JALAL & MALKI
[2021] FamCA 637
FAMILY COURT OF AUSTRALIA
| JALAL & MALKI | [2021] FamCA 637 |
| PROPERTY SETTLEMENT – Just and equitable |
| Family Law Act 1975 (Cth) s 79 |
| Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116 Hepworth v Hepworth (1963) 110 CLR 309; [1963] HCA 49 Lovine & Connor and Anor (2012) FLC 93-515; [2012] FamCAFC 168 Mallet v Mallet (1984) 156 CLR 605; [1984] HCA 21 Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52 Steinbrenner & Steinbrenner [2008] FamCAFC 193 |
| APPLICANT: | Ms Malki |
| RESPONDENT: | Mr Jalal |
| FILE NUMBER: | BRC | 2053 | of | 2016 |
| DATE DELIVERED: | 27 August 2021 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Hogan J |
| HEARING DATE: | 1 and 2 March 2021 and by way of written submissions filed 9 March 2021 and 15 March 2021 |
REPRESENTATION
| THE APPLICANT: | In person and then by way of written submissions filed 9 March 2021 |
| COUNSEL FOR THE RESPONDENT: | Mr MacDonald and by way of written submissions in reply filed 15 March 2021 |
| SOLICITOR FOR THE RESPONDENT: | Stuart Percy & Associates |
Orders
IT IS ORDERED BY WAY OF FINAL ORDER THAT
All previous Orders are discharged.
Within fourteen (14) days of them having been provided to her by the Respondent, the Applicant shall sign such documents as are necessary to cause her to resign from and otherwise cease to have any involvement in the following entities:
(a)the W Trust, being the discretionary trust established by Deed dated 28 November 2008 between Ms X as settlor and W Pty Ltd as trustee; and
(b)the D Investments Trust, being the discretionary trust established by Deed dated 15 July 2004 between Ms X as settlor and D Pty Ltd as trustee; and
(c)the C Family Trust, being the discretionary trust established by Deed dated 6 August 2003 between Mr V as settlor and W Pty Ltd as trustee; and
(d)the E Trust, being the discretionary trust established by Deed dated 3 February 2006 between Ms X as settlor and E Pty Ltd as trustee; and
(e) F Pty Ltd ACN …; and
(f) G Pty Ltd ACN …; and
(g) W Pty Ltd ACN …; and
(h) H Pty Ltd ACN …; and
(i) J Pty Ltd ACN …; and
(j) K Pty Ltd ACN …; and
(k) L Pty Ltd ACN …; and
(l) E Pty Ltd ACN …; and
(m) D Pty Ltd ACN ….
For the purposes of Order (2) herein:
(a)the Applicant shall, within fourteen (14) days of being provided with the same by the Respondent, sign all such documents as may be required to:
(i)transfer or otherwise assign to the Respondent all shareholdings or interest of any nature whatsoever she has in any of the entities listed in Order (2); and
(ii)facilitate the appointment of the Respondent, or a person nominated in writing by him, as a director and/or secretary of any of the entities listed in Order (2) in her place; and
(iii)do all such acts and things and sign all necessary documents to transfer to the Respondent, or his nominee, all of her interests of any nature whatsoever, including any credit loan accounts or unpaid present entitlements, in all of the trusts listed in Order (2); and
(iv)assign to the Respondent any loan account standing to her credit or debit in any of the entities or trusts listed in Order (2) and provide to him a full release and discharge from and against any claim, right, entitlement or interest in any such loan account in the listed entities or trusts; and
(v)renounce and forego any power, right, interest or entitlement (legal and beneficial) in or to the entities or trusts listed in Order (2); and
(vi)ensure her removal as a guarantor of any commercial facilities related to any of the entities and trusts listed in Order (2).
(b)the Respondent shall, within twenty-eight (28) days, do all things necessary to have the Applicant released as a guarantor of any commercial facilities related to any of the entities and trusts listed in Order (2).
