BAINES & BAINES
[2016] FCCA 1017
•11 May 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BAINES & BAINES | [2016] FCCA 1017 |
| Catchwords: EVIDENCE – Fresh evidence – where Applicant’s lawyers submitted an amended balance sheet annexed to written submissions three weeks after the close of the proceedings – where no leave sought to reopen – whether amended balance sheet should be considered. PRACTICE AND PROCEDURE – Appointment of Registrar to sign documents under Family Law Act 1975 (Cth), s.106A – Registrar of the Federal Circuit Court of Australia should be appointed and not a Registrar of the Family Court of Australia. |
| Legislation: Family Law Act 1975 (Cth), ss.4, 79, 80, 90MT, 90MZD, 106A Income Tax Assessment Act 1997 (Cth), ss.126-140 |
| Cases cited: Black v Kellner (1992) 15 Fam LR 343; FLC 92-287 Hickey & Hickey (2003) 30 Fam LR 355; FLC 93-143; [2003] FamCA 395 Milankov & Milankov (2002) 28 Fam LR 514; FLC 93-095; [2002] FamCA 195 S & S [2004] FamCA 906 Stanford v Stanford (2012) 47 Fam LR 481; FLC 93-518; [2012] HCA 52 |
| Applicant: | MR BAINES |
| Respondent: | MS BAINES |
| File Number: | SYC 4275 of 2011 |
| Judgment of: | Judge Scarlett |
| Hearing dates: | 4-7 March 2014 |
| Date of Last Submission: | 2 May 2014 |
| Delivered at: | Sydney |
| Delivered on: | 11 May 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Blackah |
| Solicitors for the Applicant: | Warren McKeon Dickson |
| Counsel for the Respondent: | Mr Campton SC |
| Solicitors for the Respondent: | Gordon & Barry |
THE COURT NOTES THE FOLLOWING DEFINITIONS FOR THE PURPOSE OF THESE ORDERS
A.“Property B property” means the property at Property B in the State of New South Wales and being the property described in title reference (omitted) and which is registered in the name of the Applicant Husband.
B. “Property O property” means the property at Property O, Sydney in the State of New South Wales and being the property described in title reference (omitted) and which is registered in the name of the Husband.
C. “Property C property” means the property at Property C in the State of New South Wales and being the property described in title reference (omitted) and which is registered in the name of (omitted) Pty Ltd.
D. “(business omitted) Pty Ltd” means (business omitted) Pty Ltd, ABN (omitted), being a company registered in the State of New South Wales and having its registered office at Property K in the State of New South Wales and in respect of which the Husband and the Wife are the Directors and the Husband is the Secretary and the sole Shareholder.
E.“Husband” means Mr Baines also known as Mr Baines who was born on (omitted) 1950.
F. “Wife” means Ms Baines who was born on (omitted) 1959.
G. “(omitted) Pty Ltd” means (omitted) Pty Ltd, ABN (omitted), being a company registered in the State of New South Wales and having its registered office at Property K in the State of New South Wales and in respect of which the Husband and the Wife are the Directors, the Husband is the Secretary and the Shareholders are Mr Baines Superannuation fund as to 311,182 Class A shares, the Husband as to 132,982 Ordinary Fully Paid Beneficially Held Shares, the Wife as to 38,305 Ordinary Fully Paid Beneficially Held Shares and the Baines Superannuation Fund as to 500,368 Ordinary Fully Paid Beneficially Held Shares.
H. “Property A property” means the property at Property A in the State of New South Wales being the property described in title reference (omitted) and which is registered in the name of the Husband.
I. “Property K property” means the property at Property K in the State of New South Wales being the property described in title reference (omitted) and which is registered in the name of the Husband.
J. “Property M mortgage” means the mortgage from the Respondent Wife to the (omitted) Bank registered on the Property M property and being registered mortgage number (omitted).
K. “Property M property” means the property at Property M in the State of New South Wales being the property described in title reference (omitted) and which is registered in the name of the Wife.
L. “Property E property” means the property at Property E in the State of Queensland being the property described in title reference (omitted) which is registered in the name of the Husband.
M. “Parties” means the Husband and the Wife.
N. “Property P mortgage” means the mortgage from the Wife to the (omitted) Bank registered on the Property P property being registered mortgage number (omitted).
O. “Property P property” means the property at Property P in the State of New South Wales being the property described in title reference (omitted) and which is registered in the name of the Wife.
P. “Property R mortgage” means the mortgage from the Wife to the (omitted) Bank registered on the Property R property being registered mortgage number (omitted).
Q. “Property R property” means the property at Property R in the State of New South Wales being the property described in title reference (omitted) and which is registered in the name of the Wife.
ORDERS
PART A – NON SUPERANNUATION ORDERS
Company
Within fourteen (14) days of the date of these Orders and prior to the implementation of Order (9) of the Superannuation Orders, the Husband and Wife shall do all acts and things and sign all documents necessary:
(a)For the Husband to resign all directorships, positions and offices in (omitted) Pty Ltd;
(b)To transfer to the Wife all of his Ordinary Shares in (omitted) Pty Ltd.
Subject to the Husband complying with Order (1) above, the Wife shall from the date of implementation of Order (1) indemnify and keep indemnified the Husband against all liability of whatsoever nature:
(a)By reason of the Husband having been employed as a Director, Officer or Shareholder of (omitted) Pty Ltd; and
(b)By reason of the Husband having been involved in any business operated by (omitted) Pty Ltd.
Real Estate
Within twenty-eight (28) days of the date of these Orders, the Husband shall do all acts and things and sign all documents necessary to:
(a)discharge the Property M mortgage;
(b)discharge the Property P mortgage;
(c)discharge the Property R mortgage; and
(d)cause those discharges to be registered on the title to the said properties.
Pending compliance with Order (3) above, the Husband shall do all acts and things and sign all documents necessary to indemnify the Wife and keep her indemnified with respect to the Property M mortgage and shall pay all mortgage instalments relating to the said Property M mortgage until such time as the discharge of the said mortgage is registered.
Contemporaneously with the Husband complying with Order (3) above the Wife shall do all acts and things and sign all documents necessary to withdraw any Caveat lodged by her on the:
(a)Property B property;
(b)Property O property;
(c)Property A property;
(d)Property K property; and
(e)Property E property.
Other
Within twenty-eight (28) days of the date of these orders, the Husband shall pay to the Wife the cash sum of $303,973.50.
In default of the Husband complying with either Order (3) or Order (6) above, the Husband shall do all acts and things and sign all documents necessary to sell the Property B property for the best price reasonably obtainable in the following manner:
(a)The Husband shall authorise the Wife to instruct such lawyer as is necessary to have the conduct of the sale on behalf of both parties.
(b)The Wife shall appoint such real estate agent (hereinafter referred to as “the agent”) as is necessary to have the conduct of the sale.
(c)The Property B property shall be listed for sale by public auction within six (6) weeks of the date of appointment of the agent.
(d)The reserve price for the purpose of such auction shall be such price as is nominated by Mr G of (omitted) Valuations.
(e)The agent shall, if requested by the Wife at a date three (3) months after the date upon which the Property B property is first listed in accordance with Order (7)(c) and thereafter at three (3) monthly intervals until the Property B property is sold, nominate a sale price other than the originally nominated sale price and being such price as is determined by the Wife.
(f)The Husband shall cooperate in every way with the agent, including but not limited to:
(i)Making the key available to the agent;
(ii)Allowing inspection of the Property B property at all reasonable times requested by the agent;
(iii)Not taking any step to hinder or prevent a sale being effected;
(iv)Ensuring the said Property B property including the grounds is in a neat and clean condition at the time of inspection by the agent and any prospective purchaser; and
(v)Signing all documents requested by the agent in relation to the listing of the said property, other than a Contract or Agreement for Sale, which has not been authorised by the lawyer referred to in Order (7)(a).
(g)In the event that bidding at the auction does not reach the reserve price, the Wife may negotiate with the highest bidder or any other interested person and effect the sale of the said property at a price which is not more than 10% below the reserve price or such other price as the Wife shall nominate.
(h)In the event that the Property B property is not sold by public auction within eight (8) weeks from the date of appointment of the agent, the Husband shall do all acts and things and sign all documents necessary and as requested by the Wife so as to list the said property for sale by private treaty with the agent appointed in accordance with Order (7)(b) above.
(i)The sale price at which the said property shall be listed is to be such price as the Wife shall nominate.
(j)If the said property remains unsold, the parties must do all acts and things and sign all documents necessary to re-list the said property immediately for sale by public auction again on a date nominated by the agent and at such auction there is to be no reserve price unless otherwise nominated by the wife in writing.
Upon settlement of the sale of the Property B property, the proceeds of sale are to be paid in the following manner and priority:
(a)all costs and expenses of sale, including legal costs and disbursements, agent’s commission, advertising expenses and auction expenses;
(b)the amount required to pay all municipal and water rates outstanding with respect to the said property;
(c)the amounts payable to the wife as prescribed by Orders (3) and (6) above; and
(d)the balance to the Husband.
In the event that the proceeds of sale of the Property B property are insufficient to meet the amounts payable to the Wife under Order (3) or Order (6), the Husband must do all acts and things and sign all documents necessary to sell the Property A property for the best price reasonably obtainable in the following manner:
(a)The Husband shall authorise the Wife to instruct such lawyer as is necessary to have the conduct of the sale on behalf of both parties.
(b)The Wife shall appoint such real estate agent (hereinafter referred to as “the agent”) as is necessary to have the conduct of the sale.
(c)The Property A property shall be listed for sale by public auction within six (6) weeks of the date of appointment of the agent.
(d)The reserve price for the purpose of such auction shall be such price as is nominated by Mr G of (omitted) Valuations.
(e)The agent shall, if requested by the Wife at a date three (3) months after the date upon which the Property A property is first listed in accordance with Order (9)(c) and thereafter at three (3) monthly intervals until the said property is sold, nominate a sale price other than the originally nominated sale price and being such price as is determined by the Wife.
(f)The Husband shall cooperate in every way with the agent, including but not limited to:
(i)making the key available to the agent;
(ii)allowing inspection of the said property at all reasonable times requested by the agent;
(iii)not taking any step to hinder or prevent a sale being effected;
(iv)ensuring the said property including the grounds is in a neat and clean condition at the time of inspection by the agent and any prospective purchaser; and
(v)signing all documents requested by the agent in relation to the listing of the said property, other than a Contract or Agreement For Sale, which has not been authorised by the lawyer referred to in Order (9)(a).
(g)In the event that bidding at the auction does not reach the reserve price, the Wife may negotiate with the highest bidder or any other interested person and effect the sale of the said property at a price which is not more than 10% below the reserve price or such other price as the wife shall nominate.
(h)In the event that the said property is not sold by public auction within eight (8) weeks of the date of appointment of the agent, the Husband shall do all acts and things and sign all documents necessary and as requested by the Wife so as to list the said property for sale by private treaty with the agent appointed in accordance with Order (9)(b) above.
(i)The sale price at which the said property shall be listed is to be such price as the Wife shall nominate.
(j)If the said property remains unsold, the parties must do all acts and things and sign all documents necessary to re-list the said property immediately for sale by public auction again on a date nominated by the agent and at such auction there is to be no reserve price unless otherwise nominated by the wife in writing.
Forty-eight (48) hours prior to settlement of the sale of the Property A property, the Husband must vacate the said property and leave it in good order and condition.
Upon the settlement of the sale of the Property A property the proceeds of sale are to be paid in the following manner and priority:
(a)all costs and expenses of sale, including legal costs and disbursements, agent’s commission, advertising expenses and auction expenses;
(b)the amount required to pay all municipal and water rates outstanding with respect to the said property;
(c)the amounts payable to the Wife as prescribed by Order (3) and (6) above; and
(d)the balance to the Husband.
In the event that any amount remains payable to the Wife in accordance with these Orders the Husband must pay interest on the amount from the date it is payable, being twenty-eight (28) days from the date of these Orders, at the rate prescribed by Part 22 of the Rules to the date of payment.
