Dohdi and Mehmet - [2019] FamCA 108

FAMILY COURT OF AUSTRALIA

DOHDI & MEHMET

[2019] FamCA 108

FAMILY LAW – PROPERTY ADJUSTMENT – Where discussion of applicable principles – Where both parties seek adjusting orders – Where small cash pool for division – Where assessment of contributions and relevant section 75(2) factors – Where pool divided as to 65 per cent to the wife and balance to the husband.

Family Law Act 1975 (Cth) ss 75, 79

Bevan & Bevan [2014] FamCAFC 19
Chapman & Chapman [2014] FamCAFC 91
Dickons & Dickons [2012] FamCAFC 154
Pandelis & Pandelis [2018] FamCAFC 66
Russell & Russell (1999) FLC 92-877
Scott & Danton [2014] FamCAFC 203
Stanford & Stanford [2012] HCA 52
Teal & Teal [2010] FamCAFC 120

APPLICANT:

Ms Dohdi

RESPONDENT:

Ms Mehmet

FILE NUMBER:

PAC

5460

2015

DATE DELIVERED:

1 March 2019

PLACE DELIVERED:

Parramatta

PLACE HEARD:

Parramatta

JUDGMENT OF:

Foster J

HEARING DATE:

7 and 8 February 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Cairns

SOLICITOR FOR THE APPLICANT:

Sharon Payne Family Lawyers

COUNSEL FOR THE RESPONDENT:

Ms Conte-Mills

SOLICITOR FOR THE RESPONDENT:

Warren F Ball & Co

Orders

That the husband and wife sign all necessary documents and do all necessary things so as to authorise and direct that monies presently held in trust for them in a controlled monies account together with interest accrued if any to date of distribution be divided as to 65 per cent to the wife or as she may otherwise direct in writing and 35 per cent to the husband or as he may otherwise direct in writing.

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 Dohdi & Mehmet 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 PARRAMATTA

FILE NUMBER: PAC 5460 of 2015

Ms Dohdi

Applicant

And

Ms Mehmet

Respondent

REASONS FOR JUDGMENT

The matter for determination is the question of property settlement as between the applicant wife and the respondent husband.
Final parenting orders in relation to the three children of the parties’ relationship were made by consent on 17 July 2018. In summary, those orders provided:
a)That the parties have equal shared parental responsibility for the children.
b)That the children live primarily with the mother.
c)That the children spend time with the father on alternate weekends and at other times by agreement during school term, half school holidays and on other special occasions.
Property proceedings were commenced by the applicant wife in her Initiating Application filed 7 June 2016 as amended by her Amended Initiating Application filed 15 November 2018. Orders sought by the applicant wife related to certain funds remaining on investment for the parties in a controlled monies account and in respect of that fund the wife sought that she receive 80 per cent of the funds with the balance being paid to the husband.
The husband in his Further Amended Response to the wife’s Initiating Application sought an order that the funds held in a controlled monies account be divided equally.
Both parties amended the division sought by them in final submissions as referred to below.
At trial the wife relied upon:
a)Her Affidavits filed 25 July 2018 and 6 February 2019.
b)Her Financial Statement filed 6 February 2019.
At trial the husband relied upon:
a)His Affidavit filed 16 August 2018.
b)His updated Financial Statement sworn 7 February 2019 (Exh “F”).

Context

At trial the applicant wife was aged 36 and in fair health having historically been diagnosed with cancer.
At trial the husband was aged 44 years and in fair health being dependent upon a disability support pension as a consequence of historical heart issues.
The parties married in a Sharia ceremony according to Islamic law in 2001/2002, subsequently registered in Australia in 2002.
The parties commenced cohabitation in mid-2002 and separated in March 2015 and were divorced in September 2016.
There are three children of the parties’ relationship:
a)X born … 2003 aged nearly 16 years at trial;
b)Y born … 2004 aged 14 years at trial; and
c)Z born … 2009 and aged nine years at trial.
All children live primarily with the wife. She receives no financial assistance from the husband for the children.

Approach to Property Adjustment

The approach to the determination of an application under s 79 of the Family Law Act 1975 (Cth) (“the Act”) is set out in Stanford & Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman [2014] FamCAFC 91 and Scott & Danton [2014] FamCAFC 203.
The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4).
The Court in the application of s 79(2) of the Act needs to conclude that it would be unjust or unfair to leave the parties’ property rights intact.
In many cases such as the present matter, this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here both parties seek disparate orders as to the division of cash funds on deposit.
It would, in some circumstances, be unjust or unfair to leave property rights intact where there is common ownership and discrete assets are sought by each. Such is the case in this matter and the parties both agree that their common ownership of property, the funds on deposit, is to be brought to an end so as to reflect their respective contentions as to entitlement.
It would be unjust or unfair to leave those funds unresolved. It is appropriate that property adjustment orders be made.
Otherwise, a consideration of s 79(4) factors as discussed below reveals it would be, otherwise, unjust or unfair to leave the parties’ property rights as they are.
Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g), in particular, the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant: (s 79(4)(e)).
The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.

