Aarons & Aarons (No 4) - [2022] FedCFamC1F 502

Federal Circuit and Family Court of Australia
(DIVISION 1)
Aarons & Aarons (No 4) [2022] FedCFamC1F 502

File number(s): MLC 6647 of 2021

Judgment of: WILSON J

Date of judgment: 13 July 2022

Catchwords: FAMILY LAW – MAJOR COMPLEX FINANCIAL PROCEEDINGS LIST – scope and appointment of single expert for tax advice – whether single expert valuations are updated prior to trial – whether “property” for the purposes of s 79 of the Family Law Act – whether assets that may be the subject of a mutual will should be included in property valuations – applications dismissed.

Legislation:
Family Law Act 1975 (Cth) s 79

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 rules 7.1.6 and 7.31(3)(e)

Cases cited:
Dadon & Dadon (No 2) [2022] FedCFamC1F

Woodcock & Woodcock [2022] FedCFamC1F 173

Division: Division 1 First Instance

Number of paragraphs: 34

Date of hearing: 13 July 2022

Place: Melbourne

Counsel for the Applicant: T. North SC with Mr A. Barbayannis

Solicitor for the Applicant: Strongman & Crouch

Counsel for the Respondent: Mr S. Williams QC with Mr C. Nehmy

Solicitor for the Respondent: Hargreaves Family Lawyers
ORDERS

MLC 6647 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:
MR AARONS

Applicant

AND:
MS AARONS

Respondent

order made by:

WILSON J

DATE OF ORDER:

13 JULY 2022

THE COURT ORDERS THAT:
1.The wife’s application for the appointment of the Mr R to provide advice on the most tax effective way to eliminate loan accounts between the respective groups and to calculate capital gains tax payable upon the sale of each asset in the S Group is granted.
2.The husband’s application to include the E Town Estate land and business in any valuation to be supplied by Ms T is refused.
3.The application to value K Street, Suburb L is refused.
4.The husband’s application to value the wife’s interest in the U Family Trust is refused.
5.Costs are reserved.

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 the pseudonym Aarons & Aarons is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
WILSON J
Introduction

Pursuant to orders made by me on 9 May 2022, the trial of this proceeding was adjourned to 16 May 2022 on an estimated duration of 10 days.
The proceeding was mediated,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Aarons & Aarons (No 4)

Details

AGLC: Aarons & Aarons (No 4) [2022] FedCFamC1F 502
Case: [2022] FedCFamC1F 502
Decision Date: 13 July 2022

CaseChat Overview and Summary

In the Federal Circuit and Family Court of Australia, Wilson J heard applications in a major financial proceeding between Mr Aarons and Ms Aarons. The parties were unable to agree on the scope of engagement and timing of the appointment of a single expert for tax advice. The wife sought orders for the immediate appointment of Mr R to provide evidence on taxation matters, while the husband proposed a regime in which Mr R would only be appointed if the accountants were unable to reach an agreement within 28 days of being appointed to prepare a joint report. Wilson J considered the concept of interposing Mr R to provide a determination where division of opinion emerged between the accountants to be wasteful and contrary to the enabling approach experts in the Major Complex Financial Proceedings List should adopt.

Wilson J also considered whether assets that may be the subject of a mutual will should be included in property valuations. The husband argued that the E Town Estate land and business, as well as the wife's interest in the U Family Trust, should be included in any valuation to be supplied by Ms T. The wife opposed these applications, and Wilson J refused them. The court also considered whether single expert valuations are updated prior to trial. Wilson J noted that the wife had proposed a letter of instruction to Mr R on 31 May 2022, and once the husband agreed to sell various properties, the letter of instruction was amended on 8 June 2022. The husband proposed allowing three weeks for the accountants to confer, thereafter appointing Mr R in case of disagreement. However, the husband rejected the wife's proposal for the immediate appointment of Mr R, and Wilson J granted the wife's application for the appointment of Mr R to provide advice on the most tax-effective way to eliminate loan accounts between the respective groups and to calculate capital gains tax payable upon the sale of each asset in the S Group.

Finally, Wilson J considered whether certain properties should be included in the property valuations. The husband sought to include the E Town Estate land and business in any valuation to be supplied by Ms T, as well as to value K Street, Suburb L. The wife opposed these applications, and Wilson J refused them. The court also considered whether the husband's application to value the wife's interest in the U Family Trust should be granted. The wife opposed this application, and Wilson J refused it. Costs were reserved. The trial remains fixed for 8 August 2022.

