Bissett and Bissett - [2017] FCCA 2815

FEDERAL CIRCUIT COURT OF AUSTRALIA

BISSETT & BISSETT

[2017] FCCA 2815

Catchwords:
FAMILY LAW – Final property orders made – complete failure on part of husband to engage in proceedings – wife incurred unnecessary costs due to husband’s failure to make disclosure – assets acquired without the knowledge of the wife.

Legislation:

Family Law Act 1975, ss.75(2), 79(4), 90MT, 106A

Chang & Su [2002] FamCA 156
In the Marriage of Hickey (2003) 30 Fam LR 355
Turner & Turner and Anor [2016] FamCAFC 121

Applicant:

MS BISSETT

Respondent:

MR BISSETT

File Number:

MLC 9799 of 2016

Judgment of:

Judge McNab

Hearing date:

20 October 2017

Date of Last Submission:

20 October 2017

Delivered at:

Melbourne

Delivered on:

20 October 2017

REPRESENTATION

Counsel for the Applicant:

Ms Johnson

Solicitors for the Applicant:

Cahill & Rowe Family Law

No appearance by the Respondent

ORDERS

Superannuation Splitting Order – (omitted)

That for the purposes of these Orders:
(i)the Husband is the member spouse;
(ii)the Wife is the non-member spouse;
(iii)'the Superannuation Fund' is (omitted) Super Fund (ABN (omitted)); and
(iv)'the Trustee' means (omitted) Trust, or such trustee(s), person(s), or corporation(s) as may be responsible from time to time for the management or investment of the Superannuation Fund.
That paragraphs 3 to 6 of these Orders are binding on the Trustee.
That the base amount to be allocated to the Wife out of the Husband’s interest in the Superannuation Fund is $268,962 (“the base amount”).
That in accordance with Section 90MT(1)(a) of the Family Law Act 1975 whenever the Trustee makes a splittable payment from the interest held by the Husband in the Superannuation Fund the Trustee shall pay to the Wife the base amount of $268,962 which is calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (provided that such base amount shall not exceed the value of the interest determined under Section 90MT(2)), and there be a corresponding reduction in the entitlement that the Husband would have had but for these Orders.
That paragraphs 3 and 4 have effect from the operative time.
That the operative time for the purpose of these Orders is the beginning of the fourth business day after the day on which an original certified copy of the final sealed Orders or a sealed copy of these Orders is served upon the Trustee.
That the Trustee and the parties in accordance with the obligations set out under the Family Law Act 1975, the Family Law (Superannuation) Regulations 2001 and the Superannuation Industry (Supervision) Act and Regulations 1994, shall do all such acts and things and sign all such documents as may be necessary to calculate the entitlement and make the payment in accordance with these Orders.
That the Wife shall do all things necessary, including but not limited to, exercising her request pursuant to r.7A.07(2) of the Superannuation Industry (Supervision) Regulations 1994 for the payment of the transferable benefits out of the Husband’s interest in the Superannuation Fund to the Wife…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Bissett and Bissett

Details

AGLC: Bissett and Bissett [2017] FCCA 2815
Case: [2017] FCCA 2815
Decision Date: 20 October 2017

CaseChat Overview and Summary

This matter came before Judge McNab concerning the division of property and superannuation interests between the Husband and Wife. The dispute involved the allocation of a significant portion of the Husband's superannuation, the sale of two properties (Property A and Property B), the transfer of another property (Property C), and the Husband's sole interest in a fourth property (Property D). The court was required to make orders to effectuate these divisions and to provide for the payment of costs.

The primary legal issues before the court were how to achieve a just and equitable division of the parties' financial resources, including their superannuation interests and real property. This involved determining the method and terms for the sale of Properties A and B, the distribution of sale proceeds, and the specific amounts and mechanisms for payment from the Husband to the Wife. The court also needed to address the implications of capital gains tax arising from property sales and to make orders regarding the Husband's sole interest in Property D and the Wife's interest in Property C.

