Baggin & Hallion
[2021] FedCFamC1F 80
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 twenty eight (28) days from the date of these Orders, the husband shall do all acts and things and sign all documents necessary to transfer all of his right title and interest in the Motor Vehicle 1 registered number … to the wife.
5.That within twenty eight (28) days from the date of these Orders, the wife shall sign all documents as may be presented to her by the husband so as to relinquish any claim she may have arising as a result of her having been a potential beneficiary of the B Trust.
6.That the husband by these Orders indemnifies and shall keep the wife indemnified against any liability of any nature which the wife has at any time arising in any way in respect of the B Trust, including but not limited to any liability of the wife to the B Trust.
7.That within twenty eight (28) days from the date of these Orders, the wife shall make available for collection by the husband, or his agent, the following items located in the Suburb D property:
7.1.The husband’s power and hand tools;
7.2.The husband's hi-fi equipment and cables in such condition as reflected in the valuation of these items in the report from Mr E, being the digital music player and remote control, speakers, speaker cables and network server;
7.3.The husband’s CD collection;
7.4.The antler carving set and the small antler gifted to the husband by his parents; and
7.5.The husband's books and personal effects remaining in the Suburb D property.
8.That in the event that the wife does not comply with Order 2 of these Orders, the parties shall forthwith do all acts and things and sign all documents necessary to effect the sale of Suburb D property for the best price reasonably obtainable in the following manner:
8.1.The parties shall instruct such lawyer as they agree upon to have the conduct of the sale on behalf of both parties or, in the absence of agreement reached within 65 days of the date of these Orders shall instruct such lawyer as may be appointed by the President for the time being of the Law Society of New South Wales (“the lawyer”), the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;
8.2.The parties shall appoint such agent as they agree upon to have the conduct of the sale on behalf of both parties and in default of agreement as to agent within 65 days from the date these Orders with such agent as the President of the Real Estate Institute of New South Wales shall appoint (“the agent”), the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;
8.3.List the Suburb D property for sale by public auction within six weeks from the date of appointment the agent unless otherwise agreed in writing by the parties;
8.4.The reserve price for the purpose of such auction shall be such price as the parties agreed upon in writing or, in the absence of agreement reached within 72 days of these Orders shall be the price nominated as the fair market value of the Suburb D property by a valuer appointed by the President for the time being of the New South Wales Division of the Australian Property Institute (“the valuer”), the costs of and incidental to such appointment and valuation to be borne equally by the parties as and when same fall due;
8.5.The valuer shall, if requested by either the husband or the wife at a date three calendar months after the date upon which the Suburb D property is first listed pursuant to Order 8.3 and thereafter at three (3) calendar monthly intervals until the Suburb D property is sold, nominate a sale price other than the originally nominated sale price;
8.6.The parties shall each cooperate in every way with the agent and the valuer including (without limiting the generality of the foregoing):
8.6.1.making the key available to the agent and the valuer;
8.6.2.allowing vacant inspection of the Suburb D property at all reasonable times requested by the agent and the valuer;
8.6.3.doing or saying nothing to hinder or prevent a sale being effected;
8.6.4.ensuring the Suburb D property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and
8.6.5.signing all documents requested by the agent in relation to the listing for sale of the Suburb D property except a contract or agreement for sale which has not been authorised by the parties' lawyer;
8.7.In the event the bidding at the auction does not reach the reserve price the parties or such of them as attends the auction may negotiate with the highest bidders or any other interested person and effect a sale of the Suburb D property at a price which is not more than 10% below the reserve price, or at such other price as the parties agree upon in writing;
8.8.In the event that the Suburb D property remains unsold, the parties shall do all acts and things and sign all documents necessary to continue to relist the Suburb D property for sale by public auction again at three (3) monthly intervals, and the provisions of Order 8.5 to 8.7 shall apply successively until the Suburb D property has been sold so that at each successive auction the reserve price shall be 10% less than the reserve price at the immediately preceding auction unless otherwise agreed by the parties in writing; and
8.9.The parties may arrange for work to be undertaken to prepare the Suburb D property for sale, provided the scope and costs of the works and the arrangements for payment of such costs in the first instance shall be agreed in writing by the parties within seventy two (72) days of the date of these Orders.
9.That on settlement of the sale of the Suburb D property the proceeds of sale be paid in the following manner and priority:
9.1.All costs and expenses of sale including legal costs and disbursements, agent's commission, valuer’s fees, and auction expenses (including repayment of any such expenses as have been paid by either or both of the parties);
9.2.The amounts required to discharge the Suburb D mortgage;
9.3.The amounts required to pay all council and water rates outstanding with respect to the Suburb D property;
9.4.The amounts required to repay either or both of the parties for their respective contributions to the costs of work carried out to the Suburb D property pursuant to Order 8.9.
9.5.Subject to Orders 10 and 11, the balance of the sale proceeds are to be disbursed to the parties in the proportions, so as to achieve a division of the Pool One interest set out at the Reasons for Judgment, as to:
A.52.5% to the husband; and
B.47.5% to the wife.
10.That in the event that the wife fails to pay the rates and outgoings and her share of the mortgage repayments with respect to the Suburb D property in compliance with Orders 12.2 and 12.4, the amount by which the husband is out of pocket as a result of the wife's non- compliance shall be deducted from the wife’s share of the proceeds and added to the husband’s share.
11.That in the event that the husband fails to pay the insurance and his share of the mortgage repayments with respect to the Suburb D property in compliance with Orders 12.3 and 12.4, the amount by which the wife is out of pocket as a result of the husband's non-compliance shall deducted from the husband’s share of the proceeds and added to the wife’s share.
12.That as and from the date of these orders until the transfer or sale of the Suburb D property in accordance with these Orders:
12.1.the wife shall have the right of exclusive occupation of the Suburb D property;
12.2.the wife shall pay all rates and outgoings in respect of the Suburb D property and at her expense maintain the Suburb D property in good order and condition;
12.3.the husband shall at his expense insure the Suburb D property in an amount equivalent to the current market value of the Suburb D property at the time of effecting or renewing such insurance; and
12.4.the parties shall each make and be responsible for the payment of 50% of all monies due and owing pursuant to the Suburb D mortgage.
13.That subject only to these orders, the husband and wife are each hereby declared to be solely legally and beneficially entitled to the exclusion of the other, to all other property of whatsoever nature and kind in their respective ownership, possession and/or control as at the date of these Orders and to which they are or may become entitled, including but not limited to their respective superannuation entitlements.
14.That subject only to these Orders, as and from the date of these Orders, each party hereby releases the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other by reason of or in respect of any act, cause, matter or thing.
