Grohl & Acland (No 2)
[2022] FedCFamC1F 259
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Grohl & Acland (No 2) [2022] FedCFamC1F 259
File number(s): WOC 692 of 2016 Judgment of: RIETHMULLER J Date of judgment: 21 April 2022 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Orders to reflect previous Reasons for Judgment – No matters of principle Legislation: Family Law Act 1975 (Cth) Cases cited: Grohl & Acland [2022] FedCFamC1F 101 Division: Division 1 First Instance Number of paragraphs: 12 Date of last submission/s: 11 April 2022 Place: Parramatta Solicitor for the Applicant: Sydney Family Law Specialists Solicitor for the First Respondent: S & R Lawyers Solicitor for the Second Respondent: Litigant in person (did not participate) ORDERS
WOC 692 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GROHL
Applicant
AND: MR ACLAND
First Respondent
MS LIVINGSTONE
Second Respondent
ORDER MADE BY:
RIETHMULLER J
DATE OF ORDER:
21 APRIL 2022
THE COURT ORDERS THAT:
1.That within twenty-eight (28) days of the making of these orders the first respondent shall do all things and acts and sign all documents as is necessary to transfer, free from any mortgage, encumbrance or guarantee, the whole of his right, title and interest in the property described in Certificate of Title Folio Identifier … and known as V Street, Suburb B NSW (“the [Suburb B] property”) to the applicant, and for this purpose:
(a)Both the applicant and the first respondent shall do all things and acts and sign all documents as is necessary to discharge the mortgage to the Commonwealth Bank of Australia registered on title of the Suburb B property and it is noted that there is no money owing on such mortgage; and
(b)Both the applicant and the first respondent are hereby restrained from drawing upon the mortgage registered upon the Suburb B property or from causing same to increase, in any way, prior to the discharge of same and the transfer of the Suburb B property into the applicant’s sole name.
2.That within three (3) calendar months of the making of these orders the first respondent is to pay the amount of $4,148,194 (“the settlement sum”) to the applicant.
Default Provisions
Provision of Real Estate Agents by the first respondent
3.That in the event that the first respondent fails to comply with Order 2 above, then within seven (7) days of the first respondent’s non-compliance , the first respondent is to provide the name of three (3) Real Estate Agents to the solicitors for the applicant for the purposes of selling the property described in Certificate of Title Folio Identifier … and known as Property E, together with their draft Agency Agreement which sets out their commissions, fees and charges.
4.That within seven (7) days thereof, the applicant is to select one (1) Real Estate Agent from such proposed agents to be appointed (“the Agent”) for the purposes of selling Property E.
5.In the event the applicant fails to select a Real Estate Agent within the timeframe set out in Order 4, the first respondent be at liberty to select one (1) of the three (3) proposed Real Estate Agents within seven (7) days thereof and provide notice to the applicant of same.
Provision of Real Estate Agents by the applicant
6.In the event the first respondent should fail to provide the name of three (3) Real Estate Agents in compliance with Order 3 above, within seven (7) days of the first respondent’s non-compliance with Order 3, the applicant is to provide to the solicitors for the first respondent the name of three (3) Real Estate Agents for the purposes of selling Property E, together with their draft Agency Agreement which sets out their commissions, fees and charges.
7.That within seven (7) days thereof, the first respondent is to select one (1) Real Estate Agent from such proposed agents (“the Agent”), to be appointed for the purposes of selling Property E.
8.In the event the first respondent fails to select a Real Estate Agent within the timeframe set out in Order 7, the applicant be at liberty to select one of the three (3) proposed Real Estate Agents within seven (7) days thereof and provide notice to the first respondent of same.
