Gristwood & Gristwood (No 2)
[2023] FedCFamC1F 73
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Gristwood & Gristwood (No 2) [2023] FedCFamC1F 73
File number(s): BRC 4166 of 2017 Judgment of: HOWARD J Date of judgment: 17 February 2023 Catchwords: FAMILY LAW – PROPERTY – Where Judgment has been delivered – Where the parties were ordered to attempt to produce an agreed minute of orders reflecting the Reasons for Judgment – Where the parties could not agree on a form of orders – Where the Court heard submissions in relation to the wording of the final orders – Where the Court made orders substantially in line with the husband’s proposed minute of order. Legislation: Family Law Act 1975 (Cth) Part VIII Cases cited: Gristwood & Gristwood [2022] FedCFamC1F 725 Division: Division 1 First Instance Number of paragraphs: 8 Date of hearing: 30 January 2023 Place: Brisbane Counsel for the Applicant: Mr Kirk KC Solicitor for the Applicant: Hopgood Ganim Lawyers Counsel for the Respondent: Mr Dickson KC Solicitor for the Respondent: Barry Nilsson Lawyers ORDERS
BRC 4166 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GRISTWOOD
Applicant
AND: MR GRISTWOOD
Respondent
order made by:
HOWARD J
DATE OF ORDER:
17 February 2023
THE COURT ORDERS ON A FINAL BASIS THAT:
The Gristwood Group/Defined Terms
1.For the purpose of these Orders, the “Gristwood Group” shall be defined as:
(a)The AB Trust
(b)AN Unit Trust
(c)Gristwood Consulting
(d)The Gristwood Trust
(e)J Pty Ltd
(f)O Pty Ltd
(g)S Unit Trust
(h)DD Pty Ltd
(i)GG Pty Ltd
(j)AO Pty Ltd
(k)JJ Pty Ltd
(l)AP Unit Trust
(m)AP Pty Ltd
(n)AQ Pty Ltd
(o)LL Pty Ltd
(p)AC Pty Ltd
(q)AR Trust
(r)AT Pty Ltd
(s)O Trust
(t)AS1 Trust
(u)AS2 Trust
(v)AS Partnership
(w)AU Pty Ltd
(x)AV Trust
(y)AW Trust
(z)AV & AW Partnership
(aa)AX Pty Ltd
(bb)AY Trust
(cc)AZ Trust
(dd)BA Trust
(ee)BC Trust
(ff)BC & BD & BE Partnership
(gg)BF Trust
(hh)BG & BH & BF Partnership
(ii)BJ Trust
(jj)BK Pty Ltd
(kk)BL Pty Ltd
(ll)BM Trust.
2.For the purpose of these Orders, the “Notation A entities” are the entities to be sold/wound up and shall be defined as:
(a)AP Unit Trust;
(b)AP Pty Ltd
(c)AS1 Trust;
(d)AS2 Trust;
(e)AS Partnership;
(f)AV Trust;
(g)AW Property Trust;
(h)AV & AW Partnership;
(i)AX Pty Ltd;
(j)BA Trust;
(k)BC Trust;
(l)BC & BD & BE Partnership;
(m)BF Trust;
(n)BG & BH & BF Partnership
(o)BJ Trust;
(p)BK Pty Ltd
(q)DD Pty Ltd
(r)GG Pty Ltd
(s)AO Pty Ltd
(t)J Pty Ltd
(u)O Pty Ltd
(v)JJ Pty Ltd
(w)LL Pty Ltd;
(x)S Unit Trust;
(y)AQ Pty Ltd.
3.For the purpose of these orders, the “Notation B entities” are the entities to be retained by the Husband and shall be defined as:
(a)AB Trust
(b)AN Unit Trust
(c)Gristwood Consulting
(d)The Gristwood Trust
(e)AC Pty Ltd
(f)AR Trust
(g)AT Pty Ltd
(h)O Trust
(i)AU Pty Ltd
(j)AY Trust
(k)AZ Trust
(l)BL Pty Ltd
(m)BM Trust.
Wife’s retention of property
4.That as part of the Wife’s entitlement to property settlement, the Wife shall retain and/or receive as her absolute property, all her right, title and interest to and in, and the Husband shall relinquish and/or transfer to the Wife, all of his right, title and interest, if any, to and in the following:
(a)all monies held in accounts with any banks or financial institutions in the Wife’s sole name;
(b)the personal belongings in the Wife’s possession;
(c)the Wife’s motor vehicle (the make and model and registration number of which the Wife will not disclose to the Husband because of concerns for her safety);
(d)the real property purchased by the Wife for the sum of over $850,000 pursuant to the contract of sale dated April 2021 (details of which the Wife will not disclose to the Husband because of concerns for her safety);
(e)the Wife’s superannuation entitlements;
(f)the legal costs paid by the Wife in these proceedings; and
(g)all other interests in property and financial resources of whatsoever nature that the Wife has at the date of these Orders.
