Hastings and Hopkins and Ors

[2017] FamCA 959

FAMILY COURT OF AUSTRALIA

HASTINGS & HOPKINS AND ORS [2017] FamCA 959

FAMILY LAW – PRACTICE AND PROCEDURE – property settlement proceedings – where the husband has not filed any material in response – where the wife has been informed the parties or their entities have a significant taxation liability to the Australian Taxation Office – order that the husband provide to the wife’s solicitors information and documents to enable taxation returns for the entities of the parties – order that the wife engage an accounting firm to enable the finalisation of the taxation returns to occur – order that the husband provide all documents and information requested by the wife’s solicitors and her accountants within seven days of such request being made.

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

APPLICANT: Ms Hastings

FIRST RESPONDENT: Mr Hopkins

SECOND RESPONDENT: B Pty Ltd

THIRD RESPONDENT:

FOURTH RESPONDENT:

Hopkins Holdings Pty Ltd

C Pty Ltd

FILE NUMBER: MLC 10970 of 2015

DATE DELIVERED: 9 November 2017

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Johns J

HEARING DATE: 9 November 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hoult

SOLICITOR FOR THE APPLICANT: Marsh & Maher

FIRST RESPONDENT: No Appearance

SECOND  RESPONDENT: Mr Hoult

THIRD RESPONDENT: Marsh & Maher

FOURTH  RESPONDENT:

No Appearance

No Appearance

No Appearance

Orders

1. That within 7 days of the date of these Orders (“the Date”) the husband shall provide to the wife’s solicitors the following information and documents to enable the taxation returns of B Pty Ltd, Hopkins Holdings Pty Ltd, Hopkins Trust and The Hopkins Family Trust to be completed for the 2015, 216 and 2017 financial years:

   (a)       Details of rental income and expenditure regarding the properties;

   (b)For the period 1 July 2014 to 30 June 2017 relating to B Pty Ltd as trustee for the Hopkins Family Trust:-

   (i)Loan statements for the properties;

   (ii)Details of any further loans taken out by B Pty Ltd as trustee for the Hopkins Family Trust;

   (iii)Details of any sale or purchase of assets;

   (iv)Details on the land at cost for:

   I.1 D Street, Suburb E in the State of Victoria;

   II.2 D Street, Suburb E, in the State of Victoria

   III.3 D Street, Suburb E, in the State of Victoria

   IV.F Street, Suburb E, in the State of Victoria;

   (v)Copies of bank statements;

   (c)Details of the following investments made by Hopkins Holdings Pty Ltd as trustee for the Hopkins Trust:-

   (i)G Pty Ltd; and

   (ii)H Pty Ltd;

   (d)For the period 1 July 2014 to 30 June 2017 relating to Hopkins Holdings Pty Ltd as trustee for the Hopkins Trust:-

   (i)Details of any income and expenditure;

   (ii)Details of any asset purchases or sales;

   (iii)Details of any loans taken out;

   (iv)Copies of bank statements.

2. That the wife be authorised to appoint J Accounting to finalise the taxation returns for B Pty Ltd as trustee for the Hopkins Family Trust and Hopkins Holdings Pty Ltd as trustee for the Hopkins Trust for the 2015, 2016, 2017 and 2018 financial years.

3. That in furtherance of the preceding paragraph the husband shall provide all documents and information requested by the wife’s solicitors and/or J Accounting within 7 days of such request being made.

4. That within 7 days the wife cause the following sealed documents to be served upon the Australian Taxation Office:-

   (a)       Further Amended Initiating Application;

   (b)       Affidavit of the wife;

   (c)       These orders.

5. That within 7 days the wife cause the following sealed documents to be served upon the husband:-

   (a)       These orders;

   (b)       Reasons for Judgment.

6. That all extant applications be adjourned to the Registrar’s Directions List at 9.30am on 2 February 2018.

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 Hastings & Hopkins 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: MLC 10970 of 2015

Ms Hastings

Applicant

And

Mr Hopkins

First Respondent

And

B Pty Ltd
Second Respondent

And

Hopkins Holdings
Third Respondent

And

C Pty Ltd
Fourth Respondent

EX-TEMPORE REASONS FOR JUDGMENT

1. The matter of Hastings & Hopkins and Ors comes before the Court today upon the Further Amended Initiating Application of the wife filed 1 November 2017.  That is an application which seeks final orders for an alteration of property interests.  It also seeks a raft of interim orders in respect of the parties’ interests including orders for the sale of property.  The wife does not today in this interim hearing seek to press all of those applications. 

2. The husband has not appeared at Court this day.  He has been called first during the call over at approximately 10.05am.  He was further called at approximately 10.15am prior to the commencement of the hearing.  He has not answered the call.  I note from the Court file that he has had solicitors on the record, albeit briefly.  Those solicitors filed a Notice of Address for Service on 2 August 2017.  I understand that on 6 November 2017 they have a filed a Notice of Ceasing to Act. 

3. These proceedings have been on foot since December 2015.  At no stage has the husband filed any material in response to the many applications made by the wife.  The matter has had interim hearings on three occasions in 2016 before Thornton J.  It has had various procedural hearings before Registrar Mestrovic and Registrar Jenkins and also a procedural hearing before Registrar Russell.  Each of those registrars as well as Thornton J has made orders requiring the husband to file a response to initiating application, a financial statement and affidavits in response. 