Upon compliance with the terms of Orders (2) and (3), the Applicant and the Respondent do all things and sign all documents necessary to cause Davidson & Sullivan Lawyers to pay the funds held in trust on behalf of the parties, being the balance of the nett sale proceeds of the sale of real property situated at M Street, C Town in the State of Queensland, and more particularly described as Lot … on Survey Plan …, Title reference … and any interest accumulated on the same, in the following manner:
(a)to the Respondent: the sum of $200,000.00 if he has already been paid $20,000.00 in accordance with the Order made on 6 August 2020 or $220,000.00 if this payment has not yet been made; and
(b) to the Applicant: the balance.
The Applicant shall make the motor vehicle owned by W Pty Ltd available for collection by the Respondent within seven (7) days of the payment to her of the funds referred to in Order (4).
Except as otherwise provided for in this Order, the Applicant retain as her absolute property and is entitled to be the sole legal and beneficial owner of and to retain sole use and control of:
(a)the funds paid to her pursuant to Order (4); and
(b)the $20,000.00 paid to her pursuant to Order 7e of the Orders made by consent on 6 August 2020; and
(c)any other funds held in all bank accounts in her sole name; and
(d)the furniture, household contents and other chattels currently in her name or possession in both Australia and Country Q; and
(e)her superannuation entitlements, including her interests with O Super Fund and P Super Fund, and
(f)all other proprietary interests of whatsoever nature in her current possession or under her control.
The Applicant retain sole liability for and indemnify the Respondent with respect to:
(a)her student loan, HECS or HELP debt; and
(b)her credit card liabilities; and
(c)any other loan, lease or credit card liability held or registered in her sole name in both Australia and Country Q.
Except as otherwise provided for in this Order, the Respondent retain as his absolute property and is entitled to be the sole legal and beneficial owner of and to retain sole use and control of:
(a)the funds paid to him pursuant to Order (4); and
(b)the $20,000.00 paid to him pursuant to Order 7f of the Orders made by consent on 6 August 2020; and
(c)all entities and trusts listed in Order (2) and any and all income, investments, assets and tax credits (if any) therefrom; and
(d)the funds held in all bank accounts in his sole name; and
(e)the furniture, household contents and other chattels currently in his name or possession; and
(f)his superannuation entitlements, including his interests with R Super Fund; and
(g)all other proprietary interests of whatsoever nature in his current possession or under his control.
The Respondent be solely liable for and indemnify the Applicant absolutely in relation to:
(a) his credit card liabilities; and
(b)any and all liabilities of whatsoever kind and all actions and claims whenever made in relation to or arising from those entities and trusts listed in Order (2), including those arising for her as a consequence of any loan shown in the books of account of any listed entity or trust as being owed by the Applicant to the same or from any unpaid present entitlements recorded as owing to the Applicant by any entity or trust listed in Order (2); and
(c)any other loan, lease or credit card liability held or registered in his sole name.
Other than as is specifically provided for in these Orders, the parties are solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of each of the parties as at the date of the making of these Orders.
The Applicant and the Respondent shall execute all deeds, instruments or documents and do all acts and things necessary to give effect to these Orders within fourteen (14) days of a written request to do the same.
In the event that either party refuses or neglects to do any act or sign any document required to be done or executed in compliance with the provisions of these Orders fourteen (14) days after being requested to do so, and any such refusal, failure or neglect is proved by affidavits filed and served by or on behalf of the party alleging this, then, pursuant to s 106A of the Family Law Act 1975 (Cth), a Registrar of the Family Court of Australia at Brisbane is hereby appointed to execute all deeds and documents in the name of the defaulting party and do all acts and things necessary to give validity and operation to these Orders.