15.That in the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, then the Registrar of the Court shall be appointed pursuant to s 106A of the Family Law Act 1975 to execute such deed, document or instrument in the name of the said party and to do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
16.That all outstanding Applications, save as to costs, be 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).
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 a pseudonym Baggin & Hallion has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BAUMANN J:
INTRODUCTION
When two career driven and highly functioning parties commenced their relationship in 2006, they both anticipated a long and profitable union – shaped by their life experiences to that point, the Applicant husband, Mr Baggin, being 34 years of age and the Respondent wife, Ms Hallion, being 26 years of age.
The parties were not to be blessed with children during their relationship and although they celebrated their marriage in the United Kingdom in 2011, marital tensions began to arise with separation occurring on 19 April 2016. The husband commenced a new relationship shortly after separation and is now the father of twin girls born in 2017.
Despite being represented by competent solicitors throughout, all attempts to resolve these property proceedings by compromise failed such that it required a trial to be conducted by Microsoft Teams in June 2020. Having seen the parties under cross-examination, it is apparent that each party carries a degree of hurt from the fact the relationship did not continue and the hopes and dreams of the future which they both anticipated 14 years earlier had not been realised. Resolution, in such circumstances, by negotiations, was sadly unlikely.
Frankly, by the final hearing where the husband was represented by Ms Christie of Senior Counsel and the wife was represented by Mr Sweeney of Counsel, through a number of concessions properly made, the range of forensic issues narrowed. To a large degree, the parties’ final proposals reflected what they argued to be the weight to be applied to their respective and diverse contributions to the marriage from cohabitation to the final hearing. The Court expresses its regret that these Reasons were not published more quickly.
COMPETING PROPOSALS
Although the husband’s case outline filed 25 May 2020 did not set out a revised minute of order, the hearing commenced with the husband relying on his Initiating Application filed 14 September 2017, and the orders set out in that Application, essentially that:
(a)within three months of the date of the orders, the husband shall pay to the wife $270,000 (less certain adjustments); refinance or discharge the current mortgage and the wife will transfer her interest in the former matrimonial home at C Street, Suburb D (“the Suburb D home”), to the husband;
(b)the husband will transfer the Motor Vehicle 1 to the wife; and
(c)each party (save for some specified items described at proposed order 9) shall retain all other property, superannuation and other legal and equitable interests in their ownership or control to the exclusion of the other party – with the husband to retain exclusively the B Trust.
During the hearing, an alternate position was advanced by the husband, contained in Exhibit 3 – and being Appendix One to these Reasons. The husband’s final position was to allow the wife 60 days from final orders to pay him $1,174,303 and refinance or discharge the current mortgage agreed at the trial to be at a level of $552,362, and the husband would transfer his interest in the Suburb D home to the wife. If the wife was unable to raise the necessary funds, then the Suburb D home was to be sold and after a number of adjustments, the husband (by proposed order 9) sought an order that the wife receive 16% of the nett balance of the sale proceeds. All other orders were the same.
The wife relied upon the orders sought in her case outline filed 27 May 2020 (being Appendix Two to these Reasons), which essentially provided that:
(a)the husband transfer to the wife his interest in the Suburb D home after discharging the mortgage over the property, within 60 days;
(b)the husband transfer to the wife the Motor Vehicle 1; and
(c)otherwise, as the husband seeks, the parties retain all other assets and interests, with the wife relinquishing her interests in the B Trust.
Although at one stage the wife’s orders identified the ownership of the dog “S” was in dispute, the husband in his evidence did not contest that “S” should remain in the care of the wife.
In her evidence at the hearing, the wife said she had made an “online” application through a mortgage broker for finance to enable her to refinance the current debt and was satisfied she could do so.
I note neither party seeks a splitting order in respect of the husband’s superannuation benefits which have a combined value (agreed by the parties) at $484,020.
STATUTORY PATHWAY
Shortly stated, but more concisely and elaborately described in the Full Court decision in Hickey & Hickey (2003) FLC 93-143, in a property settlement case, the Court must adopt a well-known four-step process, essentially:
(a)to identify the pool of assets and liabilities generally, and usually at the time of hearing;
(b)to assess the relative contributions of both the financial, non-financial, direct and indirect nature as specified by s 79(4) of the Family Law Act 1975 (Cth) (“the Act”);
(c)to consider the factors as are relevant contained in s 75(2) of the Act; and
(d)finally, consider the ultimate analysis to determine whether the order the Court proposes to make is just and equitable to both parties.
Both experienced Counsel, alert to the requirements offered by the High Court in Stanford & Stanford [2012] HCA 52, submitted it was just and equitable within the meaning of s 79(2) of the Act to make an order. I agree.
BRIEF CONTEXTUAL CHRONOLOGY
The statements of fact that follow in these reasons should be construed as findings of fact.
The parties commenced cohabitation in 2006, however they dispute in which month cohabitation commenced – the husband asserts in June 2006 whilst the wife asserts it was February 2006. Considering the length of the relationship, I have formed the view that it matters little which date of cohabitation is adopted. The husband’s evidence is that the wife moved into his rented property at F Street, Suburb G in June 2006. Whilst it is reasonable to assume that before living together full time, periods of “staying over” would have occurred, on balance I prefer the husband’s evidence on this issue and for the purpose of these Reasons I adopt June 2006 as the date of cohabitation.
The husband estimated his assets, liabilities and superannuation at the date of cohabitation totalled $747,472 (paragraph 23). However the main components of this aggregate pool comprised:
(a)estimated 50% interest in a Suburb G property held jointly with his former wife of $612,500;
(b)savings of $27,682;
(c)shares of approximately $20,304; and
(d)Super Fund 1 superannuation of $61,214.
I accept the husband’s evidence as to the value of his superannuation, savings and shares but the value of his interest in the Suburb G home is to be taken into account at a level which the husband received funds from this property settlement proceedings with his former wife, referred to later in these Reasons.
The wife estimated her nett assets at the commencement of her relationship to be $31,803.24 (paragraph 20). This consisted of a car, artwork and personal effects, plus superannuation of $16,803. I accept the wife’s evidence.
At cohabitation the husband was employed by the New South Wales public service; the wife was employed by H Company.
In November 2006, the husband’s former wife commenced property proceedings against him resulting ultimately in consent orders being made on 12 December 2007 (see annexure “K”) which relevantly provided for the husband’s former wife to pay him $500,000 within 42 days. The husband retained his accumulated superannuation entitlements. Other smaller interests were dealt with by the orders. On 12 February 2008, the husband received total funds of approximately $502,000 representing the funds due to him under the orders.