Appointment of Real Estate Agent
9.That within a further seven (7) days of the applicant or first respondent selecting the Real Estate Agent to sell Property E, the applicant and the first and second respondents (“the parties”) are to do all acts and things and sign all documents as is necessary to cause the Agent to be appointed for the sole purpose of the sale of Property E, including doing all such acts and things and signing all documents as is necessary to appoint the Agent (including, but not limited to, signing the Agency Agreement) and shall cause Property E to be listed for sale by public auction (unless the parties agree to an a sale by private treaty in consultation with the Agent) at the best possible price and at the earliest possible date and for the purposes of implementing the sale:
(a)The reserve price for Property E (or listing price if the parties agree to a private treaty sale) shall be as agreed between the parties and in consultation with the Agent, and, in the absence of agreement, shall be the price nominated by Mr CC of Valuations NSW (“the single expert valuer”) with the costs of and incidental to such appointment to be paid equally by the parties as and when they fall due;
(b)Property E shall be listed for public auction on a date nominated by the Agent appointed by the parties pursuant to these orders, and shall be listed for auction on a date not later than five (5) calendar months from the date of these orders, unless otherwise agreed by the parties in writing;
(c)That in the event that the bidding at auction does not reach the reserve price, the parties may jointly negotiate with the highest bidders or any other interested person/entity and effect sale of Property E at a price which is not more than 5% below the reserve price or any other price as agreed between the parties;
(d)That if Property E continues to remain unsold, the parties shall do all acts and things and sign all documents as is necessary to immediately, after the completion of each auction, re-list Property E for sale by a public auction (unless the parties otherwise agree to a sale by private treaty) on a date nominated by the Agent and being not later than a date two (2) calendar months after the date of the previous auction with the reserve price being set 5% below the previous reserve price, and keep listing Property E for sale by public auction at intervals not greater than two (2) calendar months, on dates nominated by the Agent, and with progressive further reductions of 5% in the reserve price until a sale is effected;
(e)The parties shall sign all documents requested by the Agent in relation to the listing for sale of Property E except a contract or agreement for sale which has not been jointly authorised by the parties; and
(f)The parties shall not confer on an Agent, without the consent of the other parties, any right to any sole or exclusive agency in respect of Property E or to any commission.
Appointment of solicitor and/or conveyancer
10.Within seven (7) days of default of Order 2, the applicant is to provide to the first and second respondent the details for three (3) solicitors and/or conveyancer for the purposes of acting on the sale of Property E, including but not limited to:
(a)Attending to the preparation of a contract for the sale of Property E;
(b)To give effect to the sale; and
(c)To transfer Property E to the purchaser/s of Property E,
and the first respondent shall, within a further seven (7) days, select one of the solicitors/conveyancers from the list and all parties shall then forthwith and within seven (7) days do all acts and things and sign all documents to instruct the solicitor/conveyancer to have conduct of the sale of Property E.
11.In the event the first respondent should fail to select one of the solicitors/conveyancers from the list within the timeframe stipulated in Order 10 above, the applicant be at liberty to select one of the three (3) proposed solicitors and/or conveyancers within seven (7) days thereof and provide notice to the first and second respondent of same.
12.In the event the applicant should fail to provide the details of three (3) solicitors and/or conveyancer within the timeframe stipulated in Order 10 above, the first respondent be at liberty to elect the solicitor and/or conveyancer within a further seven (7) days of the applicant’s non-compliance with Order 10, for the purposes of acting on the sale of Property E, including but not limited to:
(a)Attending to the preparation of a contract for the sale of Property E;
(b)To give effect to the sale; and
(c)To transfer Property E to the purchaser/s of Property E,
and provide notice to the applicant and second respondent of same.
13.The parties are to do all things and sign all documents as necessary to give effect to the appointment of the solicitor and/ or conveyancer in compliance with the above.
Sale Provisions
14.That in the event that Property E is to be sold pursuant to these orders, the first and second respondents shall cooperate in every way with the Agent including (without limiting the generality of the foregoing):
(a)Making the keys available to the agent;
(b)Allowing inspection of Property E at all reasonable times requested by the Agent;
(c)Doing or saying nothing to hinder or prevent a sale being effected;
(d)Providing vacant possession upon settlement of the sale of Property E to the purchaser, including ensuring that all possessions/company property and waste are removed from the property prior to settlement of the sale and bearing any expense(s) related to removal of same; and
(e)Ensuring that Property E including the grounds are in a neat and clean condition at all times of inspection by the Agent and any prospective purchasers.
