DAJANI & BASHARA
[2016] FamCA 940
•12 October 2016
FAMILY COURT OF AUSTRALIA
| DAJANI & BASHARA | [2016] FamCA 940 |
| FAMILY LAW – PROPERTY – Consideration of the value of the husband’s business – Consideration of alleged debts owed to the husband’s siblings – Consideration of contributions, s79(4)(d)-(g) factors and what is an appropriate and just and equitable property settlement order. FAMILY LAW – CHILD SUPPORT – Where the wife’s application for departure order and discharge of child support arrears is dismissed. FAMILY LAW – PARENTING – Where the father is to hold passports but both parents be jointly responsible for applying for new passports and travel related documents for the children. |
| Australian Passports Act 2005 (Cth) Gray v O’Donnell [2009] NSWSC 259 |
| APPLICANT: | Ms Dajani |
| RESPONDENT: | Mr Bashara |
| FILE NUMBER: | SYC | 3027 | of | 2013 |
| DATE DELIVERED: | 12 October 2016 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Watts J |
| HEARING DATE: | 11 - 13 November 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Lethbridge, SC |
| SOLICITOR FOR THE APPLICANT: | Edwards Family Lawyers |
| SOLICITOR FOR THE RESPONDENT: | Marsdens Law Group |
Orders
Pursuant to s 79 Family Law Act 1975 (Cth) (“the Act”) a property settlement order is made in the terms of paragraphs 2 to 11 below.
Within three (3) months the husband pay to the wife the sum of $876,113 and discharge any liability which the wife may have in respect of:
2.1.1.CBA viridian line of credit (a/c 807);
2.1.2.CBA viridian line of credit (a/c 439);
2.1.3.CB Better Business loan; and
2.1.4.Suncorp line of credit.
Simultaneously with the payment referred to in paragraph 2, the wife sign all documents and do all things necessary to transfer to the husband all her right, title and interest in the former matrimonial home situated at and known as B Street, Suburb C in the State of New South Wales being the whole of the land contained in Folio Identifier … (“the Suburb C property”).
Simultaneously with the payment referred to in paragraph 2, the husband be solely entitled to the property situated at and known as D Street, Suburb E in the State of New South Wales, Folio Identifier … (“the Suburb E property”).
In the event that the husband fails to comply with paragraph 2, the parties shall do all acts and things, and execute all documents necessary to cause the Suburb C property to be sold by public auction in the following manner:
5.1.Sign all authorities and execute all documents necessary to list the property for sale with an agent agreed between the parties in writing or failing agreement within 14 days of the date of these orders, the wife shall nominate three (3) agents and the husband is to select one, and in the event that the husband fails to make a selection within 7 days thereof, the wife shall select one of the agents (“the agent”) and the wife shall be entitled by this order to sign the sales agreement and other sales documents on behalf of the husband;
5.2.Sign all authorities and execute all documents necessary to instruct solicitors as agreed between the parties to act on the sale and if no agreement can be reached on the solicitors to be nominated, such solicitors as appointed by the President of the Law Society of New South Wales, for the time being or his nominee (“the conveyancing solicitors”);
5.3.Be responsible for giving joint instructions to the agent and the conveyancing solicitors acting on the sale;
5.4.Neither party will, without the express written consent of the other, cause any other agency agreement to be effected or binding on the parties;
5.5.Neither party will encumber or otherwise deal with the Suburb C property without the prior written consent of the other party;
5.6.The reserve price will be $1,800,000 or such other reserve price as the parties agree upon in writing;
5.7.Pending settlement of the sale of the Suburb C property, the husband is solely responsible for and shall do all acts and things necessary so as to pay, as and when they fall due, all instalments of the water rates, council rates, insurance premiums, other utilities and the mortgage repayments in respect of the Suburb C property and to pay any arrears in respect of those liabilities;
5.8.The husband shall provide access to the Suburb C property at all reasonable times to prospective purchasers and the agent, or his or her representative;
5.9.The husband shall maintain the Suburb C property in reasonable condition and repair pending completion of the sale;
5.10.In the event that the reserve price for the Suburb C property is not reached at the first auction, the parties may then negotiate with the highest bidder or any other bidder present at the auction or any other interested party in an effort to sell the Suburb C property at a price not more than 10 per cent below the reserve price or such price as agreed between the parties in writing. If a contract for the sale of the Suburb C property is not exchanged within 14 days of the day of the auction, the parties shall forthwith re-list the Suburb C property for further auction or auctions and paragraphs 5.1 to 5.10 will apply in relation to the further auction sale.
The parties shall cause the proceeds of sale of the Suburb C property to be paid in the following manner and priority:
6.1.In payment of all the conveyancing solicitor’s legal costs and disbursements, commissions, costs of valuations and expenses of sale;
6.2.In payment of any amount necessary to discharge the following liabilities:
6.2.1.CBA viridian line of credit (a/c 807) to a sum of $549,995;
6.2.2.CBA viridian line of credit (a/c 439) to a sum of $409,998;
6.2.3.CB Better Business loan to a sum of $196,280;
6.2.4.Suncorp line of credit to a sum of $482,156.
6.3.Payment of any balance of the loans referred to in paragraph 6.2 from the husband’s share of the proceeds of the sale pursuant to paragraph 6.5;
6.4.In payment of all outstanding council and water rates and other utilities. The husband is to pay from his share of the proceeds of sale all outstanding council and water rates and other utilities;
6.5.As to the balance, 81.38 per cent to the wife and 18.62 per cent to the husband
In the event that the husband fails to comply with paragraph 2, the parties shall do all things and execute all documents necessary to cause the Suburb E property to be sold by public auction or private treaty, as may be recommended by the Agent, in the following matter:
7.1.Sign all authorities and execute all documents necessary to list the Suburb E property for sale with an agent agreed between the parties in writing or failing agreement within 14 days of the date of these Orders, the wife shall nominate three (3) agents and the husband is to select one within 7 days thereof, and in the event that the husband fails to make a selection, the wife shall select one of the agents and shall be entitled by this Order to sign the sales agreement and other sales documents on behalf of the husband;
7.2.Sign all authorities and execute all documents necessary to instruct agreed solicitors to act on the sale and, if no agreement, such solicitors as appointed by the President of the Law Society of New South Wales, for the time being or his nominee (“the conveyancing solicitors”);
7.3.The parties shall be responsible for giving joint instructions to the agent and the conveyancing solicitors acting on the sale;
7.4.Neither party will, without the express written consent of the other, cause any other agency agreement to be effected or binding on the parties;
7.5.No party will encumber or otherwise deal with the Suburb E property without the prior written consent of the other party;
7.6.The listing or reserve price will be $915,000 or such other price as the parties agree upon in writing;
7.7.Pending settlement of the sale of the Suburb E property, the husband shall be solely responsible for, and shall do all acts and things necessary so as to pay, as and when they fall due, all instalments of the water rates, council rates, insurance premiums, other utilities and the mortgage repayments in respect of the Suburb E property;
7.8.The husband shall provide access to the Suburb E property at all reasonable times to prospective purchasers and the agent, or his or her representative;
7.9.The husband shall maintain the Suburb E property in reasonable condition and repair pending completion of the sale;
7.10.In the event that the reserve price for the Suburb E property is not reached at the first auction, the parties may then negotiate with the highest bidder or any other bidder present at the auction or any other interested party in an effort to sell the Suburb E property at a price not more than 10 per cent below the reserve price unless otherwise agreed by the parties in writing. If a contract for the sale of the Suburb E property is not exchanged within 14 days of the day of the first auction, the parties agree to forthwith re-list the Suburb E property for an auction or auctions and paragraphs 7.1 to 7.10 will apply in relation to any further sale.
