Hathaway & Hathaway (No 2)
[2024] FedCFamC1F 136
•8 March 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Hathaway & Hathaway (No 2) [2024] FedCFamC1F 136
File number: MLC 8027 of 2015 Judgment of: HARTNETT J Date of judgment: 8 March 2024 Catchwords: FAMILY LAW – ENFORCEMENT – Where each party seeks enforcement of final consent orders made four years prior – Where wife’s interest in the self-managed superannuation fund is not rolled out – Where there is a dispute as to the calculation of the wife’s interest – Where there is dispute as to whether the wife remains a member of the superannuation fund – Where husband has not disclosed financial taxation records of the superannuation fund – Where the wife alleges her interest in the superannuation fund has not been properly accounted for – Order made for financial disclosure Legislation: Corporations Act 2001 (Cth) ss 198F, 203AA, 290
Superannuation Industry (Supervision) Act 1993 (Cth)
s 17A
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 6.01, 6.03
Superannuation Industry (Supervision) Regulations 1994 (Cth) r 13.12
Division: Division 1 First Instance Number of paragraphs: 58 Date of hearing: 7 February 2024 Place: Melbourne Counsel for the Applicant: Mr Anderson Solicitor for the Applicant: Resolve Divorce Lawyers Counsel for the First Respondent: Ms Swart Solicitor for the First Respondent: Lakey Family Law and Mediation Counsel for the Second Respondent: Mr Anderson ORDERS
MLC8027 of 2015 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR HATHAWAY
Applicant
AND:
MS HATHAWAY
First Respondent
Z2 PTY LTD
Second Respondent
ORDER MADE BY:
HARTNETT J
DATE OF ORDER:
7 FEBRUARY 2024
THE COURT ORDERS THAT:
1.The Trustee of the Z2 Superannuation Fund before 8 February 2024 at 12.00pm make available to the Wife and her solicitors the taxation returns of the superannuation fund for the years ended 30 June 2020, 30 June 2021, 30 June 2022 and 30 June 2023.
2.On or before 9 February 2024 at 12.00pm the Husband pay to the Wife $6,911.25 in land tax liability as paid by the Wife, being a partial payment of such tax.
AND THE COURT NOTES THAT:
A.There remains dispute between the parties as to the Husband’s payment of a further amount to the Wife in the sum of $2,214.
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 Hathaway & Hathaway has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J
INTRODUCTION
These reasons for judgement support the Orders made by the Court on 7 February 2024.
The matter proceeded before the Court in circumstances where the applicant husband (“the husband”) and the respondent wife (“the wife”) have each filed an Enforcement Application with respect to the enforcement of final property orders made by consent of the parties on 13 April 2018 (“the final orders”). The second respondent to the proceeding is Z2 Pty Ltd (“the trustee”), the corporate trustee of Z2 Superannuation Fund (“the superannuation fund”), a self‑managed superannuation fund which was controlled by the parties and two of their four adult children, all of whom were directors of the superannuation fund, at the time of the making of the final orders.
The husband seeks to enforce Order 8 of the final orders. As does the wife. The wife also seeks to enforce Orders 2, 4, 5, 6, 9, 10, 11, 14 and 18 of the final orders.
The final orders are as follows:
1.[Z2 Pty Ltd] (“the Trustee”) be joined as a party to these proceedings.
SUPERANNUATION
2.The Husband and Wife and the Trustee do all things and give all necessary authorities to facilitate a recalculation of their respective member’s account balances in the [Z2 Superannuation Fund] (“the Fund”) as at 13 April 2018 (“the valuation date”), to take into account:
(a)the Fund’s interest in the [Z Property Trust], based on the property at [Q Street, Suburb C] at a value of $1,850,000; and
(b) the then value of the Fund’s share and other investments, with the costs (if any) of such recalculation to be borne by the Fund.
3. Pending the Roll Out referred to in paragraph 8, neither the husband nor the wife shall take any steps to seek to withdraw any of their entitlements from the Fund (the husband warranting that he has not withdrawn any of his entitlements since 30 June 2016).
