Close and Beake and Anor (No.2) - [2018] FCCA 3373

FEDERAL CIRCUIT COURT OF AUSTRALIA

CLOSE & BEAKE & ANOR (No.2)

[2018] FCCA 3373

Catchwords:
FAMILY LAW – Property – Application for property adjustment orders – undefended hearing – failure to make full and frank disclosure.

Legislation:

Family Law Act 1975, ss.75, 79, 117

Federal Circuit Court Rules 2001, r.16.05

Cases cited:

Stanford & Stanford [2012] HCA 52

Hickey & Hickey & Commonwealth (2003) FLC 93-143, 30 FamLR 355

Black & Kellner (1992) 15 FamLR 343; [1992] FLC 92-287
Turner & Turner [2016] FamCAFC 121
Weir & Weir (1992) 16 FamLR 154; [1993] FLC 92-338
Colgate Palmolive v Cussons (1993) 118 ALR 248
Preston v Preston [1982] 1 All ER 41

Applicant:

MS CLOSE

First Respondent:

MR BEAKE

Second Respondent:

MR A BEAKE

File Number:

BRC 1092 of 2015

Judgment of:

Judge Lapthorn

Hearing date:

9 February 2018

Date of Last Submission:

9 February 2018

Delivered at:

Brisbane

Delivered on:

20 November 2018

REPRESENTATION

Counsel for the Applicant:

Dr Sayers

Solicitors for the Applicant:

Best Wilson Buckley

Solicitors for the First Respondent:

No appearance

Solicitors for the Second Respondent:

No appearance

ORDERS

That the Court declares pursuant to section 79(2) of the Family Law Act that it is just and equitable and otherwise proper to make orders relating to the alteration of property rights as between the parties.

Retention of property by the Applicant Wife

That the Applicant Wife (Wife) retain as her absolute property the title to and possession of and the Husband forthwith relinquish, transfer and assign (if necessary) to the Wife and/or relinquish all right, title and interest if any, to and in:
(a)her interest in the property located at Property A;
(b)the furniture and items of household adornment in her possession;
(c)the bank accounts in her name;
(d)her shares in Shares 1;
(e)her shares in Shares 2;
(f)her shares in Shares 3;
(g)her jewellery and items of personal adornment; and
(h)her superannuation entitlements held with Super Fund S.

Retention of property by the First Respondent

That subject to his compliance with obligations set out in these Orders, the First Respondent (Husband) retain as his absolute property the title to and possession of and the Wife forthwith relinquish, transfer and assign (if necessary) to the Husband and/or relinquish all right, title and interest if any, to and in:
(a)his interests and/or shareholdings in:
(i)Company F Pty Ltd; and
(ii)Company G Pty Ltd;
(b)his beneficial interests or entitlements in The Investment Trust;
(c)any bank accounts in his sole name;
(d)any household contents and items of household adornment in his possession; and
(e)jewellery and items of personal adornment.

General retention of property

That except for the property and financial resources dealt with under these orders, each party retain as his or her own property all assets or financial resources or both of which that party is the legal owner or which is in their possession or control as at the date of the parties signing these orders.

Liabilities

That the Wife be forthwith…

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 Close and Beake and Anor (No.2)

Details

AGLC: Close and Beake and Anor (No.2) [2018] FCCA 3373
Case: [2018] FCCA 3373
Decision Date: 20 November 2018

CaseChat Overview and Summary

This case involved an application by the Applicant Wife against the First Respondent Husband and the Second Respondent (whose role is not specified in the provided text) concerning the division of property. The proceedings were heard in the Family Court of Australia by Judge Lapthorn.

The court was required to determine the just and equitable distribution of property and liabilities between the parties, including the allocation of various assets such as real estate, shares, bank accounts, jewellery, and superannuation entitlements. The court also needed to address the liabilities incurred by each party and the potential for superannuation splitting, as well as the transfer of specific scholarship fund benefits. Furthermore, the court had to consider provisions for default in payment, including the appointment of a receiver and manager for certain companies and trusts, and the security interests to be granted to the Applicant Wife.

Judge Lapthorn declared that it was just and equitable to make orders for the alteration of property rights. The orders provided for the Wife to retain specific assets, including her interest in Property A, household items, bank accounts, shares, jewellery, and superannuation. The Husband was to retain his interests in Company F Pty Ltd, Company G Pty Ltd, The Investment Trust, his sole name bank accounts, household contents, and jewellery. Each party was to be responsible for liabilities incurred in their own name, with provisions for indemnification. The court also ordered a superannuation splitting arrangement for the Husband's entitlements in Super Fund T in favour of the Wife, and the Husband was to transfer his interest in certain scholarship funds to the Wife. A significant cash sum was ordered to be paid by the Husband to the Wife as property settlement, with detailed provisions for default, including the appointment of a receiver and manager over "The Beake Group" entities and the granting of a security interest to the Wife. The First Respondent was ordered to pay the Applicant's costs on an indemnity basis.

