Aitken & Aitken (No 8)
[2025] FedCFamC1F 49
•5 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Aitken & Aitken (No 8) [2025] FedCFamC1F 49
File number(s): SYC 5021 of 2019 Judgment of: HARPER J Date of judgment: 5 February 2025 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Enforcement of final orders made by consent – Where husband required to make payment to the wife of $22,916,124 – Where husband proposed orders to enforce final orders to enable payment to the wife – Whether the husband’s proposed orders are “machinery” orders to implement final orders or variations affecting the substantive rights of the wife – Final orders made by consent are to be construed objectively in their entirety and subjective intentions of the parties are not relevant – Whether the Court has power to make the orders proposed by the husband or if application pursuant to s 79A of the Family Law Act1975 (Cth) (“the Act”) is necessary – Where parties could vary final consent orders by consent pursuant to subsection 79A(1A) of the Act – Where receivers appointed by the wife pursuant to final orders – Remuneration of receivers yet to be determined. Legislation: Corporations Act 2001 (Cth) ss 260A, 260B
Family Law Act 1975 (Cth) s 79A
Cases cited: Bray & Bray (1988) FLC 91-968; [1988] FamCA 22
Fazil & Fazil [2024] FedCFamC1A 54
Goldsmith & Stinson (No 2) (2023) FLC 94-134; [2023] FedCFamC1A 25
Harvey v Phillips (1956) 95 CLR 235; [1956] HCA 27
Langford & Coleman (1993) FLC 92-346; [1992] FamCA 68
Nagel & Clay [2021] FamCA 358
Division: Division 1 First Instance Number of paragraphs: 38 Date of hearing: 23 January 2025 Place: Sydney Counsel for the Applicant: Mr Dura SC Solicitor for the Applicant: Mills Oakley Counsel for the First Respondent: Mr Kearney SC with Mr Springthorpe Solicitor for the First Respondent: Nolan Lawyers Counsel for the Second Respondent: Mr Anderson Solicitor for the Second Respondent: Mangioni Biggs + Co ORDERS
SYC 5021 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR AITKEN
Applicant
AND: MS AITKEN
First Respondent
MR VIK AND MR SCIARRA OF AS PTY LTD
Second Respondent
ORDER MADE BY:
HARPER J
DATE OF ORDER:
5 FEBRUARY 2025
THE COURT ORDERS THAT:
1.Paragraphs 1, 4 and 9 of the Amended Application – Enforcement filed on 18 November 2024 by the husband be dismissed.
2.The Amended Application – Enforcement filed on 18 November 2024 be otherwise stood over to 2025 for mention at 9.30 am on 26 March 2025.
3.The costs to date of the Amended Application – Enforcement filed on 18 November 2024 be 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).
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 the pseudonyms Aitken & Aitken have been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
These are property proceedings pursuant to Pt VIII of the Family Law Act 1975 (Cth) (“the Act”) between the applicant husband, Mr Aitken (“husband”) and the respondent wife, Ms Aitken (“wife”).
On 9 April 2024 final orders were made by consent (“final orders”). Order 6 required the husband to pay the wife the sum of $22,916,124 within 3 months of the orders being made. The husband was in default of this obligation as of 9 July 2024. In the event of default in compliance with Order 6, Order 26 became operative providing for the appointment of receivers of specified parcels of real property owned by D Pty Ltd (“D Pty Ltd”), in which the spouse parties were the only directors and shareholders.
D Pty Ltd is the central business entity which held wealth available to the parties in their pool of assets, in a group of corporate entities and trusts which were defined in the final orders collectively as the Aitken Group Entities.
Several other orders should be specifically mentioned. Order 15 is set out as follows:
15. Subject only to these Orders and upon compliance by the Husband with Orders 4 to 7 and 19 to 24 inclusive, within 28 days of being called upon by the Husband to do so the Wife shall:
15.1 transfer and/or assign to the Husband or as he may direct all interest and entitlement of the Wife in and to The [Aitken] Group Entities, including but not limited to all shares, units, credit loan accounts, unpaid entitlements, monies and other benefits to which the Wife may be entitled;
15.2 resign from any and all positions the Wife may hold in respect of The [Aitken] Group Entities, including but not limited to as trustee, appointor, guardian, director, or secretary; and,
15.3 relinquish her position as a beneficiary or potential beneficiary of each of The [Aitken] Group Entities and any and all rights and interests that the Wife may have as a result of the same;
and the Wife shall do all acts and things and sign all documents provided to her by the Husband necessary to give effect to the above Order at the Husband’s sole expense.
Order 26 provides as follows:
26. In the event that Orders 4, 6 and/or 8 are not complied with, then pursuant to s.420 of the Corporations Act 2001 (Cth) [Mr Vik] and [Mr Sciarra] of [AS Pty Ltd] (Receiver) be appointed as receiver, without security, over the Security Properties (the Assets).