4. Paragraphs 5-8 of these orders are binding upon the Trustee of the Fund.
5.The base amount to be allocated to the wife out of the interest of the husband in the Fund is $X where
X= (A + B)/2 – B
A= the husband’s Members balance as at the valuation date
B= the wife’s Members Balance as at the valuation date.
6. That whenever the Trustee of the Fund makes a splittable payment from the interest held by the husband in the Fund the Trustee shall pay to the wife the amount which is calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 and there be a corresponding reduction in the entitlement the husband would have had but for these Orders.
7. The operative time for the purpose of these orders shall be 31 May 2018 (“the Rollout date”).
8.By the Rollout date, the Trustee of the Fund do all things and sign all documents to roll out to an alternate complying superannuation fund nominated by the wife (the wife to furnish a certificate from the ATO confirming that it is a complying superannuation fund)her then Members entitlement (to include the payment split), with the rollout to include in specie all units held by the Fund in the [Z Property Trust No 2], and the balance of her entitlement to be in cash unless otherwise agreed.
9.Following the payment split and the rollout, the wife shall forthwith resign as a director of the Trustee of the Fund and transfer the shares held by her in the Trustee of the Fund to the husband, and resign as a member of the Fund, and the husband shall thereafter indemnify the wife in relation to all liabilities of, or arising from the wife’s involvement or association with, the Fund save from a liability arising as a consequence of any activity or conduct of the wife and save for any liability arising as a consequence of the wife’s use of [Q Street].
[B Street]
10. On or before the Rollout date:
(a) the Husband and Wife and [AA Pty Ltd] at the wife’s expense do all things and sign all documents to cause [AA Pty Ltd] as Trustee of the [Hathaway Trust] to make an in specie distribution in favour of the wife (as a beneficiary of [the Hathaway Trust]) of all units held by [the Hathaway Trust] in the [Z Property Trust No 3]; and
(b) the Husband do all things and sign all documents to:
(i) Transfer all shares held by the Husband in [Z Pty Ltd] to the wife (the other Respondents warranting that they hold no shares); and
(ii) resign any office held in [Z Pty Ltd].
11.The Husband pay, indemnify the wife and keep her indemnified in relation to any liabilities of [Z Pty Ltd], [Z Property Trust No 2] and [Z Property Trust No 3] extant as at the Rollout date save for any liability (other than existing liability for land tax) arising since 1 July 2011 with respect to [B Street] and relating to the land, the premises or the use of or activity occurring on that land and premises and save for any liability arising by reason of the past use by the wife of [Q Street, Suburb C].
OTHER
12. Save as provided in the preceding paragraphs, the wife shall forthwith upon compliance with paragraph 10 (at the husband’s expense):
(a)assign to the husband any interest held in any loan account or entitlement under any trust or corporation or trust hereunder;
(b) transfer to the husband any shares held in any corporation referred to hereunder;
(c) resign any office held in any corporation referred to hereunder;
(d) renounce any power, right, interest or entitlement under any trust referred to hereunder; and
(e) do all things necessary to facilitate her removal as a signatory to any bank account of any of the entities hereunder:
12.1 [AA Pty Ltd]
12.2 [Hathaway Trust]
12.3 [Hathaway Family Trust]
12.4 [Hathaway Family Trust No 2]
12.5 [BB2 Pty Ltd]
12.6 [BB2 Trust]
12.7 [BB3 Pty Ltd]
12.8 [PP Trust]
12.9 [BB Properties Pty Ltd]
12.10 [BB Properties Trust]
12.11 [JJ Pty Ltd]
12.12 [KK Trust]
12.13 [DD Properties Pty Ltd]
12.14 [DD Properties Trust]
12.15 [Hathaway Pty Ltd]
12.16 [Hathaway Practice Trust]
12.17 [Hathaway Family Savings Pty Ltd]
12.18 [Hathaway Family Savings Trust]
12.19 [Hathaway Family Investments Trust]
12.20 [Hathaway Family Investments Trust No 2]
12.21 [BB Holdings Pty Ltd]
12.22 [BB Investments Pty Ltd]
12.23 [Z2 Pty Ltd]
12.24 [Z2 Superannuation Fund]
12.25 [Z Pty Ltd]
12.26 [Z Property Trust No 4]
12.27 [JJ2 Pty Ltd]
(“the Entities”).
