Palasar & Ninesh [2023] FedCFamC2F 1142

Palasar & Ninesh [2023] FedCFamC2F 1142

Background Details

• Court: Federal Circuit and Family Court of Australia (Division 2), Melbourne, Judge Glass, 31 August 2023
• Parties: The wife (applicant) and the husband (respondent)
• Type: Marriage
• Duration: The parties began living together and married in 2014, and separated in December 2018; the relationship lasted approximately 4 years.
• Ages at Judgment: The wife is 39, the husband is 41.

Children

• Children from Relationship: One child, currently 5 years old.
• Parenting Arrangement: The parenting dispute was resolved by consent at the end of the trial. The child lives with the wife in Melbourne. The husband lives and works overseas.

Initial Financial Positions

• Wife:

  • Savings of approximately $50,000.

• Husband:

  • Owned two properties and a half-interest in a third, with total equity of $525,000.
  • Savings of $100,000. Total initial financial contributions of $625,000, which the court found to be $575,000 more than the wife's.
  • Superannuation of approximately $150,000.

Contributions During the Relationship

• Financial Contributions:

  • The husband contributed financially through his property and his income from work in the technology industry, earning approximately $20,000 per month.

• Non-financial Contributions:

  • The wife was solely responsible for the homemaking duties, including cooking, cleaning, laundry and shopping. After the child's birth in 2018 she stopped work to care for him and made the overwhelming parenting contributions.

Post-Separation Contributions and Actions

• Financial Contributions:

  • The husband maintained the real properties, continuing the home loan repayments, rates, insurance and maintenance. From 2022 he paid child support of $250 a week and spousal maintenance of $400 a week.

• Non-financial Contributions:

  • The wife was solely responsible for the child's care after separation, with help from her parents.

• Dissipation of Assets:

  • The husband kept drawing on the home loans after consenting in June 2022 to an order restraining him from encumbering the properties, increasing his liability by $199,671 in breach of that order. He gave no adequate explanation of where the money went.
  • The court added back $313,186, being the whole increase in his home loan liabilities since June 2019 (which included the sums he conceded he had drawn for his own legal fees and for maintenance), and a further $8,400 of bond and rental funds he did not account for.

Current Financial Position & Property Pool

• Current Income:

  • Wife: Earning very little from brief online classes; she is her son's sole carer and cannot yet return to work. Her earning capacity was accepted as approximately $65,000 per annum once she returns to full-time work in two to three years.
  • Husband: Earning $364,000 per annum.

• Property Pool:

  • Non-superannuation property, including the add-backs and a $65,000 loan the husband made to a third party: $1,771,994.
  • Superannuation: $295,973.
  • Total: $2,067,967.

Assessment of Contributions and Future Needs

• Contributions:

  • Non-superannuation assets: 62.5% by the husband and 37.5% by the wife, reflecting the husband's substantial initial contribution.
  • Superannuation: assessed as reflected in the current balances, 74% by the husband and 26% by the wife, because neither made contributions to superannuation during the relationship beyond one modest payment.

• Future Needs Adjustment:

  • An adjustment of 12.5% of the non-superannuation assets in the wife's favour ($221,499), so that each party retains 50% of those assets ($885,997 each).
  • A greater adjustment for the superannuation, given the very large difference in earning capacity: the parties' superannuation was equalised by a splitting order with a base amount of $70,279 in the wife's favour, about 24% of the total superannuation.

• Final Division: Equal division of the non-superannuation assets, with the husband to pay the wife $745,793 within 90 days, and the properties to be sold if he does not; superannuation equalised by the splitting order.

Unique Aspects

• Large amounts were added back because the husband drew on the home loans in breach of a consent order and did not explain how the money was used.
• The wife's role as the child's sole carer and her limited earning capacity carried significant weight in the adjustment.
• The court declined to allow for capital gains tax on the properties, because the evidence did not show a significant risk that any of them would have to be sold.

Key Takeaways

• The husband's substantial initial contributions were weighed against the wife's homemaking and parenting contributions and her future needs.
• Drawing on assets in breach of a court order, without explanation, can lead to those sums being added back to the pool.
• Spousal maintenance was ordered at the agreed rate of $400 per week until 31 August 2025, two years, allowing the wife time to return to full-time work.

The law since this decision

This case was decided before 10 June 2025. From that date the Family Law Act 1975 (Cth) sets out the steps for a property settlement in s 79(3) to (5), and the court must consider the effect of family violence on each party's contributions (s 79(4)(ca)) and on their current and future circumstances (s 79(5)(a)), and any material wastage of property (s 79(5)(d)). In Western Australia, a property case between married couples is decided under that Act in the Family Court of Western Australia. A case between de facto partners in Western Australia is decided under the Family Court Act 1997 (WA), which has not adopted those 2025 changes.