Jung & Meyer

Case [2024] FedCFamC1F 433

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Jung & Meyer [2024] FedCFamC1F 433  

File number(s): MLC 4616 of 2021
Judgment of: JOHNS J
Date of judgment: 26 June 2024
Catchwords: FAMILY LAW – PROPERTY – application for final property orders – where the parties had a long marriage – where the parties jointly established a successful business during the marriage – where the husband has property interests in Australia and Country D – where the husband alleges his Country D property is inherited – where the wife has had primary care of the children since separation – where the husband has not provided full and frank disclosure – where the husband proposes a two-pools approach, effectively quarantining the Country D interests – where the wife proposes a holistic approach – assessment of contributions during cohabitation – assessment of post-separation contributions – consideration of s 75(2) factors
Legislation:

Evidence Act 1995 (Cth) s 140(2)

Family Law Act 1975 (Cth) ss 75(2), 79

Federal Circuit and Family Court of Australia Rules 2021, Chapter 6

Cases cited:

Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545;

Bonnici v Bonnici (1992) FLC 92-272;

Chang & Su [2002] FamCA 156;

Chapman & Chapman [2014] FamCAFC 91;

Dickons v Dickons (2012) 50 Fam LR 244;

Oriolo and Oriolo (1985) FLC 91-653;

R v Watson; Ex parte Armstrong (1976) 136 CLR 248;

Singerson & Joans [2014] FamCAFC 238;

Stanford & Stanford (2012) 247 CLR 108;

Stone & Stone [2015] FamCAFC 18;

Weir and Weir (1993) FLC 92-338;

Whisprun Pty Ltd v Dixon (2003) 200 ALR 447

Division: Division 1 First Instance
Number of paragraphs: 184
Date of last submission/s: 11 August 2023
Date of hearing: 9 – 11 August 2023
Place: Melbourne
Counsel for the Applicant: Mr Sweeney
Solicitor for the Applicant: Lander & Rogers
Counsel for the Respondent: Ms Swart
Solicitor for the Respondent: Swifty Legal

ORDERS

MLC 4616 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS JUNG

Applicant
AND:

MR MEYER

Respondent

ORDER MADE BY:

JOHNS J

DATE OF ORDER:

26 JUNE 2024

THE COURT ORDERS THAT:

Definitions

1.For the purposes of these orders:

(a)The "Suburb F Property" means the real property situate at and known as E Street, Suburb F in the state of Victoria more particularly described as Certificate of Title Volume … Folio …;

(b)The "Suburb H Property" means the real property situate at and known as G Street, Suburb H in the state of Victoria more particularly described as Certificate of Title Volume … Folio …;

(c)The "Suburb K Property" means the real property situate at and known as J Street, Suburb K in the state of Victoria more particularly described as Certificate of Title Volume … Folio …;

(d)The "City M Property" means the real property situate at and known as L Street, City M, Country D;

(e)The "Commercial Property" means the real property situate at and known as NN Street, Suburb OO, City M,…

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AGLC
Jung & Meyer [2024] FedCFamC1F 433
Case
[2024] FedCFamC1F 433
Decision Date

CaseChat Overview and Summary

Ms Jung and Mr Meyer, married for many years, sought final property orders following their separation. The court had to decide on the appropriate division of their assets and liabilities, considering their equal contributions during the marriage, the wife's primary care of the children post-separation, and the husband's failure to make full disclosure of his assets. The husband proposed a two-pools approach, isolating his overseas properties, while the wife advocated for a holistic approach. The court assessed the contributions of both parties during the marriage and post-separation, as well as the factors outlined in section 75(2) of the Family Law Act.

The court found that a 4% adjustment in favour of the wife was necessary due to her responsibilities in caring for the youngest child and the husband's non-disclosure. It was determined that dividing the assets in a 56% to 44% ratio in favour of the wife was just and equitable. The court rejected the husband's claim for an equalisation of superannuation interests due to their modest value and the minor difference between the parties. The wife was to retain the family home, the business, and receive a significant adjustment in her favour, while the husband was to keep his overseas properties and other assets. The court also made injunctive orders to protect the business from the husband's potential interference and required the husband to resign from all corporate roles related to the business.

The final orders included provisions for the equal distribution of the capital gain from the sale of the Suburb F property, the transfer of certain assets to each party, and the winding up of shared financial obligations. The wife was granted exclusive control over the family business, and the husband was restrained from using certain business-related email addresses and engaging in actions that could harm the business. The court also addressed indemnities, superannuation, and other miscellaneous matters. The orders were designed to ensure a fair and equitable division of the parties' assets while protecting the interests of both the wife and the business.