5.That the Wife be solely responsible for and meet payment of all liabilities in the Wife’s name (but excluding any liabilities specifically dealt with in these Orders) and the Wife shall indemnify the Husband from any liability howsoever arising thereunder.
6.That within seven (7) days of the date of these Orders the Husband shall do all acts and things and give all authorities as shall be necessary to cause the sum of $1,640,712 held in the Barry Nilsson Lawyers Trust Account to be transferred to the Wife, noting that the Wife received by way of partial property settlement the sum of $25,000 on 17 November 2022.
Husband’s retention of property
7.That as part of the Husband’s entitlement to property settlement, the Husband retain and/or receive as his absolutely property, all his right, title and interest to and in, and the Wife shall relinquish and/or transfer to the Husband, all of her right, title and interest, if any, to and in the following:
(a)the Husband’s interest (and that of any entity in the Gristwood Group) in the Notation B entities;
(b)all monies held in accounts with any banks or financial institutions in the Husband’s sole name;
(c)the personal belongings in the Husband’s possession;
(d)the Husband’s motor vehicles;
(e)the Husband’s superannuation entitlements;
(f)the legal costs paid by the Husband in these proceedings and in his criminal proceedings; and
(g)all other interests in property and financial resources of whatsoever nature that the Husband has at the date of these Orders.
8.That the Husband be solely responsible for and meet payment of all liabilities in the Husband’s name (but excluding any liabilities specifically dealt with in these Orders) and the Husband shall indemnify the Wife from any liability howsoever arising thereunder.
Establishment of Cash Management Account
9.That the Husband and Wife do all things to establish a separate account in the Barry Nilsson Lawyers Trust Account (with such funds to be invested upon receipt so that interest can be earned on the capital sum held), in their joint names, to be held on trust for them jointly and disbursed only in accordance with these orders (save as otherwise agreed in writing) and to be maintained until the sale of the last of the Business Interests, the sale of the last of the parties interests in the Gristwood entities provided for in these orders or the winding up of the last Notation A entity (whichever is the later) (the Controlled Monies account).
Sale of retail stores
10.That the Husband do all acts and things to secure a sale of the parties’ interests in the businesses that are operated via J Pty Ltd; O Pty Ltd, S Unit Trust; DD Pty Ltd, GG Pty Ltd, JJ Pty Ltd and LL Pty Ltd (the Business Interests):
(a)in the case of those representing interests in any retail enterprise/franchise in Queensland, by sale to NN Company; and
(b)in the case of those representing interests in any retail enterprise/franchise in NSW, Tasmania, or the ACT, by sale to Mr UU.
11.In the event the Husband has failed to finalise the sales referred to in Order 10 of these Orders to the identified purchasers by 17 March 2023, then by 14 April 2023, the Husband and Wife do all acts and things and sign all documents as may be necessary to appoint a business broker to market for sale the Business interests for the best cash price reasonably obtainable.
12.With respect to the appointment of the business broker, the Wife shall nominate three business brokers by no later than 31 March 2023, if necessary, and the Husband shall select one of the business brokers within seven (7) days of the Wife’s nomination (the Broker).
13.That in relation to the sale of the Business Interests by the Broker:
(a)the parties shall sign any engagement letter or agreement provided by the Broker regarding their appointment within seven (7) days of receipt of same;
(b)the parties will obtain the written recommendation of the Broker as to the way in which to market the respective Business Interests for sale;
(c)the sale be by Expressions of Interest, unless otherwise recommended by the Broker;
(d)in the event of any dispute between the parties as to the manner of sale, such dispute shall be determined by the Broker; and
(e)the parties authorise the Broker to provide each party with any information or documentation regarding the sale of the Business Interests, upon their request.
14.That the parties retain an independent solicitor, by agreement, to prepare the contract of sale and effect the sale of each of the Business Interests (whether the sale is sold privately pursuant to Order 10 or by the Broker pursuant to Order 11), and that with respect to the appointment of an independent solicitor;
(a)the Wife shall nominate three solicitors and the Husband shall select one within seven (7) days of the Wife’s nomination, failing which the Wife’s shall select the solicitor from her panel;
(b)the parties shall sign any engagement letter or agreement provided by the solicitor regarding their appointment within seven (7) days of receipt of same; and
(c)the parties authorise the solicitor to provide each party with any information or documentation regarding the sale of the Business Interests, upon their request.