Orders 27 to 34 provided for the powers and duties of the receivers. In particular, Order 30 provides:
30.The costs and expenses incurred by, and remuneration of, the Receiver in acting as receiver of the Assets be paid from the Assets and that the Receiver is entitled to charge at the rates shown in the Consent of Receiver dated and filed on 29 September 2023.
The “assets” in Order 30 referred to the “Security Properties” which are defined to be five specific parcels of real estate.
Order 39 provides:
39.The Husband and the Wife do all acts and things and execute all documents, authorities, and writings necessary to give effect to these Orders.
The evidence showed that the husband moved promptly after 9 April 2024 to place himself in a position to make the payment of $22,916,124 to the wife to comply with Order 6.
In summary, he caused D Pty Ltd to apply to the ANZ bank for loans totalling $26,350,000. On 27 June 2024, ANZ approved the loans as follows: $26,000,000 “to assist with buying back of equity interest…from existing equity holder”, $300,000 to finance the leasing of plant and equipment, and $50,000 to cover credit cards transaction. The essential process by which the husband proposed to meet his obligation in Order 6 was for D Pty Ltd to draw down these loans, and then lend to the husband $22,916,124 for payment to the wife.
The bank required the satisfaction of a number of conditions precedent and the execution by the wife a range of documents, described by the bank as constituting a “whitewash process”. In summary this process included the wife executing directors’ and shareholders’ resolutions of D Pty Ltd concerning the provision of financial assistance by a company to one of its officers in accordance with s 260B of the Corporations Act 2001 (Cth) (“Corporations Act”), to avoid the prohibition in s 260A.
The bank also required the wife to provide her resignation as a director and shareholder of D Pty Ltd and other Aitken Group Entities and as a trustee of relevant trusts, before the loans to D Pty Ltd could be drawn down to make payment to her.
The husband’s solicitors provided the necessary documents to the solicitors for the wife on 20 June 2024 in time to settle the loan by 9 July 2024 and make payment to the wife.
However, the wife resisted executing a number of the documents for several reasons, including concern about her exposure as a director pursuant to s 260A of the Corporations Act, if she entered into the “whitewash” documents to enable the husband to discharge his personal obligation to her and the lack of information about the on-lending arrangement between D Pty Ltd and the husband.
The wife’s solicitors made a counter proposal, but the parties reached an impasse and the date for compliance with Order 6 came and went. On 26 July 2024 the wife appointed receivers pursuant to Order 26.
On 18 November 2024 the husband filed an Amended Application – Enforcement (“enforcement application”) seeking inter alia enforcement of the wife’s compliance with Orders 15 and 39 of the final orders, by requiring her to execute specified “whitewash” documents to resign any legal or equitable interest she has in the Aitken Group Entities, as beneficiary, unitholder or shareholder. The husband also sought joinder of the receivers.
On 5 December 2024, the parties attended a mention and by way of consent orders, Mr Vik and Mr Sciarra of AS Pty Limited, in their capacity as Receivers of the Assets were joined to proceedings as the second respondent (“the receivers”). Orders were also made in terms of paragraphs 5 and 7 of the husband’s enforcement application, which imposed a stay upon the receivers from carrying out Orders 26 to 34 of the final consent orders. The Court noted that the stay of and restraint upon the second respondents as receivers was imposed pending further order, and that the second respondents propose to submit to whatever order the Court ultimately makes in relation to the husband’s enforcement application.
The balance of the husband’s enforcement application was stood over for interim hearing on 23 January 2025.
The wife forwarded to my Chambers by email on 18 December 2024 a Response to the enforcement application seeking it be dismissed and that the husband pay her costs of and incidental to the application.
The husband filed a Case Outline on 21 January 2025 which set out in Annexure C the precise orders sought by him in the enforcement application. These included alternative orders for the wife to execute “whitewash” documents necessary to enable him to obtain the funds to make payment to her, but after deducting the receivers’ costs incurred to date and discharge of the receivers’ appointment.
The husband according to his Case Outline filed on 21 January relied on the following documents:
(a)Amended Application – Enforcement filed 18 November 2024;
(b)Affidavit of Mr Aitken filed 30 September 2024; and
(c)Affidavit of Mr Aitken filed 7 November 2024.
He also sought to rely upon a Letter of Offer from ANZ to D Pty Ltd dated 22 January 2025 which was marked as Exhibit A.
The wife according to her Case Outline filed on 21 January 2025 relied on the following documents:
(a)Affidavit sworn by Ms Aitken filed 3 December 2024;
(b)Tender bundle comprising letter from ANZ to D Pty Ltd dated 26 September 2024 filed 21 January 2025 marked as Exhibit B; and
(c)An outline of submissions which was annexed to her Case Outline.
The receivers appeared at the interim hearing and raised the issue of their remuneration. They argued that it was premature to make orders as sought by the husband. All parties agreed the position of the receivers would have to be addressed after the issues the subject of this judgment were determined.