Within fourteen (14) days of the date of these Orders or at such date as may be determined by the Wife the Husband must deliver to the Wife the piano currently in his possession.
Unless otherwise specified in these Orders:
(a)Each party shall be solely entitled to the exclusion of the other to all property and chattels of whatsoever nature and kind in the possession or title of such party as at the date of these Orders;
(b)Each party shall be solely liable and indemnify the other against any liability encumbering any item of property to which that party is entitled in accordance with these Orders; and
(c)Each party shall be solely liable for and indemnify the other against any liability in their respective names including but not limited to credit cards and personal loans.
The Husband and Wife must do all acts and things and sign all documents necessary to give effect to these Orders.
In default of either party doing any act or thing or signing any document or executing any instrument necessary to give effect to these Orders, the Registrar of the Federal Circuit Court of Australia at Sydney is hereby appointed to sign all such documents and execute all such instruments in the name of the defaulting party and the defaulting party will be responsible for the whole costs of any such Application by the non-defaulting party to the Registrar of this Court.
PART B – SUPERANNUATION ORDERS
IN MAKING THESE ORDERS THE COURT NOTES;
A.The Mr Baines Superannuation Fund ABN (omitted) (“the Super Fund”) is a self-managed superannuation fund listed by the Australian Taxation Office on the Super Fund Lookup Website (omitted) as a complying superannuation fund.
B.The Super Fund was established under a Deed of Trust dated 1 August 2007. The rules governing the operation of the Super Fund are contained in the Deed of Trust (“the Rules”).
C.The Husband and the Wife are the only members of the Super Fund.
D.The trustee of the Super fund is a corporation, (business omitted) Pty Ltd (ACN (omitted)) (“the trustee corporation” “the trustee”) and the Husband and wife are the Directors of that corporation.
E.The Husband has the following member accounts in the Super Fund and in accordance with s.90MT(2) of the Family Law Act 1975 as at 30 June 2013 the respective balance was:
a.Accumulation $2,087,950
b.Accumulation (Tax free) $1,360,495
Total$3,448,444
F.The Wife has the following member account in the Super Fund and in accordance with s.90MT(2) of the Family Law Act 1975 as at 30 June 2013 the respective balance was:
a.Accumulation $874,320
b.Accumulation (Tax Free) $1,234,588
Total$2,108,908
G.That the requirements of procedural fairness in accordance with s.90MZD of the Family Law Act 1975 have been observed on the basis that the parties are the directors of the trustee corporation of the Super Fund.
H.“Baines Superannuation Fund” means Baines Superannuation Fund, ABN (omitted), created by Deed dated 18 July 2012 and in respect of which (omitted) Investments is the trustee.
Superannuation Orders
IT IS ORDERED:
Wife to transfer her entire interest in the Super fund to the Husband for an Instant (Splitting Order 1)
That in accordance with paragraph 90MT(1)(b) of the Family Law Act 1975:
(a)the Husband is entitled to be paid the specified percentage, being 100% out of the Wife’s Super Fund interest; and
(b)the Wife’s entitlement to the amount in her member account (and the entitlement of any other person to payments out of the Wife’s interest) in the Super Fund, is correspondingly reduced.
That the Husband and Wife in their capacity as directors of the trustee corporation of the Super Fund, shall do all such acts and things and have signed all such documents as may be necessary to:
(a)calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the Husband in clause 1 of this Order; and
(b)pay the entitlement whenever the trustees make a splittable payment out of the Wife’s interest in the Super Fund.
Splitting Order 1 operates from Operative Time 1.
Substantive Superannuation Split in favour of wife (Splitting Order 2)
That in accordance with paragraph 90MT(1)(b) of the Family Law Act 1975:
(a)the Wife is entitled to be paid the specified percentage being 50% out of the Husband’s Super Fund interest; and
(b)the Husband’s entitlement to the amount in his member account (and the entitlement of any other person to payments out of the Husband’s interest) in the Super Fund is correspondingly reduced.
That the Husband and Wife in their capacity as directors of the trustee corporation of the Super Fund shall do all such acts and things and have signed all such documents as may be necessary to:
(a)calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the Husband in clause 4 of this Order; and
(b)pay the entitlement whenever the trustees make a splittable payment out of the Husband’s interest in the Super Fund.
Operative time of the Order
The operative times for Splitting Order 1 and Splitting Order 2 operate as follows:
(a)Firstly, Operative Time 1 operates from the beginning of the day of the transfer of the transferable benefit; and
(b)Secondly, Operative Time 2 operates immediately following the operation of Operative Time 1.
Transfer of Investment Property to Trustee of Wife’s New Super Fund
The service of this Order shall be deemed to have occurred on the date of the Order by reason of the parties in their capacity as directors of the trustee corporation and the Court notes that this will enliven the operating standards under Part 7A of the Superannuation Industry (Supervision) Regulations 1994.
That after service by the trustee, on behalf of the Super Fund, of the payment split notice in accordance with regulation 7.03 of the Superannuation Industry (Supervision) Regulations 1994 in accordance with the operating standards under the Superannuation Industry (Supervision) Regulations 1994, the Wife shall do all such acts and things and sign all such documents as may be necessary, including but not limited to exercising her request in accordance with regulation 7A.06 of the Superannuation Industry (Supervision) Regulations 1994 (“the Wife’s regulation 7A.06 request”) for the transfer of the transferable benefits (defined in regulation 1.03 of the Superannuation Industry (Supervision) Regulations 1994) from the Super Fund to the Wife’s interest in a complying superannuation fund nominated by the Wife, being the Baines Superannuation Fund (ABN (omitted)) (“the Wife’s New Super Fund”).
That the Husband and Wife as directors of the trustee corporation shall convene a meeting by exchange of minutes within fourteen (14) days after receipt of the Wife’s regulation 7A.06 request and in that meeting do all such acts and things, and sign all such documents as may be necessary to authorise the transfer of the transferable benefit in accordance with regulation 7A.12 of the Superannuation Industry (Supervision) Regulations 1994 to the trustee of the Wife’s New Super Fund by way of the following:
(a)The transfer of all right title and interest in the shares of (omitted) Pty Ltd from the trustee of the Super Fund to the trustee of the Wife’s New Super Fund; and
(b)The transfer of sufficient cash from the trustee of the Super Fund to the trustee of the Wife’s New Super Fund to meet the balance of the trustee’s liability in accordance with Splitting Order No 2 and the directors shall do all such things as may be necessary to sell or otherwise liquidate other investment property of the Super Fund to obtain the necessary cash referred to hereon
And it is noted that the trustee of the Super Fund will be eligible for Capital Gains Tax Rollover relief in accordance with s. 126-140 of the Income Tax Assessment Act 1997 for any in specie transfers.
That immediately following the transfer of the transferable benefits from the Husband’s interest in the Super Fund to an interest in the name of the Wife in the Wife’s New Super fund, the Wife shall do all such things and sign all documents necessary to resign:
(a)as a director of the trustee corporation; and
(b)as a member of the Super Fund;
in accordance with the Rules of the Super Fund.
That contemporaneously with the wife’s compliance with the provisions of Order (26) of this Order, the Husband will indemnify and keep the wife effectively indemnified against all liability of and in relation to the Super Fund including any debt personally guaranteed by the wife, and including any unpaid income tax assessed or hereinafter assessed against the Wife in respect of income derived or deemed to have been derived by the Super Fund inclusive of interest, penalties, costs and fines and from all proceedings, costs, claims or demands in respect thereof.
That in the event of any dispute arising between the parties in the exercise of their powers as trustees of the Super Fund, the parties shall appoint an arbitrator nominated by the President of the Institute of Chartered Accountants.
Pending the transfer of the transferable benefits from the Husband to the Wife and from the Wife to the Husband:
(a)Each party is restrained from dealing with, charging, encumbering or disposing of any investment property of the Super Fund other than in accordance with the terms of this Order; and
(b)Each party shall immediately revoke any binding death benefit nomination already made and each party be, and is hereby, restrained from:
(i)making any binding death benefit nomination in favour of a child described in regulation 13 of the Family Law (Superannuation) Regulations 2001;
(ii)making any other nomination where the effect of such nomination would be to render any splittable payment not splittable; and
(iii)doing any such act or thing which would defeat, extinguish or reduce the entitlement of either party under this order.
AND THE COURT NOTES
A. The value of the transferable benefits to be transferred:
a) from the Wife’s interest in the Super Fund to the Husband’s interest in the Super Fund; and
b) from the Husband’s interest in the Super Fund to the Wife’s interest in the Wife’s New Super Fund;
are calculated in accordance with regulation 7A.12 and regulation 7A.11 respectively of the Superannuation Industry (Supervision) Regulations 1994;
B. In accordance with regulation 14F of the Family Law (Superannuation) Regulations 2001, any payments from:
a) The Wife’s interest in the Super Fund made after the trustees have transferred the transferable benefits from the Wife to the Husband’s interest in the Super Fund; and
b) The Husband’s interest in the Super Fund made after the trustees have transferred the transferable benefits to the Wife’s New Super Fund;
are not splittable payments.
IT IS NOTED that publication of this judgment under the pseudonym Baines & Baines is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 4275 of 2011
| MR BAINES |
Applicant
And
| MS BAINES |
Respondent
REASONS FOR JUDGMENT
Application
This is an application for settlement of the parties’ property. The Husband is the Applicant. His Application was filed on 28th November 2011.
The Wife filed her Response and supporting documents on 15th March 2012.
The hearing took place over a period of four days, from 4th March to 7th March 2014.
Background
The Husband was born on (omitted) 1950. He is now 65 years of age.
The Wife was born on (omitted) 1959. She is now 56 years of age.
The parties commenced living together in (omitted) 1984, according to the Wife. They were married on (omitted) 1984. They separated on 6th March 2010 and were divorced by Order of this Court on 25th August 2011.
There are three children of the marriage, all adults.
X was born on (omitted) 1986. Y was born on (omitted) 1988. Z was born on (omitted) 1992.
The parties’ lawyers have each prepared a chronology, and recourse has been had to each document for relevant details.
The Husband studied (qualifications omitted) between 1974 and 1979 and commenced in (business omitted). He purchased a number of properties from 1975 onwards.
On (omitted) 1975, the husband purchased a property at Property L for $45,000.00.
On (omitted) 1977 the husband purchased a property at Property W for $43,500.00.
On (omitted) 1979 the Husband purchased a (business omitted) and premises at Property K1, for $60,000.00.
On (omitted) 1981 the Husband registered a company called Mr Baines Pty Ltd which became the trustee of the Baines Superannuation Fund.
On (omitted) 1981 the Husband purchased a (business omitted) at Property K2 for $138,000.00 and relocated his (business omitted) to that property.
On (omitted) 1983 the parties purchased a property at Property A for $257,500.00. The property was registered in the Husband’s name.
On (omitted) 1985 the Husband sold the property at Property K1 for $86,000.00.
In (omitted) 1985 the Husband sold the property at Property W, for $86,000.00.
On (omitted) 1985 the Husband sold the property at Property L for $60,000.00.
In 1986, the parties demolished the old house at Property A and commenced building a new house on the property.
The Wife ceased working full time before the birth of the parties’ son X on (omitted) 1986 and returned to work on a part time basis.
The parties’ second child Y was born on (omitted) 1988. The Wife returned to work on a part time basis after the child’s birth.
On (omitted) 1991 the company (omitted) Pty Ltd was registered. The company purchased a property at Property C for $660,000.00.
The parties’ third child Z was born on (omitted) 1992. The Wife ceased work altogether.
In 1997 the parties purchased Property T for $303,000.00.
In 1998 the parties purchased a property at Property E for $166,900.00.
In July 1998 the parties purchased a property at Property B, for $2,250.000.00.
On 14th August the parties purchased an apartment at Property O for $228,000.00.
The Wife’s mother died in 2002. On (omitted) 2003 probate of the mother’s will was granted. The Wife received an inheritance of $390,000.00. She purchased her siblings’ shares in a property at Property P.
