Palasar & Ninesh
[2023] FedCFamC2F 1142
•31 August 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Palasar & Ninesh [2023] FedCFamC2F 1142
File number(s): MLC 4953 of 2022 Judgment of: JUDGE GLASS Date of judgment: 31 August 2023 Catchwords: FAMILY LAW – PROPERTY – Addbacks – Assessment of contributions where husband made substantial initial contribution – Adjustment where wife solely responsible for care of the parties’ child and significant earning disparity between the parties
FAMILY LAW – SPOUSAL MAINTENANCE – duration of agreed weekly payment
Legislation: Family Law Act 1975 (Cth) s 4(1), 72, 74, 75(2), 75(3), 79(4), 81, 90XT(1)(a)
Family Law Regulations 1984 (Cth), reg. 12A
Family Law (Superannuation) Regulations 2001 Part 6
Federal Circuit and Family Court of Australia Rules 2021 (Cth) r 10.17
Cases cited: AJO & GRO (2005) FLC 93-218
Clauson & Clauson (1995) FLC 92-595
Cornett & Hext (2021) FLC 94-067
Dulton & Dulton (2020) FLC 93-984
Fox v Percy (2003) 214 CLR 118
Rankin & Rankin (2017) FLC 93-766
Russo & Wylie (2016) FLC 93-747
Stanford v Stanford (2012) 247 CLR 108
Trevi & Trevi (2018) FLC 93-858
Division: Division 2 Family Law Number of paragraphs: 73 Date of last submission/s: 23 August 2023 Date of hearing: 21-23 August 2023 Place: Melbourne Counsel for the Applicant: Mr Stavris Solicitor for the Applicant: Baraka Lawyers Counsel for the Respondent: Mr Devries Solicitor for the Respondent: Conlan Cummings Lawyers ORDERS
MLC 4953 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS PALASAR
Applicant
AND: MR NINESH
Respondent
ORDER MADE BY:
JUDGE GLASS
DATE OF ORDER:
31 AUGUST 2023
THE COURT ORDERS THAT:
1.The Respondent pay to the Applicant the sum of $745,793 (“the Payment”) within 90 days.
2.In the event the whole of the Payment is not made by the due date, the Respondent sign all documents and do all things necessary for the sale of one or more of the properties situate at and known as B Street, Suburb C, D Street, Suburb E and F Street, Suburb G, and upon completion of the sale(s), the proceeds be applied as follows:
(a)firstly, to pay all costs, commissions and expenses of the sale;
(b)secondly, to discharge any loan or other encumbrance affecting the real property;
(c)thirdly, such amount of the Payment as is outstanding, together with interest at the rate prescribed by Rule 10.17 of the Federal Circuit and Family Court of Australia Rules 2021 (Cth); and
(d)fourthly, the balance of the net proceeds of sale to the Respondent.
3.The parties do all things and sign all documents necessary to transfer to the Applicant the balance of the funds held on trust by the Respondent’s solicitor.
4.In accordance with section 90XT(1)(a) of the Family Law Act 1975 (Cth), whenever a splittable payment becomes payable from the member spouse’s interest in Super Fund 1, Super Fund 1 shall pay to the non-member spouse, the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using a base amount of $70,279 and there is a corresponding reduction in the entitlement the member spouse would have had but for these Orders.
5.The previous Order have effect from the operative time.
6.The operative time for these Orders is 4 days after service of a sealed copy of said Orders on Super Fund 1.
7.This Order binds Super Fund 1.
8.Super Fund 1 do all acts and things and sign all such documents so the trustee can, in accordance with their obligations, make the payment to the non-member in the sum of $70,279 in accordance with Order 4 above.
9.That the parties do all acts and things and sign all such documents as may be required to arrange for the non-member member’s share of the member’s superannuation entitlement in accordance with Order 4 above to be rolled out of Super Fund 1 into a superannuation fund of the non-member’s choosing.
10.Each party shall otherwise retain all property, liabilities and resources in their respective possession including but not limited to shares, motor vehicles, bank accounts, superannuation entitlements, insurance policies, and loans to third parties.
11.The Respondent pay to the Applicant the sum of $400 per week by way of spousal maintenance until 31 August 2025.