4. At no stage has he filed any material in compliance with the orders made by the Court. 

5. The wife had anticipated being in a position to proceed with her application for an alteration of property interests on an undefended basis today.  However, that application has been derailed as a result of information that has come to hand that indicates that the parties or their entities have a substantial outstanding taxation liability.  At paragraph 52 of her affidavit filed 1 November 2017 the wife deposes as follows:

   On 26 October 2017 [Mr Hopkin’s] solicitors finally provided my solicitors with a letter from the ATO dated 18 September 2017 which states that [Mr Hopkin’s] has an outstanding taxation liability of $7,499,840.11… 

6. That notice from the Australian Taxation Office is annexure SLH-9 to the wife’s affidavit.  In the circumstances, and sensibly might I add, the wife does not today seek to press her substantive application for alteration of property interests.  She recognises that it is necessary to clarify and crystallise the position with the Australian Taxation Office. 

7. She recognises that in order to do so it is necessary that that agency be served with the applications before the Court so that they be given an opportunity to be heard as to how and in what manner the parties’ interests should be applied so as to address the outstanding liability and thereafter an adjustment can be made.  To that end what she now seeks is to press paragraphs 7, 9 and 10 of her amended initiating application for interim orders. 

8. Paragraph 7 of that application is an application that the husband provide to the wife’s solicitors information and documents to enable taxation returns for the entities of the parties, that is, B Pty Ltd, Hopkins Holdings Pty Ltd, Hopkins Trust and the Hopkins Family Trust to be completed for the financial years ending 30 June 2015, 2016 and 2017.  What the wife sets out in her affidavit material is a history of not being provided with necessary financial information to enable the completion of those taxation returns.  Particularly from paragraphs 23 on of her affidavit the wife sets out the structure of the parties’ corporate interests. 

9. The reality is that the wife is an office holder of many of those entities.  Notwithstanding her position as an office holder she has not been provided with the financial documentation necessary to enable completion of the taxation returns.  To that end she seeks an order requiring the husband to produce those documents.  Whilst she seeks that order it is conceded by her counsel today that it may well be that the husband – as he has with other orders of this Court – simply ignores that obligation.  Nonetheless, I accept and am satisfied that it is necessary that an order be made for the documentation to be provided. 

10. At paragraph 9 of her application the wife seeks to engage an accounting firm to enable the finalisation of the taxation returns to occur.  The wife again deposes in her affidavit of 1 November 2017 the difficulties that she has had in relation to engaging with the parties’ previous accountants. 

11. In paragraph 28 of that affidavit she deposes as follows: 

    Whilst [Mr Hopkin’s] has always engaged [K] Accountants to manage the accounting needs of the family businesses and entities, due to his close relationship with these accountants I have recently engaged J Accounting to assist me with finalising the outstanding taxation returns for [B] and the [Hopkins] Family Trust and the other corporate entities in which I have an interest. 

12. At paragraph 29 of her affidavit she sets out the particulars of the information required by that accounting firm to complete the returns for the B Pty Ltd entity as well as the family trust of which it is a trustee.  Similarly, she sets out the information required in respect of Hopkins Holdings at paragraph 35 of her affidavit and at paragraph 43 she indicates that in respect of the entity C Pty Ltd returns have only been completed up to 30 June 2015. 

13. It is important that the wife engage accountants that she can confidently work with and have trust in.  The reality is, for whatever reason – and I do not know because the husband has not put material before the Court – the previous accountants have not completed returns.  They have not assisted the wife to date in enabling her to complete and lodge returns and it is against that backdrop that she now seeks to engage her own accountants.  I am satisfied that that is an appropriate order to make having regard to that history. 

14. The final order the wife seeks is set out at paragraph 10 of her application and it is an order that the husband provide all documents and information requested by the wife’s solicitors and her accountants within seven days of such request being made.  Again that is an order that is necessary in order to ensure the timely completion of the outstanding tax returns.  For the reasons already identified I am satisfied that that is an appropriate order to be made. 

15. It is clear that the parties have an ongoing obligation to make full and frank disclosure. That is specifically provided for in the Family Law Rules 2004 (Cth). It would seem on the face of the material presented to the Court by the wife that there has been a significant lapse in the husband’s compliance with those obligations such that we now have a position where returns are outstanding for extended periods of time, there is a significant taxation liability and penalties and interest continue to accrue whilst those matters remain outstanding.

16. In order to mitigate the loss and damage that is being caused by the seeming non-engagement by the husband with the Australian Taxation Office it is necessary that the wife be in a position to lodge returns as soon as practicable.  Accordingly, I am satisfied that it is appropriate that I make orders in the terms of paragraphs 7, 9 and 10 of the wife’s further amended application for interim orders.  I will make one amendment to paragraph 9 of that application and that will be that the wife be authorised to appoint J Accounting; rather than the Court making that appointment it is the wife be authorised to make that appointment. 

17. I will also make a further order requiring the wife to cause a copy of her Further Amended Initiating application, her affidavit and these orders on the Australian Taxation Office and an order that the wife’s lawyers cause a copy of these orders and my Reasons for Judgment to be served upon the husband.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johns delivered on 9 November 2017

Associate: 

Date:  9 November 2017