Barrett & Simmel (No 2)
[2023] FedCFamC1F 773
•8 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Barrett & Simmel (No 2) [2023] FedCFamC1F 773
File number(s): MLC 9563 of 2021 Judgment of: CARTER J Date of judgment: 8 September 2023 Catchwords: FAMILY LAW – PROPERTY – interpretation of final orders – whether ‘close of trading’ means close of trading on the ASX – where the final orders tied the share price to the close of trade – where there was no on market trading of particular shares on the day the final orders were made – s 79A application of the Family Law Act 1975 (Cth) to vary the orders – whether there has been a miscarriage of justice as a result of suppression of evidence – whether there has been a miscarriage of justice as a result of any other circumstance – where the Court finds there has been no miscarriage – where discretion would not have been exercised had miscarriage been established. Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 7.11
Family Law Act 1975 (Cth) s 79A
Cases cited: Barker& Barker (2007) 26 Fam LR 650
In the marriage of Holland, M.R. and Holland K.C. (1982) FLC 91-243
Division: Division 1 First Instance Number of paragraphs: 75 Date of hearing: 21-22 August 2023 Place: Melbourne Counsel for the Applicant: Mr Fabian Dixon SC Counsel for the Applicant: Mr Soren Heggie Solicitor for the Applicant: Taussig Cherie Fildes Counsel for the Respondent: Mr Geoff Dickson KC Solicitor for the Respondent: Lander & Rogers ORDERS
MLC 9563 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BARRETT
Applicant
AND: MR SIMMEL
Respondent
ORDER MADE BY:
CARTER J
DATE OF ORDER:
8 SEPTEMBER 2023
THE COURT ORDERS THAT:
1.The Further Amended Initiating Application filed by the wife on 31 July 2023 be dismissed.
2.The Amended Response filed by the husband on 7 August 2023 be otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUSTICE CARTER
Final orders were made by consent in mid-2022 at about 12.23 pm, having been sent to my chambers from the wife’s solicitors, at approximately 10.00 am that day.
Pursuant to the orders, the wife was to receive a cash payment such that the wife retained 32.5 per cent of the asset pool set out at Annexure A of the orders. The orders relevantly provided at Order 1.3 that to make the calculation as to the cash payment to the wife:
The value of the [B Pty Ltd] shares ([…]), the [C Ltd] shares ([…]) and the [D Ltd] Shares ([…]) is to be determined as at the close of trading on the date of these orders.
In Annexure A, being the agreed asset pool, in the column headed “Value” in relation to all three of those shares it reads:
Share Price to be determined as at close of trading on date of Orders.
It is agreed that:
(a)on the day before orders were made, at the close of trading on the ASX the B Pty Ltd shares were listed at just over $1 per share;
(b)on the day orders were made, there was no trading of the B Pty Ltd shares on the ASX as the company had entered into a trading halt, implemented in the face of a takeover bid made by E Pty Ltd;
(c)on the same day, E Pty Ltd purchased a number of shares in B Pty Ltd, acquiring the shares off market at an amount that worked out to be around $1.50 per share; and
(d)on the day after orders were made, the B Pty Ltd shares closing price was around $1.50 per share. During that day, the husband sold some shares in B Pty Ltd at under the closing price.
Using the B Pty Ltd share price of just over $1 per share, the husband’s shareholding at the date the orders were made would be calculated to be $3,606,343. Using the share price of around $1.50 per share, that increases to $5,042,497.
The husband has paid the wife $773,545. That was calculated to be the wife’s 32.5 per cent entitlement using the B Pty Ltd share price of just over $1 per share in determining the net pool. If the pool was calculated using the share price of around $1.50 per share – as sought by the wife – she would be paid a further $432,280 (plus interest) to make up her entitlement under the orders.