In the event that the husband fails to make the payment referred to in paragraph 2, the parties shall cause the proceeds of sale of the Suburb E property to be applied in the following manner and priority:
8.1.In payment of all legal costs and disbursements, commissions, costs of valuations and expenses of sale;
8.2.In payment of any amount necessary to discharge the following liabilities:
8.2.1.CBA viridian line of credit (a/c 807) to a sum of $549,995;
8.2.2.CBA viridian line of credit (a/c 439) to a sum of $409,998;
8.2.3.CB Better Business loan to a sum of $196,280;
8.2.4.Suncorp line of credit to a sum of $482,156.
8.3.Payment of any balance of the loans referred to in paragraph 8.2 from the husband’s share of the proceeds of the sale pursuant to paragraph 8.5;
8.4.In payment of all outstanding council and water rates and other utilities. The husband from his share of the proceeds of the sale of the Suburb E property is to make payment of all outstanding council and water rates and other utilities;
8.5.As to the balance, 81.38 per cent to the wife and 18.62 per cent to the husband.
Until the payment referred to in paragraph 2 or the completion of the sale of both the Suburb C property and the Suburb E property, the husband shall cause the wife to be paid from income received from the Suburb E property from the date of these orders, one half of the income received from the Suburb E property after deduction of any payment to a lending institution that has a loan which is solely secured over the Suburb E property and after payment of any other outgoings on the Suburb E property.
Each party be solely entitled to the exclusion of the other to all other property, chattels and superannuation in their respective names or possession as at the date of these orders and that each party indemnify the other in relation to any debt associated with any asset that is kept by each of them respectively.
The parties shall do all acts and things and sign all documents necessary to give effect to these Orders.
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 s 106A of the Act to execute such documents on behalf of such party.
Each party have liberty to relist the matter in respect of implementation of the property settlement order.
The wife’s application for a child support departure order is dismissed.
The husband be entitled to hold the children’s passports and any other travel documents.
For the purposes of s 11 Australian Passports Act 2005 (Cth):
16.1.It is noted that orders made by this court allow the children to travel internationally;
16.2.The children are permitted to have an Australian passport or travel related documents provided the application for that document is made by the parents jointly who are to each sign any declaration on the application in the form approved by the relevant Minister.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Dajani & Bashara has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 3027 of 2013
| Ms Dajani |
Applicant
And
| Mr Bashara |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
The husband and wife both ask the court to make different property settlement orders. The wife also makes a child support departure application. Although parenting matters have generally been resolved by orders which were previously made, there is still an outstanding issue in respect of which parent should hold the passports of the children.
APPLICATIONS
The wife seeks that there be a cash adjustment such that the husband makes a payment to the wife to achieve an overall settlement of 60 per cent of the net assets available to the wife and 40 per cent to the husband. If the husband is unable to raise the necessary finance to make the cash payment, the wife seeks the sale of the property at B Street, Suburb C (“the Suburb C property”) and if necessary, also the sale of the property at D Street, Suburb E (“the Suburb E property”).
The husband seeks to retain the Suburb C property and the Suburb E property and his real estate business. He proposes that he pay to the wife the sum of $150,000.
The wife seeks a child support departure order so that all arrears of child support which she owes are discharged and reduced to nil and that the annual rate of child support payable by the wife be reduced to nil from the date of the making of the order until the date the wife receives her entitlement pursuant to the property settlement order.
Both parents seek to hold the children’s passports.
DOCUMENTS RELIED UPON
The documents relied upon by each party are set out in Schedule 1.
SHORT HISTORY
The husband was born in 1961 and is currently 55 years old.
The wife was born in 1966 and is currently 50 years old.
The parties commenced cohabitation upon their marriage in 1996 in State F, USA.
The parties’ first child was born in 1999 and is currently 16 years old.
The parties’ second child was born in 2002 and is currently 14 years old.
The parties separated under the one roof in October 2012. The wife left the matrimonial home in December 2012 and the parties divorced on 7 April 2014.
CREDIT
Wife
There were inconsistencies in the wife’s evidence when she was questioned about overhearing conversations between the husband and his brother.
The wife also gave unimpressive evidence when asked questions about her taking jewellery and gold from the former matrimonial home. In her affidavit, the wife draws a distinction between jewellery and gold but in her oral evidence attempted to conflate the two. Later in cross examination the wife asserted she may have taken about ten pieces of gold.
Subject to those comments, the wife generally gave her evidence in a relatively straightforward way and when her evidence is taken as a whole, it was not impugned by any objective evidence.
Husband
The husband was permitted to give further oral evidence in chief. He amended what he said in paragraph 141 (h) – (k) of his affidavit where he said that monies had come in from his brother into his CBA account. The monies had actually gone into a CBA account in his brother’s name. There was another amount of $52,000 that had gone into the husband’s account in 2005. The husband said that money had come from a Mr G who, so the husband said, was a man in the Middle East and he had rung his brother and his brother had organised for Mr G to transfer the moneys into his account. In the first questions asked in cross examination, it was put to the husband that he had not told the truth about Mr G’s identity and that Mr G was in fact a lawyer in London. The husband eventually agreed that he hadn’t told me the truth and Mr G was not a man in the Middle East.
The husband was asked questions about a loan application he had made to the bank. In his oral evidence he at first said that he told the bank the truth. Then he gave evidence that he had not told the bank the truth. I accept the truth of the second statement but the fact that he would actually make the first statement on his oath damaged his credit.
I am unable to accept the husband’s evidence unless it is about an uncontroversial matter; supported by objective evidence or inherently likely.
Where there is an inconsistency between the evidence of the wife and the evidence of the husband, unless I indicate otherwise, I would prefer the evidence of the wife.
The husband’s brother (Mr H)
The credibility of the husband’s brother’s evidence was compromised when he attempted to explain the content of the letters between him and his brother. The husband’s brother’s initial evidence was that at no time had the husband had an involvement in any investments in Country V in the Middle East. He said (at [6] of his affidavit), “I have had no business proposals or plans for investment with [the husband] since he married [the wife], apart from lending [the husband] money”. That was not so. There are other difficulties with the evidence of the husband’s brother which I discuss below. I cannot accept the evidence of the husband’s brother unless it is about an uncontroversial matter; supported by objective evidence or inherently likely.
DETAILED CHRONOLOGY
The husband was born in the Middle East in 1961 and is currently 55 years old.
The wife was born in the Middle East in 1966 and is currently 50 years old.
The parties met in the United States of America (“USA”) and commenced cohabitation upon their marriage in 1996 in State F, USA. The husband partly owned a shop.
In 1998 the parties purchased a property in Suburb I, J County, State F (“the Suburb I property”).
The parties’ first child was born in 1999 and is currently 16 years old.
