Bhatt & Solanki
[2023] FedCFamC2F 690
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Bhatt & Solanki [2023] FedCFamC2F 690
File number(s): PAC 5852 of 2021 Judgment of: JUDGE MURDOCH Date of judgment: 15 June 2023 Catchwords: FAMILY LAW – PROPERTY SETTLEMENT – Where the parties’ were married for 10 years – where there are no children of the marriage – where the husband asserts he made overwhelming financial and non-financial contributions throughout the marriage and seeks that items be notionally added back to the property pool –where the wife asserts that her contributions were made significantly more arduous as a result of the husband’s conduct – where the wife’s Kennon claim is not substantiated – contributions assessed as equal - where there is a significant disparity in the income of husband and the wife – orders made adjusting the overall property of the parties as 52.5 percent to the wife and 47.5 percent to the husband. Legislation: Family Law Act 1975 (Cth) ss 75(2), 75(2)(o), 79, 79(4)(d)-(g) Cases cited: AJO & GRO [2005] FamCA 195
Bevan & Bevan [2013] FamCAFC 116
Edgehill & Edgehill [2007] FamCA 1102
Fields & Smith [2015] FamCAFC 57
Gollings & Scott [2007] FamCA 397
Hickey v Hickey & Attorney-General of the Commonwealth (Intervener) [2003] FamCA 395
Horrigan & Horrigan [2020] FamCAFC 25
Kessey & Kessey [1994] FamCA 162
Kowaliw and Kowaliw [1981] FamCA 70
NHC & RCH [2004] FamCA 633
Norbis v Norbis [1986] HCA 17
Stanford & Stanford [2012] HCA 52
Trevi & Trevi [2018] FamCAFC 173
Division: Division 2 Family Law Number of paragraphs: 82 Date of hearing: 29 – 31 May 2023 Place: Parramatta Counsel for the Applicant: Mr Maddox Solicitor for the Applicant: John & Co Lawyers Counsel for the Respondent: Mr Di Lizia Solicitor for the Respondent: JC Legal Practice Table of Corrections 19 June 2023 In the Catchwords “55 percent to the wife and 45 percent to the husband” has been corrected to show “52.5 percent to the wife and 47.5 percent to the husband”. ORDERS
PAC 5852 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS BHATT
Applicant
AND: MR SOLANKI
Respondent
order made by:
JUDGE MURDOCH
DATE OF ORDER:
15 June 2023
THE COURT ORDERS THAT:
Cash payment to wife
1.That within 42 days the husband pay to the wife the sum of $260,389.
Suburb C Property
2.That contemporaneously with the husband’s compliance with Order 1 above the wife shall do all acts and things and sign all documents necessary to transfer to the husband all her right, title and interest in the property situated at and known as B Street, Suburb C, NSW (“the Suburb C Property”) at the husband’s sole expense and cost.
3.That contemporaneously with the transfer of the Suburb C Property pursuant to Order 2 above the parties shall do all such acts and things and sign all documents necessary to discharge the loan secured by way of mortgage against the title of the Suburb C Property (“the Suburb C mortgage”) at the husband’s sole expense and cost.
4.Pending compliance with Orders 1, 2 and 3 above the parties are hereby restrained from assigning, transferring, further encumbering or dealing in any way with their interest in the Suburb C Property.
5.That from the date of these orders the husband shall have sole right, as between the parties, to occupy the Suburb C Property.
6.That from the date of these orders:
(a)the husband shall assume all liability for and indemnify the wife against all payments in respect of the Suburb C mortgage; and
(b)the husband shall assume all liability for and indemnity the wife against all apportionable rates, capital gains tax, taxes, and outgoings of, or with respect to, the Suburb C Property of whatever nature and kind.
7.That should the husband fail to discharge the Suburb C mortgage within 3 months of the date of these Orders the parties shall, on first day of the 4th month from the date of these orders do all acts and things and sign all documents necessary to sell the Suburb C Property in accordance with the conditions set out below:
(a)The parties shall sign all documents, including any authorities for sale, necessary to enable the Suburb C Property to be listed for sale by way of private treaty with a licensed real estate agent nominated by the husband;
(b)the parties shall retain a solicitor or conveyancer as nominated by the husband to act on the sale of the Suburb C Property and both parties shall do all acts and things and sign all documents necessary to allow and cause the issue of a Contract for the Sale of Land for the Suburb C Property and any document required to affect the sale; and
(c)The sale price shall be determined by the husband.
8.That upon completion of any sale of the Suburb C Property, the parties shall do all things necessary and sign all documents so that the proceeds of sale be distributed as follows:
(a)in payment of real estate agent’s commission and all advertising expenses of and incidental to the sale;
(b)in payment of all legal costs and disbursements of and incidental to the sale;
(c)in payment of all amounts required to discharge the mortgage and all outstanding council and water rates, and any other amounts owing as against the property; and
(d)in payment of the balance to the husband.
The Suburb E Property
9.That within 42 days from the date of these orders, the husband shall do all acts and things and sign all documents necessary to transfer to the wife all his right, title and interest in the property situated at and known as D Street, Suburb E, NSW (“the Suburb E Property”) at the wife’s sole expense and cost.
10.That contemporaneously with the transfer of the Suburb E Property pursuant to Order 9 above the parties shall do all such acts and things and sign all documents necessary to discharge the loan secured by way of mortgage against the title of the Suburb E Property (“the Suburb E mortgage”) at the wife’s sole expense and cost.