ISSUES IN DISPUTE
The wife filed an Initiating Application on 11 October 2022 which was further amended on 31 July 2023, seeking;
·relief under s 79A(1)(a) to vary the orders (essentially so that the calculations are done on the basis of the B Pty Ltd share price at around $1.50); or in the alternative
·a declaration that the total amount payable to the wife under the orders is $1,205,825 (being effectively an enforcement application, which turns on the interpretation of the orders).
The husband seeks that application be dismissed.
To resolve the controversy, there are two disputes between the parties that I must now determine.
First, I will deal with the dispute as to the interpretation of Order 1.3. I must determine whether the words that the “value of the…. shares…is to be determined at close of trading” means:
(1)the share price at the close of trading on the ASX on the date of the orders, which fixed the share price for B Pty Ltd at just over $1 per share – as contended by the husband; or
(2)the price at which the last share was traded on the day the orders were made, including off market trades, or those conducted after the close of the ASX – as contended by the wife. If that is the case, the wife asserted the price for the B Pty Ltd shares should be set at around $1.50 per share, being the price that they were traded, on the date of the orders although not on the ASX.
Secondly, if I reject the wife’s contentions as to that first dispute, and find that the pool is to be calculated on the basis that the B Pty Ltd share price is just over $1 per share, I must then determine the wife’s application pursuant to s 79A(1)(a).
WHAT IS THE MEAING OF ‘VALUE OF THE SHARES AT CLOSE OF TRADING’
Order 1.3 refers to the “value” of the shares to be determined “as at the close of trading” on the date the orders were made. That order does not refer to the ASX or explicitly exclude off market trades. It does not use the words ‘share price’.
What does ‘close of trading’ mean?
It was the wife’s contention that using the B Pty Ltd share price of close to $1 cannot be correct, as the B Pty Ltd shares did not ‘trade at that value’ on the day the final orders were made. Rather, she said those shares traded – albeit not on the ASX – for around $1.50 that day and accordingly that is the relevant figure.
It was asserted by senior counsel for the wife that to interpret the reference to ‘close of trading’ in Order 1.3 to only refer to trading on the ASX was to impermissibly read into the order a limitation that is not reflected or implied in the order as to how the shares were to be ‘valued’.
I do not agree.
I am not satisfied that the lack of specific reference to ASX close of trade is an omission of any significance. The three companies referred to in the order are all publicly listed companies, trading on the ASX. “Close of trading” is a term of art. It means the close of a trading session on the relevant stock exchange, when that market closes for the day. That is the plain and ordinary meaning of the words “close of trading”.
It does not seem to me – as contended by senior counsel for the wife – that the reference in the orders to “close of trading” could have been intended to extend to capture private agreements made or off market transactions concluded after the close of the exchange at any time up until 11.59 pm on the day the orders were made. If that were so, that would mean the parties could not rely on the ASX share price for any of the shares. Rather, they would need to make enquiries as to whether or not there had been any off market trades, or trades of any shares at any time up until midnight on the date of the orders. If that were the case, how would they ever know if they had correctly identified the final trade of the day? As senior counsel for the husband acknowledged, this could also result in a farcical situation; had one shareholder elected to sell to another purchaser a single B Pty Ltd share off market, at 50 cents at 11.59 pm on the date of the orders - the parties would then, according to the wife’s argument, be bound by that figure.
To conclude as I am urged to do by senior counsel for the wife, that the orders include transactions outside the ordinary course of market trading, would, in my view, require a stretching of the ordinary and natural meaning of the words ‘close of trading’. If the order was to include off market trading it would have needed to use those explicit words.
It is also plain from the correspondence sent from the wife’s solicitors to those of the husband on the date of the orders that the orders linked the share price to the ASX closing price. In a letter the wife instructed her lawyers to write to the husband’s lawyers that day, the letter states the wife’s contention that for the purpose of Order 1.3, the “the share price for the [B Pty Ltd] shares shall be determined by the closing price on the date that trading resumes”. The wife did not, in that letter, assert that off market trades made on the date of the orders were relevant to the determination of the share price. Nor did she explicitly refer to trading on the ASX – but it is quite clearly implied. She was, however, electing to nominate a different ‘close of trade’ day for the purpose making the calculations.