AND IT IS FURTHER ORDERED THAT
In the event that any party seeks an order that the other party pay his or her costs:
(a)if thought necessary by a party, that party has leave to file a further affidavit by that party containing any evidence relevant to the issue of costs and one other affidavit in support of the same, provided that such affidavits are filed within seven (7) days of the date of this Order; and
(b)any such party shall file and serve any written submissions in support of such application for costs within seven (7) days of today; and
(c)the party against whom an order for costs is sought shall, within a further seven (7) days thereafter, file and serve any brief written submissions in answer to the submissions filed and served by the party seeking costs; and
(d)the party seeking an order for costs shall file and serve any brief further written submissions within seven (7) days of its service, strictly in reply to the submissions served by the party against whom an order for costs is sought,
and any such application for costs shall be considered in Chambers.
AND IT IS FURTHER ORDERED THAT
Save as is otherwise ordered herein, no party is permitted to use any documents provided to them in the course of this proceeding for any purpose other than this proceeding or any appeal in respect of these Orders.
All outstanding Applications are dismissed.
This matter be removed from the Pending Cases 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 Jalal & Malki 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 BRISBANE |
FILE NUMBER: BRC 2053 of 2016
| Ms Malki |
Applicant
And
| Mr Jalal |
Respondent
REASONS FOR JUDGMENT
Ms Malki (the Applicant), who was born in 1965, and Mr Jalal (the Respondent), who was born in 1971, started to live together in about September 1997 and married in 1997. They have no children together. They separated in about September 2011 and remain unable to agree about how to finalise their property adjustment proceedings.
The Applicant is qualified to PhD level; the Respondent is a professional. In the lead up to the trial, the Applicant was financially supported by a combination of casual work and Centrelink benefits, whilst the Respondent remained self- employed.
One of the consequences of the parties’ voluntary separation in late 2011 is that they no longer enjoy the common use of property in which their existing legal and equitable interests were acquired during their cohabitation and subsequent marriage. Another consequence is the cessation of any “assumption that any adjustment to those interests could be effected consensually as needed or desired”.[1] I accept that, in the circumstances of this case, it is just and equitable within the meaning of s 79(2) of the Family Law Act 1975 (Cth) that, pursuant to s 79(1) of the Act, orders altering the interests in property owned by each of them are made.[2]
[1] Stanford v Stanford (2012) 247 CLR 108 at [42].
[2] Ibid at [42].
Given this conclusion, it is necessary to resolve the conflict between the parties about the terms of the orders which are appropriate to reflect properly those matters which, by s 79(4) of the Act, must be considered.
The competing proposals
The Applicant
The Applicant proposed that it was just and equitable that orders be made to ensure that she receive and/or retain the following property: the entirety of the nett sale proceeds obtained from the sale of real property located at M Street, C Town[3] (likely to be in the amount of about $330,823.00[4]); the entirety of her entitlement to superannuation held with P Super Fund and O Super Fund (of $338,428.00); the real property owned by her in Country Q (valued at about $19,840.00); all chattels and property currently owned by her and in her possession or under her control, whether in Australia or in Country Q; and that the Respondent pay her funds in whatever amount is necessary to see her receive property valued at 60 per cent of the nett value of the total property of the parties.
[3]More particularly described as Lot … on Survey Plan …, Title reference ….
[4]An indicative amount only and exclusive of the deduction of the costs of sale but inclusive of the payment to each party of the $20,000.00 provided for by the order made by consent on 6 August 2020.
The Applicant proposed that the Respondent receive and/or retain: the real property located at B Road, C Town[5] (likely to have a nett value of about $341,355.00); his entitlement to superannuation with R Super Fund (of $77,658.00); the shares he owns in the various corporate entities which constitute the Jalal Group; the shares she owns in some of the corporate entities included within the Jalal Group; the $20,000.00 paid to him as a consequence of the 6 August 2020 Order[6]; and all chattels and property currently owned by him and in his possession or under his control. She also proposed that he indemnify her in respect of all liabilities, of whatever nature and whenever arising, associated with the various corporate entities for which she has previously been a director or in which she remained a shareholder as at the date of trial.
[5]Owned by D Pty Ltd atf D Investments Trust.
[6]Inferred given that no submissions were made about this issue.
