HARRIS & HARRIS
[2012] FamCA 987
•22 November 2012
FAMILY COURT OF AUSTRALIA
| HARRIS & HARRIS | [2012] FamCA 987 |
| FAMILY LAW – PROPERTY – where the matter has an extensive litigation history – where the proceedings were remitted for rehearing after a successful appeal from final property orders – where the parties reached consent during the rehearing – where orders made by consent. |
| Family Law Act 1975 (Cth) |
| Stanford v Stanford [2012] HCA 52 |
| APPLICANT: | Ms Harris |
| RESPONDENT: | Mr Harris |
| FILE NUMBER: | BRF | 3592 | of | 2005 |
| DATE DELIVERED: | 22 November 2012 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Murphy J |
| HEARING DATE: | 22 November 2012 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Hogan |
| SOLICITOR FOR THE APPLICANT: | Schultz Toomey O’Brien |
| COUNSEL FOR THE RESPONDENT: | Mr Waterman |
| SOLICITOR FOR THE RESPONDENT: | Stockley Furlong |
Orders
IT IS ORDERED BY CONSENT THAT
Pursuant to Rule 10.17(a) of the Family Law Rules 2004, orders, declarations and notations be made in terms of the document titled “Minutes of Consent” sealed and attached hereto.
IT IS FURTHER ORDERED THAT
All outstanding applications are dismissed and the proceedings are removed from the list of cases awaiting finalisation.
All subpoenaed documents be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.
IT IS NOTED THAT
In light of the agreement reached between the parties, Ms Harris Snr is excused from compliance with the subpoena for her to give evidence.
MINUTES OF CONSENT
BY CONSENT IT IS ORDERED BY WAY OF FINAL ORDER IN RESPECT OF PROPERTY SETTLEMENT AND SPOUSE MAINTENANCE APPLICATIONS
That all previous Orders are discharged
That the parties are released from any Undertakings previously provided to the Court and from any arrears obligation imposed by any previous Order.
Property
That the wife shall retain as hers absolutely the following property and Super interests:-
(a)all furniture, artwork, personal possessions, bank accounts and chattels currently in her possession;
(b) her BT Super Fund member entitlement;
(c) Her Sunsuper Super Fund member entitlement;
(d)The Hyundai and Ford motor vehicles currently in her possession;
(e) the Mazda motor vehicle currently in her possession.
(f)the balance of the sale proceeds (in the sum of approximately $127,000) of the property situated at K Street, X Town in the State of Queensland, currently held by Schultz Toomey O’Brien.
That the husband shall retain as his absolutely the following property and Super interests:-
(a)all furniture, artwork, personal possessions, bank accounts, chattels, motor vehicles currently in his possession;
(b) all of his shares in the company, AB Pty Ltd;
(c) all of his shares in the company, Y Pty Ltd;
(d) all of his shares in Harris Nominees Pty Ltd;
(e)all of his interest in the balance of his beneficiary loan account with the Harris Family Trust;
(f) all life insurance policies in his name;
(g)save as is otherwise dealt with in this Order – his entitlement to Super held in the HA Super Fund.
That the husband shall :
(a)forgo all claims upon any money asserted by him to have been removed by the wife from the joint bank account of the parties with the Z Bank (in the amount of approximately A$19,444.00);
(b)accept responsibility for and indemnify the wife and keep her indemnified in relation to the sum of $25,000.00 removed by her from the Bank account of Harris Nominees, HA Account No.2;
(c)forgo all and any claim he may have, accept responsibility for and indemnify the wife and keep her indemnified in relation to the sum of $20,000 removed by the wife from the bank account of Y Pty Ltd as trustee of the HA Super Fund;
(d)by the term of this Order authorise the payment to the wife of the balance of the sale proceeds, of the property situated at K Street, X Town in the State of Queensland, currently held by Schultz Toomey O’Brien and shall forthwith do any thing and sign any document necessary to cause this payment to occur.
Liabilities
The husband shall indemnify the wife, and keep her indemnified, against any and all liability that the husband and the wife have jointly or severally including to the Harris Family Trust or to the Australian Taxation Office in respect of any of the activities of the Harris Family Trust arising out of the time during which the wife was a director of Harris Nominees Pty Ltd.
The husband shall indemnify the wife, and keep her indemnified, against any and all liability that he has incurred in his own name in respect of borrowings from the ANZ Bank and in respect of credit card liabilities incurred in his name.