Orders

Orders of the court

That the Court declares pursuant to section 79(2) of the Family Law Act that it is just and equitable and otherwise proper to make orders relating to the alteration of property rights as between the parties.

Retention of property by the Applicant Wife

That the Applicant Wife (Wife) retain as her absolute property the title to and possession of and the Husband forthwith relinquish, transfer and assign (if necessary) to the Wife and/or relinquish all right, title and interest if any, to and in:

(a) her interest in the property located at Property A;

(b) the furniture and items of household adornment in her possession;

(d) her shares in Shares 1;

(e) her shares in Shares 2;

(f) her shares in Shares 3;

(g) her jewellery and items of personal adornment; and

(h) her superannuation entitlements held with Super Fund S.

Retention of property by the First Respondent

That subject to his compliance with obligations set out in these Orders, the First Respondent (Husband) retain as his absolute property the title to and possession of and the Wife forthwith relinquish, transfer and assign (if necessary) to the Husband and/or relinquish all right, title and interest if any, to and in:

(a) his interests and/or shareholdings in:

(i) Company F Pty Ltd; and

(ii) Company G Pty Ltd;

(b) his beneficial interests or entitlements in The Investment Trust;

(d) any household contents and items of household adornment in his possession; and

(e) jewellery and items of personal adornment.

General retention of property

That except for the property and financial resources dealt with under these orders, each party retain as his or her own property all assets or financial resources or both of which that party is the legal owner or which is in their possession or control as at the date of the parties signing these orders.

Liabilities

That the Wife be forthwith responsible for and meet payment when due of any liability in the Wife's name (not otherwise dealt with by these orders) including:

(a) The mortgage liability owing to Bank K and secured over the property located at Property A;

(b) the wife's credit card liability owing to Bank K;

(d) the wife's personal tax liability (if any) including any general interest charges applied to such liability;

(e) any other liability that the Wife has incurred in her own name since separation; and

the Wife indemnify and keep indemnified the Husband from all liability howsoever arising therein.

That the Husband be forthwith responsible for and meet payment when due of any liability in the Husband's name (not otherwise dealt with by these orders) including:

(a) the Husband's credit card liability; and

(b) any other liability that the Husband has incurred in his own name or any associated corporate entity;

the husband indemnify and keep indemnified the wife from all liability howsoever arising therein.

Superannuation splitting provision

That Orders 8 to 10 (inclusive) of these Orders are binding on Super Fund T (the Trustee) as Trustee of Super Fund T (the Fund).

That in accordance with Section 90MT(1)(b)(i) of the Family Law Act 1975 (the Act), whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of the Respondent, Mr Beake from his interest in the Fund, the Applicant, Ms Close, is entitled to be paid by the Trustee of the Fund 100% of the splittable payment and there is to be a corresponding reduction in the entitlement Mr Beake would have had but for these Orders.

That pending the payment of the transferrable benefits by the Trustee to the superannuation fund nominated by the Wife, the First Respondent or his agents are restrained from and an injunction is hereby granted restraining the First Respondent or his agents from dealing with the First Respondent's superannuation entitlements in the Fund other than in compliance with these Orders.

10.

The operative time for paragraph 8 is four (4) business days after the service of a copy of these signed and sealed Orders on the Trustees with such orders to be verified as a true and correct copy in accordance with section 148 of the Evidence Act 1995.

Transfer of Scholarship Fund

11.

That within 14 days of the date of these Orders, the First Respondent do all acts and things and sign all documents necessary to transfer to the Applicant all of his right, title, and interest in and to the following scholarship fund held by (Scholarship Fund):

(a) Benefit number (The Education Fund);

(b) Benefit number (Supplementary Education Program); and

12.

That as and from the date of these Orders, the First Respondent or his agents are restrained and an injunction is hereby granted restraining the First Respondent or his agents for dealing with the (Scholarship Fund) other than in compliance with these Orders.

Payment of a cash sum

13.

That within 35 days of the date of these Orders (the date of settlement), the First Respondent pay or cause to be paid to the Applicant's Solicitors' Law Practice Trust Account the sum of $639,000 as and by way of property settlement.

14.

That in the event that the First Respondent does not make the cash payment referred to in Order 13 above within the time stipulated, the First Respondent will be liable to pay interest on any sum outstanding to the Applicant at the rate specified and calculated under rule 17.03 of the Family Law Rules 2004 calculated from the date of settlement until the time of full payment on so much thereof as is from time to time is outstanding.

Security

15.

That in the event of a default under paragraphs 13 or 14, Orders 16 to 25 apply.

16.

That in the event that the First Respondent does not make the payments referred to within the time period stipulated under order 13 above, the Applicant be at liberty to appoint Mr S of Chartered Accountants as Receiver and Manager of:

(a) Company I;

(b) Company F Pty Ltd;

(d) Company G Pty Ltd as Trustee for The Investment Trust;

(The Beake Group)

to enable an orderly sale of so much of the assets of the entities of The Beake Group to enable any cash payments under these Orders to be made to the Applicant.

