Catlin & Catlin

Case [2025] FedCFamC1F 36

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Catlin & Catlin [2025] FedCFamC1F 36

File number(s): ADC 748 of 2014
Judgment of: BERMAN J
Date of judgment: 7 February 2025
Catchwords: FAMILY LAW – ENFORCEMENT – Where the wife seeks a declaration to enforce various paragraphs of a final Consent Order made in 2016 – Where the order provided that the husband pay the wife 60% of WIP received from the husband’s business – Where the wife contends the husband has collected at least $1.3 million in WIP – Where the husband asserts the order provides for a 60% payment of a reconciliation adjustment – Where there has been no reconciliation adjustment – Where the husband asserts the payment obligation has not crystalised – Where the Court finds that the Consent Order does not reference  a “reconciliation” or “adjustment” payment – Where the wife seeks a declaration that she be entitled to a sum certain –Consideration of calculation of the WIP received by the husband – Where the husband has failed to provide requisite disclosure – Orders for the husband to pay the wife a sum certain.
Legislation:

Family Law Act 1975 (Cth) ss 81, 79, 105, 114

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 6.01, 6.03, 6.06, 10.13, 11.07, 11.09

Family Law Rules 2004 (Cth) rr 1.04, 1.08
Cases cited:

Australian Competition and Consumer Commission v Adata (Vic) Pty Ltd (No 3) [2015] FCA 583

Catlin & Catlin [2017] FamCA 818

Catlin & Catlin [2018] FamCA 235

Edmunds-Jones Pty Ltd v Australia Women’s Hockey Association Inc [1999] NSWSC 1014

Harris v Calladine [1991] HCA 9

I limited & Chester & Ors (2010) FLC 93-456

Neame v Neame Trs [1956] SLT 57

Re McGorm; Ex parte Co-operative Building Society of South Australia [1989] FCA 87

Weir & Weir (1993) FLC 92-338

Division: Division 1 First Instance
Number of paragraphs: 180
Date of hearing: 24-25 July & 9 and 11 December 2024
Place: Adelaide
Counsel for the Applicant: Mr Bullock
Solicitor for the Applicant: Howe Jenkin
Counsel for the Respondent: Mr Ower KC together with Ms Betro
Solicitor for the Respondent: 1878 Elix Lawyers

ORDERS

ADC 748 of 2014

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS CATLIN

Applicant
AND:

MR CATLIN

Respondent

ORDER MADE BY:

BERMAN J

DATE OF ORDER:

7 FEBRUARY 2025

THE COURT ORDERS THAT:

1.There be a declaration that Mr Catlin (“the respondent”) is liable to pay Ms Catlin (“the applicant”) the sum of SEVEN HUNDRED AND TWENTY FOUR THOUSAND FOUR HUNDRED AND TWENTY SIX DOLLARS AND FORTY NINE CENTS ($724,426.49).

2.There be a declaration that the applicant’s entitlement in the Superannuation Fund 1 is fixed in the sum of ONE HUNDRED AND THIRTY THOUSAND SIX HUNDRED AND TWENTY THREE DOLLARS ($130,623) inclusive of her member balance.

3.Pursuant to r 6.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Family Law Rules”) the parties do each file a Financial Statement…

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AGLC
Catlin & Catlin [2025] FedCFamC1F 36
Case
[2025] FedCFamC1F 36
Decision Date

CaseChat Overview and Summary

In the case of Catlin & Catlin, the wife sought a declaration to enforce various paragraphs of a final Consent Order made in 2016, which provided that the husband pay the wife 60% of the Work In Progress (WIP) received from the husband’s business. The wife contended that the husband had collected at least $1.3 million in WIP, whereas the husband asserted that the order provided for a 60% payment of a reconciliation adjustment, which had not occurred as there had been no reconciliation adjustment and the payment obligation had not crystalised. The wife sought a declaration that she be entitled to a sum certain.

The court considered the calculation of the WIP received by the husband and noted that the husband had failed to provide the requisite disclosure. The court found that the Consent Order did not reference a “reconciliation” or “adjustment” payment and ordered that the husband pay the wife a sum certain. The court ordered that the respondent pay to the applicant the sum of $724,426.49 and that the applicant’s entitlement in the Superannuation Fund 1 is fixed in the sum of $130,623. The court also ordered that the parties file a Financial Statement within 28 days of the date of the order and listed the Enforcement Application for further directions.

The court dismissed the Initiating Application filed on 22 August 2024. The form of the order is subject to the entry in the Court’s records. This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors, or to record a variation to the order.

Orders

Orders of the court

ADC 748 of 2014

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS CATLIN

Applicant

AND:

MR CATLIN

Respondent

ORDER MADE BY:

BERMAN J

DATE OF ORDER:

7 FEBRUARY 2025

THE COURT ORDERS THAT:

1. There be a declaration that Mr Catlin (“the respondent”) is liable to pay Ms Catlin (“the applicant”) the sum of SEVEN HUNDRED AND TWENTY FOUR THOUSAND FOUR HUNDRED AND TWENTY SIX DOLLARS AND FORTY NINE CENTS ($724,426.49).