The wife shall indemnify the husband, and keep him indemnified, against any and all liability that she has incurred in her own name in respect of borrowings from the Westpac Bank and in respect of any credit card liabilities incurred in her name.
Payment
That the husband pay or cause to be paid to the wife the sum of $600,000.00 with such amount to be payable as follows:
(a)The sum of $275,000.00 to be paid to the Trust Account of Schultz Toomey O’Brien Lawyers on or before 20 February 2013;
(b)The sum of $160,000.00 to be paid to the Trust Account of Schultz Toomey O’Brien Lawyers on or before 30 June 2014;
(c)The sum of $165,000.00 to be paid to the Trust Account of Schultz Toomey O’Brien Lawyers on or before 20 February 2015.
That, in respect of the payment referred to in 9(b) above : in the event the husband requests, by notice in writing delivered to the wife no later than 31 May 2014, that he be granted an extension of time within which to pay the sum of $160,000.00, the time for payment of that amount shall be extended to no later than 30 July 2014 and such amount ($160,000) shall, if not paid to the Wife before this date, become due and payable on 30 July 2014.
That, in respect of the payment referred to in 9(c) above : in the event the husband requests, by notice in writing delivered to the wife no later than 20 January 2015, that he be granted an extension of time within which to pay the sum of $165,000.00, the time for payment of that amount shall be extended to no later than 20 March 2015 and such amount ($165,000) shall, if not paid to the Wife before this date, become due and payable on 20 March 2015.
That until the husband has complied with paragraph 9 above in its entirety, and save for the operation of paragraphs 17 and 18 neither party shall, without the written consent of the other, do anything, sign any documents or take any steps to increase the mortgage repayable to the ANZ Bank (which is currently in the amount of $262,046.00) secured by mortgage over property described as 31 and E Street, G Town in the State of Queensland more particularly described as Lot … on … and Lot … on … nor encumber further the said properties in any manner whatsoever.
That in the event that the Husband, in his capacity as a Director of Y Pty Ltd, as trustee of the E Property Trust requests that the Wife, in her capacity as Director of Y Pty Ltd as trustee of the E Property Trust consent to the refinance or sale of either or both of the properties at E Street, G Town, then he shall provide to her written notice of such request, accompanied by all documents outlining the basis for the same as are in his possession at the time of such request and, in the event that any action by the husband is necessary for him to ensure his compliance with paragraph 9 above, the Wife shall act reasonably and shall not unreasonably withhold her consent to such action by him.
That the husband and wife, both personally and as directors of Y Pty Ltd as trustee of the E Property Trust , forthwith will do all such necessary acts and things and sign all such documents required to cause a caveat to be lodged by consent in favour of the wife over the real properties situated at E Street, G Town, in the State of Queensland more particularly described as Lot … on … and Lot … on … (“the properties”) in order to secure payments due to her pursuant to paragraph 9 above..
That upon the husband complying with the terms of paragraph 9 in its entirety the wife will, upon the request of the husband made to her in writing, provide to him a signed request to withdraw the caveats referred to in paragraph 14 above.
That in the event that the husband gives notice to the wife pursuant to paragraph 13, 17 and/or 18 of this Order and provided that he provides to her:
(a)all information relevant to the proposed sale of either or both of the properties; and
(b)a copy of the Contract for Sale of either or both of the properties he proposes that the parties execute in their capacity as Directors of Y Pty Ltd as trustee for the E Property Trust; and
(c)that such Contract for Sale is in an amount representing market value (as agreed between the parties or determined by a valuer jointly instructed by the parties),
the wife shall do all such things (including signing all such documents as are necessary to facilitate the removal of the caveat or caveats referred to in paragraph 14 above) to facilitate the sale of either or both of the properties.
