Musa & Waheed
[2025] FedCFamC2F 215
•20 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Musa & Waheed [2025] FedCFamC2F 215
File number(s): PAC 4534 of 2023 Judgment of: JUDGE NEWBRUN Date of judgment: 20 February 2025 Catchwords: FAMILY LAW – PROPERTY – Just and equitable orders made. Legislation: Family Law Act 1975 (Cth) Cases cited: De Angelis & De Angelis (2003) FLC 93-133
Jones & Dunkel (1959) 101 CLR 298
Khang & Asmar [2024] FedCFamC2F 1326
Kowaliw & Kowaliw (1981) FLC 91-092
Lotta & Lotta [2017] FamCA 50
Division: Division 2 Family Law Number of paragraphs: 160 Date of hearing: 31 October – 1 November 2024, 5 December 2024, 9 December 2024 Place: Parramatta Counsel for the Applicant: Mr Kenny Solicitor for the Applicant: GDA Lawyers Pty Ltd Counsel for the Respondent: Mr Rosic Solicitor for the Respondent: Simon Diab & Associates ORDERS
PAC 4534 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS MUSA
Applicant
AND: MR WAHEED
Respondent
ORDER MADE BY:
JUDGE NEWBRUN
DATE OF ORDER:
20 FEBRUARY 2025
ON A FINAL BASIS THE COURT ORDERS THAT:
1.Within 10 weeks of the date of these Orders, the husband shall pay to the wife the sum of $345,019.
2.Simultaneously with the above payment to the wife, the wife shall transfer her entire right, title and interest in the property at B Street, Suburb C in the State of New South Wales having Folio Identifier: … ("the Suburb C property") to the husband.
The Suburb C property
3.Failing compliance with Order 1, the parties do all acts and things and sign all documents necessary to cause the Suburb C Property to be listed for sale in accordance with the following:
(a)The parties shall instruct a real estate agent to sell the Suburb C property by agreement or failing agreement, the wife shall nominate three real estate agents and the husband shall select one of the nominated real estate agents within seven days of receipt of the proposed real estate agents to act on behalf of the parties (“real estate agent”).
(b)The parties shall instruct an independent solicitor or conveyancer entitled to control and operate a trust account to act on the sale of the Suburb C property by agreement and failing agreement, the wife shall nominate three solicitors or conveyancers and the husband shall select one to act on the conveyance on behalf of the parties within seven days of receipt.
(c)The reserve and listing price shall be set as agreed between the parties in writing and failing agreement within seven days of receipt of the appointment of the real estate agent, the reserve price shall be as recommended by the real estate agent.
(d)In the event that the reserve or listing price is not reached, the sale of the Suburb C property shall be such amount as is agreed between the parties and failing agreement, an offer received to buy the Suburb C property at a price that is not less than 95 per cent of the reserve or listing price shall be accepted by the parties.
(e)The parties shall cooperate in every way with the real estate agent of the Suburb C property including making the key available and allowing inspection at times as required by the real estate agent.
(f)That upon agreement being reached for the sale of the Suburb C property the parties shall execute all documents necessary to complete the sale of the Suburb C property including all transfer documentation forthwith upon its submissions to them by the real estate agent or their solicitor within no less than seven days of being requested to do so.
4.Following the sale of the Suburb C property, the net proceeds of sale be distributed in the following manner and priority:
(a)In payment of all real estate agent’s commissions, legal conveyancing fees and other sale expenses;
(b)Discharge of the mortgage outstanding;
(c)Payment of any outstanding council rates;
(d)Payment of any taxes in relation to the sale;
(e)The sum of $345,019 be paid to the wife; and
(f)The balance be paid to the husband.
The Town E property
5.Within 10 weeks of the date of these Orders:
(a)The parties do all acts and things and sign all documents necessary to transfer the husband’s entire right, title and interest in the property located at D Street, Town E in the State of New South Wales having Folio Identifier: … ("the Town E property") to the wife; and
(b)The parties do all acts and things and sign all necessary documents so as to discharge the mortgage loan secured over the Town E property and release the husband from all liabilities in relation to the mortgage loan, with the wife to refinance the sum owing into her sole name.
6.Failing compliance with Order 5, the parties do all acts and things and sign all documents necessary to cause the Town E property to be listed for sale in accordance with the following:
(a)The parties shall instruct a real estate agent to sell the Town E property by agreement or failing agreement, the husband shall nominate three real estate agents and the wife shall select one of the nominated real estate agents within seven days of receipt of the proposed real estate agents to act on behalf of the parties (“real estate agent”).
(b)The parties shall instruct an independent solicitor or conveyancer entitled to control and operate a trust account to act on the sale of the Town E property by agreement and failing agreement, the husband shall nominate three solicitors or conveyancers and the wife shall select one to act on the conveyance on behalf of the parties within seven days of receipt.
(c)The reserve and listing price shall be set as agreed between the parties in writing and failing agreement within seven days of receipt of the appointment of the real estate agent, the reserve price shall be as recommended by the real estate agent.
(d)In the event that the reserve or listing price is not reached, the sale of the Town E property shall be such amount as is agreed between the parties and failing agreement, an offer received to buy the Town E property at a price that is not less than 95 per cent of the reserve or listing price shall be accepted by the parties.
(e)The parties shall cooperate in every way with the real estate agent of the Town E property including making the key available and allowing inspection at times as required by the real estate agent.
(f)That upon agreement being reached for the sale of the Town E property the parties shall execute all documents necessary to complete the sale of the Town E property including all transfer documentation forthwith upon its submissions to them by the real estate agent or their solicitor within no less than seven days of being requested to do so.
7.Following sale of the Town E property, the net proceeds of sale be distributed in the following manner:
(a)In payment of all real estate agent’s commissions, legal conveyancing fees and other sale expenses;
(b)Discharge of the mortgage outstanding;
(c)Payment of any outstanding council rates;
(d)Payment of any taxes in relation to the sale;
(e)The balance be paid to the wife.
Personal property
8.As between the husband and the wife, and subject to the above Orders, the husband and the wife shall each respectively retain all interest in and entitlement to:
(a)All personal property now held in his/her respective possession or control.
(b)All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively.
(c)All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
Other
9.Except as otherwise provided by these Orders, each party remains solely responsible for all debts, including credit card debts, in the parties’ respective names.
10.Each party is solely liable for and indemnifies the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
11.The parties shall do all acts and things necessary and give all consents and execute all documents and writings to give effect to these Orders in the time periods prescribed.
12.In the event either party fails to execute any deed, document or instrument necessary to give effect to all or any of these orders, then the Registrar of the Court shall be appointed pursuant to section 106A of the Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of refusal or failure by way of affidavit at the cost of the non-compliant party.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE NEWBRUN:
INTRODUCTION
These are Reasons for Judgment relating to a final property hearing held before the Court on 31 October 2024, 1 November 2024, 5 and 9 December 2024.
The applicant wife and respondent husband both appeared, legally represented.
PROPOSALS
The wife sought orders as set out in her Case Outline. These included the transfer of the former matrimonial home at B Street, Suburb C NSW (“the Suburb C property”) to the husband, the transfer of the property at D Street, Town E, NSW (“the Town E property”) to the wife, and a cash payment to the wife in a sum necessary to give effect to a division of the net property pool as asserted by her of 72/28 in her favour.
The husband sought orders as set out in his Case Outline. These included the transfer of the Suburb C property to the husband, the transfer of the Town E property to the wife, and a cash payment of $90,000 to the wife. His proposed orders sought to give effect to a 45/55 division of the net property pool in his favour.
MATERIAL RELIED UPON
The wife relied upon:
(a)(Amended) Application filed 6 May 2024;
(b)Financial Statement filed 30 August 2024;
(c)Her affidavits filed 30 August 2024 and 28 October 2024;
(d)Case Outline filed 25 October 2024.
The husband relied upon:
(a)Response to Final Orders filed 25 October 2023;
(a)Financial Statement filed 30 August 2024;
(b)His affidavit filed 30 August 2024;
(c)Case Outline filed 25 October 2024.