17.

That the Applicant, by these Orders, is granted a security interest in and to all property owned by any entity compromising The Beake Group in accordance with Section 12 of the Personal Property Securities Act 2009.

18.

That the Applicant and/or the Receiver and Manager be at liberty to perfect the registration of any security interests over any and all assets of entities within The Beake Group in order to secure the interest of the Applicant.

19.

That the Receiver and Manager be, by these Orders, have all necessary powers as set out in the Corporations Act relevant to External Administrators and be at liberty to:

(a) Take control and possession of all assets and undertakings of The Beake Group;

(b) Exercise the Powers of a Director of all entities in The Beake Group;

(d) Call in any and all trade debtors of The Beake Group;

(e) Claw back any payments made by any entity in The Beake Group to any related person or entity for the period six (6) months preceding the date of these Orders;

(f) Have first charge over the receipt of any payments to be made to any entity within The Beake Group as and from the date of these Orders;

(g) Enter into any contract for the sale of any assets of the entities comprising The Beake Group;

(h) Appoint any valuer to undertake valuations of property owned by The Beake Group;

(i) Appoint any agent to sell any item of property owned by The Beake Group on such terms as the Receiver and Manager sees fit; and

(j) Take possession of any item of property, including plant, machinery, equipment (mobile or fixed) vehicles, or aircraft and if necessary impound such property for the duration of his appointment;

20.

That immediately upon default by the First Respondent, then the First Respondent, his employees, servants or agents are hereby restrained and an injunction is granted restraining them from:

(a) Moving any plant, equipment, vehicles or aircraft from their current locations;

(b) Dealing with or disposing of any plant, equipment, vehicles or aircraft owned by The Beake Group;

21.

That upon the appointment of Mr S, the powers of the existing directors are suspended in relation to dealing with the assets of all entities in The Beake Group.

22.

That the cost of and incidental to the appointment of the Receiver and Manager be paid from the realisation of any assets from his appointment in priority to any distributions under these orders.

23.

That the Receiver and Manager is granted a charge over any remaining assets of The Beake Group as and by way of security for the payment of his fees.

24.

That once able to do so, the Receiver and Manager make such payments including any interest on amounts outstanding as calculated by reference to these Orders to the Applicant in accordance with these Orders.

25.

That subject to Orders 31 to 33 below, on the payment of all obligations and costs in favour of the Applicant, the Receiver and Manager be at liberty to account to the First Respondent and Second Respondent as to the balance of any money or property remaining after his obligations under these Orders have been discharged.

26.

That upon the actions occurring at paragraph 25 above, Mr S be discharged as Receiver and Manager.

Miscellaneous

27.

That any duty levied pursuant to the Duties Act 2001 (Qld) payable on transactions arising from these Orders or any documents executed pursuant to these Orders be paid by the transferee spouse or the spouse receiving the benefit of same.

28.

That the parties promptly comply with the requirements of the Duties Act and associated legislation and all requisitions issued by the Office of State Revenue, Department of Natural Resources and Mines, Department of Transport and Main Roads and any other government department in relation to any document executed or transaction pursuant to or putting into effect the terms and conditions of this order. In default of either of the parties hereto complying with any requisition so issued within fourteen (14) days of the date upon which any requisitions issue, the party not in default will be entitled to comply with any outstanding requisition and recover from the other party in default the costs and outlays incurred in complying with any requisition, such costs to be calculated in accordance with the Family Law Rules.

Default provisions

29.

That each party do and procure the doing of all things and sign and procure the signing of all documents necessary to give full force and effect to the provisions of these Orders and in the event either party refuses or neglects to comply with any provision of these Orders within 14 days of a written request to do so, then pursuant to section 106A a Deputy Registrar of this Court at Brisbane is appointed to execute all documents in the name of that party and do all acts and things necessary to give validity and operation to these Orders.

Preparation of transfer documents and costs of preparation

30.

That the transferee spouse prepare the documentation necessary to give effect to the provisions of these Orders at their cost and further be responsible for the payment of registration fees, if any, in relation to the transfer of the property to their name.

Costs

31.

That the First Respondent pay the Applicants costs of and incidental to these proceedings on an indemnity basis.

32.

That the First Respondent be responsible for the payment of costs of any Cost Assessment to be obtained by the Applicant.

33.

That the Receiver and Manager be at liberty to pay such amounts from the sale of any property of The Beake Group as required to meet the order for costs.

Liberty to apply

34.

That the parties and the Receiver and Manager may apply to the Court after giving 7 days written notice to the other party about the interpretation or enforcement of these orders.

NOTATION:

A. That this matter has proceeded by way of undefended hearing in the absence of the First Respondent and the Second Respondent and pursuant to Rule 16.05(2)(a) of the Federal Circuit Court Rules 2001 the First Respondent and the Second Respondent may apply to have these orders set aside.

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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