Hanas & Jolaha

Case [2023] FedCFamC1F 196

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Hanas & Jolaha [2023] FedCFamC1F 196   

File number(s): SYC 113 of 2019
Judgment of: ALTOBELLI J
Date of judgment: 28 March 2023
Catchwords:

FAMILY LAW – PROPERTY –Where the Court assessed financial and non-financial contribution to be equal as at the date of the hearing – Where an adjustment was needed to reflect the husband’s greater contribution at cohabitation and the wife’s future needs – Where the weight to be attached to the husband’s initial contributions was assessed against the rubric of all the contributions subsequently made – Finding of contribution in favour of the husband and adjustment in favour of the wife for future needs.

FAMILY LAW – SPOUSAL MAINTENANCE – Where the wife seeks an order for periodic spousal maintenance for a finite period – Where the wife has primary care of the child – Where the husband has capacity to pay but alleges the wife has no need – Where wife is a poor historian regarding financial evidence – Where the wife’s claim for maintenance is less than her expenditure – Finding that the wife has a need for spousal maintenance – Order for spousal maintenance and rental contribution for a finite period.  
Legislation: Family Law Act 1975 (Cth) ss 72, 75(2), 79
Cases cited:

Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116

G and G (1984) FLC 91-582; [1984] FamCA 60

Hall v Hall (2016) 257 CLR 490; [2016] HCA 23

Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395

Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78

MS & PS (2006) FLC 93-268; [2006] FamCA 588

NHC & RCH (2004) FLC 93-204; [2004] FamCA 633

Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17

Trevi & Trevi (2018) FLC 93-858;[2018] FamCAFC 173
Division: Division 1 First Instance
Number of paragraphs: 73
Date of hearing: 28–31 March 2022, 11 April 2022, 30 September 2022
Place: Sydney
Counsel for the Applicant: Mr Sansom SC
Solicitor for the Applicant: Mills Oakley Lawyers
Counsel for the Respondent: Mr O’Ryan KC
Solicitor for the Respondent: York Law Family Law Specialists

ORDERS

SYC 113 of 2019

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS HANAS

Applicant
AND:

MR JOLAHA

Respondent

order made by:

ALTOBELLI J

DATE OF ORDER:

28 March 2023

THE COURT ORDERS THAT:

1.The Applicant wife (“the Wife”) shall relinquish any right, title and interest in the following properties:

(a)The property situated at and known as J Street, Sydney (“the J Street property”) being all of the land comprised in Folio Identifier … registered in the sole name of the Respondent husband (“the Husband”);

(b)The property situated at and known as K Street, Suburb L (“the K Street property”) being all of the land comprised in Folio Identifier … registered in the names of the Husband, Ms BB and Mr CC;

(c)The property situated at and known as M Street (“the…

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Details
AGLC
Hanas & Jolaha [2023] FedCFamC1F 196
Case
[2023] FedCFamC1F 196
Decision Date

CaseChat Overview and Summary

The applicant, Mrs Hanas, sought an alteration of property interests and spousal maintenance from her former husband, Mr Jolaha, following their divorce. The wife sought an order for a substantial lump sum payment and a splitting order in relation to the husband’s superannuation, as well as periodic spousal maintenance and rental contributions. The husband opposed these claims, proposing a significantly lower payment and superannuation split.

The primary legal issue for the Court was to determine whether it was just and equitable to make an order for an alteration of property interests and spousal maintenance, considering the financial contributions, non-financial contributions, and other relevant factors as outlined in the Family Law Act 1975 (Cth). The Court had to assess the respective financial situations of both parties, their contributions during the marriage, and the needs of the wife post-separation.

The Court found that while the wife was unable to prove the existence of certain savings, it was clear that she did not have significant assets at the beginning of the marriage. The husband, on the other hand, had substantial assets. The Court emphasised the importance of financial transparency and the inefficiency of the litigation process. The Court ruled that certain items on the balance sheet, such as the husband’s car and additional mortgage funds, should be treated as having no value due to lack of admissible evidence and the husband’s use of these funds for legal fees. The Court also determined that the sale proceeds of company shares should be added back to the wife’s assets.

The Court concluded that the wife’s needs were significant, given her full-time care for their child and reliance on Centrelink benefits and spousal support. While the husband had the capacity to meet these needs, the Court found that the wife’s proposed claims were excessive. Instead, the Court ordered the husband to pay the wife $595,370, subject to a reimbursement by the wife of $23,265 for joint costs, and a superannuation split of $156,221. The Court also ordered the husband to pay spousal maintenance and rental contributions until the child turned eight.

In summary, the Court made orders for a property settlement and spousal maintenance that reflected the financial realities and needs of both parties, while also considering the contributions made during the marriage.