The wife says that some months prior to purchasing jointly the Suburb D home the parties had been looking for a property to buy (no doubt aware that funds from the husband’s interest in the Suburb G property would be received under the orders). It is not clear when the parties signed a contract to purchase the Suburb D home, however it is agreed settlement occurred on 4 April 2008, with the purchase price of $930,000 and costs like duty etc. met by two loans from a bank totalling $570,000 and a balance of $400,705 funded from the husband’s family law property settlement proceeds.
The husband says, at paragraph 39, that the balance of the funds received from his property settlement were applied to purchase new furniture and appliances for the Suburb D home; an engagement ring for the wife for $42,000; and living costs and joint expenses including for an overseas holiday. I accept this evidence.
From April to June 2010, substantial renovations were carried out to the Suburb D home. Although both parties agree that sub-contractors were engaged and an increase in the loan facility by $150,000 was used to fund renovation expenses, there is a dispute as to what personal non-financial contributions were made by the parties to the renovations. I deal with that dispute when further discussing contributions.
In 2011 a further $30,000 was borrowed to assist to fund the parties’ wedding held in the United Kingdom in 2011.
In July 2013, the wife commenced employment with J Company where she continues to be employed as a professional. Because of the significant additional income by way of bonuses and the like during the period of the husband’s employment with K Company (“KPL”) from April 2014 to 21 February 2018, and thereafter with M Pty Ltd as a manager, I separately deal with this remuneration and benefits below.
Prior to separation, on 9 June 2015 the husband established the Baggin self-managed superannuation fund and shortly thereafter in July 2015, the B Trust was established.
On 9 April 2016, the parties finally separated after a relationship since cohabitation of nearly 10 years. The husband left the Suburb D home, and within three months the husband had commenced cohabitating with his new partner Ms L (who was the mother of W now aged seven years, from an earlier relationship). Although as again discussed when analysing direct financial contributions, the wife and husband agreed on separation to continue to contribute to the joint account, because of the disparity in income, the husband contributed more than the wife. The wife, who lived in the home, reduced her contributions to the joint account after separation initially to and agreed sum of $1,500 per month, with the last payment made on 28 November 2016. On 9 December 2016, the husband indicated he would not continue to contribute to the account; would cancel the wife’s health insurance as well as disconnecting all services to the Suburb D home (which were in the husband’s name). No surprisingly, the letter alarmed the wife. The tenor of the letter was inappropriate, however it had the effect of permanently reducing the trust and cooperation between the parties. The joint bank account was closed on 5 June 2017 with, I accept, the contributions made to the account from separation to closure being:
(a)Wife - $12,000; and
(b)Husband – nett $30,466 (after withdrawals by the husband from the joint account).
With the bank mortgage falling into arrears, the husband commenced proceedings for property settlement on 14 September 2017 and after the wife formally responded, she filed an Application in a Case seeking interim relief which came before Justice Loughnan on 27 November 2017, when the following orders were made:
1.Until further order, orders are made in the terms sought by the wife at paragraphs 2, 3 and 4 of her Application in a Case filed 16 October 2017, as set out hereunder:
2.That within 28 days of the date of these Orders, the husband pay in full all arrears in respect of the Suburb D mortgage.
3.That the husband pay and continue to make all repayments as and when they fall due in respect of the Suburb D mortgage.
4.That within 28 days of the date of these Orders, the husband shall pay to the wife or as she may direct in writing, the sum of $150,000 by way of interim property settlement.
2.Otherwise the Application is dismissed.
3.The costs of the parties of and incidental to the proceedings today are reserved.
The husband complied with the Orders. The husband paid mortgage payments of $100,424 from the date of the interim Orders on 27 November 2017 to 1 April 2020 and paid to the wife the sum of $150,000 by 26 December 2017.
The husband left his employment with KPL on 21 February 2018, and on 9 March 2018 and again on 8 November 2019 when the husband says he was unemployed (temporarily as it turns out), he sought the wife’s consent to reduce the mortgage repayments to interest only, however the wife did not respond so repayments by the husband continued.
In May 2018, the husband joined M Pty Ltd where he was still employed at the time of the hearing. In May 2019 the husband established the Baggin Family Trust.
The wife has, during the proceedings, asserted the husband had “wasted” large sums of his after separation income on such things as holidays, gifts and lifestyle, such that when making trial directions on 19 May 2019, Justice Loughnan ordered, inter alia, at Orders 11 and 12 that:
11.Within 28 days from the provision of further disclosure documents by the Applicant to the Respondent pursuant to order 10, the Respondent provide to the Applicant:
11.1.A schedule of the alleged spending by the Applicant on holidays, gifts and lifestyle estimated in the balance sheet by the Respondent as between $300,000 to $1,000,000 with verifying documents;
11.2.A schedule of the application by the Respondent of the amounts received by way of interim property settlement from the Applicant pursuant to Orders dated 27 November 2017 on legal costs and repairs to the Suburb D property, together with verifying documents.
12.Within 28 days from compliance by the Respondent with Order 11.1, the Applicant provide the Respondent with particulars of all transactions in excess of $1,000 in the schedule provided pursuant to Order 11.1.
At paragraphs 149 to 157 of her affidavit, the wife under the heading of “wastage”, advanced a claim that the husband used his substantial income for a lavish lifestyle post separation, on holidays, travel expenses, luxury goods and household items and eating out. The wife produced schedules in respect of this alleged wastage. I refer to this evidence when considering the impact of s 75(2)(o), however Mr Sweeney in final oral submissions did not seek to contend for an adjustment for the husband’s use of his income post separation as he pleased. He was prudent and correct not to do so.
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.
On 7 May 2018, the husband commenced employment with M Pty Ltd in a senior positon at a base remuneration of $350,000 (gross inclusive of superannuation). He was also then eligible to participate “in various incentive schemes based on my performance and at my employer’s sole discretion” (see paragraph 96). I accept this evidence.
A short term incentive payment of $140,525 after tax was received by the husband on 23 May 2019.
Long term incentive schemes from his new employment enabled the husband to acquire 13,293 class A units and stapled shares in the M Limited Partnership and M1 Limited respectively on 27 May 2019. In anticipation of acquiring these interests, the husband established on 3 May 2019 the Baggin Family Trust, controlled by the husband, of which the husband and Ms L are the discretionary beneficiaries.
The price paid to acquire the units and stapled shares was NZD$800,000 which was fully funded by a loan at interest from the husband’s employer. That loan is described in the evidence as “the participation loan”. The husband says that as a result of applying some of the nett short term incentive payment (received 23 May 2019) and further payment from net distributions of short term incentives received on 11 July 2019 and 8 November 2019, he estimated at that time that the balance of the participation loan at the time of trial (2 June 2020) with accrued interest would be NZD$626,585 (paragraph 105).
