GHASEMI & SALEHI

[2014] FamCA 979

FAMILY COURT OF AUSTRALIA

GHASEMI & SALEHI [2014] FamCA 979

FAMILY LAW – PROPERTY – Whether appropriate to make orders adjusting property interests – where significant initial contribution by the husband – where parenting orders provide for shared care of the children – where assessment as to parties’ respective contributions – where husband’s evidence as to his income and financial resources unsatisfactory – where consideration as to any further adjustment having regard to section 75(2).

Family Law Act 1975 (Cth) ss 75, 79

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

APPLICANT: Mr Ghasemi

RESPONDENT: Ms Salehi

FILE NUMBER: PAC 3267 of 2012

DATE DELIVERED: 13 November 2014

PLACE DELIVERED: Dubbo

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 25, 26, 27 and 28 August 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Campton

SOLICITOR FOR THE APPLICANT: Belgrave Lawyers Pty Ltd

COUNSEL FOR THE RESPONDENT: Ms Fishburn

SOLICITOR FOR THE RESPONDENT: Colin Daley Quinn

Orders

1. That within 2 months from the date of these orders the husband pay to the wife the sum of $104,066 and in consideration of that payment the wife transfer to the husband her interest in the property at A Street, Suburb E (being Folio Identifier …) and provided always that concurrently with the said transfer the husband do all things necessary to refinance or discharge the present mortgage encumbrances or loans secured over the said property so as to remove the wife from all or any liability in regard to the mortgages or loans  and that wife sign all documents necessary to facilitate the husband refinancing or discharging the said mortgages or loans.

2. That within 14 days from the date of these orders the husband do all necessary things and sign all necessary documents to procure a transfer of the Toyota motor vehicle presently in the possession of the wife from W Pty Ltd to the wife and the husband indemnify the wife from all or any financial liability to the company or otherwise arising from the said transfer.

3. That within 14 days from the date of these orders the wife do all things necessary and sign all documents necessary to transfer to the husband or his nominee all her shareholding and interest in W Pty Ltd and to resign from any office still held in the said company and that the husband indemnify the wife from any financial liability to the company or financial liability arising from the trading circumstances of the company or her interest therein including but not limited to any liability for income or other tax and any liability arising from any personal covenants given by the wife in relation to the lease of the X Street, Sydney premises by the company.

4. That in default of the husband paying to the wife the sum provided for in Order 1 by the due date the husband and wife shall do all things necessary to sell the property at A Street, Suburb E for the best price reasonably obtainable and the proceeds of sale shall be applied in the following order and priority:

   (a)       In discharge of the mortgage encumbrances secured thereon;

   (b)       In payment of $104,066 together with interest accrued to the wife;

   (c)       In payment of agents commission, legal costs and other sale expenses;

   (d)       In payment of the balance then remaining to the husband;

   and that pending sale the husband shall pay as they fall due and payable all mortgage or loans payments  secured against the property, council and water rates, insurances and utilities and shall keep the property in good order and condition having regard to the condition of the property as at the date of these orders.

5. That as between each other the husband and wife otherwise shall be each respectively entitled to retain their interest or entitlement to personal property  in his or her respective possession or control including any entitlement to superannuation.

6. Liberty to apply as to implementation or enforcement of these orders.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Ghasemi & Salehi has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 3267  of 2012

Mr Ghasemi

Applicant

And

Ms Salehi

Respondent

REASONS FOR JUDGMENT

1. The applicant husband and the respondent wife having resolved outstanding parenting  issues by consent remain in dispute in relation to the question of property.