15.That upon settlement of the sale of Property E, if applicable, the proceeds of sale shall be disbursed as follows:
(a)To pay all costs, commissions and expenses of the sale; then
(b)In payment of any council and water rates and maintenance levies outstanding in respect of Property E; then
(c)In payment of one third (1/3rd) of the balance then remaining to the second respondent (being full satisfaction of her interest in Property E) and the second respondent shall be liable for and indemnify the applicant and the first respondent with respect to any Capital Gains Tax (“CGT”) payable by the second respondent associated with the sale of her one third interest in Property E; then
(d)In payment of an amount sufficient to discharge the Property E mortgage being the Commonwealth Bank of Australia Line of Credit (Account Number …44) and any other mortgage secured against Property E; then
(e)In payment of an amount into the trust account of the first respondent’s solicitor sufficient to satisfy the claim of S Pty Ltd and simultaneously upon payment of same, S Pty Ltd shall do all acts and things and sign all documents as is necessary to remove their caveat (document identification …) from Property E to enable settlement of the sale to be effected); then
(f)In payment of the amount calculated using the following formula:
0.25 x ((2/3 x sale price) - $500,000)
to be held jointly on behalf of the parties in the trust account of the first respondent’s solicitor pending the assessment by the Australian Taxation Office (“ATO”) of the first respondent’s CGT liability; then
(g)In payment to the applicant of an amount sufficient to result in the applicant receiving 37.5% of the asset pool as set out in Schedule A; then
(h)In payment of the balance then remaining to the first respondent.
16.In the event that Property E is sold pursuant to these orders, the first respondent shall do all acts and things and sign all documents as is necessary and provide all required authorities to lodge his individual taxation return (for the financial year in which Property E is sold) with the ATO return by no later than 1 August immediately following the conclusion of the financial year in which Property E was sold.
17.Within twenty-one (21) days of the first respondent lodging his individual taxation return, the first respondent shall do all acts and things to authorise his appointed accountant to provide to the applicant particulars regarding the CGT owed by the first respondent as a result of the sale of Property E, including providing to the applicant a copy of the first respondent’s Notice of Assessment and completed individual taxation return for the applicable financial year.
18.Upon the provision of the information required by Order 17, the applicant and the first respondent shall do all acts and things to authorise the first respondent’s solicitor to make payment to the first respondent’s Australian Taxation Office Account of the amount required to satisfy the first respondent’s CGT liability (excluding the amounts calculated by the Accountant to be the first respondent’s other taxation liabilities, including but not limited to personal income tax liabilities), and in the event that there is any shortfall between the amount held in trust and the amount required to be paid, such shortfall shall be met by the first respondent 62.5% and the applicant 37.5%.
19.Upon payment of the first respondent’s CGT Liability in accordance with Order 18, any remaining proceeds held in trust shall be forthwith disbursed by the first respondent’s solicitor as follows:
(a)In payment of 37.5% of the balance then remaining to the applicant; then
(b)In payment of the balance then remaining to the first respondent.
Restraints and Injunctions
20.That in the event that the first and second respondent seek to sell, subdivide or otherwise deal with all or any part of Property E to enable full compliance with Order 2 then:
(a)The first and second respondent shall ensure that the applicant is involved in and privy to any such dealings and/or proposed dealings;
(b)The applicant’s consent in writing is required to effect such dealing before such dealing is made; and
(c)The first and second respondent are restrained by injunction from proceeding with any dealing/proposed dealing unless the terms of this Order are strictly complied with.
21.That pending the payment to the applicant of the full amount referred to in Order 2 and/or the settlement of the sale of Property E, the first and second respondents are hereby restrained by injunction from dealing with Property E, including selling, subdividing, dealing or otherwise further encumbering Property E, without first obtaining the written consent of the applicant and compliance with Order 20.
Other property
22.In the event that the Line of Credit (Account Number …44) has an amount owing which is higher than $461,698 at the time of settlement of the sale of Property E, then any additional amount owing above $461,698 shall be deducted from the first respondent’s final share of the sale proceeds.
23.That within seven (7) days of the date of these orders, the first respondent shall pay to the applicant the amount of $3,767.50, being his 50% share of the valuation fees owing to the applicant, together with interest as required by the Orders made on 23 September 2021.
24.That the first respondent shall indemnify and keep indemnified the applicant against any liability of any nature which the applicant has at any time arising in any way in respect of the first respondent’s companies, including but not limited to Q Pty Ltd and X Pty Ltd, whether from her position in the said companies, her receipt of any money from the companies, or any liability of the companies or otherwise.
25.That within fourteen (14) days of the making of these orders the first respondent shall do all acts and sign all documents as is necessary to discharge, release, terminate or transfer to the first respondent’s sole name any, and all, personal guarantees given by the applicant in respect of any liabilities of, or credit advanced to, the first respondent and/or his companies or otherwise in relation to the said companies and its business.
26.That unless otherwise specified in these orders, as against the first respondent, the applicant be solely entitled to retain, and the first respondent have no interest in:
(a)The Suburb B property;
(b)The furniture and contents in the Suburb B property;
(c)The applicant’s superannuation;
(d)The applicant’s motor vehicle;
(e)The applicant’s bank accounts; and
(f)The applicant’s personal belongings.
