Huda & Huda
[2021] FamCAFC 118
•16 July 2021
FAMILY COURT OF AUSTRALIA
Huda & Huda [2021] FamCAFC 118
Appeal from: Huda & Huda [2020] FCCA 822 Appeal number:
NOA 48 of 2020
File number:
BRC 1238 of 2015
Judgment of:
KENT J
Date of judgment:
16 July 2021
Catchwords:
FAMILY LAW – APPEAL – PROPERTY – Where the primary judge found that the husband had no credibility as a witness, failed to provide any meaningful disclosure and has assets and financial resources that he has not disclosed – Where the husband does not challenge any of those findings on appeal – Where the primary judge found that the husband was to be solely responsible for repayment of a loan – Whether the primary judge ought to have found that the husband used the funds advanced to purchase property and improve the parties’ financial position – Whether the finding that the husband embarked upon a course of conduct designed to reduce or minimise assets was open to the primary judge – Where the husband was found to lack credibility and failed to disclose what he did with the money – Where the failure to challenge those findings supports the conclusion that the husband ought be solely responsible for the loan.
Legislation:
Family Law Act 1975 (Cth) ss 79, 94AAA(3)
Cases cited:
Devries v Australian National Railways Commission (1993) 177 CLR 472; [1993] HCA 78
Hicks & Trustee of the Bankrupt Estate of Hicks (2021) FLC 94-006; [2021] FamCAFC 19
House v The King (1936) 55 CLR 499; [1936] HCA 40
Huda & Huda and Laham (2018) FLC 93-837; [2018] FamCAFC 58
Lee v Lee (2019) 266 CLR 129; [2019] HCA 28
Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57
Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550; [2016] HCA 22
Division:
Appeal Division
Number of paragraphs:
89
Date of hearing:
3 November 2020
Place:
Brisbane
Counsel for the Appellant:
Mr Fisher
Solicitor for the Appellant:
Raniga Lawyers
The Respondent:
In person
ORDERS
NOA 48 of 2020
BRC 1238 of 2015APPEAL DIVISION OF THE FAMILY COURT OF AUSTRALIA
BETWEEN: MR HUDA
Appellant
AND: MS HUDA
Respondent
ORDER MADE BY:
KENT J
DATE OF ORDER:
16 JULY 2021
THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.There be no order as to costs of the appeal.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Huda & Huda has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
KENT J:
On 2 July 2020 the primary judge in the Federal Circuit Court of Australia (“the Federal Circuit Court”) made parenting and property settlement orders giving effect to reasons for judgment delivered on 9 April 2020 in proceedings between Mr Huda (“the husband”), Ms Huda (“the wife”) and the Independent Children’s Lawyer representing the children’s interests in the parenting proceedings.
By an Amended Notice of Appeal filed 31 August 2020 the husband appeals from some of the property orders. There is no appeal from the parenting orders. The self-represented wife opposes the appeal. Appellate jurisdiction in respect of this appeal is exercised by a single judge pursuant to s 94AAA(3) of the Family Law Act 1975 (Cth) (“the Act”).
Underpinning the property settlement orders that were made, and of central importance to consideration of the husband’s challenges on appeal to those orders, are several fundamental findings made by the primary judge.
First, the primary judge explained in some detail his finding that the husband had no credibility as a witness and his finding that the wife’s evidence ought be accepted in preference to that of the husband where there is discrepancy.
Second, the primary judge provided detailed findings throughout the reasons as to the husband’s abject failures to provide any meaningful disclosure of either his historical, or current, financial affairs.
Third, and perhaps most significantly, the primary judge recorded a finding that it is “highly likely” that the husband has assets and financial resources that he has not disclosed either to the wife or to the Court. It followed from that finding that by reason of the husband’s conduct it was not possible for the Court to determine the full nature and extent of property interests or financial resources of the husband.
There is no challenge on appeal to any of these fundamental findings.
Apart from the undisclosed assets and financial resources of the husband, which obviously were of an unknown extent and value, given the husband’s non-disclosure, the primary judge recorded in the orders the identifiable assets and financial resources of the parties. The effect of the orders made was, in summary:
(a)The husband and wife each retain 50 per cent of property interests worth $742,713.54 (comprised mainly of sale proceeds of real property totalling $635,568.19);
(b)That the wife’s share of the sale proceeds be paid to her solicitor’s trust account;
(c)That the husband’s share of the sale proceeds was first to be used to meet an amount payable to the Child Support Registrar for arrears of child support, which at the time of trial was some $46,935.85;
(d)That the balance of the sale proceeds to be received by the husband be paid directly to one Mr Laham in partial discharge of a judgment debt which Mr Laham had obtained against the husband; and
(e)That the husband be declared responsible for the outstanding judgment debt (if any) owed to Mr Laham and indemnify the wife and keep the wife indemnified in respect of same.
The orders made by the primary judge are predicated upon the conclusion by the primary judge that the husband ought bear sole responsibility for a judgment debt obtained by a third party, one Mr Laham, against the husband. The husband seeks to challenge on appeal the primary judge’s findings of fact supporting the conclusion that the husband ought bear sole responsibility for that debt. The husband seeks orders on appeal having the effect that the wife bear equal responsibility for the subject debt.
Factual background/findings of the primary judge
The husband was born in 1949 and is 72 years old. He was born in Country Q, arrived in Australia in approximately 1969 or 1970 and later became an Australian citizen. He is self-employed in the construction industry but otherwise very little is known of the husband’s financial circumstances as he has failed to provide adequate, or any meaningful, disclosure. The husband’s abject failure to disclose formed part of the primary judge’s reasoning for rejecting the husband’s case in respect of the loan from Mr Laham (discussed below).
The wife was born in 1965 and is 55 years old. She was also born in Country Q, arrived in Australia in January 2000 and also later became an Australian citizen. As at trial the wife was a part-time retail assistant at Business A earning approximately $38,000 per annum.