11.Pending compliance with Orders 9 and 10 above the parties are hereby restrained from assigning, transferring, further encumbering or dealing in any way with their interest in the Suburb E Property.
12.That from the date of these orders the wife shall have sole right, as between the parties, to occupy the Suburb E Property.
13.That from the date of these orders:
(a)the wife shall assume all liability for and indemnify the husband against all payments in respect of the Suburb E mortgage ; and
(b)the wife shall assume all liability for and indemnity the husband against all apportionable rates, capital gains tax, taxes, and outgoings of or with respect to the Suburb E Property of whatever nature and kind.
14.That should the wife fail to discharge the Suburb E mortgage within 3 months of the date of these Orders the parties shall, on first day of the 4th month from the date of these orders do all acts and things and sign all documents necessary to sell the Suburb E Property in accordance with the conditions set out in below:
(a)the parties shall sign all documents, including any authorities for sale, necessary to enable the Suburb E Property to be listed for sale in a manner nominated by the wife with a licensed real estate agent nominated by the wife;
(b)the parties shall retain a solicitor or conveyancer as nominated by the wife to act on the sale of the Suburb E Property and both parties shall do all acts and things and sign all documents necessary to allow and cause the issue of a Contract for the Sale of Land for the Suburb E Property and any document required to affect the sale; and
(c)the sale price shall be determined by the wife.
15.That upon completion of any sale of the Suburb E Property, the parties shall do all things necessary and sign all documents so that the proceeds of sale be distributed as follows:
(a)in payment of real estate agent’s commission and all advertising expenses of and incidental to the sale;
(b)in payment of all legal costs and disbursements of and incidental to the sale;
(c)in payment of all amounts required to discharge the mortgage and all outstanding council and water rates, and any other amounts owing as against the property; and
(d)in payment of the balance to the wife.
The Real Property in Country Y
16.That within 28 days from the date of these orders, the parties shall do all acts and things and sign all documents to sell the land in Country Y located at 1F and 2F Street, Town G, Country Y (“the Country Y property”).
17.That upon completion of the sale of the Country Y property the parties shall do all things necessary and sign all documents so that the proceeds of sale be distributed as follows:
(a)in payment of real estate agent’s commission and all advertising expenses of and incidental to the sale;
(b)in payment of all legal costs and disbursement of and incidental to the sale;
(c)in payment of 52.5 per cent of the balance to the wife; and
(d)in payment of the balance remaining to the husband.
Vehicle 4 and Vehicle 5
18.That within 14 days the husband shall do all acts and things and sign all documents necessary to cause for Vehicle 4 and Vehicle 5 to be sold by private sale.
19.That upon completion of the sale of Vehicle 4 and Vehicle 5 pursuant to Order 18 above the husband shall do all things necessary and sign all documents so that the proceeds of sale be distributed as follows:
(a)in payment of any advertising and selling costs;
(b)in payment of all legal costs and disbursement of and incidental to the sale;
(c)in payment of 52.5 per cent of the balance to the wife; and
(d)in payment of the balance remaining to the husband.
Bank Accounts, Liabilities and Superannuation
20.That within 14 days for each bank account held in the parties’ joint names, each party do all things including signing all documents necessary to:
(a)equally divide between them any proceeds remaining in the account; and
(b)close the account immediately afterwards.
21.That the husband will indemnify and keep indemnified the wife in relation to all liabilities and debts in his name, including but not limited to any credit card liabilities, personal income tax liabilities and any debts to his family members.
22.That the wife will indemnify and keep indemnified the husband in relation to all liabilities and debts in her name, including but not limited to any credit card liabilities, personal income tax liabilities, and any debts to her family members.
23.That other than as is specifically provided for in these Orders, each of the parties are solely entitled to the exclusion of the other to all items of personal and real property in their respective possession or of which they are the registered proprietor as at the date of these Orders, including but not limited to all or any money standing to the credit of the each of the parties in any bank or building society, shareholdings in private and/or public companies, motor vehicles, any present or future expectation under a trust or estate and superannuation entitlements in Australia and overseas.
Section 106A
24.In the event that either party fails or neglects to sign any document pursuant to these Orders, a Registrar of the Federal Circuit and Family Court of Australia (Division 2) is hereby appointed to execute such documents in the name of the party in default so as to give validity and operation to these Orders pursuant to s 106A of the Family Law Act 1975 (Cth) upon being satisfied of such failure or neglect by way of affidavit evidence.
Costs and Finalisation
25.Within 14 days the wife is to file and serve any application for costs by way of a Minute of Order sought, together with written submissions of no more than three pages and five annexures.
26.Within 14 days thereafter the Husband is to file and serve a response to any such application for costs by way of a Minute of Order sought, together with written submissions of no more than three pages and five annexures.
27.Within 2 days thereafter the wife has liberty to file any further written submissions in reply of no more than one page.
28.That save as to the question of costs, all extant applications are otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Bhatt & Solanki has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MURDOCH
INTRODUCTION
These are proceedings for alteration of property interests pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
The parties were married in 2008 in Country Y. The parties separated on 31 December 2018 and a divorce order was granted in late 2022.
There are no children of the relationship. The wife has an adult child from a prior marriage who lives overseas.
The parties are at issue as to the nature and composition of the property pool. The wife asserts that an adjustment should be made to any contribution finding in her favour as her contributions were made more onerous as a result of the husband’s perpetration of family violence.