The Respondent
The Respondent proposed that it was just and equitable that orders be made to ensure that he receive a payment of $220,000.00[7] from the nett sale proceeds of the M Street property (with the Applicant to receive the balance of the same); that he receive and/or retain all of the entities and trusts constituting the Jalal Group (which would effectively see him receive property valued at no less than about $341,355.00[8]); that he retain his entitlement to superannuation ($77,658.00) and all chattels and property currently owned by him and in his possession or under his control and that the Applicant return to him a motor vehicle owned by W Pty Ltd. He proposed that he indemnify the Applicant, generally as she sought.
[7]I infer, in addition to the $20,000.00 he is to receive pursuant to the terms of the 6 August 2020 consent order, although no submissions were made about this issue to clarify whether the Respondent sought to receive $220,000.00 in total (inclusive of the $20,000.00 ordered by the August 2020 Order) or $240,000.00.
[8]Being the nett value of B Road C Town, owned by D Pty Ltd atf D Investments Trust.
The property of the parties and related issues
I find the property of the parties and their respective entitlements to superannuation to be as set out in the table below. I do so based on: the parties’ agreement about the manner in which I should arrive at the value to be attributed to various chattels in the absence of expert evidence about the same; my decision, given the very significant time that has passed since the parties separated, to exclude those liabilities each party has as at the date of the trial from consideration in arriving at the nett value of the property of the parties; my determination that, in attributing value to the various entities and trusts which the Respondent has referred to collectively as constituting “the Jalal Group”, the most appropriate course is simply to take in the nett value of the real property situated at B Road, C Town[9] as it is the only asset of any significant value held within the Group.
[9]Owned by D Pty Ltd atf D Investments Trust.
| Asset | Ownership | Value |
| M Street property | Sold and nett sale proceeds held in trust | Approx. $330,823.00[10] |
| B Road, C Town | D Pty Ltd atf D Investments Trust [part of the Jalal Group] | $407,616.00[11] |
| Vacant land in Country Q[12] | Applicant | $19,840.00[13] |
| Ride On Mower | Applicant | $450.00[14] |
| Household contents | Applicant | $1,000.00[15] |
| Husqvarna edge trimmer | Respondent | $100.00[16] |
| Household contents | Respondent | $15,000.00[17] |
| Vintage engine | Respondent | $4,350.00[18] |
| Cabinet | Respondent | $1,750.00[19] |
| Diamond engagement ring | Respondent | $5,000.00[20] |
| Coin collection | Respondent | $15,000.00[21] |
| Stamp collection | Respondent | $1,000.00[22] |
| Australia Post album stamp collection | Respondent | $2,000.00[23] |
| Vintage tractors and engines | Respondent | $20,000.00[24] |
| D Pty Ltd D Investments Trust F Pty Ltd G Pty Ltd W Pty Ltd W Trust K Pty Ltd BB Family Trust E Pty Ltd E Trust L Pty Ltd H Pty Ltd J Pty Ltd T Pty Ltd U Pty Ltd | Various | $NIL[25] |
| Superannuation | ||
| P Super Fund | Applicant | $338,024.00[26] |
| O Super Fund | Applicant | $404.00[27] |
| R Super Fund | Respondent | $77,658.00[28] |
| Total non superannuation property | $823,929.00 | |
| Total superannuation | $416,086.00 | |
| Total | $1,240,015.00 |
[10]On the basis that I have notionally added back the $20,000.00 each party is entitled to have been paid upon the settlement of the sale of the M Street property as provided for in the 6 August 2020 Order.
[11]See S Report 24 February 2021: using WBC liability and Y Valuers valuation of $650,000.00 as at 5 February 2021.
[12]Remaining balance of inherited land following sale of a portion of the same to realise funds applied toward the purchase of the M Street property.
[13]Applicant’s Balance Sheet filed 5 February 2021; Respondent’s Balance Sheet filed 28 February 2021.
[14]Applicant’s Balance Sheet filed 5 February 2021; Respondent’s Balance Sheet filed 28 February 2021.
[15]Applicant’s Balance Sheet filed 5 February 2021; Respondent’s Balance Sheet filed 28 February 2021.