In the event that the husband in his capacity as director of Y Pty Ltd as trustee for the E Property Trust gives written notice to the wife prior to 1 January 2014 that it is his intention to sell or refinance either or both of the properties then:
(a)The husband and wife, in their capacity as directors of Y Pty Ltd Ltd as trustees for the E Property Trust shall appoint a conveyancing solicitor to act on behalf of Y Pty Ltd as trustee for the E Property Trust in the sale of these properties; and
(b)The husband and wife, as trustees of the HA Super Fund shall engage a solicitor to act as a stakeholder for the receipt of the proceeds of sale or refinance of the properties;
(c)That upon the settlement of the sale of the properties or either of them the conveyancing solicitor shall cause the net proceeds of sale to be paid, on behalf of the HA Super Fund, to the stakeholder solicitor;
(d)That upon confirmation by the stakeholder solicitor of the receipt of the sale proceeds and contemporaneously and simultaneously thereafter:
(i)pursuant to Section 90MT1(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of Wife’s interest in the HA Super Fund the Husband shall be entitled to be paid such amount as shall see him receive 100per cent of the Wife’s interest in that fund and that there be a corresponding reduction to the entitlement the Wife would have had in the HA Super Fund;
(ii)the stakeholder solicitor shall and by this Order is irrevocably directed to pay, not before 30 May 2014 and no later than 30 June 2014, to the Trust Account of Schultz Toomey O’Brien Lawyers on behalf of the wife the sum of $160,000 and, in the event that there are any funds remaining after this payment, the stakeholder solicitor shall hold any remaining amount on behalf of the husband as trustee of the HA Super Fund and shall pay no more than $165,000.00 to the Trust Account of Schultz Toomey O’Brien Lawyers, on behalf of the wife, no later than 20 February 2015 with any balance then remaining to be paid to the husband as Trustee of the HA Super Fund.
(iii)That paragraph 17(d)(i) has effect from the operative time being 4 business days after the service of the Order on the Trustee
In the event that the husband in his capacity as director of Y Pty Ltd as trustee for the E Property Trust gives written notice to the wife in the period from 30 June 2014 until 30 September 2014 that it is his intention to sell or refinance either or both of the properties then:
(a)The husband and wife, in their capacity as directors of Y Pty Ltd Ltd as trustees for the E Property Trust shall appoint a conveyancing solicitor to act on behalf of Y Pty Ltd Ltd as trustees for the E Property Trust in the sale of these properties; and
(b)The husband and wife, as trustees of the HA Super Fund shall engage a solicitor to act as a stakeholder for the receipt of the proceeds of sale or refinance of the properties;
(c)That upon the settlement of the sale of the properties or either of them the conveyancing solicitor shall cause the net proceeds of sale to be paid, on behalf of the HA Super Fund, to the stakeholder solicitor;
(d)That upon confirmation by the stakeholder solicitor of the receipt of the sale proceeds and contemporaneously and simultaneously thereafter:
(i) pursuant to Section 90MT1(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of Wife’s interest in the HA Super Fund the Husband shall be entitled to be paid such amount as shall see him receive 100per cent of the Wife’s interest in that fund and that there be a corresponding reduction to the entitlement the Wife would have had in the HA Super Fund;
(ii)the stakeholder solicitor shall and by this Order is irrevocably directed to pay, no later than 20 February 2015, to the Trust Account of Schultz Toomey O’Brien Lawyers on behalf of the wife the sum of $165,000 and, in the event that there are any funds remaining after this payment, the stakeholder solicitor shall pay the same to the husband as trustee for the HA Super Fund.
(iii)That paragraph 18(d)(i) has effect from the operative time being 4 business days after the service of the Order on the Trustee
That until the husband has complied with the terms of paragraph 9 above in its entirety, or the wife has received her full entitlement to property pursuant to this Order, neither the husband nor the wife shall do anything, sign any documents, or take any steps to replace or cause to be replaced the company, Y Pty Ltd, as the trustee of the E Property Trust.
HA Super Fund – Resignation as beneficiary
That upon the husband complying with the terms of paragraph 9 above in its entirety, the wife will do all acts and things and sign all documents as may be necessary to:
(a)resign her positions as Appointer and Trustee of the HA Super Fund as the case may be;
(b)resign her position as a beneficiary of the HA Super Fund and resign as a member of the fund;
(c)renounce and relinquish in favour of the Husband all right as to capital and income in the HA Super Fund.
That upon compliance with the obligations prescribed in paragraph 9 above in its entirety, the husband shall call a meeting as the Trustee of the HA Super Fund and take the relinquishment of the wife as beneficiary of the HA Super Fund and pass all resolutions in favour of the relinquishment of the wife’s interest as a beneficiary otherwise under the HA Super Fund.
HA Super Fund – Splitting Order
Save for circumstances in which the terms of paragraph 17(d)(i) or 18(d)(i) have been made operative, that upon the husband complying with the terms of paragraph 9 above in its entirety that pursuant to Section 90MT1(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of Wife’s interest in the HA Super Fund the Husband shall be entitled to be paid such amount as shall see him receive 100per cent of the Wife’s interest in that fund and that there be a corresponding reduction to the entitlement the Wife would have had in the HA Super Fund but for this Order.
