Mohammed and Sali
[2007] FMCAfam 597
•10 August 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MOHAMMED & SALI | [2007] FMCAfam 597 |
| FAMILY LAW – Property adjustment – full and frank disclosure. |
| Family Law Act 1975, ss.79(4)(a) to (c), 75(2), 79(2) |
| In the marriage of Lee Steere (1985)FLC91-626 In the marriage of Ferraro (1993)FLC92-335 In the marriage of Clauson (1995)FLC92-595 Russell and Russell (1999)FLC92-877 Ferrie v Whitehead (1879) 5 VLR (L) 132 Montefiore v Smith (1876) 14 SCR (NSW)245 at p251 Chorn v Hopkins (2004) FLC 93-204 Black and Kellner (1992) 15 Fam LR 343 |
| Applicant: | AMRUTHA MOHAMMED |
| Respondent: | MOHAMMED SALI |
| File Number: | SYM7967 of 2005 |
| Judgment of: | Lapthorn FM |
| Hearing dates: | 5 October, 21 December 2006 |
| Date of Last Submission: | 1 March 2007 |
| Delivered at: | Newcastle |
| Delivered on: | 10 August 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr Livingstone |
| Solicitors for the Applicant: | Etheringtons Solicitors |
| Counsel for the Respondent: | Ms Rees |
| Solicitors for the Respondent: | Cameron Gillingham Boyd |
ORDERS
That within 28 days the husband and the wife to all such acts and things and sign all documents necessary for the husband to transfer all of his right, title and interest in the property known as 21 Rivenoak Avenue, Padstow (“the Padstow property”)(folio identifier 26/24981) to the wife subject to all incumbrances secured against the Padstow property including the first registered mortgage and the Bankwest Equity Loan.
That on or before the transfer of the Padstow property pursuant to order 1 herein, the husband and wife do all such acts and things as maybe necessary to discharge the mortgages secured against the property in joint names and the wife thereafter be responsible for and keep the husband indemnified against all liabilities arising under the loans secured against the Padstow property.
That within 28 days the husband and the wife do all such acts and things and sign all documents necessary for the husband to transfer all of his right, title and interest in the property known as 31 Lewis Street, Cambridge Gardens (“the Penrith property”)(folio identifier 7/810961) to the wife subject to all incumbrances secured against the Penrith property.
That on or before the transfer of the Penrith property pursuant to order 3 herein, the husband and wife do all such acts and things and sign all such documents as maybe necessary to discharge the mortgages secured against the property in joint names and the wife thereafter be responsible for and keep the husband indemnified against all liabilities arising under the loans secured against the Penrith property.
That the wife as against the husband be declared the sole owner in law and equity of the vacant blocks of land in India.
That subject to these orders each party shall otherwise retain all assets, resources and liabilities including superannuation, long service leave and holiday entitlements in his or her name possession and/or control.
That in the event that either party fails, refuses or neglects to execute any deed, document or instrument necessary to give effect to these orders, then pursuant to s106A, a Registrar or Deputy Registrar of the Federal Magistrates Court of Australia is hereby appointed to execute all deeds, documents and instruments in the name of the defaulting party and to do all such acts and things necessary to give validity and operation to such deeds, documents and instruments.
That each party have liberty to re-list the matter on 7 days notice in relation to the implementation of these orders.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYM7967 of 2005
| AMRUTHA MOHAMMED |
Applicant
And
| MOHAMMED SALI |
Respondent
REASONS FOR JUDGMENT
Applications
This matter concerns competing applications for property adjustment between the applicant wife and the respondent husband.
The wife seeks orders that would provide for her to receive all of the parties’ real estate along with her bank accounts, superannuation, jewellery and personalty as well as a splitting order in relation to the husband’s superannuation.
The husband seeks orders that would provide for the wife to own the matrimonial home and for him to own an investment property in Penrith along with a cash adjustment in his favour of $26,852.00. The husband also seeks that the wife transfer to him, her title and interest in two vacant lots of land in India. He also seeks an order that would provide for each party to retain all other property in their respective possession or control including superannuation.
Background
The husband is 38 years of age having been born on 14 March 1969. He is a chef and lives at Earlwood in Sydney in rented accommodation.
The wife is 34. She was born on 1 December 1972. The wife lives in the former matrimonial home at Padstow and runs a personnel agency business known as Job Fitts Consultants.