12.Both parties be released from any Undertaking provided in relation to these proceedings.
13.All extant applications be dismissed.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE GLASS:
Ms Palasar and Mr Ninesh were married in 2014 and separated in December 2018. They have one child, X, now 5 years old.
X currently lives with Ms Palasar in Melbourne. Mr Ninesh presently lives in City H and works in City J.
At the conclusion of the trial, the parties resolved their parenting dispute by consent. Orders have been pronounced providing for X to live with Ms Palasar and spend time with Mr Ninesh as agreed between the parties, and failing agreement for four visits of five hours each school holiday period and for two visits of five hours each school term.
Remaining for determination are the parties’ competing applications for property settlement and spousal maintenance orders.
PROPERTY
Ms Palasar proposes that Mr Ninesh make a payment to her such that she receive 60% of the value of the parties’ assets. She also proposes an equalisation of the parties’ superannuation interests.
Mr Ninesh proposes that he make a payment to Ms Palasar such that she receive 30% of the value of the parties’ assets. He proposes there be no alteration of the parties’ superannuation interests.
Pursuant to section 79 of the Family Law Act 1975 (Cth), I have a discretion to make such order altering the parties’ interests in property as I consider appropriate. I am prohibited from making an order unless I am satisfied, in all the circumstances, it is just and equitable to do so.[1] If I am so satisfied, I am required to consider the matters prescribed by subsection 79(4) of the Act and by the device of paragraph 79(4)(e), relevant matters referred to in subsection 75(2) of the Act.
[1] Family Law Act 1975 (Cth) s 79(2).
Property interests
It is necessary to begin by identifying, according to common law and equitable principles, the existing legal and equitable interests of the parties in property.[2] For reasons that follow, I find those interests to comprise the following:
[2] Stanford v Stanford (2012) 247 CLR 108 (“Stanford”) at [37].
Asset
O'ship
Value
Funds held on trust by Respondent’s solicitors
Jt
$13,064
Part property settlement
W
$100,000
Savings
W
$1,040
Motor Vehicle 1
W
$26,100
Part property settlement
H
$80,000
Suburb C (50% interest)
H
$300,000
less Commonwealth Bank loan #...85 (50%)
H
($144,204)
Suburb E
H
$700,000
less Commonwealth Bank loan #...36
H
($357,389)
less Commonwealth Bank loan #...28
H
($405,402)
Suburb G
H
$1,000,000
Bank savings
H
$47,800
ANZ shares
H
$8,623
Motor Vehicle 2
H
$15,775
Loan to Mr K
H
$65,000
Add-back (home loan increases)
H
$313,186
Add-back (bond and rental funds)
H
$8,400
Total non-superannuation interests
$1,771,994
Super Fund 2
W
$77,708
Super Fund 1
H
$218,265
Total superannuation interests
$295,973
Total property interests
$2,067,967
The parties each proposed various values both for their own savings balances and the other’s. Neither were cross-examined on their assertions. In that circumstance, I prefer each party’s assertion as to the balance of their own savings accounts.
During the hearing, Mr Ninesh produced screenshots for the current home loan balances which were not challenged. I accept those screenshots reflect the current balances of the home loan accounts. Mr Ninesh also gives unchallenged evidence that he is liable for only 50% of the loan secured against the Suburb C property. Although Ms Palasar asserts that he is liable for 100% of the liability, in the absence of any challenge to Mr Ninesh’s evidence, I am unable to accept the assertion. I accordingly find Mr Ninesh to be liable for one half of the loan.
Mr Ninesh had initially proposed the inclusion of Ms Palasar’s Higher Education Contribution Scheme loan as her liability. Despite some cross-examination of Ms Palasar on the topic, she did not assert that the liability should be included. Mr Ninesh did not ultimately seek its inclusion. Given it is Ms Palasar’s liability arising from her studies prior to the parties’ marriage, I am satisfied that there is no proper basis for Mr Ninesh to be liable for a portion of it which would be the case if it were included in the list of the parties’ assets and liabilities.[3]
[3] Rankin & Rankin (2017) FLC 93-766 at [34].
Mr Ninesh also did not seek to include his credit card liabilities, which he conceded had accrued after the parties’ separation. I am satisfied that concession is properly made.