Was there a B Pty Ltd share price at close of trading on the day of the orders?
I reject the submission made by senior counsel for the wife that as there was no public trading on the date of the orders, an available interpretation of the orders is that there is no value attributable to the shares that day. It was argued in those circumstances, the interpretation that the share price is limited to ASX trading only leads to the order being invalid. I do not agree.
The logical conclusion of the argument advanced by the wife would have to be that on a Saturday and Sunday – or any other day there is no trading on the ASX – a person’s share portfolio has no value. That cannot be correct.
Rather, I am satisfied that where there is no trading in a stock on the ASX on any given day, the closing price remains unchanged (and does not drop to $0.00) from the last traded price recorded on the trading platform. That is – the closing price on the ASX for the B Pty Ltd shares on the date the orders were made remained the same closing price on the ASX for those share on the day before the orders were made.
The husband relied on information from G Company which on the date of the orders listed the B Pty Ltd share price as just over $1 as at close of trade that day. The wife objected to that evidence, on the basis that it was hearsay, and evidence from a third party trading platform. I note that he adduced that evidence in response to the wife’s own hearsay evidence from the third party trading platform H Company and from the Google search annexed to her affidavit, on which she sought to rely.
As already stated, I am satisfied that where there was no ASX trading on the date of the orders, as a matter of logic, the share price at close of trading had not altered from the previous day. Indeed, the Google search that the wife conducted on the date of the orders shows the close of trade share price at just over $1 from the day before the orders were made. It had not changed. There is no other evidence as to the ‘close of trading’ share price on the ASX that day.
What does “value” mean?
As observed, Order 1.3 does not refer to ‘share price’, but refers rather to the ‘value’ of the shares. However, the circumstances surrounding the making of the order do not support the argument advanced by senior counsel for the wife that there is a distinction to be read into the orders between the phrase ‘share price’ and the phrase ‘value’ of the shares.
Those circumstances include:
(a)Annexure A to the orders is a document headed “Agreed Asset Pool”. The B Pty Ltd shares are listed as an asset. In the column headed “Value” the document records “Share Price to be determined as at close of trading on date of Orders”;
(b)in the jointly signed letter sent to chambers accompanying the executed minutes, the terms “value of the shares”; the “value of the husband’s shareholdings”; the “worth” of the shares; and “share price” are used without distinction. As best I can tell, the ASX close of trade share price was used to determine the dollar amounts attributed to the price/value/worth of the husband’s shareholding in paragraph 8(e)(xi) of that letter; and
(c)similarly, at paragraph 66 of the wife’s trial affidavit filed on 20 July 2022 she referred without distinction to “share price”, “the value of [the husband’s] shareholdings”, and “the [B Pty Ltd] shares were worth…” in which, again, as best I can tell, she referred to the share price at close of trade on the ASX on each listed day.
I do not regard Order 1.3 as being ambiguous or lacking in clarity. I have outlined the circumstances surrounding the making of the order. There was nothing in those circumstances to which I was directed that indicated any other conclusion could be reached as to the meaning of the order. There was – for instance – no suggestion that the parties had ever discussed the value of the shares other than in reference to the share price listed on the ASX.
Accordingly, it is apparent that orders contemplated the value of the shares to be calculated according to the share price at close of trade on the ASX, and not by some other mechanism. There is no evidence to support any other interpretation.
I am therefore satisfied that the interpretation of orders made on that date is that the value of the B Pty Ltd shares be taken at close to $1 per share, and the wife’s application for a declaration otherwise must fail.
SHOULD THE ORDER BE VARIED PURSUANT TO SECTION 79A(1)(A) OF THE FAMILY LAW ACT?