[16]Respondent’s Balance Sheet filed 28 February 2021.
[17]Valued by method agreed during the trial.
[18]Valued by method agreed during the trial.
[19]Valued by method agreed during the trial.
[20]Applicant’s Balance Sheet filed 5 February 2021; Respondent’s Balance Sheet filed 28 February 2021.
[21]Valued by method agreed during the trial.
[22]Applicant’s Balance Sheet filed 5 February 2021; Respondent’s Balance Sheet filed 28 February 2021.
[23]Valued by method agreed during the trial.
[24]Valued by method agreed during the trial.
[25]Given: the value attributed to the Jalal Group in the 24 February 2021 S Report of $399,100.00; that the primary asset of the Group is the real property at B Road, C Town and the Respondent’s acceptance of the approach of using the equity in that property as the value of the Group.
[26]Applicant’s Balance Sheet filed 5 February 2021; Respondent’s Balance Sheet filed 28 February 2021.
[27]Applicant’s Balance Sheet filed 5 February 2021; Respondent’s Balance Sheet filed 28 February 2021.
[28]Applicant’s Balance Sheet filed 5 February 2012; Respondent’s Balance Sheet filed 28 February 2021.
The Respondent contended that the property of the parties for the purpose of this aspect of the approach to determining those orders which are just and equitable should include the following as being in the Applicant’s possession or under her control: livestock (at an asserted total value of $8,313.00); a tractor (at an asserted value of $8,500.00); Howard slasher (at an asserted value of $2,000.00); and a Honda generator (an asserted value of $150.00). However, I accept the Applicant’s evidence to the effect that, in the time since the September 2011 separation, she has sold these items for a total of about $14,650.00,[29] which she has applied to her financial support.
[29]Comprising: about $4,000.00 for the cattle; $8,500.00 for the tractor; $2,000.00 for the slasher and $150.00 for the generator.
The Respondent also contended that the Applicant continued to own a one-third share in an apartment in Country Q which had been bought in December 2011 for approximately $17,040.00. Whilst he also ultimately accepted the value attributed by the Applicant at one stage to this apartment (in the amount of about $40,000.00), the Applicant’s evidence included that she had in fact sold her interest in the apartment for about $17,446.00 and had applied the funds she received to her living expenses and maintenance costs associated with the M Street property. Whilst Counsel for the Respondent submitted that, in the absence of documentary evidence corroborating the Applicant’s account, I should reject her evidence and find that she continues to own a one-third interest in the apartment, I have, on balance, decided to proceed on the basis of an acceptance of the Applicant’s evidence about the apartment. My acceptance of her evidence about her disposal of it and the use to which she has put the funds she received from it does not derogate from the facts that it was bought by funds which had been accumulated by the parties during their cohabitation and that only she received the benefit of the same after separation.
In the exercise of what has been referred to as the “discretion within a discretion” to determine the manner in which the issue of notional add-backs are to be treated within the exercise of the overarching discretion of determining just and equitable orders under s 79 of the Act,[30] I decline to notionally add back the amounts discussed above for the purpose of calculating the nett value of the property of the parties. Rather, I will have regard to the fact of the Applicant’s receipt of these funds from the sale of property after separation pursuant to s 75(2)(o) of the Act.[31] I will similarly take into account the Respondent’s assertion that the Applicant should, in essence, bear the entirety of the $25,000.00 reduction in the price obtained for the M Street property because of her failure in the time since September 2011 to ensure that the property did not suffer termite damage.
[30]Lovine & Connor and Anor (2012) FLC 93-515 at [103].
[31]See, for example: Bevan & Bevan (2013) FLC 93-545 per the plurality at [79] and per Finn J at [160].
Whilst I accept that the Respondent caused W Pty Ltd to pay salary and bonus payments to his partner and that various of her educational, travel and personal expenses have been met from the same source in the period following the September 2011, I am not persuaded that these payments have “depleted” the value of the property of the parties for the purpose of these proceedings, especially given the quantum of the payments the Respondent caused W Pty Ltd to make for the Applicant’s support and benefit during the same period.