In 2003 the Wife purchased a property at Property H for $800,000.00. She subsequently sold the property in July 2005 for $950,000.00.
The Wife resumed part time work in 2006.
In 2007 the Husband assisted the parties’ daughter Y (Y) to purchase a home unit in (omitted) and the parties’ son X to purchase a home unit in Canberra.
In 2008 the Wife returned to work full time, working five days per week.
On (omitted) 2008 the wife purchased a property at Property R for $510,000.00.
The parties separated on 6 March 2010.
After the parties separated, the Husband remained living in the former matrimonial home and the Wife moved into rental premises in (omitted). The Husband paid spousal maintenance of about $1,000.00 per week.
In October 2010 the Wife purchased a property at Property M. The Husband paid the mortgage instalments and also paid the Wife an amount of $370.00 per week.
In October 2011 the Wife’s employment was reduced to between 2 and 5 days per week.
In December 2012 the Wife’s employment contract ceased and she commenced to work on a casual basis.
On 28th February 2013 the parties entered into Interim Consent Orders providing that:
a)within 21 days the husband was to pay to the Wife the sum of $200,000.00;
b)within 21 days the parties would do all things necessary to transfer the parties’ Mercedes motor vehicle to the Wife free of all encumbrance; and
c)the Husband would continue to meet all mortgage repayments over the property at Property M.
The parties also agreed that the classification of the funds paid to the Wife as a partial property settlement, payment for the Wife’s costs or spousal maintenance would be an issue to be determined at the final hearing.
In April 2013 the Husband purchased a motor vehicle for the parties’ daughter Y.
On 21st November 2013 the parties entered into further Interim Consent Orders. Those Orders provided that (in summary):
a)Within 21 days, the Husband would:
i)Pay to the Wife the sum of $95,000.00;
ii)Discharge the mortgage to (omitted) Bank registered on the title of the property Property T, New South Wales;
iii)Deliver to the Wife a signed transfer of all of his right, title and interest in the Property T property by way of partial property settlement;
b)The Husband would terminate any existing lease, holding over arrangement or any management agreement over the property.
c)The Consent Orders included a notation that:
The parties agree that the classification of the funds to be paid to the wife pursuant to Order 1(a) as a partial property settlement, payment for the wife’s costs or spousal maintenance for the wife is an issue to be determination (sic) at the final hearing in this manner.
Orders Sought
The Husband seeks orders to this effect:
PART A
ORDERS FOR NON-SUPERANNUATION ASSETS AND LIABILITIES
Real Property
1. That in these Orders:
1.1The Property A property means the property situate at and known as Property A in the State of New South Wales being the whole of the land comprised in folio identifier (omitted);
1.2The Property K property means the property situate at and known as Property K in the State of New South Wales being the whole of the land comprised in folio identifier (omitted);
1.3The Property B property means the property situate and known as Property B, in the State of New South Wales being the whole of the land comprised in folio identifier (omitted);
1.4The Property O property means the property situate and known as Property O, in the State of New South Wales being the whole of the land comprised in folio identifier (omitted);
1.5The Property P property means the property situate and known as Property P in the State of New South Wales being the whole of the land comprised in folio identifier (omitted);
1.6The Property M property means the property situate and known as Property M in the State of New South Wales being the whole of the land comprised in folio identifier (omitted);
1.7The Property R property means the property situate and known as Property R in the State of New South Wales being the whole of the land comprised in folio identifier (omitted);
1.8The Property T property means the property situate and known as Property T, in the State of New South Wales being the whole of the land comprised in folio identifier (omitted);[1]
[1] An order transferring to the wife the husband’s interest in the Property T property was made by Consent on 21 November 2013
1.9The Property E property means the property situate and known as Property E, in the State of Queensland being the whole of the land comprised in Lot (omitted) of Building Unit Plan (omitted).
2. That within 28 days of the date of these Orders the husband will do all acts and things and sign all documents as shall be necessary to:
2.1Pay to the wife or as she may direct in writing, the sum of $150,000;
2.2Discharge the mortgage currently secured on title of the Property M property in favour of the (omitted) Bank being dealing number (omitted);
2.3Transfer to the wife all of his right title and interest in the Property M property;
2.4Transfer to the wife all of his right title and interest in the Property P property and the wife will indemnify the husband in relation to all liabilities the parties may have in relation to that property;
2.5Transfer to the wife all of his interest in the Property R property and the wife will indemnify the husband in relation to all liabilities the parties may have in relation to that property; and
2.6Transfer to the wife all of his right title and interest in the Property T property[2]and the wife will indemnify the husband in relation to all liabilities the parties may have in relation to that property.
[2] The parties entered into Consent Orders on 21 November 2013 whereby the husband was to transfer to the wife his interest in the Property T property as an order by way of partial property settlement
3. That simultaneously upon the husband’s compliance with Order 2, the wife will do all acts and things and sign all documents as shall be necessary to transfer to the husband all of her right, title and interest in:
3.1 The Property A property;
3.2 The Property K property;
3.3 The Property B property;
3.4 The Property O property;
3.5 The Property E property;
and the husband will indemnify the wife in relation to all liabilities the parties may have in relation to those properties.
Commercial Entities
4. For the purpose of these Orders:
4.1Husband means Mr Baines (also known as Mr Baines) born (omitted) 1950;
4.2 Wife means Ms Baines born (omitted) 1959;
4.3(omitted) Pty Ltd means (omitted) Pty Ltd, ABN (omitted), being a company registered in the State of New South Wales and having its registered office at Property K, New South Wales and in respect of which the husband and wife are the directors, the husband is the secretary and the shareholders are Baines Superannuation Fund as to 311,182 Class A shares, the husband as to 132,982 ordinary fully paid beneficially held shares, the wife as to 38,305 ordinary fully paid beneficially held shares and the Baines Superannuation Fund as to 500,368 fully paid beneficially held shares;
4.4(business omitted) Pty Ltd means (business omitted) Pty Ltd, ABN (omitted) being a company registered in the state of New South Wales and having its registered office at Property K, New South Wales and in respect of which the husband and wife are the directors, the husband is the secretary and the sole shareholder.
5. (business omitted) Pty Ltd consents to being joined to these proceedings for the purpose of consenting to and being bound by these Orders.
6. (business omitted) Pty Ltd acknowledges it has by these orders been given sufficient notice and has been afforded procedural fairness in the making of these Orders.
7.(omitted) Pty Ltd consents to being joined to these proceedings for the purpose of consenting to and being bound by these Orders.
8.(omitted) Pty Ltd acknowledges it has by these Orders been given sufficient notice and has been afforded procedural fairness in the making of these Orders.
9.The Wife will, within 7 days and before compliance with Order 10 below and Part B of these orders, return to the Husband’s accountant Mr L for lodgement, the original signed Taxation Returns and Financial Statements for (business omitted) Pty Ltd, (business omitted) Pty Ltd superannuation Fund and (omitted) Pty Ltd including the Loan Agreement between (omitted) Pty Ltd and Ms Baines dated 30 June 2013 (sent to the wife care of her lawyer by Mr L on 14 September 2013) and will do all acts and things and sign all documents as shall be necessary to facilitate lodgement[3] of such documents with the Australian Taxation Office.
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10.Following compliance with Order 9 above the Husband will take all steps and sign all documents necessary to transfer his ordinary shares in (omitted) Pty Ltd to the wife or her nominee and resign all directorships and/or positions and/or offices in (omitted) Pty Ltd.
11.Subject to the Husband complying with Order 10 the Wife shall indemnify and keep indemnified the husband against any liability of whatsoever nature which the husband has at any time arising in any way in respect of (omitted) Pty Ltd whether:
11.1by reason of the Husband having been employed as a director, officer and/or shareholder of (omitted) Pty Ltd;
11.2by reason of the husband having been involved in any business operated by (omitted) Pty Ltd;
11.3 pursuant to any guarantee given by the husband;
11.4by the receipt by the husband of any money from (omitted) Pty Ltd;
11.5 as a result of any liability of (omitted) Pty Ltd; or
11.6 otherwise.
Chattels and Residue
12.Each party will otherwise retain all liabilities of whatsoever kind or nature which stand in their sole name and will indemnify the other party in relation thereto.
13.Save as otherwise provided in these Orders the Wife will be declared to have the sole right, title and interest at law and in equity of:
13.1Any other chattels, goods, furnishings and other property which are, as at the date of these Orders, in her possession; and
13.2Any monies, shares, debentures and superannuation entitlements, which stand in her sole name as at the date of these Orders.
14.Save as otherwise provided in these Orders the Husband will be declared to have the sole right, title and interest at law and in equity of:
14.1Any chattels, goods, furnishings and other property which are, as at the date of these Orders, in his possession; and
14.2Any monies, shares, debentures and superannuation entitlements, which stand in his sole name as at the date of these Orders.
Enforcement
15.In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to these Orders then the Registrar of the Court is appointed pursuant to Section 106A of the Family Law Act, to execute such deed or instrument in the name of such party and to do all things necessary to give validity and operation to the deed or instrument.
16.Each party is granted liberty to apply on seven (7) days notice regarding the implementation of these Orders.
PART B
SUPERANNUATION SPLITTING ORDERS
IN MAKING THESE ORDERS, THE COURT NOTES:
A. The Baines Pty Ltd Superannuation fund ABN (omitted) (“the Super Fund”) is a self managed superannuation fund listed by the Australian Taxation Office on the Super Fund Lookup website ((omitted)) as a complying superannuation fund.
B. The Super Fund was established under a Deed of Trust dated 1 August 2007. The rules governing the operation of the Super Fund are contained in the Deed of Trust (“the Rules”).
C. The Husband and the Wife are the only members of the Super Fund.
D. The trustee of the Super Fund is a corporation, (business omitted) Pty Ltd (CAN (omitted))(“the trustee corporation” “the trustee”) and the Husband and Wife are the Directors of that corporation.
E. The Husband has the following member accounts in the Super Fund and in accordance with s.90MT(2) of the Family Law Act 1975, as at 30 June 2013 the respective balance was:
a. Accumulation $2,087,950
b. Accumulation (Tax free) $1,360,495
Total $3,448,444
F. The Wife has the following member account in the Super Fund and in accordance with s.90MT(2) of the Family Law Act 1975, as at 30 June 2013 the respective balance was:
a. Accumulation $874,320
b. Accumulation (Tax free) $1,234,588
Total $2,108,908
G. That the requirements of procedural fairness in accordance with s.90MZD of the Family Law Act 1975 have been observed on the basis that the parties are the directors of the trustee corporation of the Super Fund.
H. “Baines Superannuation Fund” means Baines Superannuation Fund, ABN 72 174 265 433, created by Deed dated 18 July 2012 and in respect of which (omitted) Pty Ltd is the trustee.
i. “(omitted) Pty Ltd” means (omitted) Pty Ltd, ABN (omitted) 919, being a company registered in the state of New South Wales and having its registered office at Property K, New South Wales and in respect of which the husband and wife are the directors, the husband is the secretary and the shareholders are Mr Baines Superannuation fund as to 311,182 Class A shares, the husband as to 132,982 ordinary fully paid beneficially held shares, the wife as to 38,305 ordinary fully paid beneficially held shares and the Baines Superannuation Fund as to 500, 368 Ordinary fully paid beneficially held shares.
IT IS ORDERED:
Wife to transfer her entire interest in the Super Fund to the Husband for an Instant (Splitting Order 1)
1.That in accordance with paragraph 90MT(1)(b) of the Family Law Act 1975:
a) the Husband is entitled to be paid the specified percentage, being 100%, out of the Wife’s Super Fund interest; and
b) the Wife’s entitlement to the amount in her member account (and the entitlement of any other person to payment out of the Wife’s interest) in the Super Fund, is correspondingly reduced.
2.That the Husband and Wife in their capacity as directors of the trustee corporation of the Super Fund, shall do all such acts and things and have signed all such documents as may be necessary to:
a) calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the Husband in clause 1 of this Order; and
b) pay the entitlement whenever the trustees make a splittable payment out of the wife’s interest in the Super Fund.