The Full Court in Barker& Barker (2007) 26 Fam LR 650, stated at [120]:
A miscarriage of justice under s 79A(1)(a) will occur if circumstances exist which “for some significant reason, make the order contrary to law and justice according to the law as it relates to the integrity of the judicial process”…
(Emphasis in original)
Their honours said further that the words “miscarriage of justice” should not be construed narrowly. A miscarriage of justice can only occur as a result of something that happened before or at the time the order sought to be varied or set aside is made, and the circumstances that created the miscarriage, must have had an influence on the outcome of the dispute.
The case law makes it clear that s 79A is remedial in nature. It is designed to overcome miscarriages of justice and ought be construed liberally, and not narrowly, to effect that purpose.
In determining the wife’s s79A(1)(a), I must consider:
(a)first, whether a ground has been established;
(b)I must then consider if that ground gives rise to a miscarriage of justice;
(c)if I am satisfied there has been a miscarriage justice, this enlivens my discretion to determine whether I should or should not vary or set aside the order; and
(d)last, if I decide to exercise my discretion, I then determine what order, if any, should be made in substitution.
What is the ground?
It is the wife’s case that the miscarriage of justice by reason of “any other circumstance” arose as a result of the unusual circumstances of the trading halt, and private trades occurring on the very day the orders were made. She said those facts meant the ‘true value’ of the B Pty Ltd shares were not reflected in the ‘close of trading’ share price, and that accordingly she would not receive the agreed percentage of the ‘true value’ of the asset pool.
There was also some argument that the husband had possibly suppressed evidence, or failed to disclose relevant information.
Has there been a miscarriage of justice?
Miscarriage of justice – “any other circumstance”
Senior counsel for the wife submitted that in circumstances where there was private trading of the B Pty Ltd shares on the day the orders were made – in which the shares were traded at around $1.50 per share – that higher share price reflected the ‘real value’ of the shares at the time the orders were made. Accordingly, it was asserted as follows:
(a)the non-superannuation pool should be calculated using the correct and actual value of the B Pty Ltd shares at around $1.50. The net tangible pool would then be $7,617,879;
(b)the wife’s 32.5 per cent entitlement to that pool meant that in addition to the assets already in her possession, she should receive a payment from the husband totalling $1,205,825;
(c)if the lower share price of close to $1 was used to calculate the pool, the wife would instead receive a payment of $773,545;
(d)that would leave her with just under 27 per cent of the pool calculated using the ‘real’ value of the B Pty Ltd shares, instead of 32.5 per cent of that pool.
It is the wife’s case that these factors amount to a miscarriage of justice as a result of “any other circumstance”.
Has the parties’ agreed mechanism to value the shares created a miscarriage of justice?
In support of her case, the wife relied on the evidence of Mr F, forensic accountant, who filed an affidavit on 11 October 2022, with his report dated 20 September 2022. The husband objected to that valuation being admitted into evidence. However, I granted leave to the wife to adduce that evidence pursuant to r 7.11 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Mr F was instructed by the wife to provide “a view as to what value should be attributed” [emphasis added] to the B Pty Ltd shares as at the close of trading on the date of the orders. That is, rather than utilising what the parties had agreed in the orders to be an appropriate method of valuing the shares (being the share price at close of trade on the day the orders were made), it was apparent from those instructions that the wife sought to have a value ‘attributed’ to the shares based on other factors, or some other mechanism.
In determining the ‘value’ of the shares at the relevant time, Mr F said he took into account a range of matters including:
(a)the closing price on the day prior to the trading halt, and the opening price the day immediately following that halt (even though that was information relating to events after the date of valuation);
(b)the mean share price between mid-2021 and mid-2022 (which included the substantial trade of shares at around $1.50 that day, and again included information relating to events after the date of valuation) was over $2.00;
(c)that for all of the month in which the orders were made the shares traded within a share price band under $1.50; and
(d)E Pty Ltd specialises in buyouts and acquisitions of businesses with a robust market position, and prefers to have majority stakes in companies. The offer that E Pty Ltd made indicated “a premium being paid over and above the listed share price trading prior to the offer”.