Both parties ultimately contended that various sums ought be added-back to the parties’ present interests in property. Add backs are exceptional and discretionary.[4] Reasonably incurred expenditure does not usually come within accepted categories of add backs.[5] The three recognised categories of add backs are where parties have expended money on legal fees, there has been premature distribution of matrimonial assets, or “waste” or wanton, negligent, or reckless dissipation of assets.[6]
[4] Dulton & Dulton (2020) FLC 93-984 at [32] and the cases there cited.
[5] Cornett & Hext (2021) FLC 94-067 at [48] and the case there cited.
[6] Trevi & Trevi (2018) FLC 93-858 (“Trevi”) at [27], citing AJO & GRO (2005) FLC 93-218 at [30].
Ms Palasar has accrued a substantial liability for her own legal fees. Mr Ninesh conceded that the sums he has drawn from the home loans to pay his own legal fees ought be added back. So much is consistent with avoiding making a pre-emptive decision about one party paying the other’s legal costs.[7] The total sum conceded by Mr Ninesh for that purpose is $72,760.
[7] Trevi at [37].
Mr Ninesh also concedes that sums he withdrew from the home loans for the purpose of meeting his child and spousal maintenance obligations should be added back. Given his Financial Statement reveals a capacity to meet those obligations from his income, I am satisfied that concession is appropriately made. The sum he concedes should be added back for that purpose is $3,733.33.
Ms Palasar contends that the total sum that should be added back against Mr Ninesh amounts to $299,581, being the difference between the total home loan balances after their re-finance in June 2019, and their present value. Her assertion inaccurately assumes that Mr Ninesh is solely liable for the home loan secured against the Suburb C property. When that error is corrected, the difference between the loan balances for which Mr Ninesh is liable between June 2019 and now is $313,186.
Ms Palasar’s contention includes the sums Mr Ninesh concedes should be added back. In effect, it amounts to an assertion that an additional sum of $236,693 ought be added back due to the premature distribution of matrimonial assets, or waste, wanton, negligent, or reckless dissipation of assets.
On 9 June 2022, the Court made an Order by consent that “the Husband be and is hereby restrained from selling, encumbering, or disposing of the interest of the parties or either of them” in the real properties.[8] The balance of his home loan liabilities at the end of June 2022 was $707,323. Despite the Order, Mr Ninesh continued to draw on the home loans for which he is liable such that his liability has increased by $199,671.
[8] Court Orders dated 9 June 2022, paragraph 3.
Mr Ninesh increased the liability against the real properties, further encumbering them. So much was clearly a breach of the Order to which he had consented. The issue was raised with his solicitors by way of correspondence on 20 June 2022, 20 September 2022, 12 October 2022, and 24 January 2023. Both the October and January letters clearly identify the issue as a contravention of orders.
Mr Ninesh’s oral evidence on the topic was fanciful. He claimed to have no recollection of having seen the letters, despite acknowledging that an assertion he was contravening orders, would have attracted his attention. His continued redraws on the home loans in contravention of the Order can appropriately be described as wanton.
Mr Ninesh sought to justify at least part of his behaviour by asserting that he did not have the means to make maintenance payments otherwise, and that the loan accounts are essentially his savings accounts in Australia. According to his Financial Statement, he had no need to draw on his savings to pay child support and spousal maintenance. He therein deposes to a capacity to meet all of his expenditure, including child and spousal maintenance payments from his income of $7,150 per week. There is no evidence his financial position has changed in any material way over the last three years. He also gave oral evidence that he has $1,000 left over from his income each month, after he meets his expenses. I reject Mr Ninesh’s evidence that he was unable to pay child support and spousal maintenance without drawing on the home loans in contravention of the injunction.
Because Mr Ninesh deposes to being able to meet all of his expenditure from his substantial income, I am satisfied that his drawings from the home loans were unnecessary to meet his reasonable expenditure.
Mr Ninesh’s only affidavit evidence in relation to withdrawals from the home loans is to assert that withdrawals made on 3 and 6 October 2022 totalling $45,000 were “reasonable and necessary to enable me to continue to finance the mortgages on all properties”.[9] That conclusory statement is also inconsistent with his sworn Financial Statement wherein he deposes to being able to meet both all of the home loan repayments and all of his other expenditure from his income.
