statement which is Exhibit 27. This statement shows an outstanding balance of child support owing by the husband as at 22 June 2007 in the sum of $12,655.70.
That amount comprises penalties and other amounts in the sum of $2,782.99.
CONCLUSIONS IN RELATION TO CONTRIBUTIONS
The husband’s initial contribution made in 1976 is not a matter upon which great weight can be placed given all the other substantial contributions that have been made by both parties during a long marriage. I find that up until the date of separation in November 1998, the myriad of contributions made by the parties personally should be seen as equal. The wife however can point to contributions made on her behalf by her mother to argue that some adjustment should be made in her favour. The contributions made on behalf of the wife by her mother were significant. They went beyond the natural love and affection of a grandmother for a child. She actually became the children’s nanny, freeing the parties to pursue their business enterprises. After separation the wife had the primary responsibility for the children, particularly the younger child and I find that there is an imbalance in her favour in contributions after the parties separated. I find that there should be an adjustment on contributions in favour of the wife of 7.5 percent.
SECTION 79(4)(d) – (g) FACTORS
Counsel for the husband acknowledged an adjustment on s.75(2) factors of about 5 percent to the wife.
The solicitor for the wife originally submitted that there should be a 40 percent adjustment in the wife’s favour based on s.75(2) matters. The solicitor for the wife then changed her submission as to the percentage adjustment to the wife based upon contributions.
As a result Counsel for the husband amended his position to a 20/30 percent adjustment for s.79(4)(d) – (g) factors.
The wife is aged 45. The husband is aged 55. Both parties claim their health is impaired. As set out above, when I was discussing the wife’s credit, the wife gave evidence of a general nature that she was on depression pills and could not remember things. The husband says he has a reduced earning capacity and has not in fact worked since he ceased involvement with the company in 2002.
The husband’s evidence is that he cannot work in Sydney anymore because psychologically he cannot bring himself to do it. He has gone back to Iran on a significant number of occasions. In his evidence when asked by me he said that since June 2002 he has gone back to Iran on five occasions so far as he can remember. In April 2002 he went back to Iran for two or three months. In May 2003 he went back to Iran for three months. In August 2003 he went back for two months. In September 2004 he went back for two months. In September 2005 he went back for two months. He said otherwise he was in Australia apart from October 2002 when he went to the US for four to five days. He said he went to Iran because it was easier to be away from the atmosphere and the emotional distress that he was suffering in Sydney. He said after 27 years of being in Australia he could not work in Sydney anymore. He says had lost everything. He also said it was cheaper to live with his parents and his relatives overseas.
The wife says, given what she alleges is her poor health, she has not worked since 2001, and that she has several more years of responsibility for N. She also points to the fact that the husband is well educated and she is not.
Wife’s capacity as a business woman
There are a number of documents which the wife was shown, MFI1, relating to the wife’s seeming involvement in business activities. The wife said that Mr Z and Mr MD tried to help her out so that she could have some business but it never happened.
The wife conceded that on one trip to Iran using an introduction by a company called …, she attempted to “make business” and wanted to do so. She asserted however that “nothing happened”.
In the middle of 2005 the wife conceded that she went to a trade conference with Ms LG and completed on travel documents her usual occupation as business woman. She asserted in oral evidence that her assistance to Ms LG was unfruitful and no business came from that trip.
As set out above the wife has travelled overseas extensively since 2001.
Exhibit 25 is an application for a loan on behalf of the wife for a sum of $116,000. In that application I am satisfied that the wife represented to the National Australia Bank that she had net monthly income from salary of $3,047. Whilst I do not take that document to be truthful it is some indication that the wife does have an earning capacity that is beyond what she has given in sworn evidence.
Conclusion about earning capacity
The breakdown of the parties’ marriage has significantly affected the earning capacity the parties both had during the “hay days” of the company’s successful operation of the four businesses.
Having said that and having seen both parties in the witness box, I am far from convinced that their health is such that they are disabled from gainful employment.
The husband has been overseas half the time between 2000 and 2006. I find that he has not satisfactorily explained why he has not exercised his earning capacity whilst overseas.
I think that the desire of both parties to openly declare their earning capacity is compromised by the continuation of these proceedings which have been going on for many years. I am satisfied that both parties have a capacity to earn and to earn to a level sufficient to be able to meet their day to day commitments.
Funds received from Centrelink
As I have previously said I accept that the wife substantially uses the income she receives on behalf of her mother for the purposes of supporting her mother.
The wife clearly has the responsibility of looking after N for the next three years and she is entitled in my view to an adjustment for the effect that that does have on her earning capacity.
The wife conceded that she received $50 per week for the rental of a car parking space attached to the unit in which she lives in H. She said she had no idea that she had to disclose that income.