2. In his further amended application filed on 14 August 2014 the father sought in summary the following orders in relation to property:

   a)That the property at A Street, Suburb E be transferred to the husband and upon transfer to the husband he shall discharge the present mortgage encumbrances secured over the said property so as to release the wife from any liability in regard thereto;

   b)That pending transfer of the A Street property the husband meet as they fall due and payable mortgage payments, rates and charges utilities and insurance payments in relation to the property;

   c)That the husband indemnify the wife in respect of all liabilities in relation to W Pty Ltd including but not limited to all taxation liabilities of the company or any other liability arising in connection with any interest, loan account, office or employment in relation to the company;

   d)That otherwise the husband and wife to be solely entitled to all personal property in their respective possession or control, all shares, debentures units in unit trusts, bank, building society or credit union accounts standing in their name respectively and all interest in life insurance policies and superannuation funds standing in their sole name;

   e)Payment to the husband of sum that affects a division to the applicant husband of 75 per cent of the asset pool, and payment to the wife of the balance of the asset pool.

3. The wife for her part (Exh AA) seeks substantive orders similar to that proposed by the husband save that she is to receive a sum equivalent to 50 per cent of the asset pool.

Section 79

1. 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 v 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 (21 October 2014).

2. The process ordinarily involves a staged process.

3. 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. 

4. 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.

5. 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) and the Court needs to conclude that it would be unjust or unfair to leave property rights intact.

6. In many cases 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.

7. In particular, such a circumstance arises where both parties seek adjusting orders but are unable to agree as to same. In this matter the parties have a jointly owned property together with other assets. Both parties seek different orders as to the division of their property. It is conceded by counsel for both parties that it is appropriate for the court to make orders altering their present property interests. It is appropriate that the court do so.

8. Once the s 79(2) issue is resolved the Court then considers the contributions made by the parties as defined in s 79(4)(a) to (c).

9. 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)).

10. 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

1. The parties are in substantial agreement as to the asset pool. Discrete issues in dispute are considered below.

2. The agreed pool is as follows:

   Assets:

   Joint               Property A Street, Suburb E  $640,000

   Joint               Balance proceeds of B Street  $131,634

   Joint               W Pty Ltd

   Wife               Toyota … motor vehicle  $    7,000

   Wife               Loan to her sister  $    5,000

   Wife               Preliminary distribution  $100,000

   Wife               PPS superannuation  $  90,947

   Wife               REST superannuation  $    8,927

   Wife               Ausfund superannuation  $      278

   Wife               MLC superannuation  $    1,232       

   Husband         Preliminary distribution  $  15,000

   Husband         Jewellery  $    3,000

   Husband         St George bank account  $      400

   Husband         MLC superannuation  $  65,028

   $1,068,446

   Liabilities:

   Joint               Mortgage A Street  $366,000

   Net                 $702,446

3. No value was ascribed to the company W Pty Ltd nor indeed its spin-off Y Pty Ltd. However the financial circumstances of both are referred to below.

4. Neither party contended for anything other than a one pool approach, the one significant discrete issue as to contributions being the husband’s initial contribution at the beginning of the relationship.

5. The husband contended that the wife’s jewellery in her possession should be included at a value of $50,000, yet offered no evidence to support such a contention. The wife sought to establish that the husband had her jewellery retained by him at separation, that jewellery having a value of $50,000. On the evidence such a finding is not open nor is there any evidence from the wife to support any value asserted. This item will not be included in the asset pool.

6. Similarly the wife contended that the husband had in his possession household contents of hers to a value of $30,000. No supporting evidence was adduced by her. The husband asserts that he has contents to the value of $3,000 in his possession as set out in his financial statement. That sum only will be included in the pool as an admission against interest.

7. Otherwise the husband contended that some provision should be made for the prospective taxation impact of a transfer of the Toyota motor vehicle to the wife from the company W Pty Ltd, for the taxation impost of the rectification of the husband’s loan account within the company and the cost of winding up the company. The circumstances of the company as put to the court by the husband are vague and uncertain. The company remains the head lessee of the Sydney commercial premises and not one word of evidence has been adduced to illuminate whether the landlord of these significant commercial premises is aware of the machinations as to the purported transfer of the head lease to the husband’s new shelf company and then a transfer of that company to his sister-in-law. As discussed below the strong inference is that the whole charade is a sham designed by the husband to hide his income from firstly the child support agency and then the court. The husband’s contention is thus rejected, how he deals with the company issues will remain a matter for him alone.

