Cull & Lenz
[2021] FedCFamC1F 235
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Cull & Lenz [2021] FedCFamC1F 235
File number(s): SYC 6598 of 2017 Judgment of: REES J Date of judgment: 26 November 2021 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE –
Trustee for sale – Orders to facilitate settlement.Legislation: Family Law Act 1975 (Cth) s 117(2A) Division: Division 1 First Instance Number of paragraphs: 20 Date of hearing: 26 November 2021 Place: Sydney Solicitor for the Applicant: Nolan Lawyers First Respondent: Self-Represented Solicitor for the Second Respondent: Auyeung Hencent & Day Lawyers Trustee for Sale: Mr BC, AMS Lawyers ORDERS
SYC 6598 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR LENZ
Applicant
AND: MS CULL
First Respondent
MR DEA
Second Respondent
MR BC
Trustee for Sale
ORDER MADE BY:
REES J
DATE OF ORDER:
26 NOVEMBER 2021
THE COURT ORDERS:
1.That Mr BC, the trustee for sale of the property at EE Street, Suburb FF (“the property”) be authorised to make application for the Foreign Resident Capital Gains Withholding Clearance Certificate, a copy of which is annexed to these orders, on behalf of the vendor of the property.
2.That Mr BC have leave to provide a copy of these orders to the Australian Taxation Office.
3.That the wife pay the husband’s costs of this application in the sum of $2,000.
4.That the solicitor for the husband serve a copy of these orders and reasons for judgment upon the Australian Taxation Office.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Cull & Lenz has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Rees J:
These proceedings for property settlement between Mr Lenz (“the husband”) and Ms Cull (“the wife”) have a long and tortured history but they are listed for final hearing commencing on 9 February 2022.
In the course of the preparation for trial, it has been necessary to make orders on 19 March 2021 appointing Mr BC trustee for sale of a property at EE Street, Suburb FF of which the wife is the registered proprietor.
Orders which were made on 24 November 2020 which provided for the disposition of the proceeds of sale of the Suburb FF property, after discharge of the mortgage and other specified payments. Those orders made specific provisions for the balance of the proceeds of sale to be paid into a controlled monies account held by the husband’s solicitors. It is anticipated that the balance to be held is about $1,800,000.
The Suburb FF property has been sold and the purchaser is ready to settle the transaction.
Mr BC has sworn an affidavit in support of this application where he deposes that:
2.Before completion of the sale of [the [Suburb FF] property], a vendor may, but is not required to, apply for a Foreign Resident Capital Gains Withholding Clearance Certificate (“the FRCGWC Certificate”) and provide the Certificate to the purchaser.
3.If the FRCGWC Certificate is not provided to the purchaser before completion of the sale of the Property, the purchaser is required to remit on completion to the Australian Taxation office (“ATO”) part of the purchase price in the amount equal to 12.5% of the purchase price, being $462,500 (“the withholding amount”).
4.This Withholding Amount will be held by the ATO and [the wife] may claim credit for he Withholding Amount once she lodges her tax return at the end of the financial year following settlement.
(As per original)
Mr BC has been informed by the Australian Taxation Office (“the ATO”) that he can make application for the Foreign Resident Capital Gains Withholding Clearance Certificate (“the FRCGWC Certificate”) on behalf of the wife if he is authorised to do so by order of the court.
On 11 June 2021, Mr BC sent an email to the wife asking for her authorisation to apply on her behalf for the FRCHWC Certificate. She did not respond.
Mr BC deposed that on 22 June 2021 he sent an email to the solicitor then acting for the wife asking for the authorisation but did not receive a relevant response.
On 22 June 2021, Mr BC spoke to the wife by telephone.
He then sent an email to the wife’s then solicitor stating, inter alia:
…I note that I just spoke to [the wife] over the phone. As I understand it, [the wife] wished to:
1.Advise me that you are now retained to represent her in relation to the sale of the Property in accordance with the Orders made in the proceedings on 19 March 2021 and 24 November 2020 – please advise if this is not correct; and
2.Request that I direct payment of proceeds of sale of the Property to your trust account and that I make certain payments in relation to the costs of the sale to [the wife].
I advised [the wife] that I am only able to process the payments of the proceeds of sale of the Property in accordance with the Orders made in the Proceedings on 19 March 2021 and 20 November 2020. Accordingly, if [the wife] wishes to request that the proceeds of sale be distributed in any other way (including to her and/or your trust account), I will need to be served with Court orders to that effect.
On 8 November 2021, the solicitor for the husband wrote to the wife enclosing a Minute of an Order authorising Mr BC to apply for the certificate and further advising that if it were necessary to make an application to the court seeking the orders set out in the Minute, costs would be sought against the wife in respect of that application. The wife did not respond.
The husband filed an application on 11 November 2021.
The application was served upon the wife by email on 11 November 2021. The wife has been notified by email of the listing of the application before me by the husband’s solicitor on 18 November 2021 and by the court on 22 November 2021. I am satisfied that she is aware of the proceedings today as an email was sent to the Court by an associate of the wife this morning advising that she would not attend. No adjournment was sought.
In the event that FRCGWC Certificate is not provided on settlement, $462,500 will be paid to the ATO and held on the wife’s behalf by the ATO, thus effectively partially defeating the orders made for the preservation of the proceeds of sale so that they can be distributed by the Court.
It is not intended by the making of these orders to defeat the interest of the ATO in being paid the appropriate capital gains tax, if any, on the sale of the property. I propose to direct the solicitors for the husband to provide a copy of these orders and reasons for judgement to the ATO who are entitled, as of right, to intervene in the proceedings and seek orders if they are so advised.
In the event that the ATO does not seek to intervene, the orders in the substantive proceedings will make provision for the payment of the capital gains tax before distribution of the proceeds of sale.
COSTS
The husband seeks an order that the wife pay the costs of this application.
That application is governed by the provisions of s117(2A) of the Family Law Act 1975 (Cth).
Relevantly, this application was made necessary because of the wife’s refusal to co-operate with the trustee for sale.
She will be ordered to pay the husband’s costs in the sum of $2,000 as sought.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees. Associate:
Dated: 26 November 2021
0
0
0