Orders

Orders of the court

MLC 4616 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS JUNG

Applicant

AND:

MR MEYER

Respondent

ORDER MADE BY:

JOHNS J

DATE OF ORDER:

26 JUNE 2024

THE COURT ORDERS THAT:

Definitions

1. For the purposes of these orders:

(a) The "Suburb F Property" means the real property situate at and known as E Street, Suburb F in the state of Victoria more particularly described as Certificate of Title Volume … Folio …;

(b) The "Suburb H Property" means the real property situate at and known as G Street, Suburb H in the state of Victoria more particularly described as Certificate of Title Volume … Folio …;

(c) The "Suburb K Property" means the real property situate at and known as J Street, Suburb K in the state of Victoria more particularly described as Certificate of Title Volume … Folio …;

(d) The "City M Property" means the real property situate at and known as L Street, City M, Country D;

(e) The "Commercial Property" means the real property situate at and known as NN Street, Suburb OO, City M, Country D;

(f) The "Corporate Entities and Trusts" means:

(i) N Pty Ltd ATF Jung Meyer Family Trust;

(ii) N Pty Ltd ATF O Property Trust;

(iii) N Pty Ltd ATF Jung Unit Trust;

(iv) P Pty Ltd ATF O Property Trust;

(v) Q Pty Ltd;

(vi) O Super Pty Ltd ATF Superannuation Fund 1;

2. That all previous orders including order 5 of the orders made by this Court on 20 August 2021 be and are hereby discharged.

Suburb F Property

3. The parties and each of them do all acts and things and sign all necessary documents to distribute equally to each of them the capital gain obtained by the O Property Trust arising from the sale of the Suburb F property.

4. That the Husband and the Wife forthwith irrevocably authorise and direct S Accountants, ("the Accountants") at their joint and equal expense, to prepare the taxation returns for the O Property Trust and, each of them personally, for the financial year ended 30 June 2023.

5. The parties forthwith authorise and direct Lander & Rogers to release the remaining proceeds of sale of the Suburb F Property, being $960,998.07 plus accrued interest thereon, to be distributed as follows:

(a) Firstly, to pay to the wife the sum of $693,118;

(b) Secondly, to pay to the husband the sum of $267,880;

(c) Thirdly, as to the interest accrued thereon:-

(i) 56 per cent to the wife; and

(ii) 44 per cent to the husband.

Corporate Entities and Trusts

6. The Wife be permitted to operate and make all decisions in relation to the day-to-day operation of the business trading as 'R Company' (conducted via N Pty Ltd ATF the Jung Meyer Family Trust) ("R Company"), to the exclusion of the Husband.

7. That within 60 days of the date of these orders, the Husband do all such acts and things and sign all documents necessary to:

(a) Tender his resignation as an appointor, guardian, or substitute appointor of each of the trusts comprised in the Corporate Entities and Trusts;

(b) Tender his resignation as a director and/or secretary of each of the companies comprised in the Corporate Entities and Trusts;

(c) Transfer his shares (if any) in each of the companies comprised in the Corporate Entities and Trusts, to the Wife;

(d) Renounce all claims against, and relinquish all entitlements to, each of the companies and trusts comprised in the Corporate Entities and Trusts of whatsoever nature, including unpaid beneficiary entitlements and loan accounts (and any and all claims of the Husband personally);

(e) Renounce all claims against the Wife relating to the Corporate Entities and Trusts;

(f) Assign to the Wife all unpaid beneficiary entitlements he may have, consent to his removal as a beneficiary, and agree not to receive any future distribution from, any of the trusts comprised in the Corporate Entities and Trusts.

8. That subject to the Husband’s compliance with orders 3, 4 and 5 hereof, the parties do all such acts and things to cause the Suburb K property to be removed as security held by the Commonwealth Bank of Australia ("CBA") over the following liabilities of N Pty Ltd ATF the Jung Meyer Family Trust and instead cause all security to be held over the Suburb H Property or as otherwise required by the CBA:

(a) The CBA Overdraft (account ending in …41);

(b) The CBA Loan (account ending in …34); and

(c) The CBA Guarantee.

9. The Husband be restrained by injunction from:

(a) Doing any act or thing permitted to be done by the Wife pursuant to order 6 hereof;

(b) Taking any actions directly intended to materially and/or negatively impact on the business of R Company;

(c) Enticing away or attempting to entice away employees, suppliers, contractors, or sub­contractors of R Company;

(d) Doing any act or thing to cause any contractor/supplier to cease transacting business with R Company, including but not limited to contractors/suppliers in Country D;

(e) Registering any company which include the words ‘Jung’, ‘N Pty Ltd’, ‘R Company’ or related names or any derivation thereof; and

(f) Using any email address formerly used by him whilst employed in the business of R Company.