[9] Affidavit of Mr Ninesh filed 7 August 2023, paragraph 54(ii).
Mr Ninesh failed to comply with requests for disclosure in a timely fashion, producing a substantial volume of material, including relevant bank accounts, on the business day prior to the commencement of trial. He also failed to answer questions formally put to him in March 2023 in relation to drawings made by him. His lawyers’ assertion that by asking a single question about total drawings that particularised individual transactions, amounted to the asking of multiple questions, was erroneous and pedantic. Those unanswered questions included formally querying the application of funds that were the subject of an injunctive restraint. Mr Ninesh has still failed to provide any adequate explanation of the totality of the purposes to which he has applied the improperly drawn funds.
In addition to the funds drawn by Mr Ninesh from the home loans, he has disposed of savings which Ms Palasar deposed, without contradiction or challenge, to have amounted to $405,000 in November 2021. Whilst some of those funds were distributed to the parties by way of part property settlement, the balance of their disposition is unexplained by Mr Ninesh aside from an assertion that they were applied to child and spousal maintenance. Again, that evidence is inconsistent with his Financial Statement. I reject any suggestion that Ms Palasar should contribute to that maintenance from her property settlement.
I am satisfied the evidence supports a conclusion that Mr Ninesh’s increases in his home loan liabilities since June 2019 can be characterised as a premature distribution of the parties’ assets, or their wanton, negligent, or reckless dissipation. His failure, despite multiple requests, to explain the application of those funds is exceptional. I exercise my discretion to add back the sum of $313,186 to the present value of the parties’ assets and liabilities.
Mr Ninesh asserts that a Mr K owes him the sum of $65,000. The funds transferred by Mr Ninesh to Mr K were drawn from a Commonwealth Bank Savings account. For that reason, I am satisfied that the loan should be treated as an asset independent of the add-back referred to in the preceding paragraph.
Ms Palasar gives unchallenged and uncontradicted evidence that Mr Ninesh would have received the sum of $8,400 by way of bond and rental funds following the parties leaving Country L. She deposes that Mr Ninesh “has remained silent on where these funds have been transferred and used towards”.[10] In the exceptional circumstance of a lack of explanation from Mr Ninesh as to their application or use, I also find those funds to have been recklessly or prematurely distributed. I accordingly also consider it appropriate to add them back.
[10] Affidavit of Ms Palasar filed 2 August 2023, paragraph 54.
The parties otherwise agreed on the identity and value of their interests in property. That agreement included adding back the amounts received by each of them by way of part property settlement.
Justice and equity
Both parties seek an alteration of their property interests in order to finally determine the financial relationships between them.[11] Implicit in those requests is an acceptance that the making of an order would be just and equitable.[12] I consider it to be just and equitable to make a property settlement order because there will no longer be the common use of property by the parties.[13]
[11] Family Law Act 1975 (Cth), s 81.
[12] Russo & Wylie (2016) FLC 93-747 at [54].
[13] Stanford at [42].
Contributions
I am required to take into account the parties’ financial and non-financial, direct and indirect, contributions to the acquisition, conservation or improvement of property.[14] I am also required to take into account the parties’ contributions to the welfare of the family.[15]
[14] Family Law Act 1975 (Cth), s 79(4)(a)–(b).
[15] Family Law Act 1975 (Cth), s 79(4)(c).
Mr Ninesh contends that I should adopt a two-pool approach, considering non-superannuation property separately from superannuation property. Ms Palasar made no contrary submission. I consider it appropriate to do so.
Non-Superannuation Assets
At the commencement of the parties’ relationship, Mr Ninesh owned the Suburb E and Suburb G properties, and had a half interest in the Suburb C property. He gives evidence of his equity in those properties to then have amounted to $525,000. He also gives evidence of having had savings of $100,000. Those initial financial contributions totalled $625,000. Ms Palasar gives evidence that she had savings of approximately $50,000 prior to the parties’ marriage.
Neither party’s evidence in relation to their initial contributions was challenged or contradicted. I accordingly find that Mr Ninesh contributed non-superannuation assets with a value of $575,000 more than those contributed by Ms Palasar.