The parties commenced cohabitation in September 2002 and were married in 2003. There are two children of the marriage; C born in 2005 (14 years old as at trial) and D born in 2007 (12 years old as at trial).
The parties separated on 3 January 2015 when the husband barricaded the former family home (conveniently referred to as “the Suburb G property”) and prevented the wife and children from entering the home. The relationship was therefore about 12.5 years in duration. As at trial there had been some 4.5 years since separation.
The reasons for judgment in respect of parenting issues reflect that the wife has borne primary caring responsibility for the children throughout their lives, including in the lengthy
post-separation period. The parenting orders made by the primary judge on 2 July 2020 see a continuation of the children living primarily with the wife and spending alternate weekend time with the husband.
On 13 February 2015 the husband filed an Initiating Application seeking property and parenting orders. The first trial took place on 17, 18, 19 and 20 May 2016. Final property orders were made on 17 June 2016. The trial judge in that case rejected the case of the husband and of Mr Laham that there existed legitimate loans made by Mr Laham to the husband.
The husband and Mr Laham filed separate Notices of Appeal against those orders. On 10 May 2018 the Full Court allowed both appeals,[1] concluding that the primary judge had failed to accord procedural fairness to the husband and Mr Laham. The Full Court remitted the matter for rehearing.
[1] Huda & Huda and Laham (2018) FLC 93-837.
The rehearing commenced on 29 July 2019. It was originally listed for four days and had been given priority. It eventually concluded after ten days.
The husband was represented by solicitors and counsel throughout the first trial and on the appeal resulting in the orders made by the Full Court on 10 May 2018. The alleged debt to Mr Laham was a central issue in each of the first trial and thus on that appeal. The point of emphasis here is that well prior to the commencement of the second trial the husband could not have conceivably been in any doubt about his disclosure obligation.
The husband was self-represented during nine of the ten days of hearing in the second trial, being represented only on the eighth day (28 October 2019) by solicitors and counsel.
It bears emphasis that this history of the litigation brings into sharp focus the husband’s
non-disclosure in this case, including with respect to the issue of the Laham loans. Despite the very existence of such loans being put in issue by the wife over the years of this litigation, including throughout the first trial, the husband failed in the second trial to produce any documents whatsoever to corroborate either his receipt of loan funds or the use he made of any funds received.
Despite the husband’s failure to comply with trial directions to file one consolidated trial affidavit of evidence in chief and one affidavit for each witness, the primary judge allowed the husband to rely upon a number of affidavits of himself and Mr Laham, all of which were a number of years old. As will be discussed, the husband’s appeal was formulated on the erroneous contention that the primary judge refused to receive these affidavits into evidence.
The wife was represented by solicitors and counsel for the duration of the second trial.
The Independent Children’s Lawyer appeared by counsel throughout the second trial. The trustee for sale of the Suburb G property appeared on the first (29 July 2019) and the tenth (30 October 2019) days of the hearing of the second trial.
Mr Laham filed a Notice of Discontinuance following the first trial and he was later removed as a party to the property proceedings. However, Mr Laham attended with counsel on the first day of the trial and, despite not being a party to the proceedings, sought one half of the proceeds of sale held in the trust account. The primary judge considered that as Mr Laham may be a person who will be affected by any order made he would have a right to be heard and granted leave for him to be heard. Mr Laham appeared on the first (29 July 2019), fourth (1 August 2019), seventh (15 August 2019), eighth (28 October 2019) and tenth (30 October 2019) days of the second trial.
As already noted, final property settlement orders were made on 2 July 2020, from which the husband appeals.
Alleged loan from Mr Laham
As the husband’s challenges on appeal are directed in one way or another to the findings the primary judge made concerning this loan, it is helpful to set out the factual context relating to the subject loan as found by the primary judge.
The primary judge’s reasons for judgment reflect that his Honour did not make a finding as to the existence of any loans advanced by Mr Laham in reliance upon any of the husband’s evidence. To the contrary, the primary judge made it clear that the husband would not have discharged the onus of proof he bore on this issue had he relied only on his own evidence (at [189]). It is clear that the primary judge relied only upon Mr Laham’s evidence as to the findings as to the making of any loans by Mr Laham to the husband (at [233]).
In an affidavit of Mr Laham dated 3 August 2015, which is annexed to an affidavit of the husband filed on 9 August 2019, Mr Laham sets out the various amounts allegedly advanced to the husband from 10 March 2005 until 26 April 2006 and the interest amount as follows:
Date Amount
(i) 10/03/2005 $15,000.00
(ii) 17/05/2005 $33,250.00
(iii) 02/06/2005 $10,000.00
(iv) 10/09/2005 $9,387.00
(v) 29/09/2005 $52,755.00
(vi) 17/11/2005 $26,080.00
(vii) 01/12/2005 $34,200.00
(viii) 20/01/2006 $20,000.00
(ix) 17/02/2006 $20,000.00
(x) 15/03/2006 $10,000.00
(xi) 20/04/2006 $850.00
(xii) 26/04/2006 $118,470.00
Subtotal: $349,992
Interest $205,529.30
Total $555,521.30
(As per the original)
As appears from the foregoing table, there was alleged to be a sum of $205,529.30 in interest owing. The primary judge recorded, with apparent acceptance, evidence to the effect of an agreement between the husband and Mr Laham for the payment of interest at 5 per cent per annum capitalised and that the loan was to be repaid after 10 years, the date of 30 May 2015 being the date by which the loan was to be repaid (at [169]).
It is to be noted in passing that the itemised amounts recorded include some amounts which appear to be curious amounts given the odd totals. That is, whilst some of the advances are in round sums several of them are in odd amounts.