In early 2001 the parties travelled to Sydney for a holiday to see one of the husband’s brothers. Following their trip, the parties decided to move to Sydney. They arrived in November 2001. On arrival in Sydney, the wife worked as a health professional. The husband returned to the USA for two months and during that time he sold the Suburb I property and his interest in the shop.
In early 2002 the family travelled to Adelaide so the wife could sit her health professional registration exams. The wife also undertook a four week course to obtain her registration. Whilst the wife was attending the course, the eldest child was placed into day care.
In early 2002 the husband incorporated K Pty Ltd (“K Pty Ltd”). The husband is the sole director and shareholder of that company. The company purchased a franchise from a global chain with origins in the USA. At first the business was operated under the supervision of this franchisor. During this time the husband obtained his practitioners license. The wife assisted the husband in running the business.
In May 2002 the parties purchased a property at L Street, Suburb E (“the L Street property”) for $695,000. That property was rented out from the date of purchase until 2009.
In August 2002 the husband purchased the Suburb E property, a commercial property. This property was used as the office for the real estate business from 2002 to 2011.
The parties’ second child was born in 2002 and is currently 14 years old.
In December 2005 the parties purchased the Suburb C property, which became the matrimonial home. The husband and children currently reside in that property. Between 2005 and 2007 the parties carried out renovations on the property. In 2007 the parties performed major renovations to the property. The renovations cost approximately $300,000.
In 2008 the husband purchased a rent roll for K Pty Ltd.
In 2009 the wife became aware the husband had refinanced and borrowed monies against the L Street property. She asserts he told her they had to sell the property. The property was sold on 15 May 2009 for $910,000.
In 2011 the husband bought into the Business M franchise and his business became known as M K Pty Ltd. The business moved to rental premises in N Street, Suburb E.
The parties separated in October 2012 and divorced on 7 April 2014. The wife moved out of the Suburb C property in December 2012. The children, who were then 13 and 10 years of age, remained with the husband in the matrimonial home. Since December 2012 the wife has resided in rented accommodation.
The husband alleges that in June 2013, when he took the children away for the long weekend, the wife removed from the Suburb C property 10 Persian carpets, silverware, antiques, and family photo albums, the husband’s personal and financial documents and jewellery worth $90,000. The husband also alleges that in July 2013 the wife withdrew $2,622 from the children’s bank accounts, which he says had been built up over the years representing the children’s pocket money and gifts.
In June 2014 the wife withdrew $10,000 from her superannuation fund.
In July 2014 the wife visited her family in the USA and withdrew her American retirement fund savings totalling USD$14,867. She used these funds to assist with hospital bills.
On 1 August 2014 the wife’s sister loaned to the wife the sum of USD$5,000. On 14 July 2015 the wife borrowed a further $16,785 from her sister. On 31 August 2015 the wife borrowed an additional $24,992 from her sister.
On 12 September 2014 the wife borrowed $3,000 from her friend Ms O. She borrowed another $4,000 from this person on 19 November 2014.
On 12 September 2014 orders were made by Stevenson J requiring the husband to pay to the wife the sum of $50,000 by way of interim spouse maintenance.
During 2015 the wife borrowed a total of $11,500 from her mother.
APPROACH
In this matter my task is to:
44.1.Identify according to ordinary common law and equitable principles and then value the property, assets, financial resources and liabilities of the parties;
44.2.Determine whether it is just and equitable to make an order altering those interests and if so;
44.2.1.Identify relevant contributions and assess them;
44.2.2.Consider relevant matters referred to in s 79(4)(d) – (g) Family Law Act 1975 (Cth) (“the Act”);
44.3.Determine what order adjusting the property, assets and liabilities of the parties is just and equitable.
BALANCE SHEET
The settled balance sheet is set out below. It is a renumbered version of Exhibit 35 with items with a nil value removed. Where values are not agreed they appear in bold as determined by me. The reasons for each determination are set out under item numbers following the table.
| Assets | ||||||
| Item no. | Title | Description | Husband | Wife | Agreed/ Determined | Value |
| 1 | J | B Street, Suburb C | $1,800,000.00 | $1,800,000.00 | Agreed | $1,800,000.00 |
| 2 | H | 2 D Street, Suburb E | $915,000.00 | $915,000.00 | Agreed | $915,000.00 |
| 3 | H | Westpac a/c #130 | $1,452.00 | $1,452.00 | Agreed | $1,452.00 |
| 4 | H | Westpac Esaver #858 | $911.00 | $911.00 | Agreed | $911.00 |
| 5 | H | Openheimer Funds | $10,300.00 | $10,300.00 | Agreed | $10,300.00 |
| 6 | H | Barclays Bank, London | $3,790.00 | $3,790.00 | Agreed | $3,790.00 |
| 7 | H | K Pty Ltd | $262,000.00 | $410,000.00 | Determined | 410,000.00 |
| 8 | H | Loan account K Pty Ltd | $253,826.00 | $253,826.00 | Agreed | $253,826.00 |
| 9 | W | CBA Streamline a/c 900 | $1,119.00 | $1,119.00 | Agreed | $1,119.00 |
| 10 | W | German motor vehicle | $33,000.00 | $33,000.00 | Agreed | $33,000.00 |
| 11 | H | Household effects | $2,000.00 | $40,000.00 | Determined | nil |
| 12 | W | Household effects | $40,000.00 | $1,000.00 | Determined | nil |
| 13 | H | 4WD motor vehicle | $4,500.00 | $4,500.00 | Agreed | $4,500.00 |
| 14 | W | Orders made 24.6.2013 | $100,000.00 | $0.00 | Determined | nil |
| 15 | W | Orders made 21.9.2014 for $50,000 | $0.00 | $0.00 | Agreed | nil |
| 16 | H | Funds transferred to husband's sister from joint Bank of America a/c post separation | $0.00 | $48,530.00 | Determined | $46,564.00 |
| 17 | W | T Super | $44,577.00 | $44,577.00 | Agreed | $44,577.00 |
| Total assets | $3,525,039.00 | |||||
| Liabilities | ||||||
| Item no. | Title | Description | Husband | Wife | Agreed/ Determined | Value |
| 18 | J | CBA Viridian line of credit (a/c #807) | $549,995.00 | $549,995.00 | Agreed | $549,995.00 |
| 19 | J | CBA Viridian line of credit (a/c #439) | $409,998.00 | $409,998.00 | Agreed | $409,998.00 |
| 20 | J | CB Better Business loan a/c | $196,280.00 | $196,280.00 | Agreed | $196,280.00 |
| 21 | J | Suncorp line of credit | $482,156.00 | $482,156.00 | Agreed | $482,156.00 |
| 22 | H | Mr H (brother) | $216,000.00 | $0.00 | Determined | nil |
| 23 | H | Ms H(sister) | $564.00 | $0.00 | Determined | nil |
| 24 | H | AMEX | $1,500.00 | $0.00 | Determined | nil |
| 25 | W | German Auto finance | $23,008.00 | $23,008.00 | Agreed | $23,008.00 |
| Total liabilities | $1,661,437.00 | |||||
| Total net assets | $1,863,602.00 | |||||
Item 1
Each party had been given leave to rely upon different expert evidence in relation to the value of the Suburb C property. The wife’s expert said the property had a value of $1.9 million. The husband’s expert said that the property had a value of $1.7 million. The experts gave evidence concurrently and were cross examined. There were significant difficulties with the evidence of both the experts about different issues. The parties sensibly decided to compromise and a value of the matrimonial home in the sum of $1.8 million was agreed.