The parties commenced cohabitation and married in 2014. They moved to Country L to live that same month. Ms Palasar gives evidence that Mr Ninesh then worked in the technology industry, earning approximately $20,000 each month. She also gives evidence that she was “solely responsible for all homemaker duties including cooking, cleaning, laundry, grocery shopping and other household shopping”.[16] I accept her unchallenged evidence.
[16] Affidavit of Ms Palasar filed 2 August 2023, paragraph 50.
X was born in 2018. Ms Palasar ceased work as an educator to care for X while Mr Ninesh continued to work full time. I find Ms Palasar made the overwhelming parenting contributions for X during the parties’ relationship.
In December 2018, the parties separated. Ms Palasar and X commenced living with her parents in Melbourne. Mr Ninesh continued to work in Country L. He travelled to Melbourne every two to three months for a few weeks at a time and would spend short periods of time with X at Ms Palasar’s parents’ residence.
In late 2021, Mr Ninesh returned to live in Melbourne, before again moving overseas for work to City H in late of 2021. He has thereafter returned to Melbourne on six occasions and spent limited time with X.
After the parties’ separation, Ms Palasar was solely responsible for X’s care, albeit with the assistance of her parents. She initially had access to a credit card in Mr Ninesh’s name which she used for X’s expenses. From May 2022, Mr Ninesh paid child support to Ms Palasar of $250 per week. From October 2022, Mr Ninesh also paid spousal maintenance of $400 per week to Ms Palasar.
After the parties’ separation, Mr Ninesh continued to maintain the real properties, including making home loan repayments, paying rates, insurances and maintenance expenses.
After the parties’ marriage, and in the period post-separation, they both made a myriad of contributions. Primarily, Mr Ninesh’s contributions were financial, where as Ms Palasar’s were non-financial and by way of parenting.
Mr Ninesh’s assertion that the parties’ contributions ought be assessed at 80% in his favour would equate to him being assessed to have contributed approximately $1,063,000 more than Ms Palasar. That amount vastly exceeds the differential in their initial contributions, made 9 years ago. I do not accept that to appropriately reflect the parties’ overall contributions.
Ms Palasar asserts that contributions ought be assessed at 60% in favour of Mr Ninesh. That would equate to them being assessed to favour Mr Ninesh by approximately $354,500. I consider such an assessment inadequately reflects the considerable initial contribution made by Mr Ninesh.
On balance, I assess the parties’ contributions to the non-superannuation assets to be 62.5% by Mr Ninesh and 37.5% by Ms Palasar. In dollar terms, that amounts to a differential between the parties’ contributions in the amount of $442,998.
Superannuation Assets
At the commencement of the parties’ relationship, Mr Ninesh had superannuation interests worth approximately $150,000. He made one contribution to that superannuation interest after the parties’ marriage, being the sum of $5,375 in the Financial Year ending 30 June 2020.
Ms Palasar gives no evidence of the value of her superannuation interest at the commencement of the parties’ relationship. However, she gave uncontradicted oral evidence that she has made no contributions to her superannuation since that time.
As the parties made no superannuation contributions during their relationship, neither made any direct or indirect contributions to superannuation during that time. The only subsequent contribution to superannuation was modest.
I accordingly find that the parties’ contributions to superannuation to be reflected in the current balance of their respective interests. In percentage terms, that reflects Ms Palasar having contributed 26% of the value of the parties’ total superannuation interests, and Mr Ninesh having contributed 74% of the value of those interests.
Paragraphs 79(4)(d, e, f and g) and subsection 75(2) factors
Ms Palasar is 39 years old. She is an educator. She has post-graduate qualifications and certificates. She has 8 years of experience an educator both in Australia and Country L, although has not worked full time since X’s birth. She is currently conducting brief online classes for 1-2 hours per week.
Ms Palasar seeks to return to full-time work when she is able to do so. She anticipates she will need to undertake a period of casual relief, or part time work before she will gain full time employment. In order to work, she will need X to have a place in before and after school care on the days she is working. X is currently on the relevant wait list, but no place is yet available for him. Ms Palasar gave evidence the wait list is long, and she is unsure when a place may become available. I am satisfied that because Ms Palasar is her son’s sole carer, she currently is unable to work as an educator.