The following documents became exhibits:
(a)Exhibit A: Joint balance sheet;
(b)Exhibit B: Various documents tendered by the wife;
(c)Exhibit C: Pages 32 to 35 of the wife’s supplementary tender bundle;
(d)Exhibit D: Pages 194 to 241 of the wife’s tender bundle, being tax returns for F Pty Ltd for financial years 2020 to 2023;
(e)Exhibit E: Husband’s tender bundle;
(f)Exhibit F: Updated joint balance sheet;
(g)Exhibit G: Registration certificate and two G Company finance documents, H Company documents together with Redbook documents.
EVIDENCE
The Court has considered the documentary material relied upon by the parties discussed above, and the parties’ oral evidence. The standard of proof applied by the Court in respect to the evidence is the balance of probabilities. The Court does not propose to set out the entirety of the evidence. Relevant evidence relating to the issues to be determined will be set out below and/or under the headings, “Balance sheet”, “Contributions”, and “Section 75(2)”. Where there is any conflict between the evidence referred to below and in those sections of these Reasons, the evidence under the headings “Balance sheet”, “Contributions” and “Section 75(2)” shall take precedence.
The wife presented well as a witness. She sought to answer questions honestly and responsively. Her demeanour was unremarkable.
The husband’s presentation as a witness was less than satisfactory in that he often did not answer questions responsively. He was an unreliable historian as to relevant events with his recollection of events often shown to be poor or non-existent. His demeanour was unremarkable. The Court proceeds with significant caution in relation to his evidence.
Aspects of the husband’s oral evidence
The Court does not propose to now set out the entirety of the husband’s oral evidence. Aspects of his affidavit evidence will be referred to later in these Reasons. Aspects of his oral evidence now referred to relate to certain aspects of the wife’s contended add back issues, namely the gambling issue and cash withdrawals issue.
In cross-examination, the husband stated that even if he withdrew cash it did not mean that he used that cash for gambling; it could have been for lunch or to play pool.
The husband stated that whenever he was at a sporting club, his playing card stayed in the machine, and he might have left his card in the machine effectively unattended by himself.
When it was put to the husband that he had spent significant periods of time on 8 separate days (gambling) in early 2023 at J Venue, the husband stated there was no way in the world that he would have spent such hours gambling.
When the husband was asked whether he had left his card in the machine on more than 7 occasions, the husband stated that a lot of the time he left it (in the machine). When the husband was asked whether for a month in early 2023 at J Venue, where the records of that club showed he had spent some 29 hours and 46 minutes during that month at the club, his card was within the club, the husband stated that he did not know. It was put to the husband that his card was engaged with a machine during that month for some 29 hours and 46 minutes, to which the husband denied. It was put to the husband that during that month he had spent some 29 hours gambling at the club to which he denied.
It was put to the husband, having been shown his player activity statement report for that month from J Venue, that by the end of that month he had suffered losses of $4,124, to which the husband denied. In this context, the husband stated that himself and a friend were both putting basically equal amounts of money on his card.
It was put to the husband that his business bank records showed withdrawals from his business bank account for gambling, to which the husband denied.
The husband agreed that between August 2022 and June 2024 he had gambled at J Venue.
It was put to the husband that if one went through the records of J Venue and added up the relevant figures, the husband had suffered losses overall, to which the husband denied.
The husband was cross-examined as to the number of hours he gambled at the club in 2023. At one point the husband stated that he had left his card in the machine and anyone could have played with it.
The husband disagreed with the summaries of the monetary amounts and hours spent at J Venue set out in paragraph 263 of the wife’s affidavit filed 30 August 2024 relating to the husband’s gambling there between August 2022 and June 2024.
It was put to the husband that he had an opportunity to have his witness Mr K attend court today, to which the husband stated that he had made a phone call earlier in the day telling this person there was more to go in the court case. The husband was asked whether Mr K had his own card, to which the husband answered in the affirmative.
It was put to the husband that he had made 7 separate daily visits to J Venue in late 2022, to which the husband replied that his card always gets lost.
The husband’s attention was drawn to the content of page 113 of the wife’s tender bundle being a player activity statement report for the husband for the month of January 2023 at J Venue. The husband stated that his card stays in the machine, and that it could be 5 to 6 days before his card is picked up.
The husband was questioned as to cash withdrawals whilst at J Venue, to which the husband stated that it doesn’t mean he was gambling.
It was put to the husband that in February 2023 he had attended J Venue and lost money gambling. The husband stated that someone else could play with your card.
It was put to the husband that on one date in early 2023 he had spent some 2 hours 48 minutes gambling at J Venue, to which the husband stated he did not recall. It was put to the husband that on that day he had withdrawn cash from his business account at Suburb L, $300, $900 from J Venue and a further $600 from that club, and that he had had a bad day on the poker machines, to which the husband denied.
In answer to a question from the Court, the husband stated that he had a bad habit of leaving his card in the machine at J Venue. It was then put to the husband, by the wife’s counsel, that his explanation of leaving his card in the machine was ridiculous, to which the husband replied that there was a second person, Mr K, playing on his card regularly.
The husband was asked why he withdrew $900 and then $600 whilst at J Venue on the same day, to which the husband stated he had no explanation. It was put to the husband that the records of that club show that he was gambling on that day, to which the husband stated he did not recall. It was put to the husband that he had lost money and made withdrawals on that day, to which the husband denied. The husband stated that there were two “of us” on the same card at the time and he had a bad habit of leaving his card in the machine.
It was put to the husband that his business bank account showed cash withdrawals on another date in early 2023 of $500 at J Venue, and that his player activity statements at the club for that day showed he spent some 4 hours 52 minutes. It was put to the husband that the suggestion that some other person was operating his card on that day was inconsistent with his withdrawal of $500 at the club. And it was put to the husband that on that day he was at the club for some 4 hours 52 minutes and that he had withdrawn a $500 at the club, to which the husband denied. Again, the husband stated that there were “two of us”.
It was put to the husband that in late 2023 he had withdrawn $500 from J Venue, and a further $300 withdrawn from that club on the same day. The husband’s attention was then drawn to his player activity statement report for J Venue for the same day showing activity of some 52 minutes. The husband stated that he would not spend a total of $800 during such time. It was put to the husband that his player activity statement report showed a turnover of some $136,957 for that month in late 2023, to which the husband stated that once again, there were “two of us” playing. He stated that 98 to 99 per cent (of the time) his card was in the machine.
It was put to the husband that during the period January to March 2023 he had withdrawn from his personal bank account $11,350 whilst at J Venue. The husband stated that if the record showed that, it did not mean he was playing with (such money).
It was put to the husband that for each other month up to September 2024 he was withdrawing cash from his personal account whilst at J Venue, to which he agreed.
The husband was asked whether he was aware that the wife had actually sought from his solicitors information as to the whereabouts of his friend Mr K regarding a possible subpoena. The husband stated that he was asked for this person’s phone number and name which he provided. The husband stated that he sees this person regularly including at the club. The husband stated that Mr K was available to come to court today (Friday 1 November 2024), and that he had spoken to him and called him.
It was put to the husband that he had not provided the phone number of Mr K to the wife’s solicitors, to which the husband stated that he apologised, no phone number was provided, but only the name and address of this person. It was put to the husband that he provided an incorrect address for this person, to which the husband stated that that was the address given to him.
The husband was cross-examined as to his cash withdrawals from certain bank accounts.
In cross-examination, it was put to the husband that for the month of December 2022 he had withdrawn cash of $19,400, to which the husband stated that he withdrew that money for work or his wages if he hadn’t paid wages.
In cross-examination, it was put to the husband that he had withdrawn cash of $1,500 (from his business account …54) (from J Venue) on 16 December 2023, to which the husband replied that he could not explain, it was something to do with his business, work or wages.
The husband acknowledged the cash withdrawals from his business’s CBA bank account …54, as set out in the wife’s table in paragraph 242 of her affidavit. The husband was then asked to explain, given his taxable income of $34,000 per annum, how he could make cash withdrawals in excess of $100,000 per annum, to which the husband replied in the negative and stated that this was something he would have to provide to the ATO.
The husband acknowledged that he did not pay cash when he made mortgage loan repayments. On the assumption that the husband had made cash withdrawals over a period of 2 years 8 months of $304,170, he was asked what he had spent the money on. The husband replied that the majority of withdrawals were work-related, that is, something that he paid for himself or that he had paid his worker if his worker wanted cash.