Item 7
This is a disputed asset of significant value. There is no issue the husband intends to continue operating the K Pty Ltd business into the foreseeable future.
Mr S, the single forensic accounting expert selected by the parties, prepared a report dated 6 November 2015. That report set out the value of the interest which the husband held in K Pty Ltd (“the company”) as at 30 June 2015.
Mr S provided valuations of the company on a number of alternate bases as follows:
49.1.On the assumption that the husband will continue to operate the business;
49.2.On a net asset basis, both with and without the value of the rent roll included as an asset of the company; and
49.3.On the assumption that the company was liquidated and its assets sold as separate assets. That is, on a net asset backing basis taking into account asset write down and liquidation costs.
Mr S noted that he was aware of concerns that the financial statements of the company may not be accurate but said that he had been instructed to prepare the report on the assumption that the financial statements were accurate. Mr S nonetheless made some adjustment to the value of some assets and liabilities disclosed in the financial statements as appropriate for the different valuation alternatives.
Mr S’s qualified opinion based on the restricted scope of his instructions led him to make the following conclusions about the indicative value of the husband’s interest in the company as at 30 June 2015 (which figures exclude loan account repayable to the husband by the company):
As a going concern excluding the rent roll
$47,000
As a going concern including the rent roll
$410,000
On a liquidation basis
$262,000
The “rent roll” is the annual property management commission (excluding letting fees and other charges).
The company was incorporated in May 2002. The husband has been the sole shareholder of the company. The company operates a well-known national franchise real estate agency in Suburb E. Its primary business relates to sales and property management of residential and commercial properties. The business currently employs seven staff (including the husband) with five full time and two part time employees undertaking sales and leasing activities. In addition, the business uses the services of three contractors who provide property sales services on commission. The business has recently moved to new leased premises.
The company owns an extensive rent roll. The annual rent payable in respect of properties under management in the financial year ending 2015 was close to $4.7 million. The rent roll is the company’s most valuable asset.
The single expert considered that the most appropriate method of valuation was to capitalise future maintainable earnings, however, the single expert concluded that on the basis of the accounts provided, there was not sufficient profit to support a value for goodwill. The single expert consequently concluded that the most appropriate valuation method would be a net asset backing approach adopting a nil value for goodwill.
The single expert commented that real estate agencies which undertake property management activities are often bought and sold on the basis of a multiple of the rent roll. The single expert opined that it was common for residential rent rolls to be sold for multiples of between 3.2 and 3.8 times the annual property management fees. However, the multiple applied varied based on the attributes of a particular rent roll.
At [D.15] of his report, the single expert sets out the attributes of the husband’s company’s rent roll which led him to conclude that the appropriate multiple in this case to use was 3.5 for the residential properties and 2.25 for the commercial properties. There was no effective challenge to this opinion. Based on the assumed management fees, the single expert concluded that the value of the combined residential and commercial rent roll was $710,000.
The single expert at [D.21] went on the comment that whilst “the rent roll method” results in a higher value, if the rent roll were to be sold, it would be likely that there would be realisation costs such as selling fees and taxation. In addition, it is possible that there would be a retention clause (such that the price would be reduced for any properties that did not continue with the purchaser for a minimum period) and a restraint clause imposed upon the husband such that he would not be able to undertake employment in a similar role within a certain area for a certain period of time.
In oral evidence, the single expert said that there may need to be a discount for these considerations and that he had not made an adjustment by way of assessing a specific number for the considerations set out in [D.21] of his report. The single expert agreed there could be a risk of as much as a 10 per cent adjustment to the value of the rent roll but on the other hand, if all the tenants stayed with the purchaser, no adjustment would be needed.
At page 22 of the single expert’s report, the single expert has reduced the valuation of the company on a liquidation basis by the sum of $106,050 (being a combination of adjustments for reduction in value of non-current assets and the inclusion of new liabilities including redundancy payments, lease payouts, liquidation costs and costs of sale).
The single expert agreed in cross examination that there was an error in Schedule D1 in that not all of the fixtures and fittings, lease improvements and office equipment had been excluded from the valuation on a liquidation basis by way of adjustments and the figure had to be further adjusted by another $33,000 which would increase liquidation costs from $106,050 to somewhere in the region of $139,000 and it would reduce the value of item 7 on the balance sheet to a sum of $262,000, if I accepted a liquidation basis as the appropriate method of valuation.
In reaching the overall value of the husband’s business, the single expert also took into account the long term commitment the husband’s company had to the new leased premises.
As mentioned, the valuation of the husband’s interest in the company takes into account the fact that the company owes the husband the sum of $253,826 which is reflected as a separate asset owned by the husband at item 8 on the balance sheet.
The husband’s evidence is that he intends, for the foreseeable future, to operate his business as a going concern. It would be inappropriate to adopt a valuation on a liquidation basis when there is not going to be any liquidation any time soon.
I shall consider the costs of an eventual liquidation and the effect of assumptions made in the valuation relevant to the husband’s earning capacity when considering s 79(4)(d) – (g) matters.
The value of the husband’s business as a going concern with the rent roll is $410,000.
Items 11 and 12 - household effects
The husband says that he has $2,000 worth of household effects and the wife says he has $40,000 worth of effects. The husband says that the wife has $40,000 worth of household effects and the wife says she has $1,000 worth of effects. It was agreed that the dispute between them primarily arises out of who might be in possession of the Persian carpets. The husband’s evidence is he went away with the children for the weekend; came back and they were gone. The wife denies taking them, although she agrees that she went to the former matrimonial home on that weekend and removed some items. The husband says he and the wife were the only ones who had the codes to the alarm on the house. The wife agreed that the children thought she was the one who had taken the carpets. The evidence does not allow me to say which version of events is to be accepted. Although I generally did not accept the husband’s evidence, his evidence about this particular event seemed plausible. Given my credit findings, I am not prepared however to say that the wife took these carpets in the face of her denial that she did so. The inability to make a decision about that is not of any great moment given that the husband did not adduce any admissible evidence as to the value of these carpets.
The wife did agree that she took some items made of gold from the home. Although the wife may have been in possession of some jewellery and some items of gold after the separation, there is no evidence which would allow me to assess the value of those assets for the purposes of entering them on the balance sheet.
Apart from the items the husband says the wife took from the home (see [18] and [19] of the husband’s affidavit), I note that he remained in the home after separation. The husband did assert at [182](e) of his affidavit that the wife took furniture in June 2013 but he does not specify what furniture she took and I infer the husband has retained the majority of the furniture and household effects in the matrimonial home.
Overall I am not of the view that it would be appropriate to place any value against either party’s household effects.
Item 14
It is not disputed that pursuant to orders made on 24 June 2014 and 12 September 2014 the wife received cash distributions in the sum of $100,000 and $50,000.
The husband’s final position was that although he does not press the $50,000 to be added back against the wife, he does press that the $100,000 be added back against the wife because she spent it on legal fees.
