Salim & Hakim (No 2)
[2024] FedCFamC1F 616
•13 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Salim & Hakim (No 2) [2024] FedCFamC1F 616
File number(s): PAC 5392 of 2020 Judgment of: JARRETT J Date of judgment: 13 September 2024 Catchwords: FAMILY LAW – PROPERTY – Non-disclosure by respondent – Where only significant assets at the time of trial were shares in companies operated by respondent – Where companies since placed into liquidation – Whether just and equitable to make any order Legislation: Family Law Act 1975 (Cth) ss 75(2)(o), 79(4)(a), (b) and (c) Cases cited: Salim & Hakim [2024] FedCFamC1F 615 Division: Division 1 First Instance Number of paragraphs: 78 Date of last submission/s: 11 September 2024 Date of hearing: 20 – 22 February 2024 Place: Parramatta Counsel for the Applicant: Mr Givney Solicitor for the Applicant: Maclaren’s Lawyers Counsel for the Respondent: Mr O’Reilly Solicitor for the Respondent: The Norton Law Group ORDERS
PAC 5392 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS SALIM
Applicant
AND: MR HAKIM
Respondent
ORDER MADE BY:
JARRETT J
DATE OF ORDER:
13 SEPTEMBER 2024
THE COURT ORDERS THAT:
1.The amended initiating application filed on 15 June 2021 is dismissed.
2.The response to final orders filed on 8 January 2021 is dismissed.
3.Otherwise all other outstanding applications are 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).
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
JARRETT J:
This is a property adjustment application. The issues requiring determination to inform the outcome in these proceedings concern the identification of the pool of property available for distribution between the parties. The outcome is in dispute, largely because despite many attempts to have the applicant particularise the orders that she seeks, she has not done so. The respondent says that the proceedings should be dismissed because the parties have a “negative pool”.
BACKGROUND
The parties married in 2004 in City F, Country E. There is a dispute between the parties about when they separated. The applicant says that the parties separated under the one roof in 2013 and the respondent says that the parties’ separation occurred sometime in 2020. The dispute about this is largely irrelevant although the significance of it for the respondent seems to lie in his desire to paint the applicant as having perpetrated a crime. But for my purposes, what is important are the contributions each has made, in terms of s 79(4)(a), (b) and (c), to the acquisition, conservation and improvement of their property and to the welfare of the parties’ family.
However, to the extent that it is thought to be important, I am satisfied that the parties separated in 2020 as the respondent contends. The parties lived in the same dwelling until that time and the applicant was given to treating the respondent as if they were still a couple. The cards, gifts and notes between the parties put into evidence by the respondent attest to that. The parties holidayed together as a family on multiple occasions. The text of the cards and messages put to the applicant in cross-examination as being from her to the respondent are inconsistent with the parties being separated between 2013 and 2020. It is more likely that there was a short period of separation in 2013 as the respondent contends and that the parties were thereafter reconciled until final separation in 2020.
The parties have three children, one of whom is now an adult. Their two younger children are 15 and 9 years. All of the children presently live with the applicant.
Initially, the parties lived in a home owned by the respondent (or one of his companies) at C Street, Suburb D. During 2007 the parties moved their residence to Country OO and lived in City NN where they remained until 2009. They returned to Australia because the respondent says that he incurred debts to the government of City NN and a warrant for his arrest was issued. The applicant accepted that the respondent had attempted to engage in business in City NN and things had gone badly. They left City NN. She accepted that he probably had debts but did not know of how much. She thought that the arrest warrant issued in respect of the respondent was for a different crime. Exhibit 2 (tendered without objection) appears to be an arrest warrant for the respondent issued by the “Government of [City NN]” in 2012. Just how the warrant establishes a debt as suggested by the respondent was not explained.
When the parties returned to Australia, they recommenced living at C Street, Suburb D until the applicant and the children vacated the home in 2020.
The respondent has three children from a previous marriage. Soon after the parties’ marriage, the respondent’s children resided with the applicant and the respondent for about three and half years. The respondent employed a nanny who took the children either to school or preschool and then returned them to the home in the afternoon. Aside from those matters, the applicant was responsible for the respondent’s children's care consistently with her role in the household as the primary carer of the children and primary homemaker.