10. Pending the Husband’s compliance with orders 3, 4 and 5 hereof the Husband be and is hereby restrained from increasing the mortgage or borrowings secured on the title to the Suburb K Property.

11. The Wife personally and as a director of N Pty Ltd sign all documents and do all acts and things required to transfer to the Husband, at the expense of the Husband all of the interest of the said company in Motor Vehicle 1 driven by him and the husband shall pay, as and when payments fall due all repayments owing under the lease to T Finance relating to the purchase of that vehicle.

Retention of items

12. The Husband retain for his sole use and benefit absolutely, to the exclusion of the Wife:

(a) The Suburb K property;

(b) The City M Apartment;

(c) The Commercial Property;

(d) The part-property settlement of $1,890,000 received by him in accordance with the Interim Orders made on 18 May 2021;

(e) The sum of €50,000 applied by him to the purchase of the City M Property;

(f) His U Shares share portfolio;

(g) Any funds to his credit in any bank accounts in his name (including bank accounts held by him in Country D);

(h) His superannuation entitlements, subject to the provisions of these orders; and

(i) Any personal taxation liability accruing or accrued in his name.

13. The Wife retain for her sole use and benefit absolutely, to the exclusion of the Husband:

(a) The business trading as 'R Company' and the Corporate Entities and Trusts;

(b) The Suburb H Property;

(c) The part-property settlement of $1,890,000 received by her in accordance with the Interim Orders made on 18 May 2021;

(d) Her V Shares;

(e) Her digital currency portfolio and investments;

(f) Any funds to her credit in any bank accounts in her name;

(g) Her superannuation entitlements, subject to the provisions of these orders; and

(h) Any personal taxation liability accruing or accrued in her name.

Indemnities

14. Unless otherwise specified and contemporaneously with the Husband's compliance with all of his obligations pursuant to these orders, the Wife indemnify the Husband and keep him indemnified in relation to any liability of whatsoever nature and kind arising from his interest in the Corporate Entities and Trusts.

15. The Wife indemnify the Husband and keep him indemnified in relation to the following:

(a) The mortgage registered on the title of the Suburb H Property, in favour of the Commonwealth Bank of Australia;

(b) The repayment of loans provided by Mr W;

(c) Any personal income tax liability; and

(d) Any funds owing in relation to her Commonwealth Bank credit card.

16. The Husband indemnify the Wife and keep her indemnified in relation to the following:

(a) The mortgage registered on the title of the Suburb K Property, in favour of the Commonwealth Bank of Australia;

(b) Any personal income tax liability; and

(c) Any other liability in his sole name including any liability attaching to any item of property being retained by him pursuant to these orders.

Superannuation Fund 1

17. The Husband and the Wife sign all documents and do all acts and things required to roll out the Husband's member balance of $70,439 held in Superannuation Fund 1 to a superannuation fund nominated by him in writing within 14 days of the date of these orders.

18. In the event that the Husband refuses or neglects to advise the Wife of the name of the nominated superannuation fund the Wife shall be at liberty to pay his member balance to an industry fund of her choice and she shall forthwith advise the Husband of the superannuation fund to which that member balance has been paid.

Other

19. Unless otherwise specified in these orders and save for the purposes of enforcing the payment of any monies due under these or any subsequent orders:

(a) Each party be solely entitled to the exclusion of the other to all real and personal property (including choses-in-action) in the legal or beneficial ownership or possession of that party as at the date of these orders;

(b) Any monies standing to the credit of the parties in any joint bank account are to be divided between the parties equally, and the parties forthwith are to do all such acts and things as may be necessary to close any such joint bank account/s;

(c) All insurance policies remain the property of the owner named thereon; and

(d) Each party be solely liable for and indemnify the other with respect to any liability encumbering any item of property to which that party is entitled pursuant to these orders.

20. Each of the parties do all things necessary and sign all such documents as are required by them individually or in their respective capacities as directors or shareholders to ensure compliance with the obligations imposed by these orders.

21. The parties be at liberty to provide a copy of these orders to their bankers, in order to implement the orders herein.

22. Any applications for costs arising from these proceedings be dealt with on the papers, with the party seeking costs to file and serve written submissions within 28 days of the date of these orders and any submissions in response to be filed and served within 14 days thereafter.

23. All extant applications be otherwise dismissed.

IT IS DIRECTED

24. That all documents produced to the Court pursuant to subpoena and exhibits relied upon by the parties be returned by the Subpoena Clerk of the Federal Circuit and Family Court of Australia, Division One, Melbourne Registry, to the person or organisation who produced same after the expiration of thirty (30) days from the date of these orders, or otherwise upon the conclusion of any appeal.

