FAMILY COURT OF AUSTRALIA
| HIBBERT & HIBBERT | [2012] FamCA 831 |
| FAMILY LAW - PROPERTY - DEBT - Where the husband lent sums of money to his child and the wife's child for a business venture - Where the loans were repayable on demand - Loans repayable on demand create a cause of action immediately upon the loan being made - Per s 14(1) of the Limitation Act 1969 (NSW), loans not recoverable as they were advanced over six years ago. FAMILY LAW - PROPERTY SETTLEMENT - WASTE - Where the husband seeks an addback for moneys advanced by the wife to her son for living expenses following his injury - Where the advances were made by the wife with the knowledge of the husband on the understanding that the son would repay the funds from the proceeds of his common law claim – Moneys not added back - Where the husband sought an addback for the wife's gambling on poker machines and the wife sought an addback for the husband's betting on horse races and funds expended on his horse racing enterprise - Inappropriate to deal with issue by way of addback where amounts cannot be quantified - No adjustment to be made pursuant to s 75(2)(o) of the Family Law Act 1975 (Cth) as the court is not in a position to compare the parties' relative spending. |
| Limitation Act 1969 (NSW) Family Law Act 1975 (Cth) ss 72, 75(2)(o) |
| Young v Queensland Trustees Ltd (1956) 99 CLR 560 Ogilvie v Adams [1981] VR 1041 Gleeson v Gleeson [2002] NSW SC 418 (29 May 2002) |
| APPLICANT: | Mr Hibbert |
| RESPONDENT: | Ms Hibbert |
| FILE NUMBER: | SYC | 5508 | Of | 2010 |
| DATE DELIVERED: | 28 September 2012 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Rees J |
| HEARING DATE: | 10, 11, 12, 13, & 14 September 2012 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Schonell SC |
| SOLICITOR FOR THE APPLICANT: | Diamond Conway Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Lethbridge SC, Ms Sproston |
| SOLICITOR FOR THE RESPONDENT: | Gonzalez & Co |
ORDERS
IT IS ORDERED
That within three months, the husband pay to the wife’s solicitors the sum of $1,408,473, or in the event that the former matrimonial home at Suburb B (“the former matrimonial home”) is sold, the amount be adjusted in accordance with Orders 6 to 8 hereof.
That upon payment to the wife of the amount of $1,408,473 as referred to in Order 1, she shall transfer to the husband her whole right, title and interest in the former matrimonial home, subject to all encumbrances and the husband simultaneously shall indemnify the wife in respect of any liability for those encumbrances and discharge the wife from any liability for them.
That the husband do all acts and things required to transfer to the wife his right to recover against MM (“the wife’s older son) and NM (“the wife’s younger son”) all monies paid to the National Australia Bank (“NAB”) in satisfaction of guarantees given by the parties to the NAB to support loans made…
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- HIBBERT & HIBBERT [2012] FamCA 831
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- [2012] FamCA 831
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CaseChat Overview and Summary
The court was required to determine the enforceability of loans made by the husband to his stepchildren, given the passage of time and the operation of the *Limitation Act 1969* (NSW). Additionally, the court had to consider whether to "add back" certain expenditures made by the wife on her son's living expenses, the wife's gambling on poker machines, and the husband's betting on horse races, when calculating the net property of the parties. The court also had to address the proceeds from the sale of thoroughbreds and funds held in trust for legal fees.
Rees J found that loans made by the husband to his stepchildren, being repayable on demand, were statute-barred under section 14(1) of the *Limitation Act 1969* (NSW) as they were advanced more than six years prior to the proceedings. Regarding the wife's advances to her son for living expenses, the court declined to add them back, noting the husband's knowledge and the understanding of repayment from a legal claim. The court also determined that it was inappropriate to deal with the parties' gambling and horse racing expenditures by way of addback due to the inability to quantify the amounts precisely, and therefore no adjustment would be made under section 75(2)(o) of the *Family Law Act 1975* (Cth) to compare their relative spending. The court also noted that proceeds from the sale of a thoroughbred were already accounted for and that funds held in trust for legal fees would be dealt with separately.
The court ordered a property settlement that included the husband paying a substantial sum to the wife, with adjustments to be made upon the sale of the former matrimonial home. The orders also addressed the transfer of rights to recover monies owed by the parties' respective children for loans guaranteed to the National Australia Bank, and the transfer of interests in various companies and jointly owned horses. The husband was also ordered to continue spousal maintenance payments to the wife until her property settlement was fully received.
Orders
Orders of the court
IT IS ORDERED
1.
That within three months, the husband pay to the wife’s solicitors the sum of $1,408,473, or in the event that the former matrimonial home at Suburb B (“the former matrimonial home”) is sold, the amount be adjusted in accordance with Orders 6 to 8 hereof.
2.
That upon payment to the wife of the amount of $1,408,473 as referred to in Order 1, she shall transfer to the husband her whole right, title and interest in the former matrimonial home, subject to all encumbrances and the husband simultaneously shall indemnify the wife in respect of any liability for those encumbrances and discharge the wife from any liability for them.
3.
