Hamza and Magdi

[2011] FamCA 206

FAMILY COURT OF AUSTRALIA

HAMZA & MAGDI [2011] FamCA 206

FAMILY LAW - PROPERTY - Settlement in relation to marriage – Duty of full and frank disclosure – Valuation of overseas properties – Credit – Leave to amend affidavit in chief during cross-examination – Where the husband rejected the signature on the jurat as his own
FAMILY LAW - SPOUSAL MAINTENANCE – Where the wife is unable to support herself adequately

Family Law Act 1975 (Cth) – s 72, s 74, s 75(2), s 79, s 81

Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693
Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414
Ferraro and Ferraro (1993) FLC 92-335
Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355
Lee Steere and Lee Steere (1985) FLC 91-626
Weir and Weir (1993) FLC 92-338

APPLICANT: Ms Hamza

RESPONDENT: Mr Magdi

FILE NUMBER: PAC 5413 of 2007

DATE DELIVERED: 30 March 2011

PLACE DELIVERED: Sydney

PLACE HEARD: Parramatta

JUDGMENT OF: Johnston J

HEARING DATE: 6, 7 & 8 October 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Barry

SOLICITOR FOR THE APPLICANT: Legal Aid NSW, Bankstown Office

COUNSEL FOR THE RESPONDENT: Mr Mihalic

SOLICITOR FOR THE RESPONDENT: Morgan Ardino & Co

Orders

1. Paragraphs 2-6 of these orders are binding on R Superannuation Limited, the Trustee of the R Superannuation Plan (“the Plan”).

2. Pursuant to s 90MT(4) of the Family Law Act 1975 the base amount to be allocated to the wife out of the interest of the husband in the Plan is $100,000.

3. Pursuant to s 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the interest held by the husband in the Plan, the wife is entitled to be paid the amount which is calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, and there be a corresponding reduction in the amount that the husband would have had but for these orders.

4. That order 3 has effect from the operative time.

5. The operative time for the purposes of order 4 of these orders is four (4) business days after the date of service of these orders upon the Trustee of the Plan.

6. That until such time as the superannuation split to the wife pursuant to these orders can be rolled over into a separate account of the wife:

   6.1.The husband shall provide to the wife no less than twenty-eight (28) days’ notice before such time as he elects to retire from and/or take voluntary retirement and/or for any reason accepts or becomes entitled to access the whole or any part of his entitlement in the Plan.

   6.2.The husband shall direct and authorise the Trustee of the Plan to communicate with the wife and/or any person authorised by her in writing:

   6.2.1.To answer any reasonable inquiries as may be made by her or on her behalf from time to time in relation to her entitlements in the Plan; and

   6.2.2.To provide to the wife and/or her authorised representative a copy of any notice of any application or request by the husband which seeks release of entitlements in the Plan in so far as that release may effect the wife’s entitlement in the Plan pursuant to these orders.

   6.3.The husband by himself, his servants and/or agents is hereby restrained from doing any act or thing which would prevent the wife, her heirs, executors, administrators or nominees from receiving the benefits in the Plan to which she is entitled pursuant to these orders.

7. That within 42 days the husband pay to the wife the sum of $41,092.

8. That the husband’s obligation pursuant to the previous order is to be secured and for this purpose the husband is to do all things and sign all documents necessary to create a charge over his interest in the property at BB Street in D, Sydney, New South Wales with his duty to comply with the order.  The wife may lodge a caveat to protect her interest in the charge but she is to remove it at her expense upon compliance by the husband of his obligation under the said order.

9. That it is declared that the husband and the wife are the sole owners respectively of all other property and superannuation in their possession and/or control.

10. That the husband indemnify the wife in relation to all liabilities in respect of his property being Property 1 in Egypt, any taxi and taxi licence in which he has an interest in Egypt and his time share with Hotel Group 1.

11. That the above orders not commence operation until 29 April 2011.

12. That both parties have liberty to re-list these proceedings by arrangement with Justice Johnston’s Associate [Associate’s e-mail address] for further submissions about the form of the orders only, at any time not later than 28 April 2011.

13. That the wife forthwith arrange for service by hand of a sealed copy of these orders on Ms B under cover of a letter particularly drawing Ms B’s attention to paragraphs 8 and 11 of these orders.

14. That Ms B have liberty to re-list these proceedings for the purpose of making submissions in relation to paragraph 8 of these orders not later than 28 April 2011.

15. That all exhibits be released.

16. That the husband pay to the wife or as she shall in writing direct the sum of $130 per week spousal maintenance first payment to be made on 7 April 2011 and each Thursday thereafter.

17. That the sum referred to in the previous order shall be varied on and from the instalment of maintenance next due after 31 December each year in accordance with the variation in the Consumer Price Index published by the Australian Bureau of Statistics for all groups for Sydney by comparison of the Consumer Price Index as it stands on 31 December immediately preceding the date of variation with the same index at the same date 12 months prior thereto. 