15.That on settlement of the sale of each of the Business Interests, the proceeds be paid in the following manner and priority:
(a)in such manner as is required to meet all payments and obligations of the entity effecting the sale (including in payment of all commissions and expenses directly associated with the sale, all legal expenses arising from the sale, the discharge of any liabilities of the selling entity, and any winding up costs, in the case of the Notation A entities); and
(b)the parties’ share of the balance then remaining (or that is due to any entity owned by them or either of them) to be deposited into the Controlled Monies Account established pursuant to Order 9 of these Orders.
16.In the event that any selling entity and/or Notation A entity has an obligation to make payment to either party at the time of settlement of the sale of that entity’s business interests or the winding up of that entity, then each of the Husband and Wife shall deposit any such sum into the Controlled Monies Account.
17.In the event that either party has an outstanding liability to any of the selling entities at the time of settlement of the sale of that entity’s Business Interests, such sums shall be paid from the Controlled Monies account.
18.That following the sales referred to in the preceding Orders, the husband do all things within his power and sign all documents to cause the Notation A entities to be wound up, and the parties’ entitlements (and the entitlement of any entity in the Gristwood Group) arising from such winding up shall be paid to the Controlled Monies Account
19.In the event that any of the Notation A entities has an obligation to make payment to either party at the time of settlement of the sale of that entity’s business interests, then each of the Husband and Wife shall deposit any such sum into the Controlled Monies Account.
20.That the parties do all acts and things to cause the taxation, realisation costs and any winding up costs to be paid from the Controlled Monies Account, to the extent that they have not already been met by the entity obliged to meet the taxation or costs at the relevant time.
21.In the event that either party has an outstanding liability to any of the Notation A entities at the time of winding up, such sums shall be paid from the Controlled Monies account.
22.That within 14 days of the conclusion of the sale of the last of the Business Interests, the sale of the last of the parties’ interests in the Notation A entities, or the winding up of the last of the Notation A entities (whichever is the later), the balance of the Controlled Monies account shall be applied:
(a)first, to set aside such sum as is estimated by an agreed accountant to meet future taxation, realisation and winding up costs yet to be crystallised arising from the sales (to be paid from the Controlled Monies account if not paid at the point of sale), and with regard to the appointment of the agreed accountant:
(i)the Husband shall nominate three accountants and the Wife shall select one within seven (7) days of the Husband’s nomination, failing which the Husband shall select the accountant from his panel;
(ii)the parties shall sign any engagement letter or agreement provided by the accountant regarding their appointment within seven (7) days of receipt of same; and
(iii)the parties authorise the accountant to provide each party with any information or documentation regarding their estimate to future taxation, realisation and winding up costs, upon their request.
(b)second, to divide the balance as to 55% to the wife;
(c)third, the remaining 45% to the husband, at which time the husband shall pay to the wife the sum of $1,462,511 (“the Payment”).
23.That from the date of these Orders, in relation to the Notation B entities, the Husband indemnify the Wife and keep her indemnified against all liabilities, actions, claims, suits and all demands of any nature whatsoever:
(a)in relation to any revenue liability for duty and/or income tax associated with the Wife’s resignation and/or transfer and/or renouncement of her interest in the Gristwood Group;
(b)arising directly or indirectly out of, in or ancillary to the Notation B entities (including any monies which may be owing by way of loan account and/or guarantees and/or indemnities or otherwise given by the Wife to the Gristwood Group which she may be liable for) and the Husband shall obtain a release of the Wife from such loans and/or guarantees if any;
(c)in relation to any debt owing by the Wife, whether past, present or future, including but not limited to any liability that might be occasioned to the Wife by reason of her holding any office in any of the Notation B entities as guarantor, if any, given on the Husband’s behalf or on behalf of the Notation B entities and the Husband shall obtain a release of the Wife from any such guarantees relating to any entity in the Gristwood Group;
(d)in relation to all actions, claims or demands by the Commissioner of Taxation in relation to any taxation liability (including income tax, capital gains tax, GST or fringe benefits tax) that the Wife may incur or have incurred by way of assessments, reassessments, penalties or interest on income, benefits or gains howsoever earned or deemed to have been earned by her howsoever arising as a result of her involvement or association in any entity as a director and/or shareholder and/or employee and/or beneficiary of any entity during the relationship; and
(e)in relation to any lease, guarantee, mortgage, borrowing, debt or demand or other claim in relation to the Notation B entities.
