Brennan v McGuire (No 4) - [2011] FCA 702

FEDERAL COURT OF AUSTRALIA
Brennan v McGuire (No 4)
[2011] FCA 702

Citation: Brennan v McGuire (No 4) [2011] FCA 702

Parties: ROBERT GEORGE BRENNAN v GLENYS FREYA MCGUIRE

File number: NSD 1147 of 2010

Judge: RARES J

Date of judgment: 10 June 2011

Legislation: Domestic Relationships Act 1994 (ACT) s 14
Federal Court of Australia Act 1976 (Cth) s 51A

Cases cited: Brennan v McGuire (No 3) [2011] FCA 505 referred to
Brennan v McGuire [2010] FCA 1443 referred to

Date of hearing: 10 June 2011

Date of last submissions: 10 June 2011

Place: Sydney (via video link to Canberra)

Division: GENERAL DIVISION

Category: No catchwords

Number of paragraphs: 18

Solicitor for the Applicant: Ms M Reid of Phelps Reid

Counsel for the Respondent: Respondent appeared in person

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1147 of 2010

BETWEEN:
ROBERT GEORGE BRENNAN
Applicant

AND:
GLENYS FREYA MCGUIRE
Respondent

JUDGE:

RARES J

DATE OF ORDER:

10 JUNE 2011

WHERE MADE:

SYDNEY (VIA VIDEO LINK TO CANBERRA)

THE COURT ORDERS THAT:
1.        The orders made on 24 February 2011 and entered on 2 March 2011 be varied by:
(a)       in Order 1 deleting “31 March 2011” and substituting “17 June 2011”;
(b)       deleting orders 2 and 3(b) and inserting the following:
(a)       as Order 2:
2.At the settlement appointment Ms McGuire shall deliver to Mr Brennan:
(a)       bank cheques:
(1)in favour of Frank Lopilato as liquidator of the company in the sum of $205,000;
(2)in favour of Mr Brennan (or as he may direct in writing not later than 2 working days before the settlement appointment) in the sum of $613,500;

(b)an executed mortgage over the property in registrable form settled by the Registrar securing the interest of Mr Brennan in the fund up to the date on which the last of the following occurs:
(1)the company in liquidation pays a final dividend to the fund in respect of its proof of debt;
(2)the fund’s 2009 and 2010 tax returns are signed, and any tax payable or refundable has been paid by or credited to the fund (as the case requires);
(3)the fund pays Mr Kaufline the whole of his member balance represented by 30.55% of the total members’ funds after the steps in (1) and (2) have occurred;
(4)Mr Kaufline and all persons other than Mr Brennan have signed and delivered to Mr Brennan resignations as members of the fund and as trustees.

(b)as Orders 2B and 2C:
2BMs McGuire be and is hereby removed as a member and trustee of the fund and her former interest therein be credited to Mr Brennan absolutely.
2CMs McGuire by herself her servants and agents be restrained from communicating directly or indirectly with:
(a)any accountants or other persons appointed to act for the fund in respect of the fund, its accounts, taxation position or its affairs;
(b)the company or the liquidator in respect of the liquidation of the company or its affairs

except and only to…

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 Brennan v McGuire (No 4)

Details

AGLC: Brennan v McGuire (No 4) [2011] FCA 702
Case: [2011] FCA 702
Decision Date: 10 June 2011

CaseChat Overview and Summary

In the case of Brennan v McGuire (No 4), the parties were Mr Brennan and Ms McGuire, who were embroiled in a protracted dispute over a superannuation fund and a company. The Federal Court of Australia was tasked with addressing the ongoing conduct of Ms McGuire, who had continued to criticise Mr Brennan despite previous court orders. The central legal issues involved whether Ms McGuire should be restrained from her continued hostile conduct towards Mr Brennan and if so, what mechanism should be employed to ensure compliance with the final orders made in the earlier proceedings.