Orders

Orders of the court

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Background

Background to the litigation

These reasons for judgment explain the orders that the Court has made in relation to alteration of property interests and spousal maintenance.BACKGROUND The wife is the applicant in this case (“the wife”), and the husband is the respondent (“the husband”). The wife is 34 years old and the husband is 47 years old. They commenced cohabitation from marriage in mid-2010, separated on 31 August 2018, and were divorced on 21 October 2019. They thus cohabited for just over eight years, and it has been over four years since separation. They have one child born in 2017 (“the child”), who is currently five years old. The parents both live in Sydney. The husband describes himself as director of a firm. The wife cares full-time for their daughter and is in receipt of $552 per week in Centrelink benefits, as well as financial support from the husband in the sum of $380 per week in child support payments, $720 per week in spousal maintenance, and $650 per week in rent contributions. On 29 March 2022, the parties entered into consent orders in relation to parenting matters. These orders provide, in effect, that the parties have equal shared parental responsibility for the child who lives with the wife and is to spend gradually increasing time with the husband. The orders further provide that the wife be permitted to change the child’s residence to an area of Sydney by the end of the 2022 calendar year, but is thereafter restrained from further changing the child’s residence to a location that is further away. It is common ground between the parties that at the commencement of cohabitation the husband had substantial assets in accordance with paragraph 13 of his trial affidavit filed on 11 March 2022. In effect, he had net assets of $231,451 and superannuation of $107,653. It is also common ground that all of the real estate held by the husband at the time of cohabitation remains in existence. At the date of cohabitation, the wife contends that she had a motor vehicle and some savings of about $20,000. Whilst the Court will ultimately find that the wife was unable to prove to the Court’s satisfaction that she did have the savings, nothing turns on this. The husband is a successful businessman. He has degrees in multiple fields. The wife, likewise, has degrees in those fields and has worked in various firms. She is also undertaking studies in another field. The wife seeks an order the effect of which would be that the husband pay to her $1.5 million, and that there be a splitting order in relation to the husband’s superannuation in an amount of $253,160. The husband proposes a payment to the wife of $595,370, subject to a reimbursement by her to him of $23,265 for various joint costs incurred relating to the proceedings but paid initially by him. In addition, he proposes a superannuation split of $156,221. The wife also seeks an order for periodic spousal maintenance as to $720 per week, together with payment of rental of up to $650 per week, both to continue until 1 December 2025. The husband opposes this.

Evidence

Evidence Before The Court

In MS & PS (2006) FLC 93-268, Coleman J explained at [39] that in determining whether to make an order for spousal maintenance, the Court should follow a four-step process, as follows:(1)Can the applicant support themselves adequately?(2)If not, what are the applicant’s reasonable needs?(3)What capacity does the respondent have to meet those needs?(4)What order is reasonable, having regard to s 75(2) of the Act?THE EVIDENCE BEFORE THE COURT In support of her case, the wife relied on the following documents:(a)Amended Initiating Application filed 15 March 2019;(b)Her affidavit filed 30 November 2021;(c)Her affidavit filed 10 March 2022 (financial issues) with associated tender bundle;(d)Financial Statement filed 9 March 2022; (e)Single Expert Report of Ms FF dated 14 March 2022;(f)Case outline filed 25 March 2023;(g)Various documents jointly tendered during the proceedings, marked as exhibits J1–J2; and(h)Document tendered during the proceedings, marked as exhibit A1. In support of his case, the husband relied on the following documents:(a)Amended Response to Initiating Application filed 14 May 2019;(b)Case outline filed 25 March 2022;(c)Joint Balance Sheet filed 25 March 2022;(d)His affidavit filed 11 March 2022 (as to financial) together with exhibits;(e)His affidavit filed 30 November 2021 (as to parenting) together with exhibits;(f)Financial Statement filed 9 March 2022;(g)Affidavit of Ms GG filed 1 March 2022;(h)Affidavit of Mr CC filed 1 March 2022;(i)Affidavit of Ms HH filed 1 March 2022; and(j)Various documents tendered during the proceedings, marked as exhibits R1–R49.BALANCE SHEET ISSUES The joint balance sheet was exhibited as a joint tender. The document is reproduced below: In item 25 there is a dispute between the parties about the value of the husband’s car, Motor Vehicle 1. The determination of this is related to item 57, a liability relating to the vehicle. The Court rules that both items 25 and 57 should be noted as nil on the balance sheet. There was no admissible evidence of the value of the husband’s motor vehicle. The parties were unable to agree as to the value of the same. The reference by the parties to a RedBook value is not admissible evidence of value when there is a contest between the parties about this issue. The best the Court can do, therefore, is to pragmatically treat both the asset and liability as having a nil value. It is curious to the Court that in a case that was so robustly litigated by the parties who seemingly had no hesitation in incurring vast amounts of legal fees, they could neither agree to the value of the car nor engage a single joint expert in this regard. There is an issue in relation to item 30, being the sale proceeds of NN Company shares. The Court is satisfied that the wife used the sale proceeds to fund her legal fees. They should be added back. There was only the faintest resistance to this in her case. There is an issue about item 38. It is clear from the evidence that the husband extended the mortgage over one of his properties by $235,589. The wife contends this amount should be added back. She contends that for all practical purposes it was used to pay his legal fees, and that it amounted to a premature distribution of matrimonial assets. The Court agrees. The conclusion is supported as follows. He agreed that he paid lawyers $183,588.33. He agreed that he paid $25,000 to his sister and her husband in repayment of loans that were used to meet his legal fees. The balance was left in his offset account, however, the Court is satisfied from the cross-examination of the husband that the most likely use of these funds was to pay legal fees. On the husband’s own evidence it is very difficult for the Court to see why, at the very least, he did not make a concession of an add-back of $183,588.33. This is merely the tip of the iceberg, the Court observes, in relation to conduct of litigation that was both inefficient and ineffective.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

This is an application under s 79 of the Family Law Act 1975 (Cth) (“the Act”) which relevantly provides:79 Alteration of property interests(1)In property settlement proceedings, the court may make such order as it considers appropriate:(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property; or(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage—altering the interests of the bankruptcy trustee in the vested bankruptcy property;including:(c)an order for a settlement of property in substitution for any interest in the property; and(d)an order requiring:(i) either or both of the parties to the marriage; or(ii) the relevant bankruptcy trustee (if any);to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.…(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and(e)the matters referred to in subsection 75(2) so far as they are relevant; and(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.