13.The Respondents jointly and severally pay, indemnify the wife and keep her indemnified in relation to any liabilities of, or arising from her involvement or association with, any and all of the Entities, including but not limited to taxation save for any liability arising by reason of the transfer of the units in the [Z Property Trust No 3], in which event the Husband and Wife shall assume equal responsibility for such liability, and each shall do all things reasonably necessary to secure rollover relief for Capital Gains Tax with respect to that transfer.
14. The wife otherwise retain, free from any claim by any of the Respondents (and they to remove any caveats lodged by any of them), her interest in:
[J Street, Suburb K]
[N Street, Suburb O]
[L Street, Suburb M].
15.As between the husband and wife, save as provided in these orders (other than for enforcement purposes):
(a) each of them shall retain all assets in their respective possession as at the date of these orders;
(b) each shall be solely liable for any liability attaching to any item of property being retained by them pursuant to these orders;
(c) each shall retain their respective superannuation entitlements.
16. The Husband shall look for and, if he locates, cause to be delivered to the Wife:
(a) her Certificate of Citizenship; and
(b) the […] brooch.
17.The Wife shall look for and, if she locates, cause to be delivered to the Husband:
(a) the Ketubah (religious Jewish marriage certificate); and
(b) the study desk given to the husband by his mother.
18. The Husband by 15 May 2018:
(a) deliver to a professional copying service provider nominated by the wife the family photo albums, to enable her to obtain copies, the wife not to remove such albums from the premises of the service provider; and
(b) return to the wife the key to the front door of [B Street] (if located).
ORDERS FOR A JEWISH DIVORCE (GETT)
19.The Husband and Wife shall appear before the Melbourne Beth Din (Jewish Ecclesiastical Court) forthwith upon being called upon by the other and/or summoned by the said Jewish Ecclesiastical Court so to do.
20.Each of the Husband and Wife shall thereupon grant a “Gett” (Jewish Bill of Divorce) to the other if and when required, orders and/or directed so to do by the said Jewish Ecclesiastical Court.
21.Each of the Husband and Wife shall do all acts and things as may be required of them by the said Jewish Ecclesiastical Court to give validity and operation according to “Halakhah” (Jewish Law) to:
(a) any grant of a Gett; and
(b) any requirement, order or direction of the said Jewish Ecclesiastical Court in relation to the dissolution of the parties’ marriage in Jewish Law.
22.The wife shall otherwise release the second to fifth Respondents from all or any claims she now has against any or all of them or any of their assets.
23.All extant applications be otherwise dismissed and removed from the list of cases awaiting hearing.
24. All parties bear their own costs of these proceedings.
IT IS DIRECTED THAT
25. All documents produced to the Court pursuant to subpoena and exhibits relied upon by the parties be returned by the subpoena clerk of the Family Court of Australia, Melbourne Registry, to the person or organisation who produced same.
On 7 February 2024, the parties had some discussions with respect to the totality of the orders sought by the wife, with the outcome being that the ambit of the dispute for the purpose of the hearing on 7 February 2024 was contained to the rollout of the wife’s superannuation interest in the superannuation fund, and as a preliminary issue the disclosure and/or discovery required to be provided by the husband, and to the payment by the husband to the wife on account of land tax as provided for in the final orders. The husband conceded that he owed the wife a payment for land tax as paid by her, although he disputed the quantum. He also sought further time in which to make the payment he owed to the wife, albeit the debt has been outstanding for some years.