However, upon X gaining a place at before and after school care, Ms Palasar will have the capacity to return to employment on a casual or part time basis, and to thereafter return to the fulltime workforce in the medium term. She gives evidence that she anticipates commencing with two to three days per week of work in the near future before estimating her return to full time work in around two to three years. I accept the reasonableness of her proposal given she has been out of the Australian workforce for nine years, and is solely responsible for X’s care. I also accept her uncontradicted and unchallenged evidence that her earning capacity would be approximately $65,000 per annum.
Mr Ninesh is 41 years old. He works in City J as a professional, currently earning $364,000 per annum. He is the department head for M Company. He deposes to his current contract being for two years. That evidence is inconsistent with the terms of his employment contract signed in 2021 which prescribes its duration as “unlimited”.[17] He gives no evidence of having signed a new employment contract since that time. There were several aspects of the way in which Mr Ninesh gave his evidence that were inconsistent. I prefer the contemporaneous material of his actual employment contract, and find his contract term to be unlimited.[18]
[17] Affidavit of Ms Palasar filed 2 August 2023, Annexure FK3.
[18] Fox v Percy (2003) 214 CLR 118 at [31] per Gleeson CJ, Gummow & Kirby JJ.
I consider the relevant factors to warrant an adjustment to the contributions assessment to the non-superannuation assets of 12.5%, equating to a dollar adjustment of $221,499 in Ms Palasar’s favour and creating an overall differential from the contribution assessment of $442,998. That percentage adjustment is the middle of the range contended by Mr Ninesh.
I consider the relevant factors warrant a greater adjustment of the parties’ superannuation interests, particularly in circumstances of the vast earning capacity differential between the parties. I find an adjustment to equalise the parties’ superannuation, by cash sum of $70,279, or approximately 24% of the overall value of the parties’ superannuation interests, to be appropriate. That adjustment amounts to a differential of $140,557 from the contribution assessment.
Property Conclusions
The overall result of my assessment is that both parties are to retain 50% of the value of the parties’ non-superannuation assets, being $885,997. On the basis that Ms Palasar retain the joint funds held in Mr Ninesh’s solicitors’ trust account and the other assets in her name, she requires further assets worth $745,793.
Both parties propose that Mr Ninesh make a cash payment to Ms Palasar in order to adjust the parties’ interests in non-superannuation assets. Mr Ninesh proposes making a payment of $50,000 within 14 days and the balance in 90 days. Ms Palasar seeks the total payment within 90 days. I consider it preferable that the entire payment be made within 90 days.
Mr Ninesh adduces evidence of the capital gains tax he would be required to incur in the event he was required to sell any of the real properties. Allowance should generally be made for such tax if I order a sale, or am satisfied a sale is inevitable, or will probably occur in the near future, or if the asset was acquired solely as an investment with a view to its ultimate sale for profit. If I am otherwise satisfied that there is a significant risk of sale in the short to mid-term, I may take into account a potential capital gains tax liability as a relevant 75(2) factor.[19]
[19] Rosati & Rosati (1998) FLC 92-804 at [6.36].
Mr Ninesh’s evidence in relation to the risk of sale is solely the following:
This asset pool does not reflect the CGT liability which I will incur if required to sell one or other of the properties…[20]
The evidence is of no assistance in assessing the probability or risk of sale of one or more of the properties. Mr Ninesh has equity in the properties approximating $1,100,000. He has substantial income from which he can service further borrowings. Were he to apply his savings to the payment to Ms Palasar, finance the balance of the payment to her along with the existing home loan liabilities, the loan to value ratio on the properties would be approximately 80%.
[20] Affidavit of Mr Ninesh filed 7 August 2023, paragraph 40.
The evidence does not satisfy me there is a significant risk that Mr Ninesh will be required to sell any of the properties. There is no evidence the properties were acquired with a view to their ultimate sale for profit. I accordingly decline to make any allowance for a potential capital gains tax liability, even if Ms Palasar seeks a default provision for sale in the event Mr Ninesh does not make the required payment by the due date. Put another way, I decline to make allowance for a capital gains tax liability that may not arise, which allowance would reduce the amount Ms Palasar is otherwise entitled to.