The court found that Ms McGuire had persistently criticised Mr Brennan to the fund’s professional advisers and the liquidator, which led to unnecessary expense and delay. The judge concluded that restraining Ms McGuire from such conduct was appropriate to protect Mr Brennan's interests. The court considered two mechanisms to ensure compliance: requiring Ms McGuire to pay a sum of $100,000 into court or having her grant a mortgage over a property. Ultimately, the court opted for the latter, as it did not immediately require Ms McGuire to pay a significant sum of money that she might not be able to afford. This decision was also intended to facilitate any remaining issues between Mr Kaufline and Mr Brennan being resolved.

The court further addressed the valuation of the property and adjusted the sum payable to Mr Brennan considering the delay and reduction in the likely value of the company. The court maintained the agreed value of the property and adjusted the payment to Mr Brennan, taking into account the delay and the reduced value of the company. The final orders included varying the previous orders to extend the settlement appointment, adjusting the sums to be paid, removing Ms McGuire as a member and trustee of the fund, and restraining her from communicating with certain parties. Additionally, the court ordered that Ms McGuire should pay Mr Brennan’s costs incurred after a specific date.

Orders

Orders of the court

1. The orders made on 24 February 2011 and entered on 2 March 2011 be varied by:

(a) in Order 1 deleting “31 March 2011” and substituting “17 June 2011”;

(b) deleting orders 2 and 3(b) and inserting the following:

(a) as Order 2:

2. At the settlement appointment Ms McGuire shall deliver to Mr Brennan:

(a) bank cheques:

(1) in favour of Frank Lopilato as liquidator of the company in the sum of $205,000;

(2) in favour of Mr Brennan (or as he may direct in writing not later than 2 working days before the settlement appointment) in the sum of $613,500;

(b) an executed mortgage over the property in registrable form settled by the Registrar securing the interest of Mr Brennan in the fund up to the date on which the last of the following occurs:

(1) the company in liquidation pays a final dividend to the fund in respect of its proof of debt;

(2) the fund’s 2009 and 2010 tax returns are signed, and any tax payable or refundable has been paid by or credited to the fund (as the case requires);

(3) the fund pays Mr Kaufline the whole of his member balance represented by 30.55% of the total members’ funds after the steps in (1) and (2) have occurred;

(4) Mr Kaufline and all persons other than Mr Brennan have signed and delivered to Mr Brennan resignations as members of the fund and as trustees.

(b) as Orders 2B and 2C:

2B Ms McGuire be and is hereby removed as a member and trustee of the fund and her former interest therein be credited to Mr Brennan absolutely.

2C Ms McGuire by herself her servants and agents be restrained from communicating directly or indirectly with:

(a) any accountants or other persons appointed to act for the fund in respect of the fund, its accounts, taxation position or its affairs;

(b) the company or the liquidator in respect of the liquidation of the company or its affairs

except and only to the extent that any such person, without solicitation, directly or indirectly, by her or on her behalf, seeks to communicate with her.

“up to 17 February 2011 and that thereafter Ms McGuire pay Mr Brennan’s costs as taxed other than the costs of attending to the obligations he had to perform to settle on 31 March 2011, and the taxed costs payable by each party may be set off against the other to produce a net amount owed by one of them”.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I am satisfied that Ms McGuire will continue to criticise Mr Brennan to the fund’s professional advisers and the liquidator. As a result of my final orders she has no continuing interest in either the fund or the company. It is appropriate that she not continue her criticisms. The evidence before me at and following the trial demonstrates that Ms McGuire continues to feel very deeply that Mr Brennan merits criticism and she expresses that criticism to others. I am satisfied that she will seek to continue this hostile conduct wherever she can. She should be restrained from doing so in the liquidation and the administration of the fund, since that conduct can only lead to unnecessary expense and delay. In any event, she is likely to have informed the liquidator of anything relevant by now and the orders I contemplate making will permit him to seek and receive her input if he wishes to do so.CONCLUSION I propose to exercise the power to vary the final orders that I made on 24 February 2011 and entered on 2 March 2011 for the reasons above and pursuant to the powers and reasons that I identified in Brennan (No 3) [2011] FCA 505 at [27]-[28] and [33].