The s 79(4) considerations
In considering the relevant matters mandated by s 79 of the Act, it must be remembered that:
a)“community of ownership arising from marriage has no place in the common law”;[32] and
b)there is no presumption of equality of contribution between parties to a marriage, irrespective of the length of their union;[33] and
c)the exercise of the discretion conferred must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity.[34]
[32]Stanford v Stanford (2012) 247 CLR 108, [39] citing Hepworth v Hepworth (1963) 110 CLR 309, 317 per Windeyer J.
[33] Mallet v Mallet (1984) 156 CLR 605.
[34] Bevan & Bevan (2013) FLC 93-545 at [73].
I accept the submission made by Counsel for the Respondent to the effect that, despite the passage of time since separation, it is appropriate and just in the circumstances of this case that the Court approach the assessment of the parties’ respective contributions to the property of the parties on a global basis, rather than on an asset by asset basis. I do so because, despite the time that has passed since the parties separated in September 2011, the assets of relatively significant value which remain for consideration are assets which existed at the time of separation and I consider it more likely than not that any increase in the value of the same (for example, in the value of the M Street property, the B Road property and in each of the parties’ respective entitlements to superannuation) has been the result of market influences rather than any particular or specific contribution by a party.
The parties’ contributions until separation
It is, I consider, unnecessary to specifically particularise all of the myriad contributions, financial and non-financial, made by each party prior to their separation in September 2011. I accept that each of them, on occasions, made greater financial contribution than the other; I accept that the Applicant initially supported the Respondent financially when he left paid employment to commence the business ultimately run through W Pty Ltd; I accept that funds earned by the Applicant from her paid employment[35] and funds earned by the Respondent via his operation of W Pty Ltd were applied to meet the parties’ general living expenses, including mortgage repayments, and toward other maintenance costs; I accept that both parties contributed to and supported each other during the course of their relationship in varying ways; I accept that both made contributions to the development and operation of the business operated via W Pty Ltd and that both contributed to the operation of their household and maintenance of the properties in which they lived at various times.
[35]I note that the Respondent accepted that the Applicant had contributed about $800,000.00, sourced in her earnings and inheritance, to the acquisition and maintenance of property and to the financial support of the parties during their cohabitation.
Insofar as the Applicant’s inheritance is concerned, I generally accept that, of the $47,000.00 she obtained following the sale by her of inherited property, $32,881.00 was applied to the November 2009 purchase of the M Street property[36] (for $505,000.00, with the balance of the purchase price being met by borrowings of $404,000.00 and joint savings) and the balance was applied to, and for, the parties’ joint endeavours and/or their support.
[36]Held in only the Applicant’s name for asset protection reasons.
I accept generally that, save for the contribution by the Applicant of approximately $47,000.00 received by her as a consequence of inheritance, the parties contributed equally until their separation.
The parties’ contributions from separation until trial
It is uncontentious that the Applicant remained living in the M Street property after separation until its sale earlier this year.
I accept that, after separation, the mortgage repayments for the loan secured over the M Street property continued to be made by W Pty Ltd until 22 February 2018 and that the total amount paid after separation was about $201,780.00.
I also accept that after separation, the Applicant made the following direct financial contributions in relation to the M Street property in which she lived:
a)$27,905.00 by way of mortgage repayments; and
b)$14,500.00 drawn from her superannuation in June and July 2020; and
c)$3,136.00 in relation to meet costs associated with fixing fences, lantana control and mowing; and
d)$1,824.00 towards insurance for the property; and
e)$9,400.00 toward rates; and
f)$4,775.00 to fix and have underground power lines installed; and
g)$2,500.00 to pay for utilities.
I accept that, the Applicant used a redundancy payment of $73,129.00 she received in January 2013 to support herself and meet some of the ongoing maintenance costs associated with the M Street property whilst she undertook further study she started in 2014.