The husband acknowledged cash withdrawals from his personal M Bank account …98 of $44,200 between July to September 2021 and January to March 2024. The husband was asked whether he was able to explain those cash withdrawals, to which the husband answered in the negative.
The husband stated he presently has one employee in his business, Mr N. He stated that presently this employee is paid in cash.
LEGAL PRINCIPLES
In Lotta & Lotta [2017] FamCA 50 Foster J stated:
281 The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford (2012) 247 CLR 108 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman (2014) FLC 93–592 and Scott & Danton [2014] FamCAFC 203.
282The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
283Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
284There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.
285In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
286In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here the wife seeks an order for adjustment of property and the husband contends that there should be no such adjustment.
287It is thus important to ascertain the present property and resources of the parties so as to facilitate a consideration of the s 79(2) question.
288In some circumstances it is not possible to determine whether it is just and equitable to make adjustment orders as to the parties’ present property rights without a consideration of s 79 (4) matters.
289Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g) in particular the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).
290The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92–877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
BALANCE SHEET
The balance sheet of the parties is now set out (Exhibit F):
Ownership Description Applicants [sic] value Respondents [sic] value Assets 1 J B Street, Suburb C NSW $1,150,000 $1,150,000 2 J D Street, Town E NSW $550,000 $550,000 3 WM Bank Savings Account ending …42$361 (as at 25.10.24)$3614 W Commonwealth Bank Account ending …72 $3,057 (as at 25.10.24) $3,057 5 WCommonwealth Bank account ending …99$16 (as at 25.10.24)$166 JO Bank offset account ending #...27$340$340.297 WMotor Vehicle 1$15,900$20,0008 HM Bank Account ending …98$112$112 (as at 29.10.2024)9 H F Pty Ltd Commonwealth Bank Account ending …54 $6,126 (as at 29.10.24) $6,126 (as at 29.10.24) 10 H F Pty Ltd E$10,000 Nominal (no valuation) 11 H Motor Vehicle 2 $48,550 $15,000 12 HMotor Vehicle 3$52,955$50,00013 WHousehold Contents$2,000$15,00014 HHousehold Contents$15,000$2,00015 WLaptop and gold ring$400$40016 HLap top$150$150Total $ $ Addbacks 17 H Unaccounted cash withdrawals by the Husband from August 2021 to September 2024 (from CBA #...54) $329,980 $0 18 H Unaccounted cash withdrawals by the Husband from 1 July 2022 to September 2024 (from M Bank …98) $52,610 $0 19 H Transfer to Mr P (room mate) on 13.6.2023) $13,000 $0 20 H Transfers to Mr P from April 2024 to September 2024 under the guise of wages $22,900 $0 21 H Transfers to Mr Q (cousin) on 26.8.22 and 2.5.23 $3,000 $0 22 H Transfers to Mr R on 7 and 8.3.23 $4,000 $0 23 H Transfer to Mr S (brother) on 17.12.22, 13.1.23, 11.2.23, 26.3.23, 20.5.23, 2.6.23, 4.6.23, 5.6.23 $15,850 $0 24 H Gambling Losses in the 13 months of the marriage (June 2021 – July 2022) $60,149 $0 25 H Gambling losses in the period August 2022 to June 2024 $82,696 $0 26 H Missed mortgage repayments for the Suburb C Property which have resulted in the home loan balance increasing $15,100 $0 27 W Sale of Motor Vehicle 4 to Wife’s brother $0 $17,000 Total $599,285 $17,000 Liabilities 28 J Mortgage B Street Suburb C NSW $531,760 (as at 29.10.24) $531,760 (as at 29.10.2024) 29 J Mortgage D Street Town E NSW $238,716 (as at 29.10.24) $238,716 (as at 29.10.24) 30 W T Bank Credit Card $4,643 (as at 25.10.24) $4,643 31 WU Finance Loan$17,126 (as at 26.10.24)$032 W Cash Loan from Family and friends for living expenses $19,808 (as at 30.8.2024) $0 33 W Rent arrears $1,550 (as at 24.10.24) $0 34 W HELP Loan $48,777 (as at 10.9.2024) $48,777 (as at 10.9.2024) 35 H Finance on Motor Vehicle 2 $30 as at 30.10.2024 $24,623 36 H Finance on Motor Vehicle 3$52,955 as 25.10.24$55,570 (as at 30.10.2024)37 H Debt to Australian Tax Office – F Pty Ltd Nil $22,173 (as at 30.10.2024) 38 H Cash Loan from Family and friends Nil $60,000) Total $ 915,365
$845,284$986,262 Superannuation Member Name of Fund Type of Interest Applicant’s Value Respondent’s Value 39 W Super Fund 1 Accumulation interest $87,000 $87,000 40 H Super Fund 2 $174,000 $87,000 Total $249,743 $243,959 Financial Resources Ownership Description Applicant’s Value Respondent’s Value 41 Total $0.00 $0.00 (Strikethroughs as per original document)
As to item 10, the wife’s contended value for the husband’s business, F Pty Ltd, $10,000, which the husband disputed, the wife contended that this figure of $10,000 represented the company’s likely plant and equipment. The Court observes that that company’s cash balance appears in item 9, and its motor vehicle is the subject of an asset in item 11 and a corresponding financial liability for that car in item 35.
The wife pointed to F Pty Ltd’s 2022 tax return (noting the parties separated in August 2022) showing total assets of $42,728 and total liabilities of $26,879, a difference of $15,849.
The Court observes:
·F Pty Ltd’s 2020 tax return showed total assets of $27,641 and total liabilities of $29,957, a difference of –$2,316.
·F Pty Ltd’s 2021 tax return showed total assets of $41,946 and total liabilities of $40,153, a difference of $1,793.
·F Pty Ltd’s 2023 tax return showed total assets of $90,313 and total liabilities of $89,654, a difference of $659.
The above tax returns were tendered in evidence by the husband (Exhibit D). There was no significant cross examination in relation to the company’s tax returns. Clearly, in relation to the 2023 tax return of the company, the Court is unable to determine the precise assets and liabilities of the company in relation to the figures provided for as its assets and liabilities in that tax return.
The husband had submitted, inter alia, that there was no formal valuation of the company in evidence.
The Court is unable to determine from the evidence the current value of the company’s plant and equipment and item 10 shall be removed from the balance sheet.
As to item 11, the husband’s company’s Motor Vehicle 2, the wife contends its value is $37,400, and the husband contends $15,000.
The husband submitted that because the above vehicle is registered in the name of the husband’s company, and because there is no formal valuation of the company F Pty Ltd, item 11 should be removed from the balance sheet. However, there is force to the wife’s submission that the company is owned and controlled by the husband and its assets (and the Court would add, its liabilities) therefore should be brought to account in the balance sheet.
The wife asserts that from the husband’s disclosure documents that the vehicle was insured on 1 February 2024 for $57,000 which the Court regards as particularly significant. Her Redbook evidence in relation to the vehicle, Exhibit G, refers to a price guide range of $37,400-$46,250. The husband’s Financial Statement filed 30 August 2024 gives a “nil” value for the vehicle. Doing the best it can, the Court assesses the vehicle's value at $37,400 and this sum shall represent item 11.
Addbacks (items 17 to 27 in the balance sheet)
It is helpful to set out some relevant legal principles relating to addbacks. In Khang & Asmar [2024] FedCFamC2F 1326, her Honour Judge Murdoch referred to the following cases, at 119 to 120:
119.The Full Court in Omacini & Omacini [2005] FamCA 195, identified three clear categories where it may be appropriate to notionally add back an item of expenditure:
•where the parties have expended money on legal fees;
•where there has been a premature distribution of matrimonial assets;
•where there has been a waste, reckless, negligent or wanton dissipation of assets as outlined by Baker J in Kowaliw and Kowaliw [1981] FamCA 70.
120.Notionally “adding back” items to the asset pool is a discretionary exercise which ought to be the exception rather than the rule.[15] Thus the party seeking the notional add back bears the onus of persuasion. As stated by the Full Court in Trevi & Trevi [2018] FamCAFC 173 at [30]:
…When the discretion is exercised in favour of adding back, it reflects a decision that, exceptionally, in the particular circumstances of a case, justice and equity requires it. The second premise is its corollary: in cases that are not “exceptional” justice and equity can be achieved, not by adding back, but by the exercise of a different discretion — usually by taking up the same as a relevant s 75(2) factor. Indeed, it has been said that the latter is “a course which is, perhaps, technically more correct” than adding back to the list of existing interests in property.