The primary judge accepted the wife’s evidence that she had no knowledge of any alleged advances by Mr Laham to the husband until that was first alleged by the husband subsequent to the parties’ separation in the context of disputed property settlement. At all material times, including throughout the first trial of the property proceedings, the wife contended that the husband’s allegation of loans made by Mr Laham to the husband was a fraudulent connivance between them designed to reduce her proper entitlement to property settlement. In support of that contention the wife relied upon the following undisputed facts surrounding the alleged advances:
(a)That the husband and Mr Laham are close friends;
(b)The absence of any written loan agreement;
(c)The absence of any contemporaneous documents whatsoever to corroborate that any of the advances were in fact made by Mr Laham to the husband or that any were received by the husband (no bank statements/bank records/copy cheques of either Mr Laham or the husband have ever been produced);
(d)That the advances were allegedly made from accounts in the name of Mr JJ or Mr KK, not in Mr Laham’s name, which accounts Mr Laham asserted he controlled – no documents concerning any such accounts were disclosed;
(e)The recording of the advances on a single piece of paper in Mr Laham’s handwriting, with only a photocopy being produced, the original of which was not produced by either Mr Laham or the husband and was thus unavailable for time verification by forensic examination;
(f)The absence of any documents whatsoever produced by the husband on disclosure to demonstrate any receipt of any advances or to demonstrate the use made of any advances;
(g)Despite it being an alleged term agreed between the husband and Mr Laham that the total amount loaned together with interest was to be repaid on or before 30 May 2015, it was not until 2018 (subsequent to the first trial and the appeal) that Mr Laham pursued any formal steps of recovery;
(h)Despite it being alleged that the advances or some of them were to assist the husband’s business no contemporaneous business records whatsoever, including, for example, any taxation returns, were produced by the husband to corroborate the receipt of any advances in the business and the use of such advances as a tax deductible debt in the business.
All of the foregoing is so despite the authenticity of claimed advances by Mr Laham to the husband being an issue from the outset and throughout the first trial. That is, despite these issues having been agitated at the first trial there remained in the second trial a dearth of any documents whatsoever to corroborate the husband’s case concerning the alleged loan or the use made of monies advanced. Put simply, as counsel for the husband acknowledged on the hearing of this appeal, not a single document was produced by the husband to corroborate the movement of any funds from the Mr JJ or Mr KK accounts to Mr Laham’s accounts, or from Mr Laham’s accounts to any account of the husband, in circumstances where Mr Laham alleged the advances were made by cheques drawn on his account in the husband’s favour. Not a single document was disclosed to demonstrate any use made of any advance the husband received.
Despite the significant body of evidence putting the very authenticity of the loans or advances from Mr Laham in serious doubt, the primary judge ultimately concluded, in reliance upon Mr Laham’s uncorroborated oral evidence, that Mr Laham had made the advances to the husband. The wife has not filed any Cross-Appeal or Notice of Contention in respect of that conclusion. The wife explained on the hearing of the appeal that she has no money left. All of the funds she received via the property settlement orders have been consumed in legal fees. The wife sought to agitate on appeal the same proposition she advanced at trial, namely, that the alleged loans were a connivance.
Whilst the primary judge accepted Mr Laham’s evidence to support the conclusion that the subject advances were made, it bears emphasis that the primary judge did not accept every aspect of Mr Laham’s evidence. That would have been impossible given the glaring inconsistency in Mr Laham’s evidence on the important question as to whether or not the advances were made to both parties or whether the wife ever had any knowledge of the advances, at the time, as is recorded by the primary judge in the following:
175.In paragraphs 7 and 8 of another affidavit of Mr Laham (dated 14 September 2015 and filed on the same day) – Mr Laham states:-
“7. Both parties knew of the liability to me and of my claim in respect of equity in the properties. Due to my longstanding friendship with the parties and particularly [the husband], I never took steps to secure the debt by insisting that a mortgage be executed and registered.
8. So far, no repayments have been made by either [the husband] or [the wife] and my hope was that on the sale of the properties or refinancing by the parties the liability to me would be liquidated.”
176.That affidavit is also annexed to the affidavit of the husband filed on 9 August 2018.
177.In a subsequent affidavit of Mr Laham dated 17 May 2016 (also annexed to the affidavit of the husband filed 9 August 2018) he states in paragraph 6:-
“6. I have met [the wife] on a few occasions at community functions. But I have never spoken to her about the loans owing to me by her husband as I did not consider that to be an appropriate thing to discuss with her.”
178.Mr Laham does not explain how “both parties knew of the liability to me” – when he specifically sates that he hasn’t discussed the alleged loan with [the wife]. I have come to the conclusion that [the wife] did not know of the existence of the loan. I will refer to this matter again later in these Reasons for Judgment.
(Emphasis in original)
On 27 November 2018 the husband consented to judgment being entered in the Supreme Court of Queensland in favour of Mr Laham in proceedings instituted by Mr Laham naming only the husband as defendant. The husband consented to judgment in the amount of $693,369.33 being entered against him (at [167] and [169]), on the basis that he had made no repayment whatsoever and interest had accrued to arrive at that total.
As already referred to, Mr Laham gave evidence that he recorded the amounts of the advances noted above made to the husband on a single piece of paper, a photocopy of which was an annexure to his affidavit filed on 18 May 2016. That is a photocopy. As the primary judge records the original of the annexure has never been provided rendering it impossible for the wife to undertake any forensic examination of the original document to verify its validity (at [183]–[186]).
The primary judge recorded in the reasons for judgment, repeatedly, that the wife was never made aware of the loan or any loans from Mr Laham; was not consulted about such loans nor about repayment so as to avoid substantial interest accruing (see, for example, [178], [221], [237], [241] and [298]).
The husband and Mr Laham advanced contentions to the effect that some of the advances were made to assist in the acquisition of the Suburb G property and subsequent construction of a residence. At [229] the primary judge recorded his acceptance of the wife’s evidence that the parties purchased the Suburb G property in or about May 2007 for $226,000. Notably, that is a date more than two years after the first advance was made on 10 March 2005 and more than one year after the last advance was made on 26 April 2006. The primary judge also records his acceptance of the wife’s evidence that the house construction undertaken upon the Suburb G property commenced in 2009 and was completed in either 2010 or 2011. Those dates obviously post-date the dates of any of the subject advances by some years. Further, the primary judge recorded his acceptance of the wife’s evidence that the husband told her at the time that materials for the construction of the house were purchased using income earned from the projects the husband was undertaking.