Exhibit 34 shows that the wife has expended $97,932 and the husband has expended $97,568 on legal fees. Neither party wishes to have paid legal fees added back onto the balance sheet on the basis that they are very similar in value. The husband’s argument is that he paid his legal fees as a result of personal exertion earnings through his employment in the real estate business. That is a difficult argument for him to maintain given the reduction of about $250,000 in his loan accounts since separation (which are not otherwise sought by the wife to be brought into account on the balance sheet). The fact is the husband has continued to derive income from the assets of the parties, namely the unit at Suburb E and the real estate business (particularly the rent roll) after the separation. The result is that I would not add the amount of $100,000 onto the balance sheet against the wife as asserted by the husband onto the balance sheet.
Items 16, 22 and 23
Item 16 is an amount of $48,530 which the wife asserts should be added back against the husband as monies that the husband paid to his sister Ms H in alleged repayment of a debt owed to his sister.
Item 22, in the sum of $216,000, is an amount the husband alleges that he owes his brother, Mr H and item 23 is an amount of $564 which he alleges he still owes his sister, Ms H.
Generally in relation to these alleged debts, senior counsel for the wife pointed to the fact that the husband’s loan applications to the bank, made at a time after the alleged debts were said to have been incurred, did not have any information whatsoever in them about the personal liabilities to his brothers and sisters. I don’t put a lot of weight on that fact. I do accept that the husband was telling me the truth when he said he was perfectively willing to write on a loan application to the bank whatever it took to get the loan and that it would not be advantageous to him to place on that document details about personal loans that he owed to his brothers and sisters. Consequently, the absence of a reference to debt to his brother and sister on bank loan applications is a neutral fact when judging whether the loans the husband now alleges are genuine.
In April 2013 the husband gave his sister Ms H a cheque for USD $46,000 drawn upon the joint account of the parties with the Bank of America. This payment was made by the husband to his sister about six months after the separation.
The husband says that it was a repayment of an amount that he borrowed from his sister in 2005 in the sum of $50,000.
In his trial affidavit (at [150]) the husband sets out details of three deposits into the parties’ joint account in November 2004 and in March 2005. Those receipts add to $46,564. The husband’s sister claims that there is still $564 owing but given the differences in exchange rates, the mathematics are difficult to reconcile.
The husband’s sister swore an affidavit on 21 October 2015 and gave evidence by electronic means.
The husband’s sister said that all her siblings were close knit and I inferred that they freely helped one another out from time to time.
Her evidence corroborated the husband’s assertions that three amounts were transferred to the parties in US dollars as follows:
19.11.2004 $11,779.12
10.3.2005 $4,771.12
30.3.2005 $30,014.21
The husband’s sister says that the exchange rate at the time was at about parity.
It was only the payment on 10 March 2005 that came directly from the brother’s sister to him. The other two amounts came from his nephew Mr P and another sister of the husband, Ms R. The husband’s sister, Ms H asserts that these were her monies and that the transfers through other relatives was simply an arrangement that she made.
It does not appear from the evidence that the husband’s sister Ms H at any time pressed the husband for the repayment of these monies between March 2005 and April 2012. Rather, shortly after separation, in April 2013 the husband is said to have told his sister “I am now able to pay the money back to you that you lent me”.
On 12 June 2013 the husband’s sister sent an email to the husband in the following terms:
Dear [Mr Bashara],
I hope things are better for you now. I received some money in my account and I just wanted to thank you so much for that. I am looking forward to receiving the rest soon. How are the boys?
Lots of love
[Ms H]
There are two issues arising from that email. The first is the use of the expression “I received some money in my account”. The clear implication from that statement is that monies were electronically transferred to an account and the husband’s sister had become aware that they had been deposited. What had actually happened was that at a time when the husband’s sister, who usually lives in London, was in the USA, she deposited a cheque from the husband drawn on the parties’ joint USA bank account into her USA bank account.
The husband’s sister attempted to explain the inconsistent words that were used in the email by saying that she wrote the email quickly and it was not her intention to say anything except that she had received a cheque and put it into her account. The husband’s sister was asked in re-examination whether or not English was her first language and she indicated that it was not. The husband’s sister however swore her written affidavit without the aid of an interpreter and gave her oral evidence in English without any apparent difficulty.
The second issue that arises from the email that was written is that it appears to be inherently unlikely that having not pressed for the repayment of a debt of $46,500 for a period of eight years, the husband’s sister would write her brother an email thanking him so much for the money sent but saying that she looked forward to receiving the rest soon (the rest being $564).
Because of these two difficulties with the email, I conclude that the email was written by the husband’s sister primarily for the purposes of being used in these proceedings.
I accept that the wife had very little knowledge over the years as to the interaction between the husband and his siblings, relatives and business partners in relation to international financial transactions.
The wife discovered a series of letters that were written to the husband from overseas in 1997 and 1998. Those letters are in a Middle Eastern language which the wife understands. Those letters have been translated into English (see Mr U’s affidavit sworn 8 October 2015).
What those letters indicate is that the husband and his siblings, relatives or business partners during the marriage were involved in the building of apartments in the Middle East. The letters generally indicate that significant funds were held in trust for the husband overseas by siblings of the husband connected to the husband’s investment in real estate in Country V at that time.
Of some relevance to the current discussion is a statement in a letter dated 12 December 1998 that an amount of about USD $24,000 held by Ms R (the husband’s other sister) was being held on behalf of the husband. Senior counsel for the wife attempted to connect that statement with the asserted transfer by Ms R allegedly on behalf of Ms H of the sum of USD $30,014 on 30 March 2005. There were two difficulties with that submission. One is the amount of time that had passed between 1998 and 2005. The second is that the letter of December 1998 says, “By now, you should have the 24 ones kept by [Ms R]”. What the December 1998 letter does demonstrate is that monies owed to the husband as a result of property transactions in Country V were held overseas, for at least some time, by one of the husband’s siblings.
As already noted, the wife had no knowledge of the dealings between the siblings, relatives and business partners over the years of the marriage and what is in the letters illustrate that the husband has not been candid with the wife about his international financial dealings. In relation to the husband’s sister (and as detailed below in relation to the husband’s brother and for that matter more generally, in relation to any of the husband’s siblings), I have no confidence that I know what were the true details of what was behind the international money transfers between the husband and his siblings.
I am unable to find that when the husband handed his sister a cheque for USD$46,000 in April 2013 about six months after separation, that that was a repayment of a debt he owed his sister. In any event, it is probable that the asserted debt owed by the husband to his sister was a statute barred debt (see Gray v O’Donnell [2009] NSWSC 259 and Ogilvie & Adams [1981] VR 1041). I shall add that amount back onto the balance sheet against the husband.
The difficulties become even greater when attempting to make some assessment as to what the situation is between the husband and his brother, Mr H. As indicated, I do not accept the husband’s brother is a truthful witness. In his affidavit, the husband’s brother initially said that he had advanced sums totalling $343,000; that he had been repaid $146,595 and consequently the debt outstanding was $196,400. However, it was an agreed fact that $47,700 of the sums allegedly owed were clearly incorrect. On the face of the husband’s written evidence, the alleged debt consequently was $148,700.