3. Splitting Order 1 operates from Operative Time 1.
Substantive Superannuation Split in favour of Wife (Splitting Order 2)
4.That in accordance with paragraph 90MT(1)(b) of the Family Law Act 1975:
a) the Wife is entitled to be paid the specified percentage, being 50%, out of the Husband’s Super Fund interest; and
b) the Husband’s entitlement to the amount in his member account (and the entitlement of any other person to payments out of the Husband’s interest) in the Super Fund, is correspondingly reduced.
5.That the Husband and Wife in their capacity as directors of the trustee corporation of the Super Fund, shall do all such acts and things and have signed all such documents as may be necessary to:
a) calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the Wife in clause 4 of this Order; and
b) pay the entitlement whenever the trustees make a splittable payment out of the Husband’s interest in the Super Fund.
6. Splitting Order 2 operates from Operative time 2.
Operative time of the Order
7.The operative times for Splitting Order 1 and Splitting Order 2 operate as follows:
a) Firstly, Operative Time 1 operates from the beginning of the day of the date of the transfer of the transferable benefit; and
b) Secondly, Operative Time 2 operates immediately following the operation of Operative Time 1.
Transfer of Investment Property to Trustee of Wife’s New Super Fund
8.The service of this Order shall be deemed to have occurred on the date of the Order by reason of the parties in their capacity as directors of the trustee corporation and the Court notes that this will enliven the operating standards under Part 7A of the Superannuation Industry (Supervision) Regulations 1994.
9.That after service by the trustee, on behalf of the Super Fund, of the payment split notice pursuant to r.7A.03 of the Superannuation Industry (Supervision) Regulations 1994, the Wife shall do all such acts and things and sign all such documents as may be necessary, including but not limited to exercising her request pursuant to r.7A.06 of the Superannuation Industry (Supervision) Regulations 1994 (“the Wife’s r.7A.06 request”) for the transfer of the transferable benefits (defined in r.103 of the Superannuation Industry (Supervision) Regulations 1994) from the Super Fund to the wife’s interest in a complying superannuation fund nominated by the Wife, being the Baines Superannuation Fund (ABN (omitted))(“the Wife’s New Super Fund”).
10.Provided that Orders 9 and 10 of these Orders has[4]been complied with, the Husband and Wife as directors of the trustee corporation shall convene a meeting by exchange of minutes within 14 days after receipt of the Wife’s r.7A.06 request and in that meeting do all such acts and things and sign all such documents as may be necessary to authorise the transfer of the transferable benefit pursuant to r.7A.12 of the Superannuation Industry (Supervision) Regulations 1994 to the trustee of the Wife’s New Super Fund by way of the following:
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a) The in specie transfer of all right title and interest in the shares in (omitted) Pty Ltd from the trustee of the Super Fund to the trustee of the Wife’s New Super Fund; and
b) The in specie transfer of sufficient other investment property of the Super Fund from the trustee of the Super Fund to the trustee of the Wife’s New Super Fund to meet the balance of the trustee’s liability in accordance with Splitting Order 2,
and it is noted that the trustee of the Super Fund will be eligible for Capital Gains Tax Rollover relief pursuant to s 126-40 of the Income Tax Assessment Act 1997 for any in specie transfers.
11.That immediately following the transfer of the transferable benefits from the Husband’s interest in the Super Fund to an interest in the name of the Wife in the Wife’s New Super Fund, the Wife shall do all such things and sign all documents necessary to resign:
a) as a director of the trustee corporation; and
b) as a member of the Super Fund;
in accordance with the Rules of the Super Fund.
12.That contemporaneously with the Wife’s compliance with the provisions of Order 11 of this Order, the Husband will indemnify and keep the Wife effectively indemnified against all liability of and in relation to the trustee corporation whether:
a) by reason of the wife having been employed as a director, officer and/or shareholder of (business omitted) Pty Ltd;
b) by reason of the wife having been involved in any business operated by (business omitted) Pty Ltd;
c) pursuant to any guarantee given by the wife;
d) by the receipt by the wife of any money from (business omitted) Pty Ltd;
e) as a result of any liability of either (business omitted) Pty Ltd; or
f) otherwise.
13.Pending the transfer of the transferable benefits from the Husband to the Wife and from the Wife to the Husband:
a) Each party is restrained from dealing with, charging, encumbering or disposing of any of the investment property of the Super Fund other than in accordance with the terms of this Order: and,
b) Each party is hereby restrained from:
i) making any binding death nomination or other nomination where the effect of such nomination would be to render any splittable payment not splittable; and
ii) doing any such act or thing which would defeat, extinguish or reduce the entitlement of either party under this Order.
AND THE COURT NOTES:
A. The value of the transferable benefits to be transferred:
a) from the Wife’s interest in the Super Fund to the Husband’s interest in the Super Fund; and
b) from the Husband’s interest in the Super Fund to the Wife’s interest in the Wife’s New Super Fund;
are calculated in accordance with r.7A.12 and r.7A.11 respectively of the Superannuation Industry (Supervision) Regulations 1994;
B. Pursuant to r.14F of the Family Law (Superannuation) Regulations 2001, any payments from:
a) the Wife’s interest in the Super Fund made after the trustees have transferred the transferable benefits from the Wife to the Husband’s interest in the Super Fund; and
b) the Husband’s interest in the Super Fund made after the trustees have transferred the transferable benefits to the wife’s new Super Fund;
are not splittable payments.
Enforcement
17[5]. In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to these Orders then the Registrar of the Court is appointed pursuant to Section 106A of the Family Law Act, to execute such deed or instrument in the name of such party and to do all things necessary to give validity and operation to the deed or instrument.
18.Each party is granted liberty to apply on seven (7) days notice regarding the implementation of these Orders.
[5] Sic. There are no proposed orders numbered 14, 15 or 16
The Wife seeks the following orders as set out in a Minute of Proposed Orders submitted by Senior Counsel for the wife:[6]
[6] Notations 1 to 17 inclusive contain definitions that are essentially similar to the definitions contained in the Minute of Orders sought by the husband and it is therefore unnecessary to reproduce them here
PART A
(NON-SUPERANNUATION ORDERS)
Company
1. Within 7 days of the date of these Orders and prior to the implementation of Order 9 of the Superannuation Orders, the Husband and Wife shall do all acts and things and sign all documents necessary:
1.1for the Husband to resign all directorships and/or positions and/or offices in (omitted) Pty Ltd; and
1.2to transfer to the Wife all his Ordinary Shares in (omitted) Pty Ltd.
2. Subject to the Husband complying with Order 1, the Wife shall from the date of implementation of Order 1 indemnify and keep indemnified the Husband against all liability of whatsoever nature:
2.1by reason of the Husband having been employed as a Director, Officer and/or Shareholder of (omitted) Pty Ltd; and
2.2by reason of the Husband having been involved in any business operated by (omitted) Pty Ltd.
Real Estate
3. Within 28 days of the date of these orders, the Husband shall do all acts and things and sign all documents necessary to:
3.1 discharge the Property M mortgage;
3.2 discharge the Property P mortgage;
3.3 discharge the Property R mortgage; and
3.4to cause those discharges to be registered on the title to the said properties.
4. Pending compliance with Order 3 the Husband shall do all acts and things and sign all documents necessary to indemnify the Wife and keep her indemnified with respect to the Property M mortgage and shall pay all mortgage instalments relating to the Property M mortgage and all outgoings attaching to the Property M mortgage until such time as the discharge of the Property M mortgage is registered.
5. Contemporaneous with the Husband complying with Order 3 the Wife shall do all acts and things and sign all documents necessary to withdraw any Caveat lodged by her on the:
(a) Property B property;
(b) Property O property;
(c) Property A property;
(d) Property K property; and
(e) Property E property.
Other
6. Within 28 days of the date of these Orders, the Husband shall pay to the Wife the cash sum of $1,917,000[7].
[7] The wife formerly sought an amount of $1,500,000 until the conclusion of the final hearing
7. In default of the Husband complying with Order 3 and/or Order 6, the Husband shall do all acts and things and sign all documents necessary to sell the Property B property for the best price reasonably obtainable in the following manner:
7.1The Husband shall authorise the Wife to instruct such lawyer as is necessary to have the conduct of the sale on behalf of both parties.
7.2The Wife shall appoint such agent as is necessary to have the conduct of the sale.
7.3The Property B property shall be listed for sale by public auction within 6 weeks from the date of appointment of the agent.
7.4The reserve price for the purpose of such auction shall be such price as is nominated by Mr G of (omitted) Valuations.
7.5The agent shall, if requested by the Wife at a date 3 calendar months after the date upon which the Property B property is first listed pursuant to Order 7.3 and thereafter at 3 calendar monthly intervals until the Property B property is sold, nominate a sale price other than the originally nominated sale price and being such price as is determined by the Wife.
7.6The Husband shall cooperate in every way with the agent, including but not limited to:
7.6.1 making the key available to the agent;
7.6.2 allowing inspection of the Property B property at all reasonable times requested by the agent;
7.6.3 not taking any step to hinder or prevent a sale being effected;
7.6.4 ensuring the Property B property, including the grounds, are in a neat and clean condition at the time of inspection by the agent and any prospective purchaser; and
7.6.5 signing all documents requested by the agent in relation to the listing of the Property B property, other than a Contract or Agreement for Sale, which has not been authorised by the lawyer referred to in Order 7.1.
7.7In the event bidding at the auction does not reach the reserve price, the Wife may negotiate with the highest bidder or any other interested person and effect the sale of the Property B property at a price which is not more than 10% below the reserve price or such other price as the Wife shall nominate.
7.8In the event the Property B property is not sold by public auction within 8 weeks from the date of appointment of the agent, the Husband shall do all acts and things and sign all documents necessary and as requested by the Wife so as to list the Property B property for sale by private treaty with the agent appointed pursuant to Order 7.2.
7.9The sale price at which the Property B property shall be listed shall be such price as the Wife nominates.
7.10If the Property B property remains unsold, the parties shall do all acts and things and sign all documents necessary to immediately re-list the Property B property for sale by public auction again on a date nominated by the agent and at such auction there shall be no reserve price unless otherwise nominated by the Wife in writing.
8. Upon settlement of the sale of the Property B property, the proceeds of sale shall be paid in the following manner and priority:
8.1all costs and expenses of sale, including legal costs and disbursements, agent’s commission, advertising expenses and auction expenses;
8.2the amount required to pay all municipal and water rates outstanding with respect to the Property B property;
8.3amounts payable to the Wife pursuant to Orders 3 and/or 6;
8.4 the balance to the Husband.
9. In the event that the proceeds of sale of the Property B property are insufficient to meet the amount payable to the Wife pursuant to Order 3 and/or Order 6, the Husband shall do all acts and things and sign all documents necessary to sell the Property A property for the best price reasonably obtainable in the following manner:
9.1The Husband shall authorise the Wife to instruct such lawyer as is necessary to have the conduct of the sale on behalf of both parties.
9.2The Wife shall appoint such agent as is necessary to have the conduct of the sale.
9.3The Property A property shall be listed for sale by public auction within 6 weeks from the date of appointment of the agent.
9.4The reserve price for the purpose of such auction shall be such price as is nominated by Mr G of (omitted) Valuations.
9.5The agent shall, if requested by the Wife at a date 3 calendar months after the date upon which the Property A property is first listed pursuant to Order 9.3 and thereafter at 3 calendar monthly intervals until the Property A property is sold, nominate a sale price other than the originally nominated sale price and being such price as is determined by the Wife.
9.6The husband shall cooperate in every way with the agent, including but not limited to:
9.6.1 making the key available to the agent;
9.6.2 allowing inspection of the Property A property at all reasonable times requested by the agent;
9.6.3 not taking any step to hinder or prevent a sale being effected;
9.6.4 ensuring the Property A property, including the grounds, are in a neat and clean condition at the time of inspection by the agent and any prospective purchaser; and
9.6.5 signing all documents requested by the agent in relation to the listing of the Property A property, other than a Contract or Agreement For Sale, which has not been authorised by the lawyer referred to in Order 9.1.