Judge McNab made detailed orders to implement the property settlement. These included a Superannuation Splitting Order directing the Trustee to allocate a base amount of $268,962 to the Wife from the Husband's superannuation interest. The court ordered the sale of Properties A and B, with the Wife having sole conduct of the sales, and specified the order of application of sale proceeds, including provisions for capital gains tax and the distribution of the balance. The Husband was ordered to pay the Wife a total sum of $1,036,411, with specific provisions for payment from a bank account, sale proceeds, and ultimately, by transfer of shares if necessary. The Husband was restrained from dealing with certain assets pending these payments. The court also declared the Husband's sole interest in Property D and ordered the transfer of the Wife's interest in Property C to the Husband. Finally, the Husband was ordered to pay the Wife's costs fixed at $8,685.

Orders

Orders of the court

Superannuation Splitting Order – (omitted)

That for the purposes of these Orders:

(i) the Husband is the member spouse;

(ii) the Wife is the non-member spouse;

(iii) 'the Superannuation Fund' is (omitted) Super Fund (ABN (omitted)); and

(iv) 'the Trustee' means (omitted) Trust, or such trustee(s), person(s), or corporation(s) as may be responsible from time to time for the management or investment of the Superannuation Fund.

That paragraphs 3 to 6 of these Orders are binding on the Trustee.

That the base amount to be allocated to the Wife out of the Husband’s interest in the Superannuation Fund is $268,962 (“the base amount”).

That in accordance with Section 90MT(1)(a) of the Family Law Act 1975 whenever the Trustee makes a splittable payment from the interest held by the Husband in the Superannuation Fund the Trustee shall pay to the Wife the base amount of $268,962 which is calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (provided that such base amount shall not exceed the value of the interest determined under Section 90MT(2)), and there be a corresponding reduction in the entitlement that the Husband would have had but for these Orders.

That paragraphs 3 and 4 have effect from the operative time.

That the operative time for the purpose of these Orders is the beginning of the fourth business day after the day on which an original certified copy of the final sealed Orders or a sealed copy of these Orders is served upon the Trustee.

That the Trustee and the parties in accordance with the obligations set out under the Family Law Act 1975, the Family Law (Superannuation) Regulations 2001 and the Superannuation Industry (Supervision) Act and Regulations 1994, shall do all such acts and things and sign all such documents as may be necessary to calculate the entitlement and make the payment in accordance with these Orders.

That the Wife shall do all things necessary, including but not limited to, exercising her request pursuant to r.7A.07(2) of the Superannuation Industry (Supervision) Regulations 1994 for the payment of the transferable benefits out of the Husband’s interest in the Superannuation Fund to the Wife in accordance with r.7A.13 of the Superannuation Industry (Supervision) Regulations 1994.

That until the happening of any of:

(i) The establishment of a separate account in the name of the Wife in the Superannuation Fund; or

(ii) The transfer or “rolling over” into another superannuation fund or superannuation account of the payment split created by these Orders; or

(iii) The Wife satisfies a condition of release and is paid by the payment split which was created by these Orders; or

(iv) The Wife executing a waiver of rights within the meaning of Section 90MZA of the Family Law Act in relation to the payment split created by these Orders;

the Husband be and is hereby restrained by himself, his servants or agents from executing a Death Benefit Nomination in favour of any person or doing any other act or thing which would render any part of his interest in the Superannuation Fund a “not splittable payment” within the meaning of Regulations 12 or 13 of the Family Law (Superannuation) Regulations 2001.

10.

That the Court notes:

(i) That the value of the transferable benefits from the Husband’s interest to the Wife’s interest are calculated in accordance with r.7A.13 of the Superannuation Industry (Supervision) Regulations 1994;

(ii) Pursuant to r.14F of the Family Law (Superannuation) Regulations 2001, any payments from the Husband’s superannuation interest in the Superannuation Fund made after the Trustee has created a new interest in the Wife’s name in the Superannuation Fund, as contemplated in these Orders, are not splittable payments; and

(iii) The Trustee will be relieved of its obligations to calculate and split payments under these Orders in the event that a lump sum is paid to the Wife in accordance with the requirements under the Superannuation Industry (Supervision) Regulations 1994.

11.

That each party and the Trustee have liberty to apply in relation to the implementation of the Orders affecting the Husband’s superannuation interest.

