Karimi & Shah

Case [2022] FedCFamC1F 741

Federal Circuit and Family Court of Australia

(DIVISION 1)

Karimi & Shah [2022] FedCFamC1F 741

File number(s): SYC 6153 of 2017
Judgment of: ALTOBELLI J
Date of judgment: 29 September 2022
Catchwords: FAMILY LAW – PROPERTY – Property adjustment – Issues of disclosure – Where husband seeks to withdraw admissions made by way of a Notice to Admit Facts – Consideration of Kennon & Kennon – Finding of family violence – Dowry – Where the full value of various properties situated in Country B cannot be realised in Australia due to sanctions imposed on the overseas transfer of such property – Final property orders made.
Legislation:

Family Law Act 1975 (Cth) ss 75, 79, 90C, 102NA

Family Law Rules 2004 (Cth) rr 11.07, 11.08, 11.09

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 8.03

Federal Circuit Court Rules 2001 (Cth) r 15.31

Federal Court Rules 2011 (Cth) Pt 22
Cases cited:

Benson & Drury (2020) FLC 93-998; [2020] FamCAFC 303

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

Deangrove Pty Ltd v Commonwealth Bank of Australia [2003] FCA 268

Drabsch v Switzerland General Insurance Co Ltd (1996) 130 FLR 127

Hashim & Hashim [2012] FamCA 135

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

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

Keating & Keating (2019) FLC 93-894; [2019] FamCAFC 46

Kennon v Kennon (1997) FLC 92-757; [1997] FamCA 27

Khadem & Dabiri [2020] FamCAFC 321

Lo Pilato (liquidator) v Barclays Workshop Pty Ltd (in liq) [2013] FCA 729

Mehra & Bose (No.3) [2013] FCCA 2273

Mendicino & Mendicino and Ors (No. 4) [2015] FamCA 485

Singh & Dala [2017] FCCA 2945

Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52

Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173

Weir and Weir (1993) FLC 92-338; [1992] FamCA 69
Division: Division 1 First Instance
Number of paragraphs: 150
Date of hearing: 23–25 May 2022, 2 June 2022
Place: Sydney
Counsel for the Applicant: Mr O’Brien
Solicitor for the Applicant: Diana Perla & Associates
Counsel for the Respondent: Mr Guterres
Solicitor for the Respondent: Fox & Staniland Lawyers

ORDERS

SYC 6153 of 2017

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

MS KARIMI

Applicant
AND:

MR SHAH

Respondent

order made by:

ALTOBELLI J

DATE OF ORDER:

29 September 2022

THE COURT ORDERS THAT:

1.Within 28 days of the date of these orders:

(a)the Respondent husband (“husband”) do all acts and things and sign all documents to transfer to the Applicant wife (“wife”) the property at C Street, Suburb D, also known as E Street, Suburb F and more fully described as Folio Identifier … ("the Suburb D property");

(b)the wife do all acts and things and sign all documents necessary to discharge the mortgage to Westpac Banking Corporation Registered No. … ("the Westpac mortgage") and/or refinance the Westpac mortgage over the Suburb D property.

2.In the event that the wife…

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AGLC
Karimi & Shah [2022] FedCFamC1F 741
Case
[2022] FedCFamC1F 741
Decision Date

CaseChat Overview and Summary

The applicant, Ms Karimi, filed an application under section 79 of the Family Law Act 1975, seeking an alteration of the property interests between her and the respondent, Mr Shah. The central dispute involves the division of assets accumulated during their marriage, specifically focusing on a commercial property and the former matrimonial home. The wife alleges that she is entitled to a dowry as per their marriage agreement and seeks equitable distribution of the assets. The husband contests the wife's claims, asserting that the assets should be divided according to their respective contributions and needs. The court was tasked with determining the just and equitable division of the matrimonial property, taking into account the contributions of each party, both financial and non-financial, as well as the welfare of any children of the marriage.

The court considered several factors, including the husband's substantial pre-marriage savings and business success, the wife's allegations of family violence, and the binding financial agreement that was later set aside. The court examined the contributions made by each party to the acquisition, conservation, and improvement of the matrimonial property, as well as their respective earning capacities and the standard of living that would be reasonable post-separation. Additionally, the court assessed the impact of any proposed order on the earning capacity of either party and the overall welfare of the children. The court also reviewed the terms of any financial agreements that were in place and any other relevant factors under section 75(2) of the Family Law Act 1975.

The court found that an equitable division of the property would require a detailed assessment of the specific contributions made by each party, both during the marriage and in relation to the assets in question. The court concluded that the wife was entitled to a fair share of the assets, taking into account her contributions and the need for an adequate standard of living post-separation. The court ordered that the commercial property and the former matrimonial home be sold, and the proceeds divided between the parties in a manner that reflected their respective contributions and needs. The court also ordered that certain personal items be returned to the husband as per the terms of the release of the dowry claim. This decision ensures a fair and equitable distribution of the matrimonial assets, considering all relevant factors.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