The parties married on 29 January 1994.
They have one child Inshaa Mohammed born 16 January 2002 and therefore 5 years of age. Inshaa lives primarily with her mother pursuant to orders made by the court on 5 October 2006. According to those orders the child is to live with the father from Sunday morning to Tuesday morning for 3 consecutive weeks and in the 4th week from Monday morning to Tuesday morning.
The parties separated under the one roof in August 2004. Upon the wife obtaining orders for sole occupation of the matrimonial home in October 2004 they have lived separately and apart since. The marriage lasted 10 years.
In March 1997 the parties came to live in Australia as the husband was sponsored by the owners of the Malabar Indian Restaurant in Crows Nest.
When Inshaa was a new born baby the wife’s parents came to Australia and cared for her whilst the husband and wife worked. When she was about 6 months old she went with her grandparents to live in India. She remained there for 18 months. Upon their return the grandparents remained living with the parties for about 12 months before returning to India in November 2004. The wife’s father lived with the wife from March 2005 until November 2005 and her mother lived with her from August 2005 until May 2006.
Issues
The parties are at odds as to their respective contributions, the value of property overseas and whether the husband has made a full and frank disclosure of his financial affairs.
A significant issue in this case was whether the husband has an interest in partnership with Mr Varghese. The wife argues that the husband has not made full and frank disclosure of his financial affairs and as a consequence there should be a significant property adjustment in her favour.
There is also dispute as to whether a number of items should be added back into the pool of assets and liabilities.
The Evidence
The parties each filed a number of affidavits in these proceedings to which I have had regard. I have also had the benefit of observing both the husband and the wife, the husband’s father and Mr Varghese give evidence.
I found the giving of evidence disappointing by all witnesses in this case with the exception of the wife’s father. Neither the husband nor the wife were candid in their evidence and I was left with the impression that they both kept the “whole truth” from the court.
Mr Varghese’s evidence was also unsatisfactory. I will address some of the difficulties in accepting the evidence of the husband and Mr Varghese in more detail later in this judgment.
The wife gave evidence of the period of time the husband spent with the child in the year prior to the hearing. She said that he had spent 18 days and 5 nights with him. This evidence was different to what she told the Child Support Agency. I did not accept her evidence as to the discrepancy as truthful and had difficulty accepting her evidence throughout.
Another example was her evidence in relation to the value of her business. At first she said that the business had no assets but later had to concede this was not the case. By the way she prepared her Financial Statement it appears she was inviting the court to include her business expenses in the pool of liabilities of the parties but not any assets of the business. I note exhibit ‘W2” has an agreed valuation of the business as nil. My observation of the wife during the delivery of this evidence caused me to doubt the veracity of her evidence throughout. She avoided answering the questions directly and was determined to paint the picture that it was all too hard to separate her private expenses from business expenses in her credit card balances.
The law
The approach the court is required to adopt in determining an application under s.79 of the Family Law Act for adjustment of property interests is well established by authority (In the marriage of Lee Steere[1]; In the marriage of Ferraro[2]; In the marriage of Clauson[3]).
[1] (1985)FLC91-626
[2] (1993)FLC92-335
[3] (1995)FLC92-595
The approach ordinarily involves a four staged process. Firstly the court must identify the property, liabilities and financial resources of the parties at the time of the hearing. The court then considers the contributions made by the parties as defined in s.79 (4)(a) to (c). Thirdly the court must consider the future needs of the parties by having regard to the provisions of s.75(2) in so far as they are relevant. Finally in determining what order the court should make the court must be satisfied in all of the circumstances that it is just and equitable to make the order – S79(2). It is the justice and equity of the actual orders that the court must consider Russell and Russell[4].
[4] (1999)FLC92-877
The property of the parties
The parties are in dispute as to what items constitute the assets and liabilities at the date of the hearing.
Land in India
In either 1994 or 1995 the husband and wife purchased two blocks of land in India for $2,400. The husband said that each party acquired title to one block. This does not appear to be the case. Both blocks are held in the wife’s name. Although the purchase occurred in 1994 or 1995 the land was only paid off in 2003. If I understand the husband’s evidence correctly it was at that time the title was transferred from the previous owner to the wife.
The husband accepts the wife’s value of both blocks at $800 notwithstanding the original purchase price.
