FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Emmerton & Manwaring (No 2) [2024] FedCFamC2F 966
File number: ADC 4841 of 2017 Judgment of: JUDGE BROWN Date of judgment: 26 July 2024 Catchwords: FAMILY LAW – PROPERTY – final hearing – marriage of 28 years – marriage produced two children whom are now adult – where the parties operated a small family business – where the husband attended to the physical aspects of business and the wife attended to administration and accounts aspects – where the husband placed the company into liquidation during the part-heard trial without notice to the wife – where loans were taken from the business in respect no liability for tax has been calculation – where the parties have an inchoate debt to the Australian Tax Office – where the family Trust holds various properties – consideration of one party’s non-compliance with previous orders of this court – consideration of add backs – where a two pool approach is adopted – assessment of future needs – considerations of just and equitable – waste – matters to be considered Legislation: Corporations Act 2001 (Cth)
Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) Pts VIII, VIIIB, ss 75(2), 79, 106A
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 190
Income Tax Assessment Act 1936 (Cth) Div 7A
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Div 6.1.2, r 12.06
Cases cited: Benson & Drury (2020) FLC 93-998
Bevan & Bevan [2013] FamCAFC 116
Black & Kellner (1992) FLC 92-287
Biltoft & Biltoft (1995) 19 Fam LR 82
Briese & Briese (1986) FLC 91-713
Browne & Green (1999) 25 Fam LR 482
Chang v Su [2002] HCA Trans 549
NHC & RCH (2004) 32 Fam LR 518
Clauson & Clauson (1995) 18 Fam LR 693
D & D [2003] FamCA 473
DJM & JLM (1998) 23 Fam LR 396
Dickons & Dickons (2014) 50 Fam LR 244
Ferguson & Ferguson (1978) FLC 90-500
Fields v Smith (2015) FLC 93-638
Ferraro v Ferraro (1992) 16 Fam LR 1
Fox v Percy (2003) 214 CLR 118
Hickey & Hickey (2003) 30 Fam LR 355
Kennon & Kennon (1997) FLC 92-757
Kowaliw and Kowaliw (1981) FLC 91-092
Kucera & Kucera (2009) FMCAfam 1032
Emmerton & Manwaring [2023] FedCFamC2F 476
Lemnos & Lemnos [2007] FamCA 1058
L & L [2003] FamCA 40
Luciano & Luciano [2000] FamCA 401
Mallett & Mallett (1984) 156 CLR 605
Marker & Marker [1998] FamCA 42
AJO & GRO (2005) 33 Fam LR 134
Prince & Prince (1984) FLC 91-501
Rodgers & Rodgers (No 2) [2016] FamCAFC 104
Rosati v Rosati (1998) FLC 92-804
Russell & Russell (1999) 25 Fam LR 629
Stanford & Stanford [2012] HCA 52
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Townsend & Townsend (1994) 18 Fam LR 505
Trevi & Trevi [2018] FamCAFC 173
Waters & Jurek (1995) 20 Fam LR 190
Watson & Ling [2013] FamCA 57
Weir & Weir (1993) FLC…
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- AGLC
- Emmerton & Manwaring (No 2) [2024] FedCFamC2F 966
- Case
- [2024] FedCFamC2F 966
- Decision Date
CaseChat Overview and Summary
The court adopted a two-pool approach, considering both the accumulation pool and the non-accumulation pool. The reasoning included the assessment of future needs, just and equitable considerations, and the impact of waste by one party. The court also took into account non-compliance with previous orders and the add-back principle. The outcome mandated the distribution of specific properties and assets to the wife, with the husband required to vacate one property and place another on the market for sale under specified terms. Additionally, the wife was declared the beneficial owner of certain properties within the family trust. The husband was to transfer his interest in the former matrimonial home to the wife, subject to certain conditions, or alternatively, the property was to be sold under court-specified terms. The parties were also directed to indemnify each other against various liabilities and to undertake calculations for anticipated capital gains tax.
