Ikbal and Nizram

[2017] FamCA 988

FAMILY COURT OF AUSTRALIA

IKBAL & NIZRAM [2017] FamCA 988

FAMILY LAW – PROPERTY – Just and Equitable – Where there is dispute as to the asset pool – Where the parties own property in both Australia and Country B – Where there is significant dispute as to the disposition of sale proceeds from properties in Country B – Where the husband’s sisters gave evidence as to property transactions in Country B – Where the husband’s sisters’ evidence is accepted – Where the parties agree their contributions are equal – Where the parties agree there should be no adjustment on the basis of section 75(2) factors – Where the asset pool should be distributed equally between the parties – Orders made accordingly. 

Family Law Act 1975 (Cth) ss 75, 79

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

APPLICANT: Mr Ikbal

RESPONDENT: Ms Nizram

FILE NUMBER: PAC 2903 of 2015

DATE DELIVERED: 1 December 2017

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 4 and 5 September 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Stenhouse

SOLICITOR FOR THE APPLICANT: Matthew Folbigg Pty Ltd

COUNSEL FOR THE RESPONDENT:	Mr Lee
SOLICITOR FOR THE RESPONDENT:	Sydney BD Lawyers

Orders

1. That within three (3) months from this date the husband pay to the wife the sum of $234,816.50.

2. That in consideration of the payment provided for in Order 1 the wife do all things necessary to transfer to the husband her interest in the property at C Street, Suburb D in the State of New South Wales being land contained in Folio Identifier … (“the Suburb D property”) and that concurrently with such transfer the husband refinance the mortgage debt presently secured against the said property so as to release the wife from all or any liability in regard thereto.

3. That the husband indemnify the wife from all or any liability in respect to the parties joint credit cards debts as follows:

   Amex Blue Credit Card #...08       

   Coles – Card number #...04

   ANZ – Card number #...07

   Westpac MasterCard #...25

4. That in default of the husband complying with Order 1 the parties shall forthwith sell the property at the best price reasonably obtainable and the net proceeds of sale shall after selling costs and discharge of mortgage be divided so as to facilitate an equal division of the property as set out in paragraph [45] provided always that the husband shall pay as they fall due and payable Council and Water rates, insurances and mortgage payments pending sale.

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

6. That proceedings be removed from the cases pending list.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 2903  of 2015

Mr Ikbal

Applicant

And

Ms Nizram

Respondent

REASONS FOR JUDGMENT

The Proceedings

1. The issues for determination relate to whether there should be adjusting property orders as between the husband and wife and, if so, what orders should be made.

The husband’s application

1. The applicant husband commenced proceedings on 18 June 2015. By his Amended Application filed 3 March 2017 he sought property orders in summary as follows:

   (1)That the wife pay to the husband a sum equivalent to 57 per cent of the total net asset pool,

   and to give effect to such a division:

   (2)That the property known and situated at C Street, Suburb D in the State of New South Wales being land contained in Folio Identifier … (“the Suburb D property”) be transferred to the husband, the parties discharge the mortgage secured over that property and the husband thereafter indemnify the wife with respect to the mortgage.

   (3)That all funds held in joint bank accounts be divided equally between the husband and the wife and that thereafter close the said accounts.

   (4)That the parties each pay one half of the following joint credit card and/or loan and thereafter close the said accounts:

   i)The AMEX credit card;

   ii)The Coles Myer credit card;

   iii)The ANZ loan;

   iv)The Westpac Mastercard;

   v)Arrears of rates in respect of the Suburb D property.

   (5)That the husband and the wife each retain their interest in and entitlement to:

   i)all personal property his/her respective ownership, possession or control;

   ii)all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively;

   iii)all interests in life insurance policies and superannuation funds standing in his/her sole name respectively;

   iv)all interests in business to which either party has an interest in;

   v)all other property and/or financial resources now or in the future.

   (6)That each party indemnify the other from and in respect of all actions, claims, suits and demands as may be made against him/her in relation to all liabilities in his/her name.

   (7)That each party release the other party from all debts owing from one to the other.

   (8)That the wife pay the husband’s costs of and incidental to these proceedings.

2. At trial the husband in summary sought orders that:

   a)He within three months pay the wife $35,721.00 and that she transfer her interest in the matrimonial home unit to him;

   b)He indemnify the wife from the four joint credit card debts.