Disposition
A central and threshold difference between the parties lay in the question whether the Court had power to make the orders sought by the husband.
He argued that his proposed orders were “machinery” orders necessary to implement the final consent orders. In particular he characterised the wife’s refusal to sign the “whitewash” documents as a breach of her obligations under Orders 15 and 39, which he therefore sought to enforce.
The wife argued that, far from being machinery orders, the husband’s proposed orders were a fundamental variation to substantive final orders which could only be made by exercise of the Court’s jurisdiction under s 79A of the Act. Although seeking in her response only that the husband application be dismissed with costs, in her Case Outline she argued the final orders could be varied under s 79A(1A), if this was a consent position between the parties, and set out a form of such orders without propounding them as a formal alternative to orders sought by the husband. However, the husband did not concede this was necessary or appropriate and there was no application under s 79A before the Court.
It has been confirmed many times by the Full Court that the substantive provisions of final orders cannot be altered after they have been entered (Goldsmith & Stinson (No 2) (2023) FLC 94-134 (“Goldsmith”) at [130]). Consequential orders may be made after final orders to implement such final orders if they do not “affect the parties’ substantive rights” (Goldsmith at [131]–[133]; Fazil & Fazil [2024] FedCFamC1A 54 at [55]).
The first question to be addressed is whether the orders proposed by the husband are consequential rather than variations of substantive final orders. If the latter, this Court has no power to make them.
As noted, the final orders are orders made by consent. The correct approach to construing final consent orders was not in dispute. Where there has been no hearing on the merits, or delivery of reasons for judgment, but final consent orders have been made which embody the agreement of the parties, in matrimonial causes it is to the orders alone that the Court must look. The orders are construed objectively in their entirety without regard to the subjective intentions of the parties and having regard to extrinsic material only to the extent of resolving ambiguity or if the agreement embodied in the consent orders is impugned for illegality, misrepresentation, non-disclosure of a material fact, duress, mistake, undue influence, abuse of confidence or the like (Harvey v Phillips & Anor (1956) 95 CLR 235; Langford & Coleman (1993) FLC 92-346 at 79,671; Nagel & Clay [2021] FamCA 358 at [7], [8]).
So the first question is answered by construing the entirety of final orders objectively according to their terms (Bray & Bray (1988) FLC 91-968 at 76,999). The subjective intentions of the parties are irrelevant, as is the question whether they have acted reasonably in attempting to resolve their impasse.
In my view, the orders proposed by the husband, if made, would constitute a variation of substantive final orders which would affect the substantive rights of the wife. Shareholdings and interests as a beneficiary in a trust are examples of proprietary interests which the orders proposed by the husband would plainly affect. Contrary to the submissions of the husband, the Court is not simply being asked to enforce an order for each party to “do all acts and things and execute all documents, authorities, and writings necessary to give effect” to the final orders.
The obligation in Order 6 was unambiguous. It required payment by the husband of $22,916,124 to the wife by the specified date. The payment is not made conditional upon any event or reciprocal step by the wife, such as giving up any rights or interests. Order 6 is plainly a substantive order.
The obligation of the wife pursuant to Order 15 to execute documents giving up her rights as a director, or shareholder of D Pty Ltd and other entities in the Aitken Group Entities, or as a beneficiary or unitholder in any trust within the Aitken Group Entities is also substantive. But unlike Order 6, the obligation is conditional, upon payment by the husband in compliance with Order 6 and thus the obligations imposed by Order 15 did not arise until she received payment and the condition was fulfilled. The orders proposed by the husband would have the effect of requiring the wife to give up those rights, or many of them, before receiving payment fulfilling the condition, albeit as a step towards receiving payment. In other words, the orders proposed by the husband seek to reverse the order in which substantive interests, rights and obligations of the parties under the final orders are to be altered or reorganised.
The orders proposed by the husband are sought, I accept, to enable payment to the wife in compliance with the final orders and to accord with the requirements of the ANZ bank. But those matters are beside the point.
I am not persuaded the Court has the power to make the orders proposed by the husband. Rather resort must be made to s 79A, as the wife argued. In the absence of a consent position and appropriate application which could enliven s 79A(1A) the Court is unable to make orders to resolve the impasse.
This conclusion renders unnecessary further discussion of the submissions of the parties. The husband’s enforcement application to vary the final orders must be dismissed. The balance of the application concerning the position of the receivers and their remuneration will be adjourned to a date for mention after the parties have had an opportunity to consider these reasons.
It is regrettable that this situation has arisen. The husband gave evidence that he could not arrange payment to the wife without using bank finance, and that the appointment of the receivers had caused commercial damage to D Pty Ltd. The wife cannot at present receive $22,916,124 and the husband may have some exposure for interest on the unpaid $22,916,124 which could be substantial. The costs of the receivers have already become significant. The Court strongly encourages the parties to redouble their efforts to resolve the impasse in a commercially sensible and pragmatic fashion to minimise further cost.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 5 February 2025
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