Nonetheless, in oral evidence the husband’s brother continued to assert the husband owed him $200,000. That assertion adds to the significant doubts I have about his evidence. The brother attempted to say the $47,700 was interest but I am unable to find that is so. Prior to the husband’s brother making that assertion in his oral evidence, he had only said in his affidavit that in March 2002, “we discussed interest and agreed [the husband] would pay a commercial rate based on home mortgage rates at the time”. The calculation of interest is one that the husband’s brother made up in oral evidence.
The letter to the husband dated 11 August 1998 (page 25 of the translator’s affidavit) indicates that at that time an amount of $33,024,300 [Country V] (the equivalent of about USD $188,000) was held overseas on behalf of the husband at a time when seven of the 10 apartments which the husband and his siblings and others had built in Country V had been sold.
Senior counsel for the wife submitted the husband and the brother had collaborated during the preparation of their affidavits. It does appear that, in part, one affidavit has been used as a template for the other. Tellingly in this case, both witnesses actually made the same error in their affidavits in relation to four deposits that were in fact made into the husband’s brother account and not made into the husband’s account as stated in both their affidavits. This significantly affects the weight I can give this evidence.
In relation to the alleged debt to the brother, I don’t have any objective evidence as to where the money that is alleged to have come into the husband’s account came from. It arrived in 2002 and 2005. The wife suggests the monies might have come from the 1997/1999 real estate ventures in Country V. That is probably not the direct source of these funds. The wife only knew about the 1997/1999 deal because she discovered some documents in a brief case that the husband had in his house. It is not implausible that there may have been other overseas ventures between the husband and his siblings and other possible business partners that the wife knew nothing about. I am not prepared to accept that these monies that came into the husband’s account were in fact monies loaned to the husband by his brother.
Although it was not clear, it is likely that any debt to the husband’s brother was also statute barred. The lawyer for the husband submitted that even if it is statute barred, it has to be taken into account as a contribution made on behalf of the husband. That might be so if I accept that these monies were the brother’s monies which I don’t. I have no great confidence that I know about all the husband’s activities overseas.
I do not accept there is still a debt owed by the husband to his brother and I shall mark those items as “nil”.
Item 24
The husband wants his AMEX debt included on the balance sheet because he asserts he has used it for living expenses. Given that the wife’s post separation debts (referred to in the next paragraph) are not being placed on the balance sheet, I shall not count the husband’s Amex debt on the balance sheet but take them into account when considering s 79(4)(d) – (g) matters.
Other liabilities asserted by the wife
The wife also claims that she has the following debts which she has incurred since the separation. Those debts are as follows (using numbers in Exhibit 35):
Item 32
Centrelink debt
$ 7,500.00
Item 33
Child support arrears
$1,800.00
Item 34
Loan from sister – Ms W
$48,788.00
Item 35
Loan from friend – Ms O
$5,000.00
Item 36
Loan from other – Ms X
$12,000.00
Item 37
Medical bills in US (the husband agrees this debt was incurred)
$8,000.00
Item 38
Y Legal
$11,113.00
Item 39
Edwards Family Lawyers
$37,969.00
$ 132,170.00
The Centrelink debt relates to a Newstart allowance that the wife received after separation but which the wife says she was then required to pay back because the husband asserted to the Child Support Agency that he had 100 per cent care of the children. In relation to items 34 to 36, it is unclear to me as to how much of those amounts the wife says went towards living expenses and how much went to other expenditure including legal fees. The wife says she incurred medical bills in the US in July 2014 when she travelled there to visit her family and was admitted to hospital for issues in relation to anxiety. Legal fees should not be placed upon the balance sheet. Given the uncertainties, I will not place these liabilities on the balance sheet but take items 34-37 of Exhibit 35 into account in a general way when considering s 79(4)(d) – (g) matters.
WHETHER AN ORDER ALTERING INTERESTS SHOULD BE MADE
The parties have separated and their partnership has ended. After the separation, there was no longer a continuing commitment to the mutual use of assets and a shared responsibility for liabilities. As the balance sheet set out above demonstrates, the assets and liabilities remaining with each party are $1,800,000 in assets and $1,638,429 in debts held jointly; $1,646,343 in assets held by the husband and $78,696 in assets and $23,009 in debts held by the wife.
The parties both seek that I make a property settlement order. I find that in all the circumstances, it is just and equitable to make an order altering property (including adjusting liabilities).
CONTRIBUTIONS
The wife contends that the court should find that the wife’s contribution exceeds those of the husband by 5 per cent.
The husband submits that a contribution finding should be made as to 60/40 per cent in his favour.
The parties lived together from the date of their marriage for 16 years.
Initial Contributions
The husband says that he worked in automotive repairs from about 1989/1990. By the time of the marriage, he was running this auto repair shop in partnership with another Country V man called Mr V. The auto repair shop had contracts with dealerships to repair their cars. One of the benefits that the husband had as a result of running this business was that he had a motor vehicle available to him. Whilst the husband had an interest in this business as at the date of the marriage, I have no evidence as at that date as to what that interest is worth. At the commencement of the cohabitation, the husband had an IRS tax debt in the sum of $80,000.
At the commencement of the cohabitation, the husband moved into the wife’s rental accommodation. At that time the wife was working as a qualified health professional and had been doing so since 1989.
The wife’s major asset at the commencement of the cohabitation was savings in the sum of $35,000. She also had a small interest in a retirement fund, superannuation, furniture, contents, jewellery and one Persian rug.
At the commencement of the marriage, the husband had a house at AA Street, BB County, State F, US. That house however was mortgaged to almost the total of its value and was sold shortly after the marriage for no net gain.
At the commencement of the cohabitation, the husband also had three motor vehicles, five Persian carpets and some gold jewellery. I have no information as to the value of those items.
Financial contributions
About two years after the parties married, they jointly purchased the Suburb I property. The purchase price was approximately $500,000 and the parties borrowed about 90 per cent of the purchase price. The wife says that the deposit came from monies that had been saved into a joint account. The husband asserts that the deposit came totally from the sale of a motor vehicle. I accept the wife’s version.
After the marriage, the wife continued working as a health professional but also helped out in the auto repair shop assisting in reception and taking cars to and from dealerships and clients as needed. In 1997 the wife also became a licensed real estate agent and commenced earning commissions in 1998 and 1999. The wife’s income was paid into a joint account from which the mortgage was paid.
The first child of the marriage was born in the USA in 1999.
In early 2001 the parties decided to move to Australia and were able to do so as a result of the wife obtaining a skilled working visa as a health professional. She sponsored the husband.
In late 2001 the parties sold both their major assets in the USA, namely the Suburb I property and the husband’s interest in the auto repair shop. After moving expenses, the parties were able to bring approximately $900,000 to Australia (USD $450,000). There is a difference in the evidence as to how much of the USD $450,000 came from the sale of the auto repair shop; the husband saying USD $250,000 and the wife saying in her affidavit that it was USD $150,000 and in oral evidence it was around $100,000 to $200,000, with the balance of the monies coming from the sale of the Suburb I property. I accept the wife’s evidence as being more reliable.
The second child of the marriage was born in 2002. Thereafter, the husband was the primary wage earner during the marriage but supplemented from time to time by income earned by the wife during the marriage.
Non-financial contributions and role of homemaker and parent
The wife planned, shopped for and prepared meals. She also did laundry, ironing and did other household chores.