Child Support
The current assessment for N is $27.75 per week.
The order that I have made discharges all previous orders and means that the husband will no longer be contributing $125 per week from rental monies towards N’s support.
The wife submitted that the younger child goes to M College which is expensive. This is a college that the husband has objected to the child going to in the past. He is 15 years of age and it is put that given the husband’s history of going back to Iran since the separation it is unlikely that the wife would be secured in any way in relation to future payment of child support. The wife is of the view that the husband will leave Australia once the proceedings are finalised. The husband in sworn evidence said that he considered Australia his home and I accept that that is so. However, I am mindful of the fact that between January 2000 and March 2006 the husband has spent about half of that time outside Australia (see Exhibit L).
The wife has the ability through processes available to her under the Child Support (Assessment) Act to seek an increase in this weekly amount based on the husband’s earning capacity. There is no evidence to indicate that she has attempted to exercise her rights in that regard. Given the overall facts in this case however it is understandable that she would feel that that process might be difficult, but the husband at the end of this case will still have assets in Australia against which any future assessment of child support might be executed.
The wife made a rather startling allegation that the husband and her brother’s former wife had got married in Iran. The husband denied that and denied any relationship at all with the wife’s brother’s wife. There is absolutely no other corroborating evidence to support the allegation made by the wife and I do not accept it.
The husband asserted that the wife has a new partner, Mr Z. The wife gave evidence that Mr Z, who seems to live in New Zealand, provided emotional support to her and to her younger son. She said she did not have a sexual relationship with him. Whilst the wife conceded that she went to see Mr Z in New Zealand in April 2003, the husband’s assertion was not made out in the evidence and there is no evidence that these two parties are in any way living together or sharing financial resources.
Other matters
The wife had taken proceedings in the Iranian Court seeking that the husband pay the wife $10,000 (AUD) by way of dowry. There was hearsay evidence that the order had been made but there was no verification of that. Interim consent orders were made that monies currently held in trust would be used to pay whatever order the Iranian Court might make in relation to the dowry but I have no indication that any monies have been paid from that fund for that purpose.
The wife gave oral evidence that the Iran Court is going to “dig out” what the husband has in Iran. She asserted that she had told the Iran Court about the Australian proceedings. She asserted that the husband had lots of property in Iran that would be discovered.
The wife had also made an application in Iran for maintenance support. She agreed that she was seeking maintenance back to 1980. The wife also said she did tell the Iran Court about the interim property orders made in Australia.
There is no indication that the wife claims against the husband outside the jurisdiction will be successful.
The wife in oral evidence reiterated what she set out in paragraph 45 of her affidavit. She said in about November 1998 she went to the National Australia Bank with her husband; the attendant in the bank vault seemed to know the husband well and that the husband opened six security boxes containing bundles of American dollars, Australian dollars and Japanese Yen. Her understanding was that this was cash taken from the shops from day to day trading at H. It was put to the wife in cross examination that there was only one box but she denied that.
Both parties assert that the other has not fully disclosed their financial position, but I am unable to find either against the wife or the husband that they have failed to disclose substantial capital reserves.
The parties have not entered into a financial agreement under the Family Law Act.
The parties have had the benefit of previous interim property orders made.
A division of assets based on the findings on contributions would lead to the wife receiving not only the home in which she lives but a portion of the rental properties. This will give her investment income.
CONCLUSION IN RELATION TO SECTION 79(4)(d) – (g) FACTORS
When all the above matters are taken into account the matter which primarily leads to a further adjustment is the wife’s continuing primary responsibility for the support of N. This will impact to some degree upon her ability to re-enter the work force on a full time basis, particularly if she wishes to engage in overseas commerce.
This burden is increased when the history of the husband’s support of N is reflected upon.
I find there should be a 2.5 percent adjustment to the wife based upon s.79(4)(d) – (g) factors.
JUST AND EQUITABLE
Counsel for the husband submitted that overall it would be just and equitable for there to be an equal division of the net financial assets of the parties.
On both versions of the submissions by the solicitor for the wife, the adjustment sought 90 percent in the wife’s favour.
Taking into account my findings in respect of contributions and 79(4)(d) – (g) factors, the adjustment to be made in favour of the wife will be 60 percent in the wife’s favour.