These reasons for judgment explain the orders for alteration of property interests made in this case. All values referred to in this judgment are expressed in Australian dollars unless otherwise specified.background Ms Karimi (“the wife”) is the applicant. She lives in Sydney, is 45 years old and describes herself as a professional. The respondent, Mr Shah (“the husband”) is 61 years old. He also lives in Sydney and describes himself as a tradesperson. Both parties were born in Country B. The husband moved to Australia from Country B in or around 1986. The husband began working as a tradesperson in 1988, and by 1995 the husband enjoyed considerable success in his business. He had a team working with him. His work was both commercial and residential. The business was later incorporated as J Pty Ltd., with him being the sole shareholder and director. In 2000, the husband purchased a commercial property in a northern Sydney suburb (“the commercial property”) for $850,000. He contends that he used savings of $500,000 and a loan from the Commonwealth Bank of $380,000 towards the balance. The parties commenced cohabitation in Country B in or around 2003, and married in 2004. It is common ground that on marriage the husband undertook to give the wife a dowry upon her request. The dowry has been the subject of litigation in Country B, and remains an issue for the Court to consider in the present context. The parties have two children, both aged 15 years. One child spends equal time between both parents, and the other child lives with the mother. In 2009, the family relocated to Australia. They moved into a property in a northern Sydney suburb owned by the husband (“former matrimonial home”). He purchased this in 1996 for $220,000, by way of a bank loan and $60,000 from his savings. Between 1998 and 2003, the husband renovated the property and estimates he spent between $250,000–300,000, from a line of credit. The period of cohabitation was a tumultuous one. The wife makes allegations about family violence, including coercive and controlling violence, almost throughout the entire relationship. The police became involved from time to time. The relationship was unstable, and a strong inference is that both parties felt insecure about their own financial circumstances. For example in mid-2011 they entered into a binding financial agreement providing for the wife to become an equal owner in the former matrimonial home and the commercial property. This binding financial agreement was later set aside by Judge Henderson (as her Honour then was) on 23 August 2018. In 2012, the parties were on holiday in Country B. The wife alleges, but the husband denies, that he then effectively prevented the wife and children from leaving the country. The Court finds that the wife attempted to leave, initially with the children, but was prevented from doing so, as the children had been placed on the Watch List in Country B. In early 2013, the wife returned to Australia without the children. The husband returned to Australia without the children a few months later in 2013, and there were negotiations between them about their financial affairs, including the wife’s right to the dowry.

Evidence

Evidence Before The Court

The wife would be required to formally release the husband from his obligations to pay the dowry to the wife and would be required to return to the husband certain specific items of personalty. They would otherwise keep what they respectively have at law and in equity.The evidence In support of her case, the wife relied on the following documents:(a)Initiating Application filed 3 May 2018;(b)Financial questionnaire filed 16 July 2020;(c)Notice to Admit Facts dated 29 June 2021, marked as exhibit A8;(d)Financial statement filed 13 April 2022;(e)Her affidavit filed 13 April 2022;(f)Her affidavit filed 21 April 2022;(g)Her minute of orders sought contained in her case outline filed 22 April 2022;(h)Case outline filed 19 May 2022; and(i)Various documents tendered during the proceedings, marked as exhibits A1–A7. In support of his case, the husband relied on the following documents:(a)Amended Response to Initiating Application filed 16 May 2022;(b)Financial statement filed 16 May 2022;(c)His affidavit filed 18 May 2022;(d)Case outline filed 19 May 2022; and(e)Various documents tendered during the proceedings, marked as exhibits S1–S11. The parties also provided to the Court a joint balance sheet.the applicable law This is an application under s 79 of the Act which relevantly provides:79 Alteration of property interests(1)In property settlement proceedings, the court may make such order as it considers appropriate:(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property; or(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage—altering the interests of the bankruptcy trustee in the vested bankruptcy property;including:(c)an order for a settlement of property in substitution for any interest in the property; and(d)an order requiring:(i) either or both of the parties to the marriage; or(ii) the relevant bankruptcy trustee (if any);to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.…(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and(e)the matters referred to in subsection 75(2) so far as they are relevant; and(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

This is an application under s 79 of the Act which relevantly provides:79 Alteration of property interests(1)In property settlement proceedings, the court may make such order as it considers appropriate:(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property; or(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage—altering the interests of the bankruptcy trustee in the vested bankruptcy property;including:(c)an order for a settlement of property in substitution for any interest in the property; and(d)an order requiring:(i) either or both of the parties to the marriage; or(ii) the relevant bankruptcy trustee (if any);to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.…(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and(e)the matters referred to in subsection 75(2) so far as they are relevant; and(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage. Section 79(4) incorporates the provisions contained in s 75(2) of the Act, which states:(2) The matters to be so taken into account are:(a)the age and state of health of each of the parties; and(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and(d)commitments of each of the parties that are necessary to enable the party to support:(i)himself or herself; and(ii)a child or another person that the party has a duty to maintain; and(e)the responsibilities of either party to support any other person; and(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:(i)any law of the Commonwealth, of a State or Territory or of another country; or(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;and the rate of any such pension, allowance or benefit being paid to either party; and(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and(l)the need to protect a party who wishes to continue that party’s role as a parent; and(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and(n)the terms of any order made or proposed to be made under section 79 in relation to:(i)the property of the parties; or(ii)vested bankruptcy property in relation to a bankrupt party; and(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:(i)a party to the marriage; or(ii)a person who is a party to a de facto relationship with a party to the marriage; or(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and(p)the terms of any financial agreement that is binding on the parties to the marriage; and(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.