Paragraph 22 has effect from the operative time.
The operative time for the purposes of paragraph 23 is four business days after the service of sealed orders on the Trustee.
Save as is specifically referred to in these Orders the husband and wife each forego any claim they may have to any other Super benefits belonging to or earned by the other.
Default provision : E Street, G Town
That in the event that the husband defaults in any way whatsoever in respect of the obligations imposed on him by the terms of paragraph 9 (save as these are modified by the application of paragraphs 10 and 11 above) above:
(a) the husband and the wife shall, as directors of Y Pty Ltd as trustee for the E Property Trust, take all steps necessary to cause the E Property Trust to sell the real properties situated at E Street, G Town in the State of Queensland more particularly described as Lot … on … and Lot … on … (“the E Street properties”); and
(b)The husband and wife, in their capacity as directors of Y Pty Ltd Ltd as trustees for the E Property Trust shall appoint a conveyancing solicitor to act on behalf of Y Pty Ltd Ltd as trustees for the E Property Trust in the sale of these properties; and
(c)The husband and wife, as trustees of the HA Super Fund shall engage a solicitor to act as a stakeholder for the receipt of the proceeds of sale or refinance of the properties;
(d)the sale of each of the E Street properties shall take place by private treaty within 3 calendar months of the date any default by the husband of any term of paragraph 9 above and if there is no contract, the terms of which are acceptable to both the husband and the wife, in place with respect to either or both of the properties at the end of that 3 calendar months then the unsold property or properties shall be sold at public auction that, unless the parties otherwise agree in writing, shall take place within 4 calendar months after the date of any default by the husband.; and
(e)the real estate agent/s and any auctioneer appointed to facilitate the marketing and sale of each of the E Street properties, by private treaty or auction, shall be as agreed between the husband and the wife in writing or, in default of agreement, as appointed by the President or Chief Executive Officer of the Real Estate Institute of Queensland or his/her nominee; and
(f)the listing price of each of the E Street properties shall be as agreed between the husband and the wife in writing or, in default of agreement, as fixed by the President or Chief Executive Officer of the Real Estate Institute of Queensland or his/her nominee; and
(g)should either or both of the E Street properties have to be sold at public auction, the reserve price or prices shall be fixed prior to auction by agreement between the parties or, in default of agreement, by the auctioneer and should the highest bid at the auction not reach the reserve price then the husband and the wife shall negotiate with the highest bidder or bidders with the intent of reaching an agreement as to the sale that is acceptable to both the husband and the wife; and
(h)should either or both of the E Street properties not sell at the first public auction then it or they shall be presented for sale at a second public auction that shall take place within another calendar month of the first auction on the same terms as the first as provided for above; and
(i)the husband shall cooperate as required with the real estate agent/s and/or auctioneers in respect of the marketing and sale of the property situated at 31 E Street, G Town, including in respect of the facilitation of pre-sale inspections of the premises by the agent/s and any interested prospective purchasers and he shall, if required by any purchaser of the property do all things necessary to give vacant possession of the said property on the date of settlement of the sale; and
(j)upon sale of both of the E Street properties, the husband and the wife shall cause Y Pty Ltd as trustee for the E Property Trust to pay all of the costs of sale and to have prepared the financial statements and any outstanding annual taxation returns for E Property Trust and to pay any Capital Gains Tax liability of the said E Property Trust in order to arrive at a sum of money (“the net sale proceeds”) and irrevocably direct the conveyancing solicitor to pay the net sale proceeds to the stakeholder solicitor on behalf of the HA Super Fund; and
(k)that, pursuant to Section 90MT1(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of husband’s interest in the HA Super Fund, the wife shall be entitled to be paid such amount as shall see her receive 70 per cent of the net value of the HA Super Fund (being that amount of the total sale proceeds of the E Street properties less the costs of sale and capital gains tax related to the sale of the same) less any payments received by her pursuant to paragraph 9 above and, in order to give effect to this, the Husband’s member entitlement in the HA Super Fund shall be decreased by whatever amount as is necessary to see the wife receive 70 per cent of the net value of the HA Super Fund and the wife shall nominate the Super fund into which her entitlement shall be rolled over and the husband shall be entitled to the balance thereafter.
Paragraph 26 (i) has effect from the operative time.
The operative time for the purposes of these Orders is four business days after the service of sealed orders on the Trustee.
This Order binds the Trustee of the HA Super Fund.