Following them leaving the Suburb D property in 2020 the applicant and the children lived with the applicant’s parents until 2021. On 12 July 2021 a judge of the Family Court of Australia (as this court was formerly know) made an order permitting the applicant sole use and occupation of the Suburb D property. The respondent’s appeal against those orders was unsuccessful. The applicant and the children have lived in the Suburb D property ever since. The respondent has lived in rented accommodation ever since.
ASSETS, LIABILITIES AND FINANCIAL RESOURCES
Before dealing with the parties’ respective contentions about the assets, I record that I am satisfied on the balance of probabilities that the respondent has not made proper financial disclosure in this case. His evidence concerning his financial circumstances was confused and confusing and, I am satisfied, deliberately so. The evidence of the applicant’s brother, Mr PP demonstrates that the respondent has attempted to conceal certain payments to him. It was not until very shortly before the trial that the respondent provided any proper information about the receipt by him of $2,850,000 in the two years leading up to the trial pursuant to an agreement he entered into in 2019. To the extent that the respondent provided a copy of the relevant agreement in 2021, I am satisfied that the agreement had been changed by him as Mr PP attests. The respondent’s evidence about his income and the way in which the director’s loans that are now present in the books of account of Hakim Pty Ltd and J Pty Ltd was most unpersuasive.
It was not until the final day of the trial at the commencement of the address by counsel for the respondent that counsel for the applicant provided a balance sheet for which his client contended. It is as follows:
ASSETS Ownership Description Applicant’s value Respondent Hakim Pty Ltd $1,236,200.00 Respondent J Pty Ltd $1,143,835.00 Applicant NAB and Westpac accounts $1,646.00 Applicant QQ Bank account $11,547.00 Total $2,483,228.00 ADDBACKS Ownership Description Applicant’s value Respondent Legal fees paid $307,439.00 Applicant Interim property settlement $100,000.00 Total $307,439.00 TOTAL VALUE $2,790,667.00
One of the difficulties with this balance sheet is that it is replete with arithmetical errors. The balance sheet without the errors is:
ASSETS Ownership Description Applicant’s value Respondent Hakim Pty Ltd $1,236,200.00 Respondent J Pty Ltd $1,143,835.00 Applicant NAB and Westpac accounts $1,646.00 Applicant QQ Bank account $11,547.00 Total $2,393,228.00 ADDBACKS Ownership Description Applicant’s value Respondent Legal fees paid $307,439.00 Applicant Interim property settlement $100,000.00 Total $407,439.00 TOTAL VALUE $2,800,667.00
The balance sheet for which the respondent contends is as follows:
ASSETS Ownership Description Applicant’s value Respondent Westpac account 50 $290.00 Respondent NAB account 38 $49.00 Respondent Household contents $5,000.00 Respondent Hakim Pty Ltd $2,067,969.00 Respondent Adjustments to valuation of Hakim Pty Ltd ($196,648.00) Respondent J Pty Ltd $1,175,836.00 Respondent Adjustments to valuation of J Pty Ltd ($2,087,767.00) Respondent N2 Pty Ltd $14,927.00 Total $977,656.00 LIABILITIES Ownership Description Applicant’s value Respondent Australia Taxation Office ($20,461.00) Respondent Government of City NN (1) ($724,680.00) Respondent Government of City NN (2) ($92,423.00) Respondent Director’s loan to Hakim Pty Ltd ($869,270.00) Respondent Director’s loan to J Pty Ltd ($928,299.00) Respondent Current proceedings in District Court of NSW ($858,993.00) Total $3,494,136.00 SUPERANNUATION Ownership Description Applicant’s value Respondent Super Fund 1 $17,128.00 TOTAL VALUE ($2,499,352.00)
It can be seen from the balance sheets promoted by each of the parties that the most significant assets are the respondent’s interests in the companies J Pty Ltd and Hakim Pty Ltd.