I accept that, after separation, the Respondent, via entities under his control, continued to be responsible for ensuring that the mortgage repayments relating to the B Road property (in an amount of about $330,958.00) continued to be made and that the other costs associated with the retention of that property continued to be met.
I accept that, from separation until 21 February 2017, the Respondent caused W Pty Ltd to continue to deposit funds into a bank account used by the Applicant and that these funds were used by her to pay for electricity, rates at times, car expenses, food, medical expenses and other household bills. Whilst the Respondent contended that the total of the funds made available for the Applicant’s use was in the amount of $142,718.00, the Applicant accepted only that a total of about $110,342.00 had been provided. On either scenario, it is clear that the Applicant received the benefit of relatively significant financial support in this manner from W Pty Ltd in the period from separation in September 2011 until early 2017.
I accept that, having received an inheritance of about $179,983.00 in early November 2017, the Respondent applied the same to W Pty Ltd.
Conclusions about contributions
In assessing the contributions made by the parties, the Court embarks upon a process involving the exercise of a broad discretion in respect of which reasonable minds may differ. Whilst this process is neither an accounting or mathematical exercise, it does involve a movement from a “qualitative evaluation of contributions to a quantitative reflection of such evaluation” – that is, a “leap” from words to figures.[37]
[37]Steinbrenner & Steinbrenner [2008] FamCAFC 193 per Coleman J at [234].
As noted earlier, I consider that, but for the application by the Applicant of her inheritance to joint purposes, the contributions of the parties to separation were equal. I also consider it undeniably clear that, in the period since separation, the Respondent has made the overwhelming contributions to the conservation and maintenance of the property the subject of consideration in these proceedings. These contributions enabled the Applicant to live in accommodation without having to make any direct financial contribution to the costs of the same for about six years after the parties separated – during which time she was able to undertake and complete further study; in addition, she was provided with funds from which she was able to meet many of her day-to-day living expenses.
Even taking into account the financial and other contributions made by the Applicant to the M Street property (including those made following her receipt of an inheritance) and the fact that it is more likely than not that the Respondent gained some benefit from not having to bring the parties’ financial inter-relationship to an end earlier than is the case (for example, by being able to continue to operate the Jalal Group as he had prior to separation without having to take steps to have the Applicant – the sole legal owner of the M Street property – removed as a guarantor of various financial accommodations extended to the Jalal Group), the quantum of the financial contributions made by the Respondent after the September 2011 separation are such as to persuade of the conclusion that the quantification of contributions favour him.
Given the orders sought by the Respondent, it is, I consider, unnecessary that I further quantify further the significant post-separation financial contributions he made.[38]
[38]Noting that the requirement is to make orders which are just and equitable, not to express conclusions in percentage terms.
None of the orders proposed by either party will have any effect on the earning capacity of either party.
Relevant s 75(2) matters and conclusions about the same
I consider that it is more likely than not that the Applicant’s future financial situation will be significantly more precarious than that faced by the Respondent. Whilst she is very qualified, I accept that she has faced significant difficulty in obtaining paid employment; given her age, I think it more likely than not that she will continue to face such difficulties into the future. I accept that she was supported by receipt of Jobseeker payments between the end of April 2020 until she started paid employment on a casual and temporary basis in mid-November 2020. I accept that since about mid-November 2020, she has worked for anywhere between 10 and 36 hours per week, for which she has been paid $36.00/hour (gross).
I also accept that the Applicant has various liabilities which will need to be met, including a HELP loan of $27,200.00, funds borrowed from her mother and the amount of $5,000.00 (which she borrowed to pay toward the costs of the forensic report in these proceedings). I accept that, given the car she has been using is owned by W Pty Ltd and will need to be returned to that entity, she will have to purchase a car for her own use.
Whilst the Applicant has superannuation entitlements totalling $338,428.36, she will not be able to access the same (absent meeting a condition of release prior to then) until early 2025.
I accept that, since the September 2011 separation, the Applicant has obtained the sole benefit from the funds received from the sale of the property discussed in paragraphs 9 and 10 above.
