D'Cruz and Pierce and Ors (No. 2)

[2008] FamCA 988

FAMILY COURT OF AUSTRALIA

D’CRUZ & PIERCE AND ORS (NO. 2) [2008] FamCA 988

FAMILY LAW – PROPERTY – Transaction to defeat claim – Orders

APPLICANT: Ms D’Cruz

RESPONDENT: Mr M Pierce

SECOND RESPONDENT:	Mr C Pierce
THIRD RESPONDENT	DM Ltd
FOURTH RESPONDENT	K Nominees Ltd

FIFTH RESPONDENT	Mr T
SIXTH RESPONDENT	MT Trustees Ltd

FILE NUMBER: MLF 3135 of 2004

DATE DELIVERED: 29 October 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Dessau J

HEARING DATE: 29 October 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr D.J. Brown SC

SOLICITOR FOR THE APPLICANT: Kennedy Wisewoulds

COUNSEL FOR THE RESPONDENT: Mr P.M. O'Shannessy

SOLICITOR FOR THE RESPONDENT: Griffin Sweeney Lawyers

COUNSEL FOR THE SECOND RESPONDENT Mr Aldridge SC

SOLICITOR FOR THE SECOND RESPONDENT	Taylor Splatt & Partners
SOLICITOR FOR THE FIFTH RESPONDENT	White Cleland
COUNSEL FOR THE FIFTH RESPONDENT	Mr Grant

Orders

IT IS DECLARED

1. That the purported equal partnership agreement entered into orally between the husband and the second respondent Mr C Pierce in March 1996 is a sham and of no effect.

1. That the written agreement dated 14 June 1996 between the husband and the second respondent Mr C Pierce is a sham and of no effect.

1. That from 31 March 1996, the husband was the beneficial owner of the shares in the company K Australia Pty Ltd (CAN …) known as K 1 Pty Ltd

IT IS ORDERED

1. That order 1 of the orders made on 4 April 2005 (as amended), order 2 of the orders made on 5 February 2008 and order 1 of the orders made on 29 May 2008 be discharged.

1. That until further order the second respondent Mr C Pierce be restrained by himself, his servants and/or agents from:

5.1      Resigning from any office or power of appointment held by him in any of the following corporate entities or trusts:

5.1.1   PK Pty Ltd;

5.1.2   LO Pty Ltd;

5.1.3   VH Holdings Pty Ltd;

5.1.4   G Investments Pty Ltd;

5.1.5   PH Pty Ltd;

5.1.6   MT Trust;

5.1.7   DM Trust,

5.1.8   GN Trust;

5.1.9   The Education Trust; and

5.1.10  C Pierce Trust,

("the corporate entities").

5.2      Selling, alienating, encumbering, dealing with or otherwise doing any act or thing reasonably likely to have the effect of reducing the value of:

5.2.1   Any property, both real or personal, in which he has a legal or beneficial interest; and

5.2.2   Any property, both real and personal, held in the name of any of the corporate entities;

5.3      Removing, replacing or altering any of the trustees of the MT Trust or the DM Trust save in the event that he seeks to do so by reason of the circumstances contemplated by notation "A" of the orders made on 5 February 2008,

SAVE THAT this order does not preclude:

(a)       Any of the named entities from meeting, with the consent of the husband and the wife first obtained, any demands or assessments received from the Australian Taxation Office (for tax, interest or penalties) from being paid;

(b)       The Education Trust from paying education costs for the grandchildren of the second respondent (subject to the provision by the second respondent of an accounting of all school fees paid to date from that Trust);

(c)       The second respondent accessing his superannuation entitlements or personal bank accounts referred to in his financial statement filed on 6 March 2008;

(d)       Expending monies of the C Pierce Trust to complete construction/ renovation of the Bayside property owned by the Trust subject to the second respondent providing to the wife details and documents as to all monies expended pursuant to this order;

(e)       Selling the Coastal property provided that the wife first consents in writing.

1. That the solicitors for the wife serve a sealed copy of these orders upon the solicitors for the sixth respondent by sending the said orders to the solicitors for the sixth respondent by way of facsimile transmission.

1. That the second respondent provide to the wife a detailed accounting for all monies received by him or paid at his direction since 1 January 2008 from the MT Trust.

1. That pursuant to s106B of the Family Law Act 1975 the deed of retirement executed by the husband and the fifth respondent dated 29 November 1997 be set aside.

1. That within 7 days of the said deed of retirement being set aside, the husband, the wife and the fifth respondent do all such acts and sign all such documents as may be necessary to appoint the husband and wife as directors and equal shareholders of BNE Pty Ltd in lieu of the fifth respondent.

