FEDERAL CIRCUIT COURT OF AUSTRALIA
| COWAN & COWAN | [2016] FCCA 1952 |
| Catchwords: FAMILY LAW – Property – application in a case – application to restrain sale of matrimonial home – application for interim distribution of funds in controlled monies account. FAMILY LAW – Contravention – application – contravention – where application never prosecuted. PRACTICE AND PROCEDURE – Application in a case – application to reopen proceedings. |
| Legislation: Family Law Act 1975 (Cth), ss.75, 79, 81, 106A |
| Cases cited: Baglio & Baglio [2013] FamCA 105 Bevan & Bevan (2013) 49 Fam LR 387; FLC 93-545; [2013] FamCAFC 116 Bremner & Bremner (1994) 18 Fam LR 407; (1995) FLC 92-560 Hickey & Hickey (2003) 30 Fam LR 35; FLC 93-143; [2003] FamCA 395 Money & Money (1994) 17 Fam LR 814; FLC 92-485 Pierce & Pierce (1998) 24 Fam LR 377; [1998] FamCA 74 Stanford v Stanford (2012) 247 CLR 108; 47 Fam LR 481; FLC 93-518 Way & Way (1996) FLC 92-702 |
| Applicant: | MR COWAN |
| Respondent: | MS COWAN |
| File Number: | SYC 4683 of 2013 |
| Judgment of: | Judge Scarlett |
| Hearing dates: | 5-6 August, 18-19 November 2014, 18 December 2015 |
| Date of Last Submission: | 18 December 2015 |
| Delivered at: | Sydney |
| Delivered on: | 27 July 2016 |
REPRESENTATION
| Counsel for the Applicant: | Ms Cohen (direct brief) |
| Counsel for the Respondent: | Mr Sansom SC |
| Solicitors for the Respondent: | McPhee Kelshaw |
ORDERS
All previous Orders are hereby discharged.
Within twenty-eight (28) days from the date of these Orders the Applicant and the Respondent are to do all such things and sign all such documents, instruments, writings and things necessary to give all consents necessary to cause the real property situate at and known as Property W in the State of New South Wales being the whole of the land in Certificate of Title Folio Identifier (omitted) to be listed for sale and sold by public auction at a reserve price and with an Auctioneer to be agreed upon and in default of agreement for seven (7) days at a reserve price and with an Auctioneer to be appointed by the President of the Real Estate Institute of New South Wales acting as Expert not Arbitrator.
In relation to such auction of the property:
(a)The costs for any advertising and Auctioneer’s and other expenses necessary prior to the auction are to be paid by the parties from the controlled monies account with the (omitted) Bank being account number (omitted) in the name of McPhee Kelshaw Pty Ltd CMA atf Ms Cowan & Mr Cowan; and
(b)The parties must cooperate with the President of the Real Estate Institute of New South Wales and with the Auctioneer and Agent appointed…
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- COWAN & COWAN [2016] FCCA 1952
- Case
- [2016] FCCA 1952
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CaseChat Overview and Summary
The court was required to determine the just and equitable distribution of the parties' property and financial resources, considering their respective contributions and various factors outlined in section 75(2) of the *Family Law Act 1975* (Cth). Key issues included the management and sale of the matrimonial home, the allocation of sale proceeds, the resolution of capital gains tax liabilities arising from the sale, the finalisation of partnership taxation affairs, and the division of other assets and liabilities, including business interests and credit card debts. The court also needed to address the costs associated with the sale and the finalisation of taxation matters.
In its reasoning, the court ordered the sale of the matrimonial home, with the proceeds to be applied first to sale costs, then to discharge the mortgage, and thereafter to address capital gains tax liabilities. The court directed that a private ruling be obtained from the Australian Taxation Office to assess capital gains tax. The net proceeds were to be applied towards the Respondent's capital gains tax liability, with a portion allocated to her solicitors, and the remainder to be divided, with 60% to the Respondent and 40% to the Applicant. The Applicant was also ordered to indemnify the Respondent for various liabilities, including capital gains tax on another property and all partnership liabilities. The court further ordered the dissolution of the partnership and the finalisation of its taxation affairs, with the Applicant bearing responsibility for associated costs and liabilities. Various other assets and liabilities were allocated between the parties, with the Applicant receiving sole entitlement to certain business interests and the Respondent retaining her superannuation. The court noted that the parties intended these orders to finally determine all financial relations between them.