Orders

Orders of the court

MLC 6647 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR AARONS

Applicant

AND:

MS AARONS

Respondent

order made by:

WILSON J

DATE OF ORDER:

13 JULY 2022

THE COURT ORDERS THAT:

1. The wife’s application for the appointment of the Mr R to provide advice on the most tax effective way to eliminate loan accounts between the respective groups and to calculate capital gains tax payable upon the sale of each asset in the S Group is granted.

2. The husband’s application to include the E Town Estate land and business in any valuation to be supplied by Ms T is refused.

3. The application to value K Street, Suburb L is refused.

4. The husband’s application to value the wife’s interest in the U Family Trust is refused.

5. Costs are reserved.

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.

Background

Background to the litigation

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Evidence

Evidence Before The Court

As these reasons explain, each application is refused. The trial remains fixed for 8 August 2022. The first issue – taxation evidence Mr North SC who appeared with Mr Barbayannis of counsel for the husband submitted that the parties had agreed to the appointment of Mr V as a single expert providing tax advice. They said the parties are unable to agree on the scope of Mr R’s engagement. The husband sought a regime pursuant to which Mr W of X Company and Mr Z of AA Company confer with one another and prepare a joint statement pursuant to rule 7.31(3)(e) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 and that any issues that cannot be resolved between their respective accountants be referred to Mr R. On behalf of the wife, it was contended that Mr R should be appointed as a single expert to provide evidence as to taxation matters. However, the wife disagreed with the timing of the appointment and the scope of the matters on which Mr R should be requested to express his opinion. So far as the timing was concerned, the wife sought orders for Mr R’s appointment forthwith. This was to be contrasted with the husband’s contentions to the effect that he be engaged only if Mr BB and Mr Z are unable to reach agreement with respect to any taxation issues within 28 days of being appointed to prepare a joint report. On behalf of the wife, Mr Williams QC and Mr Nehmy of counsel submitted that having regard to the proximity of the trial, Mr R should be engaged immediately. The wife so submitted contending[1] – (a)she had proposed a letter of instruction to Mr R on 31 May 2022;(b)once the husband agreed to sell various properties that letter of instruction was amended on 8 June 2022;(c)on 13 June 2022 the husband proposed allowing three weeks for the accountants to confer, thereafter appointing Mr R in case of disagreement;(d)on 15 June 2022 the husband rejected the wife’s proposal for the immediate appointment of Mr R which could then be refined based on any agreement reached between the accountants; and(e)the accountants conferred on 15 June 2022 yet the husband’s accountant stated they were not in a position to discuss certain tax issues.[1] This was the gravamen of paragraph 2 of the husband’s minute of orders filed on 8 June 2022. In debate with Mr North SC I raised how the concept of interposing Mr R to provide some form of determination where division of opinion emerged between Mr BB and Mr Z added to the time involved in obtaining Mr R’s evidence. Further, where the accountants disagreed, it seemed to me to be wasteful for Mr R to provide some form of determination in the dispute between the accountants. The determination of conflicts between experts was the province of the judge, not for some expert having a putative supervisory function. If the determination by Mr R provided yet a third opinion on some issue, the point would be of no further utility and if anything, burdened the evidence by more conflicting opinion. In my view, experts in the Major Complex Financial Proceedings List should adopt a more enabling approach.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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File number(s):	MLC 6647 of 2021
Judgment of:	WILSON J
Date of judgment:	13 July 2022
Catchwords:	FAMILY LAW – MAJOR COMPLEX FINANCIAL PROCEEDINGS LIST – scope and appointment of single expert for tax advice – whether single expert valuations are updated prior to trial – whether “property” for the purposes of s 79 of the Family Law Act – whether assets that may be the subject of a mutual will should be included in property valuations – applications dismissed.
Legislation:	Family Law Act 1975 (Cth) s 79 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 rules 7.1.6 and 7.31(3)(e)
Cases cited:	Dadon & Dadon (No 2) [2022] FedCFamC1F Woodcock & Woodcock [2022] FedCFamC1F 173
Division:	Division 1 First Instance
Number of paragraphs:	34
Date of hearing:	13 July 2022
Place:	Melbourne
Counsel for the Applicant:	T. North SC with Mr A. Barbayannis
Solicitor for the Applicant:	Strongman & Crouch
Counsel for the Respondent:	Mr S. Williams QC with Mr C. Nehmy
Solicitor for the Respondent:	Hargreaves Family Lawyers

MLC 6647 of 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:	MR AARONS Applicant
AND:	MS AARONS Respondent

order made by:	WILSON J
DATE OF ORDER:	13 JULY 2022