24.That within 30 days of these Orders, the Husband and Wife shall do all acts and sign all necessary documents at the Husband’s sole expense, to give effect to the following:
(a)resign the Wife from a position as director or secretary of any company in the Gristwood Group;
(b)transfer the Wife’s shareholding in any company listed as a Notation B entity to the Husband;
(c)remove the Wife as a signatory and account holder of any bank accounts in the name of any entity in the Gristwood Group;
(d)resign the Wife as an appointor and/or principal and/or trustee of any trust entity in the Gristwood Group;
(e)assign from the Wife to the Husband, the benefit or liability of any loan accounts standing to her debit or credit to any entities in the Notation B entities; and
(f)renounce any interest or right the Wife holds as a beneficiary of any trust listed as a Notation B entity;
and pending the resignation of the Wife as an appointor and/or principal and/or trustee and the renouncement of her interest as a beneficiary, the Wife shall be restrained from making any claim or demand for the time being in relation to any trust as a discretionary beneficiary or otherwise in relation to the distribution of any capital or income from any trust to her.
25.That within 14 days of the conclusion of the sale of the last of the Business Interests, the sale of the last of the parties’ interests in the Notation A entities, or the winding up of the last of the Notation A entities (whichever is the later):-
(a)the wife shall transfer any remaining shareholdings in any company in the Gristwood Group to the husband; and
(b)the wife shall renounce any remaining interest or right the wife holds as a beneficiary of any trust in the Gristwood Group and, pending the renouncement of her interest as a beneficiary, the wife shall be restrained from making any claim or demand for the time being in relation to any trust as a discretionary beneficiary or otherwise in relation to the distribution of any capital or income to her.
Security for payment
26.That pending the Payment, the Husband be restrained from amending or dealing with in any way his interest in the Call Option in F Pty Ltd and upon the Payment, the Wife will do all acts and things and sign all documents necessary to release the Husband from these obligations.
Default provisions
27.That with respect to the obligations contained in these Orders:
(a)the parties have liberty to apply if there has been a breach of the Orders by either of the parties and such breach has not been rectified within seven (7) days of it occurring; and
(b)that each party shall do all acts and things necessary including signing all necessary documents so as to give full force and effect to the provisions of these Orders and in the event that either party refuses or neglects to comply with any provision of these Orders within fourteen (14) days of a written request to do so by the other party, then a Registrar of the Federal Circuit and Family Court of Australia, be hereby appointed, pursuant to s 106A of the Family Law Act 1975 (Cth) to execute all documents in the name of that party and to do all acts and things necessary to give validity and operation to these Orders.
Other
28.That unless otherwise provided for in these Orders, each party shall do all acts and sign all documents to give full force and effect to the terms of these Orders and in the event that either party refuses or neglects to comply with the provision of these Orders within seven (7) days of a written requesting to do so by the other party, then a Registrar of this Court shall be appointed to execute all documents in the name of the party necessary to give validity and operation to the terms of these Orders.
29.That save and except as otherwise provided for in these Orders, the transferee spouse or the spouse receiving the benefit of a transaction pursuant to these Orders shall prepare all documentation necessary at their sole expense to give effect to the provisions of these Orders at their cost and further be responsible for the payment of any registration fees in relation to the transfer of the property into their sole name.
30.That any duty payable on any transactions arising from these Orders or any documents executed pursuant to these Orders shall be paid by the transferee spouse or the spouse receiving the benefit of such transfer or transaction.
31.That either party shall have liberty to apply to this Honourable Court upon the giving of seven (7) days’ notice in writing to the other party in relation to interpretation and/or enforcement of the terms and conditions hereof.
32.That, for a period of 30 days from the date of this Order, the parties shall have liberty to apply in relation to the wording of the orders contained in paragraphs 24(b), 24(f) and 25 – to ensure that the wording of those orders reflects the Reasons for Judgment delivered on 27 September 2022 and the Reasons for Judgment delivered on 17 February 2023. To remove any doubt, this liberty to apply clause shall expire in 30 days from the date of this Order.
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 the pseudonym Gristwood & Gristwood has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOWARD J:
This application for property settlement under Part VIII of the Family Law Act 1975 (Cth) (‘the Act’) came on for trial before me in Brisbane on 26, 27, 20 and 29 April 2022. The last written submission was received by the Court on 8 July 2022. Reasons for Judgment were delivered on 27 September 2022.[1] The parties were given some time to attempt to reach an agreed position in relation to the wording of the final order reflecting the Reasons for Judgment.
[1] Gristwood & Gristwood [2022] FedCFamC1F 725.