There were some single expert valuations prepared in respect of Hakim Pty Ltd and J Pty Ltd. It was not explained how the figures contended for by the applicant relate to the values opined by the single expert. For the respondent’s part, it was suggested that the liability position of each company had change since the reports had been done and the changed liabilities needed to be accounted for, hence the adjustments in the respondent’s balance sheet.
As it turns out, all of this is for nought. On 11 March 2024 the applicant filed an amended application in a proceeding in which she sought leave “to re-open the proceedings”. Her evidence established, and it was ultimately not contested, that following the conclusion of the trial and the reservation of my judgment, the respondent caused administrators to be appointed to Hakim Pty Ltd and J4 Pty Ltd. Her evidence also revealed the existence of another entity, J Pty Ltd. I pause to note that both parties, though the respondent was primarily to blame, used the name J Pty Ltd to refer to both entities, being J Pty Ltd and J4 Pty Ltd. Rarely did either refer to the Australian Company Number to differentiate them. Even the single expert report referred to these two entities interchangeably such that considerable care is required to be satisfied about the identity of the entity to which reference is made at any particular point in time.
The applicant sought a range of orders, namely:
(a)an order restraining the administrators appointed from taking any steps in the administration of J4 Pty Ltd and Hakim Pty Ltd;
(b)the removal of the administrators from those two companies;
(c)relief pursuant to s 106B of the Family Law Act 1975 (Cth) in respect of the transfer of certain company shares to the fourth respondent to the application;
(d)the appointment of a receiver to J4 Pty Ltd, Hakim Pty Ltd and J Pty Ltd;
(e)certain restraints against the respondent from dealing with the assets of the companies;
(f)a deposit of $50,000 as security for her costs of the application in a proceeding; and
(g)a separate order for costs.
I dealt with that application on 22 March 2024. By that time the applicant had changed tack and instead of seeking the appointment of a receiver to the three companies referred to above, she sought the appointment of a liquidator. Leave to reopen was not opposed, but the other relief sought by the applicant was opposed.
I granted the applicant leave to reopen, but dismissed her applications in respect of the administrators of Hakim Pty Ltd and J4 Pty Ltd. Because the applicant had undertaken none of the procedural requirements leading to the orderly hearing of an application to appoint a liquidator to J Pty Ltd, I adjourned that application to 27 March 2024 so those matters could be satisfied. I made directions for the respondent to provide sworn evidence about a number of matters. I delivered reasons for the orders I made: Salim & Hakim [2024] FedCFamC1F 615.
The respondent filed an affidavit in compliance with my direction. Included in it was the following evidence:
3. I own 100 shares in [N3 Pty Ltd]. This company was registered [in] 2021. It is not a trading entity. Annexed hereto […] is a copy of the current ASIC search of [N3 Pty Ltd].
4. [N3 Pty Ltd] is the sole shareholder of [J Pty Ltd]. Annexed hereto […] is a copy of the current ASIC search of [J Pty Ltd]. [J Pty Ltd] started trading [in] 2024 for the purpose of establishing a source of income for myself and my family.
5. [J Pty Ltd] mostly purchases materials locally and resells them. The capital to fund these purchases is received from advanced payments from clients for their orders.
6. I now understand that this entity could conflict with [J4 Pty Ltd], and have accordingly appointed a liquidator, [RR Company] to wind up [J Pty Ltd] from […] 2024. [J Pty Ltd] does not have any assets, stock or liabilities. Annexed hereto […] is a letter from [RR Company] dated […] 2024 regarding the proposed creditors voluntary liquidation.
By the time the application came before me on 27 March 2024 the applicant had already appointed a liquidator to J Pty Ltd. The only order I was asked to make in the circumstances was one authorising the provision of evidence and exhibits from the trial to the liquidator of that company. The amended application in a proceeding was otherwise dismissed.
Having received nothing from either party about the progress of the administrations, after foreshadowing my intention to do so and seeking submissions from the parties about my intended course (none of which were received) I directed the respondent to file evidence that in effect set out what had become of the administrations. His evidence, filed on 11 September 2024 demonstrates that both Hakim Pty Ltd and J4 Pty Ltd have each had liquidators appointed.
No party has sought to make any further submissions having regard to this information.