27.That unless otherwise specified in these orders, as against the applicant, the first respondent be solely entitled to retain, and the applicant have no interest in:
(a)The first respondent’s companies;
(b)The first respondent’s superannuation;
(c)The first respondent’s bank accounts; and
(d)The first respondent’s personal belongings.
28.That unless otherwise specified in these orders, the applicant be solely responsible for and indemnify the first respondent in relation to the applicant’s liabilities.
29.That unless otherwise specified in these orders, the first respondent be solely responsible for and indemnify the applicant in relation to the first respondent’s liabilities.
30.That unless otherwise specified in these orders, each party be solely entitled to the exclusion of the other parties, or either of them, to retain all property in their individual possession and/or control including but not limited to bank accounts, superannuation accounts, chattels, and motor vehicles.
31.That unless otherwise specified in these orders:
(a)The first respondent and applicant each be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(b)The first respondent and applicant each be liable for and indemnify the other against any liability in their respective sole names, including but not limited to credit cards and personal loans.
32.That the first respondent and applicant shall each do all such things as are necessary and sign all such documents as are necessary to give effect to these orders.
33.That the first respondent and applicant each have liberty to make an application to the court in relation to the implementation of these orders.
34.That pursuant to section 90ST of the Family Law Act 1975 (Cth) it is intended that these orders shall finally determine the financial relationship of the parties and avoid further proceedings between them.
35.In the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these orders then the registrar of the Federal Circuit and Family Court of Australia shall be appointed pursuant to section 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and to 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 refusal or failure by way of affidavit.
NOTATION:
A.It is noted that the first respondent disputes that S Pty Ltd have any claim to funds from the sale of Property E and accordingly the orders with respect to holding funds in trust with respect to their claim are made for the sole purpose of enabling S Pty Ltd to remove the caveat on Property E. Matters regarding the payment by the first respondent to S Pty Ltd remain a civil matter which the first respondent is defending and such matter is between those parties and does not concern the applicant nor the second respondent.
B.It is noted that the formulas set out in Schedule A attached to these orders are included for the purpose of:
(a)Calculating the second respondent’s share of Property E (if sold);
(b)Calculating the funds to be held in trust pending the realisation of the first respondent’s CGT liability being realised; and
(c)Calculating the amount to be divided to as to achieve the applicant receiving 37.5% of the net asset pool and the first respondent receiving 62.5% of the net asset pool, including a schedule of the asset pool as defined in the Reasons for Judgment made on 16 March 2022.
“Schedule A”
Calculation of the asset pool for the purpose of the sale of [Property E]Calculation of parties’ share of sale proceeds
Formula 1
(1/3 x [Property E] sale price) – (1/3 x Costs of the Sale) = [Ms Livingstones’] share of the [Property E] sale proceedsFormula 2
Payment into Trust for future CGT = 0.25 x ((2/3 x [Property E] sale price) - $500,000)Formula 3
[Property E] proceeds to be divided between the first respondent and the applicant
= [Property E] sale price – (2/3 x costs of the sale) – Formula 1 value – Formula 2 valueDivision of Assets
Applicant First Respondent Assets T Bank Account ending *[…]07 $9,171 CBA Netbank Saver Account ending *[…]22 $12,642 T Bank Account ending *[…]56 $205 CBA Streamline Account ending *[…]70 $3,399 U Company Shares $960 CBA Account ending *[…]30 $3,025 [Motor Vehicle 1] $3,000 [Q Pty Ltd] $15,000 Household Contents $1,000 [X Pty Ltd] $15,000 [V Street, Suburb B] NSW $885,000 CBA Standard Term Deposit Account ending *[…]64 (Addback) $362,581 Line of Credit Account ending *[…]44 funds (Addback) $362,248 CBA Account ending *[…]70 funs withdrawn (Addback) $23,118 Legal Fees paid by the Respondent from the Company (Addback) $152,542 Superannuation withdrawn post separation (Addback) $31,032 Share of the [Property E] sale proceeds Applicant to receive 37.5% of the net assets Share of the [Property E] sale proceeds First respondent to receive 62.5% of the net assets Liabilities NIL $0 Line of Credit Account ending *[…]44 $(461,698) Superannuation [Y Super Fund] $60,356 [AA Super Fund Pty Ltd] $160,000 [Z Super Fund] $10,531 [BB Super Fund] $0 Net Total TBC Net Total TBC Overall Percentage 37.5% 62.5% 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 Grohl & Acland has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
RIETHMULLER J:
The applicant sought property settlement orders against the first respondent following the breakdown of their de facto relationship in March 2016. Following the final determination of the matter before me in November 2021, an alteration of property interests to effect a 37.5 to 62.5 per cent split was decided in favour of the first respondent. The outcome achieved by the applicant at final hearing was greater than the outcome sought by the first respondent.