The wife’s response

1. The respondent wife filed an Amended Response to the husband’s application on 7 April 2017 seeking relevantly, in summary, the following orders:

   (1)That the wife transfer her interest in the former matrimonial home at C Street, Suburb D to the husband after payment by the husband to the wife of half the valuation figure less the mortgage.

   (2)That mortgage …92 in favour of the Westpac Banking Corporation secured over the Suburb D property be discharged and thereafter the husband indemnify the wife with respect to the said mortgage, actions, suits, demands and claims as made against the Suburb D property.

   (3)That upon failure to comply with Orders (1), (2) and (3), the Suburb D property be sold and the wife be given half the proceeds of sale after payment of the mortgage, agency commission, legal expenses, rates, water charges and levy.

   (4)That the wife keep in her name and possession the overseas property known as E Street, Suburb F, City G, Country B (“City G property”) and indemnify the husband from all actions, suits, demands and claims concerning that property.

   (5)That the husband keep in his name and possession the overseas property known as H Street, Suburb J, City K, Country B (“City K property”) and indemnify the wife from all actions, suits, demands and claims concerning that property.

   (6)That the husband account to the wife as to the proceeds of sale of the overseas property known as L Street, Suburb M, City N, Country B (“City N property”) and the proceeds be divided equally between the parties after payment of reasonable expenses.

   (7)That the husband account to the wife as to the proceeds of sale of the overseas property known as O Street, Suburb P, City G, Country B (“City G No 2 property”) and the proceeds be divided equally between the parties after payment of reasonable expenses.

   (8)That the wife and the husband each retain all interest in and entitlement to:

   i)all personal property his/her respective ownership, possession or control;

   ii)all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively;

   iii)all interests in life insurance policies and superannuation funds standing in his/her sole name respectively;

   iv)all interests in business to which either party has an interest in;

   v)all other disclosed properties and/or financial resources now or in the future.

   (9)That each party indemnify the other from and in respect of all actions, claims, suits and demands as may be made against him/her in relation to all liabilities in his/her name.

Documents relied on

1. At trial the husband relied upon the following documents:

   a)Amended Initiating Application filed 3 March 2017;

   b)his financial statement filed 3 March 2017;

   c)his trial affidavit filed 19 April 2017;

   d)the affidavit of Ms Q filed 19 April 2017;

   e)the affidavit of Ms R filed 19 April 2017;

   f)the affidavit of Ms S filed 19 April 2017.

2. At trial the wife relied upon the following documents:

   a)Amended Response to Initiating Application filed 7 April 2017;

   b)her financial statement filed 6 April 2017;

   c)her trial affidavit filed 19 April 2017.

Background

1. The husband, who was born in Country B, at trial was aged 49.

2. The wife, who was born in City G, Country B, at trial was aged 40.

3. The parties married in Country B and commenced cohabitation on 8 August 1988. The parties migrated to Australia in 1996 residing in rented premises in Suburb T.

4. The parties purchased the matrimonial home situated at C Street, Suburb D, “the Suburb D property”, in 1998.

5. The parties separated on 24 December 2014 and divorced in Country B on 14 May 2015.

6. There are two children of the marriage, Ms S born in 1989, now 28 and Ms U born in 1999, now 18.  The child, Ms U, is currently a student at university.

7. The husband says he has been solely responsible for the children since late 2014 and that the children have not spent any time nor communicated with the wife since leaving the Suburb D property in late 2014. At separation the children were aged 25 and 15.

8. The husband receives child support for the youngest child in the sum of $64.00 per week from the wife in accordance with a child support assessment.

9. The wife remarried in 2015 to Mr V.

Property context

1. At the commencement of cohabitation in Country B neither party had assets of significance.

2. The parties lived in Country B until they migrated to Australia. At the time the parties came to Australia the first child was five years of age. They initially lived in rented premises.

3. The husband worked in the performing arts until coming to Australia and then as a factory worker and later in the service industry.

4. The wife worked with Company W from 1997 to 1998, cared for the second child Ms U after she was born from 1999 to 2003, then worked with Company X from 2003 to January 2005 and then worked with Company Y from February 2005 to date.

5. Both parties contributed their income to their household and other expenses.

6. It is not in issue that the wife was the primary homemaker and carer for the children with the husband assisting subject to his work commitments.