The wife, ably assisted by the competent solicitors she engaged in this matter, pressed for further information before the hearing about the value of the units in M Company. The Court was informed that a valuation by N Accountants as at 31 March 2020 had not been released at the time the husband affirmed his affidavit on 11 May 2020. Subsequent to the husband’s affidavit being affirmed it is now clear that:
(a)on 18 May 2020 the husband received notice from his employer that he was to receive a bonus for the year ended 31 March 2020 of AUD$525,000 gross (inclusive of superannuation) – see Exhibit 1;
(b)on 29 May 2020 the husband received AUD$194,786 which was the nett amount after tax at source and payment made off the participation loan of $83,480;
(c)on 22 May 2020 the husband received notice that there would be a final dividend for the 2020 financial year (payable to the Baggin Family Trust), however at the date of the trial the exact dividend had not been declared. At paragraph 8 of Exhibit 1, the husband says that:
100% of the dividend will be applied in repayment of the participation loan from M Company in accordance with the terms of the Loan Agreement dated 27 May 2019. I will be required to pay tax on the income earned by the Trust and distributed to me, even though those funds are applied directly in repayment of the loan and are not distributed to the Trust.
(d)on 27 May 2020, the husband (via his solicitors) informed the wife that:
Relying on the draft N Accountants Report released and subject to update upon release of the final report, our client calculates the net value of Baggin Family Trust at $926,848.
The calculation in the letter broadly asserts this figure was calculated as follows:
Value of 13,293 units NZD$1,620,418 Less participation loan and accrued interest NZD$626,585 Nett assets value in NZD NZD$993,832 Converted to AUD (at exchange rate of 0.93 AUD$926,848
(e)The Court ruled at the commencement of the trial, for reasons given orally, that the husband could rely upon the affidavit of his Accountant, Mr O, filed 29 May 2020, who provided an opinion to provide advice on the tax liability to beneficiaries of Baggin Family Trust and the nett effect was an amount payable of AUD$69,591 by the husband, as the Trust intended to distribute all income to the husband. As the husband’s savings at the time of trial are to be excluded from the pool, so should future tax;
(f)Mr O also provided an opinion of potential Capital Gains Tax on a sale of the units at a valuation of NZD$1,620,417 (adopting a cost base of NZD$800,000) and concluded that Capital Gains Tax payable on profit by beneficiary would amount to AUD$179,881 (see annexure “E” to Mr O’s affidavit). Mr O was not required for cross-examination, because Counsel agreed on a statement (tendered as Exhibit 5) as follows:
The CGT calculation made by O makes assumptions that can be re-considered on the following basis:
1. The husband is not required to dispose of the shares this financial year or any year in which he continues to be employed by M Company;
2. The husband does not have to distribute the sale of shares to himself.
3. There is a cost base of $NZ800,000 on the shares and any calculations prepared by O are based on a sale at the current valuation;
4. If share proceeds are distributed to beneficiaries (other than the husband) the CGT payable on any sale will be based on the marginal rates of the beneficiary.
(As per original)
On the basis of this evidence, I will include (for reasons to follow in a separate pool), the sum of $926,848 as the value of the Baggin Family Trust.
Recently in Taffner & Taffner (2021) FLC 94-022 at [43] the Full Court said “[i]t is well established that even if the capital gains tax has not been calculated, it cannot be ignored if it is foreseeable that it will be payable in the short to midterm.” The term “midterm” was not defined. In Taffner the Full Court adopted what was said in Rosati & Rosati (1998) FLC 92-804 at [6.36]. Those principles were further explained by the Full Court in G & G [2001] FamCA 1453.
Based on those principles, I do not intend to reduce the value of the Baggin Family Trust for the potential Capital Gains Tax because I am not persuaded that the husband has any intention to sell the holding in the short term or foreseeable future. It is, on the current evidence, a particularly attractive investment – with the gross value having increased by over 100% in just 12 months. He continues, as required by the Loan Agreement, to reduce the participation loan.
THE POOL
Thankfully, and to the credit of Counsel, the areas of dispute as to what constitutes the pool of assets and liabilities (“the balance sheet”) narrowed by final submissions.
No notional “add back” for the husband’s alleged “wastage” was sought by the wife for example.
The husband contended that a separate pool be constituted for interests held by the husband arising from events post separation – including his interest in the Baggin Family Trust established on 3 May 2019 and units in his employer M Pty Ltd. This is on the basis that the wife cannot be shown to have made any contribution to those interests (separation having occurred some years earlier). I am satisfied that it assists in the transparent analysis of the parties’ contributions and as to what orders achieve justice and equity, for a separate pool of those interests, as assessed previously, to be constituted. In so doing, I accept I depart from the preferred and unusual “global” approach as urged upon me by Counsel for the wife, Mr Sweeney.
Bank accounts
As the parties’ Financial Statements reflect, since separation, over four years before trial, the parties have used income and financial resources at their disposal as they saw fit. One of the balance sheets tendered as part of Exhibit 21 shows that bank account balances at the time of the hearing were:
(a)Husband - $143,487; and
(b)Wife - $30,692.
With the husband’s significantly superior income, it would be expected that his savings would be greater. He had however an anticipated personal income tax liability of around $69,000 to meet for the income tax year ended 30 June 2020.
The wife’s savings represent the balance after she has accessed her interim property distribution of $150,000 and her income, less living expenses and legal expenses.
Both parties have incurred legal expenses, and in the exercise of discretion, having formed the view on the evidence that the legal expenses were met from the parties’ post separation income (and in the wife’s case a loan from her mother), I see no injustice to either party by:
(a)not including their bank account balances in the pool;
(b)not “adding back” any sums for legal expenses (see Chorn & Hopkins (2004) FLC 93-204); and
(c)not including the parties’ credit card liabilities.
Audi motor vehicle and contents acquired post separation by husband with partner Ms L
At paragraph 132, the husband says certain items of furniture and household items were purchased jointly with Ms L. They have been valued, and accepting the husband’s evidence on this point as I do, it is appropriate for a 50% share of the value, or $6,770, to be included in the balance sheet.
Similarly, at paragraph 133, the husband provides details of the purchase of the Motor Vehicle 2 in December 2016 for $86,499 and the arrangements for financing the vehicle. He says, and I accept, that Ms L’s Motor Vehicle 3 was traded in at an agreed figure of $35,000. I am therefore satisfied that it is just and equitable to include in the balance sheet 50% of the current value of the Motor Vehicle 2, as an interest of the husband.
ADD BACKS
On 27 November 2017, Justice Loughnan ordered the husband to pay to the wife the sum of $150,000 “by way of interim property settlement”. Although I accept, as Mr Sweeney for the wife argued, I am not bound by this characterisation at that time, I do regard it as just and equitable to include the payment of $150,000 in the balance sheet. This is particularly so, having made the discretionary decision not to “add back” any amount for legal expenses.
