Field and Kingston (No 5)
[2021] FamCA 457
FAMILY COURT OF AUSTRALIA
| FIELD & KINGSTON (NO. 5) | [2021] FamCA 457 |
| FAMILY LAW – PRACTICE AND PROCEDURE – final orders made by Foster J on 21 November 2019 – respondent being dilatory in his compliance with those orders. |
| Field & Kingston (No. 4) [2019] FamCA 863 Field & Kingston (No. 4) [2021] FamCA 357 |
| APPLICANT: | Ms Field |
| RESPONDENT: | Mr Kingston |
| FILE NUMBER: | PAC | 2095 | of | 2014 |
| DATE DELIVERED: | 29 June 2021 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Wilson J |
| HEARING DATE: | 21 & 22 June 2021 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Not applicable |
| SOLICITOR FOR THE APPLICANT: | Matthews Folbigg Pty Ltd |
| COUNSEL FOR THE RESPONDENT: | Not applicable |
| SOLICITOR FOR THE RESPONDENT: | Cathers Beaver & Kamiya |
Orders
On or before noon on 6 July 2021 the respondent must pay the applicant the entire sum ordered by Foster J in paragraph 1 of his Honour’s orders made 21 November 2019.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Field & Kingston has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: PAC 2095 of 2014
| Ms Field |
Applicant
And
| Mr Kingston |
Respondent
REASONS FOR JUDGMENT
Introduction
Following the handing down of my reasons for judgment on costs[1] I had hoped that what seemed to be the remaining impediment to the conclusion of this litigation was removed. That hope has proven forlorn.
[1]Field & Kingston (No. 4) [2021] FamCA 357.
The relevant property has been sold, the net proceeds of sale remain in trust and costs have been determined. On 21 June 2021, approaching two years since Foster J made property adjustive orders, this proceeding was mentioned before me on account of what I was told was an insuperable obstacle to finalisation, namely the calculation and payment of capital gains tax.
The subject of capital gains tax has been a live issue since I assumed control of this proceeding. On behalf of the respondent, Ms Beaver informed me during several directions hearings that over a sustained period the respondent and his accountant have been endeavouring to quantify precisely the capital gains tax payable in respect of the sale of the Suburb B property. Ms Beaver submitted that unless and until his liability for capital gains tax is quantified, the respondent will not agree to the release of the sum presently held in trust. Ms Munk, the applicant’s solicitor told me on 21 June 2021 that her client was willing to receive an amount less than the sum ordered by Foster J simply to be done with this litigation. Ms Munk requested orders being made giving effect to the orders pronounced by Foster J on 21 November 2019. Ms Beaver opposed that. I was requested to rule on the issue.
Synopsis
For the reasons that follow, more than enough time has elapsed consequent upon the sale of the Suburb B property for capital gains tax issues to have been determined. In any event, paragraph 5 of the orders made by Foster J addresses the problems about which the respondent complains. I order that by noon on 6 July 2021 the respondent pay the applicant the sum set out in paragraph 1 of the orders of Foster J made on 21 November 2019.
Short factual narration
On 24 May 2021 the respondent made an affidavit in which he stated that his estimated liability for the payment of capital gains tax was between $180,000 and $200,000. The respondent emphasised in that affidavit that those amounts were estimates. In paragraph 15 of that affidavit the respondent deposed to his accountant having told the respondent that upon an assessment of capital gains tax of $200,000, the applicant would need to reimburse him in the sum of $95,000 pursuant to paragraph 5 of the orders of Foster J.
To my mind, that statement revealed that the respondent had already received accountancy advice about his prospective liability for capital gains tax ($200,000) and that pursuant to paragraph 5 of the orders of Foster J 47.5% of that liability was $95,000. On that basis it could not be said that the respondent was unaware of his CGT liability. His real grievance seemed to relate to the net amount he will receive based on those arithmetical calculations. He expressed the opinion that based on his own calculations he would derive the sum of $705,783.18 from the proceeding whereas the applicant would derive $1,463,267.53 from the proceeding. The respondent stated that he would receive $757,484.18 less than the applicant.
It must be stated that Foster J devoted considerable attention to the question of capital gains tax liability if the Suburb B property was sold.[2] In paragraph 104, Foster J held as follows –
The application of these principles lead to the conclusion that the incidence of any future CGT liability is probably remote and thus the contended liability should be the subject of a contingent order that requires the wife to indemnify the husband for a percentage reflecting her overall percentage entitlement of any additional personal income tax liability arising from the inclusion of a CGT component in his assessable income should he be required to sell to meet the wife’s entitlement.
[2]Field & Kingston (No. 4) [2019] FamCA 863 (at [101] – [104]).
The fact that the respondent opines that the applicant will derive a greater amount than him is largely immaterial having regard to Foster J’s consideration of the issue and that those findings remain undisturbed.
The time has come for the orders of Foster J to be given effect.
The respondent must pay the applicant the entire sum ordered by Foster J in paragraph 1 of his Honour’s orders made 21 November 2019 by noon on Tuesday 6 July 2021.
I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 29 June 2021.
Associate:
Date: 29 June 2021
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