18. That upon compliance by the husband with his obligations under the above property orders the orders made on 8 October 2010 and 16 February 2011 shall be discharged.

IT IS NOTED that publication of this judgment under the pseudonym Hamza & Magdi is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: PAC 5413 of 2007

Ms Hamza

Applicant

And

Mr Magdi

Respondent

REASONS FOR JUDGMENT

Introduction and Applications

1. These are defended property and spousal maintenance proceedings.  The parties in these proceedings are Ms Hamza and Mr Magdi.  For convenience I shall refer to them as “the wife” and “the husband” respectively.

2. The wife seeks orders to the following effect:

   ·An order splitting the husband’s interest in the R Superannuation Plan so that the wife would have a base amount of 100 percent of the husband’s interest in this superannuation;

   ·That when the restriction period ends the husband do all things and sign all documents necessary to achieve the transfer to the wife of 50% of all shares held by him in R Limited;

   ·That the husband forthwith pay to the wife a sum equal to the aggregate of the following:

   o50 percent of the value of his Property 1 in Egypt;

   o50 percent of the value of the taxi registered in his name in Egypt;

   o50 percent of the value of his interest in the time share apartment in Egypt;

   ·That the husband pay to the wife a sum equivalent to US$25 000 within 28 days.

   ·That otherwise the parties be declared to be the sole owner of all other property in their possession and/or control respectively;

   ·That the husband pay to the wife by way of spousal maintenance the sum of $150 per week to an account as nominated by the wife, first payment on the first Thursday after the date of the orders and thereafter each Thursday.

3. On the other hand, the husband seeks orders to the following effect:

   ·A superannuation splitting order allocating a base amount of $40 000 to the wife in the husband’s interest in the R Superannuation Plan;

   ·That the husband transfer to the wife his interest in the parties’ time share apartment in Egypt;

   ·That within 28 days the husband pay to the wife the sum of 40 000 Egyptian pounds;

   ·That the husband transfer to the wife 50 percent of all shares held by him in R Ltd as at the date of separation;

   ·That the husband be declared not to have any interest in the taxi licence and taxi vehicle alleged to be owned by him in Egypt; and

   ·That the wife’s application for spousal maintenance be dismissed.

Background

1. The husband was born in 1956 and he is therefore 54 years of age.  The wife was born in 1946 and she is therefore 65 years of age. 

2. The parties met in Egypt in early 1981.  They married on 24 June 1982 in Egypt.  They separated on 9 November 2005.

3. There are two children of the marriage, now both adults.  They are the parties’ daughter E who was born in 1985 and who is therefore 25 years of age, and their son B who was born on 16 September 1988 and who is therefore 22 years of age.

4. At the time of marriage, the wife owned an interest in an apartment in Egypt.  The building in which this apartment is situated had been purchased in February 1979 by the wife’s father in the names of the wife and her five sisters in equal shares at Property 2 in Egypt for 20 000 Egyptian Pounds. Apart from this property, neither the husband nor the wife owned any property of significant value at the time of their marriage.

5. After their marriage the parties moved into a home unit owned by the wife’s father and her step-mother in Property 3 in Egypt. The wife paid the rent.

6. The wife worked full time as an office worker until the birth of their first child in 1985, after which time, she stopped working full time.

7. The husband said that in 1985, he inherited US$20 000 from his uncle Mr M, who lived in Saudi Arabia.  The husband said that he used this money to make investments in Egypt, managed by his brother Mr N.  Although, as indicated below, I have a poor view of the husband’ credit, I accept this.

8. The husband worked in a shop from the commencement of the marriage until 1983.

9. The husband’s brother converted his car into a taxi and for a period the husband and his brother operated the taxi as a joint business.  The husband drove the taxi. The husband says that he sold his interest in the taxi business to his brother for a sum equivalent to $4 000.

10. In March 1987, the parties moved with their daughter E to Australia. The family lived with the wife’s sister Ms S and her family for approximately 2 months, then they found rented accommodation for themselves at M in Sydney.  The husband commenced working in a factory for 3 years.

11. As indicated above the parties’ second child, B, was born in 1988.

12. In 1989 or 1990 the husband purchased a home unit in B Street, L in Sydney for approximately $100 000.  The husband said that $10 000 was sent from his brother, Mr N, in Egypt for the deposit.  The balance was borrowed on mortgage from a building society.  The husband said that the source of the $10 000 was an investment in Egypt funded from the inheritance referred to above.  I accept this because the parties’ circumstances were so modest I do not believe it came from any savings. 

13. In 1989, the wife was diagnosed with a stomach disease.

14. The factory in which the husband worked closed in 1990.  The husband then commenced working for an airline in the catering section in approximately 1991.

15. In 1991, when they were on holiday in Egypt, the parties discussed the possibility of purchasing a home unit in Egypt.  The wife offered to sell to her sister Ms T her interest in her property in the building (Property 2) in Egypt for 40 000 Egyptian Pounds.  The wife’s sister subsequently paid this amount to the wife.  The wife says that she gave this money to the husband and that he kept it.  There is an issue about all of this and I shall refer to it again below.