8. The husband further contended that the incidence of additional capital gains income tax and sale costs of the A Street property should be included in the pool as a liability. He seeks an order that he acquire the wife’s interest in the property and in that event with no reasonable prospect of a sale such expenses would ordinarily be excluded. The indulgence sought by the husband is that he retain the property. In the event that he fails to do so then he should bear the sale costs with each party thereafter being responsible in the ordinary course for their respective additional tax arising from the capital gain on sale which is estimated to be about equal in any event.

9. Thus the only adjustment to the agreed pool is the figure for the husband’s contents. The amended pool is as follows:

   Assets:

   Joint               Property A Street, Suburb E  $640,000

   Joint               Balance proceeds of B Street  $131,634

   Joint               W Pty Ltd

   Wife               Toyota … motor vehicle  $    7,000

   Wife               Loan to her sister  $    5,000

   Wife               Preliminary distribution  $100,000

   Wife               PPS superannuation  $  90,947

   Wife               REST superannuation  $    8,927

   Wife               Ausfund superannuation  $      278

   Wife               MLC superannuation  $    1,232       

   Husband         Preliminary distribution  $  15,000

   Husband         Jewellery  $    3,000

   Husband         Contents   $    3,000

   Husband         St George bank account  $      400

   Husband         MLC superannuation  $  65,028

   $1,071,446

   Liabilities:

   Joint               Mortgage A Street  $366,000

   Net                 $705,446

The relationship of the parties

1. The husband at the date of trial was aged 37. The wife at the date of trial was aged 37.

2. The parties commenced cohabitation at the time of their marriage in May 2002.

3. There are two children of the relationship, Z born in 2004 now nearly 10 years of age and J born in 2007 who is seven years of age.

4. The parties separated in June/July 2012 when the wife moved out of the former matrimonial home at B Street, Suburb E taking with her the children of the marriage.

5. At the time of trial the wife was residing with her parents.

6. At the commencement of cohabitation the parties resided in the husband’s parents’ home at 2 A Street, Suburb E for about 12 months.

7. At the time of cohabitation the husband was working in recreational services and the wife was a public servant.

8. The husband and wife had the following assets at the time of their marriage:

   Husband:

   a)Property at Suburb V purchased by him in about 1997 for $135,000 with the purchase price is substantially comprising a mortgage borrowing of $113,000

   b)Motor vehicle

   c)Minimal superannuation

   Wife:

   a)Minimal superannuation

   b)$5,000 loan to her sister.

9. The husband’s property at Suburb V was sold in February 2003 for $312,000 with the net proceeds of sale being approximately $200,000. The husband applied part of the proceeds of sale to the purchase of two real estate properties, 1 A Street, Suburb E and B Street, Suburb E.

10. The A Street property was purchased for $390,000 with a mortgage advance of $360,000. This property has been used by the parties as an investment property and is subject to prospective capital gains tax on sale.

11. The B Street property was purchased for $440,000 with a mortgage advance of $380,000. The parties occupied this property as their matrimonial home save for a period of about six months in 2007 when the property was being renovated. During this period the parties resided at the husband’s parents’ home.

12. In November 2004 the husband and wife purchased the business W Pty Ltd for $200,000 with the purchase price being obtained by way of a further mortgage borrowing secured over the parties’ real estate. At the time of purchase the business had about 10 full-time employees. The husband had worked in the business for some years prior to its purchase.

13. Following the birth of the first child the wife had about six months off work before returning to her position in the public service and she had a similar period of work following the birth of the second child before returning to part-time work in the public service.

14. There is no issue that both of the parties were engaged in the homemaking and care of the children subject to the respective work commitments. The husband’s engagement in the recreational services industry saw him travel from time to time and be absent from the home for purposes connected with the parties’ business.

15. In 2004 the husband’s car was traded in and the parties purchased the first Toyota vehicle. In 2005 the parties purchased the second Toyota vehicle through the company.