The final orders included the distribution of proceeds from the sale of specific properties, the transfer of interests in certain properties, and the indemnification of the parties against various liabilities. The court also specified the retention of personal property by each party, free from further claims by the other. The orders further required the parties to execute necessary documents within stipulated timeframes to effect these arrangements, with provisions for judicial intervention if either party failed to comply. All extant applications were dismissed as finalised.
Orders
Orders of the court
ADC 4841 of 2017
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:
MS EMMERTON
Applicant
AND:
MR MANWARING
Respondent
ORDER MADE BY:
JUDGE BROWN
DATE OF ORDER:
26 JULY 2024
THE COURT ORDERS THAT IN FULL AND FINAL SETTLEMENT OF ALL CLAIMS FOR ALTERATION OF PROPERTY PURSUANT TO PART VIII OF THE FAMILY LAW ACT 1975 (CTH) (AS AMENDED):
K Street, Town L
1. The proceeds of sale of the property situate at K Street, Town L in the State of South Australia, described in Certificate of Title Book Volume … Folio … (“the Town L property”) remaining in the Trust Account of Tindall Gask Bentley, be distributed to the wife.
C Street, Suburb D
2. The proceeds of sale of the property situate at C Street, Suburb D in the State of South Australia, described in Certificate of Title Book Volume … Folio … ("the Suburb D property") remaining in the Trust Account of Tindall Gask Bentley, be distributed to the wife.
Net Proceeds of sale of the Livestock
3. The proceeds from the sale of livestock held in the Trust Account of Tindall Gask Bentley be distributed to the wife.
AB Street, Suburb AC
4. Within twenty-one (21) days of the date of this order the husband do vacate the property situate at AB Street, Suburb AC in the State of South Australia described in Certificate of Title Volume … Folio … (“the Suburb AC property”) and deliver up the keys and any other means of entry to the Suburb AC property to the wife or such other person nominated to him or his solicitor by her or by her solicitor.
5. Within sixty (60) days of the date of this order the parties shall do all things and execute all documents necessary to place the Suburb AC property on the market for sale on the following terms and conditions:
(a) The wife be appointed sole agent to sell the property;
(b) The wife provide all instructions to the said sales agent and conveyancer to give effect to these orders including but not limited to:
(i) The method of sale;
(ii) Advertising and marketing of the property;
(iii) The execution of the contract of sale;
(iv) Release of the settlement statement;
(v) Ascertain the status of rates and payments and any information as to any utility accounts outstanding in respect of the Suburb AC property; and
(vi) The payment of the proceeds of sale in accordance with these orders;
(c) The nominated reserved price be not less than $650,000.00 (SIX HUNDRED AND FIFTY THOUSAND DOLLARS) unless the appointed sales agent recommends a higher figure or the parties agree on a lower figure and in absence of agreement as to such lower figure, it is to fixed by the court;
(d) Upon the sale of the Suburb AC property the net proceeds be distributed in the following manner and priority:
(i) Pay all costs (including commission) and expenses of sale and conveyancing to the relevant persons;
(ii) Reimburse the wife for any reasonably incurred costs to clean the Suburb AC property preparing it for sale;
(iii) Pay arrears of all rates, taxes and outgoings with respect to the Suburb AC property of whatsoever nature and kind;
(iv) To the wife by payment to the Trust Account of Tindall Gask Bentley, such sum as calculated by Mr R that shall be sufficient to meet the anticipated capital gains tax associated with the sale of the Suburb D, Town L and Suburb AC properties, to be drawn upon to pay any assessment of capital gains tax upon issued by the Australian Tax Office;
(v) The parties’ son Mr X be reimbursed TWENTY ONE THOUSAND, FIVE HUNDRED AND SEVENTY SEVEN DOLLARS AND SIXTY SIX CENTS ($21,577.66) to discharge the joint liability in respect of the AA Bank; and
(vi) Any proceeds remaining in the Trust Account of Tindall Gask Bentley to be distributed as follows:
