FAMILY COURT OF AUSTRALIA
FARADAY & MCKENZIE [2007] FamCA 1626
FAMILY LAW – PROPERTY – Settlement in relation to marriage
Family Law Act 1975 (Cth)
MMAL Rentals Pty Ltd v Bruning (2005) 63 NSWLR 167
Mopeke Pty Ltd and Ors v Airport Fine Foods Pty Ltd and Ors [2007] NSWSC 153
In the Marriage of Chick (1987) Fam LR 64
Dean v Dean (1988) FLC 91-982
M & M [2002] FamCA 349
Australian Family Law and Practice at [36-370]
Ramsay v Ramsay (1997) FLC 92-742
Sapir v Sapir (No 2) (1989) FLC 92-047
Georgeson and Georgeson (1995) FLC 92-618
Hull and Hull (1983) FLC 91-360
Turnbull and Turnbull (1991) FLC 92-258
M & M (unreported No CA1542 of 1990)
M & M (unreported No S2132 of 1992)
W & W (unreported No BR9107 of 1995)
Reynolds and Reynolds (1985) FLC 91-632.
M & M [2005] FamCA 1211
SL v EHL [2005] FamCA 132
V & H [2005] FamCA 191 (Moore J)
T & D [2004] FamCA 1160 (Strickland J)
T & T [2001] FamCA 230 (Ellis, Coleman and O’Ryan JJ)
Harrison v Harrison (1996) FLC 92-682 (Ellis, Baker and Warnick JJ)
Orrong Strategies Pty Ltd v Village Roadshow Ltd [2007] VSC 1 (unreported, Supreme Court of Victoria) (Habersberger J)
Surf Road Nominees Pty Limited and Ors v Tass James and Ors [2004] NSWSC 61 (Einstein J)
Hosking v Ipex Software Services Pty Ltd [2004] VSC 299 (unreported, Supreme Court of Victoria) (Habersberger J)
Dismin Investments Pty Ltd v Commissioner of Taxation [2000] FCA 1703 (Heerey J)
Holt & Anor v Cox (unreported, New South Wales Court of Appeal) (Mason P, Priestley JA and Cole JA).
APPLICANT: Ms Faraday
RESPONDENT: Mr McKenzie
FILE NUMBER: SYF 3543 of 1999
DATE DELIVERED: 21 December 2007
PLACE DELIVERED: Sydney
PLACE HEARD: Sydney
JUDGMENT OF: Justice O'Ryan
HEARING DATE: 5, 6, and 7 March 2007, 16 April 2007 and 30 May 2007 REPRESENTATION
COUNSEL FOR THE APPLICANT: Mr Lethbridge
SOLICITOR FOR THE APPLICANT: Swaab Attorneys
COUNSEL FOR THE RESPONDENT: Mr Lloyd
SOLICITOR FOR THE RESPONDENT: Paul & Paul Lawyers
ORDERS
1.By 4.00 pm on 23 February 2008 the Wife do all acts and things and execute all deeds, documents, instruments and writings as may be necessary to transfer to the Husband the whole of her right, title and interest in and to the property situate at and known as …, C in the State of New South Wales being the land in Folio Identifier ….
2.By 4.00 pm on 23 February 2008 and contemporaneous with the transfer in Order 1 hereof the Husband pay to the Wife the sum of $1,092,259.
3.In the event that the Husband fails to comply with Order 2 hereof by the due date then the Husband also pay to the Wife interest on the sum outstanding and otherwise due to be paid by the Husband in accordance with Order 2 hereof at the rate prescribed in the Family Law Rules on such amount calculated as and from the date of…
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- Faraday and McKenzie [2007] FamCA 1626
- Case
- [2007] FamCA 1626
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CaseChat Overview and Summary
The primary legal issues before the court were the equitable distribution of the parties' assets and liabilities, including the transfer of property, payment of sums of money, discharge of mortgages, and the division of superannuation interests. The court also had to consider provisions for the sale of property in the event of non-compliance with certain orders, and the allocation of tax liabilities arising from capital gains. Furthermore, the court was tasked with ensuring that each party was indemnified against future claims relating to certain entities and the superannuation fund.