12.

That a copy of these Orders be served forthwith upon the Trustee.

Property A

13.

That within 21 days of the date of these Orders the parties do all such acts and things and sign all documents necessary to place the real property situate at and known as Property A, being the whole of the land more particularly described in Certificate of Title Volume (omitted) Folio (omitted) (“the Property A property”) on the market for sale on the following terms and conditions:

(a) The Wife have the sole conduct of the sale and be authorised to communicate directly with the real estate agent appointed in the sale of the property and authorise the said real estate agent to undertake all necessary actions in relation to the said sale without reference to the Husband;

(b) (omitted) of (omitted), shall be the appointed real estate agent;

(c) The reserve price shall be as determined by the Wife in consultation with the real estate agent (NOTING THAT the estimated selling range is between $780,000 and $830,000);

(d) The method of sale of the Property A property shall be as determined by the Wife in consultation with the real estate agent;

(e) (omitted) Conveyancing, shall be retained by the Wife for the purposes of the sale and be remunerated on their standard conveyancing rates applicable to such transactions;

(f) The Wife is authorised to communicate directly with the real estate agent having control of the leasing of the Property A property and authorise the said agent to undertake all necessary actions in relation to the said sale without reference to the Husband including making the key available and allowing inspection of the real property at times requested by the real estate agent appointed in the sale of the property; and

(g) The Husband is restrained by injunction from in any way interfering with the sale of the Property A property, including but not limited to obstructing the real estate agent appointed in the sale of the property or the leasing agent.

14.

That within seven days of being so requested, the parties sign all documents necessary to give effect to the sale of the Property A property including signing the contract of sale, vendor’s statement, all necessary transfer documents, mortgage discharge documents and any other document necessary to effect settlement of the sale.

15.

That upon the settlement of the sale of the Property A property the sale proceeds shall be applied as follows:

(a) Firstly, to pay all costs, commissions, and expenses of the sale including conveyancing costs;

(b) Secondly, to discharge the mortgage and any other encumbrance affecting the Property A property;

(d) Fourthly, to pay to the Husband a sum to be calculated in accordance with order 23, on account of the capital gains taxation arising from the sale;

(e) Fifthly, the balance then remaining as to:

(i) 55% to the Wife, to be paid in the first instance to the Cahill & Rowe Family Law Trust Account; and

(ii) 45% to the Husband, subject to order 25(b).

16.

That pending the settlement of the sale of the Property A property:

(a) The Husband shall continue to have the sole right to receipt of any rental income;

(b) The Husband shall continue to pay all instalments pursuant to the mortgage secured against the Property A property and all rates, taxes and apportionable outgoings of the Property A property as and when they fall due and at the level as at the date of these orders;

(c) The parties are restrained by way of injunction from further encumbering the Property A property, including but not limited to increasing the value of the mortgage encumbering the property as at the date of these orders; and

(d) The parties shall hold their respective interests in the Property A property upon trust pursuant to these orders.

Property B

17.

That within 21 days of the date of these Orders, the parties do all such acts and things and sign all documents necessary to place the real property situate at and known as Property B, being the whole of the land more particularly described in Certificate of Title Volume (omitted) Folio (omitted) (“the Property B property”) on the market for sale on the following terms and conditions:

(b) Mr T of (omitted) shall be the appointed real estate agent;

(c) The reserve price shall be as determined by the Wife in consultation with the real estate agent (NOTING THAT the estimated selling range is between $1,300,000 and $1,500,000);

(d) The method of sale of the Property B property shall be as determined by the Wife in consultation with the real estate agent (NOTING THAT the recommended method of sale is by public auction);

(e) (omitted) Conveyancing shall be retained by the Wife for the purposes of the sale and be remunerated on their standard conveyancing rates applicable to such transactions;

(f) The Wife is authorised to communicate directly with the real estate agent having control of the leasing of the Property B property and authorise the said agent to undertake all necessary actions in relation to the said sale without reference to the Husband, including making the key available and allowing inspection of the real property at times requested by the real estate agent appointed in the sale of the property; and

(g) The Husband is restrained by injunction from in any way interfering with the sale of the Property A property, including but not limited to obstructing the real estate agent appointee in the sale of the property or the leasing agent.