BACKGOUND
In these reasons a statement of fact is a finding of fact, unless it is obvious from the context that I am reciting the position of one of the parties.
During the course of the parties’ relationship two items of real property were purchased in Australia in the parties’ joint names:-
·D Street, Suburb E in the state of New South Wales (“the Suburb E property”); and
·B Street, Suburb C in the state of New South Wales (“the Suburb C property”).
During the course of the relationship two items of real property were acquired in Country Y, both being vacant blocks of land:-
·1F and 2F Street, Town G, Country Y held in the joint names of the parties (“the joint Country Y property”); and
·1H and 2H Street in Country Y in the wife’s sole name (“the wife’s Country Y property”).
A brief background to the matter as agreed by the parties by way of their Joint Chronology filed on 26 May 2023 is as follows:
·The husband was born in 1971. He is currently 52 years of age.
·The wife was born in 1975. She is currently 48 years of age.
·The husband arrived in Australia in 1994 on a student visa for the purposes of undertaking post-graduate studies.
·The parties met in 2007 and commenced a relationship at this time.
·In 2008 the parties married in Country Y.
·In 2008 the wife moved to Australia. At this time the parties commenced residing in a rental property located at J Street, Suburb K.
·It appears that there was a period of time during the marriage when both parties were not engaged in paid employment and reliant on Centrelink payments.
·In 2009 the parties commenced residing in a unit located at L Street, Suburb M.
·In 2009 the husband obtained employment as a customer service officer for Company N at the Suburb O Location.
·In 2009 the wife commenced receiving Centrelink benefits.
·In 2010 the parties’ commenced residing at the home of the wife’s brother in Suburb P.
·In 2012 the parties purchased the Suburb E property for a purchase price of $234,000. The parties’ commenced residing in the Suburb E property at this time.
·In 2012 the wife commenced employment as a customer service officer at Q Company in Suburb E and Suburb R.
·In 2014 the parties purchased the Suburb C property for the sum of $580,000, being a house and land package.
·In 2015 the parties moved into the Suburb C property.
·In 2016 the husband accepted a voluntary redundancy from his employment at the Suburb O Location and received a lump sum cash payment of $42,000.
·In 2017 the wife commenced a temporary position at S Company.
·In 2018 the wife commenced a full-time role at T Company before moving to U Company.
·In late 2018 the parties separated on a final basis. At this time the wife moved out of the Suburb C Property. The husband has continued to live in the property subsequent to separation.
·In mid-2019 the wife applied for an Apprehended Violence Order against the husband. The husband has been charged with various offences arising from the wife’s allegations, although there is no specific evidence as to what these charges are. The criminal proceedings are next listed before the court in 2023.
·In 2020 the husband was stood down from his position as a health care worker.
·In 2021 the husband commenced full-time employment as a transport worker.
·In late 2022 the parties were divorced.
THE COMPETING PROPOSALS
By the conclusion of the parties’ evidence it was agreed by the parties that the court would make orders so that:-
·The wife will transfer her interest in the Suburb C property to the husband.
·The husband will transfer his interest in the Suburb E property to the wife.
·The Country Y property registered in both parties’ names is to be sold and the net proceeds of sale be divided between the parties in the same proportion as the overall adjustment of the parties’ property.
·The wife is to retain the real property in Country Y in her sole name.
·The boat and trailer registered in the husband’s name is to be sold and the proceeds of sale be divided between the parties in the same proportion as the overall adjustment of the parties’ property.
·Each party otherwise retain all items of property and superannuation property in their power, possession and control.
·An order be made pursuant to section 106A of the Act.
Thus the only issues to be determined are:-
·If the husband is to pay any further sum of money to the wife by way of adjustment; and
·The distribution of the nominal funds in the parties’ joint bank account.
THE PARTIES
Only the husband and wife were cross examined in the matter. I had the opportunity to observe each of them in the witness box for a lengthy period of time and to observe their communication skills and general demeanour.
The wife came to live in Australia from Country Y in 2008. She gave evidence that English is her second language and at the time of her arrival in Australia her English skills were “moderate.” The husband disputed this fact and asserted that when the wife came to Australia she had “very fluent English.” When it was put to the husband that the wife’s English skills have improved since she has been in Australia, the husband’s evidence was that: “It may have, it’s become more Australianised.” Whilst the wife had to be reminded on several occasions to simply answer the question asked of her, I observed that she was clearly concentrating to understand and answer the questions asked of her. I observed that she struggled during the process and on several occasions had to ask for the question to be repeated as she did not understand some of the terminology used in the questions put to her. The wife gave her evidence in a calm and direct manner. I accept that she was attempting to answer the questions to the best of her ability. Whilst I will make specific findings of fact I found the wife to be a believable witness and the general tenor of her evidence to be credible.
The husband came to live in Australia from Country Y in 1994 and has completed tertiary studies at V College subsequent to his arrival in Australia. I observed his English skills to be superior to that of the wife. His demeanour in the witness box was very different to that of the wife – he was rude, argumentative, defensive and aggressive in tone. He had to be told within the first few questions to simply answer the question asked of him. On several occasions he spoke over counsel and would not let counsel finish his question, despite being reminded several times to do so. He accused counsel of “manipulating my words” in circumstances where counsel was simply putting the husband’s own deposed evidence to him:
I feel the facts are there and you are twisting words and putting it back to me to get something out of me, it’s inappropriate and unnecessary, my words are there.