In relation to the issue of contended addbacks, at the outset it is probably helpful to deal with the husband’s contention that most of the wife’s contended addbacks related to the husband’s alleged expenditure of his (or his company’s) post-separation income, which was not income arising out of the parties’ relationship and which could not form the basis of any contended add back. In the circumstances of this case, the Court rejects this contention of the husband.
This is because, firstly, the Court finds that the wife made a significant indirect contribution to the husband earning income post separation (through his company) because of her continued primary care of the child; the wife’s primary care of the child both during the relationship and after separation enabled the husband to devote his energies to working full-time in his business and thereby earn significant income.
In this context, regarding the wife’s primary care of the child, the Court acknowledges that the wife herself was working in employment for significant periods during the relationship and post separation; however, the Court accepts her evidence as to her care of the child both pre and post separation. For example, if the wife stayed back at work, she would collect the child and take him back to her office; the wife might leave work early to take the child home; the child might come to the wife’s office when he was sick and the wife would care for him there; the wife worked from home four days each week when she changed jobs in early 2021; the wife on most occasions continued to pick up and drop off the child from daycare after the wife moved the child to a daycare centre local to the parties’ home. The Court observes that post-separation the child usually lived with the wife and spent every second weekend with the husband.
Secondly, in this context, the Court accepts the wife’s evidence relating to her significant contribution towards the development and maintenance of the husband’s business during their relationship through her administrative work; the Court accepts the wife’s detailed and particularised evidence in this context appearing at paragraphs 137 to 141 of her affidavit filed 30 August 2024 in preference to the husband’s evidence in this regard.
Thirdly, the Court accepts the wife’s evidence relating to her being solely responsible for payment of the child’s extracurricular fees post-separation, and the husband’s failure to pay child support, including her evidence that since March 2023 the husband made no financial contribution towards the child’s upkeep even though the wife requested that he do so on multiple occasions. The Court observes that the husband had ceased paying childcare fees in March 2023.
As to item 17, the wife’s contended addback relating to the husband’s cash withdrawals from his business account …54 during the period August 2021 to September 2024 in the sum of $329,980, the husband’s oral evidence was that the majority of cash withdrawals from his business’s bank account …54 for the above period were work-related, being for business expenses. His solicitor’s letter to the wife’s solicitors dated 5 April 2024, in relation to cash withdrawals from the husband’s CBA business account …54 for the 2023 taxation year, states that the withdrawals were to meet business expenses.
The wife submitted that the husband, in relation to this contended add back, should have produced in evidence his business’ invoices (i.e. invoices to the company from third parties) relating to what he asserted were work-related cash withdrawals.
However, the husband’s business’s company tax returns for the financial years 2020 to 2023, in relation to which there was no cross-examination, showed, inter alia, total expenses of:
·$186,548 for the 2020 taxation year;
·$253,602 for the 2021 taxation year;
·$265,793 for the 2022 taxation year;
·$321,425 for the 2023 taxation year.
The wife, in her affidavit filed 30 August 2024, stated that from the commencement of the parties’ relationship until separation (August 2022) she was primarily responsible for managing the husband’s personal tax returns, business and company start-up. In paragraph 138(d) the wife stated that she had authorisation on the company’s business account. She gives examples of the work she assisted the husband with in this regard including:
·track and make certain payments from the business account;
·management of ATO Business Activity Statement payments and utility bills associated with operating the business, and printing of statement for each quarter for the accountant;
·attending to collation of all business receipts, invoices and documents required for end of financial year tax returns.
The wife stated that in about early 2022, the husband finally attended to invoicing clients, however, she stated that notwithstanding this, she continued to attend to the remainder of the tasks for his business as listed in paragraph 138 of her affidavit.
Of note, in view of the above administrative work the wife was conducting for the business from the commencement of the parties’ relationship up until separation, the wife, at least in paragraphs 137 to 140 of her affidavit under the heading “[Mr Waheed’s] Business and Tax returns”, levels no criticism against the husband in relation to cash withdrawals made from the business’ bank account …54 from August 2021 until separation in August 2022.
The Court acknowledges that the wife asserted in paragraph 246 of her affidavit that she was not aware of the extent of the husband’s cash withdrawals during the marriage as he had removed her access to his business bank account in about November 2019 when she discovered he had been gambling. However, this assertion is inconsistent with the tenor of paragraphs 138 to 140 of her affidavit in which, again, she asserted that she had authorisation on the husband’s company’s business account at least up until separation. Further, the wife, in her oral evidence, stated that during the parties’ marriage she had access to the husband’s business bank account including his bank statements. She stated that she saw lots of monies going in and out of the account. It was put to the wife that the husband brought in a healthy income into the household, to which the wife replied that a lot was not brought into the home, and a lot (went) on the husband’s business expenses.
In her affidavit filed 30 August 2024, the wife, at paragraph 235, asserts that the husband applied a significant portion of money held in his company’s bank account …54 towards his personal expenses. She asserted that his personal expenses included, but was not limited to, for example, payment of the Suburb C property mortgage, car related expenses, meals and food, household electricity bills, clothing, and household effects. These asserted personal expenses indicate the husband was expending his company’s income for, inter alia, reasonable living expenses.
Whilst the Court accepts (see the discussions below as to items 24 and 25 in the balance sheet relating to gambling addbacks) that it is likely that the husband utilised cash withdrawals from his business’s CBA account to fund gambling activities, the Court is not persuaded that the husband’s cash withdrawals from this account over and above what he likely withdrew to fund gambling activities were made for a purpose other than to meet business expenses or his reasonable living expenses. Item 17 shall be removed from the balance sheet.
As to item 18, relating to cash withdrawals by the husband from 1 July 2022 to September 2024, from his personal M Bank …98 account, $52,610, the wife asserts in her affidavit filed 30 August 2024 that the husband withdrew a total of $44,200 from this account in the period 1 July 2021 to 31 March 2024, and of that sum a total of $25,600 was withdrawn at J Venue.
In her affidavit filed 30 August 2024, the wife does not assert that, during the relationship, she did not have access to the husband’s personal M Bank …98 account. In this context, and again, in paragraphs 138-141 of this affidavit, she asserts, inter alia, that from the commencement of the parties’ relationship until separation she was primarily responsible for managing the husband’s personal tax returns and took responsibility for the husband’s individual tax return preparation management through his accountant.
A perusal of the bank statements for the M Bank account shows a significant number of unremarkable debit transactions for what appear to be living expenses.
Whilst the Court accepts (see the discussions below as to items 24 and 25 in the balance sheet relating to gambling addbacks) that it is likely that the husband utilised cash withdrawals from his M Bank bank account to fund gambling activities, particularly taking into account the above sum of $25,600 withdrawn from his personal M Bank …98 account at J Venue, the Court is not persuaded that the husband’s cash withdrawals from this account (as summarised by the wife in paragraph 244 of her affidavit filed 30 August 2024) over and above what he likely withdrew to fund gambling activities represented wastage of matrimonial assets. Item 18 shall be removed from the balance sheet.
Items 19 and 20 related to the wife’s contended addbacks for the husband’s cash transfers from his business’ bank account to Mr P on 13 June 2023, $13,000, and transfers to this person from April 2024 to September 2024 under the guise of wages, $22,900.
The Court found the husband’s oral evidence in relation to these contended addbacks involving Mr P to be unreliable. The Court now refers to aspects of this evidence.
A document forming part of Exhibit B was a letter from the husband’s solicitors dated 5 April 2024 to the wife’s solicitors relating to, inter alia, “Our client’s disclosure on bank statements”, and stated that the $13,000 transferred to Mr P was payment in exchange for work conducted by this person. (The husband, in his oral evidence, agreed that he had transferred $13,000 to this person on 13 June 2023 from his business CBA account …54).
However, in oral evidence, when it was put to the husband that his solicitor, in the above letter, stated that the $13,000 transferred to Mr P was payment in exchange for work conducted by him, the husband stated that that statement was incorrect and referred to monetary dealings with Mr P in relation to a trip to Country V.