16. In 1991, the husband sold the B Street in L, Sydney unit for $103 000.  The parties then rented a home for many years in the C area in Sydney.

17. Some time between 1992 and 1994 the husband opened a bank account in Egypt and deposited money to this account on occasions.

18. Between 1992 and 2002, the parties and their children went on holidays to Egypt annually usually for approximately a month or so.  The wife took the children on two separate trips during this period.  The husband was able to book flights for the family at a substantial discount through his employment with the airline.

19. In 1992, the parties purchased a time-share apartment in Egypt which entitled them to accommodation for 1 week per year in a hotel.  The parties never stayed at this time share.  The husband rented the time share out.

20. In 1995 the husband purchased a home unit at Property 1 in Egypt for 110 000 Egyptian Pounds.  This unit was in an uncompleted state.  Over the next couple of years the parties travelled to Egypt and undertook work on the unit.  They also sent money to the husband’s brother to pay for work done on the unit.

21. In 1997, the husband took a trip alone to Egypt to visit his mother who was ill.

22. On 15 December 2000, the parties purchased a house at C Street in C for $240 000 funded from savings of $30 000 and a mortgage from Westpac.

23. In late 2002 the C Street in C, Sydney property was sold.  The wife is unaware of what happened to the proceeds of the sale.  The husband said that, after the mortgage and expenses were paid, the parties were left with $40 000 - $50 000 which was used to pay for holidays to Egypt for the parties and their children.  The proceeds were also used to purchase a Ford vehicle for $8 000, as well as furniture totalling $15 000 to $20 000.  I accept this.

24. Following the sale of the C Street in C, Sydney property, the family moved to a rental property at S Street in C, Sydney.  The wife and the children continue to live in this property.

25. In approximately 2002 or 2003, the husband bought a taxi for his brother Mr O with money from his Egyptian bank account.

26. In 2003 or 2004, the husband sent some money to his brother in Egypt to invest in land. 

27. In approximately 2003, the husband commenced a relationship with his de facto partner Ms B.  From at least January 2004 the husband used Ms B’s address as his address for the purposes of correspondence relating to his account with the Arab Bank.

28. In June 2005, the husband and wife travelled with their two children to Egypt.  At this time, the husband informed the wife that he was going to marry Ms B.

29. In August 2005, the wife and children returned to Australia.  The husband returned to Australia separately at approximately that time.

30. On 8 September 2005 the husband and Ms B borrowed $40 000 to enable Ms B to purchase a motor vehicle.

31. As indicated above, the parties separated on 9 November 2005 when the husband moved out of the home.  The children continued to live with the wife. 

32. In December 2005, the wife was advised by the family solicitor that the husband had withdrawn money from the Arab bank.

33. From November 2005 to March 2006, the husband paid rent totalling $6 200 on the family home, in lieu of child support payments.  This was pursuant to an agreement between the parties.

34. In June 2006, the husband began living in a de facto relationship with Ms B. 

35. In mid 2007, the wife began receiving Rent Assistance from Centrelink.  She gave these payments to the husband and he continued to pay the rent until 10 October 2008.  The wife has paid the rent since this time.

36. In approximately October 2008, the husband and his de facto partner took out a joint mortgage of $250 000 on her property at BB Street in D, Sydney (previously owned solely by Ms B).  Her mortgage balance had been $200 000 and she and the husband refinanced this to $250 000 in both names.  The agreed value of this property is $550 000.  At this time, Ms B transferred a one half interest in the property to the husband.  The husband said that it is his responsibility to pay the mortgage even though he and Ms B are both mortgagors.  He said that he has to pay out the mortgage in effect to pay for his one half interest in the property.

37. In approximately September 2010 the husband sent approximately $50 000 from the borrowed funds to his brother in Egypt, the husband saying this was necessary for his brother to use to finance a medical operation and expenses.

38. On 8 October 2010, at the conclusion of the hearing, I made the following orders:

    1.That pending further order the husband is restrained from further encumbering or disposing of or dealing with his interest in his jointly owned property at [BB Street in D, Sydney].

    2.That pending further order the husband is restrained from dealing with money standing to his credit in any bank account or credit union beyond reasonable living expenses.

    3.That otherwise the Court’s decision in this matter is reserved to a date to be advised.

Credit

1. Both parties required the assistance of Arabic interpreters, although the wife more so than the husband.

2. The wife gave her evidence in a responsive manner most of the time.  On a few occasions she endeavoured to supplement her answers to questions with information which appeared to be perceived by her to favour her case.  But this ceased after I pointed out to the wife that this would not assist the Court.

3. In my view, the wife was a much more impressive witness than the husband.  I regard her as being a witness of the truth.  Where her evidence conflicts with that of the husband generally I prefer the wife’s evidence.

4. On the other hand the husband was most unimpressive.  He has repeatedly failed to comply with Court directions to file and serve his evidence within the time limits imposed.  He also had great difficulty in giving responsive answers to relevant questions.