To this may be added that the primary judge accepted detailed evidence from the wife concerning the construction work undertaken by the husband in his business in the years 2005/2006 through to 2010 which were highly productive (at [226]–[229]).
At [230] the primary judge recorded this finding:
The wife refers to the “busiest years” for the Huda Group and the money to purchase the land and build the house of E Street, Suburb G came from income received from the Huda Group. I accept the wife’s evidence that the husband told her that the money to build the property on the land at E Street, Suburb G came from income earned from the business. The clear import of the wife’s evidence is that the money to purchase the land at E Street, Suburb G also came from income from the business. [The husband] has not provided any or any adequate disclosure of documents. [The husband] has not made a full disclosure of his financial affairs. Specifically, for present purposes, [the husband] has not made full disclosure of his financial affairs during the years 2005 – present. Full and frank disclosure of his financial affairs during this period would have given the Court an opportunity to weigh the competing assertions of the parties.
(As per the original) (Emphasis added)
As is clear the primary judge was not persuaded that any advances made by Mr Laham to the husband were applied to the Suburb G property. That is hardly surprising given the husband’s lack of disclosure together with the lack of any temporal connection between the claimed dates of advances being made and the respective dates upon which the Suburb G property was acquired and when subsequent construction upon that property occurred.
As security for the judgment debt obtained in 2018, the husband granted Mr Laham a mortgage over the husband’s interest in the Suburb G property owned jointly by the parties. The Suburb G property has subsequently been sold and as at trial the sale proceeds were held in the trust account of the trustee for sale, Mr W.
The husband also executed a General Security Agreement in favour of Mr Laham, which was registered on 1 December 2018.
Mr Laham alleged that the amounts loaned originated from an account in the name of Mr JJ or Mr KK, which Mr Laham asserts he had control of and was entitled to use (at [179]).
The advances were supposedly made by way of cheque, the only evidence of which is the various amounts set out in an affidavit (see affidavit of Mr Laham dated 3 August 2015 at paragraph 5, a copy of which is annexed to affidavit of the husband filed on 9 August 2019) and the handwritten note by Mr Laham earlier referred to setting out what Mr Laham believed to be the cheque numbers (see affidavit of Mr Laham filed on 18 May 2016 at Annexure “A”).
It was the husband’s case at trial that the loan owed to My Laham was a joint loan and that the parties should be equally responsible for the repayment of same. The husband asserted that the monies loaned were used to purchase the land at Suburb G and fund the build of the house.
As already noted, it was the wife’s case that the years during which the Suburb G property was purchased and the house was built were very busy years for the husband’s company and the money to purchase the property and build the house came from income received from the company. The primary judge accepted the wife’s evidence that the husband had told her the money to purchase the land and build the house came from income earned (at [230]). It follows that the primary judge rejected the husband’s contention that loan funds were applied to the Suburb G property and/or to the business.
Relevantly, the primary judge found:
187.The husband has failed to disclose any bank statements that would verify the depositing (by him) of monies advanced by cheque from Mr Laham. In the affidavits sworn by Mr Laham he did not annex any bank statements. He had explained that the monies were moved from an account in the name of Mr JJ or Mr KK – but the Commonwealth Bank (according to Mr Laham) no longer has any records of accounts in the name of Mr JJ or Mr KK.
…
189.[The husband] has failed to make proper disclosure. If the only evidence that [the husband] was relying on to prove that the loan existed was his own evidence – then I would be inclined to conclude that [the husband] has failed to discharge the onus of proof. However, I did have the opportunity to observe Mr Laham in the witness box. He was cross-examined by [counsel for the wife]. Mr Laham’s evidence in the witness box accorded with his evidence as provided in the affidavits that he had earlier affirmed and which form part of the evidence in this trial. The situation is unusual. Some of the unusual aspects are as follows:-
a) There is no written loan agreement;
b) Mr Laham and [the husband] are friends;
c)No bank statements have been disclosed (in the name of Huda, Laham or Mr JJ and Mr KK) to prove that the advances of money actually occurred at the times stated; and
d)The money was not actually advanced from an account in the name of Laham, but rather came from an account in the name of Mr JJ and Mr KK.
…
230.The wife refers to the “busiest years” for the Huda Group and the money to purchase the land and build the house of E Street, Suburb G came from income received from the Huda Group. I accept the wife’s evidence that the husband told her that the money to build the property on the land at E Street, Suburb G came from income earned from the business. The clear import of the wife’s evidence is that the money to purchase the land at E Street, Suburb G also came from income from the business. [The husband] has not provided any or any adequate disclosure of documents. [The husband] has not made a full disclosure of his financial affairs. Specifically, for the present purposes, [the husband] has not made full disclosure of his financial affairs during the years 2005 – present. Full and frank disclosure of his financial affairs during this period would have given the Court an opportunity to weigh the competing assertions of the parties.
(Emphasis added)
The husband’s lack of credibility
In addition to the numerous findings that the primary judge made with respect to the lack of the husband’s financial disclosure, the primary judge also made various significantly adverse findings of credit against the husband, largely in the context of the parenting dispute. The husband made a number of serious allegations against the wife including:
(a)That the wife physically abused the children (at [52]–[53]);
(b)That the wife abused the children by allowing them to jump off rocks into water (at [54]–[55]);
(c)That the wife was having sexual intercourse with another man in front of the children (at [56]–[57]);
(d)That the wife abused the children by bathing in front of them (at [58]–[59]);
(e)That the wife is a drug addict and abuses the children (at [60]–[65]);
(f)That the wife masturbates in front of the children (at [71]); and
(g)That the wife had been “having sexual relations with the children since the children were born” (at [129]).