Whilst I accept that the self-employed Respondent has, more recently, suffered a financial set-back as a consequence of difficulties associated with a project undertaken with Company N, the evidence suggests that he has a secondary income stream available to him – namely, that associated with him acting as an expert witness in litigation. On balance, as noted above, I consider his future financial circumstances to be likely to be superior to those of the Applicant. I note that he is financially responsible for a soon-to-be four year old child, has the liabilities about which he has given evidence and has some medical issues – although, given the gross receipts from the same demonstrated in the accounts exhibited to his affidavit, the same do not seem to me to have adversely impacted his capacity to undertake work as an expert witness.
The Respondent asserted that the Applicant’s failure to agree to sign, in her capacity as a director of D Pty Ltd, an extension of a commercial lending facility meant that he was denied the cash flow that would have enabled him to continue in his venture with Company N – and thereby caused him financial loss – and exposed him to additional fees and a higher interest rate on the borrowings. Even if that was the case, I am not persuaded that the Applicant, a guarantor of such borrowings, acted unreasonably, particularly given the concurrence of the cessation of W Pty Ltd making the mortgage repayments for the M Street loan and the request to execute the extension, the absence of any knowledge about the Respondent’s intended use of the funds to be made available by an extension of the facility and the fact that it appears to have been the Respondent’s intention to have the same loaned to an entity in which she had no interest.
What orders are just and equitable?
On the basis of the conclusions outlined above and having regard to the parties’ respective contributions to trial and the relevant s 75(2) matters, I consider that those orders which are just and equitable are orders which will result in:
a)the Applicant receiving a cash payment of about $110,000.00 (inclusive of the $20,000.00 already payable to her by virtue of the 6 August 2020 Order) and retaining her entitlement to superannuation and the chattels and property in her possession and under her control (other than the shares which it is agreed she should transfer to the Respondent) and being indemnified by the Respondent in the manner particularised; and
b)the Respondent receiving a cash payment of $220,000.00 (inclusive of the $20,000.00 already payable to him by virtue of the 6 August 2020 Order) and retaining his entitlement to superannuation and the chattels and property in his possession and under his control and will receive a transfer of the Applicant’s shares in the relevant entities within the Jalal Group and the assignment of any of her other entitlements and/liabilities in respect of the same.
The consequence for the parties of the orders to be made is that the Applicant will receive property and entitlement to superannuation having a total value of about $469,718.00 (representing about 37.88[39] per cent of the nett value of the total property of the parties), whilst the Respondent will receive property and entitlement to superannuation having a total value of $769,474.00 (representing about 62.05 per cent of the nett value of the total property of the parties). The conclusion that this is just and equitable in the circumstances of this case also takes into account that the Applicant has already had the benefit of the receipt of about $32,096.00,[40] the s 75(2) considerations discussed above and a consideration of the issue of the $25,000.00 reduction in the sale price of the M Street property consequent on termite damage.
[39]Depending on the actual nett sale proceeds – see footnote No. 4.
[40]See: paragraphs 9 and 10 above.
It is, I consider, just and equitable and appropriate that the Respondent receive a payment in cash from the remaining nett sale proceeds of the sale of the M Street property rather than by way of a superannuation-splitting order because: he has the obligation to support a young child; receiving a cash payment will enable him to apply the same to the ongoing operation of the business he operates through the Jalal Group; and he will be unable to access any entitlement to superannuation until about mid-2023.
Whilst Counsel for the Respondent submitted that orders should be made to ensure that the funds currently held in the solicitors’ trust account are preserved pending the filing of any application for an order for costs, I consider that the terms of the orders made are such as to allow any application for an order for costs to be considered before the likely payment out by the solicitors of the funds held in trust.
For the reasons outlined above, I consider that the orders set out at the commencement of these Reasons will, as far as practicable determine the financial relationships between the parties and are the orders which are just and equitable appropriate to be made.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 27 August 2021.
Associate:
Date: 27 August 2021
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