In 2024 the bank statements in evidence show the husband paying Mr P for “contractor” or “wages” as follows:
·9 April 2024: $1,000
·12 April 2024: $1,100
·20 April 2024: $1,250
·25 April 2024: $750
·6 May 2024: $1,050
·10 May 2024: $1,100
·12 May 2024: $600
·15 May 2024: $600
·18 May 2024: $1000
·22 May 2024: $50
·25 May 2024: $600
·26 May 2024: $300
·31 May 2024: $2250
·15 June 2024 $1100
·22 June 2024: $1350
·29 June 2024: $1,000
·6 July 2024: $1000
·14 July 2024: $800
·19 July 2024: $1250
·26 July 2024: $900
·3 August 2024: $1350
·12 August 2024: $1000
·28 August 2024: $500
·9 September 2024: $600
·24 September 2024: $600
·28 September 2024: $500
The above sums total about $23,600.
The wife submitted that an analysis of the above “wage” payments to Mr P assumed particular importance, inter alia, because the husband had ceased making mortgage repayments on the Suburb C property after February 2024, albeit he had made a repayment in June and August 2024.
In oral evidence at one point the husband stated that he did know specifically what Mr P did for a living, however at another point in his oral evidence the husband stated that Mr P could have been working for him in May and June 2024, and Mr P was probably working for him in August 2024.
The husband stated that he and Mr P are not presently on good terms, and that he last saw this person around August 2024. However, as submitted by the wife, monetary transfers were made from the husband’s business bank account to Mr P in September 2024.
The husband stated that he never received a bill from Mr P for anything (and the husband, through his solicitor’s correspondence to the wife’s solicitors, and in oral evidence, stated that he could not locate any invoices from Mr P).
It was put to the husband that the wife’s side had asked for tax file declaration forms for this person, to which the husband replied that “we” had been having difficulties getting them. He had spoken to his accountant about this request. He acknowledged that the first request was made in April 2024. The husband stated the difficulty in obtaining the documents was related to the accountant being a bit unreliable.
The husband, ultimately, failed to explain in a persuasive manner, why the sums in items 19 and 20 were paid to Mr P; those sums should be taken into account under s 75(2)(o).
As to item 21, an addback relating to the husband’s monetary transfers to his cousin Mr Q, namely $1,000 on 26 August 2022, and $2,000 on 2 May 2023, from his M Bank personal bank account, the husband stated through his solicitor’s letter to the wife’s solicitors “business expenses”. Again, the transfers were made from the husband’s M Bank personal bank account and not his business’s bank account. No explanation is given by the husband for these transfers.
In the husband’s solicitor’s letter to the wife’s solicitors relating to Mr Q, it is stated that in relation to invoices issued by this person and other documents with respect to business expenses the husband instructs that he does not have a copy of the invoices.
The husband, ultimately, failed to explain in a persuasive manner, why the sum in item 21 was paid to Mr Q; that sum should be taken into account under s 75(2)(o).
As to item 22, contended add back transfers to “Mr R” on 7 and 8 March 2023, $4,000, the husband stated through his solicitor’s letter to the wife’s solicitors that the transactions relating to this person relate to “business expenses”. In another letter from the husband’s solicitors to the wife’s solicitors, it is stated that in relation to funds transferred to Mr R the husband does not recall the particulars “but is looking into this further and will provide you with further particulars upon receipt of same.”
The husband, ultimately, failed to explain in a persuasive manner, why the sum in item 22 was paid to Mr R; that sum should be taken into account under s75(2)(o).
As to item 23, ultimately, in submissions, the wife did not press this contended addback, and it shall be removed from the balance sheet.
As to item 24 and 25, the wife’s addbacks relating to alleged gambling losses of the husband in the sums of $60,149 (June 2021 to July 2022) and $82,696 (August 2022 to June 2024) respectively, the Court makes the following findings:
(a)The Court accepts that the wife caused her solicitors to issue a subpoena to J Venue and that that club produced records indicating that the husband was a member of the club and produced his personal Player Activity Statement Report (in respect to gambling activities) for the period June 2021 to June 2024. The Court accepts that the tables, set out in the wife’s affidavit filed 30 August 2024 at paragraphs 262 and 263 were prepared by the wife’s lawyer and do in fact (subject to two figures; see below) accurately summarise the husband’s Player Activity Reports at the club from the above subpoenaed records of the club.
(The two figures which were not accurately recorded in the tables, but which do not relevantly affect the net expenditures for gambling by the husband, were: February 2022 the total win was $32,338.80, and for March 2022 the total win was $50,527.40.)
(b)The Court does not accept that the husband admitted to the wife, as alleged by her and denied by the husband, that the husband admitted to having a gambling addiction.
(c)Those above tables set out contended gambling losses of the husband in the sums of $60,149 for the period June 2021 to July 2022, and $82,696 for the period August 2022 to June 2024. The Court finds that the husband did suffer net gambling losses at J Venue as set out in those tables for those two periods, namely $60,149 and $82,696. In relation to this finding, the Court makes these observations and related findings:
(i)The husband likely had available cash funds for gambling turnover (see the reference to the husband’s turnovers for gambling in paragraphs 262 to 263 of the wife’s affidavit filed 30 August 2024) between June 2021 and June 2024 from available funds in his business bank account (CBA account ..54) and from available funds in his personal M Bank account ..98.
In this context, the Court refers to the bank statements in evidence, relating to the above business bank account and personal bank account; the wife’s reference to the husband’s cash withdrawals from his business bank account and personal bank account are referred to in paragraphs 242, 243 and 244 of the wife’s affidavit filed 30 August 2024. The Court also refers to the husband’s oral evidence admitting to withdrawing the cash sums set out in those paragraphs of the wife’s said affidavit.
(ii)It is likely that the husband withdrew cash sums from his above business bank account and personal bank account between June 2021 and June 2024, either at ATMs or at the club itself, to enable him to outlay monies for the aforesaid gambling.
(iii)The Court rejects the husband’s evidence that during his gambling activities during the above periods (between June 2021 and June 2024) there was a second person, Mr K, who played on his playing card regularly or at all at the club, whether on his own or together with the husband. The Court rejects his evidence that he had a bad habit of leaving his playing card in the machine at the club, and the Court rejects his evidence that he often left his playing card in a machine for lengthy periods of time at the club. The Court rejects the husband’s evidence suggesting that third parties at the club may well have gambled on machines there using his playing card. In this context, the Court should explain that the evidence before the Court indicated that the husband possessed a playing card, issued by the club, enabling him to operate a poker machine. The purport of the husband’s above evidence, which the Court rejects, was that the wife’s evidence relating to the extent of the husband’s gambling losses at the club was completely overstated and inaccurate.
The Court should state that it found the husband’s oral evidence in relation to the gambling issue unpersuasive. His evidence lacked particularity, and his recollection was poor. He failed to present any significant body of evidence, with particularisation, demonstrating that the extent of gambling losses contended by the wife for his gambling at J Venue (by reference to the husband’s Player Activity Statements from the Club) were completely overstated and inaccurate.
The Court observes that his affidavit evidence relating to gambling referred to an allegation that he “never lost a substantial amount of money when gambling. I would estimate losing a maximum of $2,000 over a 7 year period”; the Court should state that it rejects this evidence which is utterly at odds with the husband’s Player Activity Statements from the Club.
Rather, the husband’s defence to the wife’s gambling loss contentions was essentially comprised, through his oral evidence in cross-examination, by denials, by reference to his oral evidence alleging that his friend Mr K was significantly involved with him in his gambling activities, and by reference to his allegations that he often left his playing card in the machine at the club which may have allowed other third parties to use it without his knowledge. The Court does not accept this evidence, and finds that, at least to a significant extent, it lacked reality, and in this regard the Court refers to its discussions above and below relating to these gambling addback issues.
In this context of gambling addbacks, and in the circumstances, the Court also draws a Jones & Dunkel (1959) 101 CLR 298 inference against the husband because he failed to call Mr K as a witness in his case; the Court infers that any evidence that Mr K could have given on this topic of gambling would not have assisted the husband’s case on this issue.
