FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Baggin & Hallion [2021] FedCFamC1F 80
File number(s): SYC 6026 of 2017 Judgment of: BAUMANN J Date of judgment: 30 September 2021 Catchwords: FAMILY LAW – PROPERTY – assessment of contributions – two pool approach – assessment of relevant s 75(2) factors – just and equitable orders Legislation: Family Law Act 1975 (Cth) ss 79, 75 Cases cited: Best & Best (1993) FLC 92-418
Chorn & Hopkins (2004) FLC 93-204
G & G [2001] FamCA 1453
Hickey & Hickey (2003) FLC 93-143
Horrigan & Horrigan [2020] FamCAFC 25
Jabour & Jabour (2019) FLC 93-898
Kowaliw & Kowaliw (1981) FLC 91-092
Pates & Pates [2018] FamCAFC 171
Pierce & Pierce (1998) FLC 92-844
Rosati & Rosati (1998) FLC 92-804
Stanford & Stanford [2012] HCA 52
Taffner & Taffner (2021) FLC 94-022
Townsend & Townsend (1994) 18 Fam LR 505
Division: Division 1 First Instance Number of paragraphs: 88 Date of hearing: 1 and 2 June 2020 Place: Brisbane Counsel for the Applicant: Ms S Christie SC Solicitor for the Applicant: Pearson Emerson Meyer Family Lawyers Counsel for the Respondent: Mr D Sweeney Solicitor for the Respondent: Barkus Doolan ORDERS
SYC 6026 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1) BETWEEN: MR BAGGIN
Applicant
AND: MS HALLION
Respondent
ORDER MADE BY:
BAUMANN J
DATE OF ORDER:
30 SEPTEMBER 2021
THE COURT NOTES:
A.The following definitions for the purpose of these Orders:
1.1.“husband” means the Applicant, Mr Baggin, born … 1972;
1.2.“party” means the Applicant or the Respondent;
1.3.“the Act” means the Family Law Act 1975 (Cth);
1.4.“the B Trust" means the trust established by Deed made on or about 26 June 2015 of which B Pty Ltd ACN … is the trustee and the husband is the principal (appointor);
1.5.“the parties” means the Applicant and the Respondent;
1.6.“the Suburb D property” means the property situated at and known as C Street, Suburb D in the State of New South Wales being the whole land contained in Folio Identifier … and held in name of the parties as joint tenants, presently occupied by the wife;
1.7.“the Suburb D mortgage” means the mortgage secured upon the title to the Suburb D property being registered dealing number AD …;
1.8.“wife” means the Respondent, Ms Hallion, born … 1979.
THE COURT ORDERS:
1.That all previous Orders be discharged.
2.That within sixty (60) days from the date of these Orders, the wife shall:
2.1.pay to the husband or as he directs in writing the sum of $600,000; and
2.2.do all acts and things and pay all monies so as to discharge the Suburb D mortgage and provide to the husband a discharge of mortgage or copy thereof to evidence the same.
3.That simultaneously with compliance by the wife with Order 2, the husband shall do all acts and things and sign all documents necessary so as to transfer all of his right title and interest in the Suburb D property to the wife.
4.That within…
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CaseChat Overview and Summary
The central legal issue before the court was whether the husband had made full and frank disclosure of his income, assets, and liabilities, as required under section 90SM of the Family Law Act 1975. Specifically, the court had to determine the value of the husband's interests in various trusts and his employment benefits, which were central to the property settlement.
The court found that the husband had made full disclosure of his financial circumstances, although some of this disclosure was delayed and came from the husband's accountant. The court accepted the husband's evidence regarding his contributions to the joint account and his income from employment benefits. The husband's evidence was corroborated by the accountant's report and testimony, leading the court to accept the figures provided by the husband regarding his contributions, incentive schemes, and severance pay. The court also considered the husband's interest in the Baggin Family Trust and found that the husband's employment with a competitor of his former employer resulted in the loss of future benefits from the trust.
The court ordered that the husband's financial disclosure was complete and accurate, and it affirmed the valuation of the assets and income as presented. The final orders reflected the court's findings on the financial arrangements post-separation and the husband's employment benefits.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Because of the disputes that remain as to the “balance sheet”, I prefer to deal with the various disputed issues separately, and by so doing, I am able to record some of the evidence received relating to the husband’s employment benefits and how he has sought to manage funds available to him. I accept to a large degree a number of these transactions were not known to the wife and that she was highly suspicious. I am satisfied that the husband has made full disclosure, albeit some was late and related to the report of N Accountants and the evidence of Mr O, the husband’s accountant.THE HUSBAND’S EMPLOYMENT ARRANGEMENTS POST SEPARATION AND VALUE OF HIS INTEREST IN THE BAGGIN FAMILY TRUST It is not in dispute that the parties agreed to contribute from their wages and other income after the acquisition of the Suburb D home in April 2008, into a joint P Bank account number …81 from which scheduled mortgage payments were debited as well as creating a fund to cover outgoings on the property and many joint expenses. Usually they used a joint credit card to pay the other expenses and the outstanding balance each month was paid off from account number …081. The husband’s income being superior he contributed more to the account (reaching $5,500 per month) than the wife (reaching $2,500 per month). The husband says (at paragraph 43), and I accept, he met shortfalls from time to time. Each party retained under their personal control the excess funds received from income after their contributions to the said joint account, although I accept those funds were contributed to other expenses the parties incurred as a couple. At paragraph 45, the husband estimates that over the period since acquiring the Suburb D home until separation in April 2016, the respective contributions to the P Bank account …081, were:(a)Husband - $706,407; and(b)Wife - $254,010. In April 2014, the husband commenced employment with KPL and he became eligible to participate in short term and long term incentive schemes. At paragraph 48 of his trial affidavit, the husband sets out, and I accept, the sums he received by way of short term incentives, in October each year in 2015, 2016 and 2017 (nett of tax and superannuation deduction) totalled $390,996. The long term incentives were arranged by the allocation of units in two separate KPL Trusts – the “Q Trust” and the “R Trust”. The husband held 30 units in the Q Trust and in October 2015, 2016 and 2017 he received payments, which he estimated (after allowance for income tax) totalled $263,021 nett. I accept this evidence. At paragraphs 51 to 55, the husband gave details of the allocation of 30 units in the R Trust held in the B Trust, established in July 2015. For the reasons identified in the husband’s evidence, when the husband’s employment was terminated by KPL in February 2018, the units were subsequently redeemed at their face value of $30, without the Trust having received any benefits from the R Trust. When the husband’s employment was terminated (nearly two years after separation) a net severance pay of $132,760 was paid to him. However when KPL became aware that on 7 May 2018 the husband had commenced employment with a competitor of KPL, any right to future entitlements from the R Trust or under the Deed of Separation and Release ended.