The facts and circumstances relevant to this proceeding are set out in Grohl & Acland [2022] FedCFamC1F 101.
Due to the intricate numerical calculations of the proceedings, I ordered the parties provide a joint draft Minute of Order to give effect to the Reasons for Judgment dated 16 March 2022.
The orders contained in the Reasons for Judgment required the parties to electronically file a written submission with respect to any numerical errors that may be discovered in the reasons and a joint draft Minute of Order to give effect to those reasons within 14 days.
No submissions were received from either party with respect to numerical errors in the reasons.
On 31 March 2022, 15 days after the orders were made, the parties wrote to chambers requesting further time to finalise the joint draft Minute of Order, to which I granted a further seven days. The joint draft Minute of Order was due to be filed on or before 7 April 2022; however, no such draft was received from the parties. I then directed the parties to each forward their respective draft Minute of Order to chambers by no later than Monday 11 April 2022.
The applicant’s solicitor provided a draft Minute of Order to which I have referred to when considering the orders relevant to give effect to the reasons. The first respondent’s solicitor contacted chambers to advise the first respondent does not agree with the Minute of Order submitted by the applicant, and that the first respondent is of the view that the three month timeframe provided to pay the applicant the amount of $4,148,194 (“the settlement sum”) is too short, and that adequate provision for Capital Gains Tax (“CGT”) has not been made. No alternative minute was provided, nor did he identify why he said the provisions with respect to CGT were inadequate.
With respect to the first respondent’s complaint with the timeframe provided in the applicant’s draft for the payment of the settlement sum, I refer to my reasons dated 16 March 2022. At paragraph 59 of my reasons, I take into consideration both the applicant and first respondent’s positions in relation to the timeframe which ought to be provided to the first respondent to make payment of the settlement sum. The applicant sought that payment be made in eight weeks, whilst the first respondent sought that payment be required in six months. In my reasons, having considered that the first respondent may require further time to ensure his books are in good order, I determined that I would allow a timeframe of three months for the first respondent to make payment of the settlement sum to the applicant. Whilst I note the first respondent does not agree with my reasons, some four months have passed since the final hearing, providing the first respondent considerable time to take proactive steps to ensure his books are in order ahead of time to prepare for contingencies. The process of settling orders to reflect the reasons is not an opportunity to re-argue the case.
Similarly, in paragraph 61 of my reasons dated 16 March 2022, I found that provision for CGT should be made in the event that the property located at (“[Property E]”) is sold in order for the first respondent to finance the payment of the settlement sum to the applicant. The first respondent had not sought such an order. I found that provision should be made for CGT on the sale of Property E, for the reasons set out in Grohl & Acland [2022] FedCFamC1F 101.
If the first respondent was of the view that the provision for CGT was inadequate, he has now had ample opportunity to make submissions as to any likely CGT liability that would arise upon the sale of Property E and make submissions as to the form of orders which he believes ought to be made to give effect to my reasons in a manner he feels is adequate. Given that the first respondent has not taken such an opportunity, nor provided any alternative, I am not persuaded that the provision for CGT in the draft orders is inadequate.
Upon review of the applicant’s draft Minute of Order, I have made small changes to reflect the reasons, and included additional orders which will come into effect in the event of one parties’ non-compliance with the orders. Most notably, I have removed the draft orders which required the first respondent to pay costs of and incidental to the proceedings in relation to any other expert reports, with reference to the fees owed to Valuations NSW and Financial Institution 1, as these are matters which are not discussed in the reasons nor matters which the Court is aware. Such issues may be the subject of a costs application if appropriate. I have also amended the applicant’s draft Minute of Order to change the order in which the proceeds of sale of Property E will be distributed to reflect the preferences at law as to the payment of creditors and other costs.
In light of the above, I therefore make the attached orders to give effect to my Reasons for Judgment dated 16 March 2022.
I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Riethmuller. Associate:
Dated: 21 April 2022
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