Unit in India
In 1998 the parties purchased an interest in land in India in the wife’s name for $5,120. In 2001 a mortgage was raised in the sum of $21,666 to construct a unit on this land.
The husband says that original purchase price was funded from joint funds. He says the rent received by them was insufficient to cover the mortgage but that the wife’s parents were to meet that shortfall from funds sent by the parties to them each month.
The wife was reluctant to concede that the funds for this purchase and the payment of the mortgage were acquired from their joint earnings. The wife in her evidence clearly wanted to paint the picture that this was a sole enterprise on her part. I reject that evidence.
I accept however that whilst the wife’s father was living in India he assisted the parties by managing the property.
The husband discovered in 2006 that the wife had sold the unit. She says that she received the sum of $26,376 for it. He holds the belief that the unit was either undersold or was sold for a larger sum not disclosed by the wife.
The wife conceded that she did not tell the husband about the sale notwithstanding that these proceedings had been before the court for more than a year when she sold it. The wife was legally represented at the time. I find from the wife’s evidence that she did not want the husband to know about the sale and further that she did not want him to know what she did with the proceeds of sale.
The wife paid her tax debt from the sale proceeds. She did not consider the husband would have any entitlement to those proceeds because the unit was registered in her name. The wife accepted that by her paying her tax liability from the proceeds of sale she was utilising capital. Incredibly she had no difficulty accepting the proposition that it was acceptable for her to do that but that the husband should pay his tax liability from income.
It was put to the wife that it is a common practice in India, when purchasing property, to pay part of the purchase price in cash and that that is what happened when she sold the property. The wife disputed ever receiving any cash component. She also said in response to a question put by me that she was not aware of the practice. Earlier in the evidence she said that such a practice was not legal. I did not accept her evidence on this issue. I find that she was not telling the whole truth as to her understanding of the practices for the sale of property in India. However I have no independent evidence as to what those practices are.
The husband relied on valuations provided by M Sathya Narayana and J Tamilselvan. These valuations however did not value the subject unit but a similar one in the same block. Although I allowed these affidavits to be read in the husband’s case I do not ascribe any weight to them in light of the valuation of a different property and the lack of any adoption by the deponents as to their understanding of their obligations to the court as expert witnesses.
I am unable to determine if the funds received from the sale of this unit were equal to its value. I am persuaded however that it is appropriate to add back the moneys received notwithstanding they have been utilised as they clearly formed part of the parties’ capital that was available at separation.
Question of ownership of restaurant business
The wife argues that the husband has an interest in a restaurant business in partnership with Mr Varghese. The husband denies this as does Mr Varghese.
Mr Varghese is a director of Daiva Sahayam Pty Limited which trades as Malabar Indian Restaurant in Crows Nest and Darlinghurst. The company employed the husband upon his arrival in Australia at the Crows Nest restaurant until 2003 when the Darlinghurst restaurant was opened.
The husband gave evidence that he believed that he was a partner in the Darlinghurst restaurant when it was established notwithstanding that he did not put any capital towards its acquisition or set up. He believed that he would receive a share of the profits. At no time has there been any written partnership agreement or contract drawn up. He has never been made a director of the company which runs the business.
He gave evidence of a conversation he says he had with Mr Varghese in 2003 to the effect that Mr Varghese would consider paying him a share of the profits once all the loans are paid off by the new restaurant. This in itself would not amount to the establishment of a partnership. Mr Varghese apparently did not want the wife to be involved with the business. The wife was concerned about the arrangement and felt that it was dodgy.
The husband admitted describing himself as an ‘owner/chef’ in his sworn affidavit filed in the Licensing Court in October 2003 (exhibit ‘W3’). In January 2004 he presented at the emergency department of St Vincent’s General Hospital with a laceration to his right thumb which occurred at the Darlinghurst restaurant just up the road. Throughout that form he is described as the chef and restaurant owner especially in the part of the form dealing with the Workcover details (exhibit ‘W6’).
He asserted to the Sydney City Council in September 2004 in an application for a footpath licence which is exhibit ‘W9’ that he was owner of the restaurant.