The home 

1. The matrimonial home at C Street, Suburb D was purchased in 1998 for about $185,000.00. The purchase price was funded from modest savings and as follows:

   a)A redundancy received by the husband from

   his previous employer:   $  9,000.00

   b)A loan (now repaid) from the wife’s aunt:           $  4,000.00

   c)The balance by way of mortgage to the

   Commonwealth Bank of Australia

2. The Suburb D property is currently registered in the parties’ joint names.

3. The property is currently valued at $675,000.00 with a mortgage balance of about $256,000.00.

4. The husband has resided in the Suburb D property since separation. The husband has paid all mortgage prepayments and utilities with respect to the Suburb D property since separation.

Currency issues

1. It was agreed between the parties that for the purpose of the hearing 1 dollar Country B currency was equivalent to $1,500AUD.

Overseas property transactions

L Street, Suburb M, City N, Country B  

1. The wife purchased the City N property, an apartment in Country B, in 2003 for about $25,000.00AUD. The husband says $70,000.00. No documents were produced as to the purchase.

2. The wife asserts her parents paid $10,000.00 towards the deposit of the City N property but to date have not been repaid. The husband asserts the deposit was from savings. The rent from the property was paid towards the monthly mortgage repayments.  The mortgage was paid off in 2007.

3. The wife asserts that from January 2013 to December 2014 the husband took all the rent proceeds from the property.  The wife is not sure what the husband did with the money from the rent.

4. In early 2014 the parties spoke of purchasing another property in Australia to be funded by the sale of this apartment. The wife provided to the husband’s sister Ms R a power of attorney to sell the apartment.

5. In February 2014 the wife gave Power of Attorney to Ms R Q (the husband’s sister) to sell the City N property.

6. The City N apartment property was sold to Ms Q (the husband’s older sister) for 45B: notwithstanding that the consideration was expressed on documents to be about 23.4B to reduce stamp duty. The wife asserts the husband advised her that the money was paid to him in cash. The husband denies receiving any sale funds.

7. The wife asserts she has not received any money from the sale. The husband’s sister asserts that the wife was paid in person in cash at the Land Titles Office in Country B.

8. This transaction is the subject of much issue between the parties with the husband surprisingly asserting at trial that he had only just found out about the transaction. No evidence was adduced as to the whereabouts of the husband or wife at the relevant time. Both of the husband’s sisters gave supporting evidence and were cross examined.  There was no basis for not accepting their evidence.

9. The parties agree that the property for the purpose of hearing has a value of $81,107.00.

O Street, Suburb P, City G (City G No 2), Country B:

1. The husband purchased in his name O Street, a vacant lot, in 2004 for $70,000.00 in his sole name. The wife asserts the purchase price was about $105,000.00.

2. An initial deposit was paid with the balance being paid by way of instalments to the vendor.  Those instalments ceased on final payment after five years. It is not contended that the funds came from other than matrimonial income.

   The husband’s borrowings:

3. The husband deposes that he received the following advances from his sister, Ms R, however, did not enter into a formal agreement with respect of any of the transactions:

   a)17 October 2000, cash payment – the monies were      $  16,150.00 applied towards medical expenses for his late mother Ms X who was unwell at the time

   b)3 February 2004, cash payment – the monies were      $  23,600.00 applied towards medical expenses for his late father Mr Z Ikbal who was unwell at the time

   c)16 March 2004, cash payment – the monies were $35,600.00 applied towards further medical expenses for his late father Mr Z Ikbal who was unwell at the time

   d)13 November 2010, cash payment – the monies were $5,800.00applied towards expenses while on holiday in Country B celebrating the wedding of the husband’s brother.

4. The husband asserts he has not paid back any of the advances received from his sister.

5. The husband asserts that in 2012 he transferred his interest in this property to Ms R in repayment of the debt he asserts he owed to her. He denies it was occasioned by him receiving notice of the wife’s intended divorce action. He says the wife was aware of the transfer.

6. The value of this property was agreed to be $348,112.00 for hearing.

Husband’s one third share in land at Suburb J, City K (H Street, Suburb J, City K): the City K property.

1. The husband inherited his one third interest (his two siblings the other two thirds) in this City K property in 2004 following the death of his late father.