9.7In the event bidding at the auction does not reach the reserve price, the Wife may negotiate with the highest bidder or any other interested person and effect the sale of the Property A property at a price which is not more than 10% below the reserve price or such other price as the Wife shall nominate.
9.8In the event the Property A property is not sold by public auction within 8 weeks from the date of appointment of the agent, the Husband shall do all acts and things and sign all documents necessary and as requested by the Wife so as to list the Property A property for sale by private treaty with the agent appointed pursuant to Order 9.2.
9.9The sale price at which the Property A property shall be listed shall be such price as the Wife nominates.
9.10If the Property A property remains unsold, the parties shall do all acts and things and sign all documents necessary to immediately re-list the Property A property for sale by public auction again on a date nominated by the agent and at such auction there shall be no reserve price unless otherwise nominated by the Wife in writing.
10.Forty eight (48) hours prior to settlement of the sale of the Property A property, the Husband shall vacate the Property A property and leave it in good order and condition.
11.Upon settlement of the sale of the Property A property the proceeds of sale shall be paid in the following manner and priority:
10.1[8] all costs and expenses of sale, including legal costs and disbursements, agent’s commission, advertising expenses and auction expenses;
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10.2[9] the amount required to pay all municipal and water rates outstanding with respect to the Property A property;
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10.3[10] amounts payable to the Wife pursuant to Orders 3 and/or 6.
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10.4[11] the balance to the Husband.
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12.In the event that any amount remains payable to the Wife pursuant to these Orders the Husband shall pay interest on the amount from the date it is payable, being 28 days from the date of these Orders, at the rate prescribed by the Family Law Rules to the date of payment.
13.Within 14 days of the date of these Orders or at such date as may be determined by the Wife the Husband shall deliver to the Wife the piano currently in the Husband’s possession.
14. Unless otherwise specified in these Orders:
6.1[12] each party shall be solely entitled to the exclusion of the other to all property and chattels of whatsoever nature and kind in the possession or title of such party as at the date of these Orders;
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6.2[13] each party shall be solely liable and indemnify the other party against any liability encumbering any item of property to which that party is entitled pursuant to these Orders;
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6.3[14] each party shall be solely liable for and indemnify the other against any liability in their respective names including but not limited to credit cards and personal loans.
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15.The Husband and Wife shall do all acts and things and sign all documents necessary to give effect to these Orders.
16.In default of any party doing any act or thing or signing any document necessary to give effect to these Orders, the Registrar of the Family Court of Australia[15]at Sydney shall be and is hereby appointed to sign all such documents in the name of the defaulting party and the defaulting party shall be responsible for the whole costs of any such Application by the non-defaulting party to the Registrar of the Family Court of Australia[16].
[15] This should surely read “the Registrar of the Federal Circuit Court”
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PART B
(SUPERANNUATION ORDERS)
IN MAKING THESE ORDERS, THE COURT NOTES:
A. The Mr Baines Pty Ltd Superannuation Fund ABN (omitted) (“the Super Fund”) is a self managed superannuation fund listed by the Australian Taxation Office on the Super Fund Lookup Website ((omitted)) as a complying superannuation fund.
B. The Super Fund was established under a Deed of Trust dated 1 August 2007. The rules governing the operation of the Super Fund are contained in the Deed of Trust (“the Rules”).
C. The Husband and the Wife are the only members of the Super Fund.
D. The trustee of the Super Fund is a corporation, (business omitted) Pty Ltd (ACN (omitted)) (“the trustee corporation” “the trustee”) and the Husband and Wife are the Directors of that corporation.
E. The Husband has the following member accounts in the Super Fund and in accordance with s.90MT(2) of the Family Law Act 1975 as at 30 June 2013 the respective balance was:
a. Accumulation $2,087,950
b. Accumulation (Tax free) $1,360,495
Total $3,448,444
F. The Wife has the following member account in the Super Fund and in accordance with s.90MT(2) of the Family Law Act 1975, as at 30 June 2013 the respective balance was:
a. Accumulation $874,320
b. Accumulation (Tax free) $1,234,588
Total $2,108, 908
G. That the requirements of procedural fairness in accordance with s.90MZD of the Family Law Act 1975 have been observed on the basis that the parties are the directors of the trustee corporation of the Super Fund.
H. “Baines Superannuation Fund” means Baines Superannuation Fund, ABN (omitted), created by Deed dated 18 July 2012 and in respect of which (omitted) Pty Ltd is the trustee.
Superannuation Orders
IT IS ORDERED:
Wife to transfer her entire interest in the Super Fund to the Husband for an Instant (Splitting Order 1)
1.That in accordance with paragraph 90MT(1)(b) of the Family Law Act 1975:
a) the Husband is entitled to be paid the specified percentage, being 100%, out of the Wife’s Super Fund interest; and
b) the Wife’s entitlement to the amount in her member account (and the entitlement of any other person to payments out of the Wife’s interest) in the Super Fund, is correspondingly reduced.
2.That the Husband and Wife in their capacity as directors of the trustee corporation of the Super Fund, shall do all such acts and things and have signed all such documents as may be necessary to:
a) calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the Husband in clause 1 of this Order; and
b) pay the entitlement whenever the trustees make a splittable payment out of the Wife’s interest in the Super Fund.
3. Splitting Order 1 operates from Operative Time 1.
Substantive Superannuation Split in favour of Wife (Splitting Order 2)
4.That in accordance with paragraph 90MT(1)(b) of the Family Law Act 1975:
a) the Wife is entitled to be paid the specified percentage, being 50%, out of the Husband’s Super Fund interest; and
b) the Husband’s entitlement to the amount in his member account (and the entitlement of any other person to payments out of the Husband’s interest) in the Super Fund, is correspondingly reduced.
5.That the Husband and Wife in their capacity as directors of the trustee corporation of the Super Fund, shall do all such acts and things and have signed all such documents as may be necessary to:
a) calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the Husband in clause 4 of this Order; and
b) pay the entitlement whenever the trustees make a splittable payment out of the Husband’s interest in the Super Fund.
6. Splitting Order 2 operates from Operative time 2.
Operative Time of the Order
7.The operative times for Splitting Order 1 and Splitting Order 2 operate as follows:
a) Firstly, Operative Time 1 operates from the beginning of the day of the date of the transfer of the transferable benefit; and
b) Secondly, Operative Time 2 operates immediately following the operation of Operative Time 1.
Transfer of Investment Property to Trustee of Wife’s New Super Fund
8.The service of this Order shall be deemed to have occurred on the date of the Order by reason of the parties in their capacity as directors of the trustee corporation and the Court notes that this will enliven the operating standards under Part 7A of the Superannuation Industry (Supervision) Regulations 1994.
9.That after service by the trustee, on behalf of the Super Fund, of the payment split notice pursuant to r.7A.03 of the Superannuation Industry (Supervision) Regulations 1994 in accordance with the operating standards under the Superannuation Industry (Supervision) Regulations 1994, the Wife shall do all such acts and things and sign all such documents as may be necessary, including but not limited to exercising her request pursuant to r.7A.06 of the Superannuation Industry (Supervision) Regulations 1994 (“the Wife’s r.7A.06 request”) for the transfer of the transferable benefits (defined in r.1.03 of the Superannuation Industry (Supervision) Regulations 1994) from the Super Fund to the wife’s interest in a complying superannuation fund nominated by the Wife, being the Baines Superannuation Fund (ABN (omitted)) (“the Wife’s New Super Fund”).
10.That the Husband and Wife as directors of the trustee corporation shall convene a meeting by exchange of minutes within 14 days after receipt of the Wife’s r.7A.06 request and in that meeting do all such acts and things, and sign all such documents as may be necessary to authorise the transfer of the transferable benefit pursuant to r.7A.12 of the Superannuation Industry (Supervision) Regulations 1994 to the trustee of the Wife’s New Super Fund by way of the following:
a) The transfer of all right title and interest in the shares of (omitted) Pty Ltd from the trustee of the Super Fund to the trustee of the Wife’s New Super Fund; and
b) The transfer of sufficient cash from the trustee of the Super Fund to the trustee of the Wife’s New Super Fund to meet the balance of the trustee’s liability in accordance with Splitting Order No 2 and the directors shall do all such things as may be necessary to sell or otherwise liquidate other investment property of the Super Fund to obtain the necessary cash referred to hereon
and it is noted that the trustee of the Super Fund will be eligible for Capital Gains Tax Rollover relief pursuant to s.126-140 of the Income Tax Assessment Act 1997 for any in specie transfers.
11.That immediately following the transfer of the transferable benefits from the Husband’s interest in the Super Fund to an interest in the name of the Wife in the Wife’s New Super Fund, the Wife shall do all such things and sign all documents necessary to resign:
a) as a director of the trustee corporation; and
b) as a member of the Super Fund;
in accordance with the Rules of the Super Fund.
12.That contemporaneously with the Wife’s compliance with the provisions of order 11 of this Order, the Husband will indemnify and keep the Wife effectively indemnified against all liability of and in relation to the Super Fund including any debt personally guaranteed by the Wife, and including any unpaid income tax assessed or hereinafter assessed against the Wife in respect of income derived or deemed to have been derived by the Super Fund inclusive of interest, penalties, costs and fines and from all proceedings, costs, claims or demands in respect thereof.
13.That in the event of any dispute arising between the parties in the exercise of their powers as trustees of the Super Fund, the parties shall appoint an arbitrator nominated by the President of the Institute of Chartered Accountants.
14.Pending the transfer of the transferable benefits from the Husband to the Wife and from the Wife to the Husband:
a) Each party is restrained from dealing with, charging, encumbering or disposing of any of the investment property of the Super Fund other than in accordance with the terms of this Order; and
b) Each party shall immediately revoke any binding death benefit nomination already made and each party be, and is hereby, restrained from:
i) making any binding death benefit nomination in favour of a child described in regulation 13 of the Family Law (Superannuation) Regulations 2001;
ii) making any other nomination where the effect of such nomination would be to render any splittable payment not splittable; and
iii) doing any such act or thing which would defeat, extinguish or reduce the entitlement of either party under this Order.
AND THE COURT NOTES
A. The value of the transferable benefits to be transferred:
a) from the Wife’s interest in the Super Fund to the Husband’s interest in the Super Fund; and
b) from the Husband’s interest in the Super Fund to the Wife’s interest in the Wife’s New Super Fund;
are calculated in accordance with r.7A.12 and r. 7A.11 respectively of the Superannuation Industry (Supervision) Regulations 1994;
B. Pursuant to r.14F of the Family Law (Superannuation) Regulations 2001, any payments from:
a) the Wife’s interest in the Super Fund made after the trustees have transferred the transferable benefits from the Wife to the Husband’s interest in the Super Fund; and,
b) the Husband’s interest in the Super Fund made after the trustees have transferred the transferable benefits to the wife’s new Super Fund;
are not splittable payments.
The Proper Approach to determination of a Property Application
The way a court approaches a property application under section 79 of the Family Law Act 1975 (Cth) is, first of all, to follow the principles set out by the High Court of Australia in Stanford v Stanford.[17] First, the court must consider the requirements in subsection 79(2) of the Family Law Act, which prescribes:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
[17] (2012) 47 Fam LR 481; FLC 93-518; [2012] HCA 52
The High Court held in Stanford at [37] that the Court must first identify the existing legal and equitable interests of the parties in the property.
Second, although s.79 confers a broad power on a court to make a property settlement order, “it is not a power that is to be exercised according to an unguided judicial discretion” (at [38]).