The husband listed at item 41 of his Financial Statement sworn
29 September 2004 that he held a 50% share in the Malabar restaurant
The husband gave evidence of a discussion with Mr Varghese in late 2004 in which Mr Varghese told him that there was no partnership and the husband’s employment was reduced to part time. This was confirmed in a letter dated 10 December 2004. I note this conversation occurred and the letter was written after the parties had separated and not long after these proceedings commenced. In the letter, which refers to the husband’s family problems, Mr Varghese indicated that a new manager and chef had been appointed and that the husband’s hours had been reduced to 25 hours a week at his request. There was also a request that the husband continue as the liquor licensee until arrangements could be made to change that.
Notwithstanding the reduction in hours the husband continued to spend well in excess of 25 hours a week at the restaurant. Indeed it is hard to discern what if any change occurred at all. At the hearing, some
2 years after this letter, the husband remained the licensee of the restaurant.
The business has provided the husband with the use of a motor vehicle to collect equipment and food for the business and also for personal use. No other employee has this benefit. He has purchased items for the business on his credit card. The record of employees of the company does not include the husband’s name.
Both parties and Mr Varghese gave evidence that Mr Varghese did not want the wife to have any involvement with the business. If the husband was a mere employee there would be no need for such a requirement to be stated. The wife says that although she new of this prohibition she did work on an unpaid basis for the business. The husband denied this in his affidavit but the wife was not challenged in cross examination. I accept the wife’s evidence that she did work in the business.
Mr Varghese gave evidence that both restaurants are run by Daiva Sahayam Pty Limited and their accounts are intermingled. He says the start up costs of the Darlinghurst restaurant was $100,000. This sum was borrowed from the Commonwealth Bank. He gave evidence that he had a conversation with the husband in 2003 wherein the husband asked if he could become a partner in relation to the Darlinghurst restaurant. Mr Varghese says that he told the husband that he might give him a share in the profits if the restaurant became profitable and that they would talk about it then. The husband received bonuses in 2004 only.
Mr Varghese did not impress as a witness. I found him to be evasive and at times flippant. Although it is not unusual for a judicial officer to remind witnesses to remain focused on the questions and to answer them I found it necessary to interrupt Mr Varghese on a number of occasions.
Mr Varghese was asked a number of questions in relation to an application to American Express to enable the business to accept their cards at the restaurant. This form is exhibit ‘W7’. Mr Varghese agreed that the document contained his signature and was dated 12 October 2003. In that document, which was typed, the husband is described as the owner of the business. Mr Varghese denied ever telling American Express that the husband was the owner. He was evasive in answering these questions. He suggested the document was filled in after he signed it probably by the wife. He gave this evidence notwithstanding his position that he did not want the wife to be involved with the business. I find that Mr Varghese’s evidence that he could not type was correct. I also find that he did not have any qualms in allowing the husband to be referred to as the owner of the business in that form.
In the letter of 10 December 2004 Mr Varghese reduced the husband’s hours of work. This letter was written after Mr Varghese was subpoenaed to provide evidence to the court. Mr Varghese said that he was worried about his business and that the husband was not always there and was nervous all the time so he decided to reduce his hours of work. He gave evidence of getting his son to type the letter – the only written document given to the husband in relation to the business – and then delivering it personally to the husband. He did not stay around to discuss its contents but just handed it to him and left. I did not believe this evidence.
Notwithstanding the husband’s reduced role in the business Mr Varghese provided the husband with a motor vehicle that he could use privately as well as for work. He presented a picture of the husband only having the vehicle for private use on Sundays but having to return it on Mondays. I found this evidence impossible to accept. Mr Varghese’s evidence as to other staff having access to such a vehicle was also unbelievable. The husband was required to take home the day’s takings from the business – even though the hours of work in the letter of 10 December 2004 has him finishing work at 9pm – well before the close of business for the night.
Mr Varghese gave evidence that he wanted customers to believe that the husband was the owner of the restaurant because he could not be there as he had the other restaurant to run. If his evidence is to be believed he also enabled the husband to hold himself out as the owner of the business to authorities even though he had never said to the husband that he was a partner.
Mr Varghese admitted that he has lied in letters that would be used by staff to apply for bank loans. He conceded that he was prepared to lie to help people out. I found this to be the most truthful part of Mr Varghese’s evidence.
A partnership may be created by a written contract or by oral agreement. It may also be inferred from the course of conduct of the people in question[5]. In Montefiore v Smith[6] Martin CJ held:
“A partnership may be created in many ways either by express words or the acts of the parties – and whether a partnership exists does not depend on the private intentions of the parties; what their intentions were is only to be judged of by their acts.”