BRIEF BACKGROUND
There is an extensive litigation background in this matter, with the wife having filed an Initiating Application on 8 October 2015. Each of the parties have filed applications since the making of the final orders with respect to the enforcement of the final orders.
On 10 July 2018, the husband filed an Application for Enforcement. That application was resolved when the husband discontinued it, the wife having provided the husband with the documents, as signed by her, that he and the trustee sought: namely, her resignation/purported resignation as a director of the trustee; the transfer by her of her shareholding in the trustee; and the purported renunciation by her of all her “power, right, interest, position or entitlement as a beneficiary of the Trust or in any other capacity whatsoever under or in respect of the Trust”.[1]
[1] Husband’s affidavit filed 4 October 2023, Annexure MH6.
This purported renunciation and the resignation or purported resignation of the wife (as one argument put forward by the wife’s counsel) as a director of the trustee, appears to have occurred at a time when the wife’s member benefit, as it is described by the wife, remained in the superannuation fund.
On 31 July 2018, the husband, and the children of the parties, as directors of the trustee, signed a ‘resolution of the directors of [Z2 Pty Ltd] as trustee of the fund’ determining that the wife ceased to become a member of the superannuation fund with effect on 31 May 2018.
Commencing in February 2022, further litigation ensued between the parties in respect of the funds properly belonging to the wife which remain, as an undisputed fact, in the superannuation fund. They have been characterised in some manner by the husband and the trustee. The husband has referred to the funds of the wife as being essentially quarantined, and as being a liability of the superannuation fund.
What dies seem clear is that the transferrable benefits of the wife remain in the superannuation fund and have not been rolled out by the parties in accordance with Order 2 of the 2018 final orders. In remaining not transferred, the funds would appear to remain under the control of the trustee.
ORDERS SOUGHT
The wife sought orders that the trustee of the superannuation fund forthwith make available to the wife and her solicitors the taxation returns of the superannuation fund for the years ended 30 June 2020, 30 June 2021, 30 June 2022, and 30 June 2023. The wife also sought an order that the husband pay the sum of $9,125 to her on account of land tax pursuant to the final orders.
The husband resisted the orders sought by the wife in relation to the provision of taxation returns. In relation to the land tax issue, the husband proposed he pay the wife the sum of $6,911.25 within seven days.
MATERIAL RELIED UPON
The husband relied on the following documents:
(1)Enforcement Application filed 4 October 2023;
(2)his affidavits filed 4 October 2023 and 2 February 2024; and
(3)affidavit of Mr QQ, accountant, filed 2 February 2024.
The wife relied on the following documents:
(1)Enforcement Application filed 22 November 2023;
(2)her affidavit filed 22 November 2023;
(3)affidavit of Mr RR, lawyer and self-managed superannuation fund specialist advisor, filed 22 November 2023; and
(4)Financial Statement filed 22 November 2023.
EVIDENCE
The parties did not give evidence at the hearing. At this juncture, there are limitations on what findings can be made on untested evidence and I do not make any finding against the husband or the wife.
ISSUES IN DISPUTE:
How was the wife’s member balance of the superannuation fund calculated as at 13 April 2018?
It was the husband’s evidence that the wife’s member balance for the purposes of Order 2 of the final orders was recalculated by Mr QQ, the accountant for the superannuation fund, in accordance with Order 2 of the final orders.
It was the wife’s evidence that she did not consent to Mr QQ recalculating her member account balance in the superannuation fund in accordance with the final orders. The wife asserted that the final orders did not provide for Mr QQ’s appointment to undertake such recalculation, and that the husband unilaterally engaged Mr QQ in circumstances where the person to carry out the task was required to be authorised by both the husband and the wife.