16. In 2011 the husband purchased through the company, a Mercedes car, trading in the first Toyota vehicle.

17. The husband asserts that he continues to work for the company on a PAYE basis and in addition works part-time on a self-employed basis. The husband’s evidence in relation to this present income circumstances is unclear, contradictory and confusing. The court is left with the clear impression that the husband is not being frank with the court in relation to his income and financial resources for the reasons set out below.

18. In the context of a child support review in October 2013 the husband:

    a)Had been assessed to pay child support from 5 February 2013 onwards at the rate of $158 per annum. The assessment was based on the husband estimated taxable income of $30,034 and the wife’s taxable income for 2011/2012 of $45,501;

    b)Was able to service three portfolio loans of $221,000, $366,000 and $193,000;

    c)In the context of the review application the husband represented that his income was $30,000 per annum together with rental income of $18,096 per annum. The husband further asserted he had other expenses of $85,585 and mortgage payments of $49,800 per annum;

    d)Had been previously assessed by a review officer to have an adjusted taxable income for the period 8 April 2013 to 30 September 2014 at $54,737 per annum and significantly in the context of that review in June 2013 the review officer observed: “I will not suggest that it is possible for me to get a clear picture of the husband’s resources from his business. It appears that there is some intermingling of work and business expenses (accounts seem to have both personal and business expenses e.g. the AMEX card)”;

    e)Represented to the review officer that he had sold the recreational services business, sold his Mercedes motor vehicle for $30,000, and represented to the review officer that his business made a net loss of $144,036 in the 2013 financial year;

    f)Represented to the review officer that his income comprised a PAYE income from the company of $20,170 and a franked dividend of $15,000;

    g)That he had started a new company Y Pty Ltd on 6 June 2013 that will provide property management services and that will pay him an income of about $35-$36,000 per year and that he estimates that he will make a subletting profit in relation to premises in the Sydney CBD of about $35,000 per annum;

    h)Later represented to the review officer that Y Pty Ltd was really owned by his sister-in-law;

    i)That he had sold the business previously conducted by W Pty Ltd for the sum of $10,000 and that he had outstanding creditors of $72,000;

    j)Had his adjusted taxable income figure for child support increased to $54,737.

19. Otherwise the draft balance sheet attached to the husband’s trial affidavit as at 30 June 2013 revealed loan account borrowings by the husband from the company as at 30 June 2013 of $88,587. As at 30 June 2011 the husband’s loan account borrowings from company totalled $171,949. As at 30 June 2012 the husband’s loan account borrowings from the company had been reduced to $88,024.

1. In his oral evidence the husband conceded that the business remained his, he having only sold stock and equipment. The company as at trial still retained the head lease in relation to commercial premises in the Sydney CBD and continues to sublet those premises. A new lease of the premises was taken out by the company in June 2013 for a period of three years and it is the husband’s evidence that the premises are sublet at a profit. In his oral evidence the husband asserted that the head lease of the premises at the Sydney CBD had now been transferred to Y Pty Ltd on 2 August 2013, a company in respect of which he was originally the sole director and shareholder but which he subsequently transferred to his sister-in-law. The husband signed the transfer of lease both as a director of W Pty Ltd and as director of Y Pty Ltd.

2. His sister-in-law surprisingly has no knowledge as to who the owner of the premises are but acknowledges that the subletting prospects had “great potential” with subtenants paying about $216,000 in rent including GST with her agreeing to pay the husband $25,000 per annum to manage the property.  She has provided no guarantee to the landlord in respect to the head lease and has no knowledge as to any agreement permitting subletting. Yet the Y Pty Ltd rentals are paid into a St George Bank account with only her and the husband, who has no interest in the company, as signatories.

3. The transfer of the head lease from W Pty Ltd to Y Pty Ltd was for a consideration of one dollar, notwithstanding that the rental of the property was about $150,000 per annum with the husband expected to derive therefrom a not insignificant profit from subletting. There is no evidence that the owner consented to the transfer or released the company W Pty Ltd from its covenant to pay rent. The inference is that W Pty Ltd remains primarily liable for the rent.

4. At trial the husband’s income, he asserted, comprised money earned by him from three different entities as a subcontractor, his PAYE salary and money received by him from Y Pty Ltd in relation to management of the CBD premises in respect of which is paid about $300 per week.