[5] Ferrie v Whitehead (1879) 5 VLR (L) 132
[6] (1876) 14 SCR (NSW) 245 at p251
I find that neither the husband nor Mr Varghese is to be believed in their evidence as to their business relationship. When it suited them to hold the husband out as a partner they did so. Now that there may be some perceived risk to the business in a court finding that they are in partnership they are adamant that the husband has no such interest.
I find that the husband does have an interest in the Restaurant business at Darlinghurst. The extent of that interest however can not be determined on the evidence.
The husband argues that if the court were to find that he had an interest the court would also find that the business has no value to the husband. The wife agreed that on paper the company had more liabilities than assets and therefore was of a negative value. She however did not trust the accounts. I share her concern. I do not accept that the husband and Mr Varghese are truthful as to their business arrangements. As a consequence I do not have any confidence in the figures asserted in the books of account. I am not able to ascribe any value to the business.
Claim for income tax deduction by wife on investment property
The wife conceded in cross-examination that she claimed a deduction of $6867 for the financial year ended 30 June 2005 for the net expenses of the Penrith property. The husband paid those expenses. The husband does not seek to have this sum added back into the pool of assets but invites the court to find that the wife’s income is greater than that deposed in her financial statement and affidavit. I accept that submission.
I note the wife’s evidence that she has instructed her accountant to lodge an amended taxation return to correct this claim.
Funds utilised by wife from child’s bank account
The wife gave evidence that after separation she withdrew $7000 from a bank account in the name of Inshaa and used the funds for living expenses. She did not tell the husband that she had taken this money.
These were funds available to the parties at separation and should be added back. There was no evidence that the funds belonged to Inshaa only that they were held in an account in her name. The wife gave evidence that she operated this account. I am not persuaded that there should be a corresponding liability to Inshaa.
Paid legal fees
The wife has paid to her solicitors $47,689 for legal fees. The husband asks the court to add back $32,689 of that amount taking into account some of these funds were paid from monies received by the wife post separation by way of loan.
The husband argues that unpaid legal fees of either party should not be taken into account nor should fees paid from borrowed funds. The corresponding debt would then also not be taken into account.
The husband concedes that if the court accepts this submission legal fees paid by him in the sum of $7,500 should also be added back as those fees were paid from funds that would have otherwise been available to the parties. I accept that submission.
In Chorn v Hopkins[7] the Full Court of the Family Court held that ordinarily legal fees paid from funds that existed at separation would be added back as a notional asset of the party who has had the benefit of them. The situation would be different if the fees were paid from income or funds received after separation.
[7] (2004) FLC 93-204
There is no evidence that the wife paid for any of her legal fees from funds available to the parties at the time of separation and I therefore decline to add them back into the pool of assets.
Costs of private investigator
The wife retained the services of a private investigator to report back to her on her husband’s activities. The wife says she was concerned about his care of their daughter and denied any suggestion that it was to ascertain the extent of his involvement in the restaurant business. The wife clearly lacked trust in the husband and I find that she used this service for both reasons. The cost of the service came from her post separation income and therefore I find that it should not be added back.
Husband’s taxation returns
The wife asks the court to add back the anticipated income tax refunds due to the husband. She seeks a figure of $2,427.91 be added back. The only evidence in proper form before the court as to the husband’s anticipated taxation refund is exhibit ‘W13’ which is his tax return for the 2005/2006 financial year. The parties separated in 2004. I decline to add back the return for that year given it relates to income earned post separation.
I do not give weight to the conclusions in the wife’s affidavit filed 3 October as to the husband’s anticipated refunds. For this reason I decline to add back the whole of the sum sought by the wife.
Husband’s bet with Super TAB
The wife asks that a sum of $1,320 be added back into the pool. This was the sum that the husband wagered on a horse in 2005. He described the whole transaction as a scam. The husband used his credit card to pay for this transaction. The amount of husband’s credit card liability included in the pool is limited to the debt acquired during the marriage and does not include this sum.
Although the husband was foolish to believe that the bet was a sure thing there is no reason to add back a post separation wager ultimately paid for from his post separation earnings.