There are two children of the relationship. Although the wife did work during the children’s school years, overall the wife was the primary carer of the children during the relationship.
Post separation contributions
Since separation the husband has made contributions in the role of parent of the children. The husband concedes that the children have a close relationship with the wife and that she has spent significant time with the children since the separation. Currently the children spend each alternate weekend and one night in the alternate week with their mother. Since separation, the wife has provided minimal financial support in relation to the children but the husband has had the use and occupation of a valuable former matrimonial home and exclusive access to the other major assets of the parties, particularly K Pty Ltd. Exhibit 32 indicated that the husband drew upon his credit loan account with the company from the date of separation so that the debt to him reduced from $497,576 to $262,000.
Conclusion on contributions
The husband’s interest in the auto repair shop when it was sold in late 2001 provided the parties with an amount of USD$150,000. The parties at that time had been married for about five years. It is impossible, on the evidence I have, to say what the value of that asset was at the time the parties married, but I am prepared to infer that it was an asset which had some value. I assess the contributions that both parties made whilst they were together as being equal. After the separation, the children ordinarily lived with the husband. On the other hand, the husband had access to all the major assets of the parties including the valuable matrimonial home, the real estate business that the parties had built up after they came to Australia and income from the investment unit. After the separation, the husband expended $235,000 from his loan account which was an asset which existed at the date of separation.
Taking all of those matters into account, overall I reach the conclusion that the contributions made by the parties over the whole course of the marriage to the acquisition, conservation and improvement of property are equal.
FUTURE NEEDS - SECTION 79(4)(d) - (g) MATTERS
The husband submits there should be an adjustment as a result of s 79(4)(d) – (g) factors of 10 per cent in his favour if the business is assumed to have no value but 20 per cent in his favour if a higher value is adopted.
It is the wife’s contention that few factors pursuant to s 79(4)(d) – (g) have relevance in these proceedings but seeks a further 5 per cent adjustment in her favour.
The husband is 55 years of age and is in good health. The wife is currently 49 years of age and is in good health.
There was a dispute between the parties as to their relative earning capacities. The lawyer for the husband submitted that both the parties had similar earning capacities (in the range of $90,000 - $100,000 per annum).
Senior counsel for the wife submitted that the wife’s earning capacity was in the range of $50,000 - $60,000 per year. I accept that the wife has found herself in a difficult position in the market place and her ability to seek employment at a greater annual rate has diminished and become more difficult for her. Job applications by the wife have been unfavourably considered by several employers.
The wife points to the income earning capacity and the property that the husband has available to him. It is important however to be careful not to double count income which the husband derives from assets which will be counted against him on the balance sheet at a value based upon the income those assets generate.
Notwithstanding the husband’s lawyer’s concession that the husband has an earning capacity of $100,000 per annum, I am cautious about making that finding. The single forensic accounting expert, when considering a valuation of the company based on future maintainable earnings of the company (a consideration which the single expert ultimately abandoned as an appropriate method of valuation), opined that an arms-length remuneration for the husband working in the business would be in the approximate sum of $102,000 in the 2015 financial year (see Schedule D2 of Exhibit 8). It should be remembered however that the valuation of the company does not rely upon that assumption. The company has been valued on an asset backing basis. Consequently, it would be a double counting to assume that the husband received $100,000 per annum by way of income from personal exertion in circumstances where the value being placed on the balance sheet fully values the asset from which that income is primarily being delivered, namely the rent roll.
The husband has the ability to receive various benefits from expenses paid for by his company. The single expert who valued the business had been asked to accept the accounts at face value. The husband accepted in cross examination that he had been using the advertising account of the business to pay some of his personal expenses. There was a large spike in advertising in the last year of the marriage. The husband generally said however that his accountant adjusted all of the payments from that ledger at the end of the financial year when he adjusted for personal expenses paid by the business. Those adjustments however would be dependent upon what the husband told the accountant were non-business related expenses. The husband’s evidence would indicate that he has a reasonable degree of control over instructing his accountants which expenditures are personal and given his attitude to loan applications I don’t have a great deal of confidence that he would be entirely diligent in identifying personal expenses that had to be added back that were run through the company.
Notwithstanding that the husband seems to have a successful business in selling real estate involving a significant number of employees, he is seemingly at this time unable to make any profit out of the enterprise. That is not however the end of the consideration. There was evidence before me that it might be possible for the husband to restructure the almost $200,000 he is paying in wages and the other high costs associated with him conducting the business of selling real estate to make that operation more profitable and to remunerate him for his personal exertion.
The single expert had concerns that if the rent roll was sold, then on the current expense structure of the business, there may not be enough profit to provide remuneration for the husband and the operation could in fact result in trading losses. The single expert had not turned his mind as to what changes would need to be made to the structure of the husband’s business in order for it to trade profitably without the rent roll.
The husband did not satisfy me that he had no capacity to make money from running a business selling real estate (as opposed to running a rent roll). I am not able to make a finding that the husband’s ability to earn a living through his personal exertion and employing his skills as a real estate salesman are less than the earning capacity of the wife.
The husband has re-partnered with a woman who has recently migrated to Australia and is unemployed.
The wife is not cohabiting with any other person.
Page 94 of the wife’s affidavit would indicate that her current child support assessment is at a monthly rate of $471 and her account statement at page 97 would indicate that as at 23 May 2015 there was a liability of about $1,700 owing. The wife gives details in her affidavit as to the history of the payment of child support by her since separation, including the involvement of the Child Support Agency in making determinations in relation to whether or not assessments should be amended given the relative financial circumstances of the parties from time to time. As I set out below, I do not intend to interfere with any past assessments that have been made or any arrears that have accumulated in relation to past assessments. I assume however that the child support responsibilities between the parties will be determined with the assistance of the Child Support Agency moving forward in accordance with the income and earning capacities of both the parties in the future. Any disputes about those issues in the future will need to be determined by the parties accessing normal administrative processes with the Child Support Agency and the review and appeal processes available to them if that becomes necessary. I assume however that the husband will receive some assistance from time to time from the wife by way of child support commensurate with their respective income and earning capacities.
The wife concedes that it is a consideration in the husband’s favour that he will have the care of the parties’ two children, who are currently 16 and 14 years of age.
The wife submits that I should take into account what she alleges is overt and covert pressure by the husband on the children not to spend time with her. I do not make that finding.
I take into account to a limited extent, the evidence relating to the value of the business if the rent roll had to be sold including liquidation costs, although the weight I place on that is not particularly significant given that there was no evidence given by the husband whatsoever that he intended in any foreseeable timeframe to cease to operate his real estate agency business.
The wife asserts that a further and significant adjustment should be made because the husband has not made a full and frank disclosure of his financial position. I place some weight on this submission. I do find that the husband has not satisfactorily explained to the court the history of his financial dealings with his siblings who live overseas. I am not confident that I have a full picture as to the husband’s true financial circumstances.
In 2000, the husband’ daughter from a previous marriage commenced living with the parties full time. The wife was the primary care giver and a “surrogate mother” to her.
I take into account that some of the current liabilities that the wife has accumulated since separation relate to the wife funding her living expenses and I am not able to say precisely how much that is of the wife’s current liabilities. I also take into account the husband’s Amex debt.