18.

19.

That upon the settlement of the sale of the Property B property the sale proceeds shall be applied as follows:

(a) Firstly, to pay all costs, commissions, and expenses of the sale including conveyancing costs;

(b) Secondly, to discharge the mortgage and any other encumbrance affecting the Property B property;

(d) Fourthly, to pay to the Husband a sum to be calculated in accordance with order 23, on account of the capital gains taxation arising from the sale; and

(e) Fifthly, the balance then remaining as to:

(i) 55% to the Wife, to be paid in the first instance to the Cahill & Rowe Family Law Trust Account; and

(ii) 45% to the Husband, subject to order 25(b)

20.

That pending the settlement of the sale of the Property B property:

(a) The Husband shall continue to have the sole right to receipt of any rental income;

(b) The Husband shall continue to pay all instalments pursuant to the mortgage secured against the Property B property and all rates, taxes and apportionable outgoings of the Property B property as and when they fall due and at the level as at the date of these orders;

(c) The parties are restrained by way of injunction from further encumbering the Property B property, including but not limited to increasing the value of the mortgage encumbering the property as at the date of these orders; and

(d) The parties shall hold their respective interests in the Property B property upon trust pursuant to these orders.

Capital Gains Taxation

21.

That forthwith upon a contract of sale being signed in relation to the Property B property and the Property A property respectively, the Wife appoint Ms M of (omitted) to prepare an advice on the estimated capital gains taxation payable upon each of the respective sales.

22.

That the cost of Ms M’s advice pursuant to order 21 be treated as cost of sale for the purposes of orders 15(a) and 19(a) respectively.

23.

That the amount to be paid to the Husband pursuant to orders 15(d) and 19(d) respectively be the amounts estimated by Ms M in her advice pursuant to order 21.

24.

That the Husband otherwise shall be solely liable for and indemnify the Wife absolutely against any and all capital gains taxation liabilities which may be triggered upon the settlement of the sale of the Property A property and the Property B property which will be assessed in his name.

Payment to Wife

25.

That the Husband pay to the Wife the total sum of $1,036,411 (“the payment”), as follows:

(a) By 3pm on 25 October 2017, the Husband do all such acts and things and sign all documents necessary to pay to the Wife the entire proceeds held by him in Account number (omitted) with the (omitted) Bank (NOTING THAT the balance held in that account as at 1 March 2017 was $476,190.30); and

(b) If there is a shortfall after the payment to the wife pursuant to order 25(a), the funds to be paid to the Husband from the sale of the Property B property pursuant to order 19(e)(ii) and the Property A property pursuant to order 15(e)(ii) be paid to the Wife in whatever sum is necessary to make the complete payment due to the Wife pursuant to this Order, and for the purpose of this order the payment shall be paid to the Wife directly at settlement of the sale of the respective properties; and

(c) If there is a shortfall after the payments to the wife pursuant to orders 25(a) and 25(b), within 30 days of the date of the settlement of the Property B property or the Property A property (whichever is later), the Husband do all such acts and things and sign all documents necessary to transfer to the Wife (at the Husband’s expense) shares held by him personally with an equivalent value to the amount due to the Wife pursuant to this order and for the purpose of this order:

(i) the value of the shares is to be taken as at the date of the transfer pursuant to this order; and

(ii) the shares to be transferred are as follows and in the following order, as necessary until the full payment is made to the wife:

(A) (omitted) shares;

(B) (omitted);

(D) (omitted); and

(E) The wife has liberty to apply in relation to which further shares are to be transferred to her in the event that there remains a shortfall after compliance with order 25(c)(ii)(A)-(E).

26.

In the event that the Husband defaults in the payment due to the Wife pursuant to Order 25, interest shall accrue on the outstanding amount due to the Wife in accordance with the penalty interest rate as determined by the Family Law Rules 2005 (Cth) such interest to begin to accrue upon a default pursuant to order 25(c).

27.