In his report, Mr F wrote “[t]he actual closing price, on [the date of the orders], which due to trading halt was not applicable”. I do not know what he meant by that. He was not asked to clarify what he meant by saying the closing price was “not applicable” on the relevant day.
Mr F said the value of the shares should also reflect “the information available between the closing on [the day before orders were made] and opening on [the day after orders were made]”. He concluded that in all the circumstances, the “value” of the shares at close of trading on the date the orders were made was around $1.50 each.
In his oral evidence, Mr F conceded that generally a company seeking to take over another (as E Pty Ltd was seeking to do) will pay over and above the listed market price to secure the shares. He also conceded that on the date of the orders, E Pty Ltd paid over and above the price the shares had traded at the day before, and in the days before that. He accepted they did so in order to secure a sufficient number of shares to ‘make a move’ on the company. However, he maintained the “value” of the shares on the date of the orders were around $1.50.
As indicated, instead of using the close of trade share price as envisaged in the orders – being the method agreed to by the parties after considerable negotiations – the wife now sought to use Mr F’s determination of the value of the shares to calculate the pool, and her entitlement to that pool.
The range of matters taken into account by Mr F far exceeded the matters envisaged by the parties as to how the share price would be calculated for the purposes of their property settlement. The parties could have agreed on another method of valuing the shares for the purpose of calculating the pool, or agreed to take additional matters into account. They could have agreed to orders that provided that the parties engage a jointly appointed valuer to determine the ‘value’ of the shares. But they did not.
The volatility of the B Pty Ltd shares was well known to the parties. As set out in my previous judgment; Barrett & Simmel [2022] FedCFamC1F 896 (in which I declined to summarily dismiss the wife’s application), the shares in B Pty Ltd were listed at over $1.50 at the time the parties separated. They had increased to over $3.50 by about four months later, and peaked at over $3.50 a share in late 2021. According to Mr F’s report, there was a significant share price decrease from around $3.50 in late 2021 to around $2.50 less than a week later.
As at mid-2022, the share price had dropped back to under $1.50 a share, and as at the day before the orders were presented to my chambers they were under $1.50 per share at close of trade. The wife referred to this significant volatility in her trial affidavit filed on 20 July 2022. It was also outlined in the letter forwarded to my chambers accompanying the executed minutes.
In light of this volatility, the parties reached an agreement to tie the value of the shares to the close of trade share price as at the date the orders were made.
As already observed, the share price of the B Pty Ltd shares on the ASX remained unchanged from the day before to the day of the orders being made. Also as already observed, I do not agree that there is any significance in Order 3.1 referring to the ‘value’ of the shares rather than ‘share price’ – or that it means ‘true value’ – as contended by the wife. That much is clear from Annexure A.
As senior counsel for the husband remarked, this mechanism always had the potential to benefit one party over the other, depending on what the share price was at close of trade on the day the orders were made. The mechanism was agreed by the parties, represented by very competent lawyers, in a volatile and fluctuating market. That the mechanism has apparently favoured the husband over the wife at the precise time the orders were made (with the timing of the presentation of the consent orders to my chambers being in the hands of the wife) does not in my view to amount to a miscarriage of justice. It does not seem to me that the wife can agree to that methodology prior to the orders being made, and then seek to resile from it after the orders were made – claiming an injustice against her – on the basis that there had been a variation in the share market that favoured the husband over her. The application no doubt would not have been brought – at least not by the wife – had the share price fallen following the trading halt.
There can be no suggestion that the wife’s consent to using the ‘close of trade’ share price was not informed consent, or that it was based on misleading or inadequate information. The wife was fully aware that in the months and then the days leading up to the execution of the consent minute that the B Pty Ltd share price was dropping. She nevertheless instructed her lawyers on the day before orders were made to forward the proposed minute to chambers. She was also fully aware that the share price at close of trade on that day was around $1 per share.
Will the wife receive less than her entitlement and would that amount a miscarriage of justice?