Orders
Orders of the court
1.
All previous Orders are hereby discharged.
2.
Within twenty-eight (28) days from the date of these Orders the Applicant and the Respondent are to do all such things and sign all such documents, instruments, writings and things necessary to give all consents necessary to cause the real property situate at and known as Property W in the State of New South Wales being the whole of the land in Certificate of Title Folio Identifier (omitted) to be listed for sale and sold by public auction at a reserve price and with an Auctioneer to be agreed upon and in default of agreement for seven (7) days at a reserve price and with an Auctioneer to be appointed by the President of the Real Estate Institute of New South Wales acting as Expert not Arbitrator.
3.
In relation to such auction of the property:
(a) The costs for any advertising and Auctioneer’s and other expenses necessary prior to the auction are to be paid by the parties from the controlled monies account with the (omitted) Bank being account number (omitted) in the name of McPhee Kelshaw Pty Ltd CMA atf Ms Cowan & Mr Cowan; and
(b) The parties must cooperate with the President of the Real Estate Institute of New South Wales and with the Auctioneer and Agent appointed to act with respect to the sale.
4.
Upon the sale of the said real property the parties must do all acts and things necessary to apply the proceeds of sale in the following order and priority:
(a) In payment of Real Estate Agent’s and Auctioneer’s costs and expenses;
(b) In payment of conveyancing costs and expenses of the sale of the said real property;
(c) In payment of any water and council rate adjustment;
(d) In payment of a sum sufficient to discharge the registered mortgage over the said real property to the (omitted) Bank being registered dealing (omitted);
(e) As to the balance then remaining in accordance with Orders (5) and (6) immediately following.
5.
Prior to any dispersal of the net proceeds of the sale of the said real estate to each of the parties, they must do all things and sign all necessary documents to cause:
(a) a private ruling by the Commissioner to the Australian Taxation Office to assess and calculate the capital gains liability, if any, arising from the sale of the said real property for each of the parties, with payment of any fees to be deducted from the funds held in the said controlled monies account; and
(b) lodgement of the parties’ respective individual tax returns within two (2) months of the new financial year following the sale of the said real property and upon receipt of the Tax Return service on the other party within seven (7) days.
6.
Upon receipt of the private tax ruling by the Commissioner to the Australian Taxation Office, or alternatively should this occur earlier in time, receipt of the Respondent’s individual tax return and assessment from the Australia Taxation Office for the year ending in which the sale of the said real property occurred, the balance then remaining is to be applied:
(a) in payment to the Australian Taxation Office for the capital gains liability for the Respondent, if any;
(b) in payment to the Respondent’s solicitors, McPhee Kelshaw on the Respondent’s behalf to 60%; and
(c) in payment of the balance then remaining thereafter to the Applicant.
7.
The Applicant must indemnify the Respondent and keep her indemnified in relation to any Capital Gains Tax Liability over the said real property whenever and however arising.
8.
The legal work associated with the sale of the said real property is to be conducted by such independent solicitor or licensed conveyancer as agreed in writing between the parties and in default of such agreement within seven (7) days as to the identity of such solicitor or licensed conveyancer the President for the time being of the Law Society of New South Wales or his or her nominee shall act as Expert to appoint such solicitor, with the costs for any expenses necessary for such appointment by the President of the Law Society to be paid by the parties from the said controlled monies account.
9.
The Real Estate Agent appointed to conduct the sale of the property is to be as agreed between the parties and in default of such agreement the parties must do all things necessary and each authorise payment of all fees necessary to have the identity of the Real Estate Agent determined by the President of the Real Estate Institute of New South Wales or his or her nominee to be deducted and paid by the parties from the said controlled monies account.
10.
Pending the sale of the said real property any and all rental moneys received on behalf of the partnership Mr Cowan & Ms Cowan are to be applied towards the periodic mortgage repayments to the Bank (omitted) over the property.
11.
Pending the sale of the property in accordance with these Orders, the Applicant is to be responsible for all mortgage repayments, council and water rates and insurances for the said real property and is to make all such payments as and when they fall due and must indemnify the Respondent and keep her indemnified against all such liabilities whenever and however arising.
12.
Within fourteen (14) days of the date of these Orders each party must sign all necessary documents, instruments, writings and things to instruct or require (omitted) Accountants to finalise the taxation affairs of the parties’ partnership known as Mr Cowan & Mr Cowan and pay all such monies as shall be required out of the said controlled monies account.