5. The husband has also failed to make a full and frank disclosure of significant financial facts.  In his financial statement sworn by him on 1 November 2008 the husband failed to disclose his interest as joint owner with his partner Ms B in the property at BB Street in D, Sydney.  He also failed to disclose the liability he had assumed under a mortgage over this property.  The wife and her lawyers were unaware of these matters until a couple of days prior to the trial.  He also failed to include in his filed evidence the fact that prior to separation he had incurred a joint liability with Ms B to the Commonwealth Bank for a $40 000 personal loan.  As indicated above, this funded the purchase of a motor vehicle for Ms B and clothing and general expenses for the husband and Ms B.

6. In addition, as also indicated above, the husband used Ms B’s address rather than his own, for the purposes of correspondence about his Arab Bank account.  The inference I draw is that he did not want the wife to know about the existence of this account. 

7. In my view, these matters must be regarded by the Court as very serious matters.  But there was an additional matter which caused me even greater concern.  During the course of his cross examination, the husband was shown a copy of his affidavit in chief.  When he was asked whether the signature in the jurat was his he answered in the negative.  Although I am hardly a handwriting expert, my own comparison of the signature in the jurat with those signatures acknowledged by the husband as his on two financial statements raised considerable suspicion in me that the signature in the jurat was not that of the husband.

8. Given the fact that the husband was not prepared to accept the signature on the jurat as being his, this left him in the position of having no affidavit in chief before the Court.  In these circumstances I gave leave to the husband, over the very strong objection by learned counsel for the wife, to have a short adjournment of a couple of hours, for the purpose of making a replacement affidavit in chief.  I subsequently admitted the husband’s replacement affidavit into the evidence, again over the very strong objection of counsel for the wife.

9. I must say I have never seen a party during a trial reject a signature in a jurat to an affidavit purporting to be theirs.  And certainly not during the course of their cross examination.  I accept the submission on behalf of the wife that it would be a very serious step for a court to permit a party during the course of their cross examination to be permitted to file an affidavit in chief.  But it would appear that something had probably gone amiss in the process of preparation of the husband’s affidavit.  I also accept that I must take great care not to cause a serious prejudice to the wife.  In fairness to both parties I have decided to admit into the evidence only those matters contained in the replacement affidavit which were included in the original affidavit.  On this basis I do not consider that the course I have adopted can cause any real prejudice to the wife.

1. I shall also have to give further consideration to the broader implications of this matter bearing in mind that the placing of the signature in the jurat appears to have been witnessed by a solicitor.

2. In all these circumstances I have a poor view of the husband’s evidence.  With a few exceptions including admissions against interest, I propose to give little weight to it other than in circumstances where it is supported by objective evidence.  I am far from confident that this Court and the wife have an accurate picture of the husband’s actual financial circumstances.

The Applicable Law

1. Sub-section 79(1) of the Act provides that in property settlement proceedings, the Court may make such order as it considers appropriate.

2. Sub-section 79(2) provides that the Court shall not make an order under the above sub-section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

3. There is a long-standing preferred approach to the determination of property applications.  This involves four inter-related steps.  Firstly, the Court should make findings about the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing.  Secondly, the Court should identify and assess the contributions of the parties within the meaning of s 79(4) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties.  Thirdly, the Court should consider the effect of any proposed order upon the earning capacity of either party, the relevant matters in s.75(2), any other order made under the Act affecting a party or child and any child support that a party has provided or for which a party might be liable. The Court is to determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two.  Fourthly, the Court should consider the effect of its findings and determination and resolve what order is just and equitable in all the circumstances of the case. 

4. This approach has been confirmed in numerous cases in this Court including for example Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355; Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414 and Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693.

Property available for division

Property in Egypt

1. There is no question that the pool of available property includes the property in Egypt.  But there is some dispute about the nature and value of this.

Property 2 in Egypt

1. As indicated above, in February 1979, the wife’s father had purchased a property for the wife and her five sisters at Property 2 in Egypt in equal shares.

2. The wife’s youngest sister is the only sister who currently resides in the building.  Three units were sold by the wife’s father and the other units are currently rented out.  The property is currently registered jointly in the wife’s name, and in the names of her five sisters.

3. The wife received approximately 500 Egyptian Pounds in rent from the units each year up until 1991.  The wife said that the husband kept the rent money in a bank account in Egypt and I accept this as being more probable than not.

4. As also indicated above, in 1991 the wife decided to sell her interest in Property 2 in Egypt so that the parties could use the money to buy a unit that could be left to their children.  The wife said that she could not sell her share of Property 2 in Egypt  unless she gave a large amount of the sale proceeds to the tenant for relocation purposes, which she said she understands is required by the tenancy laws of Egypt.  Because of this, the wife decided to sell her portion of the property to her sister, Ms T.  I accept this.

5. The wife made a written agreement with her sister Ms T to the effect that, in exchange for the wife’s share of the building, the wife would receive 40,000 Egyptian Pounds.  The wife received the money in cash from her sister and handed it to the husband.