The wife further asserted that Mr QQ did not comply with Order 2 of the final orders when valuing her member entitlements, as in his calculations Mr QQ excluded a sum of approximately $180,000 of dividends and bank interest. The wife claimed that these monies were monies to which she had an entitlement in part (at that time approximately $67,000) as they formed part of the superannuation fund assets at the relevant time. It was alleged by the wife, that such dividends, earlier declared in favour of the superannuation fund, should have been placed in the superannuation fund’s bank account to earn interest, but that the husband and trustee determined to withhold such funds to exclude them from the recalculation of the wife’s member entitlements in accordance with the final orders. This withholding, the wife claimed, being essentially deferring income of the superannuation fund, then benefitted the remaining beneficial members of the fund, to the exclusion of the wife. The husband denied he acted as portrayed by the wife.
It was Mr QQ’s evidence that unreceived (by the superannuation fund) dividends are not shares or other investments of the superannuation fund. It therefore followed that the unreceived dividends were not taken into account when recalculating the wife’s entitlement in the superannuation fund.
The wife engaged Mr RR, legal practitioner specialising in superannuation law to prepare a superannuation report in relation to the wife’s superannuation member entitlements. Mr RR would have adopted a different approach to Mr QQ in the recalculation exercise and is of the view that given the failure to rollout the wife’s member entitlements in the superannuation fund, the calculation of her entitlements differed from that of Mr QQ.
It is not necessary, at this juncture, for the Court to decide as to whether the wife’s member balance in the superannuation fund was accurately recalculated by Mr QQ in accordance with the final orders and/or whether Mr QQ was a person not appointed by the parties jointly.
Does the wife remain a member of the superannuation fund?
On 31 May 2018, the wife signed documents that gave effect or purported to give effect to her resignation as a company director of the trustee and resulted in a transfer of her shareholding to the husband.
It was the wife’s evidence that she signed documents to give effect to her resignation, under pressure from the husband. The husband denies that allegation made by the wife. The wife further claimed that she understood the resignation was not to be actioned until her member entitlements in the superannuation fund were rolled out to an alternate complying superannuation fund as nominated by the wife. As the wife’s entitlements have not been rolled out, she asserted that she remains a member of the superannuation fund.
Further, the wife submitted that due to the operation of s 17A of the Superannuation Industry (Supervision) Act 1993 (Cth) (“the Superannuation Act”), and whilst she remains a member of the superannuation fund, the wife must be a director of the fund such that her directorship must be cured in some way to ensure that the superannuation fund becomes a compliant fund in accordance with the relevant legislation.
I note that s 17A of the Superannuation Act provides that:
(1)Subject to this section, a superannuation fund, other than a fund with only one member, is a self managed superannuation fund if and only if it satisfies the following conditions:
(a) it has no more than 6 members;
(b)if the trustees of the fund are individuals--each individual trustee of the fund is a member of the fund;
(c)if the trustee of the fund is a body corporate--each director of the body corporate is a member of the fund;
(d) each member of the fund:
(i) is a trustee of the fund; or
(ii)if the trustee of the fund is a body corporate--is a director of the body corporate;
It was also the wife’s position that she remained a member of the superannuation fund in accordance with the Trust Deed because none of the matters as set out in clause 18 applied, namely:[2]
[2] Husband’s affidavit filed 2 February 2024, Annexure MH1, p.99.
18 CESSATION OF MEMBERSHIP
A person shall cease to be a Member of the Fund upon the first of the following events occurring:
(a)the date upon which all of the person's Benefits are paid out or a Rollover Payment arrangement is made on behalf of the Member in respect of all of the Member's Benefits in the Fund;
(b) his/her death;
(c)the date on which Unclaimed Benefits in respect of the Member are paid to the Commissioner or the Tax Commissioner;
(d)the date when Benefits payable to or on behalf of the Member cease to be payable; or
(e) such date as the Trustee shall reasonably determine;
PROVIDED THAT where a Policy providing Disablement Benefits has been effected in respect of a Member, he shall remain a Member for such period (if any) following resignation, dismissal or retirement from Gainful Employment as the Trustee shall determine.
The husband submitted that the wife was no longer a member nor beneficiary of the superannuation fund. It was the husband’s evidence that: [3]
The Wife was a member of the Fund when the Final Orders were made, but renounced and disclaimed her interest in the Fund, transferred her shareholding in [Z2 Pty Ltd] to me, and resigned as a director, following the making of the Final Orders.