The asset pool

The assets of the parties essentially comprise monies on cash deposit as referred to above are in the sum of approximately $539,110.00. There is a discrete issue between the parties as to whether superannuation funds received some years ago by the husband should be notionally added back to the pool of assets for division. That issue is considered below.

Background

At the commencement of the parties’ cohabitation the wife had some jewellery, she asserts having a value of about $10,000.00, cash savings of about $10,000.00 and some household items and personal effects.
At cohabitation, the husband had the following assets:
a)A one half interest, as tenant in common with his brother Mr B, in a property at C Street, Suburb D, New South Wales. The property was purchased for $157,500.00 in May 1998 with the purchase price being substantially funded by a mortgage advance of $126,000.00 from the Westpac Bank. The husband’s half interest in the equity in that property at the time of cohabitation was modest, he estimated it to be about $37,350.00.
b)A motor vehicle 1 estimated value of about $8,000.00.
c)Some savings of about $16,000.00. The savings were mostly expended on the parties’ honeymoon in Country E.
The property at Suburb D was tenanted for some years until about 2005 with, it appears, rent being applied to mortgage payments and the shortfall being met by the co-owners.
Subsequent to the commencement of cohabitation the parties lived in rented premises until they commence to occupy the Suburb D property in 2005, although the parties resided in Country E from May 2002 until December 2002.
At the commencement of cohabitation the husband was employed as an electronics technician and later as a sales representative.
In April 2008 the husband’s other brother, Mr F, acquired the half interest off Mr B in the Suburb D property. The wife gives evidence of various financial transactions relating to Mr F acquiring the half interest but there is no submission that such transactions have any effect on the assets available for distribution being the husband’s half share realised on sale.
As at about November 2010 the mortgage secured over the Suburb D property in favour of the Commonwealth Bank was paid out using some cash funds available to the husband as referred to below and the sum of $10,000.00 advanced by the wife’s father. Thereafter the property was unencumbered.
It is common ground that following sale of the former matrimonial home and with the agreement of the husband and wife one half of the net proceeds of sale were paid to Mr F by court order on 14 December 2018.