In relation to the husband’s various allegations against the wife, the primary judge found:
66. These are all serious allegations. None of these allegations are proved. I accept [the wife’s] evidence. [The husband’s] allegations in relation to the photograph at page 281 conclusively shows to this Court that [the husband] in this case, ([the husband]), has no credibility as a witness. Where there is any discrepancy between the evidence of [the husband] ([the husband]) and [the wife] ([the wife]) I accept the evidence of [the wife].
67. This assessment of credibility goes even further. I do not accept that [the husband] believes that [the wife] is a drug addict, or that she has sexually abused the children. If he did believe those matters to be true, then he would surely not be seeking (in his written submissions) a parenting order whereby the children live in a week about shared care arrangement between the parents. [The husband] does not believe the allegations.
68. What is the Court then to make of a person (such as [the husband]) who has come to the Court and made outrageous and scandalous allegations – which he does not even believe to be true? The conclusion I have reached is that [the husband] will say absolutely anything to the Court (whether it is true or not true) in an attempt to persuade the Court that the outcomes that he seeks should be preferred.
69. This finding against [the husband] in relation to his credibility and his truthfulness is an important issue in this case – not only in relation to the parenting aspects of the case, but the property proceedings.
70. There are many other examples of [the husband’s] lack of truthfulness contained in the evidence. It is important for the Court to refer to these items of evidence – even at the risk of repetition.
(Emphasis added)
Grounds of appeal
The Amended Notice of Appeal contains 10 Grounds of Appeal as follows:
1.The Learned Trial Judge erred in the Reasons for Judgment in Huda & Huda [2020] FCCA 822 at para 233 by finding is that [the husband] has not proved to the appropriate standard that he used to money lent to him by Mr Laham to purchase the land at Suburb G.
2.The Learned Trial Judge erred in the Reasons for Judgment in Huda & Huda [2020] FCCA 822 at para 233 by finding that [the husband] has not proved to the appropriate standard to the appropriate standard that he used the money lent to him by Mr Laham to build a house on the land at Suburb G.
3.The Learned Trial Judge erred in the Reasons for Judgment in Huda & Huda [2020] FCCA 822 at para 233 in failing to make a finding that [the husband] used the money lent to him by Mr Laham to build up the assets of the Huda family.
4.The Learned Trial Judge erred in the Reasons for Judgment in Huda & Huda [2020] FCCA 822 at para 233 in failing to make a finding that [the husband] used the money for the benefit of the Huda family.
5.The Learned Trial Judge erred in the Reasons for Judgment in Huda & Huda [2020] FCCA 822 at para 239 in making the finding that [the husband] has embarked upon a course of conduct designed to reduce or minimise the effective value of matrimonial assets.
6.The Learned Trial Judge erred in the Reasons for Judgment in Huda & Huda [2020] FCCA 822 at para 239 in failing to make an order that the loan to Mr Laham evidenced by the judgment debt of $693,369.33 payable by [the husband] to Mr Laham be repaid jointly (by [the husband and the wife]) from matrimonial assets.
7.The Learned Trial Judge erred in the Reasons for Judgment in Huda & Huda [2020] FCCA 822 at para 239 by concluding that [the husband] has also sought to cause financial harm to [the wife].
8.The Learned Trial Judge erred in the Reasons for Judgment in Huda & Huda [2020] FCCA 822 at para 239 in making the finding that [the husband] has also sought to cause financial harm to [the wife] in the absence of evidence of that fact.
9.Further and alternatively, in relation to each of Appeal Grounds 1 – 8 inclusive, the Learned Trial Judge erred in the exercise of discretion to order an alteration of the interests of the husband and the wife in accordance with what is just and equitable under section 79(2) of the Family Law Act 1975 by ordering the Husband to bear sole responsibility to repay the judgment debt to Mr Laham (Reasons for Judgment, para 243 and Orders 5, 6 and 8 made 2 July 2020).
10.The Learned Trial Judge erred in failing to disclose to the Husband his intention to take into consideration the conduct of the Husband referred to in the Reasons for Judgment, paragraphs 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, ,73, 74, 75, 76, 98 and 129 in:
(a)making property settlement orders in relation to the Husband and Wife; and
(b) making adverse findings of credit against the Husband.
(As per the original) (Emphasis in original)
Grounds 1–4 and 6
These Grounds will be discussed together given they each and collectively challenge [233] of the primary judge’s reasons in which his Honour rejects the husband’s case that the loan from Mr Laham was a joint liability and that it was used to purchase the Suburb G property and otherwise improve the parties’ financial position. Each of these grounds rely upon the proposition, in effect, that because the primary judge accepted Mr Laham’s evidence about advances being made it followed that the husband’s case as to the use of these funds was established.