The husband would not make concessions, avoided answering questions he did not feel would assist his case and would ask counsel questions in return in a rude and abrupt tone:
I never said that. Where did I say that?
and
Are you upset that I am answering the question you asked of me?
Whilst I will make specific findings of fact I am cautious in accepting the husband’s evidence.
THE STATUTORY REGIME
In determining claims for alteration of property interests pursuant to s 79, I am required to:
(a)make findings as to the identity and value of the property, liabilities, and financial resources of the parties, or either of them, at the time of the hearing and determine the legal and equitable interests of the parties in such property;
(b)consider, identify and assess the contributions by the parties to the acquisition, conservation and/or improvement of their property, including financial and non-financial contributions and any contributions to the welfare of the family before, during and after the relationship came to an end;
(c)after consideration of altering the interests in the property pool on the basis of contributions, to consider whether there should be any further adjustment to the either of the parties on account of the matters set out in s 79(4)(d)-(g) of the Act, including any relevant considerations pursuant to s 75(2) of the Act; and
(d)ensure that the orders to be made are just and equitable in all the circumstances.[1]
[1] Hickey v Hickey & Attorney-General of the Commonwealth (Intervener) (2003) FLC 93-143; [2003] FamCA 395 at [39].
DISCLOSURE ISSUES AND CREDIT
The wife clearly deposes in her affidavit that she did not, for a period of time, disclose the existence of a bank account held solely in her name with the Commonwealth Bank. The wife deposes that:-
·She accepts she made a mistake.
·She was “operating under the misconception that [the husband] might be able to obtain payment on settlement on this matter from this account, which comprised savings which I had accumulated during the life of these proceedings. I was scared that I might lose money that I have tried so hard to save for myself…I was also fearful that [the husband] would not approve of how I was using the money..”
·She did not seek any legal advice on the issue and thought it best to “simply not disclose it and hope that nothing would come of it.”
No submissions were made by the husband that the wife has not continued to provide financial disclosure such that I should not be unduly cautious in making findings in the husband’s favour.
THE BALANCE SHEET
The draft Balance Sheet, noting in bold those values still in dispute and rounding figures to the nearest dollar, is:-
Ownership
Description
Wife's Value
Husband's Value
ASSETS
1
J
B Street, Suburb C
$1,125,000
$1,125,000
2
J
D Street, Suburb E
$560,000
$560,000
3
W
1F and 2F Street, Town G, Country Y
$42,086
$42,086
4
J
1H and 2H Street, Town G, Country Y
$61,570
$61,570
5
W
CBA Smart Access #...26
$65
$65
6
W
CBA Goal Saver #...81
$67
$67
7
W
CBA Smart Access #...95
$2,974
$2,974
8
W
Motor Vehicle 1
$17,800
$17,800
9
W
Household contents
$1,500
$15,000
10
H
ANZ Access Advantage #...87
$543
$543
11
J
Nab Personal Account #...22
$45
$45
12
H
W Bank #...27
$262
$262
13
H
Motor Vehicle 2
$3,200
$3,200
14
H
Vehicle 4 and Vehicle 5
$2,000
$2,000
15
H
Motor Vehicle 3
$2,700
$2,700
16
H
Household Contents
$3,000
$3,000
17
H
Hobby Gear
$1,500
$1,500
18
W
Jewellery
Nil
$25,000
Total
$1,824,312
$1,862,812
ADDBACKS
19
W
Notional Add back of wife’s withdrawals
$39,547
$66,318
Total
$39,547
$66,318
SUPERANNUATION
20
W
Super Fund 1
$20,580
$20,580
21
H
Super Fund 2
$134,000
$134,000
Total
$154,580
$154,580
LIABILITIES
22
J
Suburb C Mortgage
$370,000
$370,000
23
J
Suburb E Mortgage
$250,000
$250,000
24
H
Personal Loan
NK
$11,000
25
H
NAB Credit Card #...38
NK
$4,266
Total
$620,000.00
$635,266.00
NET TOTAL PROPERTY POOL (including superannuation property)
$1,398,439
$1,448,444
BALANCE SHEET FINDINGS
Assets
Item 9 – Household Contents in Wife’s Possession
There is no expert evidence as to the value of the furniture in the wife’s possession. The wife makes an admission against interest that it is valued at $1,500.00. It is not the subject of dispute that the wife vacated the former matrimonial home and thereafter borrowed the sum of $2,000 to purchase items of furniture for herself from her brother. I accept the wife’s evidence given in cross examination that in her prior Financial Statement filed with the court on 1 November 2021 she listed a value of $15,000 for household contents as she was referring to her half share of the furniture and contents in “the big house”. At the time of filing the prior Financial Statement the wife was living in share accommodation and had no items of furniture in her possession. In those circumstances the value of $1,500 will be attributed to the furniture and contents in the wife’s possession.
Item 18 – Jewellery
The wife’s clear evidence both in her affidavit and during the course of cross-examination was that she does not own any jewellery at the present time. She deposes that she did have some gold jewellery when the parties were married but the majority of this was sold prior to her coming to Australia to live, with the balance sold during the course of the parties’ marriage to fund her trips back to Country Y. She was unshaken in this evidence.
During the course of cross examination the husband conceded that he does not know where the gold jewellery is; he does not know if it is in the wife’s possession and that he does not know how much it is worth although he can “estimate from the weight of the gold.”