The Superannuation Issue

In April 2012 the husband withdrew from his superannuation account $87,129.00. These funds were paid into the husband’s NAB account. It is common ground that of these funds $80,000.00 was advanced by way of loan to the parties’ cousin Mr G notwithstanding a documentary trail that would indicate a payment to a third party account.
It is the disposition of the superannuation monies that is in issue between the parties. The husband asserts that the borrower, Mr G, repaid these funds to him in cash over a period of time and that cash was spent by the husband on a motor vehicle, purchases for the household, home improvements and generally money for living expenses. The wife asserts that she has no knowledge of such repayments and there were no funds expended as alleged by the husband. The wife asserts that certain improvements to the home including the removal of asbestos, some renovation to the kitchen and bathroom and the provision of a hot water service were funded by a friend of hers in 2014 and thereafter subsequent to the wife’s diagnosis in 2014 with cancer. That friend was not called to give evidence.
The husband provided no evidence from his cousin as to the asserted repayments of those funds. There is no evidence as to the purchase or registration of a motor vehicle, no bank records and no receipts or other evidence of expenditure.
The parties’ respective assertions in relation to this issue were revealed in trial affidavits filed in mid-2018. Both parties had a significant period of time within which to adduce other evidence in support, otherwise, of their assertions. The evidence of the parties such as it is does not assist the Court in the determination of this issue. Both parties gave oral evidence and were cross-examined as to the issue. Regrettably, nothing during the course of cross-examination has assisted the Court in accepting one version or the other, particularly in the absence of corroboration that was so clearly available. There is simply a gap in the forensic preparation of both parties’ cases.
The wife having married the husband in 2001/2 when she was 19 and falling pregnant with the first child in mid-2002 has undertaken the primary role of homemaker and parenting over the years of the parties’ cohabitation. On the other hand, the husband at least until 2007 was the primary income earner.
In 2007/8 the husband suffered two heart attacks and subsequently became the recipient of a disability support pension in March 2008 on which he has remained for 11 years until trial. He asserts that at the time of his heart attacks he had significant cash savings from income earned during the relationship which were diminished in payment of property outgoings and living expenses for his household.
His oral evidence reveals that he was able to work part-time from about 2007 to supplement his Centrelink benefits. The wife by reason of the husband’s low income receives significant family support payments to assist the household and until her diagnosis with breast cancer supplementing her finances with some cash employment.
The wife asserts that the husband before his heart attack would work for five nights a week for about 12 hours each night with that employment providing significant cash income into the household. The wife’s evidence in this regard is supported by the husband’s assertion that notwithstanding his modest salary living he was able to accumulate some $40,000.00 in cash savings that assisted in meeting family expenses after he commenced on Centrelink benefits and ultimately the lump sum discharge of the mortgage over the home with the assistance of funds from the wife’s father.
Following the husband’s heart attacks, the wife provided care and assistance to the husband who was later diagnosed with depression and prescribed medication. As a consequence of the husband’s disability, the wife undertook a more significant role within the home with the children than would normally be the case by reason of the husband’s inability to assist.
Following the wife’s diagnosis with breast cancer in 2014 she underwent surgery in February of that year. The wife underwent subsequent related surgery in November 2017 and in June 2018. The wife continues on hormone replacement therapy into the foreseeable future. The wife suffers from depression and has been prescribed medication accordingly. She has little capacity if any for employment by reason of her health issues.
In January 2015 the wife was informed that the husband wanted a divorce and in March 2015 he left the matrimonial home, moving to live with his parents.
The husband remarried under Islamic law in 2016 and has sponsored his new wife into Australia. The husband’s new wife does not work and as at the time of trial was studying English. The husband’s expectation is that she will get work and support him.
Notwithstanding the husband’s asserted poor financial position he travelled to Country E in April 2015. Thereafter he travelled overseas for four months from late December 2016 to April 2017 during which time he married in late 2017 and honeymooned in Country K. Thereafter in 2017 the husband travelled overseas on three separate occasions and again in 2018.
As at the date of the parties’ separation, it appears that the parties’ assets comprised:
a)The husband’s half interest in the Suburb D property;
b)A Motor vehicle 2;
c)A Motor vehicle 3;
d)Furniture and furnishings remaining in the matrimonial home;
e)A Commonwealth Bank account having a minimal balance.
Subsequent to separation the wife remained completely reliant on Centrelink benefits including family allowance payments for the support of herself and the children. She was reliant upon charitable donations for every day necessities for herself and the three children. She and the children remained in occupation of the matrimonial home until it was sold after separation in mid-2017. Thereafter the wife and children have resided in refuge accommodation with the wife and children continuing to reside in such accommodation as at the date of trial.
The husband has provided no financial support for the wife and children post separation save for minimal payments of some outgoings in relation to the matrimonial home until it was sold. The husband asserts that he ceased working in late 2017, not by reason of any inability to undertake work but because he “did not like it”.
At trial the husband gave evidence that he was receiving a total of $516.00 per week from Centrelink including rent assistance. Otherwise, he was paying rent of $500.00 per week and estimated that his other expenses for himself and his wife including their living expenses were about $300.00 per week plus car expenses of about $50.00 per week. His trial affidavit asserts that in the period from January 2016 to August 2018 he had borrowed $80,706.00 to be paid back at the completion of these proceedings.
At trial the husband gave evidence that he had borrowed $50,000.00 from the proprietor of H Pty Ltd, a Mr J. Notwithstanding having been seen shortly prior to trial in an H Pty Ltd shirt and driving in an H Pty Ltd motor vehicle, the husband denied that he was employed by that company. He rejected a suggestion that the alleged borrowing was in reality payments made to him in lieu of salary. Regrettably, Mr J was not available to give evidence at the trial.
An application by the husband’s counsel for proceedings to be adjourned part heard to facilitate evidence being called by the husband relating to the disposition of his superannuation monies and his borrowings post separation was refused in circumstances where these proceedings have been pending for almost three years and the issues in dispute were well known to the parties, particularly the husband since mid-2018.
Yet the husband’s “borrowings” have been for his personal benefit and nothing to do with the matrimonial context.
It is, otherwise, clear that the husband has some income earning capacity that he chooses not to exercise.
The husband’s engagement with the children post separation was irregular and thus the overwhelming obligation to care for the children fell upon the wife’s shoulders. Such will be the case into the future.

The Pool

For the reasons given above, there will be no notional add back of the superannuation benefit received by the husband. Thus the asset pool for division remains the monies in the controlled monies account as identified above.