The third principle, and perhaps the most important, is:
…whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4).[18]
[18] [2012] HCA 52 at [40]
Thus, the decision in Stanford means that the Court must first consider the requirements of s.79(2) before embarking on the four step process set out by the Full Court of the Family Court in Hickey & Hickey.[19]
[19] (2003) 30 Fam LR 355; FLC 93-143; [2003] FamCA 395
In Hickey, the Full Court set out a process of four inter-related steps that must be taken by a court when determining a property application:
Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlement of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g) (“the other factors”) including, because of s 79(4)(e), the matters referred to in s.75(2) so far as they are relevant…Fourthly, the Court should resolve what order is just and equitable in all the circumstances of the case.[20]
[20] [2003] FamCA 395 at [39] per Nicholson CJ, Ellis & O’Ryan JJ
It is neither contradictory nor redundant to consider again whether a proposed order is just and equitable under s 79(2), because the Court is considering the matter after having undertaken the three previous steps referred to in Hickey.
Evidence
The Applicant Husband relied on the following documents:
a)A Minute of Order;
b)his affidavit sworn 10th February 2014;
c)his Financial Statement filed on 11th February 2014;
d)the affidavit of Mr V, a Chartered Accountant, sworn 19th December 2014; and
e)the affidavit of Mr W, a Registered Real Estate Valuer, sworn 18th February 2014.
The Husband gave oral evidence and was cross-examined by Mr Campton of Senior Counsel [21] from 4th March until part way through the third day, 6th March 2014. Mr V nor Mr W was required for cross-examination.
[21] Mr Campton took silk after the hearing and will be referred to by his current title.
The Wife relied on the following documents:
a)her affidavit sworn 11th February 2014;
b)her Financial Statement of 11th February 2014; and
c)the affidavit of Mr G, a Property Valuer, sworn 14th February 2014.
Mr G was not required for cross-examination.
Submissions
In written submissions filed on behalf of the Applicant Husband, a Balance Sheet was annexed. The explanation was given as follows:
This may vary slightly from the version that was tendered at the conclusion of the hearing and became Exhibit number 25. The reason for annexing it to these submissions is to ensure that all of the husband’s notes as to the items on the balance sheet are before the Court. Some of them did not make it into Exhibit number 25 (noting it was based on a document earlier to that emailed to the Court on 3 March 2014 at 2:54 pm). Some of the comments are superseded by the changes made to the values included by the husband in the Balance Sheet.[22]
[22] Submissions on Behalf of the Applicant Husband 28 March 2014 page 1
I am concerned at this proposal, as it appears to be an attempt to introduce fresh evidence after the close of the proceedings without the leave of the Court. A Joint Balance Sheet was tendered by consent on the last day of the hearing. In my view, the Applicant should have sought to leave to reopen so as to tender the amended unilateral balance sheet. I am not prepared to consider the amended balance sheet.
It was submitted on behalf of the Husband that this was a family with considerable wealth with a history of providing generously for their children. The Wife, it is submitted, conceded in cross examination that the parties agreed to purchase a property at (omitted) in the Australian Capital Territory for their son X.
It was further submitted that the parties enjoyed a comfortable lifestyle:
The evidence shows that the wife both during the marriage and after separation enjoyed a comfortable lifestyle as did the husband and the children. Thus following separation the husband purchased some expensive items of jewellery for himself, the wife engaged a personal trainer, joined a (hobby omitted) and continues to eat lunch out 5 days a week. She has undergone cosmetic surgery to enhance her appearance. The expenditure on motor vehicles and paying out the children’s mortgages is entirely consistent with the way that this family has conducted itself over a period of many years both prior to and after separation. It is entirely unremarkable and does not give rise to any adverse finding or the inclusion of an add-back on the balance sheet.[23]
[23] Submissions on behalf of the Applicant Husband page 6
As to the parties’ respective contributions, it was submitted that the Husband’s initial contributions greatly exceed those of the Wife and have significance even after a marriage of 26 years. The initial contributions included his professional qualifications as a (occupation omitted), his ownership of the (business omitted), a self-managed superannuation fund and five properties, as well as his significantly higher income during the early part of the marriage prior to the birth of the parties’ son X.
Further, it was submitted that the Husband’s post separation contributions over a period of four years also greatly exceed those of the Wife. He has continued to service debt, which has enabled the value of the assets to increase, and has significantly reduced the parties’ level of debt and has contributed to the welfare of the Wife and the parties’ (adult) children by the provision of financial support.
Against this, it was submitted that the Wife could not assert any significant post separation contributions, as her role of homemaker ceased and she did not have the care of any children under the age of 18 years. Further, it was submitted that the wife had lived beyond her means and diminished the asset pool by increasing debt.
Even on a conservative approach, it was submitted that a contribution based assessment would result in a 60/40 split in favour of the Husband, or, if the Court were to treat the Husband’s payments towards the children’s mortgages and motor vehicles as an add-back, then they should be regarded as a contribution to the welfare of the family. It was submitted that if the Court were minded to take that approach the Husband’s contribution based assessment would be 65%.
As to the factors to be considered under s.75(2) of the Family Law Act, it was submitted that the Husband is nine years older than the Wife and, even though he has a greater earning capacity, he has given evidence that he proposes to retire at the age of 65 years.
Whilst each party apparently has health problems, they do not appear to have any great significance and there has been no admissible medical evidence served in either party’s case. It was submitted that these matters may be disregarded.
It was further submitted that, having regard to the size of the asset pool, the Wife will receive sufficient property to enable her to live a comfortable lifestyle and earn an income well in excess of her current living expenses without having to work. The Court should therefore attach no weight to the Wife’s evidence about the lack of job security in the (omitted) industry.
Thus, it was submitted that the s.75(2) factors should be regarded as neutral.
Mr Blackah of Counsel, for the Husband, submitted that the Husband’s conduct since separation suggested that he had been motivated by desire to provide for the Wife, and he in fact provided generously for her after separation, including continuing to pay her mortgage. It was further submitted that:
His conduct is inconsistent with the proposition that he has sought to defraud the wife by wilful non-disclosure as on the contrary he has provided generously for her and continues to do so by paying the mortgage on the Property M property.[24]
[24] Submissions on behalf of the Applicant Husband 28 March 2014 page 9 paragraph 17
Further, whilst the Wife alleges non-disclosure by the Husband:
she does not advance any credible thesis relating to what other property might exist, what the source of that property was or where it is now. It was open to the wife to conduct searches with the NSW Land and Property Information and other bodies, and to issue subpoena to locate other assets or funds and she has not produced any relevant evidence.[25]
[25] Submissions on behalf of the Applicant Husband 28 March 2014 page 9 paragraph 20
Mr Blackah submitted that the Husband seeks a division of the non-superannuation assets as to 60% in his favour and 65% if the Court proposes to treat his payments towards the children’s mortgages and motor vehicles as an add-back.
Further, the Husband conceded that contributions to superannuation are “essentially equal”[26] and accepted that the superannuation assets should be divided between the parties equally.
[26] Ibid page 11
On the question as to whether the proposed orders are just and equitable, Mr Blackah submitted:
The parties’ assets are intermingled, for instance in the company (omitted) Pty Ltd and the Baines Superannuation Fund. Further, a disproportionate amount of property is held by the husband only. There is a need for orders to be made: Stanford v Stanford [2012]HCA 52.[27]
[27] Applicant Husband’s Case Outline 3 March 2014 page 5
There is some force in that submission.
On 2nd April 2014 the Husband’s solicitor, Ms O’Leary, filed a set of Submissions on behalf of the Applicant Husband re: Super Splitting Orders. An Updated Minute of Order sought by the Husband was annexed to those submissions. It is those proposed orders that have been considered in this decision as representing the orders that the Husband seeks.
Ms O’Leary confirmed her client’s concession that the parties’ contributions to superannuation are essentially equal and his acceptance of the proposition that the superannuation assets should be divided between the parties equally.
Ms O’Leary noted that the Husband sought orders for the Wife to facilitate lodgement with the Australian Taxation Office of the 2013 tax returns and financial statements for the parties’ commercial entities. The Wife was obliged to do so as a director of the relevant companies. This has now been done and those orders are no longer required.
The Husband also seeks orders for the Wife’s share of Baines Pty Ltd Superannuation Fund to be rolled over into her new self-managed fund through an in specie transfer of assets to avoid any Capital Gains Tax being incurred. This, it was explained, is for the benefit of both parties as it will preserve the value of their respective interests in the Baines Pty Ltd Superannuation Fund. When the Wife reaches the age of 55 in (omitted) 2014 she will be entitled to commence a pension from her self-managed super fund and no tax would be payable on any gains realised in the super fund once a pension was commenced, thereby avoiding Capital Gains Tax altogether.
Ms O’Leary noted in her submission that the wife had set up a new self-managed fund, the Baines Superannuation Fund, with an agreed value of $9,466.00. The superannuation splitting orders proposed by both parties provide for the wife to receive 50% of the Baines Superannuation Fund, so that the Wife would actually receive an amount greater than the parties’ superannuation interests. She submitted that the Court should have regard to this when making a decision about the division of the parties’ non-superannuation assets and liabilities.
The Husband also relied on Submissions in Reply prepared by Mr Blackah of Counsel. Mr Blackah noted that the orders sought by the Husband, being those annexed to the Submissions on behalf of the Husband re Super Splitting Orders, have changed from those submitted to the Court prior to the final hearing “as the husband had previously contemplated the Court taking a single pool approach to the matrimonial assets including superannuation. Taking a two pools approach has necessitated a change to the division of the non-superannuation assets sought by the husband”.[28]
[28] Submissions in reply on behalf of the Applicant Husband page 1
In the Submissions in Reply, Mr Blackah stated that the Husband had managed the parties’ resources following separation, servicing and retiring debt and meeting living expenses of himself, the Wife and their children. He submitted that this should be compared to the situation of the Wife post separation where she has lived beyond her means and accrued substantial debt against the Property P property after the previous debt was discharged by the Husband.
Mr Blackah went on to submit at paragraph [54]:
Section 79(4)(c) refers to “the contribution made by a party to a marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage.’ ‘Children’ is defined in section 4. As section 79 does not fall within Division 6 of the Act, the definition of a child is not restrained to a child under the age of 18 and in that context includes adult children.
It was submitted by Mr Campton of (now) Senior Counsel for the Wife in the Respondent Wife’s Summary of Argument Document that:
a)Both parties agreed that a Superannuation Splitting Order should be made from the Husband’s interests in the Baines Pty Ltd Superannuation Fund in favour of the Wife but they were not agreed as to the quantum of the superannuation split;
b)The form and effect of the Order would be such that the Wife would retain ultimate member entitlements in the fund that would ensure that she retains in specie the Property C property as held in part by the fund through its shareholding in (omitted) Pty Ltd;
c)It was not the subject of contest between the parties that the Wife would retain the following items of real property:
i)Property P:
ii)Property M;
iii)Property R; and
iv)The Property T property, New South Wales[29].
[29] The parties entered into Consent Orders to that effect on 21 November 2013
d)It was not the subject of contest between the parties that the Husband would, within 28 days, discharge the mortgages registered upon:
i)Property M; and
ii)Property R.
e)The Husband had discharged the mortgage on the Property T property.
f)It was not the subject of contest between the parties that the Husband would retain the benefit of the real property at:
i)Property E, Queensland;
ii)Property A;
iii)Property B;
iv)Property O; and
v)Property K.
Mr Campton submitted that the issues in dispute were:
a)Whether the Husband would discharge the mortgage registered on the Property P property; and
b)Whether the Wife would receive by way of Splitting Order from the self-managed superannuation fund, Baines Pty Ltd Superannuation Fund, an additional cash splitting payment and, if the parties’ superannuation interests were to be equalised, the approximate value of the payment would be $1,375,000.00.
In the Written Submissions on behalf of the Wife, Mr Campton submitted that his client sought the orders set out in the Minute of Order attached to the Case Outline Document with the exception of Order 6. Instead of the sum of $1,500.000.00 she now sought that the Husband pay her the greater sum of $1,917,000.00, being a 60% adjustment in her favour of the contended pool of non-superannuation property.
It was further submitted that, as to the form and content of the balance of the non-superannuation s.79 orders, the parties agreed that within 28 days the Husband would:
a)Pay out the mortgages on the Property P, Property M and Property R properties; and
b)Pay a specified sum to the wife.