1. That upon the husband and the wife being appointed directors and equal shareholders of BNE Pty Ltd, the fifth respondent do all such acts and things as may be necessary to deliver up to the solicitors for the wife all files, documents and records with respect to the M Pierce Trust to be held on behalf of the M Pierce Trust and made available to the husband at his request.

1. That within 7 days of the date of these orders, the second respondent do all such acts and sign all such documents as may be necessary to retire as guardian of the M Pierce Trust.

1. That any party wishing to seek any order for costs arising from the May 2008 proceedings shall file and serve written submissions by 31 January 2009 in support of such an order (including details of the order sought).

1. That any party against whom costs are sought shall file and serve any written submissions in response by 28 February 2009.

1. That pursuant to section 128(7) of the Evidence Act, a certificate issue to the second respondent in relation to the following passages of evidence referred to in the following pages of transcript:

14.1    Pages 37-45 23.05.2008 am;

14.2    Pages 24-26 - 26.05.2008;

14.3    Pages 78-79 - 26.05.2008;

14.4    Pages 83-92 - 26.05.2008;

14.5    Pages 8-23 - 27.05.2008.

IT IS ORDERED BY CONSENT

1. That on or before 12 December 2008 the husband and the second respondent C Pierce forward to the wife, in writing, the approach that either of them wish to make to the Australian Taxation Office ("the ATO") and the subject matter of these proceedings together with the expected quantum of any taxation and penalties (if any) arising from such approach, if accepted by the ATO ("the approach").

1. That on or before 31 January 2009, the wife advise the husband and C Pierce, in writing, of any disagreement she has as to the approach.

1. That on or before 14 February 2009 the parties and their advisors confer as to any disagreement as to the approach of the parties to the ATO.

1. That there be liberty to apply as to any difficulty with the approach of the parties or any of them to the ATO.

1. That the docketed Registrar is requested to arrange a telephone mention with all parties in around the last week of March 2009 to ascertain the progress of the ATO issues and the wife's amended application tendered on 20 May 2008 (Exhibit W2) shall be adjourned to that date.

IT IS NOTED that publication of this judgment under the pseudonym D'Cruz & Pierce is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 3135 of 2004

MS D’CRUZ

Applicant

And

MR M PIERCE

Respondent

REASONS FOR JUDGMENT

1. I gave judgment in this case on 19 September 2008. The parties were then to make submissions as to the form of the orders. That has finally occurred this morning. The form of some of the orders has been agreed. There is at least consensus in relation to others. There is one main area of dispute. It is as to whether I should make s106B of the Family Law Act orders, in addition to the declarations about the sham agreements.

2. The s106B orders arise from the wife's alternative claim. I put to one side the s106B order in relation to the Deed of Retirement which will be made in its own right, not as an alternative order.

3. The case was run before me on the basis that if the primary issue in relation to the purported March and June 1996 agreements were decided on the basis that they were not genuine and therefore did not exist, that was an end to this part of the matter.

4. I dealt with wife's alternative s106B application in my reasons for judgment to ensure that the parties had the full fruits of their litigation, it being the alternative issue before me.

5. Senior Counsel for the wife submits today that I should make the s106B orders, in addition to the declarations that he primarily sought in the case. He submits that otherwise, if the Full Court were to set aside the declarations in the event of an appeal, the s106B part of the case could not be determined, an appeal lying only against orders and not against findings.

6. Mr Brown SC for the wife urges me not to leave the wife in a precarious position whereby one appeal could be heard, the case remitted for s106B orders, and then a further appeal, with all the associated costs and delay.

7. Mr Aldridge SC for the husband’s father, the second respondent, joined by Mr O'Shannessy for the husband, submits that it would be inconsistent to make both sets of orders.  That was apparent in the draft orders for the wife, whereby after a declaration that the agreements never existed, I would then be ordering that the very same agreements be set aside.  He pointed to the implicit confusion for, for example, the Commissioner for Taxation, who needs to understand the basis upon which he is assessing taxation following these orders being made.

8. As to an appeal, Mr Aldridge submits there is no risk of two appeals. The Full Court would most likely deal with the various contentions rather than permitting the case to proceed in the way foreshadowed by Mr Brown. In any event, the wife's position could be specifically protected by a Notice of Contention placing the s106B aspect squarely before the Full Court. Mr Brown did not appear to have any cogent argument against that.

9. No authorities were cited.  It seems to be a matter of logic that I cannot and should not make what would effectively be alternative orders.  I agree with the submissions on behalf of the second respondent and the husband in that respect.

10. As to the certificate under s 128 of the Evidence Act1995 (Cth) in favour of C Pierce, the orders shall reflect that s 128(7) shall apply to C Pierce’s evidence as recorded on the transcript pages submitted by Senior Counsel on his behalf this morning.

I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dessau

Associate: 

Date:  29 October 2008