2. The husband asserts that in 2012 he transferred his interest in this property to his two sisters “for their great hospitality”. The consideration for the transfer was expressed to be 25B.

3. The parties agree that the property interest has a value of $52,210.00 at hearing.

Vacant land at City G, Country B:

1. The wife purchased this property, a vacant lot, in 2005 in the sum of about $86,000.00AUD in her sole name.

2. The deposit was funded by way of the parties’ joint savings with the balance being paid by way of monthly instalments to the vendor.  Those instalments ceased on final payment after a period of five years.

3. It is not contended that the funds came from other than matrimonial income.

4. The parties agree that the land has a value at hearing of $116,027.00. 

Apartment City G, Country B (“City G No 3”)

1. This property, a three bedroom apartment was purchased in 2010/2011 for about $87,000.00AUD in the name of the wife with a loan from AA Finance Limited (a Country B non-banking financial institution) and the balance from savings and the sale of some jewellery.  

2. At the time of purchase the wife signed a power of attorney in favour of her cousin, presumably to manage the property and its finances.

3. On 9 August 2016 the wife entered into a Deed of Agreement for Sale of the property at a sale price of $105,000.00 (agreed as being 65B).The mortgage was discharged in the sum of about $73,618.00.

Property adjustment

1. The approach to the determination of an application under s 79 of the Family Law Act 1975 (Cth) (“the Act”) is set out in Stanford v Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman [2014] FamCAFC 91 and Scott & Danton [2014] FamCAFC 203.

2. The approach ordinarily involves a staged process.

3. The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order. 

4. Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.

5. There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.

6. In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.

7. In particular, such a circumstance arises where both parties seek property adjusting orders but are unable to agree as to same. Such is the present case.

8. Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g), in particular, the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).

9. The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.

The asset pool

1. The parties provided an updated draft balance sheet during the trial (Exh “C1”).

2. The balance sheet reflecting the parties present assets and liabilities was as follows:

   Assets

   Joint              C Street, Suburb D NSW  $  675,000.00

   Wife              Land E Street at City G  $  116,027.00

   Wife              Sale proceeds Apartment City G No 4  $       30,382.00

   Joint              Westpac (ACC …37)  $           50.00

   Husband       German Motor Vehicle  $           5,000.00

   Husband       HSBC (ACC …12)  $           200.00

   Wife              CBA (ACC …44)  $           1,252.00

   Wife              Household contents  $      1,000.00

   Wife              Gold and Jewellery  $     11,330.00

   Husband       Australian Eligible Rollover Fund                  $      1,700.00

   Wife              BT Super  $    39,939.00

   Liabilities

   Joint              Mortgage C Street, Suburb D            $           256,000.00

   Joint              Amex Blue Credit Card #...08   $      4,967.00

   Joint              Coles – Card number #...04  $      3,819.00

   Joint              ANZ – Card number #...07  $      7,750.00

   Joint              Westpac MasterCard #...25  $    10,400.00

   Wife              St George Personal Loan  $    12,154.00

   Wife              NAB Low Fee VISA Credit Card                  $      2,863.00

3. The husband contended for the notional addback to the pool for adjustment the proceeds of sale of the wife’s apartment at L Street, Suburb M, City N, Country B at the agreed figure of $81,107.00. There is conflict in the evidence of the parties and the husband’s sisters, who gave clear and precise evidence when tested, as to the disposition of the funds from the sale. On balance it is accepted that the wife received the funds. 

4. The wife contended for the notional addback to the pool for adjustment of the value of the husband’s land (5B) having an agreed value of $348,112.00 that was gifted by him to his sister being the consideration for repayment of loans unrelated to the matrimonial circumstances but by way of a moral obligation asserted by the husband. The asserted loan advances total just $81,150.00.  The wife suspects that the disposition was to avoid the asset being in the husband’s hands for the purposes of property adjustment. The husband’s explanation is disingenuous at best. The wife should not be deprived from the asset being recognised as matrimonial. It was their joint funds that acquired it. It is appropriate that the value of the property be taken into account.

5. The wife further contended for the addback of the value of the husband’s inherited interest in land that was transferred to his sisters. It is an asset to which the wife asserts no contribution whatsoever. It has an agreed value of $52,210.00.  In the circumstances its disposition will not be considered otherwise than it can be regarded in some way as a partial repayment of funds from the husband’s sister supporting the inclusion of the D Street funds for consideration in the pool.