A. 70% to the wife;
B. A further and additional sum of FIFTY THOUSAND DOLLARS ($50,000.00) to the wife; and
C. The remaining proceeds to the Starke Lawyers Trust Account for the husband.
P Street, Suburb Q
6. It is declared that the husband is the beneficial owner of the equity in the former matrimonial home being the property situate at P Street, Suburb Q in the State of South Australia described in Certificate of Title Volume … Folio … (“the Suburb Q property”) subject to him satisfying the conditions stipulated in order (7) hereof.
7. Within sixty (60) days of the date of this order, the parties do all things and execute all necessary documents required of them to transfer the wife’s interest in the Suburb Q property to the husband and discharge mortgage registered number … held by H Pty Ltd (“the Suburb Q mortgage”) in the wife’s name at the husband’s sole expense in accordance with the following orders and directions:
(a) The husband is to make all necessary inquiries to obtain the finance necessary to transfer of the Suburb Q property to him and to discharge the Suburb Q mortgage and advise the wife of the financier retained by him to this effect;
(b) Upon the husband advising the wife of the financier selected by him, the wife will sign all necessary documents presented to her by the husband to discharge the Suburb Q mortgage and transfer her legal interest in the Suburb Q property to the husband at the husband’s sole expense; and
(c) The husband shall be liable for and indemnify the wife against all rates, taxes, and outgoings with respect to the Suburb Q property;
8. In the event the husband is unable to obtain the necessary finance and discharge the Suburb Q mortgage pursuant to order 7(a), within ninety (90) days of the date of this order, the parties do all things and execute all documents necessary as to place the Suburb Q property on the market for sale on such terms and conditions as follows:
(a) The wife be appointed sole agent to sell the property;
(b) The wife provide all instructions to the said sales agent and conveyancer to give effect to these orders including but not limited to:
(i) The method of sale;
(ii) Advertising and marketing of the property;
(iii) The execution of the contract of sale;
(iv) Release of the settlement statement;
(v) Ascertain the status of rates and payments and any information as to any utility accounts outstanding in respect of the Suburb Q property; and
(vi) The payment of the proceeds of sale in accordance with these orders;
(c) The nominated reserved price be not less than $850,000.00 (EIGHT HUNDRED AND FIFTY THOUSAND DOLLARS) unless the appointed sales agent recommends a higher figure or the parties agree on a lower figure and in absence of agreement as to such lower figure, it is to fixed by the court;
(d) Upon the sale of the Suburb Q property the net proceeds be distributed in the following manner and priority:
(i) Pay all costs (including commission) and expenses of sale and conveyancing to the relevant persons;
(ii) Discharge the Suburb Q mortgage;
(iii) Reimburse the wife for any reasonably incurred costs to clean the property preparing it for sale;
(iv) Pay arrears of all rates, taxes and outgoings with respect to the Suburb Q property of whatsoever nature and kind;
(v) The remainder of the sale proceeds be deposited into the Trust Account of Starke Lawyers for and on behalf of the husband.
Manwaring Family Trust
9. It is declared that the wife is the beneficial owner of the properties located at 1 Y Street, Suburb Z in the State of South Australia as described in Certificate of Title Volume … Folio … and 2 Y Street, Suburb Z in the State of South Australia as described in Certificate of Title Volume … Folio … (“the Suburb Z properties”)
10. To this end within thirty (30) days of the date of this order, the parties do all things and execute any necessary documents which may be required of them to this effect of order (9) hereof and in particular:
(a) To transfer the husband’s right, title and interest in the Manwaring Family Trust (“the Trust”) to the wife including (but not limited to) any equitable interest held by him in the Suburb Z properties to the wife at the wife’s cost;
(b) The wife indemnify and keep indemnified the husband in respect of all liabilities in particular those register pursuant to mortgage number … in favour of H Pty Ltd and other outgoings relating to the Suburb Z properties including potential capital gains tax.