In the view of the Court, and by reference to the husband’s allegations regarding Mr K, Mr K was a potential witness who would be expected to be called by the husband and not the wife (and it is not to the point that the wife issued a subpoena to Mr K). According to the husband, Mr K’s evidence, if given, would have elucidated the husband’s evidence regarding gambling with Mr K. And Mr K’s absence was not, in the view of the Court, adequately explained. As to this Jones & Dunkel inference, the Court observes that the wife had raised the gambling issue at the outset of these proceedings on about 29 August 2023 and had referred to monetary withdrawals from various clubs including J Venue. In other words, the gambling issue had been a live issue in the proceedings from the outset of commencement of proceedings.
(d)Having found that the husband incurred gambling losses as contended by the wife, the Court is of the view that the extent of the husband’s gambling losses, $60,149 from June 2021 to July 2022, and $82,696 from August 2022 to June 2024, in the circumstances of this case (see the Court’s discussions below), represented wastage of the parties’ matrimonial property.
In relation to the second tranche of net gambling losses from August 2022 to June 2024, the husband submitted that he was spending post separation income when gambling and that, accordingly, the wife could not maintain her gambling contentions against the husband. The Court rejects this submission and refers to its discussions above under “Addbacks (item 17 to 27 in the balance sheet)” prior to dealing with item 17.
In Kowaliw & Kowaliw (1981) FLC 91-092 at 76,644, Baker J said as follows:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec 75(2)(o) to applications for settlement of property instituted under the provisions of sec 79.
In the context of the Court’s above finding of wastage by the husband in relation to his gambling losses, the Court also takes into account, inter alia, the following matters:
(a)The husband’s ATO taxable incomes of $38,491 for the year ended 30 June 2021, $38,491 for the year ended 30 June 2022, and $40,978 for the year ended 30 June 2023. Having regard to the husband’s taxable income of $38,491 for the year ended 30 June 2022, one only has to contrast against that taxable income figure the gambling loss for the approximate same period of $60,149 to gauge the unreasonableness of that expenditure.
Similarly, the gambling loss between August 2022 and June 2023 of about $46,484, and the loss between July 2023 and June 2024 of about $36,202, when set against the husband’s taxable income of $40,978 for the year ended 30 June 2023, indicates the unreasonableness of that expenditure.
(b)The Court further observes that between March 2021 and January 2022 the wife was earning from her employment about $1,200 net per week, between January 2022 and August 2022 (separation date) she was earning about $1,400 net per week and was devoting all her earnings to significant weekly expenditure obligations, in particular relating to the family’s week to week living expenses as well as household expenses. In this context, the Court accepts the wife’s evidence relating to her usual household contents and household expenses expenditures during the parties’ relationship.
(c)The Court further observes that post separation to January 2023 the wife continued to work as a professional for the public sector earning, again, $1,400 net per week. Since January 2023, the wife worked as a professional for the public sector on a full-time basis, and the Court infers from the wife’s Financial Statement filed 30 August 2024 that her weekly income probably significantly increased through that employment position. The Court further observes that in about February 2024, the wife reduced her workload to three days a week. She returned to full-time work in about mid-2024 due to financial hardship and accumulating debt.
(d)The Court further observes that in about 2023 the husband had financial difficulties in relation to his business and had difficulties meeting mortgage loan repayments. He ceased making mortgage repayments in about March 2024, however made discrete monthly repayments in June and August 2024.
(e)The Court further observes that the husband had not been paying the wife child support from about mid-March 2023, and he had ceased contributing towards the child’s childcare fees from about this time. The wife had been solely responsible for payment of the child’s extracurricular fees since separation.
(f)The wife did not acquiesce or consent to the husband gambling; to the contrary, she sought that the husband get assistance to help him stop gambling.
(g)The husband’s gambling losses totalling some $142,845, when set against and contrasted with the net property pool of about $1,186,747 million (see below), represents about 12 per cent of the property pool.
The Court acknowledges legal authority to the effect that not all gambling expenditure will meet the definition of waste, and that each case will turn on its own facts: De Angelis & De Angelis (2003) FLC 93-133 at 78,239. Having regard to the above matters, including the financial circumstances of the parties, the Court does not accept that there was a reasonable level of gambling that the husband could have conducted during the period from June 2021 to June 2024, with the Court noting that the husband did not contend any particular financial figure that might have constituted a reasonable level of gambling. The gambling losses of $142,845 over the period from June 2021 to June 2024 shall be taken into account under s 75(2)(o).
As to item 26, the wife’s contended addback for the husband’s missed mortgage repayments for the Suburb C property which have resulted in the home loan balance increasing, $15,100, the husband stated that he had started repayments this month (October 2024). He acknowledged that as of the previous week, $15,099 represented the arrears of mortgage repayments to O Bank Home Loans.
In evidence, part of Exhibit E, is a letter from the husband’s solicitors to the wife’s solicitors dated 5 April 2024 stating, inter alia, under the heading “The [Suburb C] Mortgage”, that the husband instructs that he is currently facing dire financial circumstances and is currently unable to make the mortgage repayments for the Suburb C property. The letter states that the husband was relying upon payment of an invoice for about $40,000 from a company that has recently gone into liquidation to make the mortgage repayments. The letter further states that the husband also has other financial responsibilities and deadlines such as bills, two vehicle loans, living expenses, child support and other financial deadlines to meet. The letter states that the husband instructs that it will take some time to regain upcoming contracts for work to generate additional income.
In evidence, part of Exhibit B, is a letter from O Bank dated 27 September 2024 addressed to the husband referring to mortgage arrears of about $15,100. The letter refers to the husband’s discussions with the bank wherein the husband stated that in order to bring the arrears up to date he would pay $1,500 per month from 25 October 2024 until the arrears were brought up to date.
The Court, when considering this item 26, has regard to its findings of wastage (including the Court’s stated intention to take into account such wastage under s 75(2)(o)) in respect to the husband’s gambling losses; in particular that he was incurring gambling losses at a time when he was meant to be meeting the mortgage loan repayments. Accordingly, in the Court’s view, to allow item 26 would lead to double counting which should not be countenanced. Item 26 shall be removed from the balance sheet.
As to Item 27, a contended addback ($17,000) for sale of a car to the wife’s brother for $28,000 in November 2022, the husband contends that this car was sold under its market value of $45,000.
In 2017, the wife had purchased this car on finance via a salary sacrifice scheme for $60,000. In about November 2018 the car was transferred to the husband’s business at the husband’s request. The husband made the repayments on the car from December 2018 until separation, when the remaining balance was about $15,284. At this time the husband told the wife that she could take the car but she had to pay it out.
On about 8 August 2022, the wife borrowed $15,284 from her father and paid out the finance owing on the car.
The Court accepts the wife’s evidence that the vehicle had significant damage at the time of the sale to the brother as asserted by her, and that vehicles in far superior condition were selling for $35,000 at the time. The Court does not accept that the car was sold by the wife at an undervalue.
As to the application by the wife of the $28,000 paid by the brother in cash, the wife applied $15,000 of those moneys towards paying off a $15,000 debt she owed to her father since November 2021. On the balance of probabilities, the remaining $13,000 from the sale proceeds was expended by the wife on reasonable living expenses for herself and the child.
Item 27 shall be removed from the balance sheet.
Item 32 relates to the wife’s contended cash loans from family and friends for living expenses, in the sum of $19,808 (disputed by the husband). It is apparent from paragraphs 220 to 222 of the wife’s affidavit filed 30 August 2024 that this sum of $19,808 is calculated as follows:
·loan from mother, $2,400, in relation to the wife’s post separation rental property;
·loan from father, $15,284, in relation to the wife paying out a car Finance loan;
·loan from her son Mr W, $924, in relation to vehicle registration and CTP insurance;
·loan from Mr W, $1,000, for insurance excess to repair damage to the wife’s vehicle following an at fault collision;
·loan from Mr W, $200, for living expenses/groceries as the wife was short on funds.
The wife adduced no evidence that the asserted loans were likely to be enforced by the family members, or that they had an expectation, communicated to the wife, that they would be repaid the sums lent by the wife. Item 32 shall be removed from the balance sheet.