What is clear, however, is that the balance sheet has been dealt a significant blow by the appointment of liquidators to J4 Pty Ltd, Hakim Pty Ltd and J Pty Ltd. Neither party sought to argue that, in the circumstances, the respondent’s shares in those companies retained any value. There was no application for the liquidators to be joined to the proceedings.
Indeed, at the commencement of the hearing on 27 March 2024, counsel for the applicant submitted that “your Honour would simply proceed to judgment.” After a follow up question from me counsel responded “we don't see that any further re-opening can take the matter further.”
In the circumstances, I cannot proceed on any other basis than that the respondent’s shares in J4 Pty Ltd and Hakim Pty Ltd and N3 Pty Ltd’s shares in J Pty Ltd are valueless.
I find that the parties’ assets, liabilities and financial resources are as follows:
Assets: Totals Hakim Pty Ltd Nil J4 Pty Ltd Nil Interests in N2 Pty Ltd $14,927.00 NAB and Westpac accounts $1,646.00 QQ Bank accounts $11,547.00 Westpac account $290.00 NAB account $49.00 Household contents $5,000.00 $33,459.00 Add backs: Interim property settlement $100,000.00 $100,000.00 Liabilities: $0.00 Superannuation: Super Fund 1 $17,128.00 $17,128.00 Nett non-superannuation assets $133,459.00 Nett assets $150,587.00
I make the following observations about the parties’ assets, liabilities and financial resources.
The applicant argued for an add-back of $307,439 being the amount paid by the respondent for his legal fees. Although there was no clear evidence about where those funds had come from, it is tolerably clear that it could only have been from the respondent’s use of funds belonging to either Hakim Pty Ltd or J4 Pty Ltd. The evidence tended to suggest that this amount was taken up in the director’s loan accounts within the books of one or other of the companies. I do not consider in the circumstances that the amount should be added back because even if the funds were still available, they would not be available for division between these parties in these proceedings. The amount may represent a sum for which the respondent is liable to the liquidator of the relevant company, but the likelihood of the relevant liquidator pursuing the respondent for those funds (or the rest of his director’s loan account) is not answered by the evidence.
The respondent argued for the inclusion of a number of liabilities. For the reasons I have just expressed, I have included the director’s loans said to be owed by the respondent to J4 Pty Ltd and Hakim Pty Ltd. Apart from the uncertainty that surrounds whether the respondent will be pursued by the liquidators for those amounts, the evidence does not otherwise persuade me that the sums claimed are accurate. The evidence of Mr TT, the single expert, shows that insofar as these loans were concerned, the ground was constantly shifting as he tried to prepare his opinion. Although he arrived at a conclusion about the loans for the purposes of his opinion, I am not satisfied on the material before me that there is a sound basis for finding that the loans exist in the amounts claimed.
Similarly, the debts said to be owed the Government of City NN are not attested by any document that corroborates the respondent’s claims that such sums are in fact owed. Whilst I accept that there may have been a warrant for the arrest of the respondent issued, on the face of the warrant, that is in respect of a crime alleged to have been committed by the respondent, not for a debt owed to the government of City NN.
The respondent claims that I should take account of the fact that there are presently proceedings on foot in the District Court of New South Wales in which the applicant’s brother is claiming $858,993.00 from the respondent. The respondent’s evidence makes it clear that there are other proceedings on foot that seek to set off the amount claimed by the applicant’s brother. Moreover, the respondent’s evidence demonstrates that the proceedings are not particularly well advanced. In the circumstances I am not satisfied that there is any certainty at all that the amount claimed as a liability arising out of those District Court proceedings should be brought to account.
Finally, the applicant claims to have a personal tax debt of $20,461. There is, however, no evidence of such a debt. The respondent suggests in his affidavit of evidence in chief that many of the debts owed by the companies, including debts to the Australian Taxation Office, are personally guaranteed by him, but apart from asserting that the guarantees exist, there is no evidence of them.
Otherwise, the matters set out in the table above were the subject of agreement between the parties.
JUST AND EQUITABLE TO MAKE ANY ORDER?