I accept the wife’s clear and unequivocal evidence that she does not have gold jewellery in her possession. Thus the husband’s personal opinion as to the value of jewellery he asserts to be in the wife’s possession is irrelevant. This item will be removed from the balance sheet.
Notional Add Backs
The wife provides in her affidavit detailed evidence as to her post-separation expenditure. Such expenditure was the subject of cross-examination. The husband does not provide evidence as to his post separation expenditure other than his assertions as to his post-separation financial contributions. The husband seeks various sums of monies expended by the wife from her post separation income be notionally added back to the property pool, together with a withdrawal made by the wife from her superannuation entitlements during the COVID-19 pandemic.
The Full Court in AJO & GRO [2005] FamCA 195, identified three clear categories where it may be appropriate to notionally add back an item of expenditure:
·where the parties have expended money on legal fees;
·where there has been a premature distribution of matrimonial assets;
·where there has been a waste, reckless, negligent or wanton dissipation of assets as outlined by Baker J in Kowaliw and Kowaliw [1981] FamCA 70.
In Bevan & Bevan [2013] FamCAFC 116, the majority of the Full Court stated the following regarding ‘add backs’ at 87,233, [79]:
We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them”, and thus is not amenable to alteration under s79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.
Strictly speaking, given that these monies sought to be added back by both parties no longer exist, they cannot be treated as property in which the parties have a legal or equitable interest. Nevertheless, pursuant to s 75(2) (o) of the Act, the Court could take into account the dissipation of those funds.
Notionally “adding back” items to the asset pool is a discretionary exercise which ought to be the exception rather than the rule: NHC & RCH [2004] FamCA 633. As stated by the Full Court in Trevi & Trevi [2018] FamCAFC 173 at [28] and [30]:
28.However, the Full Court also made it clear that an addback does not necessarily occur whenever “a party has expended money realised from the dissipation of assets that existed as at the date of separation”, the Full Court describing such a proposition as “unduly simplistic.” An earlier Full Court made the same point, saying that adding back is “the exception rather than the rule.”
…
30.…When the discretion is exercised in favour of adding back, it reflects a decision that, exceptionally, in the particular circumstances of a case, justice and equity requires it. The second premise is its corollary: in cases that are not “exceptional” justice and equity can be achieved, not by adding back, but by the exercise of a different discretion — usually by taking up the same as a relevant s 75(2) factor. Indeed, it has been said that the latter is “a course which is, perhaps, technically more correct” than adding back to the list of existing interests in property.
Parties are entitled to reasonably conduct their affairs post separation: Gollings & Scott [2007] FamCA 397. The nature of the expenditure reflected is relevant and reasonably incurred expenditure usually does not come within the accepted categories of an “add back”. A party however is not expected to be able to provide a precise audit as to every post separation expenditure: Edgehill & Edgehill [2007] FamCA 1102.
Item 19: Notional Add Backs sought by the Husband
Both parties made concessions as to the notional addback sought by the husband to the property pool in the sum of $83,000.00. The wife concedes that the sum of $39,547.38 is to be notionally added back comprised of:-
·the sum of $19,647.38 paid by the wife post separation to her father and brother in Country Y to assist them with living and health expenses; and
·the sum of $19,900 paid by the wife to her brother as a wedding gift and to assist her brother and his new wife with purchasing a home of their own.
The husband presses for a further sum of $26,770.29 to be notionally added back to the property pool comprised of:-
·$6,000 the wife asserts she made in charitable donations;
·the sum of $10,000 the wife alleges she invested in a scheme selling household items; and
·a further sum of $10,000 pressed by the husband only during the course of final submissions, being the sum withdrawn by the wife from her superannuation entitlements during the COVID 19 pandemic.
The Wife’s Asserted Charitable Donations of approximately $6,000
The wife’s evidence is that over a period of three years post separation she made various (itemised) donations to people she knows personally living in Country Y less fortunate than herself. Such donations range from approximately $95.00 to $1,400. It was put to the wife in cross examination that it was not a sensible manner in which to spend her money to which the wife replied: “The poor people, sometimes they need surgery.” The wife denied that such expenditure was “reckless” and stated, in response to the question as to why she did not tell the husband, that such donations were from income earnt by her subsequent to the parties’ separation. During the course of re-examination the wife gave an example of one of the donations; being to a father and daughter in Country Y who were unable to earn an income during the COVID 19 pandemic.
The wife was not successfully challenged on her assertion that these funds were donated and I accept and find that it was so. The husband conceded that if the monies had been donated to people “genuinely in need” he would not press for it to be notionally added back. It is unclear as to who was to make the determination as to who is “genuinely” in need. The sum represents less than 0.5% of the value of the non-superannuation property pool. Parties are entitled to get on with their life post separation. The agitation of this issue by the husband was reflective of his broader approach to the property adjustment between the parties – in reality he seeks to engage in a selective audit of the parties’ expenditure in the five years post separation. Such an approach is contrary to well established authority and is misconceived. It is rejected.
The Investment by the Wife of approximately $10,000
The wife gives evidence that in approximately late 2022 she became aware of an investment scheme with a company selling household items and she wanted to become involved. Her role was to be a commission agent and to become involved in a similar role for which she was to earn a commission rate. It is uncontested that the wife invested the sum of approximately $10,000 which provided her with a demonstration version of the product and an “ID” to obtain new clients for marketing. The wife was of the belief that she would earn a commission of between $300 and $400 for each sale. She received a sign-on bonus of approximately $300 in late 2022. Notwithstanding her best efforts the wife was unable to secure any business and therefore earnt no further commissions. The wife unsuccessfully attempted to terminate her involvement in the scheme and obtain a refund of her monies. The wife has formed the view that she has been the victim of an elaborate scam.