There were some similarities between the extant case and that of Barker – in which the Full Court considered whether the agreed value of a parcel of land – referred to as AW – was its “real value”. However, I agree with the submissions by senior counsel for the husband that there are distinguishing features. First, I note that in Barker, the asset the value of which was in dispute was real estate; the value of which is far more stable than the considerably more volatile B Pty Ltd share price.
The consent orders governing the parties’ division of assets in Barker provided for the wife to receive between 53.5-55 per cent of the pool. At the time the orders were made, the court was informed that the asset pool was worth a total of $1,100,000 - $1,200,000. The Full Court held there was a miscarriage of justice on the basis that the value of AW was likely valued at about $2,650,000 at the time the orders were made, and not $1,650,000 as the wife and court had been informed. This almost doubled the pool. Accordingly, after a 37 year marriage that produced three children, instead of receiving a little over half of the pool, the effect of the orders would have been that the wife would have received around 30 per cent.
There are another two significant differences between the facts in Barker and the extant case. First, in the extant case, even if I accepted the wife’s assertions as to the ‘real value’ of the B Pty Ltd shares, the impact on the pool is less significant. At around $1 per share, the net tangible pool would be around $6,200,000. At around $1.50 per share, the pool would be around $7,600,000.
Secondly, in Barker, the value of AW meant the wife would receive 30 per cent – instead of over 50 per cent – of the pool. That is clearly a greater decrease in percentage to the wife (and consequently a greater increase in percentage to the husband) than the different share prices make in the extant case of around 5.5 per cent.
The Full Court in Barker referred to multiple authorities and stated at [120] that the circumstances creating the miscarriage “must nevertheless have been such as to have had an influence on the outcome of the litigation”. Their Honours quoted with approval the Full Court’s observations in In the marriage of Holland, M.R. and Holland K.C. (1982) FLC 91‑243 at 77,341:
To succeed in an application under sec. 79A, the wife must show some circumstance leading to a miscarriage of justice. Agreement to a consent order which may not adequately reflect a party’s entitlements under sec. 79 does not, of itself, show that there has been a miscarriage of justice. There may be cases where the order consented to is so far outside the ambit of what is just and equitable that the Court may infer that a party has acted under duress, in ignorance or as a result of incompetent advice.
In the current case, there is no suggestion that the wife was not properly advised, or that she acted under duress or in ignorance.
The Full Court in Barker said further at [122]:
Unless there is some particular act which impugns the process by which the orders were obtained, the mere effluxion of time and the consequent changes in the market during that period, whether they be upward or downward, will not of themselves create an injustice…
There does not seem to me to be any particular act which impugns the process by which the orders were obtained.
Moreover, I am not satisfied that the wife receiving approximately 27 per cent of the larger pool (if I accepted her evidence as to the ‘true value’ of the B Pty Ltd shares) instead of 32.5 per cent of that pool renders the overall result not appropriate, or not just and equitable such that I could be satisfied there has been a miscarriage of justice.
Miscarriage of justice – suppression of evidence
It was an important consideration in Barker that the husband had deliberately withheld information from the wife as to offers to purchase the property.
It was conceded by senior counsel for the wife that there was no evidence to suggest the husband in the extant proceedings had prior information about the off market trades, the takeover bid or the impact that might have had on the share price that he should have disclosed to the wife.
At its highest, the husband appeared to have read about the takeover, at the higher share price, in a news publication on the morning of the date of the orders before the wife did so. I do not regard the husband as having any duty to contact the wife or her solicitors and advise them about an article he read in a publicly available publication. This is particularly so in circumstances where the wife gave evidence that she had ready access to her family’s economist with whom she spoke on the date of the orders.
Nor do I regard the husband as being under a duty to disclose on that date prior to the orders being made that day, and after becoming aware of off market trades of B Pty Ltd shares at around $1.50 that he was going to rely on the ASX share price of just over $1. He could not be said to have a duty to disclose that he would rely on what I have determined to be the correct interpretation of Order 1.3 of the orders.
Accordingly, the wife’s assertions as to a suppression of evidence must fail.