Having regard to my findings about the parties’ assets liabilities and financial resources it is apparent that the applicant has the following:
NAB and Westpac accounts $1,646.00 QQ Bank accounts $11,547.00 Interim property settlement $100,000.00 $113,193.00
The respondent has the following
Shares in Hakim Pty Ltd Nil Shares in J4 Pty Ltd Nil Westpac account $290.00 NAB account $49.00 Household contents $5,000.00 Interests in N2 Pty Ltd $14,927.00 Super Fund 1 $17,128.00 $37,394.00
It is apparent that of the parties’ net assets, including superannuation, the applicant has about 75% of those assets and the respondent has about 25%. However, at least one hundred thousand dollars of the applicant’s assets is represented by the partial property settlement of $100,000 she received in 2021. Having regard to her financial circumstances and her evidence, those funds have been expended on her living expenses and her support of the children. In tangible terms, the applicant has $13,193 in bank accounts compared to the $37,394 to which the respondent appears entitled.
In those circumstances, I do not consider that it is just and equitable to make any property adjustment order at all. The applicant should retain the funds in her bank accounts and the respondent should retain the funds in his bank accounts, his household contents and his superannuation. It was not suggested that there should be any division of the parties’ assets whereby the applicant would take an interest in N2 Pty Ltd or that there would be a superannuation splitting order. Given the sums involved, it seems a parsimonious exercise to make a property adjustment order.
Having regard to those findings, it is appropriate to make an order dismissing all outstanding applications and responses.
In the event that I am wrong about that view, I make the following findings in respect of the following further matters contended by the parties.
CONTRIBUTIONS
When the parties commenced their relationship, the applicant had a motor vehicle and some jewellery. I find that the respondent had more substantive assets and in particular he had:
(a)298,731 out of 301,749 shares in Hakim Pty Ltd (incorporated in 2003) which, in turn, owned:
(i)real property at H Street, Suburb D purchased in 2003 using a cash deposit of $190,000 and borrowed funds for the balance;
(ii)real property at C Street, Suburb D purchased in 2001;
(iii)a business called J Pty Ltd;
(iv)a leased motor vehicle;
(v)another vehicle sold in 2006 for $9,800;
(vi)cash at bank of “up to $100,000”, whatever that means.
(b)property in Country E, which was sold during the relationship for an undisclosed sum;
(c)furniture, furnishings and effects of little value; and
(d)“modest” superannuation.
When the parties married, the applicant was employed in a business. Prior to that, she had worked in another field. The applicant’s evidence is that soon after the marriage the respondent asked her to stop working and he would not permit her to work or study during the relationship. These matters were not put to the respondent in cross-examination. He denies them and I do not accept them.
I accept the applicant’s evidence that the respondent worked long hours throughout the parties’ relationship. He worked six days per week. Meanwhile the applicant was the principal homemaker and parent to the respondent’s three children from his previous relationship (at least until 2006) and the parties’ own children as they came along. She was responsible for all cooking, washing and other household chores.
The respondent’s evidence demonstrates that he was active in attempting to engage in various business opportunities with others, including the applicant’s brother Mr PP. Some of those ventures went nowhere, some were moderately successful and some were not.
In 2010 the respondent incorporated J4 Pty Ltd. This company was valued by the single expert who, confusingly has referred to it as J Pty Ltd and J4 Pty Ltd. The business called J Pty Ltd was transferred from Hakim Pty Ltd to J4 Pty Ltd in 2010.
The applicant asserts that Hakim Pty Ltd owned land at the adjoining properties at H Street from where the business of J Pty Ltd was conducted. However, this assertion is a prime example of the way in which the applicant has chosen to run her case – by allegation and assertion rather than evidence. It beggars belief that she, or those that advise her, did not undertake a simple title search to establish whether this assertion was true. The respondent’s evidence, supported by the relevant title searches shows that it is not true. As I have set out above, Hakim Pty Ltd owned H Street, Suburb D. The respondent’s brother owned, and continues to own the adjoining properties at H Street, Suburb D although the respondent has been permitted to use that land both physically and for the purpose of providing security for borrowings.