6. The wife said that the husband deposited the 40 000 Egyptian Pounds into a bank in Egypt.  I accept this.

7. Both parties arranged for valuations to be prepared of the wife’s interest in the property.  Ultimately the parties were able to reach agreement on a valuation of the wife’s interest.  But this matters little because I accept the wife’s evidence about selling her interest to her sister. This disposes of this particular issue.

Property 1 in Egypt

1. As is also indicated above, on 6 August 1995, the husband purchased a property at Property 1 in Egypt for 110 000 Egyptian Pounds.  At the time, the property was still under construction.  The parties completed the unit in 1997.  The wife has never lived at this property.

2. While the parties were in Australia, they sent money to the husband’s brother to assist in finishing the unit and the unit was rented out following its completion in 1997.  The wife often asked the husband about the rent money.  His response was different each time.  On one occasion, the wife recalled asking the husband to purchase some items from Egypt for their son, to which the husband responded that his brother could purchase the items using the rent money.

3. The husband stated that this property was managed by his brother, Mr N, and that it was rented out from time to time.  The husband asserted that no money collected in rent was given to him.  This seems to me to be inherently unlikely and I do not accept this.

4. The husband continues to own this property.  

5. At the husband’s request, RR Real Estate Company valued Property 1 in Egypt on 17 September 2008 at 100 000 Egyptian Pounds.

6. At the wife’s request, Mr F, an engineer with the EE Engineering Company valued Property 1 in Egypt in June 2009 at 480 000 Egyptian Pounds.

7. The husband then requested that a fresh valuation be conducted on the property by RR Real Estate Company on 16 June 2009.  The property was valued at 184 000 Egyptian Pounds. 

8. At the request of the husband, Mr K conducted a valuation of Property 1 in Egypt in September 2010.  Mr K was cross-examined by telephone connection with him in Egypt using an interpreter. 

9. Mr K has a Bachelor of Agriculture, but currently works as a property consultant and valuer.  He gave evidence that he has experience in property valuation and estimates that he conducted 4 to 6 valuations last year, two of them being in the Property 1 in Egypt district.

10. Mr K inspected the property including going inside it.  He valued the property at 216 000 Egyptian Pounds.  It is a modern, three bedroom, one bathroom unit with views overlooking a lake.  The unit has some furniture.  It is not currently rented out to tenants.

11. Mr K gave evidence that the price per square metre for a unit in the same area is 1650 Egyptian Pounds in new buildings and 1000 Egyptian Pounds in older buildings. He said that this is an older building having been constructed in 1999.  He said that a property on the main streets in that district would attract a price of at least 3000 Egyptian Pounds per square metre.  But this property is not on the main streets.

12. The wife’s expert valuer Mr F also gave oral evidence by telephone from Egypt with an interpreter.

13. Mr F was asked how one would undertake the exercise of valuing properties in that city. He explained that, for each part of the city, there is a standard according to the area and the cost of building itself. Mr F was also asked whether there is a group of professional people in the area whose sole professional practice is valuing properties.  He responded that they only know how much the construction costs would be, and there are people working in real estate offices (who know the value of the land in that district).

14. Mr F gave evidence that he did not personally value the property, rather, that he sent someone from his office to value the property and that this person asked real-estate agents about the prices in the area. 

15. Mr F said that a valuation of 216 000 Egyptian Pounds would be an underestimation of the value of the property.  This is because he said construction costs alone are at least 1500 Egyptian Pounds per square metre, and the unit has an area of 160 square metres.

16. In my view, there are real difficulties in being able to accept the valuation by Mr F.  Firstly, he is an engineer and not a real estate valuer.  Secondly, he made his inquiries somewhat indirectly by sending a person from his office to make inquiries of real estate agents or brokers. 

17. I prefer the evidence of Mr K to that of Mr F.  In my view he is better qualified than Mr F because he is in the business of acting as agent for persons buying and selling property.  He also inspected the property and has valued properties in the area recently.

18. It is tempting to think that Mr F’s valuation is an over-estimate of the real value of the property and that Mr K’s valuation is an under-estimate of its value.  But I am unable to strike an average or to make my own guess at a valuation.

19. In all the circumstances I prefer the valuation of Mr K.  Accordingly, I accept that Property 1 in Egypt has a value of 216 000 Egyptian Pounds.  At an exchange rate of say 5.0865 Egyptian Pounds to the Australian dollar (cash rate National Australia Bank 22 March 2011) this would be equivalent to $42 465.  I find accordingly.

Time-share

1. In 1992, the parties were approached in Egypt about purchasing a time-share apartment.  The initial meeting cost 80 Egyptian Pounds, a cost paid by the wife.  The next day, the parties attended the meeting and agreed to purchase a time-share apartment.  This required regular instalment payments for life.

2. The time-share unit entitled the parties to spend one week each year at any of the Hotel Group 1 Hotels around the world, meals inclusive. 