However, I also have decided to notionally “add back” the savings of the husband at the time of separation of $215,630. His use of the funds post separation may have assisted him in making payments to the joint account, however that is a contribution argument. I assess his retaining the funds as a style of premature disposition in a Townsend & Townsend (1994) 18 Fam LR 505 sense. Certainly his income, post separation alone, was more than adequate for him to enjoy a lifestyle of his choice with some expenditure on luxury discretionary items (some of which the wife identified in the evidence on alleged “wastage”). Again, because I have decided not to include any allowance for paid legal expenses, I see it as just and equitable to include the husband’s savings at separation (ignoring a smaller account of $872).
I note that at the time of the hearing, and as a result of a further valuation opinion before trial, the Suburb D home is included in the pool at $1,950,000. The Court accepts, from media reports, that many areas in the greater Sydney area have experienced increase in property values, however neither party has, during the period of time this judgment was reserved, sought to re-open to seek to adduce any further evidence of any increase in value of the Suburb D home. Clearly the media reports are not evidence before me. The form of orders I make could, depending on the capacity of the wife to raise any necessary funds, allow the parties to share in any increase in value of the Suburb D home (if any).
Based on these findings and earlier findings, I assess the two pools of interests as follows:
POOL ONE ASSETS Ownership Description Value Joint C Street, Suburb D, New South Wales $1,950,000 Husband Motor Vehicle 2 (½ interest) $28,925 Husband Motor Vehicle 1 $42,360 Husband Contents and effects $5630 Husband Contents and effects held with Ms L $6770 Husband Personal effects (Suburb D home) $3680 Wife Contents and effects (including jewellery) $43,230 TOTAL $2,080,595 ADD BACKS Wife Interim property – Order dated 27 November 2017 $150,000 Husband Savings at separation (para 88.3) $215,630 TOTAL (including addbacks) $2,446,225 LIABILITIES Joint P Bank loan $552,362 TOTAL NETT NON-SUPERANUATION ASSETS $1,893,863 SUPERANNUATION Husband Super Fund 2 $197,321 Husband Super Fund 1 $108,165 Husband SMSF – Baggin Super Fund $178,534 TOTAL (Husband’s superannuation) $484,020 Wife Super Fund 1 $182,415 TOTAL SUPERANNUATION POOL $666,435 TOTAL NETT POOL ONE $2,560,298 POOL TWO Husband Interest in Baggin Family Trust $926,848 TOTAL COMBINED POOL ONE AND TWO $3,487,146 CONTRIBUTIONS
The Court relies upon, but does not repeat, earlier findings in this Judgment.
In final submissions, Counsel for the husband urged me “not to rely upon jurisprudential comment”, but to “fundamentally rely on the Act”. I took this submission as an attempt to warn me not to be persuaded by the eloquent earlier oral submissions of Counsel for the wife, Mr Sweeney, that the relationship was akin to a partnership and although the husband’s direct financial contributions (under s 79(4)(a)) both initially and during the relationship until separation were vastly superior to those able (from her reduced income) to be directly contributed by the wife, this should not sound in any disparity between the parties, as the wife contributed 100% of what she could.
I do not completely accept this submission by Mr Sweeney, however I agree that consistent authority guides trial judges from undertaking a precise “accounting exercise” or some form of audit (see Pates & Pates [2018] FamCAFC 171). Considering the husband’s professional background, it is hardly surprising that he is comfortable with an analysis based on direct financial contributions alone.
However that is not the approach to be adopted, and in Pierce & Pierce (1998) FLC 92-844 it was stated that “it is necessary to weigh the initial contributions of both the husband and the wife. In considering the weight to be attached to the initial contributions, in the case of the husband, regard must be had to the use made by the parties of the contribution”. I take into account that from the husband’s initial unmatched cash contribution of over $500,000 – the sum of $400,705 was contributed to acquire the Suburb D home. That property now represents the most significant interest in Pool One, however from its acquisition the parties made further financial contributions as set out above to the conservation, maintenance and improvement of the Suburb D home. I do not ignore the parties’ contributions from their employment earnings (because this is not a case where the parties received the benefit of a financial windfall in the form of gifts, inheritances, personal injury awards or the like, save for a wedding gift from the wife’s father of $3,000) to the acquisition during the relationship of cars, personal effects and furniture and general living expenses and holidays.
Section 79(4)(b) requires the Court to consider contributions made directly or indirectly, other than financial contributions, by the parties to the marriage to the acquisition, conservation or improvement of any of the property of the parties. In respect of this issue, by its nature difficult to assess with any quantifiable precision, both parties in my view tended to diminish the extent and importance of the other person’s non-financial contributions whilst seeking to maximise their own. I did not assess any real difference in non-financial contributions as a homemaker. I am satisfied they both worked hard and, more likely, the husband had longer work hours. They sometimes ate out or had meals at home. As a committed couple they did what they both had the availability to do around their home. I accept the wife is, as she said, a keen gardener and that passion reflected in her work outside the home. The husband did other jobs outside when available.
In respect of renovations to the Suburb D home, I have considered the evidence of the husband, at paragraphs 81 to 82; and the evidence of the wife at paragraphs 64 to 75; together with the evidence in their affidavits in reply (the husband at paragraphs 37 to 40 and the wife at paragraph 82). The fact that the wife felt it was necessary to tell the Court, whilst admitting the husband “did attempt to install insulation in the attic”, that he “destroyed part of the ceiling in the third bedroom” AND provide a photograph (see annexure “A” to the wife’s affidavit of 22 May 2020) is matched by evidence of the husband about who took the dry cleaning to the shop, for triviality. Such attempted “point scoring” was not helpful and of little assistance.
My finding is that they both helped, when they could, the contracted tradespeople (paid for from the additional finance of $150,000) as their skill set or availability allowed.
Post separation, the evidence is that the husband’s superior income allowed him to contribute more to the mortgage and maintenance charges than the wife, and this was before he was compelled to meet expenses by the Orders of Loughnan J as earlier described in these Reasons. I accept that the husband made further indirect contribution by the wife’s continued occupation of the jointly owned home, whilst his departure from the home required him to rent accommodation. I do not find it is necessary to precisely calculate the indirect benefit the situation created for the wife. It was of course her right as a joint owner to remain in the home and I accept her evidence that she has continued to attend to the gardens and minor maintenance in and around the home. I do take into consideration the husband’s indirect contribution in this way. I accept the home has increased in value – a gain achieved by market forces and the home not having been sold.
In respect of the parties’ superannuation interests set out in the Pool One interests, I accept they have increased post separation.
