FAMILY COURT OF AUSTRALIA
| CHOW & HARRIS AND ANOR | [2010] FamCA 366 |
| FAMILY LAW – PROPERTY PROCEEDINGS – THIRD PARTY CLAIM FOR DEBT – Rectification of loan agreement – Whether third party’s claim for principal and/or interest statute barred – Balance principal debt not statute barred – Fresh accrual of cause of action – Interest from date of fresh accrual payable but arrears before fresh accrual statute barred – Husband and wife – Property pool – Contribution – Section 75(2) – Just and equitable division |
| Family Law Act 1975 (Cth) ss 79, 75(2), 90AE Limitation of Actions Act 1958 (Vic) ss 5(7), 8, 20(1), 20(5), 24(3) |
| APPLICANT: | Ms Chow |
| FIRST RESPONDENT: | Mr Harris |
| SECOND RESPONDENT: | Ms M Harris |
| FILE NUMBER: | MLC | 5261 | of | 2008 |
| DATE DELIVERED: | 14 May 2010 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | O'Reilly J |
| HEARING DATE: | 11, 12, 13 and 16 November 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Wilson |
| SOLICITOR FOR THE APPLICANT: | Adrian Abrahams Family Lawyers |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Cantwell |
| SOLICITOR FOR THE FIRST RESPONDENT: | Hogg and Reid Solicitors |
| COUNSEL FOR THE SECOND RESPONDENT: | Dr Sadler |
| SOLICITOR FOR THE SECOND RESPONDENT: | Buxton & Associates |
Orders
SECOND RESPONDENT’S CLAIM
The loan agreement dated 4 July 1987 between Ms M Harris, the husband and Ms VH be rectified by including in the Schedule the following item:
DEFAULT INTEREST: 15.5% compounding annually.
The husband pay to Ms M Harris on or before 30 June 2010 the amount calculated in accordance with paragraphs 90 and 103 of the reasons for judgment by payment to the trust account of her solicitors:
Buxton & Associates
M W Buxton…
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- Chow & Harris [2010] FamCA 366
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- [2010] FamCA 366
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CaseChat Overview and Summary
The court was required to determine the appropriate division of the parties' property and assets pursuant to section 79 of the *Family Law Act 1975* (Cth). This involved identifying and valuing various assets and liabilities, including real estate, vehicles, superannuation funds, and debts. Additionally, the court had to consider the rectification of a loan agreement to include a specific default interest rate.
O'Reilly J ordered that the loan agreement be rectified to include a default interest rate of 15.5% compounding annually. In relation to the property settlement, the court ordered a division of 35% to the wife and 65% to the husband. The orders detailed the specific assets and liabilities to be allocated to each party, including conditions precedent for certain property transfers, such as obtaining finance or releasing liabilities by a specified date. Provisions were also made for the sale of properties if these conditions were not met, with further liberty to apply for necessary machinery orders. The court also addressed the division of superannuation funds and the payment of capital gains tax.
Orders
Orders of the court
SECOND RESPONDENT’S CLAIM
1.
The loan agreement dated 4 July 1987 between Ms M Harris, the husband and Ms VH be rectified by including in the Schedule the following item:
DEFAULT INTEREST: 15.5% compounding annually.
2.
The husband pay to Ms M Harris on or before 30 June 2010 the amount calculated in accordance with paragraphs 90 and 103 of the reasons for judgment by payment to the trust account of her solicitors:
Buxton & Associates
M W Buxton Trust Account
Commonwealth Bank
Account No …
Branch ….
3.
The parties have liberty to apply on short notice by arrangement with the Associate if any difficulty should arise in calculation of the amount the husband is to pay to Ms M Harris in accordance of paragraphs 90 and 103 of the reasons for judgment.
APPLICANT’S AND FIRST RESPONDENT’S CLAIMS
Pursuant to s79 of the Family Law Act 1975 (Cth) the property and assets of the husband and the wife and either of them be divided to effect a division of 35% wife and 65% husband as follows:
1.
The wife have:
(a) item 2: units 1 and 2, P, provided that on or before 30 June 2010 she has obtained finance sufficient to pay out or has arranged sole liability for the mortgage debt to ANZ bank (item 7) the release of the husband from all liability in relation to that mortgage and the release of all collateral security in relation to that mortgage valued net $152,000 (being $380,000 value less mortgage value agreed for the purpose of these proceedings $228,000)
(b) item 4: 2003 Toyota Camry … valued at $9,800
(c) item 5: Chattels and jewellery in her possession valued at $5,000
(d) item 17: half the value of the husband’s member account in Harris Superannuation Fund valued at $32,041.50
(e) item 18: wife’s member account in Harris Superannuation Fund valued at $36,043
(f) item 19: wife’s member account with Hesta Superannuation Fund valued at $11,206
(g) cash sum to be paid to her by the husband to represent 35% overall of the parties’ property and assets based upon the values set out in paragraphs 1 & 2 except in relation to items 17 & 18 which are to be valued according to the amounts of actual payment (and excluding the amount of $800 referred to in paragraph 2(a)(ix) which is a separate debt of the husband owing to the wife).
2.