Save for such property as is specifically referred to in these Orders the husband and wife each forego any claim they may have to any other Super benefits belonging to or earned by the other.
That upon the husband complying with the terms of paragraph 9 above in its entirety:
(a) the wife shall resign as a director of Harris Nominees Pty Ltd; and
(b)the wife shall resign as a director of Y Pty Ltd and transfer her shares in the same to the husband or his nominees;
(c)upon compliance with the terms of paragraph 9 in its entirety the Husband and the Wife shall execute each and every document so as to put into effect the terms of this paragraph within 14 days of presentation of the same to them or their solicitors.
The Directors of Y Pty Ltd as trustees for the E Property Trust and the Trustees of the HA Super Fund have been provided procedural fairness in relation to the Orders sought and raise no objection to those Orders.
That unless otherwise specified in these Orders:
(a)Each party be solely entitled to the exclusion of the other to all other property (inclusive of choses-in-action) and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s record thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, Super entitlements are deemed to be in the possession of the person who is named as the worker or whose age or working future provides the conditions for payment out of such entitlements.
(b)Each party 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.
The Husband and the Wife shall execute each and every document so as to put into effect the terms of these Orders within 14 days of presentation to them or their solicitors.
If either the Husband or the Wife shall fail or neglect to execute such document as aforesaid then the Court appoints, pursuant to Section 106A of the Family Law Act, the Registrar or a Deputy Registrar of the Family Court of Australia at Brisbane to execute each and every document on behalf of the defaulting party.
If either the Husband or the Wife are required as a consequence of a breach of paragraph 34 hereof to make application pursuant to paragraph 35 hereof to the Family Court of Australia at Brisbane then the defaulting party will be liable for the costs of the application whether such costs be party and party or solicitor and own client.
That each party pay their own costs.
That all other outstanding applications be dismissed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Harris & Harris has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRF 3592 of 2005
| Ms Harris |
Applicant
And
| Mr Harris |
Respondent
EX TEMPORE
REASONS FOR JUDGMENT
The parties to the section 79 proceedings separated eight or nine years ago. After a chequered litigation path that incorporates an earlier trial and successful appeal, the parties have today reached agreement with the assistance of their respective legal advisers after three and a half days of negotiation.
The decision of the High Court in Stanford v Stanford [2012] HCA 52, handed down last week, emphasises, consistent with the plain words of section 79(2) of the Family Law Act 1975 (Cth) (“the Act”), the necessity for a court to ensure that justice and equity requires the alteration of the existing legal and equitable interests of the parties in property.
Legal and equitable interests in property held by a corporation as trustee of a trust is at the centre of the issues of the retrial which was due to proceed before me and which has been short-circuited by the consent proposed by the parties.
I am satisfied that it is just and equitable to alter existing interests in property in the manner proposed. The parties had a relationship lasting some 20 years before their “voluntary” separation, (as that expression is used by the plurality in the High Court in Stanford) brought an end to that relationship by the actions of one or both of them (as the High Court also refers to).
The choice of one or both parties to bring about an end to their living in a marital relationship has resulted in a change to the common use of property and the stated and unstated assumptions made by each in respect of property which they owned or enjoyed, and the manner in which the legal and equitable interests in that property were together utilised. (Stanford at [41] and [42].
What order should then be made requires an application of section 79(4). (See Stanford at [43].)
The matters referred to in that subsection are embraced by the parties, each and together expressing through their legal representatives that the considerations there enumerated combine such that, by reference to the particular circumstances of this particular marriage, it is just and equitable to have orders made between them in terms of the consent to which they each append their signatures. Comprehensive proposed orders embrace that agreement.
The orders themselves are the subject of an agreement between the parties that they embrace justice and equity as between the parties as that expression is used within section 79 of the Act.
At the outset of the hearing before me, Ms Hogan, senior counsel for the wife, outlined at my request, a series of issues then outstanding between the parties which were said by her to form the parameters of the dispute between the parties.
They evidenced some complexity in the matters which would otherwise have needed to be determined by the Court and which have attended the parties’ discussions and are now embraced in an agreement.
By reference to the affidavit evidence before me, which I have read, the agreement reached between the parties can, in my view, be seen to be a sensible compromise of all issues which would otherwise have needed to be determined by the Court.
The alteration of interests proposed by the orders are in my view just and equitable. Orders should be made by consent in those terms.
I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 22 November 2012.
Associate:
Date: 28 November 2012
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