Justice O'Ryan applied principles of family law concerning property settlement, including the consideration of superannuation interests under section 90MT of the *Family Law Act 1975* (Cth). The court made detailed orders for the transfer of property, payment of a significant sum of money, and the discharge of a mortgage, with provisions for the sale of the matrimonial home if the husband failed to comply with his payment obligations. The court also ordered a specific allocation of a base amount from the husband's superannuation fund to the wife, and a rollover of the wife's superannuation interest. The orders included provisions for indemnities and the return of personal property, and appointed the Registrar of the Court to execute documents if necessary, pursuant to section 106A of the *Family Law Act*. The court also addressed the potential capital gains tax implications of a future property sale and stipulated how any such tax liability would be shared.
Orders
Orders of the court
1. By 4.00 pm on 23 February 2008 the Wife do all acts and things and execute all deeds, documents, instruments and writings as may be necessary to transfer to the Husband the whole of her right, title and interest in and to the property situate at and known as …, C in the State of New South Wales being the land in Folio Identifier ….
2. By 4.00 pm on 23 February 2008 and contemporaneous with the transfer in Order 1 hereof the Husband pay to the Wife the sum of $1,092,259.
3. In the event that the Husband fails to comply with Order 2 hereof by the due date then the Husband also pay to the Wife interest on the sum outstanding and otherwise due to be paid by the Husband in accordance with Order 2 hereof at the rate prescribed in the Family Law Rules on such amount calculated as and from the date of the Husband’s default in compliance with Order 2 hereof.
4. By 4.00 pm on 23 February 2008 the Husband do all acts and things, execute all deeds, documents, instruments and writings and pay all moneys necessary to discharge the mortgage secured on the title of …, C and thereafter do all acts and things, execute all deeds, documents, instruments and writings and pay all moneys necessary to indemnify and keep indemnified the Wife against all claims, actions, suits or demands that may be made against the Wife in relation to the mortgage.
5. If the Husband fails or neglects to comply with Orders 2 and or 4 hereof:
5.1 The Husband and the Wife forthwith do all acts and things and execute all deeds, documents, instruments and writings necessary to sell …, C by private treaty at the earliest possible date and in particular:
5.1.1 Instruct solicitors within 24 hours of nomination by the Wife to prepare a contract for sale.
5.1.2 List the property with a real estate agent within 24 hours of nomination by the Wife for the sale of the property at the earliest possible date.
5.1.3 Execute all documents requested by the agent relating to the sale.
5.1.4 Sell the property if a genuine bona fide offer is received for a sum greater than or equal to $1,200,000.
5.1.5 Instruct the agent to recommend a marketing programme and to accept and act in accordance with the agent’s marketing recommendation for the sale.
5.1.6 Execute a contract for sale.
5.1.7 Co-operate in every way with the agent in relation to the sale.
5.1.8 Execute all other documents necessary to complete the sale.
5.2 From the proceeds of the sale of …, C the Husband and the Wife do all acts and things and execute all deeds, documents, instruments and writings necessary to cause the proceeds of sale to be paid in the following manner and priority:
5.2.1 In payment of the agent’s commission and expenses (if any) due on the sale.
5.2.2 In payment of the legal costs and disbursements of the sale.
5.2.3 In payment of the amount required to discharge the mortgage.
5.2.4 In payment to the Wife of the sum remaining pursuant to Order 2 hereof together with interest calculated in accordance with Order 3 hereof.
5.2.5 In payment of the Wife’s costs and disbursements on an indemnity basis incurred as a consequence of the Husband’s failure or neglect to comply with any obligation imposed pursuant to these orders.
5.3 In the event that there remains a shortfall in respect of the amount due to the Wife pursuant to Order 2 hereof and interest accruing thereon pursuant to Order 3 hereof following the sale, that the Husband do all acts and things and execute all deeds, documents, instruments and writings necessary to transfer to the Wife all of his right, title and interest in National Australia Bank shares standing in his sole name to the value of the sum outstanding.
6. A base amount of $250,000 be allocated as required by s 90MT(4) of the Family Law Act 1975 (Cth) to the Wife out of the Husband’s member account in the K Superannuation Fund.