The parties lived what might be described as a relatively lavish lifestyle. They enjoyed family holidays and the applicant accepted that the respondent bought her gifts of luxury items. She also accepted that he purchased the family a car for her to drive. The expenses of the vehicle (save for fuel costs) were met by the husband or at his direction from his company’s business. The parties had a joint account from which the applicant could draw funds. In addition, the applicant’s evidence was that the respondent would give her money whenever she asked for it to purchase things she or the children needed from time to time.
In light of that evidence, it is surprising then that the applicant’s case is that the respondent was financially controlling and financially abusive of her. Consistently with the view I have taken of the applicant’s evidence generally, this assertion is an example of her tendency to mischaracterise and embellish the facts. That is not to say that following separation the respondent did not become difficult about providing financial assistance to the applicant and his children. He did. But the effect of the applicant’s evidence in cross-examination was that during the relationship the respondent provided her with whatever she asked for, more or less.
In 2020 the applicant and the children vacated the parties’ home at the respondent’s insistence. They lived with the applicant’s parents in what seems to have been fairly crowded circumstances. The applicant contributed $260 per week from her government entitlements to the rent her parents paid on the property that they all shared.
The applicant has been solely responsible for the day-to-day care of the children since 2020. I accept her evidence that the respondent has neither sought nor had any time with the children since then. I accept her evidence that he has not remembered the children's birthdays or interacted with the children on religious holidays, which according to the applicant’s evidence, is a time when children usually receive presents from their parents.
The applicant has always been responsible for the children’s health care and prior to separation the applicant and respondent maintained private health insurance. In 2020 the applicant took one of the children to a medical appointment. When she went to claim on the parties’ health fund for part of the cost she discovered that the insurance had been cancelled. The respondent had cancelled the insurance but did not inform the applicant he had done so. When asked about this in cross-examination, he said that he cancelled the insurance because he could no longer afford it (a proposition I do not accept) and because he had chosen not to communicate with the applicant any longer, he could not tell her what he had done. The applicant has had to reinstate the insurance for she and the children from her own resources.
The applicant has met the medical costs of the children and herself from her own resources. She has paid a total of $1,733.40 for a procedure for one child. In 2020 she had to meet the costs associated with a medical procedure for herself of $2,000. One of the parties’ children has a medical condition which requires her to consult a specialist once per year at a nett cost of $343.00. The parties’ oldest daughter was also under the care of a specialist in 2020. She had six visits at a cost of $300 each. The applicant met these costs from her own resources.
I accept the applicant’s evidence that when she and the parties’ daughters vacated the home, they took with them only a few items of clothing. The applicant says that she concentrated on ensuring that she had the children’s school uniforms and school equipment. She swears, and I accept, that otherwise a substantial amount of clothing and shoes for her and the children were left behind. She left the home fully furnished including her bedroom suite, the children's bedroom suites, the children’s toys and the like.
The parties’ children attended, and the younger two continue to attend, private schools. Despite being financially responsible for the children’s school fees prior to separation, and despite swearing in an affidavit on 7 January 2021 that he was making an arrangement with the children’s then school for the payment of arrears, between 2020 and 2021 the respondent did not pay the children’s school fees or make an arrangement for them to be paid.
The school pressed for payment and by a letter dated 2021 the school terminated the children’s enrolment with effect from a month later in 2021. Despite that, the respondent still did not pay them or make an arrangement for them to be paid. Instead, in 2021 the applicant borrowed $2,000 from her brother and paid it to the school to prevent the school expelling the children. Subsequently, the applicant moved the parties’ oldest daughter to another state high school where she completed her schooling.
Since then, the respondent has made some payments, but his payments have been irregular. He made no payments from 2022 until three days before the trial. The evidence shows that as at 2023, the outstanding school fees for the parties’ daughter Y was $5,590 and for their daughter Z was $5,440. The applicant has had to care for the children without assistance from the respondent and all the while worrying about whether their school fees had been paid from time to time.
Following the applicant’s departure from the parties’ home, the respondent gave the applicant $200.00 on about five occasions. She subsequently made an application for an assessment of child support and in due course, an assessment issued based upon the respondent’s tax return for the year ending 2020 in which he said his taxable income was $40,000.00 per annum. The assessment was for $151.00 per week. When asked about this in cross-examination, the respondent accepted that this was probably not enough for the applicant and the children to live on, but he did not pay any more to her. The applicant’s evidence, which I accept, is that between 2021 and 2023 the respondent paid the applicant $16,268.22, or an average of about $130.00 per week.