The wife readily conceded in cross examination that:-
·She did not give evidence as to the name of the company she invested in.
·She is of the view that she has lost the money.
·It was a fairly foolish thing to do and she should have known better.
It was submitted on behalf of the husband that this money, earnt and spent by the wife post the parties’ separation, should be notionally added back to the property pool as “...she was the person that spent the money at the end of the day.”
The husband’s pressing of these monies to be notionally added back is surprising given the questions that were put to the wife in cross examination cast against the husband’s later evidence in cross examination that:-
·He himself at one stage had invested money into the scheme.
·He took “serious offence” to the wife’s assertion that it was a scam.
·He has some connection to the scheme.
·He had not disclosed any of this in his own affidavit.
·He accepted that the wife had invested money into the scheme and appears to be of the view that the wife may have received more of a return than she has disclosed and may continue to do so in the future.
It is confounding in those circumstances that after the close of all the evidence the husband still pressed for the addback of this portion of the wife’s post separation income. The husband does not assert that the wife has wasted her post separation income in a reckless manner despite the nature of the wife’s cross examination. The basis on which the husband contends this sum should be added back is confusing and contradictory. The maintenance of the contention does both the husband and his legal representative little credit. It is rejected.
The Wife’s Withdrawal of Superannuation Entitlements
In approximately May 2020 the wife applied for and received $10,000 of her superannuation entitlements pursuant to special COVID-19 pandemic measures. Whilst the husband appears to dispute that the wife was entitled to these funds pursuant to the COVID regulations at the time of the wife’s withdrawal, the wife’s application to withdraw these funds from her super was successful. The husband submits that such withdrawal should be categorised as a premature distribution of assets but conceded that if I find that such monies were expended on living expenses the court would not notionally add it back to the property pool.
The wife successfully established hardship so as to trigger the release of a portion of her superannuation entitlements. It was not put to the wife that such funds were wasted or applied otherwise in reasonably meeting her living expenses. The addback is rejected.
Legal Fees
The parties agree that legal fees are not to form part of the property pool available for adjustment between the parties.
Superannuation
It is uncontested that the value of the wife’s superannuation entitlements is $20,580 and the husband’s is $134,000. Whilst the value of the husband’s superannuation entitlements is more recent than that of the wife’s, the husband had at his disposal various means by which to obtain an updated value of the wife’s superannuation entitlements but has not done so. Factual findings can only be grounded from an evidentiary basis. Each of the parties are bound by the case they ran at trial and the evidence they relied upon to support it, including omissions.
Liabilities
The husband's personal loan of $11,000.
Somewhat disingenuously, the husband seeks the court make a finding that he made higher financial contributions post separation to the Suburb E and Suburb C properties and at the same time seeks that asserted loans he obtained from his friend “Mr X” totalling $7,000 and a further loan from his friend “Ms Z” in the sum of $4,000 be listed as a liability on the balance sheet. The extent of the husband’s evidence with respect to these alleged loans was that the sum of $7,000 was borrowed in order to meet “the payments incurred on the [Suburb E] and [Suburb C] Property…” and that the sum of $4,000 was borrowed for “living expenses.” The husband was not challenged on this evidence. It was submitted by the wife that she simply did not and does not know about these alleged loans. In circumstances where the husband was not challenged as to these alleged loans, I am satisfied that it is a liability that will remain on the balance sheet.
The husbands credit card debt of $4,266
There is no evidence as to how such credit card debt was acquired by the husband. In those circumstances I am not satisfied it should be a matrimonial liability and it will be removed from the balance sheet.
Accordingly, I find that the property pool consists of assets and liabilities as follows:-
Ownership Description Value Found ASSETS J B Street, Suburb C $1,125,000 J D Street, Suburb E $560,000 W 1F and 2F Street, Town G, Country Y $42,086 J 1H and 2H Street, Town G, Country Y $61,570 W CBA Smart Access #...26 $65 W CBA Goal Saver #...81 $67 W CBA Smart Access #...95 $2,974 W Motor Vehicle 1 $17,800 W Household contents $1,500 H ANZ Access Advantage #...87 $543 J Nab Personal Account #...22 $45 H W Bank #...27 $262 H Motor Vehicle 2 $3,200 H Vehicle 4 and Vehicle 5 $2,000 H Motor Vehicle 3 $2,700 H Household Contents $3,000 H Hobby Gear $1,500 Total $1,824,312 ADDBACKS W Notional Add back of wife’s withdrawals $39,547 Total $39,547 SUPERANNUATION W Super Fund 1 $20,580 H Super Fund 2 $134,000 Total $154,580 LIABILITIES J Suburb C Mortgage $370,000 J Suburb E Mortgage $250,000 H Personal Loan $11,000 Total $631,000 NET TOTAL ASSETS (including superannuation) $1,387,439
I find that the value of the parties’ non-superannuation property is $1,232,859
I find that the value of the superannuation property is $154,580
The total value of the non-superannuation property and superannuation property of the parties is $1,387,439.
The total value at law of property held by the wife prior to any adjusting order is $687,927.
The total value at law of property held by the husband prior to any adjusting order is $699,512.