13.
The parties must do all acts and things necessary to cause the dissolution of the partnership known as “Mr Cowan and Ms Cowan”.
14.
The Applicant is to indemnify the Respondent and keep her indemnified in relation to all and any liabilities including all taxation liabilities pertaining to the said partnership whenever and however arising.
15.
Within one (1) month of the date of these Orders both parties are directed and ordered to sign all necessary documents, instruments, writings, things or authorities to apply the proceeds of funds held with McPhee Kelshaw Solicitors in a controlled monies account as follows, namely:
(a) in discharge of monies outstanding with respect to the Bank (omitted) Visa Card account number (omitted) in the name of the Respondent but with the liability having been incurred by the Applicant approximating $4,119.00 as at 19 November 2014;
(b) to the Applicant’s credit card debts to an amount not exceeding $93,000.00 and provided all outstanding statements are made available to the Respondent for proof of payments owing;
(c) to the Australian Taxation Office in an amount sufficient to discharge the parties’ joint liability with respect to the Mr Cowan & Mr Cowan partnership; and
(d) of the amount remaining as to 60% to the Respondent and 40% to the Applicant.
16.
Notwithstanding any other order and as between the parties the Applicant is to be declared solely entitled to any and all interest in the business with ABN (omitted) known as:
(a) (business omitted);
(b) (business omitted); and
(c) Mr Cowan
AND the Applicant must indemnify the Respondent and keep her indemnified in relation to any and all liabilities, including taxation liabilities associated with the above business or businesses (business omitted) & (business omitted) and Mr Cowan whenever and however arising.
17.
As between the parties, the Respondent is to retain all interest in her superannuation interest with (omitted) Super.
18.
As between the parties the Applicant is to be responsible for paying as and when they fall due all costs the Applicant and Respondent have incurred with (omitted) Accountants in relation to all outstanding monies owed to them in relation to the preparation of the personal taxation returns and estimates of tax payable of the Applicant and the Respondent and the partnership up to the current financial year and the Applicant must indemnify the Respondent and keep her indemnified in relation to the said costs.
19.
The Applicant must indemnify the Respondent and keep her indemnified with respect to any and all Capital Gains Tax with respect to the sale of her property at Property R in the State of New South Wales together with any tax payable with respect to the partnership Mr Cowan & Mr Cowan whenever and however arising.
20.
As between the parties the Applicant is to be responsible for all liabilities arising from credit card debts in his sole name and the Applicant must indemnify the Respondent and keep her indemnified in relation to the said credit card debts whenever and however arising.
21.
Subject to the above Orders the Applicant and the Respondent are to have the sole right, title and interest in:
(a) any chattels, goods, furnishings and other property not previously dealt with as part of these orders which are, at the date of these Orders in their possession respectively;
(b) any monies, shares, debentures and superannuation entitlements not previously dealt with as part of these Orders which stand in their sole name respectively as to the date of these Orders; and
(c) each party must do all things necessary including providing all consents and executing all documents and writings necessary to give effect to these orders in the time periods prescribed in these Orders.
22.
In accordance with section 81 of the Family Law Act 1975 the parties intend these Orders to determine finally all financial relations and issues between them and avoid further proceedings between them.
23.
Both parties are hereby ordered to sign all necessary documents, instruments, writings and things and to sign any necessary authority to give effect to these Orders.
24.
In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these Orders within fourteen (14) days of being requested to do so, the Registrar or a Deputy Registrar of the Court is appointed under the provisions of section 106A of the Family Law Act 1975 to execute such deed, document or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed, document or instrument upon the Registrar or Deputy Registrar being provided with such verification of such refusal or failure by way of affidavit.
25.
The Application-Contravention filed on 7 February 2014 is dismissed.
26.
The Application in a Case filed on 10 April 2014 is dismissed.
27.
The Application in a Case filed on 1 September 2015 is dismissed.
28.
The Application in a Case filed on 24 November 2015 is dismissed.
29.
All other Applications are dismissed.
THE COURT NOTES THAT
The parties have sold the former matrimonial home at Property L in the State of New South Wales and the net proceeds of the sale are held in a Controlled Money Account with the (omitted) Bank being account number (omitted) in the name of McPhee Kelshaw Pty Ltd CMA atf Ms Cowan & Mr Cowan.
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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