Since separation, the respondent has engaged in profligate spending. He has been on overseas holidays and has taunted the applicant with pictures of him and other women enjoying the surrounds of the respondent’s accommodations. The evidence shows that during the period from 2021 to 2022 the respondent paid from his personal account a sum approaching $180,000 to an entity described as “[SS Company]”. The respondent could not recall to what it was that this expenditure related. He could proffer no suggestion for the payments and said that he was surprised to see the withdrawals from his bank account. He said that he did not look at his bank statements usually. I found this evidence, and the attitude expressed by the respondent when giving it, breathtaking in its audacity. He was clearly being dishonest.
In 2021 the applicant and the children had to move from the townhouse they were then occupying. The applicant could not find affordably priced accommodation in an area that was close to the children’s school and their social networks. She commenced an application in 2021 for exclusive occupation of the residence at Suburb D, having foreshadowed the application in an affidavit sworn and filed on 8 March 2021.
The respondent resisted the application on the basis that because of his dire financial position he had decided to let out the Suburb D property and had moved to live with relatives. He did not explain how he knew of his dire financial situation given that, on his own evidence, he did not usually look at his bank statements. At paragraph 153(k) of an affidavit sworn on 5 May 2021 the respondent swore:
(k) Because of my dire financial position and in an effort to be able to continue to pay mortgage and loan repayments and not default on the loans, I decided last month to move out of the [C Street] property and live with relatives and rent out the [C Street] property. I made that decision before I was aware that [Ms Salim] wanted to make an Application to move into the property but, but psychologically I had difficulties coming to terms with moving out of my family home that I had lived in for more than 20 years. Unfortunately, the pressure on me by reason of the downturn in my business and my inability to service all the loans and mortgages (primarily due to the significant loss I took to exit [an] investment which I had no choice but to do it to stand the financial bleed) I had to rent my home. I rented the home [in] 2021 for 18 months through [an] agency […] ...
This evidence is largely false. The respondent knew that the applicant was seeking an order for sole use and occupation of the C Street property in 2021 when the applicant swore and filed her affidavit on 8 March, 2021. Her application in a proceeding seeking those orders was filed on 20 April 2021 well before the respondent said he let the property. He gave the applicant or her lawyers no notice of his intention to rent the property. He let the property to a friend of his or that friend’s wife. He did it, I am satisfied in an endeavour to stymie the applicant’s application for sole use and occupation.
In cross-examination, the respondent said that he moved from the C Street property into a property at Suburb AA for which the weekly rent was $1,900. He said he was there for “several weeks” and borrowed money from “lots of friends” so he could pay the rent. He sent a video of him on the property to the applicant’s brother showing the nature of it.
In the meantime, the applicant amended her application in a proceeding to join the new tenant of Suburb D property to the proceedings. The application was opposed by both the respondent and the new tenant. However, on 12 July 2021 the court made orders that the applicant have exclusive occupation of the Suburb D property notwithstanding its occupation by a “tenant”.
The applicant and the children have lived in the Suburb D property ever since. When she returned to the property it was in a poor and dirty condition and I am satisfied that the respondent had removed all of the furniture from home. The order for sole use and occupation also required the respondent to return to the applicant all items of personalty, furnishings, furniture, white goods and clothing and personal effects of the applicant and the children that had been removed by him. After some difficulty securing the respondent’s compliance, he returned some items, mostly in poor and degraded condition. Many larger items of furniture he did not return at all. He paid an amount by way of partial property settlement also required by the order over a period of about 3 months.
About the time the applicant re-entered the Suburb D property she set about obtaining employment. In 2021 the applicant obtained a position as a finance professional. About a year later in 2022 the applicant obtained employment elsewhere. She remains employed there. She remains solely responsible for the care of the children.
The respondent remarried in 2023 and had no difficulty accessing funds for the purposes of his wedding and a trip abroad.