The husband says his total aggregate superannuation at separation was $268,228 (paragraphs 88.19 to 88.21) and is now agreed at $484,020 – an increase of $215,792. Although the wife’s current superannuation amounts to $182,415, unlike the husband she does not depose to the value of her member benefits at separation, however her Financial Statement filed 13 October 2017 indicated a value at that time of $117,000 – an increase of $65,415. Neither party offered the Court any evidence about how much of the increase represented:
(a)Nett contributions (after tax and other deductions) made by them; and
(b)Investment income, noting that the balances at separation would attract the bulk of any investment income.
With these gaps in the evidence, I will take into consideration that contributions by each party to their respective funds are likely to have been made.
Although Counsel for the husband referred me to the Full Court decision in Horrigan & Horrigan [2020] FamCAFC 25, where it was asserted that the primary judge had failed to undertake a holistic assessment of contributions but rather that the initial contributions were quantised (an argument rejected), I am applying a holistic assessment in this case as a long line of authority requires, noting also the line of authority most recently culminating in Jabour & Jabour (2019) FLC 93-898.
Taking the myriad of contributions across the whole relationship to the final hearing into account, I assess the contribution based entitlements to the Pool One interests as 57.5% to the husband and 42.5% to the wife – a differential of 15% or approximately $384,000. I regard this as proper.
In my assessment, it cannot be argued convincingly that the wife has indirectly contributed to the interests identified in Pool Two – by her support of the husband’s career during the relationship. As I discuss when considering the s 75(2) factors next, the way in which both parties supported (as I find they did) the other party’s career, is considered. However, at the time of separation the husband was employed by KPL. The employment with M Company did not begin until May 2018; was procured entirely by the husband and the units and shares were not allocated or acquired until May 2019 – three years after separation.
As will be demonstrated, the husband’s 100% interest in Pool Two will be taken into account in the next stage of these Reasons.
SECTION 75(2) FACTORS
Although often these factors are regarded or described as “future needs” factors, the assessment of the s 75(2) factors is undertaken to ensure that the orders pronounced are not just an exercise of assessing contributions, but other matters which shape a just and equitable outcome to both parties.
The analysis is not an invitation to engage in social engineering or to tinker with contribution based assessments without proper judicial rigour. In this case, I intend to deal with each factor prescribed by the legislation, if relevant, as follows:
(a)The husband is eight years older than the wife and both enjoy good health. How long either party can continue to work in the professions of their choice with the long hours and likely performance pressures, is uncertain, although as both enjoy good health, on age alone the wife may work for longer;
(b)The husband’s income at a base level of $350,000 per annum plus bonuses/short or long term incentives exceed the wife’s income of around $120,000 (even with an annual bonus of around $10,000 if paid) many fold. Not only is the husband’s income significantly superior, so is his earning capacity. The allocation of the interests now vested in the Baggin Family Trust is clear evidence that supports this finding;
(c)Neither party has a child of the marriage to care for, as no children from his union resulted;
(d)The parties’ income will be sufficient to enable them to support themselves at a reasonable standard of living, however the husband does have a legal duty to at least maintain his twins born in 2017 (currently aged four and a half years);
(e)Neither party has the responsibility to support any other person;
(f)Neither party at this time is eligible for a pension, benefit or allowance;
(g)The Court is required to consider, the parties being divorced, “a standard of living that in all the circumstances is reasonable”. This factor does not require the Court to expect that the standard of living enjoyed as an intact couple can be maintained into the future – but rather (considering the s 75(2) factors also relate to the assessment of claims for spousal maintenance), taking into consideration whether post-divorce a reasonable standard of living can be achieved. In my view, with a combination of the personal incomes, each party will be able to enjoy a reasonable standard of income;
(h)This factor is not relevant;
(ha) This factor is not relevant;
(i)The wife says she has “contributed” to the income and earning capacity of the husband by supporting his career, which has meant he now enjoys substantial income and a secure career path. The husband says that he did likewise for the wife. The tenor of the wife’s submissions suggest she feels as if she will not benefit from the income stream the husband will enjoy into the future, in the same way she did during the course of the relationship. This is clearly correct, however the husband’s income trajectory was always (if he maintains employment in the field he has) likely to soar. I am satisfied both parties “supported” the career paths which they individually aspired to achieve. The wife attended functions, socialised and maintained many of the domestic tasks so as to enable the husband to not only be available for the long hours of his employment, but to demonstrate to colleagues her genuine support for his career advancement. She, at one stage, mentored one of the husband’s colleague’s children, who had interest in a similar career. The husband says, and I also accept, although he does not have the same expertise as does the wife, that he assisted her in completing job applications and, I infer, provided strategic support as she dealt with the highs and lows of seeking to advance her career position – one, on the evidence, that has been achieved. The fact remains however that it is not likely the wife will ever earn the income the husband is likely to earn. I take into consideration that the most valuable benefit some people take from a marriage, is the ability to earn an income (Best & Best (1993) FLC 92-418). This is not a case, unlike some cases where the obligation to care for children, or one party’s decision not to pursue a career, the ability to earn an income has been impacted negatively by the roles played in the marital relationship;
(k) I do not find that the duration of the marriage has affected the parties’ earning capacity;
(l)This factor is not relevant;
(m)The wife had not, at the time of the hearing, commenced cohabitation with another person, whereas the husband has, with Ms L. The husband concedes (at Item 34 of his Financial Statement) that he estimated he pays $1,500 a week towards expenses of rent, outgoings, health insurance, child minding and general living expenses for the child. However, at paragraphs 131 and 132 of his affidavit he deposes to how the income of his partner (estimated at $5,192 a week – Item 17) is used within the household. I do not find any of this evidence remarkable, but rather quite normal for a blended family with children to care for;
(n)I take into consideration the terms of the property adjustment order which I propose to make, that effectively will:
(i)allow the wife, if she is able to finance the current debt and pay the husband the sum calculated, to pay out the home; to retain the Suburb D home, her personal effects and her modest superannuation;
(ii)allow the husband to receive the “pay out” from the wife in cash and retain his more substantial superannuation. The fact that the husband will be unable to access his superannuation, which comprises nearly 19% of the nett Pool One interests, for at least 17 years (tax free) on current legislation (leaving aside other earlier options of transition to retirement pensions) is a factor I take into consideration where neither party seeks a splitting order; and
(iii)clearly the husband’s benefit on the Baggin Family Trust is a factor to take into consideration, but in my assessment, considering this arose three years after separation, through no contribution by the wife and as a result of a new employment opportunity pursued by the husband alone, the size of Pool Two should not cause a disproportionate adjustment.
(naa)this factor is not relevant;
(na)this factor is not relevant;
(o)The Court is to consider “any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account”. In this respect, the wife contended at paragraph 2.1.3(c) of her case outline that:
The Husband has embarked upon a course of conduct that has had the effect of depleting the asset pool, including but not limited to excessive expenditure and withdrawal of funds from joint bank accounts without the consent of the Wife.”