Mr Campton went on to submit that:
The husband conceded in cross examination that if ordered to do so, he could pay $1,500,000 to the wife and discharge the specified mortgages all within 28 days of Orders being made.[30]
[30] Written Submissions on behalf of the Wife page 1 paragraph 3
I note that the Husband’s counsel denied that the Husband had made that concession in cross examination, saying:
The husband did not concede in cross examination that he could pay $1,500, 000 to the wife and discharge the mortgages specified by the wife all within 28 days. The court is referred to page 135 of the transcript.[31]
[31] Submissions in reply on behalf of the Applicant Husband page 1 paragraph 3
In order to resolve that issue, I have had recourse to the transcript of the proceedings on Thursday 6th March 2014 at page 135. The Husband was being cross-examined by Mr Campton:
And my client seeks a cash adjustment payment from you, and you oppose that cash adjustment payment, don’t you? --- I don’t oppose it. It’s a question of how much.
Yes, it’s for the court to determine? --- Yes
So, Mr Baines, for the purpose – my client seeks payment of $1.5 million in addition to the property that she retains and for you to discharge some mortgages. You understand that? ---No. That wasn’t the offer that was given outside.
All right. If the court was to make an order to that effect, is it your evidence that you would raise finance against your properties? --- To pay $1.5 million in cash, I would have to get bank finance.
Yes? --- And possibly sell assets.
But you would like to decide what you did about that. Would that be the case? --- I would have to think about it very, very hard, yes.[32]
[32] Transcript 6 March 2014 page 135 at lines 5-21
It would appear that it is not entirely correct to submit that the Husband conceded that he could pay that amount and discharge the specified period of 28 days. There was no reference to any period of time, let alone 28 days.
Returning to the submissions on behalf of the Wife, Mr Campton made this submission in respect of the superannuation:
4. By way of the supplementary written submissions on behalf of the husband dated 2 April 2014, he now concedes as to a finding by way of equality in relation to the superannuation assets of the parties. The wife agrees that a finding as to equality as to contribution be made in relation to the superannuation pool, and contends that having regard to the content, tenor and character of the husband’s conduct in the litigation and his evidence as set out later in these submissions, she ought, as a fundamental tenant[33]of justice and equity, achieve an adjustment to the contribution finding in her favour by way of Application of s.75(2)(b) and (o). The Wife however concedes that she conducted the trial upon the basis that any order made would equally divide the superannuation between the parties. She will not demur from that process and outcome. The remaining issue between the parties as to Superannuation Split remains as to the form of the order being sought.[34]
[33] Sic. This is clearly a typographical error and it would appear that the word should be “tenet”.
[34] Written Submissions on behalf of the Wife page 1 paragraph 4
Mr Campton submitted that, in respect to the form of the proposed Superannuation Splitting Orders, that the Husband had adopted the overall methodology and terms of the Wife’s proposed Superannuation Splitting Orders. Further, it was not the subject of contest that the husband would retain the structure of the Baines Superannuation Fund and indemnify the Wife in relation to her membership of that fund or any role as a director of the Trustee, although the terms of the Husband’s indemnity are more restrictive than the terms of the indemnity sought by the Wife.
Mr Campton noted that the superannuation orders as sought by the Wife were drafted by Mr S. It is a matter of common knowledge within this jurisdiction that Mr S is an acknowledged expert in this field.
It is submitted on behalf of the Wife that her proposed splitting orders should be made for these reasons:
10.By way of background the order for the splitting of the Baines Pty Ltd Superannuation Fund is structured as a two-stage order or what may be referred to as a “Cross-Split Order”. The wife seeks an order where the parties’ member benefits are divided equally between the parties. Whilst the order may, on its face, appear simple the difficulty that the trustees may face in implementing the order is the changing values of different items of investment property and the changing values would then be reflected in a change to the member entitlements. This difficulty is exacerbated by the husband’s control and knowledge of the investment property of the Baines Pty Ltd Superannuation Fund. The Cross-Split Order, together with operative time, as drafted on the wife’s behalf, avoids this difficulty.
11.The end point of the orders as sought by the wife is that each party will be the member and trustee director of their respective self-managed superannuation funds and the investment property will be transferred between trustees as follows:
Baines Pty Ltd Superannuation Fund (Wife) Trustee = (omitted) Pty Ltd:
82.57% of the shareholding in (omitted) Pty Ltd. Cash to make up the value to 50% of Baines Pty Ltd Superannuation Fund from the date of transfer.
Baines Pty Ltd Superannuation Fund (Husband) Trustee = (business omitted) Pty Ltd:
Remaining 50% of the value of Baines Pty Ltd Superannuation Fund from the date of transfer.
12.To ensure the split is exactly 50%, the order operates in two stages:
12.1Stage 1 – The entire amount of both member entitlements (i.e. the total amount available to pay members) is placed into one member account. This is done by way of 100% splitting order to the husband who will retain the structure of the fund.
12.2Stage 2 – That 100% amount is then subject to a further order which carves out 50% to be paid on behalf of the wife.
13.The husband and the wife are in agreement in relation to the Orders required for Stage 1 (Orders 10(a) and 10(a) in both cases). The husband and wife both agree to the wife receiving as part of her 50% entitlement the shares in (omitted) Pty Ltd.
14.The husband and wife disagree as to the identity of the balance of superannuation assets to be transferred to the Wife (in order to provide her with 50% of the member entitlements) shall be comprised. They each set out their proposed Orders at Order 10(b).
15.The husband seeks at Order 10(b) that the balance be by way of an “in specie” transfer of sufficient other investment property from the Baines Superannuation Fund to the trustee of the wife’s new superannuation fund.
16.The wife seeks at Order 10(b) that the balance be by way of a cash adjustment paid from the Baines Superannuation Fund to the trustee of the wife’s new superannuation fund.
17.The Court should prefer and make the Superannuation splitting orders as sought by the wife as to both substance and form because:-
17.1the husband has the day to day management of the Baines Superannuation Fund and as such has specific knowledge of the assets and the values of the assets of the Baines Superannuation Fund.
17.2The wife does not have any knowledge of the performance value of the shares held by the Baines Superannuation Fund nor any knowledge as to any embedded CGT liabilities or restrictions on the sale or transfer of the assets.
17.3The wife has no confidence that [the] husband in his capacity as trustee of the Mr Baines superannuation Fund would no(t) cause to transfer to her poorer performing assets or assets with CGT embedded in them.
17.4To overcome the likelihood of such a transfer by the husband if there is to be an in specie transfer of ‘sufficient other investment property as contemplated by the husband’ there should be a mechanism for the transfer of a proportionate share of each asset group in the Baines Superannuation Fund if this is practically possible. If there are any embedded CGT liabilities, performance issues or restrictions associated with transacting the shares these would be shared equally by the parties.
17.5In the event of a dispute as to the identity of shares or assets to be transferred to the trustee of the wife’s new super fund the wife has no confidence that she could resolve a dispute with the husband.
17.6For the above reasons the wife contends the husband’s Orders:
17.6.1 are likely to lead to further disputation;
17.6.2may result in the wife receiving shares that are poor performing and or more difficult to transact than shares retained by the husband;
17.6.3may result in the wife receiving shares that have significant CGT embedded in them; and
17.6.4do not provide any mechanism for dispute resolution.
17.7 The wife’s Orders:
17.7.1provide for the balance of the amount to be by way of cash;
17.7.2permit the wife’s entitlement to be more precisely reckoned;
17.7.3if assets are required to be sold to pay the cash entitlement the Baines Superannuation Fund would bear any sale costs including CGT prior to the cash adjustment.
…
17.11Finally the Husband’s superannuation orders do not include Order 12 which provides the Wife with an indemnity against previous liability of the Baines Superannuation fund the structure of which shall be retained by the Husband.
17.12Additionally the Husband’s draft Superannuation Orders do not include any mechanism for resolving any dispute between the parties in their capacity as trustees for the Baines Superannuation Fund (Order 13 of the Wife’s Superannuation Orders).[35]
[35] Written Submissions on behalf of the Wife pages 2-4 paragraphs 10-17.12
The submissions on behalf of the Wife on this issue appear to be persuasive.
It is further submitted on behalf of the Wife that the Husband has failed to make a full and frank disclosure of his financial circumstances. Senior Counsel for the Wife referred the Court to the requirements of Rule 24 (i.e. Part 24). The principles are also set in various authorities, including Black v Kellner[36], Milankov & Milankov[37] and S & S[38].
[36] (1992) 15 Fam LR 343; FLC 92-287
[37] (2002) 28 Fam LR 514; FLC 93-093; [2002] FamCA 195
[38] [2004] FamCA 906
It was submitted that the Wife gave evidence both in her affidavits and orally in a straightforward and direct fashion. She endeavoured to be responsive and her credit was unshaken.
By contrast, Mr Campton submitted that:
The husband’s oral and Affidavit evidence comprised a combination of:-
29.1 Assertions un-adjacent to the truth; or
29.2 Deliberately untruthful assertions; or
29.3Cavalier statements to the extent of being reckless as to truth.[39]
[39] Written Submissions on behalf of the Wife page 6 paragraph 29
Consequently:
The wife submits that the Court should find that:-
33.1That absent an issue of fact being conceded by the wife, the court would not accept the husband’s evidence unless a document is in evidence to support it or is otherwise verified; and
33.2In the event of any dispute or conflict as between the evidence of the husband and the wife, it is submitted that the Court would, without hesitation, prefer the evidence of the wife; and
33.3That the husband would not disclose any of his relevant financial circumstances or his financial conduct until he was “cornered” by the wife’s forensic efforts, or if the financial conduct was available to the public at large; and
33.4That the tenor of the husband’s evidence was a complete disregard for the integrity of both the disclosure process as to documents and information, and as to the necessity to provide truthful evidence on oath whether by Affidavit or orally; and
33.5That the husband’s evidence on contested issues was absent reliability.[40]
[40] Written Submissions on behalf of the Wife page 7 at paragraph 33
Whilst the Husband’s evidence was at times less than satisfactory, I am not necessarily of the view that the Court should take as severe a view of the credibility of his evidence as Senior Counsel for the Wife submits.
It was submitted for the Wife that there should be an adjustment in her favour under subsection 75(2) of the Act in relation to the non-superannuation pools of not less than 10% in her favour, the magnitude of this adjustment being compounded by the Husband’s failures to disclose his financial circumstances.
It was further submitted that the net value of the non-superannuation pool was calculated at $7,416,190.00. If the Wife were to receive 60% of the value of the non-superannuation pool as she contends, she would receive $4,449,714.00. As she would retain net assets to the value of $2,532,321.00, it was submitted that the amount required to adjust to her by way of a cash payment from the Husband would be $1,917,393.00. However, the Orders made will not follow that submission, for several reasons.
Just and Equitable
As to whether it would be just and equitable to make property settlement orders, I adopt the submission of Counsel for the Husband that:
The parties’ assets are intermingled, for instance in the company (omitted) Pty Ltd and the Baines Superannuation Fund. Further, a disproportionate amount of property is held by the husband only. There is a need for orders to be made.[41]
[41] Applicant Husband’s Case Outline 3 March 2014 page 5
I am satisfied that it is just and equitable in all the circumstances to make orders for the settlement of the parties’ property.
The Property and Liabilities of the Parties
A Final Joint Balance Sheet was tendered on the last day of the hearing. Attached to the Balance Sheet are the Wife’s notes and the Husband’s notes. As I mentioned at [58] above, I am concerned about relying on the later balance sheet tendered with the written submissions, complete with additional notes, after the evidence had concluded. This appears to be a “second bite at the cherry”, to use a colloquial expression, and I propose to rely on the Final Joint Balance Sheet tendered by consent and marked as Exhibit 25.