5. The husband on 12 July 2013 resigned as director and secretary of Y Pty Ltd and is to be inferred that at that time he also transferred to his sister-in-law Ms G his entire shareholding in the company. Yet documents registered with the Australian Securities and Investment Commission disclose that the husband’s sister-in-law, who worked for the husband for 10 years, does not hold her shares in that company beneficially (Exh L). There is a strong inference that the shares remain held for the husband. 

6. The wife continues to work as a public servant on a part-time basis three days per week from 9:00 am to 4:00 pm earning about $495 per week, although she has previously worked four days per week. The wife acknowledged that she could get full time work subject to care of the children and earn about $60,000 per annum.

7. In September 2013 the B Street property was sold with the net proceeds of sale being $249,954. The wife received an interim distribution of $100,000 and the husband one of $15,000. It is agreed that those sums remain in the asset pool for division.

8. At present the husband pays child support at the rate of about $400 per month.

Contributions

1. From a consideration of the parties’ contributions the significant issue is the husband’s initial contribution that crystallised at about $200,000 on sale of his Suburb V property. There is no issue that the funds went into the marriage particularly to the purchase of two real estate properties.

2. Otherwise it is not contended that the parties’ other contributions are anything but equal.

3. Counsel for the husband submitted that contributions should favour the husband 70 per cent to the wife’s 30 per cent. That would create a disparity between the parties of about $280,000. Such an adjustment is not called for.

4. Counsel for the wife contended that contributions should be 50/50. That is not tenable with such a significant initial contribution that requires some recognition.

5. Contributions need to be assessed in a holistic fashion. This is a twelve year relationship to trial with two children. Overall contributions should favour the husband as to 60 per cent and to the wife 40 per cent creating a disparity between the parties of about $140,000.

6. The orders to be made have no impact on the earning capacity of either party.

7. The husband’s child support obligations at trial are referred to above. The parties have agreed on shared care for the children and child support at best will be modest as between the parties depending on income from time to time.

Section 75(2)

1. The parties are of similar age. Neither asserts any relevant health issue.

2. The wife works part time but can, if work is available, resume full time work subject to child care issues. The husband’s asserted income circumstances have been referred to above. He has obfuscated about his real circumstances in an effort to disguise his actual circumstances from the child support agency and the court.  He has engaged in sham arrangements with his sister-in-law. His income is suspected of being more handsome than he admits.

3. The other financial resources and the property of the parties are set out above.

4. The husband’s contention as to various contingent liabilities has been dealt with above. It is not appropriate to bring them to account under s 75(2) as their contingent nature is problematic and in the husband’s control.

5. The contribution based finding will see a significant disparity in favour of the husband.

6. The children will be in shared care arrangement with the parties. Otherwise neither party submitted there was any other relevant circumstance or factor.

7. Overall an adjustment of the contribution based finding of 5 per cent in favour of the wife is called for.

Overall

1. Thus the pool should be divided as to 55 per cent to the husband and 45 per cent to the wife.

2. The wife should receive assets to the value of $317,450.

3. The wife has:

   Wife               Toyota … motor vehicle  $    7,000

   Wife               Loan to her sister  $    5,000

   Wife               Preliminary distribution  $100,000

   Wife               PPS superannuation  $  90,947

   Wife               REST superannuation  $    8,927

   Wife               Ausfund superannuation  $      278

   Wife               MLC superannuation  $    1,232

   Total:  $213,384

4. She is to receive a cash adjustment from the husband of $104,066.

5. In consideration of that payment she is to transfer her interest in A Street to the husband, he will procure a transfer of the Toyota motor vehicle to the wife from the company and he shall indemnify the wife from all or any liability arising from the trading affairs of W Pty Ltd however arising.

6. The result in all the circumstances is appropriate and just and equitable.

7. Orders will thus be made accordingly as set out at the forefront of these reasons for judgement.

I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 13 November 2014.

Associate: 

Date:  13 November 2014