3. The husband was responsible for the time-share payments each month, however, the wife contributed to the payments on some occasions.  The wife said she used cash gifts from her family in Egypt to pay the monthly instalments.

4. The wife said that she asked the husband to book the parties into one of the Hotels for a week each time she travelled to Egypt, but that the husband would refuse.  The husband rented out the time-share instead. 

5. The wife has never stayed in the time share Hotels.

6. The time-share has an agreed value of $4 000.

BB Street in D, Sydney Property

1. There is also an issue about the husband’s interest in the property at BB Street in D, Sydney previously owned wholly by the husband’s partner Ms B. 

2. The husband said that Ms B has transferred to him a one-half interest in the property on the basis that he is responsible for the repayment of the mortgage.  Yet it is clear from the statements of details of his bank account that Ms B’s salary payments are paid to the husband’s account.  In these circumstances, I infer that in reality both the husband and Ms B are paying the mortgage repayments. 

3. In these circumstances it is submitted on behalf of the wife that in fact the equity of the husband in the property is more like the agreed value of his one half interest at $275 000 less one half of the outstanding mortgage balance of $233 000.  This would be equity of $158 500 ($275 000 - $116 500 = $158 500).

4. However, I do not propose to treat the matter in this way because, notwithstanding the poor view I have about the husband’s credit and the state of his evidence, I think it would be unfair to him.

5. But in all the circumstances, including the fact that I regard the husband as not having made a proper disclosure to the Court, I propose to include the husband’s one-half interest in the BB Street in D, Sydney property, as well as the $50 012 he sent to his brother in Egypt in the pool of available property and to set off against these assets the whole of the $233 000 outstanding mortgage balance.  The effect of this will be that the husband’s assets comprising the $275 000 interest in the BB Street in D, Sydney property and $50 012 sent to his brother will be brought into the pool at the total of $325 012 from which will be deducted the $233 000 outstanding mortgage balance.  This will result in there being net assets of $92 012 ($325 012 - $233 000 = $92 012) which are assets acquired by the husband after separation.

6. The husband might think to treat such property in this manner is unfair.  But in my view, what should be borne in mind is the fact that the actual asset position of the husband is unclear to the Court because he has failed to make a full and frank disclosure as required by the law.

7. In this regard I note that the Full Court of this Court said as follows in the case of Weir and Weir (1993) FLC 92-338 at page 79,593:

   This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black and Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs.

   …

   It seems to us that once it has been established that there has been a deliberate non-disclosure, … then the Court should not be unduly cautious about making findings in favour of the innocent party.  To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.

8. As indicated above, because of the husband’s lack of candour and his failure to disclose relevant financial matters I have no confidence that the Court and the wife are appraised of the true state of his financial circumstances.  In these circumstances, in order to arrive at an order which is just and equitable I propose to deal with these assets in this manner.  But I shall also take into account when I assess the parties’ contributions that the wife can only be found to have made a very modest indirect contribution to these assets.

9. The property available for division between the parties consists of the following:-

$
1.         Husband’s home unit at Property 1 in Egypt	42,465
2.         Wife’s bank account	70
3.         Husband’s time share in Egypt	4,000
4.         Husband’s Arab Bank account …	45
5.         Husband’s Arab Bank account … (sent to brother)	50,012
6.         Husband’s Commonwealth Bank Netbank saver account	2,727
7.         Husband’s Commonwealth Bank Streamline account	3,274
8.         Husband’s Airline Staff Credit Union account	2,006
9.         Husband’s 189 Airline shares	480
10.      Husband’s motor vehicle	8,000
11.      Husband’s half interest in BB Street in D, Sydney property	275,000
12.      Husband’s superannuation	101,433
_____________
$489,512

1. The liabilities are as follows:-

$
1.         Wife’s Westpac loan	9,369
2.         Wife’s personal loan from friends	6,831
3.         Husband’s outstanding mortgage liability	233,000
_____________
$249,200
Surplus	$240,312

Contributions

1. As indicated above, at the time of the marriage the wife’s property consisted of her interest in Property 2 in Egypt and her savings.  The wife had been working until the birth of the parties’ elder child.  From her savings she paid for all of the costs of the wedding including for the jewellery presented to her by the husband because the husband had been undertaking very little work at the time.  The wife also paid the rent of the flat in which the parties lived as well as the cost of purchasing furniture. 

2. After the parties moved to Australia the wife earned some money from selling some food and sweets items which she had cooked at home and from doing some paid ironing. 

3. The only other earnings of the wife was a very modest amount which she obtained for work which she did at the children’s school canteen when one of the paid members was unable to attend.  The wife also undertook a considerable amount of unpaid work at the canteen. 

4. On the other hand at the time of the marriage the property of the husband consisted of his personal property. 

5. I accept the wife’s evidence that at the time that they married the husband was not working.  However, between the time of marriage and the time that they moved to Australia the husband did some work driving a taxi with his brother.

