Bulleen & Bulleen (No 2)

[2010] FamCA 566

FAMILY COURT OF AUSTRALIA

BULLEEN & BULLEEN (NO. 2) [2010] FamCA 566

FAMILY LAW – PROPERTY – Adjournment

Family Law Act 1975 (Cth)

APPLICANT: Ms Bulleen

RESPONDENT: Mr Bulleen

FILE NUMBER: MLC 12431 of 2007

DATE DELIVERED: 2 June 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 2 June 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR B.R. GEDDES QC WITH MR DICKSON

SOLICITOR FOR THE APPLICANT: GILLIAN COOTE FAMILY LAW

COUNSEL FOR THE RESPONDENT: MR A.J. KIRKHAM QC WITH MR STRUM

SOLICITOR FOR THE RESPONDENT: GADENS

Orders

1. That the response filed by the husband this day be adjourned to 24 June, 2010 at 10:00 am. 

2. That notwithstanding any previous injunctions, the husband :

   (a)pay to the wife the sum of $11,000,000 (net) by 4:00 pm. on 4 June, 2010 in part payment of her entitlements under the orders made 12 March, 2010;

   (b)be at liberty to draw from the Bulleen Investment Trust a sum sufficient to meet the payment in paragraph (2)(a) hereof, and a further sum of up to $600,000 to be applied towards the taxation payable by him consequent upon the liquidation of Bulleen & Sons Pty. Ltd. and R Pty. Ltd. 

3. That the wife’s application for costs this day be dismissed. 

IT IS CERTIFIED

1. That pursuant to Rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of counsel including senior counsel.

IT IS NOTED that publication of this judgment under the pseudonym Bulleen & Bulleen is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 12431 of 2007

MS BULLEEN

Applicant

And

MR BULLEEN

Respondent

REASONS FOR JUDGMENT

1. I am dealing with the application in a case filed by the wife on 11 May and the response of the husband filed today, both of which arise out of the orders of 12 March this year.  The wife wants an adjournment of her application to obtain advice about the most tax-effective way of distributing the assets that were to be divided by orders, but equally she desires not to be responsible for the assets that are pregnant with tax, in circumstances where orders were made on 12 March for a division of 53.3 per cent to her and 46.7 per cent to the husband, after the tax was to be taken into account.

2. The husband’s complaint today is two-fold:  first, he says that there is no need for the wife to get any further advice; more importantly, he says that she has not approached the subject of the resolution of the dispute diligently. In 14 pages of his affidavit, he sets out the attempts he has made to sort the matter out.  It is quite a difficult and interesting chronology.  The wife for her part complains about the intransigence of the husband.  Neither of those positions is particularly helpful for me today.

3. The husband’s second complaint is that he does not want to be a part to a taxation ruling, for fear that it may be seen as some sort of scheme in which he might have been involved.  The wife’s position is that the tax implications on any distribution are not at all clear, hence the reason for her wanting to adjourn the matter to get advice.

4. A three-week adjournment in this case is not going to prejudice anyone, having regard to the time that has already elapsed since March this year.  The tax issue is important, but so is the wife having access to the fruits of her judgment.  She sets out the enjoyment that is currently on hold.  The husband says he wants one finalisation of the matter:  that is, he does not want a piecemeal approach.

5. Mr F, whose affidavit was also filed by the wife, has been involved with the wife’s advisors and he’s examined the various options open.  I found his affidavit helpful, in that he says that he had a meeting on 9 April with the advisor, Mr P, for the husband.  He said he reviewed the balance sheet as at 31 March for the Bulleen Investment Trust and that revealed certain information.

6. He says his analysis of the financial information revealed that the loan account between the Bulleen Investment Trust and the husband has arisen as a consequence of distributions to the husband that remain outstanding, and that there was allowance for any income tax payable on those distributions in the assessment of the asset pool.

7. As a consequence, he said, it was his opinion that a transfer of funds to the husband from the Bulleen Investment Trust could be recorded against the loan account of $11.639 million and there would be no income tax payable on the transfer of those funds.  Mr F then said that Mr P confirmed his interpretation in respect of the loan account during a meeting that was held on 5 May.

8. The husband’s position is that he sees no need for all of these exercises to be undertaken and he put forward a plausible option today.  However, one of the difficulties I have is that, on way or the other, there will be more delay and expense if I follow the husband’s pathway.  I’m not at all convinced that I should take that route, because it may involve further argument.

9. The husband’s sensible fallback position was very simply that if I lifted the injunctions that were made earlier in these proceedings and I follow, effectively, Mr F’s pathway, save for holding back the sum of $600,000, the money to which the wife is entitled is about - and is about $11 million, could be made almost straight away.  That seems to me to be the most logical route, and one which does not prejudice the wife, because ultimately, albeit she will not get entirely what she wants, adjustments can be made at a further time.

10. I propose therefore to give the wife and her advisors one further opportunity to consider her position and therefore the adjournment for the period till 24 June is granted, but that is on the basis that the second or fallback position, as put by Mr Kirkham on behalf of the husband, is the one that is carried out.  And it seems no problem at all that the sum of $11 million cannot be paid to the wife almost immediately.

11. Application has been made for costs by the wife.  Section 117 of the Act governs the principle in relation to costs and that is that each party bears their own costs.  The exceptional to that rule is where the Court feels there are some justifiable circumstances for making an order.  And if the Court decides that that is the case, then the provisions of s 117(2A) apply.  In this case, there are arguments on both sides;  the husband has complained about the attempts that he was making to set the solution in train and the wife was complaining about the husband’s intransigence.

12. The position of the husband is certainly shaky in respect of the fact that the $11 million would have been paid across to the wife in one form or another as part of her entitlement, but this is not a case where I feel that I could say that either party has contributed in some way to the issue that gave rise to the application.  In those circumstances, I decline to make any orders for costs for either party.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  8 July 2010