As to item 33, rent arrears, $1,550, contended by the wife (disputed by the husband), the wife asserts that she is currently living in a home on her aunt’s property and pays $310 a week in rent. It is not clear on the evidence what period of time post separation these rental arrears relate to. Again, separation occurred in August 2022. Further, and importantly, the wife adduced no evidence that her aunt was likely to enforce payment of the rental arrears, or that the aunt had an expectation, communicated to the wife, that she would be repaid the rental arrears by the wife. Item 33 shall be removed from the balance sheet.
As to item 34, the wife’s contended HELP loan, $48,777, disputed by the husband, the wife’s evidence relating to this contended loan was sparse. In her Further Amended Financial Statement filed 30 August 2024 she had listed at clause 54 a student HELP loan in the sum of $43,000. In schedule G32 of that Statement she had referred to a HECS Loan in relation to which she was paying $7.50 per week. In her affidavit filed 30 August 2024, paragraph 66, she had stated, inter alia, that between October 2015 (commencement of cohabitation) and March 2016, which the Court observes is about a six month period, she was a full-time carer for her other children while studying online. It is difficult to see how the wife would have incurred a student loan of at least $43,000 for six months of study for a course online, and thus it would appear that the student loan debt relates to other periods of study which are not particularised by the wife. Item 34 shall be removed from the balance sheet.
As to item 35, again the husband’s company F Pty Ltd owns a motor vehicle, namely Motor Vehicle 2.
The Court finds that the above company refinanced a loan for the above motor vehicle through G Company in about August 2024 and that it currently owes G Company about $23,544 in relation to that vehicle. The sum of $23,544 shall be the figure for item 35.
As to item 37, the husband’s contended debt to the ATO for his company, F Pty Ltd, in the sum of $22,173, the husband in oral evidence stated that the period in relation to which this debt has arisen related to a Business Activity Statement for 2023 and 2024. Again, there is force to the wife’s submission that the company is owned and controlled by the husband and its assets (and the Court would add, its liabilities) therefore should be brought to account in the balance sheet. This debt should remain in the balance sheet for item 37.
As to item 38, contended cash loans to the husband from family and friends in the sum of $60,000, disputed by the wife, ultimately this contended liability was faintly pressed. The husband had not adduced any evidence from any of the alleged lenders in relation to the loans, including evidence that they were likely to enforce repayment of the alleged loans or had any relevant expectation that they would be repaid. Item 38 will be removed from the balance sheet accordingly.
The final balance sheet accordingly will be as follows:
BALANCE SHEET
Ownership
Description
Value
Assets
1
J
B Street Suburb C NSW
$1,150,000
2
J
D Street Town E NSW
$550,000
3
W
Commonwealth Bank Account ending …72
$3,057
4
H
F Pty Ltd Commonwealth Bank Account ending …54
$6,126
5
H
Motor Vehicle 2
$37,400
Total
$1,746,583
Liabilities
6
J
Mortgage B Street Suburb C NSW
$531,760
7
J
Mortgage D Street Town E NSW
$238,716
8
W
T Bank Credit Card
$4,643
9
H
Finance on Motor Vehicle 2
$23,544
10
H
Debt to Australian Tax Office – F Pty Ltd
$22,173
Total
$820,836
Superannuation
Member
Name of Fund
Type of Interest
Value
11
W
Super Fund 1
Accumulation interest
$87,000
12
H
Super Fund 2
Accumulation interest
$174,000
Total
$261,000
Net Total Assets
Total
$1,186,747
Accordingly, the Court finds that the parties’ assets are $1,746,583, their liabilities are $820,836, and their superannuation is $261,000. Thus their net assets including superannuation are $1,186,747.
SECTION 79(2) OF THE ACT
The Court is satisfied that it is just and equitable in this case to alter the property interests of the parties in light of the breakdown of their relationship, the fact that they will no longer have the joint use and enjoyment of their property, and the fact that the continuance of the current legal ownership of their property would not afford them justice and equity.
CONTRIBUTIONS
The parties married in 2015 and commenced cohabitation in 2015 and separated in about August 2022. Their child X was born in 2018.
At cohabitation commencement, the wife owned some jewellery, a car and about $10,000 cash savings. She had a credit card debt of $4,400.
The husband had about $95,105 in cash savings in his personal NAB bank account as at 9 December 2015. He had Motor Vehicle 2 with some related car finance. As at 30 June 2015 he had about $86,424 in superannuation.
As to the above sum of about $95,105, the wife submitted that the husband had failed to disclose how that sum (which had increased to $118,320 by 9 March 2016) appeared to have been spent between early March 2016 and early May 2016. In this regard, the wife pointed to the husband’s limited bank statements attached to the husband’s trial affidavit: his NAB statement number 10 revealed credit balances of $95,105 to $103,894 between early December 2015 and early January 2016, however statement number 12 revealed an initial credit balance of $118,320 in early March 2016 but diminishing to a closing credit balance of $1,012 in early May 2016. The husband had only produced page 1 out of 8 pages from statement number 12 so there was no clear picture of how the husband had spent most of the opening balance of $118,320.
Whilst the Court accepts that the wife was not in employment between late 2015 and early 2016, and between mid-2016 and late 2016, and that during such periods the husband’s income was likely being particularly relied upon by the wife and family (during these periods of not working in employment the wife was also reliant upon certain government paid family payments) this still does not account for the husband’s unexplained diminution of significant credit funds in his NAB account between early March and early May 2016. Accordingly, there is some force to the wife’s submissions in this context that the husband failed to explain how he spent these significant monies that he brought into the relationship.
During the relationship, the husband operated a trades business. From 2017 he operated this business through a company, F Pty Ltd. He contributed his income towards, inter alia, the household expenses and living expenses on the family, and mortgage loan repayments for two properties, discussed below. He made specific lump sum payments in reduction of the mortgage loan balances, including from his superannuation, probably significantly sourced from his income accumulated during the marriage. During the parties’ relationship, the wife provided significant administrative assistance in relation to the establishment and maintenance of the husband’s business, as asserted by her.
During the relationship, the wife usually worked in employment, except for a period following cohabitation (see above) and a period of about 6 months when she went on maternity leave in relation to the parties’ child. She applied her income towards the household expenses and living expenses of the family.
In 2014 the husband had lent his sister Ms Y $50,000. In 2017 she repaid this loan to the husband through bank transfers totalling $20,000 and a cash payment of $30,000. From this cash repayment the husband used about $10,000 to buy a car for the wife and the remaining cash of $20,000 was paid into his CBA account and a joint CBA account of the parties. Ms Y’s repayment to the husband is taken into account.
The parties purchased an investment property at Town E in about early 2018 for $328,000. The parties contributed monies from their savings accumulated during the relationship towards the purchase price. The balance of the purchase price was funded through a home loan with O Bank, $262,400. The husband did renovation work to this property in 2018 and in 2021. The wife assisted the husband in this work. This property was rented out. Rental payments were paid towards the mortgage loan. The wife carried out some administrative work regarding the rental.
The parties purchased a property at B Street, Suburb C, in late 2019 for $801,000. They took out a home loan with O Bank bank for $640,800. The remaining funds of about $160,200 were likely sourced from:
(a)as to $20,000, from the husband’s Redundancy Trust account (with the Court observing that the husband had received $21,204 in late 2018 relating to a redundancy benefit claim from the trust),
(b)as to $20,000, from the husband’s savings (being savings he had from the above discussed repayment by his sister in 2017, with the Court being alert to avoid double counting in this context),
(c)the husband borrowed $20,000 from the wife’s brother-in-law, Mr Z,
(d)as to the balance, from the parties’ joint savings account, with the Court observing that the wife had paid her severance pay that she received in 2019, $10,000, into this joint savings account.
Stamp duty and ancillary purchase costs of about $40,000 were also paid out of the parties’ joint savings account.
The husband carried out renovation work to the Suburb C property as asserted by him. The wife paid for certain items at this property including for certain works as asserted by her. She also made certain payments for utilities and insurance as asserted by her.
As to homemaker and parent contributions, the wife has been the child’s primary carer since birth (child’s birth in 2018) to date. In mid-2019 the wife returned to work and enrolled the child into a daycare centre. The husband on occasion assisted the wife with the care of the child when he was not at work, including pickups from daycare. The husband spends every second weekend with the child from Friday to Sunday, together with some holiday time. During the relationship, on balance, the wife made a greater contribution towards the household chores, including cooking, with the husband assisting in this regard when he was not at work.