[3] Husband’s affidavit filed 4 October 2023, paragraph 6.3.
Counsel for the husband further submitted, and seemingly as an alternate position (but not necessarily so) and in the event the Court did not agree with the husband that on the above basis, the wife ceased to be a member of the superannuation fund as at 31 May 2018, that Orders 2 to 9 of the final orders amounted to a payment arrangement in accordance with clause 18 of the Trust Deed such that the wife ceased to be a member of the superannuation fund by virtue of the existence of those orders.
The Court was not asked to decide as to whether the wife is a member of the superannuation fund at this stage in the proceeding, although that is a question to be answered, in my mind, with some assistance from the information that can be gleaned from disclosure of the taxation returns of the superannuation fund and in the context of the wife being mistrustful as to the husband’s assertions as to the content of those returns. The disclosure of such documents is said by the wife to be necessary to any determination of the broader issues.
I not further that the Court was also not asked to fix the resignation date on which the wife’s resignation took or takes effect, a power the Court has pursuant to s 203AA of the Corporations Act 2001 (Cth) (“the Corporations Act”).
How have the wife’s entitlements in the superannuation fund been treated since 2018?
The husband claimed that the wife’s entitlements in the superannuation fund have been quarantined and treated as a liability of the fund since the commencement of the 2019 financial year.
It was the husband’s untested evidence that:[4]
…The cash component of the rollout based on [Mr QQ's] recalculation as at 13 April 2018 is a liability of the Fund for, or alternatively the Trustee may hold on a separate bare or constructive trust for the Wife, a fixed sum payable to the Wife's nominated self-managed superannuation fund in accordance with the rollout obligation created by the Final Orders subject to the Wife complying with the rollout requirements. That cash component is reflected by two entries in each subsequent annual financial statement for the Fund prepared by [Mr QQ] which have, in aggregate, quarantined and carried forward the cash component of the recalculation pending the rollout.
[4] Husband’s affidavit filed 2 February 2024, paragraph 16.
The husband provided the wife with redacted Statement(s) of Financial Position of the superannuation fund for the financial years ending 30 June 2019, 30 June 2020, 30 June 2021, and 30 June 2022 (“the financial statements”). The financial statements were annexed to the husband’s affidavit filed 2 February 2024. These documents were relied upon by the trustee, in an unredacted state, to make decisions in respect of the operations of the superannuation fund. The husband did not otherwise provide to the wife the operating statements of the fund or any other financial document, including the taxation returns, relating to the superannuation fund post 2018. The husband conceded that he provided no current information in relation to the value of the fund.
Such taxations returns as are now sought, have been requested to be provided by the husband and/or trustee, to the wife, on repeated occasions, without success.
The only information identifiable from the financial statements is a sum of $691,783 categorised as Outgoing Member Rollover, and $1,024,948 categorised as the husband’s accumulation under the heading Liability for accrued benefits allocated to members’ accounts. Both figures remained the same for the four financial years, ending 30 June 2022.
The financial statements are heavily redacted such that there is no information as to the assets, investments, and total liabilities of the superannuation fund over the relevant years. The precise nature of the information redacted is not known by the wife. The ongoing performance of the superannuation fund is not known by the wife.
There is no clear and independent evidence before the Court as to how the wife’s member entitlements have been treated by the superannuation fund. This lack of evidence gives rise to the preliminary matter of the disclosure by the husband to the wife of the relevant taxation documents of the superannuation fund.
LEGAL PRINCIPLES
Relevant to this matter:
(1)Rules 6.01 and 6.03 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) provide that:
6.01 General duty of disclosure
(1)Subject to subrule (4), each party to a proceeding has a duty to the court and to each other party to give full and frank disclosure of all information relevant to the proceeding, in a timely manner.
Note: The proceedings to which the duty of disclosure applies include both parenting proceedings and financial proceedings. Failure to comply with the duty may result in the court excluding evidence that is not disclosed or imposing a consequence, including punishment for contempt of court.