This would lead to the following distribution of assets:-
Husband’s Assets Item No. Description Percentage Value 1 W property 100% $290,000 2 C property 100% $535,000 7 Controlled monies in trust 50% $97,014 8 Loan to H 50% $70,000 12 Distribution 7/2/2000 100% $80,000 14 Distribution 14/11/2002 100% $40,000 16 Distribution 7/4/2006 100% $75,000 18 Distribution 7/6/2007 100% $11,006 20 Persian carpets (with husband) 100% $7,650 23 Husband's jewellery 100% $7,000 34 Bank accounts 100% $4,000 36 Shareholdings 100% $115,192 37 Husband's share in Iran property 100% $1,875 38 School fees for N – S College 50% $9,979 39 M College 50% $5,500 42 Mercedes vehicle 100% $11,000 47 MCL the Universal Super Scheme - NAB 100% $14,235 Husband’s Liabilities Item No. Description Percentage Value 50 Tax 50% $92,752 H pays W $1,048 Husband’s Net Assets (40%) $1,280,649 Wife’s Assets Item No. Description Percentage Value 3 104 G Street 100% $160,000 4 120 G Street 100% $160,000 5 182 G Street 100% $160,000 6 H property 100% $735,000 7 Controlled monies in trust 50% $97,014 8 Loan to H 50% $70,000 11 Victims' Compensation 100% $15,000 13 Distribution 7/2/2000 100% $100,000 15 Distribution 14/11/2002 100% $105,000 17 Distribution 7/4/2006 100% $75,000 19 Distribution 7/6/2007 100% $11,006 21 Persian carpets (with wife) 100% $38,935 22 Wife's jewellery 100% $10,000 25 Monies from HM shop 100% $29,200 26 Monies from H shop 100% $24,200 27 Monies from HR shop 100% $125,900 28 Overseas TT 100% $21,386 29 Ray White rent 100% $14,812 30 Rent LH 100% $1,159 32 Car space rent 100% $1,600 35 Bank accounts 100% $300 38 School fees for N – S College 50% $9,979 39 M College 50% $5,500 40 Furniture and effects from E property in wife's possession 100% $10,000 43 Monies from company cash box 100% $4,165 48 MCL the Universal Super Scheme - NAB 100% $27,523 Wife’s Liabilities Item No. Description Percentage Value 50 Tax 50% $92,752 W receives $1,048 Wife’s Net Assets (60%) $1,920,974
The above table is a distribution of assets including the add back of notional assets. I am mindful of the fact that given the expenditures of the parties since separation, many of the assets notionally added back no longer exist. The principal assets are the six pieces of real estate, the parties’ superannuation, the husband’s motor vehicle and some chattels. The controlled monies in trust (item 7) has been substantially reduced by the payment of tax (item 50) pursuant to the orders I made on 20 August 2007. However, the percentage distribution of remaining assets is also roughly 60/40 in the wife’s favour ($290 + $553 + $11 + $14 compare with $160 + $160 + $16 -+ $35 + $10).
Standing back and considering the distribution of assets on an overall basis, I find that the proposed distribution would lead to a just and equitable alteration of the property and assets between the parties.
APPLICATION FOR CHILD SUPPORT VARIATION
As set out above there are currently child support arrears of $12,655.70
The husband sought an order for the discharge of arrears of child support.
The husband relied on paragraph 116 Child Support (Assessment) Act as the basis upon which the court has jurisdiction to deal with the application.
Exhibit 27 shows that the arrears as at 22 June 2007 were $12,655.70. The current child support payable is $27.75.
The arrears however include $2,782.99 in penalties. Counsel for the husband conceded that no notice had been given to the Child Support Agency in relation to the husband’s application seeking a discharge of the arrears. After discussion with Counsel for the husband, Counsel for the husband indicated that the husband would fall back on his other rights and not pursue the matter pursuant to s.116 Child Support (Assessment) Act.
PROPOSED ORDERS
I am uncertain as to whether or not the tax assessed by Mr A covers the monies received by the husband in relation to the sale of shares.
The wife wanted $20,000 set aside to cover any tax payable in relation to the shares in her name that have been disposed of. The husband indicated that he would indemnify the wife for any tax payable on shares sold as set out in Exhibit 23. Given the history of dealing with issues of tax in this matter I intend to create a charge on the W property, which the wife can secure by caveat. The caveat must be withdrawn upon the wife receive a letter from Mr A or another accountant nominated by Mr A stating that Mr A or his nominee is of the opinion that there is no outstanding tax liability in relation to the sale of shares brought in the wife’s name by the husband.
I think the orders sought by the husband that the wife retain the company is more appropriate given the wife’s control of the company in its final years of trading. The wife also wanted to cause all of the stock and whatever is in the storage cage at her property to be transferred to the husband with the husband giving indemnities. Again I do not consider that to be appropriate given she has had those chattels since separation.
The husband did not seek any order against the wife in relation to her continuing claims against the husband in Iran. I infer that is because the husband has concluded any claim is unlikely to be successful and/or substantial.
I certify that the preceding two hundred and seventy-seven (277) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts
Associate:
Date: 25 October 2007
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Charge
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Injunction
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Costs
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Jurisdiction
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Statutory Construction
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