By “adding back” to the pool, the husband’s savings at the time of separation, part of the wife’s complaint has been taken into account. However, despite the effort devoted to establishing this allegation of the wife, the husband’s evidence in reply and his cross-examination provided, on my assessment, a reasonable explanation for his discretionary expenditure decisions. Simply put, the wife has not met the evidentiary onus on her to establish “waste” within the principles of Kowaliw & Kowaliw (1981) FLC 91-092 and similar authorities; and
(p)This factor is not relevant.
A balancing of these factors requires, in my assessment, a modest adjustment to the contribution based entitlements to Pool One interests. I would make no adjustment to the Pool Two contribution assessment.
I find an adjustment to the wife of 5% - or a differential of $256,000 (10%) – is just and equitable.
WHAT ORDERS ACHIEVE JUSTICE AND EQUITY?
Of course authority makes it clear that it is an assessment of the orders (not mere percentages) that must be undertaken to determine whether justice and equity to both parties has been achieved by those orders.
If the wife is to receive 47.5% of Pool One interests ($2,560,298) this computes to a sum of $1,216,142 made up as follows:
Equity in the Suburb D home
($1,950,000 - $552,362)$1,397,638 Motor Vehicle 1 $42,360 Contents, effects and jewellery $43,230 Add back for interim property Order $150,000 Superannuation $182,415 $1,815,643 Less payment to the husband to retain the home $599,501 $1,216,142
The husband’s 52.5% share of Pool One interests amounts to $1,344,156 made up as follows:
Interest in Motor Vehicle 2 $28,925 Contents and effects (combined) $16,080 Savings at separation $215,630 Combined superannuation $484,020 $744,655 Plus payment by the wife $599,501 $1,344,156
By way of “cross check”, if the husband’s contribution of the interest in the Baggin Family Trust ($926,848) is taken into account in a combined nett pool of $3,487,146, he would receive or retain under the orders I propose to make, a total benefit of $2,271,004 – or 65% of the total pool and the wife would receive or retain 35% - a differential of 30% or approximately $1,046,000. I regard this just and equitable.
For the Reasons now delivered, the orders set out at the commencement of these Reasons are just and equitable to both parties.
The wife would, by raising the amount of $600,000 (rounded up) and allowing for adjustments for costs of refinancing, have an equity in the Suburb D home (on the valuation adopted at the hearing) of approximately $790,000. Whilst I accept on the wife’s income being able to refinance (even at historically low interest rates) will be a challenge, she should be given a chance to do so by paying the husband $600,000.
If she is unable to do so, the home will have to be sold and the nett proceeds distributed so as to achieve a division of the recalculated pool of 52.5% to the husband and 47.5% to the wife.
No cross-examination (or submissions) were advanced as to the husband’s amended proposal as to the items he wished to retain from the Suburb D home. In those circumstances, I propose to order he be entitled to those items.
If any applications for costs are to be pursued, then an Application in a Proceeding can be filed in the usual way. My usual practice will be to then make directions for the determination of a costs application (or cross application), on written submissions in chambers on the papers.
I certify that the preceding eighty-eight (88) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann. Associate:
Dated: 30 September 2021
APPENDIX ONE
THE COURT NOTES:
1. 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.All previous Orders be and are hereby discharged.
2.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 $1,174,303;
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.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.Within twenty eight (28) days from the date of these Orders, the husband shall do all acts and things and sign all documents necessary to transfer all of his right title and interest in the Motor Vehicle 1 registered number … to the wife.
5.Within twenty eight (28) days from the date of these Orders, the wife shall sign all documents as may be presented to her by the husband so as to relinquish any claim she may have arising as a result of her having been a potential beneficiary of the B Trust.
6.The husband by these Orders indemnifies and shall keep the wife indemnified against any liability of any nature which the wife has at any time arising in any way in respect of the B Trust, including but not limited to any liability of the wife to the B Trust.
7.Within twenty eight (28) days from the date of these Orders, the wife shall make available for collection by the husband, or his agent, the following items located in the Suburb D property:
7.1.The husband’s power and hand tools;
7.2.The husband's hi-fi equipment and cables in such condition as reflected in the valuation of these items in the report from Mr E, being the digital music player and remote control, speakers, speaker cables and network server;
7.3.The husband’s CD collection;
7.4.The antler carving set and the small antler gifted to the husband by his parents; and
7.5.The husband's books and personal effects remaining in the Suburb D property.
8.In the event that the wife does not comply with Order 2 of these Orders, the parties shall forthwith do all acts and things and sign all documents necessary to effect the sale of Suburb D property for the best price reasonably obtainable in the following manner:
8.1.the parties shall instruct such lawyer as they agree upon to have the conduct of the sale on behalf of both parties or, in the absence of agreement reached within 65 days of the date of these Orders shall instruct such lawyer as may be appointed by the President for the time being of the Law Society of New South Wales (“the lawyer”), the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;
8.2.the parties shall appoint such agent as they agree upon to have the conduct of the sale on behalf of both parties and in default of agreement as to agent within 65 days from the date these Orders with such agent as the President of the Real Estate Institute of New South Wales shall appoint (“the agent”), the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;
8.3.list the Suburb D property for sale by public auction within six weeks from the date of appointment the agent unless otherwise agreed in writing by the parties;
8.4.the reserve price for the purpose of such auction shall be such price as the parties agreed upon in writing or, in the absence of agreement reached within 72 days of these Orders shall be the price nominated as the fair market value of the Suburb D property by a valuer appointed by the President for the time being of the New South Wales Division of the Australian Property Institute (“the valuer”), the costs of and incidental to such appointment and valuation to be borne equally by the parties as and when same fall due;
8.5.the valuer shall, if requested by either the husband or the wife at a date three calendar months after the date upon which the Suburb D property is first listed pursuant to Order 8.3 and thereafter at three (3) calendar monthly intervals until the Suburb D property is sold, nominate a sale price other than the originally nominated sale price;
8.6.the parties shall each cooperate in every way with the agent and the valuer including (without limiting the generality of the foregoing):
8.6.1.making the key available to the agent and the valuer;
8.6.2.allowing vacant inspection of the Suburb D property at all reasonable times requested by the agent and the valuer;
8.6.3.doing or saying nothing to hinder or prevent a sale being effected;
8.6.4.ensuring the Suburb D property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and
8.6.5.signing all documents requested by the agent in relation to the listing for sale of the Suburb D property except a contract or agreement for sale which has not been authorised by the parties' lawyer;
8.7.in the event the bidding at the auction does not reach the reserve price the parties or such of them as attends the auction may negotiate with the highest bidders or any other interested person and effect a sale of the Suburb D property at a price which is not more than 10% below the reserve price, or at such other price as the parties agree upon in writing;
8.8.in the event that the Suburb D property remains unsold, the parties shall do all acts and things and sign all documents necessary to continue to relist the Suburb D property for sale by public auction again at three (3) monthly intervals, and the provisions of Order 8.5 to 8.7 shall apply successively until the Suburb D property has been sold so that at each successive auction the reserve price shall be 10% less than the reserve price at the immediately preceding auction unless otherwise agreed by the parties in writing;
8.9.the parties may arrange for work to be undertaken to prepare the Suburb D property for sale , provided the scope and costs of the works and the arrangements for payment of such costs in the first instance shall be agreed in writing by the parties within 72 days of the date of these Orders.