That pending the payment pursuant to order 25(a):

(a) the Husband be restrained by way of injunction from withdrawing or in any other way diminishing the funds held by him in Account number (omitted) with the (omitted) Bank save for the purpose of giving effect to order 25(a).

28.

That pending the full payment being made to the Wife pursuant to order 25, the Husband be restrained by injunction from selling, encumbering or in any way dealing with the shares in his personal name as at the date of these Orders.

Property C

29.

That contemporaneously with the full payment being made to the Wife pursuant to order 25:

(a) The Husband and the Wife do all such acts and things and sign all documents as may be necessary to transfer to the Husband, at the expense of the Husband, all of the Wife’s right, title and interest (30%) in the real property situate at and known as Property C being the whole of the land more particularly described in Certificate of Title Volume (omitted) Folio (omitted) (“the Property C property”); and

(b) The Husband, at his expense, discharge the mortgage registered number (omitted) in favour of the (omitted) Bank secured against the Property C property absolutely (NOTING THAT the Wife does not believe that any monies are owing under the Property C mortgage.

Property D

30.

That upon the making of Final Orders it shall be declared that the Husband has no right, title or interest in, nor any right to claim any interest in, the real property situate at Property D being the whole of the land more particularly described in Certificate of Title Volume (omitted) Folio (omitted) (“the Property D property”).

31.

The Wife shall indemnify the Husband absolutely against all payment and liability for the mortgage registered number (omitted) in favour of the (omitted) and the funds owed to her brother in relation to the purchase of the property.

32.

That unless otherwise specified in these Orders and save for the purpose of enforcing these Orders:

(a) Each party shall be solely entitled to the exclusion of the other to all property (including choses in action) in their own name or possession or in the name of an entity controlled by the said party;

(b) Insurance policies shall remain the sole property of the owner named therein;

(d) Monies standing to the credit of the party in any bank accounts are to be retained by the party in whose name the account is held;

(e) Any joint tenancy of the parties in any real or personal estate is hereby expressly served; and

(f) Each party shall be solely liable for any liability in their name or in the name of an entity controlled by them or in which they otherwise have an interest or encumbering any item of property which they are to retain pursuant to these Orders, and shall indemnify the other party in relation thereto.

Section 106A Order

33.

If the Husband does not comply with his obligations (or any of them) pursuant to these Orders, a Registrar of this Court be appointed pursuant to Section 106A of the Family Law Act 1975 (Cth) to execute, in the name of the husband, all deeds and instruments necessary to give effect to the orders herein or any of them and do all acts and things necessary to give validity and operation to the said deeds and instruments.

Liberty to Apply

34.

That the Wife have liberty to apply to this Court at short notice:

(a) In the event that the mortgages encumbering the Property A and/or the Property B properties are greater than the figures estimated by the Wife in her supporting Affidavit;

(b) In the event that the bank balances in the Husband's (omitted) bank account to be transferred to the Wife herein have been depleted below the balances referred to herein;

(d) In the event that the Husband defaults with his obligations pursuant to these Orders.

Provision of Orders to third parties

35.

That in order to give effect to these Orders, the Wife be permitted to provide a copy of the Orders to:

(a) The (omitted) Bank;

(b) The (omitted) Bank;

(d) The respective leasing agents in relation to the Property A and Property B properties; and

(e) The conveyancer appointed in relation to the sale of the Property A and Property B properties.

Costs

36.

That the Husband pay the Wife’s costs of and incidental to this Application fixed in the sum of $8685.

37.

A copy of this Order be served by forwarding same by email to (omitted) by ordinary prepaid post to the Husband’s address at (omitted) and by sending an SMS message to the Husband on (omitted) with a message in the form “final orders have been made against you on 20 October 2017. You should contact the Chambers of Judge McNab on (omitted).”

AND THE COURT NOTES THAT:

A. The Court finds that there has been service of the Court documents and the affidavits relied upon in the final hearing and the minutes of proposed final orders having regard to the affidavits of Ms K sworn 20 December 2016, 27 February 2017 and 18 October 2017.

B. An application may be made within 21 days of the date of this Order to set aside this Order pursuant to r. 16.05(1) of the Federal Circuit Court Rules by reason that it has been made in the absence of the Respondent.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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