Paragraph 233 of his Honour’s reasons is as follows:
Whilst it is the case that the Court has concluded that Mr Laham lent [the husband] the money – it will be apparent from these Reasons the Judgment that that conclusion was reached on the strength of Mr Laham’s evidence – not [the husband’s]. As noted earlier in these Reasons for Judgment (in particular when considering the question of parenting) the conclusion reached by the Court is that [the husband] is not a credible witness. Where there is any conflict in the evidence between [the husband] and [the wife] – the Court prefers the evidence of [the wife]. [The husband] has not given any or any adequate explanation as to why he has failed to make full disclosure of his financial affairs covering the years from 2005 until 2019. On the authority of Weir & Weir (supra) and Black & Kellner (1992) 106 FLR 154 – the Court should not be unduly cautious about making findings in favour of the wife in the present circumstances. It seems to me undeniable that the husband in this case ([the husband]) has deliberately failed to make proper disclosure of his financial affairs. [The husband] doesn’t seem to think that the duty of disclosure applies to him. [The husband] has known for many years – certainly since 2014 – that the question of the existence of a loan from Mr Laham was disputed by the wife. The wife also disputed [the husband’s] assertions that money lent to [the husband] by Mr Laham was used to purchase the land at E Street, Suburb G and was also used to construct the house at E Street, Suburb G. [The husband] knew all of this was in dispute. He has not provided any evidence that he has made satisfactory attempts to try to locate the documentation in question. Specifically, documents to prove what he did with the money. Even if one were to give [the husband] some leeway in relation to documents from 15 years ago – one has to ask the question, where are his financial documents for the financial year ended 2019? He gave evidence in the witness box that he was involved in carrying out work pursuant to a $1.8 million contract at Suburb ZZ – during 2019 while the trial was on. And yet, the Court (and, of course, the wife) has not seen any disclosure from [the husband] in relation to that work. [The husband] disregards his obligations. I will return to [the husband’s] reckless disregard of his obligations shortly. For present purposes though the finding of the Court is that [the husband] has not proved to the appropriate standard that he used the money lent to him by Mr Laham to purchase the land at E Street, Suburb G and nor has he proved to the appropriate standard that he used the money lent to him by Mr Laham to build a house on the land at E Street, Suburb G. Indeed, in the absence of full financial disclosure – the Court can have no confidence in [the husband’s] assertions as to what he did with the money lent to him by Mr Laham. I am not prepared to make a finding that [the husband] used the money lent to him by Mr Laham to build up the assets of this family and nor I am prepared to accept that he used the money for the benefit of the family.
(Emphasis added)
Taken from the husband’s Summary of Argument filed on 2 October 2020, Ground 1 relies upon the contention that the primary judge made an error of law in not admitting into evidence the affidavits of Mr Laham dated 3 August 2015 (a copy of which is annexed to an affidavit of the husband filed on 9 August 2019) and 17 May 2016 (filed on 18 May 2016); and that had those affidavits been received into evidence the husband would have proved that the advances were used to purchase the Suburb G property and to construct the residence on that property.
The foundation for this contention of error of law is erroneous. It was pointed out by the Court to counsel appearing for the husband at the hearing of the appeal that at [166] the primary judge expressly records, as one of the many “significant indulgences” granted to the husband at the trial, that (despite the husband’s non-compliance with trial directions (at [163])) the Court granted the husband leave to rely upon affidavits “that had been filed many years ago”, including the two subject affidavits. Counsel confirmed on the hearing of the appeal that as a consequence Ground 1 could not be pursued and it was abandoned.
The abandonment of Ground 1 of the appeal has obvious consequences for Ground 2 given that, again taken from the husband’s Summary of Argument filed on 2 October 2020, Ground 2 is founded upon the same “error of law” contended for on the misconceived notion that the affidavits were not received.
The husband’s argument on appeal in support of Grounds 1 to 4 and 6 devolves into the essential contention that because Mr Laham gave evidence to the effect that Mr Laham understood or believed that the advances were used by the husband in his business and/or to purchase the Suburb G property and/or to construct the residence on the Suburb G property, the primary judge ought to have made those findings.
This argument would have it that the primary judge was bound to predominate Mr Laham’s evidence as to his own beliefs or understandings which, at best, could only be based upon hearsay, over all other evidence. That is, Mr Laham obviously could not provide any direct evidence as to what the husband actually did with any money. That other evidence includes, importantly, the evidence of the wife, outlined above, which was accepted by the primary judge viewed also against the abject failure of the husband to provide any disclosure and the husband’s abject lack of credibility as a witness to support the husband’s case about what he did with the money.
Counsel for the husband acknowledged on the hearing of the appeal that there was not a shred of documentary evidence produced by the husband to demonstrate any use he made of any funds he obtained from Mr Laham. As already noted, the primary judge made a finding, unchallenged on this appeal, that the husband probably holds assets and financial resources which he has not disclosed either to the wife or to the Court.
With respect to the husband’s assertion that the funds were used to build up the assets of the family, it bears repeating that the primary judge recorded the following findings:
230.… I accept the wife's evidence that the husband told her that the money to build the property on the land at E Street, Suburb G came from income earned from the business. The clear import of the wife’s evidence is that the money to purchase the land at E Street, Suburb G also came from income from the business. [The husband] has not provided any or any adequate disclosure of documents. [The husband] has not made a full disclosure of his financial affairs. Specifically, for present purposes, [the husband] has not made full disclosure of his financial affairs during the years 2005 – present. Full and frank disclosure of his financial affairs during this period would have given the Court an opportunity to weigh the competing assertions of the parties.
231.I note the decision In the Marriage of Weir (1992) 110 FLR 403 –where the Full Court of the Family Court stated:-
“This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in In the Marriage of Black (1992) 106 FLR 154, 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, which follows from his Honour’s findings in this case, 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.”
232.The Court is in the dark. The husband has failed to make full disclosure of his financial affairs in relation to those years referred to by the wife in her evidence. There is no proper disclosure by the husband in relation to the year when he purchased the land at E Street, Suburb G, nor is there proper disclosure by the husband in relation to the year or years when the house was constructed on the land at E Street, Suburb G. There are no bank statements and there are no tax returns.
(Emphasis in original)
In Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479 Brennan, Gaudron and McHugh JJ held:
More than once in recent years, this Court has pointed out that a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against – even strongly against – that finding of fact. If the trial judge’s finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge “has failed to use or has palpably misused his advantage” or has acted on evidence which was “inconsistent with facts incontrovertibly established by the evidence” or which was “glaringly improbable”.