WHETHER AN ORDER ALTERING PROPERTY INTERESTS SHOULD BE MADE
I should only make orders pursuant to s 79 of the Act if I am first satisfied that it is just and equitable to do so. It must not be assumed that the parties’ rights or interests should be different to that which already exists: Stanford & Stanford [2012] HCA 52 (“Stanford”).
I find that the requirements identified in Stanford are satisfied in this matter having regard to:
·The parties in this matter, having married and mixed their finances as a family, have now separated. It is therefore not possible for them to continue to mutually enjoy the accumulated assets.
·Both parties invoke s 79 of the Act seeking orders for property settlement.
·The current legal interest of the parties needing to be changed or adjusted when consideration is given to the contribution and other factors identified below.
It is therefore just and equitable in all the circumstances to make orders pursuant to s 79 of the Act adjusting the financial interest of the parties.
THE ASSESSMENT OF CONTRIBUTIONS
I accept and find, based on the concessions made during the course of final submissions that each party came into the relationship with modest assets.
I cannot make a finding on the evidence that the parties’ respective incomes earnt during the 10-year course of the relationship was $150,000 by the wife and $850,000 as asserted by the husband. The wife concedes and I accept that the husband made higher financial contributions via his income during the course of the relationship, including being almost solely responsible for meeting the expenses of the household whilst the wife was not engaged in paid employment for the first four years of the relationship.
This period of time of unpaid employment outside the home post the wife’s arrival in Australia appears to be a significant issue for the husband. The husband’s evidence is that he purchased various motor vehicles for the wife’s use. Despite conceding that the wife earnt a significant income during the relationship and both parties applied their respective incomes to the benefit of the family, if any item was purchased whilst the wife was not engaged in paid employment the husband’s evidence and view is that: “I paid for it.”
The husband asserts that the wife “did not engage in paid employment despite being qualified with tertiary qualifications and qualifications in hospitality.” There is no evidence that the qualifications obtained by the wife in Country Y were transferable to assist in her obtaining employment in Australia. I have found that the wife’s English upon her arrival was moderate and I accept that this, together with her unchallenged evidence of her significant nervousness undertaking job interviews, would have impacted her ability to gain paid employment outside the home for a period of time. The husband’s contention that the wife told a third party when it was suggested to her that she should try and obtain employment at an allied health centre “I am not interested to work” was not put to the wife in cross examination and I make no such finding based on this hearsay evidence.
I accept and find that both parties have contributed financially during the course of the marriage partnership to the best of their respective abilities.
Both the properties purchased in Australia were acquired during the course of the relationship from savings acquired during the relationship and from loans secured by way of a mortgage over each of the properties.
It is uncontested that the property in Country Y registered in both parties’ names was purchased by the wife’s parents for the parties in approximately 2010. The husband’s evidence is uncontested that the parties would take an unknown amount of cash to Country Y when they visited each year to pay for the “upkeep and maintenance of this land.” There is no particularity as to what upkeep and maintenance was required on a vacant block of land, nor how much money was expended by the parties on this during the relationship.
It is uncontested that in 2011 the wife received the sum of $10,000 from her parents from the proceeds of sale of their home. This sum, together with savings of the parties of $6,000 was applied towards the purchase of a bond. The bond was cashed and the property in Country Y was purchased in the wife’s sole name in 2017.
The husband’s entitlement to the voluntary redundancy package of $42,000 was accumulated during the course of the relationship. I cannot make a finding on the evidence as to how such monies were applied, save that it is conceded that approximately $10,000 was applied towards maintenance and improvements to the parties’ real property.
Whilst asserting that he worked long and extensive hours outside the home; up to 14 hours a day which included travel “whilst [Ms Bhatt] chose not to work at all”, the husband further asserts that he shared equally in the household duties and “sometimes more.” The husband appears to infer that rather than engaging in household duties the wife spent most of her time on her recreational hobbies and “spent many hours researching various types of hobbies online.”
The wife deposes that she was “solely responsible for the role of homemaker” and that “I never once saw [Mr Solanki] cook, clean or even get himself a glass of water. I would vacuum, mop, cut the grass, tend to the plants and trees, wash the cars, do the laundry and everything else that was required.” I accept and find, having regard to the husband’s working hours as deposed to by him, that the wife made the higher non-financial contributions throughout the relationship.
The wife asserts that her contributions were made more onerous as a result of the violence occasioned upon her by the husband. The wife’s evidence in her trial affidavit was, for the most part, generalised and broad. There were some specific incidents pleaded including disturbing photographs of bruising on the wife’s leg and arm. The wife’s affidavit did not contain evidence as to how the contended family violence made her contributions more onerous. I am not satisfied that the wife’s evidence is able to ground an inferential finding in this regard. In those circumstances there is no utility in these property adjustment proceedings in canvassing the evidence and making findings. From her oral evidence it appears that the wife, although legally represented throughout these proceedings, was under the mistaken belief that specific evidence as to the asserted violence of the husband was relevant only to the criminal proceedings and not these financial proceedings.
It is not the subject of challenge that the husband has been responsible for managing and maintaining both the properties in Australia post separation including payment of the outgoings. The husband has had the benefit of occupation of the Suburb C property post‑separation whilst the wife has been required to pay rent. The rental monies from the Suburb AA property have been applied to the payment of expenses of the property. The wife did contribute to expenses of the properties for a short period of time post-separation. The husband has incurred a liability in order to meet such expenses which are on the balance sheet.