Liabilities
I decline to include the debt owed by the wife to her brother for $30,000 as part of that relates to the payment of legal fees and the remainder was utilised by the wife for her business. I accept the husband’s submissions that as the wife has not included the assets of her business in her financial statement she is not able to then include its expenses.
For similar reasons I decline to add back the wife’s credit card debt, the debt to Flexirent and her liability to the Australian Tax Office for outstanding payments of the Goods and Services Tax.
The husband has a credit card debt arising out of the marriage in the sum of $11,088. It is appropriate that this sum be included in the pool of assets and liabilities.
Finding as to Assets and Liabilities
I find from the evidence that the assets and liabilities of the parties are set out in the table below. I have not included items such as contents as they are either negligible or similar in each party’s home.
| ASSETS | POSSESSION | VALUE $ |
| Padstow Property | joint | 450,000 |
| Penrith Property | joint | 300,000 |
| Land in India | wife | 800 |
| Add back proceeds of sale of unit in India | Wife | 26,376 |
| Husband’s interest in Malabar Indian Restaurant Darlinghurst | Husband | Unknown |
| Wife’s Bank accounts | Wife | 6,000 |
| Husband’s Bank accounts | Husband | 1,274 |
| TAB shares (proceeds) | Wife | 791 |
| TAB shares | Husband | 791 |
| Wife’s Jewellery | Wife | 4,000 |
| Add back of sale proceeds from motor vehicle | Husband | 4,000 |
| Add back of funds withdrawn from Commonwealth Bank Account in name of Inshaa | Wife | 7,000 |
| Add back of husband’s paid legal fees | Husband | 7,500 |
| TOTAL ASSETS (excluding superannuation) | 808,532 plus unknown value of husband’s interest in Restaurant | |
| SUPERANNUATION | ||
| Wife’s superannuation (5 funds) | Wife | 12,499 |
| Husband’s superannuation (MLC) | Husband | 20,696 |
| TOTAL ASSETS (including superannuation but excluding unknown value of husband’s interest in the restaurant business) | $841,727 |
| LIABILITES | ||
| Mortgage of Padstow home | Joint | 293,864 |
| Equity Loan on Padstow home | Joint | 117,804 |
| Mortgage on Penrith home | Joint | 248,000 |
| Credit Card liability | Husband | 11,088 |
| TOTAL LIABILITIES | $670,756 |
| TOTAL NET VALUE | $170,971 |
Contributions
I now turn to the second step in the exercise under s.79, namely an assessment of the parties contributions within the context of s.79(4)(a) to (c).
At the commencement of the relationship neither party had any significant assets. Because the parties eloped they did not receive any wedding presents.
Both parties worked throughout the marriage. The wife was unemployed when they first came to Australia but in September 1997 she commenced work at the Regent Hotel. In 1999 the wife undertook post graduate studies at the University of Sydney and in September of that year returned to full time work.
The wife says that she had a greater income than the husband over the length of the marriage and I accept this evidence. There were periods however when the wife was fully supported by the husband from his income whilst she was unemployed and attending university.
The parties also contributed between $500 and $800 per month for the support of the maternal grandparents. Some of this was to assist the grandparents to care for Inshaa and to meet a shortfall in the mortgage payments on the land in India. Notwithstanding this I find that the maternal grandparents received a benefit and that it is appropriate to treat this as a benefit to the wife.
In December 2001 the parties purchased a home at 21 Rivenoak Avenue, Padstow (the Padstow property) for $343,000. It was financed by a mortgage from the ANZ bank for $310,000. The parties used joint savings for the remainder. The parties agree this property is valued at $450,000. The wife has paid the mortgage since separation.
During 2002 the parties considered opening their own restaurant. They registered the name Spice Indian Restaurant and borrowed $117,020 from Bank West (the equity loan) which was secured over the Padstow property. Ultimately the parties did not pursue buying their own restaurant and used these funds to buy an investment property in Penrith. The purchase price was $310,000. $77,000 from the equity loan was used for the deposit, stamp duty and expenses and a further $248,012 was borrowed to complete the purchase.
The investment property is currently rented but this rent does not cover the mortgage payments. The husband is making these payments. The parties agree the value of this property is $300,000.
The $40,000 remaining from the equity loan was used to pay off other debts and to fund the wife’s parent’s travel to Australia in 2003.