6. From the time that the parties arrived in Australia the husband was the major breadwinner for the family.  I have referred above to his employment history.  In summary, he was in full time employment throughout almost the entire time since he and the wife moved from Egypt to Australia.  He was also able to obtain discounted flights for the family overseas as an airline employee as referred to above.  There can be no question that he has made the overwhelming financial contributions. 

7. On the other hand the wife has made the overwhelming contribution to the welfare of the family including by way of home-maker and parent.  There is no question that she was the children’s primary parent and that she was most attentive to their needs.  This is not to say that the husband did not make contributions in this regard, because he did.  But often his employment responsibilities involved him in shift work which meant that at some times when the children were home he was working in his job with the airline. 

8. Since separation the wife has shouldered the responsibility for the children and herself really with only a very modest contribution from the husband.  As indicated above he has lived separately from them with his partner Ms B.  He did not pay child support but as indicated above, agreed to pay the rent on the family home instead.  But this was for a limited period of time.  In my view this was a very modest contribution given the fact that the wife’s only income was the pension and the children, although E was an adult, were still living at home.  In addition, at the time of separation the husband had in excess of $17 000 in his Arab Bank account the details of which he had not disclosed to the wife.  The wife cannot be regarded as having had the benefit of any part of this other than indirectly through the husband paying some of her rent.

9. As indicated above, since separation the husband acquired his interest in Ms B’s home and arranged the funds which he was able to send to his brother in Egypt.  In my view the wife must be taken to have made an indirect contribution to this property because the husband has been contributing to the household of Ms B and himself, including to the maintenance of the home in which he now has an interest.  He has been using money from his sources, some of which in my view, should have been provided to assist the wife.

10. But I do not propose to deal with the husband’s interest in those assets separately from the other property available for division between the parties.  However, by including those assets in the pool of property, and making findings on a global basis, this must of course affect the finding I shall make about the parties’ contributions overall.  In my view, the finding on this basis must favour the husband to some extent.

11. Doing the best I can in all these difficult circumstances, I find the parties’ contributions overall to have been 42 percent by the wife and 58 percent by the husband.

s 75(2) matters

1. As indicated above, the wife is 65 years of age.  She has various health problems.  She has a stomach disease.  When she gets nervous, stressed or is under pressure, she often vomits blood.  The wife also suffers from back and neck pain and pain caused by the conditions of bone and joint disease.  The wife also has multiple nodular goitre which causes a choking sensation particularly when she is stressed.  She also a disability in both hands and is required to wear support gloves to assist in the blood flow.  The wife takes a considerable number of different medications.

2. In these circumstances it comes as no surprise that she is currently on a disability support pension.

3. The wife is simply unable to support herself.  She has only been able to make ends meet by contributions from the two children towards the rent and other costs and by borrowing in excess of $9000 on a personal loan from Westpac and $6831 from friends.  The husband concedes that the wife needs assistance yet says he is unable to help.  I shall deal with these circumstances in more detail in relation to the wife’s application for spousal maintenance below.

1. On the other hand the husband is 54 years of age.  He is employed as a crew leader in catering at an airline.  Apart from having high blood pressure he is in good health.  His income is $1050 per week.  From this he is required to pay income tax of $250 per week and contributions to the airline superannuation scheme of $50 per week.  Accordingly, after paying income tax and superannuation, he has net income each week of approximately $750.  The husband also has the benefit of heavily discounted air travel benefits from his employer.

2. As indicated above he lives with his de facto spouse Ms B.  Her income is $750 per week before paying tax.

3. So the husband and Ms B after paying income tax and superannuation have an amount of something like $1300 per week from which to pay their mortgage and their living costs.  This is a vastly superior financial position compared with that of the wife whom as I say has to endeavour to make do on the disability support pension and whom has only been able to get by on borrowings.

4. The husband still has many income earning years ahead of him whereas in my view the wife has no capacity for earning income given her age and poor state of health. 

5. In these circumstances in my view a just and equitable order will require a set off of property, modest as it is, in favour of the wife.  In all the circumstances in my view the appropriate set off is 10 percent of the available property and superannuation. 

Conclusion

1. The wife is to have 52 percent of the property available for division between the parties.  This is property with a value of $124 962 (52 percent of $240 312 = $124 962).

2. The only property which the wife has is her bank account with a balance of $70.  But she also has liabilities of $16 200.  So she has a deficiency of $16 130 ($16 200 + $70 = $16 130).  To achieve property with a value of $124 962 the wife would require additional property with a value of $141 092 ($124 962 + $16 130 = $141 092).

3. If the wife was to have an interest of say $100 000 in the husband’s superannuation, in order to achieve property with a value of $141 092 she would require a payment of $41 092.

4. On the other hand, the husband is also to have 48 percent of the available property.  This would be property with a value of $115 350.