The Full Court in Horrigan & Horrigan [2020] FamCAFC 25 reinforced the holistic approach espoused in Fields & Smith [2015] FamCAFC 57 and stated that the proper approach to the assessment of contributions is:
[35] …well established that an assessment of contributions is not a mathematical exercise, but rather involves the identification and assessment of all of the parties’ respective contributions, in a holistic way across the course of the relationship and in the post separation period to the point of assessment…
Precise valuation of contributions is impossible. All contributions are to be weighed collectively and not by way of compartmentalising one contribution against another or the remainder, with such weight as the court determines: Kessey & Kessey (1994) FLC 92-495.
Whilst a global approach to the assessment of contributions is generally preferred this is a discretionary determination and particular circumstances may dictate that contributions to a particular asset or group of assets should be assessed separately: Norbis v Norbis [1986] HCA 17. The wife submitted that a global approach to one property pool should be adopted in circumstances where neither party will be able to access their superannuation entitlements for some time. The husband submitted that a global approach to two property pools should be adopted with the second pool being the parties’ respective superannuation entitlements as the value of the husband’s superannuation fluctuates.
The wife submitted that a contribution finding should be made in her favour of 55% as her overwhelming majority of non-financial contributions outweighs the larger financial contributions of the husband; such contributions being made more onerous as a result of the husband’s conduct. The husband submitted that his vast superior financial contributions should ground a finding of contributions in his favour of 80%.
In this matter a global approach to the assessment to the contributions made by each of the parties to the asset pool is appropriate applied to a single pool of property of both superannuation and non-superannuation. There is no evidence as to the value of the husband’s superannuation entitlements prior to the parties commencing cohabitation. The parties are of similar age and there is no evidence that their superannuation entitlements are different in their nature, form or characteristics.
Adopting a holistic approach I assess the parties’ contributions to the property pool as equal.
This equates to both parties receiving property to a value of $693,719.50.
RELEVANT S 79(4)(D) – (G) MATTERS
Both parties are of similar age. Whilst both parties gave evidence as to specific medical issues they live with or have experienced in the past, there is no evidence before me that their income earning capacity will be reduced in the future. Neither party has commenced cohabiting with another in a domestic relationship. There are no children of the relationship. The wife relocated from Country Y to live with the husband. There is no evidence that she has any qualifications that are recognised in Australia. Neither party has a responsibility to support any other persons. The most significant factor to consider is the disparity in the parties’ income – the husband earns the sum of approximately $122,000 gross annually as compared to the wife’s annual gross income of $59,000; just over double that of the wife.
The wife submitted that having regard to the disparity in earning capacity that she should receive a 5 per cent adjustment to the contribution finding in her favour. The husband submitted that due to his health he should receive an adjustment to the contribution finding of 5 per cent in his favour. The husband then submitted that justice and equity would then dictate that the wife receive an overall division of 38 per cent to the wife and 62 per cent to the husband.
Holistically and weighing up all of the above considerations I am satisfied that an adjustment should be made to the wife as sought by her of 2.5 per cent. That equates to the wife receiving a further $34,686.
JUST AND EQUITABLE
I have found that the wife receives 52.5 per cent of the net property available for adjustment between the parties. This equates to $728,405.
The parties have agreed to how the majority of the assets are to be distributed between the parties. The parties will close the joint bank account and the net proceeds will be divided equally between them.
The wife will therefore receive the following:
Description Value Assets D Street, Suburb E $560,000 1F and 2F Street, Town G, Country Y $42,086 52.5% of proceeds of jointly held land at 1H and 2H Street, Town G, Country Y $32,324 CBA Smart Access #...26 $65 CBA Goal Saver #...81 $67 CBA Smart Access #...95 $2,974 Motor Vehicle 1 $17,800 Household contents $1,500 50% of funds in NAB Personal Account #...22 $23 52.5% of proceeds of sale of Vehicle 4 and Vehicle 5 $1,050 Total: $657,889 Add-backs Notional Add back of wife’s withdrawals $39,547 Total: $39,547 Superannuation Super Fund 1 $20,580 Total: $20,580 Liabilities Suburb E Mortgage $250,000 Total: $250,000 Net Total: $468,016
Thus the wife will receive a further payment from the husband in the sum of $260,389.
The husband will therefore receive the following:
Description Value Assets B Street, Suburb C $1,125,000 47.5% of proceeds of jointly held land at 1H and 2H Street, Town G, Country Y $29,246 ANZ Access Advantage #...87 $543 W Bank #...27 $262 Motor Vehicle 2 $3,200 47.5% of proceeds of sale of Vehicle 4 and Vehicle 5 $950 Motor Vehicle 3 $2,700 Household Contents $3,000 Hobby Gear $1,500 50% of funds in NAB Personal Account #...22 $22 Total: $1,166,423 Superannuation Super Fund 2 $134,000 Total: $134,000 Liabilities Suburb C Mortgage $370,000 Personal Loan $11,000 Cash payment to wife $260,389 Total: $641,389 Net Total: $659,034
The wife will receive property to the value of $69,371 more than that of the husband. Standing back and looking at the distribution of assets on an overall basis, I find that this distribution achieves a just and equitable alteration of the property interests of the parties.
Orders will be made accordingly.
I certify that the preceding eighty-two (82) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Murdoch. Associate:
Dated: 15 June 2023
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