The husband paid the child’s childcare fees from about November 2022 to about mid-March 2023. Prior to about May 2023, the husband occasionally purchased clothing for the child. The husband had paid about $1,200 for the child’s extracurricular and religious lessons. Otherwise, since about mid-March 2023, the wife has solely financially supported the child without financial assistance from the husband.
The husband has been residing in the former matrimonial home at Suburb C, a four bedroom home, since separation in about August 2022. In about 2023 the husband had difficulties meeting mortgage loan repayments. He ceased making mortgage repayments in about March 2024, however made discrete monthly repayments in June and August 2024, and resumed repayments in October 2024. The wife after separation secured rental accommodation for the parties’ child and her son Mr AA.
As to the parties’ respective superannuation assets, it is likely that each party indirectly contributed towards the accumulation of these assets through their marital partnership, as discussed above; for example, the wife’s primary care of the child enabled the husband to devote his energies to full time work in his business. Again, as at 30 June 2015, the husband had about $86,424 in superannuation.
Post separation the wife has made some modest payments towards maintenance of the Town E property, as asserted by her.
The wife contends that her contributions during the parties’ relationship were made significantly more arduous by reason of alleged family violence and other adverse behaviour perpetrated against herself and the child, as well as her own children, by the husband. This contention and related allegations are disputed and denied by the husband.
On the balance of probabilities, the Court is not persuaded that the husband perpetrated family violence and other adverse behaviour against the wife or children as alleged by her. The husband denied the wife’s allegations of abuse by him towards her giving explanations which explanations the Court accepts. For example, he explained that there was some conflict between the parties by reason of the wife’s strictness “in terms of imposing her religious beliefs onto me.” He explained, for example, that he was not verbally abusive or violent with the wife’s child Mr AA, an autistic boy, who could display violent behaviours. He explained how the wife’s child Ms BB did not like him for the first 2 years of the parties’ marriage and that Ms BB wrote a letter to him in late 2022 in which she profusely thanked the husband for his care of her and apologised to the husband for the way she spoke to him. The Court finds that the parties on occasion during their relationship argued, including in relation to financial matters and religious observance.
The husband was convicted recently in the Local Court of NSW of, inter alia, having assaulted the wife in mid-2022, being a date shortly before the parties’ separation. This assault was the only occasion that the wife alleges the husband physically abused her and it occurred at the end of the parties’ relationship.
The wife contended that her contributions should be assessed at 55 per cent (and enhanced if her Kennon related evidence was accepted which the Court has declined to do). The husband, in oral submissions, contended that his contributions should be assessed at 55 per cent.
Taking into account all the above discussed matters, and viewing the parties’ contributions holistically, the Court finds that the parties’ contributions to the parties’ net assets including superannuation of $1,186,747 should be assessed as equal.
SECTION 75(2) OF THE ACT
The wife is aged 43 years. The husband is aged 48 years. Their child is aged only 6 years.
The wife has a number of medical conditions in relation to which she has attended upon medical practitioners for assessment; a number of medical reports are attached to her affidavit. However, none of these reports indicate whether or not the wife is likely to suffer a reduced work capacity by reason of these conditions.
The husband asserts that he has previously been exposed to chemicals which can lead to chronic illnesses however he adduces no health professional evidence as to any specific diagnosis in this regard. He has hypertension which is being treated. He asserts he has ongoing muscular back problems from years of physical labour and carrying heavy materials and is currently on light duty at work however he adduces no health professional evidence indicating any significant loss of work capacity.
The wife presently works as a professional in the public sector on a full-time basis. Her Financial Statement filed 30 August 2024 states that her total average weekly income is $3,055, with total income tax per week of $815.
The husband continues to operate his business as a tradesperson. His Financial Statement filed 30 August 2024 states that his total average weekly income is $1,600, with total income tax per week of $640.
The Court would assess that the wife’s income earning capacity is probably greater than that of the husband when working full-time. The Court accepts the wife’s evidence that she proposes to return to working three days a week after these proceedings are finalised for the reasons asserted by her. However, the Court takes into account that should the wife begin to work part-time that she may later choose to return to full-time work.
The wife remains the child’s primary carer. The husband presently does not pay the wife any regular monetary child support. The Court acknowledges that the wife has not yet made a formal child support application, however it was always open to the husband to pay to the wife regular monetary child support. There is a real prospect that the wife will carry the majority of the financial burden for the child until he reaches 18 years.
The Court takes into account, in the husband’s favour, under s 75(2)(o), his care, assistance and support of the wife’s children from her earlier marriage, namely the children Ms BB, Mr W, and Mr AA, as asserted by him. The complimentary letter from Ms BB to the husband, set out at page 100 of his affidavit, is supportive of the husband’s assertions in this context.
As to the previously discussed matters to be brought to account in the wife’s favour under s 75(2)(o), again there were unexplained monetary transfers by the husband and gambling wastage (which monies, again, the Court assesses to have been sourced from matrimonial property) as follows:
·Mr P: $35,900
·Mr Q: $3,000
·Mr R: $4,000
·Gambling: $142,845
Total: $185,745
The parties’ net pool of assets and superannuation is $1,186,747. The Court observes that the above sum of $185,745 represents a significant amount when set against the size of the pool.
The wife contended that an adjustment in her favour under s 75(2) of 20 per cent should be made taking into account her future needs and what she contended was the extent of relevant s 75(2)(o) factors (see the wife’s contended addbacks in the parties’ balance sheet, Exhibit F).
The husband submitted that 5 per cent could be allowed in favour of the wife under s 75(2) due to her future care of the child.
Taking into account all the above matters, there should be an adjustment of 12.5 per cent in favour of the wife. This results in an adjusted contributions finding of 62.5 per cent in favour of the wife, and 37.5 per cent in favour of the husband, which in turn leads to a disparity of $296,686 in her favour.
JUSTICE AND EQUITY
Pursuant to the Court’s adjusted contributions findings, the wife should receive $741,716 (62.5 per cent of $1,186,747) and the husband should receive $445,030 (37.5 per cent of $1,186,747).
Should the wife retain:
(a)The Town E property less its mortgage loan: $311,284,
(b)Her CBA account funds: $3,057,
(c)Her superannuation: $87,000
Total: $401,341,
Less:
(a)Her credit card debt: $4,643,
Then she will retain net $396,698.
Should the husband retain:
(a)The Suburb C property less its mortgage loan: $618,240,
(b)F Pty Ltd bank account funds: $6,126,
(c)Motor Vehicle 2 less its finance debt: $13,856,
(d)His superannuation: $174,000,
Total: $812,222,
Less:
(a)Debt to ATO: $22,173,
Then he will retain net $790,049. Thus, he will need to pay the wife $345,019.
Should the husband be unable to pay to the wife the above sum of $345,019 within 10 weeks of the Court’s orders, then the Suburb C property should be sold and from the net proceeds of sale the wife be paid $345,019 and the husband retain the balance.
Should the wife be unable to refinance the sum owing on the Town E property ($238,716) within 10 weeks of the Court’s orders, then the Town E property should be sold and from the net proceeds of sale (after, inter alia, the sum owing on the Town E property is paid) the wife be paid the balance.
Under the Court’s proposed orders, the husband will retain the Suburb C property (should he be able to pay the wife $345,019, including refinancing the mortgage loan of $531,760), his business including its motor vehicle and cash, and his superannuation. If the Suburb C property has to be sold, then, after the mortgage loan is discharged and the wife is paid $345,019, he will be left with cash of about $273,221 from those proceeds of sale. Utilising his business income, he may then be able to purchase real estate for accommodation in Sydney.
Under the Court’s proposed orders, the wife will retain the Town E property (should she be able to refinance its mortgage loan), modest cash sum and credit card debt, cash payment from husband of $345,019, and her superannuation. She will remain in employment. She may then be able to purchase real estate for accommodation in Sydney.
The Court is of the view that its proposed property adjustment orders will represent a just and equitable property settlement between the parties.
The Court makes orders accordingly.
I certify that the preceding one hundred and sixty (160) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Newbrun. Associate:
Dated: 20 February 2025
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