The adjusted pool:

1. Accordingly the adjusted pool for consideration 

   Assets

   Joint              C Street, Suburb D NSW  $  675,000.00

   Wife              Land at E Street City G  $  127,500.00

   Wife              Sale proceeds Apartment City G                   $     30,382.00

   Husband       Land at D Street City G  $   348,112.00

   Wife               Apartment sale proceeds  $    81,107.00

   Joint              Westpac (ACC …37)  $         50.00

   Husband       German Motor Vehicle  $         5,000.00

   Husband       HSBC (ACC …12)  $         200.00

   Wife              CBA (ACC …44)  $         1,252.00

   Wife              Household contents  $      1,000.00

   Wife              Gold and Jewellery  $     11,330.00

   Husband       Australian Eligible Rollover Fund                $      1,700.00

   Wife              BT Super  $     39,939.00

   Total:  $  1,322,572.00

   Liabilities

   Joint              Mortgage C Street, Suburb D            $         256,000.00

   Joint              Amex Blue Credit Card #...08   $      4,967.00

   Joint              Coles – Card number #...04  $      3,819.00

   Joint              ANZ – Card number #...07  $      7,750.00

   Joint              Westpac MasterCard #...25  $     10,400.00

   Wife              St George Personal Loan  $     12,154.00

   Wife              NAB Low Fee VISA Credit Card                $      2,863.00

   Total:  $  297,953.00

   Net:  $  1,024,619.00

Contributions

1. The parties properly agreed that overall contributions should be regarded as equal save for the issue of the husband’s inherited property referred to above.

2. As that property interest has been excluded for the reasons given above there will be no adjustment to the agreed equal contribution issue.   

Section 75(2): relevant considerations

1. The wife is aged 40 and asserts no relevant health issues. The husband is aged 49 and has no relevant health issues apart from sleep apnoea and blood pressure.

2. The husband asserts he is employed on a full-time basis in the service industry earning over $600.00 per week. There is some circumspection that such represents his actual income. He is receiving $64.00 per week child support from the wife in accordance with the child support assessment. He is assisted financially by the eldest child.

3. The wife is in full time employment earning about $800.00 per week.

4. Both children live with the husband, however, the eldest child works full-time and is not dependent on him.  The husband does, however, have the ongoing primary care of the child, Ms U, now aged 18 who is currently a student at university.  Her degree is funded by HELP and she works one day per week in retail.

5. The husband has retained occupation of the matrimonial home but has continued to make mortgage payments.

6. The wife has remarried and is currently living with her husband in rental premises paying $70.00 per week in rent.

7. The parties properly agreed that there was no factor in s 75(2) that would necessitate any adjustment to the equality of contributions save as to what approach the Court adopted as to “addbacks” asserted to the asset pool that may enliven s75(2)(o).

8. As the question has been resolved by a notional pool for adjustment there will be no s 75(2) adjustment accordingly.

9. Orders proposed to be made do not impact on the earning capacity of either party: s 79(4)(d).

Conclusion

1. The wife is entitled to one half of the pool found for adjustment purposes.

2. The net pool is $1,024,619.00. She is to receive $512,309.50.00.

3. She has or notionally has:

   Wife              Land at E Street, City G  $  127,500.00

   Wife              Sale proceeds City G (No 3)  $     30,382.00

   Wife              Apartment sale proceeds   $     81,107.00

   Wife              CBA (ACC …44)  $         1,252.00

   Wife              Household contents  $      1,000.00

   Wife              Gold and Jewellery  $     11,330.00

   Wife              BT Super  $     39,939.00

   $  292,510.00        

   Less:

   Wife              St George Personal Loan  $     12,154.00

   Wife              NAB Low Fee VISA Credit Card                $      2,863.00

   $     15,017.00

   Net:             $  277,493.00

4. The wife is thus entitled to an adjusting payment from the husband of $234,816.50. In consideration of such payment the wife shall transfer her interest in the unit at Suburb D to the Husband.

5. In default the home unit will be sold with the proceeds of sale adjustment to achieve an overall equal distribution by reason of the pool set out in [45] above.

6. Such an outcome in all the circumstances is just and equitable.

7. Orders will be made accordingly.

I certify that the preceding eighty-four (84) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 1 December 2017.

Associate:

Date:  30 November 2017