(2)The duty of disclosure applies from the start of the proceeding and continues until the proceeding is finalised.
Note: Parties are also expected to comply with the duty of disclosure when complying with the pre-action procedures.
(3)The duty of disclosure also applies to a litigation guardian appointed under Part 3.5.
(4)This rule does not apply to a respondent to an application alleging contravention or contempt.
…
6.03 Duty of disclosure—documents
The duty of disclosure applies to each document that:
(a) is or has been in the possession, or under the control, of the party disclosing the document; and
(b) is relevant to an issue in the proceeding.
Note: In particular types of proceedings, practice directions may specify the documents that must be disclosed in those proceedings. See also rules 6.05 and 6.06
(2)Sections 198F and 290 of the Corporations Act provide that:
S 198F - Right of access to company books
Right while director
(1)A director of a company may inspect the books of the company (other than its financial records) at all reasonable times for the purposes of a legal proceeding:
(a) to which the person is a party; or
(b) that the person proposes in good faith to bring; or
(c) that the person has reason to believe will be brought against them.
Note 1: Section 290 gives the director a right of access to financial records.
Note 2: This section also applies to a director of a corporate director of a CCIV: see section 1225D.
Right during 7 years after ceasing to be director
(2)A person who has ceased to be a director of a company may inspect the books of the company (including its financial records) at all reasonable times for the purposes of a legal proceeding:
(a) to which the person is a party; or
(b) that the person proposes in good faith to bring; or
(c) that the person has reason to believe will be brought against them.
This right continues for 7 years after the person ceased to be a director of the company.
Right to take copies
(3)A person authorised to inspect books under this section for the purposes of a legal proceeding may make copies of the books for the purposes of those proceedings.
Company not to refuse access
(4)A company must allow a person to exercise their rights to inspect or take copies of the books under this section.
Interaction with other rules
(5)This section does not limit any right of access to company books that a person has apart from this section.
…
S 290 - Director Access
Personal access
(1)A director of a company, registered scheme, registrable superannuation entity or disclosing entity has a right of access to the financial records at all reasonable times.
Note: Section 1232B extends this section to the directors of the corporate director of a retail or wholesale CCIV.
Court order for inspection on director's behalf
(2)On application by a director, the Court may authorise a person to inspect the financial records on the director's behalf.
(3)A person authorised to inspect records may make copies of the records unless the Court orders otherwise.
(4)The Court may make any other orders it consider appropriate, including either or both of the following:
(a)an order limiting the use that a person who inspects the records may make of information obtained during the inspection;
(b)an order limiting the right of a person who inspects the records to make copies in accordance with subsection (3).
DISCUSSION
An imbalance of information presently exists in the matter where the husband and Mr QQ have access to the relevant taxation returns of the superannuation fund. The wife and Mr RR do not by reason of the husband’s unwillingness to provide same.
It has been nearly six years since the final orders were made which provided for, amongst other things, the wife’s member interest in the superannuation fund to be rolled out to a complying supernation fund as nominated by the wife. That has not occurred.
It was the husband’s position that this matter is a simple enforcement of the final orders. That is, he is prepared to roll out to the wife her entitlements in the superannuation fund as of 13 April 2018 as recalculated by Mr QQ.
It was the wife’s position that the matter is not a straightforward enforcement of an order of the final orders where she did not consent to Mr QQ undertaking the recalculation of her superannuation entitlements as at 13 April 2018; where an accurate recalculation of her entitlements has not occurred; where there may be an issue as to whether the superannuation fund is a compliant fund given her resignation as a director of the trustee (if such resignation is valid); where it is not clear how the wife’s superannuation member benefits have been treated in the nearly six years since the final orders were made; and where the wife may have further entitlements as a result of her member benefits remaining in the superannuation fund under the prudential control of the trustee.