Ratio Decidendi

Legal Principle Established

Given Ms McGuire’s conduct in frustrating the effect of my final orders, including that to which I referred in Brennan (No 3) [2011] FCA 505 at [21], [27], [33]-[34], I have considered two possible mechanisms to protect Mr Brennan’s interests from any further attempts by her to frustrate the finalisation of the superannuation fund accounts and the resolution of these proceedings by those final orders. The first possible means to achieve that compliance could be to require Ms McGuire to pay security in the order of $100,000 into Court to be held on trust so as to ensure that Mr Brennan will receive his full entitlement to and control of the fund. Once the liquidator makes his final distribution and Mr Kaufline is paid his full member balance, that amount would be used to compensate Mr Brennan for any deficiency in the sum held by the fund representing his 69.45% share plus any interest on it that had accrued. Any balance would be returned to Ms McGuire with any remaining pro rata share of the interest earned. The second mechanism is that Ms McGuire grant a mortgage over the property at Forrest, securing such compliance. That mortgage would be discharged on Mr Kaufline being paid out, Mr Brennan having his entitlement fully provided for in the fund and he being given control of the fund. On balance, I have chosen the second alternative because it does not immediately require Ms McGuire to pay money that she may not be able to afford. Mr Kaufline and Mr Brennan will have to resolve any issues outstanding between them. Mr Kaufline has relied on Ms McGuire to deal with and pursue those issues and I am satisfied that she will continue to do so, hence further the need for her to give the mortgage. This will guard against her protracting or exacerbating the issues, if any, that really remain between her brother and Mr Brennan.CONSIDERATION – ADJUSTMENT OF SUM PAYABLE TO MR BRENNAN Ms McGuire asserts that the value of the house has declined and that I should revalue all of the property. That would only prolong the proceedings. There is no evidence beyond the selling agent appraised to which I have referred to invalidate the parties’ agreed value of $1,900,000 for the property. I am not satisfied that it would cause any injustice to maintain the other values that were arrived at, mainly by agreement, for the final hearing. The asset that is the real property will be able to be realised as and when Ms McGuire wishes and I am not satisfied that there is any reason to revalue it for the purposes of these orders. However, in light of the delay in implementing my final orders and the reduction in the likely value of the company to Mr Brennan as appears from the liquidator’s latest estimated dividends, I must also adjust the payment Ms McGuire should make to Mr Brennan. In my principal reasons I attributed a value of $150,000 for the interests of Mr Brennan and Ms McGuire in the company, which included the liability of the company to the superannuation fund in respect of the loan, as I explained earlier in these reasons.

Citation:		Brennan v McGuire (No 4) [2011] FCA 702
Parties:		ROBERT GEORGE BRENNAN v GLENYS FREYA MCGUIRE
File number:		NSD 1147 of 2010
Judge:		RARES J
Date of judgment:		10 June 2011
Legislation:		Domestic Relationships Act 1994 (ACT) s 14 Federal Court of Australia Act 1976 (Cth) s 51A
Cases cited:		Brennan v McGuire (No 3) [2011] FCA 505 referred to Brennan v McGuire [2010] FCA 1443 referred to
Date of hearing:	10 June 2011
Date of last submissions:	10 June 2011
Place:	Sydney (via video link to Canberra)
Division:	GENERAL DIVISION
Category:	No catchwords
Number of paragraphs:	18
Solicitor for the Applicant:	Ms M Reid of Phelps Reid
Counsel for the Respondent:	Respondent appeared in person

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1147 of 2010

BETWEEN:	ROBERT GEORGE BRENNAN Applicant
AND:	GLENYS FREYA MCGUIRE Respondent

JUDGE:	RARES J
DATE OF ORDER:	10 JUNE 2011
WHERE MADE:	SYDNEY (VIA VIDEO LINK TO CANBERRA)