Contributions summary
It is clearly the case that the respondent introduced significant property at the commencement of the parties’ relationship. It is also the case that the applicant’s role as parent and homemaker was significant. Post separation her role as parent homemaker continued although in quite a different way in which it did during the course of the parties’ relationship. Her access to financial resources has been much restricted and has been confined to a few payments from the respondent, the payment of a partial property settlement of $100,000 and some child support. It was necessary for her to bring an application to secure proper accommodation for her and the children. All the while, the respondent continued access to the revenue generated by the company is under his control. The value of the director’s loans presently in the accounts of the companies, if they be accurate, demonstrate that the respondent had access to significant sums of money post separation which is now no longer reflected in any of the assets before the court.
Bearing in mind that when submissions were made about this, both parties were contending that J4 Pty Ltd and Hakim Pty Ltd had some value, counsel for the respondent argued that I should find that the respondent’s contribution-based entitlement was 70%. Counsel for the applicant recognised that the contribution-based assessment might favour the respondent but suggested it would be no more than 55%. However, give what has occurred since and that the administration and subsequent liquidation of those companies has occurred at the hands of the respondent, I consider that the assessment of the parties’ contributions-based entitlements would favour the applicant.
Having regard to the matters that I have referred to above, I find that the parties’ contributed to the acquisition, conservation and improvement of the property now available for division in the proportions of 53%/47% in the applicant’s favour. I consider that the applicant’s post separation contributions are significant especially when measured with the contributions made by the respondent during the same period. The assessment I arrive have arrived at balances the respondent’s significant initial contributions with the contributions made by both of the parties over the course of the relationship and the more significant contributions made by the applicant post separation to the welfare of the parties’ family.
Sections 79(4)(d), (e), (f) and (g)
The applicant is 43 years of age. The respondent is 48 years of age.
Neither suggest that they have any particular health concerns.
The applicant presently lives in the Suburb D property, but given that it is owned by Hakim Pty Ltd and that company is now in liquidation she will have to give up possession of it to the company’s liquidator for the benefit of its creditors. She has met the utilities for the property, save for the water rates. She has recently received a notice of restriction indicating that there are arrears of water rates.
Two of the parties’ children remain at school. Their eldest daughter is at university. The applicant will remain primarily responsible for them although she will receive some child support from the respondent. During the 2023 year the respondent was required to pay child support for the two minor children at the rate of $630.50 per month. In 2024 the applicant received advice that the level of child support had been reduced to $524.33 per month.
The respondent has repartnered and has a child with his new partner. I have no details of her financial circumstances because the respondent has not disclosed them.
The applicant is employed as a finance professional. She has been employed at her current workplace for nearly two years. She works five days per week, sometimes in an office in Sydney from 7.30am until 5.30pm. Otherwise, she works from home. She earns about $65,000 per annum, receives government benefits of about $160 per week and child support.
The respondent claims to be unemployed. It is clear, though that over the years since separation he has been able to earn significant amounts through the business J Pty Ltd. He agreed that he treated the earnings of the company as his own and the director’s loans noted in the companies’ accounts were tantamount to his wage from the business. Although I can make no precise finding about the respondent’s annual income, I am satisfied that it is significantly higher then anything the applicant is able to earn.
Moreover, as I have earlier set out, I am satisfied that the respondent has been less than forthcoming about his financial disclosure and there is no way of being sure on the evidence of his true financial position. This is a relevant matter under s 75(2)(o) of the Act.
In my view, an adjustment to the parties’ contribution-based entitlement is called for in the circumstances. Fixing the amount of that adjustment however, is an impossible task given that one of the matters that requires consideration is the financial circumstances having regard to the parties’ nett property and the position after application of the contribution-based assessment. That cannot be done here, given my findings about the assets and the justice and equity of any property adjustment order.
DISPOSITION
No orders are necessary to address any jointly owned property as the parties have none. The amended initiating application filed on 15 June 2021 is dismissed. The response to final orders filed on 8 January 2021 is dismissed. Otherwise, all outstanding applications are dismissed.
I certify that the preceding seventy-eight (78) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jarrett. Associate:
Dated: 13 September 2024
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