(c) If deemed necessary by the wife in her sole discretion to give effect to these orders is at liberty to remove the husband as a beneficiary or member of any class of beneficiaries of the Trust.
B Pty Ltd
11. In relation to B Pty Ltd (in liquidation) (“the Company”):
(a) Within thirty (30) days of the date of this order, the wife do all things and execute all necessary documents to:
(i) Transfer, at the husband's expense, her interest in any debit or loan account of the Company to the husband to the intent that the wife thereafter will have no further claim against the husband in relation to the Company or against the Company in relation to the assets of the Company and any monetary entitlement which either party may have in the Company including without limiting the generality of the foregoing any loan account of the husband or the wife in the Company or as to wages or dividends or otherwise either in the past, the present or in the future and any such monetary entitlement of the wife shall thereafter vest with the husband;
(b) The husband shall indemnify the wife and keep her forever indemnified in relation to any current or future liabilities arising out of or in respect of to the Company or the wife’s shareholding or any office in the Company;
(c) The husband shall further indemnify the wife and keep her forever indemnified in relation to any or all liabilities in the future arising out of or in respect of the Company or in the wife’s office in the Company or as a shareholding of the Company including (without limiting to the generality of the foregoing) any past, present or future income tax, capital gains tax, goods and services tax, directors' loans, Division 7A loans or other liability of the wife and/or of the husband and/or the Company;
(d) The husband shall cause to be forgiven, any debt or loan balance owed by the wife to the Company; and
(e) The husband shall indemnify and keep indemnified the wife from any claim, demand, suit, cost or action of the Company against the wife.
12. The parties do all things and execute all necessary documents and pay all monies equally to cause Mr R, Accountant, to undertake the calculation of any anticipated capital gains tax pursuant to these orders.
13. Including but without limiting the effect hereof, the wife shall retain for her sole use and benefit absolutely free from any further claim or demand of the husband:
(a) The property situate at BB Street, Town CC;
(b) Her motor vehicle;
(c) The clothing, jewellery and personal effects currently in her possession;
(d) The furniture and household effects currently in her possession;
(e) All amounts standing to her credit in any bank, building society or Credit Union account;
(f) Her Super Fund 1 superannuation entitlements standing in her own name without adjustment; and
(g) All other property in her possession or control whether registered in her name or not and not otherwise specified herein.
14. Including but without limiting the effect hereof, the husband shall retain for his sole use and benefit absolutely free from any further claim or demand of the wife:
(a) His motor vehicles;
(b) The clothing, jewellery and personal effects currently in his possession;
(c) The furniture and household effects currently in his possession;
(d) All amounts standing to his credit in any bank, building society or Credit Union account held in his sole name or in the name of DD Company;
(e) His Super Fund 2 superannuation entitlements standing in his own name without adjustment; and
(f) All other property in his possession or control whether registered in his name or not and not otherwise specified herein.
15. The parties shall do all acts and things reasonably required including the signing or execution of all necessary documents to give effect to the terms of this order within seven (7) days of being requested to do so.
16. That without prejudice to any other relief that may be available to a party, that if either party shall refuse or neglect or omit to execute any document necessary to give effect to the terms of these orders within seven (7) days after the same shall have been tendered to that party by or on behalf of the other party then in such event of refusal, neglect or omission a Judicial Registrar, Senior Judicial Registrar or other judicial officer of this Court or of any court exercising jurisdiction under section 106A of the Family Law Act 1975 (Cth) upon proof by affidavit of such refusal, neglect or omission is hereby appointed to execute and if in that judicial officer’s opinion it shall be necessary to do so to settle the same and do all such other acts and things and execute such other documents as shall be necessary to give full force and effect to these orders.
17. All extant applications be dismissed as finalised.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
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