2. There be a declaration that the applicant’s entitlement in the Superannuation Fund 1 is fixed in the sum of ONE HUNDRED AND THIRTY THOUSAND SIX HUNDRED AND TWENTY THREE DOLLARS ($130,623) inclusive of her member balance.

3. Pursuant to r 6.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Family Law Rules”) the parties do each file a Financial Statement within twenty-eight (28) days of the date of this order.

4. The Enforcement Application filed 11 July 2023 be listed for further directions at 9.30 am on 3 March 2025.

5. The Initiating Application filed 22 August 2024 be 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).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

The applicant’s position is that the primary application is still the Enforcement Application but if unsuccessful, then in the alternative, a variation to the final orders is sought by way of “slip rule” amendments as set out in the Initiating Application.BACKGROUND The parties commenced cohabitation and were married in 1994 and separated on 12 April 2013 after a period of 19 years of cohabitation. There are now three adult children of the marriage however as at the date of the final orders, the children were aged 12, 10 and 8 years respectively. In 1994 the parties purchased a property at Suburb AA and then in 2000 the parties purchased a property at Suburb Z. In 2006 both properties were sold and the parties purchased the Suburb G property. Each of the parties hold qualifications in financial services. At the date of the final orders, the respondent was engaged by B Pty Ltd and the applicant was employed in the financial services profession. In early 2010 the parties established K Pty Ltd as trustee for the Catlin Superannuation Fund (“the fund”). In mid-1997 the respondent commenced with a company which later became known as S Pty Ltd. In 2002 the respondent became a salaried partner however he made a decision to leave S Pty Ltd and establish B Pty Ltd. The respondent’s involvement in B Pty Ltd was via an entity controlled by him namely, BB Pty Ltd. BB Pty Ltd was the trustee of the BB Trust. It is common ground that following his decision to leave S Pty Ltd the respondent was not able to easily reach agreement with his former partners Mr Q and Mr T. Whilst not directly relevant to the current proceedings, it appears that as a result of taxation law amendments which did not allow the use of service trusts in professional practices, the respondent, Mr Q and Mr T set up a new partnership structure comprising O Pty Ltd as trustee for the O Pty Ltd Trust, R Pty Ltd as trustee for the R Pty Ltd Trust and P Pty Ltd as trustee for the P Pty Ltd Trust. It appears that each of the partners retained their separate WIP rather than transferring the WIP to a S Pty Ltd central account. The respondent’s contention is that at 30 September 2014 he considered that there was a loan account owing to O Pty Ltd in the sum of $590,063. At times, the respondent states that the loan account may have been as high as $800,000 to $1,000,000. The respondent concedes that from time to time during the relationship he advised the applicant as to what he considered was properly owed to O Pty Ltd by S Pty Ltd. The respondent summarises what he considers is the uncertainty in attempting to assess the value of the interest that O Pty Ltd had in S Pty Ltd in 2014 in the following paragraphs from his trial affidavit filed 28 October 2015:87.The reality is this loan account is reflective of what surplus would be available if the assets were fully recovered at their book value and all liabilities paid. The most significant effect of the loan account balance is the recoverability of WIP, which is shown with a book value of $1,994,864 at 30/9/2014. To be update. 88.WIP ought to be recorded at its net recoverable value. [S Pty Ltd] would classify WIP on a file as either “WIP1” (meaning it is likely to be fully recoverable), WIP2 (meaning is likely to be 50% recoverable) for WIP3 (nonrecoverable). Each […] practitioner at [S Pty Ltd] was obliged to review the WIP on their files at the end of each month and reclassify the recoverability of the WIP if appropriate. I did this meticulously. [Mr T] rarely did this and I am aware that [Mr Q] would be required to review [Mr T] files and perform this reclassification task on his behalf.89.As mentioned, I do not accept the accuracy of [S Pty Ltd’s] 30/9/2014 financial statement. The WIP on files to which I have been appointed to is shown at the recoverable amount of $592,294 at 30/9/2014. This is the same amount as when I left [S Pty Ltd]. [X Financial Services] have not recorded the WIP drawn since that time, which amounts to $160,210 for the period April to September 2014. The WIP on files I have been appointed to should therefore be reduced to $432,084.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Neither party seeks that the Court exercise its discretion to discharge, suspend or vary including the enforcement of an obligation.CONCLUSION The applicant seeks that there be declarations made pursuant to r 11.07(a) and that the proceedings then be listed for hearing as to the appropriate orders to be made that would enforce the amounts as declared. In circumstances where I have found that there be a declaration that the respondent pay to the applicant the sum of $724,426 and that her final member entitlement in the fund is $130,623, I consider it appropriate for the matter to be listed for hearing to determine the balance of the orders sought in the applicant’s Enforcement Application together with the application of default interest, if any. In anticipation of the further hearing, I propose to further order that each of the parties file a Financial Statement that complies with the provisions r 6.06 within 21 days. I make orders as appear at the commencement of these reasons.

Ratio Decidendi

Legal Principle Established

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