5. The husband has the following property:

$
1.         Home unit at Property 1 in Egypt	42,465
2.         Time share in Egypt	4,000
3.         Arab Bank account …	45
4.         Arab Bank account … (sent to brother)	50,012
5.         Commonwealth Bank Netbank saver account	2,727
6.         Commonwealth Bank Streamline account	3,274
7.         Airline Staff Credit Union account	2,006
8.         Airline shares	480
9.         Motor vehicle	8,000
10.      One-half interest in BB Street in D, Sydney property	275,000
11.      Superannuation	101,433
_____________
$489,442

1. The husband’s liabilities consist of his outstanding mortgage liability of $233 000.  Accordingly, the husband has surplus assets compared with liabilities of $256 442 ($489 442 - $233 000 = $256 442).

2. If the wife was to have $100 000 of his superannuation and he was to pay her the sum of $41 092 this would leave him with assets with a value of $115 350 ($256 442 - $141 092 = $115 350).

Fourth Step

1. If the wife was to have $100 000 of the husband’s superannuation, she might be able to make application to the trustees of the R Superannuation Limited fund for a release of all or part of this money on the grounds of hardship.  There was no evidence before the Court about such a possibility. 

2. If so, she could either invest the money to provide her with some income or use it towards her living costs.  If not, she will have to wait until the interest becomes payable.

3. In any event, the wife will also receive a payment of $41 092 which she could use in a similar manner.

4. On the other hand, the husband would have to pay the wife $41 092.  It might be possible simply for him to draw down this additional amount on the mortgage on the BB Street in D, Sydney property.  Alternatively, the husband might be able to ask his brother for repayment to him of this amount.  Or, the husband could sell his home unit in Egypt and use part of the net proceeds of sale to pay the wife.

5. It is a matter for him how he chooses to comply with the orders I propose to make to pay this amount.

6. In any event, the husband will be left with his interest in the BB Street in D, Sydney property and such other items of property that it is necessary to liquidate in order to pay the wife.

7. He will only have $1433 in the R Superannuation Plan.  But over the remaining years of his working life he will be able to rebuild his interest in superannuation.

8. He will also be assisted in meeting household expenses by Ms B.

9. I must also consider the provisions of s 81 of the Act which requires the Court to endeavour to make such orders as will finally determine the financial relationship between the parties and avoid further proceedings between them.

10. In my view, the property available for division between the parties, is so modest in this case that it would not be possible to do this.  Particularly when one considers that some of the property is in Egypt which might pose some difficulties in terms of enforcement.

Spousal Maintenance

1. As indicated above the wife is seeking an order that the husband pay to her periodic spousal maintenance of $150 per week.

2. As also indicated above the husband has conceded that the wife is unable to support herself adequately. This is of course the threshold matter set out in s 72 of the Family Law Act 1975.  Obviously the wife is able to satisfy this threshold matter because she has not worked in any substantial income earning activity since the birth of the parties’ elder child and more significantly, her age and state of health, in my view, preclude her from being able to undertake income earning work. 

3. As also indicated above her income is obtained from the disability support pension.  As I have said the wife is clearly unable to support herself adequately on this pension.  This is evidenced by the fact that the children have had to contribute to her rent and that she has gone into debt in order to make ends meet. 

4. In determining what is proper within the meaning of s 74 of the Act I am to disregard the disability pension received by the wife.

5. In her affidavit sworn on 13 November 2009 the wife set out her fortnightly expenditure.  This consisted of:

   Rent$600

   Phone$50

   Electricity$40

   Gas$25

   Water$25

   Medications   $40

6. The wife says that upon paying these expenses she is left with approximately $170 per fortnight from which she must budget in order to pay her food and public transport expenses. 

7. In these circumstances in my view the amount which she is seeking for her weekly support is modest indeed at $150 per week. 

8. On the other hand the husband says that he does not have the capacity to pay anything to the wife although he concedes, as I have said, that she is unable to support herself.  Given the amounts that I have referred to above in terms of the income coming into the household of the husband and Ms B, I find myself unable to accept the thrust of the husband’s submission in this regard.

9. This is all the more so when I note that he has been able to fund significant regular expenditure on playing poker machines at Venue 1 and at Venue 2.  I do not accept the husband’s submission that he does not have the capacity to pay a reasonable amount of weekly maintenance to his former wife.  However, bearing in mind that I have awarded the wife a 10 percent set-off of property taking account of relevant s 75(2) matters I propose to adjust the quantum of spousal maintenance so that the wife will receive $130 per week.  This will be adjusted annually in accordance with movements in the Consumer Price Index.

10. In all these circumstances, in my view, the wife has established a case for periodic spousal maintenance and it shall be paid by the husband in the modest amount of $130 per week.

11. I understand that receipt of such an amount would reduce the wife’s pension by approximately $30 per week.

12. Payment of this amount will leave the husband with in excess of $600 per week after paying his income tax and superannuation.  But in addition, Ms B will have a similar amount after paying income tax and will therefore no doubt be in a position to share many of the household costs with the husband.

I certify that the preceding one hundred and forty-seven (147) paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Johnston delivered on 30 March 2011.

Associate:     ____________________

Date:              30 March 2011