The parties were not able to reach an agreed position in relation to the wording of the final order. The matter was then listed for a case management hearing on 30 January 2023. Mr Kirk KC appeared on behalf of the applicant wife and Mr Dickson KC appeared on behalf of the respondent husband (via video link).
I expressed the view at the case management hearing on 30 January 2023 that, in the event the Court was satisfied that the orders to be made reflect the Reasons for Judgment delivered on 27 September 2022 – no further reasons would be required. Mr Dickson KC agreed with the view that I expressed in relation to this issue. He did note that the Court would be required to provide further reasons if the Court was willing to accede to the wife’s request that the payment by the husband to the wife in the sum of $1,462,511 be made by 30 June 2023. I will not be making such an order. In my view, an order which more closely reflects the Reasons for Judgment is the order proposed by the husband at paragraph 22(c) – which would see the husband paying to the wife the sum of $1,462,511 within 14 days of the conclusion of the sale of the interests referred to in the order. The husband's draft final orders will be marked as Exhibit 1 in this hearing. The wife’s proposed final orders (which form part of her written submissions) will be marked Exhibit 2 in this hearing.
Mr Kirk KC submitted that the Court should provide some further reasons.
In addition to my brief comments concerning the payment of the $1,462,511 – I have also decided that the better course of action in the circumstances of this case is to provide some very brief further reasons in relation to some other aspects raised at the case management hearing by the parties on 30 January 2023. At the case management hearing, I raised with the parties the question of the transfer of the wife’s shareholdings. As to the Notation A entities – I note the submissions made by Mr Dickson KC – in particular at page 34 of the transcript of 30 January 2023 – concerning those Notation A entities where the wife has "got skin in the game". My view is that the wife should not be required to transfer her shareholdings in the Notation A entities at this point in time. I agree with the submission made by Mr Dickson KC that the wife should transfer her shareholdings in the Notation B entities now. Further, because of the lack of cooperation between the parties (apparent from the Reasons for Judgment) it is appropriate that the wife resign directorships and resign as secretary of any company in the Gristwood Group and I also consider it appropriate that the wife resign as an appointor and/or principal and/or trustee of any trust entity in the Gristwood Group. I consider this reflects the Reasons for Judgment. There will need to be a further variation to the husband's paragraph 24. In paragraph 24(f), my view is that the wife ought not be required to renounce (at this stage) any interest or right held by her as a beneficiary in any trust listed as a Notation A entity. This means that paragraph 24(f) should state that the wife is to “renounce any interest or right the wife holds as a beneficiary of any trust listed as a Notation B entity”. Finally, to give effect to these Reasons – I have included paragraph 25 so that, once all outstanding dealings between the parties have been finalised, the wife will transfer any remaining shareholdings in the Gristwood Group and renounce any interest or right as a beneficiary of any trust in the Gristwood Group.
I will issue an order in the terms that I have outlined. I consider the orders reflect the Reasons for Judgment. The orders are substantially the same as Exhibit 1 (the husband's proposed final orders). I will grant to the parties liberty to apply for a 30 day period – but only in relation to the variations contained in paragraph 24 (i.e. variations from Exhibit 1) and in relation to the inclusion of paragraph 25. The liberty to apply does not relate to the Order generally. Further, the liberty to apply will expire 30 days from the date of the Order.
The only other point that I wish to make relates to a paragraph which is essentially a written submission on behalf of the wife. It appears at the commencement of the wife’s proposed final order at page 6 of Exhibit 2. The wife’s submission relates to the enforceability of the proposed orders. I agree with the submissions made by Mr Dickson KC in relation to this issue. His submissions appear at pp.41-42 of the transcript of the hearing on 30 January 2023. In Exhibit 1 under the heading "The Sale of [Retail] Stores" there is clearly set out the manner in which this family’s minority interests are to be sold. Minority interests are still property. If they were not property, there would have been no need for any discussion at the trial about the so-called "minority discount". It is possible for the Court to compel the crystallisation of minority interests into cash. I accept the submissions made by Mr Dickson KC on this point. I have had regard to the various dates included in Exhibit 1 by which time various things need to occur. I have altered those dates slightly to reflect the original intention of Exhibit 1 – noting that the Court agrees with this approach.
The view that I have formed is that the orders to be pronounced reflect the Reasons for Judgment delivered on 27 September 2022. To the extent that it is necessary (and only after hearing submissions from the parties on this point) I have provided these brief further Reasons for Judgment following the Case management hearing of 30 January 2023.
I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Howard. Associate:
Dated: 17 February 2023
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