Following separation the wife has had the primary care of the child Inshaa. The evidence before the court was that the husband did not take up all of his entitlement to spend time with Inshaa in accordance with the current orders of the court. During the marriage the child was cared for primarily by the maternal grandparents both in Australia and India with assistance from each of the parties. I treat the assistance from the maternal grandparents as a contribution that can be attributed to the wife.
The husband has paid modest child support.
Weighing up the various contributions of the parties I find that the wife has made a greater level of contribution than the husband. I assess the wife’s contributions to be 60% and the husband’s 40%.
Section 75(2) factors
Having determined the contribution elements the court is required to have regard to the provisions of s.75(2).
Both parties are in their thirties and are of good health save the wife has difficulties with her eyes preventing her from driving. They are both in gainful employment.
The wife is the primary carer of the parties’ child Inshaa who is only
5 years of age. I find that the husband has not cared for the child in accordance with the orders currently in place and that the wife has had to make arrangements for her care beyond what she would have to if those orders were followed. The wife will have the care of the child for many years to come.
The husband has more superannuation resources than does the wife although neither party has significant investment in superannuation.
The husband has paid child support to the mother however I am not satisfied that he is paying the appropriate rate. The husband has been less than truthful in relation to his interest in the restaurant business and I have no confidence that he has been assessed on his actual income.
When I weigh up the relevant provisions of s.75(2) I find that there should be an adjustment in the wife’s favour of 15%.
Section 79(2) – just and equitable
The fourth stage of the process is to step back and assess whether in all of the circumstances it is just and equitable to make the proposed orders.
The wife through her counsel submitted that the husband should receive nothing from the property application as he has been deceitful in not making a full and frank disclosure of his financial affairs. In support of that proposition he relied on the decision of Black and Kellner[8]. Mr Livingston over states the authority however. Although Nicholson CJ expressed a view that if he had been deciding the case at first instance he would have been disposed to find the husband was entitled to nothing those comments do not amount to the ratio decidendi of the authority. This case is authority for the proposition that when a party has failed to make a full and frank disclosure of their financial affairs they can not argue that the court is prevented from making orders due to a lack of evidence. When the court is prevented from ascertaining the truth as to the income or financial affairs of a party as a result of that party’s conduct it is open to the court to take that fact into account when considering the justice and equity of the orders it proposes to make.
[8] (1992) 15 Fam LR 343
In this case I have found both the husband and wife to be less than truthful. In particular I find that the husband has withheld the extent of his involvement with the restaurant business such that I have been precluded from properly ascertaining the extent of the asset pool and/or the true income of the husband. I take this factor into account in weighing up the justice of the orders I propose to make. For this reason the wife will receive a greater percentage distribution of the net asset pool than she otherwise would have in accordance with my findings as to contributions and s.75(2) factors.
I am satisfied that in the circumstances of the husband’s failure to make the full and frank disclosure it is just and equitable that the wife receive all of the real estate of the parties. When that is combined with the other items in her possession or control along with the add backs attributable to her she would receive approximately 86% of the net asset pool.
The wife has failed to persuade me that the husband should receive nothing but I note that the asset pool is not large. I find it appropriate for the husband to retain his superannuation, TAB shares and the small amount of funds in his name in the bank along with his credit card debt. When these items are combined with the add backs attributable to the husband he would receive $23,173 which amounts to approximately 14% of the net asset pool.
In Russell and Russell[9] the Full Court of the Family Court held that the court:
“…is required to be satisfied that it is the order to be made which is just and equitable, not just the underlying percentage division of the net value of the parties’ assets.”[10]
[9] (1999) FLC 92-877
[10] ibid at p86,439
Although I have addressed the result of my orders in percentage terms I am satisfied that by the husband retaining his superannuation and modest savings an equitable result is achieved given my findings as to the lack of honesty in his evidence. I have also been critical of the wife’s honesty but I find that the court’s inability to properly determine the husband’s interest in the business outweighs my concerns in that regard.
Conclusion
For the above reasons I make the orders set out in the beginning of this judgment.
In accordance with r.21.02(b) of the Federal Magistrates Court Rules any application for costs is to be made within 28 days of the date of these orders.
I grant liberty to the parties to re-list the matter if any difficulties arise as to the implementation of the orders.
I certify that the preceding one hundred (100) paragraphs are a true copy of the reasons for judgment of Lapthorn FM
Associate: Helen Drysdale
Date: 10 August 2007
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