Non-Superannuation Asset Pool
I find the non-superannuation assets to be:
a)Property P (wife) $815,000.00
b)Property M NSW (wife) $675,000.00
c)Property R NSW (wife) $622,500.00
d)Property T (wife) $260,000.00
e)Property C[42] (joint) $0
[42] Included in value of (omitted) Pty Ltd)
f)Property E (husband) $55,000.00
g)Property A (husband) $2,400,000
h)Property B, (husband) $2,800,000
i)Property O, (husband) $423,000
j)Property K (husband) $1,075,000
k)Wife’s shares in (omitted) Pty Ltd $78,281.00
l)(omitted) Pty Ltd (wife) $0
m)Husband’s shares in (omitted) Pty Ltd $271,764
n)(business omitted) Pty Ltd (husband)[43] $73,000.00
[43] Husband’s (business omitted)
o)Loan to (business omitted) Pty Ltd (husband) $24,196.00
p)Wife’s household contents and jewellery $10,000.00[44]
[44] Wife’s value – husband’s value is $20,000.00
q)Artworks (wife) $8,000.00
r)Mercedes Benz CLK motor car[45] (wife) $18,000.00
[45] The registration number is not published for privacy reasons
s)Husband’s household contents $10,000.00
t)Artworks ((omitted) & others)(husband) $6,200.00
u)Artworks ((omitted)) (husband) $19,872.00
v)Artworks (other) (husband) $2,660.00
w)Lexus (omitted) motor car[46] (husband) $0[47]
[46] The registration number is not published
[47] The husband contends that the car is owned by the company (business omitted) Pty Ltd and that Mr V included the car in his valuation of the company in his report of 29.11.2013 and therefore the vehicle should not be included separately in the balance sheet. The report is annexed to Mr V’s affidavit of 19.2.2014. Mr V was not required for cross-examination.
x)Toyota Camry motor car[48] (husband) $3,000.00
[48] The registration number is not published
y)(omitted) shares (31) (wife) $150.00[49]
[49] Wife’s value – husband’s value is $174.00
z)(omitted) Shares[50] (husband) $77.00
[50] The account number is not published for privacy reasons
aa)(omitted) Shares[51] (husband) $31,792.00
[51] The account number is not published for privacy reasons
bb)Managed Investment account[52] (husband) $0
[52] The account number is not published
cc)(omitted) Bank account[53] (wife) $1,593.00
[53] The account number is not published
dd)(omitted) Bank account[54] (wife) $0
[54] The account number is not published
ee)(omitted) Bank overdraft cheque account[55] (husband)
[55] The account number is not published
$-42,866.00[56]
[56] Husband’s value – wife’s value is $0
ff)(omitted) Bank Investment account[57] (husband) $32,764.00
[57] The account number is not published
gg)(omitted) Bank account[58] (husband) $0
[58] The account number is not published
hh)(omitted) Bank account[59] (husband) $-168.00[60]
[59] The account number is not published
[60] Husband’s value – wife’s value is $0
ii)(omitted) Bank account[61] (husband) $0
[61] The account number is not published
jj)(omitted) Bank saver account[62] (husband) $0
[62] The account number is not published
kk)Husband’s watches ((omitted)) and jewellery $15,000.00[63]
[63] Husband’s value – wife’s value is $22,400.00
Total $9,688,815.00
ADDBACKS
ll)Funds paid to wife under Orders 28.2.2013 $0
mm)Funds paid to wife under Orders 21.11.2013 $77,544
nn)Money drawn by wife against (omitted) Bank Home Loan a/c[64] $82,829
[64] The account number is not published
oo)Wife’s paid legal fees $198,746
pp)(omitted) Valuations (wife) $11,015.00
qq)Mr V (wife) $4,950.00
rr)Joint valuation and mediation fees (husband) $6,642.00
ss)Money paid to wife after separation $10,000
tt)Money paid to husband’s mother $0[65]
[65] Wife’s value is $229,479.00
uu)Husband’s paid legal fees $80,000[66]
[66] Wife’s value is $294,612.00
vv)Holden (omitted) and Mazda (husband) $0[67]
[67] The Holden (omitted) was purchased by the husband for the parties’ daughter Z. The Mazda was purchased by the husband for the parties’ daughter Y. The wife claims that she did not consent to the purchase of either vehicle and that a figure of $40,000.00 should be added back against the husband
ww)(omitted) (wife) $2,745.00
xx)Amount from (business omitted) Pty Ltd (husband) $0
yy)Amounts received from Y (husband) $0[68]
[68] Wife claims $295,000.00 from the account of Y paid to husband’s (omitted) Bank overdraft account. Husband deposed that he used the daughter’s account when funds were re-drawn from a mortgage which was repaid in full and consequently there is no add-back
zz)Amounts withdrawn from (omitted) Bank a/c (husband) $0
aaa)Loan to purchase Canberra property (husband) $0[69]
[69] The wife claims $357,358.00. The property is owned by the parties’ son. The husband states that any rental income is received by the son.
Total$474,471
LIABILITIES
bbb)(omitted) Bank Mortgage – Property M property account[70] (joint) $489,514
[70] The account number is not published
ccc)(omitted) Bank Home Loan – Property P (wife) $82,829
ddd)(omitted) Bank Home Loan – Property R (wife) $404,302
eee)(omitted) Bank Investment Loan[71] (husband) $357,358
[71] Secured on the Property K and Property A properties
fff)(omitted) Bank Home Loan (Property A) (husband) $195,705
ggg)(omitted) Bank Facility (husband) $1,800,000
hhh)(omitted) MasterCard (wife) $3,123[72]
iii)(omitted) MasterCard (husband) $102[73]
jjj)(omitted) MasterCard (husband) $179[74]
kkk)(omitted) Bank credit card (unspecified) (husband) $0
lll)CGT and selling costs[75] $0
mmm)Loan from (omitted) Pty Ltd to directors (joint) $65,563
nnn)Wife’s debt to (omitted)[76] $3,278
[72] Husband argues that ordinary post separation liabilities such as credit card debts, are a natural consequence of living and the parties should keep their own debt. He submitted that the credit card debts should be removed from the balance sheet
[73] As above
[74] As note 72
[75] The husband submitted, correctly in my view, that CGT and selling costs should not be taken into account, as no sale of assets is imminent.
[76] The husband made the same submission about this debt as he did in respect of the parties’ credit card debts, but it is included on the same basis as the credit card debts have been.
Total$3,401,953
By adding the total of the assets, $9,688,815.00, to the total of the add-backs, 474,471, I arrive at a figure of $10,163,286.00. By subtracting the total of the liabilities, namely $3,401,953.00, from that figure, I arrive at a total of $6,761,333.00.
I find the total net value of the non-superannuation asset pool to be $6,761,333.00.
SUPERANNUATION
Each party has superannuation interests as follows:
a)Baines Pty Ltd Superannuation Fund (wife) $2,108,908;
b)Baines Superannuation Fund (wife) $9,466
c)Baines Pty Ltd Superannuation Fund (husband) $3,448,444
Total$5,566,818
By adding the total of the parties’ superannuation entitlements, namely $5,566,818.00, to the total of the non-superannuation asset pool, being $6,761,333.00, I arrive at a total of $12,328,151.00.
Accordingly, I find the total asset pool to be $12,328, 151.00.
The Parties’ Contributions
I have already considered the submissions in respect of the parties’ contributions in paragraphs [59] – [67], [81]-[102]. I accept the submission by Counsel for the Husband that the Husband’s initial contributions greatly exceeded those of the Wife and that the Husband’s post separation contributions greatly exceed those of the Wife.
Against this, it was a long marriage of some 26 years and the Wife was, it appears, the primary caregiver for the parties’ three children. The Wife also received a substantial inheritance of $390.000.00 in (omitted) 2003 from the estate of her late mother, Ms N.
In my view, the parties’ contributions to the non-superannuation assets should be assessed at 50% to the Husband and 50% to the Wife.
It is common ground between the parties that their contributions to the superannuation assets should be regarded as equal and I find accordingly. As I indicated at [95] above, the orders proposed by the Wife (drafted by Mr S) appear to be appropriate. I found the submissions on behalf of the Wife on this issue to be persuasive.
The Effect of any Proposed Order on the Earning Capacity of a Party
Subsection 79(4) of the Family Law Act requires as paragraph (d) that the Court consider the effect of any proposed order on the earning capacity of either party to the marriage. In my view, the proposed orders will not have any effect on either party’s earning capacity.
Relevant Matters referred to in Subsection 75(2)
The Husband was born on (omitted) 1950. He is now 65 years of age. Even though, as a (occupation omitted), he has a greater earning capacity than the Wife, he has given evidence that he proposes to retire at the age of 65 years (see at [65] above. He has now reached that age.
The Wife was born on (omitted) 1959. She is 56 years of age. She is, of course, nine years younger than the Husband and does not have the same earning capacity.
As I stated at [66] above, each party apparently has health problems, but they do not appear to be of any great significance and there was no evidence as to the health of either party.
Neither party has the care or control of a child who has not attained the age of 18 years. Their three children are all adults and self-supporting.
Neither party has a duty to maintain a child or another person.
Neither party has a responsibility to support any other person.
There is no evidence that either party is eligible for a pension, allowance or benefit under any law of the Commonwealth or of a State or Territory.
The parties each have significant interests in superannuation which are being addressed separately.
There is no evidence that either party is cohabiting with another person.
There is no child support assessment and neither party has any liability to provide child support under the Child Support (Assessment) Act 1989 (Cth).
There are no binding financial agreements.
Counsel for the Husband has submitted that the 75(2) factors should be regarded as neutral.
Against this, Senior Counsel for the Wife has submitted that there should be an adjustment in her favour under s.75(2) in relation to the non-superannuation pool of not less than 10%, the magnitude of this adjustment being compounded by the Husband’s failures to disclose his financial circumstances (see at [101] above. I previously indicated at [100] above that I was not necessarily of the view that the Court should take as severe a view of the credibility of the Husband’s evidence as was submitted.
As Mr Blackah of Counsel submitted for the Husband, the Wife did not advance any credible thesis relating to what other property might exist, what the source of that property was or where it is now (see at [70] above).
I am not satisfied that there is any basis for making an adjustment in favour of the Wife of 10%, or any other amount, in respect of any non-disclosure by the Husband.
The division between the parties of the non-superannuation assets will be assessed at 50% to the Husband and 50% to the Wife. The superannuation assets will be equally divided.
Just and Equitable Orders
Again, the Court must consider whether the proposed orders are just and equitable.
The proposed orders would provide that the Wife would retain the following assets:
a)Property P $815,000
b)Property M, NSW $675,000
c)Property R, NSW $622,500
d)Property T, NSW $260,000
e)Wife’s Shares in (omitted) Pty Ltd $78,281
f)Husband’s shares in (omitted) Pty Ltd $271,764
g)Household contents and jewellery $10,000
h)Artworks $8,000
i)Mercedes Benz CLK motor car $18,000
j)(omitted) shares $150
k)(omitted) Bank account $1,593
l)Funds paid under Orders 21.11.2013 $77,544
m)Money drawn against (omitted) Bank Home Loan account $82,829
n)Paid legal fees $198,746
o)(omitted) Valuations $11,015
p)Mr V fee $4,950
q)Money paid after separation $10,000
r)(omitted) $2,745
Total $3,148,657
Less Liabilities
s)Wife’s MasterCard $3,123
t)Directors’ loan from (omitted) Pty Ltd $65,563
u)Wife’s debt to (omitted) $3,278
Total $71,964
Net assets received by wife from non-super pool $3,076,693
For the wife to receive 50% of the value of the non-superannuation pool of $6,761,333.00, she would need to receive the sum of $3,380,666.50 (as would the husband). The Wife currently has the benefit of the amount of $3,076,693.00.
Therefore, she would need to receive the amount of $303,973.50 by way of a cash payment from the Husband.
As to the superannuation splitting Orders, I have previously expressed the view that the submissions on behalf of the Wife as to the form of the proposed Orders, set out at paragraphs [91]-[95] above, are persuasive and I propose to make orders accordingly.
I am satisfied that in all the circumstances the proposed Orders are just and equitable.
I certify that the preceding one hundred and thirty-eight (138) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Date: 11 May 2016
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