Further, the wife does not accept the account of the husband without having an ability to pursue the superannuation fund’s taxation returns as a first step. If the husband’s description is an accurate representation of how the wife’s superannuation entitlements have been treated, it is reasonable to expect there is visibility of that treatment in documents such as the taxation returns of the superannuation fund.
There is also the issue of the treatment of the real property that existed in the superannuation fund at the time of the making of the final orders. That property is in Suburb C. The property is owned by Z Pty Ltd as trustee for the Z Property Trust No 2. The superannuation fund holds units in the Trust. The wife is the sole director of Z Pty Ltd. Since the making of the final orders the wife has received the rental receipts of the real property and attended to the property outgoings and maintenance. The husband’s position was that the real property no longer exists in the taxation returns of the superannuation fund because of the wife’s control and effective ownership of the real property. This would be unusual if, as it seems, the superannuation fund continues to hold units in the Trust. The taxations returns are relevant to this issue also.
In my view, the superannuation fund taxation returns for the years as requested by the wife are relevant to issues in the substantive proceedings and admissible documents. In particular, given the competing claims of the parties and the competing positions of Mr QQ and Mr RR.
Further, pursuant to those sections of the Corporations Act as referred to in [39] above, the wife would have an entitlement to access the financial records of the superannuation fund if she were currently a director of the trustee, or a director within the last seven years. Her resignation or purported resignation as a director of the trustee took effect in May 2018, some approximately five years and eight months ago.
The wife’s transferable benefits remain in the superannuation fund. The above provision suggests that the wife is required to be a director of the fund in those circumstances, regardless of how the trustee and Mr QQ have characterised her member entitlements acknowledging that the husband claims the wife has no “member entitlements”.
Rule 13.12 of the Superannuation Industry (Supervision) Regulations 1994 (Cth) provides that:
Assignments of superannuation interests
For the purposes of subsections 31(1) and 32(1) of the Act, it is a standard applicable to the operation of regulated superannuation funds and approved deposit funds that, subject to regulation 13.15, the trustee of a fund must not recognise, or in any way encourage or sanction, an assignment of a superannuation interest of a member or beneficiary.
This provision suggests there may be some difficulties around the wife’s purported renunciation as referred to in [28] above.
I conclude that as a preliminary matter, the wife should have access to the financial records of the superannuation fund being the taxation returns as sought by her. The trustee is to provide the documents forthwith to ensure the matter can progress without delay.
How much money does the husband owe the wife on account of land tax?
This issue was a further and small issue.
The husband conceded he owed the wife monies in relation to land tax incurred approximately six years ago and it was his evidence, relevantly, that:[5]
I admit I therefore owe the Wife the sum of $6,911.25. I agree to pay the Wife $6,911.25 for land tax incurred prior to the Final Orders being made, provided this payment is offset against the costs the Wife has been ordered to pay to me in accordance with the Orders of 14 September 2023 which have been calculated by my lawyer, and previously notified to the Wife's lawyer, as being in an amount of $26,662.35.
[5] Husband’s affidavit filed 2 February 2024, paragraph 100.
The wife sought that the husband pay her the sum of $9,125, on account of the amount the husband owed her as provided for in the final orders plus interest. She opposed an off set against any recent costs order in the husband’s favour as proposed by the husband.
The parties were content for an order to be made for the husband to pay the amount of $6,911.25 with the dispute as to whether the husband owed the wife a further $2,214 to be determined later. Such an order was not made by consent as there was a dispute as to the timeframe for the husband making such a payment.
The husband sought a period of seven days to make the payment of $6,911.25 to be afforded an opportunity to speak to Mr QQ and obtain advise as to the most beneficial way for him to make such payment.
There was no reason for a payment, already years overdue, to be paid within seven days in the context of the husband’s acknowledged immediate financial capacity to make such a payment.
I determined the husband pay $6,911.25 to the wife on or before 9 February 2024 at midday. This provided the husband with ample time to elect which bank account he wished to make payment from and, if he considered it necessary, to contact Mr QQ to provide him with advice as to that consideration.
I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett. Associate:
Dated: 8 March 2024
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