9.On settlement of the sale of the Suburb D property the proceeds of sale be paid in the following manner and priority:
9.1.all costs and expenses of sale including legal costs and disbursements, agent's commission, valuer's fees, and auction expenses (including repayment of any such expenses as have been paid by either or both of the parties);
9.2.the amounts required to discharge the Suburb D mortgage;
9.3.the amounts required to pay all council and water rates outstanding with respect to the Suburb D property;
9.4.the amounts required to repay either or both of the parties for their respective contributions to the costs of work carried out to the Suburb D property pursuant to Order 8.9.
9.5.subject to order 10, in payment to the wife of 16% of the then balance;
9.6.subject to order 11, in payment of the balance remaining to the husband.
10.In the event that the wife fails to pay the rates and outgoings and her share of the mortgage repayments with respect to the Suburb D property in compliance with Orders 12.2 and 12.4, the amount by which the husband is out of pocket as a result of the wife's non- compliance shall be deducted from the wife’s share of the proceeds and added to the husband’s share.
11.In the event that the husband fails to pay the insurance and his share of the mortgage repayments with respect to the Suburb D property in compliance with Orders 12.3 and 12.4, the amount by which the wife is out of pocket as a result of the husband’s non-compliance shall deducted from the husband’s share of the proceeds and added to the wife's share.
12.As and from the date of these orders until the transfer or sale of the Suburb D property in accordance with these Orders:
12.1.the wife shall have the right of exclusive occupation of the Suburb D property;
12.2.the wife shall pay all rates and outgoings in respect of the Suburb D property and at her expense maintain the Suburb D property in good order and condition;
12.3.the husband shall at his expense insure the Suburb D property in an amount equivalent to the current market value of the Suburb D property at the time of effecting or renewing such insurance;
12.4.the parties shall each make and be responsible for the payment of 50% of all monies due and owing pursuant to the Suburb D mortgage.
13.Subject only to these orders, the husband and wife are each hereby declared to be solely legally and beneficially entitled to the exclusion of the other, to all other property of whatsoever nature and kind in their respective ownership, possession and/or control as at the date of these Orders and to which they are or may become entitled, including but not limited to their respective superannuation entitlements.
14.Subject only to these Orders, as and from the date of these Orders, each party hereby releases the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other by reason of or in respect of any act, cause, matter or thing.
15.In the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, then the Registrar of the Court shall be appointed pursuant to Section 106A of the Family Law Act, 1975 to execute such deed, document or instrument in the name of the said party and to do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of Affidavit.
16.All outstanding Applications be dismissed.
17.The wife pay the husband’s costs of and incidental to these proceedings.
APPENDIX TWO
THE COURT NOTES:
A.The following definitions for the purpose of these Orders:
A.1.“Husband” means the Applicant, Mr Baggin, born in 1972;
A.2.“party” means the Applicant or the Respondent;
A.3.“Act” means the Family Law Act 1975 (Commonwealth) as amended;
A.4.“Baggin Family Trust” means the Trust established by Deed made on 3 May 2019 being T Group Pty Ltd as Settlor and B Pty Limited as Trustee.
A.5.“B Trust” means the Trust established by Deed made on 26 June 2015 being T Group Pty Ltd as Settlor and B Pty Ltd as Trustee.
A.6.“parties” means the applicant and the respondent;
A.7.“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 of the land contained in Folio Identifier …;
A.8.“Suburb D mortgage” means the mortgage secured over the Suburb D property in favour of the P Bank being registered dealing number AD…;
A.9.“wife” means the respondent, Ms Hallion, born in 1979.
THE COURT ORDERS:
1.That within sixty (60) days from the date of these Orders the husband do all acts and things and sign all documents necessary so as to transfer to the wife all his right, title and interest in the Suburb D property.
2.That simultaneous with the above transfer referred to in Order 1 hereof:
2.1.the wife do all acts and things and pay all monies so as to discharge the Suburb D mortgage and provide to the Applicant husband a discharge of mortgage or copy thereof to evidence the same;
2.2.the wife shall sign all documents presented to her by the husband so as to relinquish any claim she may have arising from her having been a potential beneficiary of the B Trust.
3.Within twenty eight (28) days of the date of the making of these Orders, the husband shall do all acts and things and sign all documents necessary to transfer to the wife all of his right, title and interest in the Motor Vehicle 1 registered number ….
4.The husband by these Orders indemnifies and shall keep the wife indemnified against any liability of any nature which the Respondent wife has at any time arising in any way in respect of the B Trust including but not limited to any liability of the wife to the B Trust.
5.The wife is solely entitled, to the exclusion of the husband to all property both real and personal in her ownership, possession and/or control including but not limited to:
5.1.Any real property in her name;
5.2.All superannuation entitlements held by her;
5.3.All monies in financial institutions in her name;
5.4.Furniture and household contents, jewellery and other personal effects (including S the dog), including all such effects held at the Suburb D property, subject to Order 7.
6.The husband be solely entitled, to the exclusion of the wife, to all property both real and personal in his ownership, possession and/or control including but not limited to:
6.1.All real property in his name;
6.2.Any motor vehicles in his name;
6.3.All superannuation entitlements held by him;
6.4.All monies in financial institutions in his name;
6.5.Furniture and household contents, jewellery and other personal effects.
7.Within 30 days of the date of the orders the wife shall make available to the husband, or his agent, the following items currently located at the Suburb D property:
7.1.The books which the wife identifies as the husband’s books;
7.2.The CDs which the wife identifies as the husband's CD;
7.3.The hi-fi equipment which the wife identifies as the husband's hi-fi equipment;
7.4.The tools which the wife identifies as the husband’s tools; and
7.5.The husband's antler carving set and small antler.
8.The husband and the wife hereby release the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
Other
9.That in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar or a Deputy Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act to execute such deed, document or instrument in the name of the said party and to do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
10.That all other outstanding Applications be dismissed.
11.The husband pay the wife's costs of and incidental to these proceedings.
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