(Footnotes omitted)
The test as to whether an appellate court should interfere with a primary judge’s factual findings is set out in Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550 at [43] (and affirmed in Lee v Lee (2019) 266 CLR 129 at [55]):
The fact that the judge and the majority of the Court of Appeal came to different conclusions is in itself unremarkable. A court of appeal conducting an appeal by way of rehearing is bound to conduct a “real review” of the evidence given at first instance and of the judge’s reasons for judgment to determine whether the judge has erred in fact or law. If the court of appeal concludes that the judge has erred in fact, it is required to make its own findings of fact and to formulate its own reasoning based on those findings. But a court of appeal should not interfere with a judge’s findings of fact unless they are demonstrated to be wrong by “incontrovertible facts or uncontested testimony”, or they are “glaringly improbable” or “contrary to compelling inferences”…
(Footnotes omitted)
It did not follow from a finding that Mr Laham made the advances to the husband that a finding had to be made that the husband used those funds for the benefit of the family. It is unknown to what use the husband put those funds and it bears repeating that there is an unchallenged finding by the primary judge that the husband probably has property and financial resources which he has not disclosed either to the wife or to the Court.
It was plainly open to the primary judge to conclude that the husband did not establish his case as to the use of any funds he obtained from Mr Laham. The findings made by the primary judge were plainly open to be made on all of the evidence and there is no merit in any of these Grounds.
Grounds 5, 7 and 8
These Grounds will be addressed together given that each of them challenge one or other of the findings the primary judge recorded at [239] of the reasons. Indeed it can be seen that Grounds 7 and 8 replicate the same complaint in no substantially different way.
At [239] the primary judge records:
I have come to the conclusion that from prior to the time of the marriage breakdown (from at least early 2014 and probably many years prior to that) [the husband] has embarked upon a course of conduct designed to reduce or minimise the effective value of matrimonial assets. He deliberately failed to address the loan from Mr Laham. [The husband] asks the Court to make an order that the loan to Mr Laham be repaid jointly (by [the husband and the wife]) from matrimonial assets. [The husband’s] actions in failing to make any repayments whatsoever over the 14 year period between 2005 and 2019 has had the effect of minimising the value of the matrimonial assets. At the very least, [the husband] has acted negligently with the matrimonial assets by failing to take a prudent approach by making repayments of principal and interest between the years 2005 and 2019. On the evidence before the Court and noting the findings made by the Court and the acceptance by the Court of [the wife’s] evidence (in relation to the work and income of the Huda Group) there is no reason why [the husband] could not have repaid the loan in full on time by the end of May 2015. The conclusion that I have actually reached is that [the husband] has acted more than negligently and he has, by ignoring the capitalised interest on the loan, acted recklessly and wantonly with matrimonial assets. Further, I gained the very real impression from the manner in which [the husband] conducted himself during the course of the trial that he has sought to cause hurt and harm to [the wife]. The untrue allegations put to [the wife] in the parenting case have already been referred to at length earlier in these Reasons for Judgment. Furthermore, the conclusion that the Court has reached in relation to [the husband’s] willingness to allow the personal loan he obtained from Mr Laham to balloon out of all proportion from the amount originally advanced – leads the Court to conclude that [the husband] has also sought to cause financial harm to [the wife].
Ground 5 contains the challenge to the finding that the husband embarked upon a course of conduct designed to reduce or minimise assets. Grounds 7 and 8 both challenge the finding that the husband sought to cause financial harm to the wife.
In argument of these Grounds counsel for the husband repeats the submission that because Mr Laham gave evidence about Mr Laham’s understanding or subjective belief about what the loan funds would be used for, the primary judge ought to have accepted that evidence and thus the primary judge erred in making the findings in [239]. I have already explained why acceptance of Mr Laham’s evidence about the making of the advances does not have the consequence that the primary judge was thereby bound to accept Mr Laham’s subjective beliefs or understandings about any subsequent use made of the funds by the husband. That was a matter that remained for the husband to prove given that the wife put that question in issue.
The husband sought that the total liability to Mr Laham, including interest, be treated as a joint liability of the parties. That is, that the total liability be deducted from the assets of the parties, and be discharged, before any distribution of property interests as between the husband and the wife occurred.
The wife put in issue the husband’s claim of any liability to Mr Laham. The wife’s case was that the post-separation mounting of this claim by the husband was a fraudulent connivance designed to reduce her proper property entitlement. As already noted, the primary judge accepted the wife’s evidence that she knew nothing at any material time about the making of any loans and moreover accepted her evidence to the effect that the business was successful and thriving at the time it was said these loans were taken.
Given that the wife joined issue as to the very authenticity or existence of the loans, the husband thus bore the onus of proof to establish not only the authenticity of the claimed liability to Mr Laham but also that the loan funds were applied for joint purposes. Further, it was necessary for the husband to establish the reasonableness of the total loan liability incurred, that is, the interest component as well as capital.
Whilst the primary judge accepted Mr Laham’s evidence as to the advances he made to the husband, the primary judge correctly found that such acceptance did not provide any proof that loan funds were applied for joint purposes.
As already noted, the husband was found to lack any credibility as a witness. Moreover, despite his obligation to disclose documents and information relevant to all issues in the case, the husband did not do so. The husband produced not a single document to establish that any funds borrowed from Mr Laham were applied for any joint purpose.
It bears repeating in this context that the unchallenged findings of the primary judge include the critical finding that the husband probably has assets and financial resources which he has not disclosed to the wife or to the Court.
In advance of the findings recorded at [239] the subject of these challenges, the critical findings of the primary judge concerning the husband’s failure to discharge his onus of proof on this issue, and thus his failure to establish a basis for the liability being treated as a joint liability, appear in the following paragraphs:
231.I note the decision In the Marriage of Weir (1992) 110 FLR 403 –where the Full Court of the Family Court stated:-
“This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in In the Marriage of Black (1992) 106 FLR 154, 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, which follows from his Honour’s findings in this case, 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.”
232.The Court is in the dark. The husband has failed to make full disclosure of his financial affairs in relation to those years referred to by the wife in her evidence. There is no proper disclosure by the husband in relation to the year when he purchased the land at E Street, Suburb G, nor is there proper disclosure by the husband in relation to the year or years when the house was constructed on the land at E Street, Suburb G. There are no bank statements and there are no tax returns.