7. The Husband and the Wife do all acts and things and execute all deeds, documents, instruments and writings necessary to satisfy Order 6 hereof by transferring the base amount to the Wife’s member account in the K Superannuation Fund and by transferring the balance of the Wife’s member account in the said Fund to a complying superannuation fund nominated by the Wife.
8. In accordance with s 90MT(1)(a) of the Family Law Act the Wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation Regulations) 2001 using the base amount allocated in Order 6 hereof and the Husband’s entitlement in the K Superannuation Fund is correspondingly reduced.
9. The operative time for the orders made in relation to the parties superannuation interests shall be the date four days from the date of these orders.
10. Subject to the trustee of the K Superannuation Fund giving effect to the request by the Wife to rollover or transfer the Wife’s interest out of the K Superannuation Fund at the expense of the Husband the Wife do all acts and things and execute all deeds, documents, instruments and writings necessary to:
10.1 Transfer to the Husband her shares in K Pty Limited.
10.2 Resign as a member of the K Superannuation Fund.
11. Contemporaneously with the Wife’s compliance with Order 10 hereof the Husband do all acts and things, execute all deeds, documents, instruments and writings and pay all moneys necessary to indemnify and keep indemnified the Wife against all claims, actions, suits or demands that may be made against the Wife in relation to K Pty Limited and/or the K Superannuation Fund.
12 The Husband do all acts and things, execute all documents and writings and pay all moneys necessary to indemnify and keep indemnified the Wife against all claims, actions, suits or demands that may be made against the Wife in relation to:
12.1 D Pty Limited.
12.2 K Superannuation Fund.
12.3 the Wife’s directorship and/or shareholding of K Pty Limited and/or membership of the K Superannuation Fund.
12.4 K Pty Limited as trustee of the McKenzie Family Trust.
13. By 4.00 pm on 31 December 2007 the Husband make available to the Wife for her collection:
13.1 The framed photographs … which were hanging on the walls of the main hallway of the C property on 25 August 2004, and
13.2 Three large paintings … that were hanging on the walls of the main hallway of the C property on 25 August 2004.
14. Pending the Husband’s compliance with Order 2 hereof, the Husband do all acts and things, execute all deeds, documents, instruments and writings and pay all moneys necessary to:
14.1 Pay all outgoings in respect of …, C property including all rates, taxes, charges, insurance and expenses in relation to repairs and improvements, arrears relating to the mortgage and other sums due or accruing in respect of this property.
14.2 Maintain …, C in a clean, tidy and tenantable condition, fair wear and tear excepted.
14.3 Not deal with his interest in National Australia Bank shares standing in his sole name.
15. The Wife and the Husband shall be solely entitled to the exclusion to all other real and personal property of whatever nature and kind in the possession, control or the name of such party as at the date of this order other than the items of property referred to in the preceding orders.
16. In the event that in any of the financial years ended 30 June 2008 to 30 June 2010 inclusive the Husband sold as an undivided lot as it is presently held the property called “[B]” then the Husband do all acts and things and execute all deeds, documents, instruments and writings necessary to diligently lodge his personal income tax return for the financial year in which the property is sold and to obtain from the Australian Tax Office an assessment of his liability for tax for the relevant financial year ended and forthwith upon receipt of the assessment provide to the Wife a copy of the assessment together with a copy of the tax return and also a calculation certified by his accountant as to the amount of the assessable tax that was referable to the inclusion in the Husband’s assessable income of the taxable capital gain made from the sale of the property.
17. Within 28 days of receipt by the Wife from the Husband of the documents in Order 16 hereof the Wife pay direct to the Husband an amount equal to one half of that portion of the assessable tax of the Husband for the relevant financial year that represents the capital gains tax only in relation to the taxable capital gain from the sale of the property called “[B]”.
18. In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all and any of these orders, then the Registrar of the Court be appointed pursuant to s 106A of the Family Law Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such deed, document or instrument and upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
19. Leave be granted to the parties to re-list the matter on the giving of seven days notice to the other party in relation to the implementation of this Order.
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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