Should I exercise my discretion
Where a party establishes there has been a miscarriage of justice, that in and of itself is not sufficient to justify the variation or setting aside of an order. Rather, the applicant must satisfy the Court both that there has been a miscarriage of justice and that it is an appropriate exercise of the discretion to vary or set the order aside; Barker at [134].
In the extant case, even had I been satisfied that there had been a miscarriage of justice, I am not satisfied that I would exercise my discretion and vary the order.
As already observed, the orders were made in good faith using an agreed method of setting the value of the shares for the purpose of calculating the pool and the wife’s entitlement in that pool. The parties were both represented by very competent solicitors, and the orders were crafted by the parties and their legal representatives over a protracted period of negotiations. The parties came up with the mechanism as included in the orders specifically to take into account the volatility of the shares, which had, post separation and over the course of those negotiations, fluctuated substantially. The volatility of the shares was well known to the parties and their representatives. It does not seem appropriate to me that the Court should now vary the orders because the application of the mechanism chosen by the parties has ultimately favoured one party over the other.
I note further that neither of the parties had any influence over the share price. There was no evidence that the husband had any knowledge of or influence over the trading halt, or any knowledge that the shares would be acquired on the date the orders were made at around $1.50 per share.
The wife’s solicitors were in control of the timing of when the proposed orders were forwarded to my chambers.
(a)the husband signed the consent orders around a week prior to that date, and the wife signed them on the following day. They remained with her lawyers thereafter. The executed minute was not sent to chambers immediately, as the wife sought further information about a particular bank account which was provided on the following day;
(b)on the day before orders were made the wife indicated she was content with the husband’s explanation about that bank account and she instructed her solicitors to provide the executed minute to Court. Trading closed at just over $1 per B Pty Ltd share that day;
(c)the wife’s solicitors did not send the minute in to chambers until 10.03 am on the date the orders were made;
(d)the wife said shortly after the minute was forwarded, she became aware of the ASX announcement that B Pty Ltd had gone into a trading halt. She waited until 10.52 am to provide that information to her solicitors;
(e)my chambers were not contacted and requested not to make the orders.
The wife gave evidence that she was extremely distressed by the news of the trading halt – so distressed that she was sent home from work. She also said that after learning about the trading halt, she spoke with her family economist. She said the family economist told her he believed there “could have been some trades” presumably referring to off-market trading. After speaking with him, the wife said she did not know whether the trading halt would mean “good news” or “bad news” for the share price. The wife also said in her oral evidence that she did not know that she could have withdrawn her consent to the orders being made, and my chambers advised prior to the making of the orders. It is difficult to imagine that the wife did not get that advice.
It seems to me more likely that the wife made a deliberate decision to leave the consent orders to be made by me – either on the date the orders were made, or in the next few days, effectively ‘hedging her bets’, to see what happened to the share price.
Another factor mitigating against the exercise of my discretion is the relatively modest difference in percentage terms to the outcome, which in my view does not result in the wife being deprived of a just and equitable share of the parties’ property. As already observed, on the wife’s figures, instead of receiving 32.5 per cent of the pool, if the shares were in fact worth around $1.50, she would receive about 27 per cent of the pool. As indicated earlier, it does not seem to me that the order consented to is so far outside the ambit of what is just and equitable that the Court should interfere.
I reach that conclusion in light of the matters set out in the ‘justice and equity’ letter to chambers dated mid-2022, which set out, inter alia;
(a)the parties lived together for nine years;
(b)there are no children of the marriage;
(c)the statements as to the parties’ respective contributions, which included the gift to the wife of a property in Suburb J by her parents who also paid for the parties’ wedding and subsequent celebrations; and the husband’s establishment and development of B Pty Ltd;
(d)both parties are in good health and neither sought any adjustment pursuant to ‘future need’ considerations.
In all the circumstances, I would not exercise my discretion and vary Order 1.3.
I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carter. Associate:
Dated: 8 September 2023
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