I am satisfied that the parties retaining an equal share of the value of their non-superannuation assets is just and equitable.
I consider it proper to provide for the sale of the real properties in default of Mr Ninesh’s compliance with the Order to make payment to Ms Palasar. I also adopt Mr Ninesh’s proposal for an Order to otherwise provide for the parties to retain their property, liabilities and superannuation, noting that Ms Palasar sought similar orders.
I find the orders proposed by Ms Palasar to equalise the parties’ superannuation assets to be just and equitable.
Mr Ninesh has previously given an Undertaking in relation to the disposal of funds in a bank account. I accept that the parties should be released from their undertakings, as proposed by Mr Ninesh.
SPOUSAL MAINTENANCE
At the commencement of the hearing, Ms Palasar sought payment of $60,000 “as a lump sum payment to stand in place of ongoing spousal maintenance”.[21] By the conclusion of the hearing, both parties agreed that an order for periodic spousal maintenance should be made at the rate of $400 per week. The issue remaining for determination is the duration of such an order. Mr Ninesh proposes that it extend to June 2024 (approximately ten months), whereas Ms Palasar proposes that it extend for three years.
[21] Amended Initiating Application of Ms Palasar filed 2 August 2023, page 4.
Pursuant to section 74 of the Act, I have a discretion to make such order for the provision of maintenance as I consider proper. Section 72 of the Act delineates the circumstances in which the power may be exercised.[22]
[22] Clauson & Clauson (1995) FLC 92-595 (“Clauson”) at 81,907.
Ms Palasar receives income by way of Government benefits totalling $757.84 per week. Pursuant to section 75(3), I am to disregard those entitlements to the extent they are income tested pensions, allowances, or benefits. That includes social security pensions and benefits, and family tax benefits, the Part A rate of which is higher than the base rate.[23] The base rate of Family Tax Benefit to which Ms Palasar is entitled is $68.46 per fortnight. Accordingly, the only government income to which I may have regard is the amount of $34.23 per week.
[23] Family Law Act 1975 (Cth), ss 4(1); Family Law Regulations 1984 (Cth), reg. 12A.
Ms Palasar receives payments from Mr Ninesh by way of child support at the rate of $250 per week. I also disregard that income in assessing Ms Palasar’s need for maintenance in circumstances where it is less than the expenses Ms Palasar incurs for X.
Ms Palasar is currently working online as an educator, earning $15 per thirty minute session. She conducts one to four sessions per week. She is a qualified educator, and is available to work during school hours. She gives unchallenged evidence that upon being able to return to work full time, she would earn approximately $65,000 per annum. Net of tax, that would equate to her receiving income of approximately $1,000 per week.
Ms Palasar deposes to incurring expenses of $1,358 per week for herself. Her weekly expenses exceed the income to which I have regard by approximately $1,300 per week. It was not suggested to her that any of her claimed expenses were excessive or inappropriate.
I conclude that Ms Palasar is unable to adequately support herself, and find her reasonable needs substantially exceed the amount of $400 per week she claims. Even upon obtaining full time work, Ms Palasar’s expenses will exceed her income.
Mr Ninesh deposes to earning income of $7,150 per week, and incurring expenses of $7,042 per week. Those expenses include the current interim spousal maintenance payment of $400 per week, along with expenditure for entertainment and hobbies of $100 per week and holidays of $200 per week. Given Mr Ninesh’s income exceeds his expenditure, including the payment of spousal maintenance of $400 per week, I am satisfied that he presently has the capacity to continue to do so. That finding is consistent with Mr Ninesh’s proposal to pay Ms Palasar $400 per week for ten months is a concession that he has such a capacity.
Mr Ninesh will shortly incur further expenses to support his new partner who is currently pregnant. He adduced no evidence as to what those expenses will be.
On balance, I consider it proper for Mr Ninesh to maintain Ms Palasar at the agreed rate of $400 per week for a period of two years. That strikes a balance between a reasonable time for Ms Palasar to obtain full time employment, the length of time since the parties’ separation, and the additional expenses Mr Ninesh is likely to incur in supporting his new family. It also takes into account a likely increase in his expenditure associated with financing the property settlement payment to Ms Palasar.
I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Glass. Associate:
Dated: 31 August 2023
0
4
4