The husband have:
(a) item 1: M property valued at $750,000 provided that on or before 30 June 2010 he has obtained finance secured on that property sufficient to pay out and by that date has paid out and obtained receipts for:
i. item 6: the debt to Ms M Harris valued at $64,153.24 provided that if he should make payment to her earlier than 30 June 2010 he have the benefit of any interest saved but that if payment not be made by that date he be solely responsible for the payment of any further interest accruing after that date
ii. item 8: ANZ supplementary loan valued at $60,000 provided that if at the date of payment the amount is greater he solely be liable to pay such greater amount to discharge that debt
iii. item 9: wife’s HECS debt valued at $35,712 provided that if at the date of payment the amount is greater he solely be liable to pay such greater amount to discharge that debt
iv. item 10: wife’s E Credit Co-op debt for tax valued at $8,800 provided that if at the date of payment the amount is greater he solely be liable to pay such greater amount to discharge that debt
v. item 11: debt to R Harris valued at $18,650
vi. item 13: husband’s outstanding tax debt valued at $16,553 provided that if at the date of payment the amount is greater he be solely liable to pay such greater amount to discharge that debt
vii. item 14: husband’s integrated tax account valued at $4,578 provided that if at the date of payment the amount is greater he solely be liable to pay such greater amount to discharge that debt
viii. the cash amount he is to pay to the wife pursuant to paragraph 1(g)
ix. $800 being half the valuation fee ordered by the Honourable Justice Cronin on 27 June 2008.
(b) item 3: 1998 Mercedes Benz … valued at $9,750
(c) item 17: half the value of his member account in Harris Superannuation Fund valued at $32,041.50.
3.
The husband and the wife do all things necessary to:
(a) pay the wife’s member account in Harris Superannuation Fund net after tax, costs and fees to her member account with Hesta Superannuation Fund
(b) pay from the husband’s member account in Harris Superannuation Fund net after tax, costs and fees:
i. half to the wife’s member’s account with Hesta Superannuation Fund and
ii. half to the husband
(c) wind up Harris Superannuation Fund with any costs of such over and above those referred to in (a) and (b) to be shared equally between the husband and the wife.
4.
If the wife by 30 June 2010 has been unable to perform paragraph 1(a) units 1 and 2 at P be sold with the following provisions to apply:
(a) the husband and the wife immediately after 30 June 2010 list the property for sale by public auction to occur within 60 days after listing;
(b) the proceeds of sale be applied:
i. in payment of the costs of sale including commission and auction costs;
ii. in payment of the mortgage debt item 7;
iii. the balance to the selling agent’s trust account pending the operation of paragraph 6.
5.
If the husband by 30 June 2010 has been unable to perform paragraph 2(a) M property be sold with the following provisions to apply:
(a) the husband and the wife immediately after 30 June 2010 list the property for sale by public auction to occur within 60 days after listing;
(b) the proceeds of sale be applied:
i. in payment of the costs of sale including commission and auction costs;
ii. in payment of the debts set out in paragraph 2(a) (i)-(vii)
iii. the balance to the selling agent’s trust account pending the operation of paragraph 6.
6.
If either of paragraphs 4 or 5 should come into operation the parties are to relist the matter before the Honourable Justice O’Reilly for such machinery orders as may be necessary to effect a division of 35% of the parties’ property and assets to the wife and 65% to the husband having regard to the existing provisos in paragraphs 1 and 2 save as to necessary adjustment having regard to the net sale values of items 1 and/or 2.
7.
The wife as soon as practicable resign as a director of Harris & Associates Pty Ltd.
8.
The wife retain the chattels in Annexure A to the order made by the Honourable Justice Cronin on 27 June 2008.
9.
The husband use his best endeavours to locate and deliver to the wife her beaded velvet dress and her medical dictionary.
10.
The wife and the husband do all things necessary to cause the Australian Taxation Office to issue an assessment of capital gains tax payable in relation to the sale of the property at D.
11.
On the issue of such assessment the wife and the husband be liable to pay one half each of any capital gains tax payable and each indemnify the other in relation to one half including as to any interest charges and penalty.
12.
Otherwise, the wife and the husband are to retain all property, assets, chattels, liabilities and financial resources in the respective name or possession of each.
13.
Unless otherwise specified in this order:
(a) each party is solely entitled to the exclusion of the other to all property and assets (including choses in action) in the possession of that party as at the date of this order;
(b) each party is solely entitled to the credit of any moneys in any bank accounts in his or her name;
(c) each party is to forego any claim he or she may have to any superannuation benefits belonging to or earned by the other;
(d) each party is to be solely liable for and to indemnify the other against any liabilities encumbering any item of property or any asset to which that party is entitled pursuant to this order.
14.
The parties are to sign all documents necessary to give effect to this order and in default a Registrar is empowered to sign all such documents.
15.
The parties have liberty to apply on short notice by arrangement with the Associate:
(a) under the slip rule;
(b) if I should have made any calculation errors in the reasons for judgment or this order;
(c) if the parties, by their solicitors, should be unable to agree the calculations required by this order;
(d) if any further machinery or other orders may be necessary to carry out this order or to give effect to the decision; or
(e) if clarification of any part of the decision or order should be required.
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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