Contributions

In Dickons & Dickons [2012] FamCAFC 154 the Full Court said at [24] and following:
There can be little doubt that the classification of contributions by reference to terms such as “initial contributions”, “contributions during the relationship”, and “post-separation contributions”, can be helpful as a convenient means of giving coherent expression to the evidence in a s 79 case and to giving coherence to the nature, form and extent of the parties’ respective contributions. However, the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
Doing so is also consistent with the demands of authority that the ultimate assessment of contributions should be made without “...giving over-zealous attention to the ascertainment of the parties’ contributions...” (Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 at 524) and the well-established recognition in the authorities (acknowledged specifically by her Honour in this case) that the process required of the Court by s 79 is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise.
The necessarily imprecise “wide discretion” inherent in what is required by the section is made no more precise or coherent by attributing percentage figures to arbitrary time frames or categorisations of contributions within the relationship. Indeed, we consider that doing so is contrary to the holistic analysis required by the section and, in the usual course of events, should be avoided.

In Pandelis & Pandelis [2018] FamCAFC 66 the Full Court reiterated:
24.We think it important to record that in Zyk and Zyk [1995] FamCA 135; (1995) FLC 92-644, the Full Court said it is somewhat artificial to purport to assign a percentage to a particular category of contributions....
An assessment of contributions to the date of separation must have regard to the modest disparity in contributions by the parties at the commencement of cohabitation that favoured the husband. However, thereafter with three children in the household and the husband mostly being the primary income earner until he commenced on Centrelink benefits and it appears the family thereafter being reliant significantly on government benefits supplemented by some employment by both parties, contributions to separation would be seen as equal particularly where the wife’s father made a lump sum contribution of $10,000.00 to facilitate the discharge of the mortgage.
Post separation the husband rightly concedes that contributions must favour the wife in terms of ongoing care for the children in the absence of any real financial support from him notwithstanding that she was able to remain in the home that was unencumbered for a period after separation.
Having regard to the contributions by each of the parties as detailed above it is just and equitable to conclude that contributions overall to trial should favour the wife. Contributions are assessed as to 52.5 per cent to the wife and as to 47.5 per cent to the husband. This is a disparity of about $26,500.00 between the parties.
Otherwise, orders proposed for property settlement being the division of monies held on deposit for the parties have no impact on the parties’ earning capacity.

Section 75(2) factors

The Court is required to have regard to the relevant, in the context of this matter, factors under s 75(2) of the Act.
The parties’ ages and their respective health issues are discussed above.
The property and financial resources of the parties now comprise funds on deposit. Otherwise, at present their income substantially comprises government benefits. The wife has very limited, if any, capacity for gainful employment by reason of her health and ongoing care for the children. The Court is satisfied that the husband has some capacity for employment which he chooses simply not to exercise. Indeed, he has remarried with the expectation that his new wife upon obtaining appropriate English-language skills will obtain employment and support him.
The wife will have the ongoing primary care of the parties’ three children.
The wife will have ongoing commitments for the support of herself and the children. The husband at present has a commitment to provide for his new wife.
The parties’ pension entitlements from Centrelink are detailed above. Neither has any superannuation entitlements.
The husband now cohabits with his new wife and the financial circumstances of their cohabitation gives rise to some suspicion that the husband and/or his new wife have other sources of income, presumably from cash employment.
The husband has provided no child support for the children of the marriage since separation, notwithstanding that the wife and children remain living in the former matrimonial home for a period after separation and that he paid some of the outgoings. Subsequent to sale of the home the husband has provided no financial assistance for the children by way of child support at all and there is negligible prospect of him doing so into the foreseeable future. This is, indeed, a significant consideration.
There is no other relevant fact or circumstance for consideration.
The pool for division is relatively small. Thus any adjustment in favour of the wife is important for her in the context of her need to be the overwhelming primary provider for the children into the future especially where she has received little in the past from the husband. He clearly seeks to remain on government benefits and become reliant on his new wife.
Counsel for the husband contended that a further adjustment of 10 per cent in favour of the wife was appropriate, whereas Counsel for the wife contended that an adjustment in the range of 10 per cent to 15 per cent was in order.
Overall, it is considered that a further adjustment to the contribution based entitlements as set out above should be made in favour of the wife as to 12.5 per cent. Such an adjustment would create a disparity of about $132,500.00 between the parties over and above contribution based entitlements. Such is just and equitable in the circumstances of this matter having regard to the s 75(2) matters referred to.
Thus overall there will be a division of funds on deposit as to 65 per cent to the wife and 35 per cent to the husband. Thus creating a disparity of about $159,000.00 between them. Such an outcome overall is just and equitable.
Orders will be made accordingly.

I certify that the preceding seventy-seven (77) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 1 March 2019.

Associate:

Date: 1 March 2019