233.Whilst it is the case that the Court has concluded that Mr Laham lent [the husband] the money – it will be apparent from these Reasons the Judgment that that conclusion was reached on the strength of Mr Laham’s evidence – not [the husband’s]. As noted earlier in these Reasons for Judgment (in particular when considering the question of parenting) the conclusion reached by the Court is that [the husband] is not a credible witness. Where there is any conflict in the evidence between [the husband] and [the wife] – the Court prefers the evidence of [the wife]. [The husband] has not given any or any adequate explanation as to why he has failed to make full disclosure of his financial affairs covering the years from 2005 until 2019. On the authority of Weir & Weir (supra) and Black & Kellner (1992) 106 FLR 154 – the Court should not be unduly cautious about making findings in favour of the wife in the present circumstances. It seems to me undeniable that the husband in this case ([the husband]) has deliberately failed to make proper disclosure of his financial affairs. [The husband] doesn’t seem to think that the duty of disclosure applies to him. [The husband] has known for many years – certainly since 2014 – that the question of the existence of a loan from Mr Laham was disputed by the wife. The wife also disputed [the husband’s] assertions that money lent to [the husband] by Mr Laham was used to purchase the land at E Street, Suburb G and was also used to construct the house at E Street, Suburb G. [The husband] knew all of this was in dispute. He has not provided any evidence that he has made satisfactory attempts to try to locate the documentation in question. Specifically, documents to prove what he did with the money. Even if one were to give [the husband] some leeway in relation to documents from 15 years ago – one has to ask the question, where are his financial documents for the financial year ended 2019? He gave evidence in the witness box that he was involved in carrying out work pursuant to a $1.8 million contract at Suburb ZZ – during 2019 while the trial was on. And yet, the Court (and, of course, the wife) has not seen any disclosure from [the husband] in relation to that work. [The husband] disregards his obligations. I will return to [the husband’s] reckless disregard of his obligations shortly. For present purposes though the finding of the Court is that [the husband] has not proved to the appropriate standard that he used the money lent to him by Mr Laham to purchase the land at E Street, Suburb G and nor has he proved to the appropriate standard that he used the money lent to him by Mr Laham to build a house on the land at E Street, Suburb G. Indeed, in the absence of full financial disclosure – the Court can have no confidence in [the husband’s] assertions as to what he did with the money lent to him by Mr Laham. I am not prepared to make a finding that [the husband] used the money lent to him by Mr Laham to build up the assets of this family and nor I am prepared to accept that he used the money for the benefit of the family.
234.[The husband] is so shambolic in his recordkeeping that one cannot be sure what he did with any particular money he received.
235.The fact that [the husband] has failed to provide full financial disclosure and the fact that [the husband] has failed to adequately prove what he did with the money that he received from Mr Laham is only one of the reasons that the Court has concluded that [the husband] should be solely responsible to repay the judgment debt to Mr Laham.
None of the findings recorded in these paragraphs are the subject of any challenge on appeal. The point of emphasis here is that these findings were in themselves amply sufficient to support the conclusion that the liability to Mr Laham was not to be treated as a joint liability.
It follows that there is no utility in the challenges directed to the subsequent findings in [239]. That is because the findings and conclusions recorded in [231]–[235] amply support the essential conclusion that the husband did not discharge his onus of proof to establish any basis for the subject liability being treated as a joint liability of both parties.
Put simply, the findings in [239] which are sought to be challenged by these grounds also supported, in addition to the earlier findings referred to, the conclusion that the husband ought be solely responsible for the subject liability. However, they were not findings essential to that conclusion. The earlier findings are self-sufficient and support the conclusion. Thus, even if it could be established that there was some error with respect to the findings in [239] it could not conceivably make any difference to the outcome.
It follows that there is no utility in these grounds of appeal.
Ground 9
By this ground the husband seeks to challenge the primary judge’s exercise of discretion in leaving with the husband solely liability for the debts to Mr Laham, in the event that any of Grounds 1–8 are made out.
This ground does not add to the challenges in Grounds 1–8 and the outcome with respect to those challenges dictates that this ground also does not succeed.
It may be added that it is well settled by authority that within the discretionary assessments to be made in determining property settlement orders under s 79 of the Act there is a discretion as to the treatment of liabilities. Whilst it will often be the case that liabilities are appropriately treated as joint liabilities, that does not follow and circumstances may dictate the conclusion, as the authorities reveal, that a liability ought be borne in a different proportion or indeed solely by one party (see, for example, the authorities referred to in Hicks & Trustee of the Bankrupt Estate of Hicks (2021) FLC 94-006 at [116]).
In order to disturb the primary judge’s discretionary conclusion the husband must demonstrate an error of the kind described in House v The King (1936) 55 CLR 499. No such error is established on this appeal.
Ground 10
By this ground the husband contends that the primary judge was obliged to warn the husband that his conduct in the parenting proceedings would be taken into consideration in making adverse findings of credit against the husband and in the making of property settlement orders.
As already referred to, in the parenting proceedings the husband advanced a series of heinous allegations against the wife, including as to her sexual abuse of the children, all of which were vehemently denied by the wife. All of these allegations were ultimately found to be baseless, outrageous and scandalous. There is no challenge on appeal to those characterisations.
Obviously the parties joined issue on these most serious allegations advanced by the husband. To adopt the language of McHugh J in Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 121, the risk of adverse credit findings being made against the husband in this context “necessarily inheres in the issues to be decided”. It follows that the primary judge was not obliged to give some separate warning to the husband of that risk.
There is no substance in this ground.
There being no substance in any of the grounds of appeal the appeal is dismissed.
Costs
The wife was self-represented on the appeal and incurred no legal costs with respect to the appeal. There will thus be no order for costs with respect to the appeal.
I certify that the preceding
eighty-nine (89) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Kent.Associate:
Dated: 16 July 2021
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