Conclusion about s 79(4)(d) – (g) matters
Taking all matters I have discussed into account the more weighty factors are, on the one hand, the husband will have the major ongoing responsibilities for the care of the two children but on the other, the uncertainty about financial disclosure by the husband of his financial circumstances. Overall, I assess all the s 79(4)(d) – (g) factors as being evenly balanced between the husband and the wife.
JUST AND EQUITABLE
The wife contends that there should be an adjustment of the parties’ property 60/40 per cent in her favour.
The husband submits that there should be a 70/30 division in his favour of the net pool of property (if the business is valued at no value and 80/20 in his favour if the higher value is adopted).
Based upon my findings in respect of contributions and s 79(4)(d) – (g) considerations, the net assets would be divided evenly.
That adjustment can be achieved by a property settlement order which distributed assets and liabilities as follows:
| Husband gets 50.0 per cent | |||
| Assets | |||
| Item No. | Description | Percentage | Value |
| 1 | B Street, Suburb C | 100 per cent | $1,800,000 |
| 2 | 2 D Street, Suburb E | 100 per cent | $915,000 |
| 3 | Westpac a/c #130 | 100 per cent | $1,452 |
| 4 | Westpac Esaver #858 | 100 per cent | $911 |
| 5 | Openheimer Funds | 100 per cent | $10,300 |
| 6 | Barclays Bank, London | 100 per cent | $3,790 |
| 7 | K Pty Ltd | 100 per cent | $410,000 |
| 8 | Loan account K Pty Ltd | 100 per cent | $253,826 |
| 11 | Household effects | 100 per cent | $0 |
| 13 | 4WD | 100 per cent | $4,500 |
| 16 | Funds transferred to husband's sister from joint Bank of America a/c post separation | 100 per cent | $46,564 |
| Liabilities | |||
| Item No. | Description | Percentage | Value |
| 18 | CBA Viridian line of credit (a/c #807) | 100 per cent | $549,995 |
| 19 | CBA Viridian line of credit (a/c #439) | 100 per cent | $409,998 |
| 20 | CB Better Business loan a/c | 100 per cent | $196,280 |
| 21 | Suncorp line of credit | 100 per cent | $482,156 |
| 22 | Mr H | 100 per cent | $0 |
| 23 | Ms H | 100 per cent | $0 |
| 24 | AMEX | 100 per cent | $0 |
| Husband pays Wife | $876,113 | ||
| Net Assets to Husband | $931,801 | ||
| Wife gets 50.0 per cent | |||
| Assets | |||
| Item No. | Description | Percentage | Value |
| 9 | CBA Streamline a/c 0900 | 100 per cent | $1,119 |
| 10 | German motor vehicle | 100 per cent | $33,000 |
| 17 | T Super | 100 per cent | $44,577 |
| Liabilities | |||
| Item No. | Description | Percentage | Value |
| 25 | German Auto finance | 100 per cent | $23,008 |
| Wife receives | $876,113 | ||
| Net Assets to Wife | $931,801 | ||
Standing back, I consider an adjustment of assets and liabilities in that manner to be one that is just and equitable between the parties
CONCLUSIONS / ORDERS
The husband indicated that he would prefer, as a default position, the sale of the Suburb C property as the first asset to be sold. The husband will be given three months to raise the necessary finance to attempt to buy the wife out, otherwise the Suburb C property will need to be sold. I do not know how much the CBA and possibly Suncorp would require to be repaid upon the sale of the Suburb C property. So far as I am aware, the liabilities are cross-collateralised against both properties. In the event that the husband fails to make the payment ordered, it is appropriate that both properties be offered for sale and that each party receive a percentage of the division of the net proceeds of each of the sale. Those percentages would be calculated as follows:
Value of the real estate:
Suburb C $1,800,000
Suburb E $915,000
$2,715,000
Less liabilities:
CBA viridian line of credit (a/c 807) $549,995
CBA viridian line of credit (a/c 439) $409,998
CB Better Business loan $196,280
Suncorp line of credit $482,156
$1,638,429
The net amount of the value of the two pieces of real estate after these liabilities are taken into account is in the sum of $1,076,571 (2,715,000 – 1,638,429).
If the wife was to receive $876,113 from that net figure, it would be 81.38 per cent of the total net figure with the husband to receive 18.62 per cent of the total net figure.
The wife wanted to be the sole trustee for the sale of the Suburb E property if it had to be sold but I would not make that order at this stage. I shall simply give either party liberty to relist the matter in respect of implementation of the property settlement order.
WIFE’S CHILD SUPPORT DEPARTURE APPLICATION
The wife made an application to discharge arrears and suspend child support responsibilities pending the implementation of the property settlement orders. The issue was not the subject of any focus by senior counsel for the wife during final submissions. I am not satisfied on the evidence that it would be just and equitable or otherwise proper to make any order discharging child support arrears or varying any assessment pending the implementation of the property settlement order. I will dismiss the wife’s child support departure application.
INCOME TO WIFE PENDING SALE
The wife wanted the income from the Suburb E property pending the sale. I have taken into account the fact that the husband has received that income up until the date of orders. It is uncertain as to whether or not the husband will be able to make the payment that has been ordered and if he is unable to do so, both properties will need to be sold. The timing of the sale of those properties is also currently unknown. As a result of these orders, the wife will potentially end up with a significant proportion of the sale proceeds from the Suburb E property. In those circumstances it is appropriate that the husband, from the date of these orders, pay to the wife one half of the income received from the Suburb E property after deduction of any payment to a lending institution that has a loan which is solely secured over the Suburb E property and after payment of any other outgoings on the property.
PASSPORTS
The husband has a strong view that given the children are with him most of the time their passports should remain with him. The parties have however agreed and consent orders have been made to the effect that each party requires the consent of the other from time to time for overseas travel which consent may not reasonably be refused. There is accordingly a structure in place which already requires the parties to cooperate with one another in relation to overseas travel. This means that the husband’s fear that the wife would withhold passports as some mechanism by which to stop him taking the children overseas is misconceived.
The husband made an assertion during oral evidence that the children had missed going overseas for certain family events because the wife hadn’t given consent but there was no evidence of any particularity in relation to those events and the wife didn’t have an opportunity to respond to any specific allegation. The husband also asserts that the as the children get older they will want their passports for reasons other than overseas travel and I accept in relation to the older child at this stage that that might be so. The children ordinarily live with the husband. He can hold their passports, but the parties should be jointly involved in renewing the children’s passports.
I certify that the preceding one hundred and fifty eight (158) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 12 October 2016.
Associate:
Date: 12 October 2016
SCHEDULE 1
The applicant wife relies on the following documents:
Case Outline
Amended Initiating Application filed 27 August 2015
Affidavit of the wife filed 28 August 2015
Financial Statement of the wife filed 27 August 2015
Affidavit of Translator Mr u filed 15 October 2015
Affidavit of Mr CC filed 9 November 2015
The respondent husband relies on the following documents:
Case Outline
Response to Initiating Application filed 20 June 2013
Affidavit of the husband filed 16 June 2015
Financial Statement of the husband filed 16 June 2015
Affidavit if Mr H filed 18 June 2015
Affidavit of Ms H filed 22 October 2015
Affidavit of Mr DD filed 26 October 2015
0