That the husband do all acts and things required to transfer to the wife his right to recover against MM (“the wife’s older son) and NM (“the wife’s younger son”) all monies paid to the National Australia Bank (“NAB”) in satisfaction of guarantees given by the parties to the NAB to support loans made by the NAB to the wife’s sons.
4.
That the wife do all acts and things required to transfer to the husband her right to recover against BH (“the husband’s son”) all monies paid to the NAB in satisfaction of guarantees given by the parties to the NAB to support loans made by the NAB to the husband’s son.
5.
That in the event that the husband does not, within three months, pay the sum referred to in Order 1 to the wife, and the parties do not do the things required in Order 2, then the husband and the wife shall immediately do all acts required to sell the former matrimonial home by public auction and unless otherwise agreed the reserve price shall be $1,650,000.
6.
That upon completion of the sale, the parties shall cause to be paid to the wife the sum of $1,582,390 less the amount actually paid to the NAB to satisfy the guarantees for loans to the wife’s sons, and any remaining balance from the proceeds of the sale of the former matrimonial home go to the husband after deduction of selling costs including agent’s costs and legal costs of sale, and payment of all money owed to the NAB.
7.
If the former matrimonial home sells for a price in excess of $1,650,000, the parties shall cause to be paid to the wife the amount of $1,582,390, less the amount actually paid to the NAB to satisfy the guarantees for loans to the wife’s sons, plus 45% of the sum by which the sale price exceeds $1,650,000, and any remaining balance from the proceeds of the sale of the former matrimonial home go to the husband after deduction of selling costs including agent’s costs and legal costs of sale, and payment of all money owed to the NAB.
8.
That if the former matrimonial home sells for a price less than $1,650,000, the parties shall cause to be paid to the wife the sum of $1,582,390 less the amount actually paid to the NAB to satisfy the guarantees for loans to the wife’s sons, less 45% of the amount by which the sale price is less than $1,650,000, and any remaining balance from the proceeds of the sale of the former matrimonial home go to the husband after deduction of selling costs including agent’s costs and legal costs of sale, and payment of all money owed to the NAB.
9.
That the wife do all acts and things to transfer to the husband her right, title and interest in C Pty Limited and T Pty Limited and the husband indemnify the wife in relation to any and all liabilities of those corporations to any third party whether present or arising in the future.
10.
That the wife do all acts and things required to transfer to the husband any interest held by her in any jointly owned horse.
11.
That the husband continue to pay to the wife the sum of $1,400 per week by way of spousal maintenance until the wife has received the whole of the amount she is to receive by way of property settlement in accordance with these Orders.
12.
That except as provided in these Orders, each party is entitled to the exclusion of the other, to any property in his or her possession.
13.
(a) That the husband do all things required to transfer to the husband’s son, the shares held by him in J Investments Pty Limited together with any further entitlement to dividends or distribution funds arising upon a liquidation of the said company.
(b) That the husband provide a direction and irrevocable authority to the Board of the said company and sign all documents necessary to give effect to these Orders.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Item 12a – Proceeds from thoroughbreds post separation (Z and foal)The husband gave evidence that his share of the proceeds of sale of Z in the sum of $100,000 net was paid into the T Pty Limited account. Accordingly, this sum has already been taken into account in the value of T Pty Limited and in the reduction of the husband’s loan account with T Pty Limited. It has also been taken into account in the assessment of the costs of the husband’s horseracing activities. There was no evidence as to the sale price of any foal after separation (hence the indication that the amount sought to be included was “$100,000 plus”). Accordingly this amount will not be included as an asset. $97,000 held in the wife’s solicitors’ trust account It was agreed in submissions that the amount of $97,000 which is held in the wife’s solicitors’ trust account on account of legal fees should be included as an asset in the balance sheet. It does not appear in the document produced by either party. This agreement will be re-visited in the discussion of legal fees and the asserted addback of the amounts received by the wife by way of interim property settlement. Because I intend to add back the whole of the wife’s paid legal fees (including the amount in trust), it will not be added to the balance sheet here. Items 13 and 14 – the withdrawal of $100,000 and the sale of the motor vehicleThe husband contends that both these items should be added back. The wife withdrew the sum of $100,000 from the …853 account in March 2010. In October 2010, she sold her motor vehicle for $24,000. The parties had separated around January 2010 but were still living at the former matrimonial home. The husband was giving the wife $350 per week for housekeeping and $300 per week for her own expenses but was otherwise paying the expenses associated with the home. He stopped making those payments in about September or October 2010. Her evidence about what was done with the money is scant. She deposited $50,000 into an account she opened jointly with her daughter, DM. She gave her younger son $25,000 as a wedding gift. She paid the expenses of her travel to the United States for her younger son’s wedding and for travel to New Zealand to stay with her daughter. Otherwise, she said, the money was spent on her living expenses. If the wife sought to assert that the whole sum of $124,000 was spent on her reasonable living expenses, then the onus was upon her to provide the evidence on which that finding could be based. She did not. The court is thus left in a position of having to make estimates which will not be as accurate as a calculation made upon the basis of evidence which was within her control. Between January 2010 and December 2010, a period of eleven months, the wife spent $11,272 per month, in addition to the $300 per week which the husband gave her. That equates to approximately $2,900 per week in circumstances where she was living at the former matrimonial home or with her daughter and had no rental expenses.