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).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

There are three children of the marriage, Mr B, aged 22 years, Mr C, aged 20 years, and X, aged 17 years. The children live with the wife. Mr B and Mr C have completed their secondary education and are taking “gap” years before commencing tertiary studies. X attends Y School. At the time of trial, she was in Year 10. BACKGROUND At the commencement of their cohabitation neither the husband nor the wife had any assets of significance. Upon the parties’ return to Melbourne in 1996, they lived at the home of the wife’s parents in Suburb Z rent-free for a period of approximately seven months. They then moved to a property owned by the wife’s father in Suburb AA, where they lived rent-free for a further period of approximately two years. During that period, the husband worked in the hospitality industry and the wife worked as a retail assistant. In 1997, the parties commenced operation of the Company and the Business. The husband and wife together with the wife’s brother, Mr CC, were the directors and equal shareholders of the Company. Initially, the Business operated as a wholesale supplier of goods. In approximately 1999, the Business commenced operating a retail outlet. At about that time, the wife’s brother resigned as a director and transferred his shares in the Company to the husband and wife. The parties’ first child, Mr B, was born in 2002. The wife continued to work in the Business following Mr B’s birth. In addition, she was the primary carer to the parties’ child. Mr B commenced attending childcare for three days per week when he was 10 months old. In 2007, the husband’s mother died. Prior to her death, she transferred her interests in two properties partly owned by her in Country D to the husband. As a result, the husband held a one-half interest in a commercial property in Country D and a one-half interest in an apartment at DD Street, Suburb BB, City M, Country D (“the Suburb BB apartment”). In 2007 or 2008, the husband’s father gifted the parties the sum of approximately €100,000, which was applied by them to further develop the Business. The husband’s father died in 2018. As a result, the husband contends he inherited his father’s interests in the Country D commercial property, and the Suburb BB apartment, resulting in the husband having a 100 per cent interest in those properties. The husband alleges he applied the cash component of his inheritance to acquire his niece’s interest in the Suburb BB apartment. During the relationship the parties bought and sold properties in their own names or entities controlled by them in which the family lived. At the time of their separation, the parties owned the former matrimonial home in Suburb H and a holiday home in Suburb F, Victoria (“the Suburb F property”). Following separation, in about early 2019 the parties purchased the property at EE Street, Suburb FF, for the husband to live in. That property was purchased for the sum of around $750,000 and was funded from the parties’ joint bank account.

Evidence

Evidence Before The Court

Throughout her oral evidence the wife impressed as a forthright and honest witness, and I accept her evidence.The husband’s evidence The husband was cross-examined on the second day of hearing. He was an unimpressive witness whom I observed to be unreliable, evasive and at times non-responsive when challenged. The husband was steadfast in his view that his interests in Country D ought not be available for division between the parties and that belief appeared to influence his attitude and approach to his obligations to make full and frank disclosure. For example, the husband was cross-examined as to the many occasions upon which he was asked, through his lawyers, to produce documents evidencing his overseas interests. The husband conceded that the wife’s lawyers had written letters dated 8 December 2022, 30 January 2023, and 27 February 2023 requesting documents, including those related to savings accounts held by him in Country D (Exhibit A6). The husband confirmed that he had not produced documents as sought in that correspondence; he appeared unrepentant as to his failure to produce those documents. At times, the husband appeared entirely dismissive of his obligation to make disclosure to the Court. For example, he was cross-examined as to his failure to produce the contract for the sale of the Suburb BB apartment, which he alleged he had sold. The husband acknowledged that he had received letters of request for that document on 5 April 2023 and 21 July 2023. The husband also conceded that by the date of the second letter, being 21 July 2023, he was in possession of the contract of sale for that property. When questioned as to why he did not then produce the document, the husband was dismissive, responding that he was overseas with the parties’ son. The husband also acknowledged that he had had five months to produce that document but that he only produced it the week prior to the commencement of the final hearing. The husband was cavalier in relation to his obligation to disclose that document. The husband was also cross-examined in relation to his employment, particularly in the period after the wife assumed control of the Business in mid-2021; the husband claimed to have been unemployed since that time. During his oral evidence, the husband confirmed that he had been asked to produce all of his payslips and employment records, and that that request was made by letter dated 1 August 2023 (Exhibit A6). The husband’s response to that request was that he was unemployed. During his oral evidence, when challenged as to his employment the husband stated that he had not worked for an entity known as “[MM Company]”; he also confirmed that he had not been paid by that entity. However, when pressed, the husband conceded that he had worked for MM Company, but claimed that he had not been paid. His explanation for not disclosing that he had worked for that entity was that it was owned by his ex-partner and that she paid for everything during their relationship.

Decision

Reasons for decision

Having regard to the wife’s responsibilities to care for the parties’ youngest child, coupled with the potential impact of the husband’s future business interests on the Business and the identified non-disclosure by him, in my view justice and equity requires that there be an adjustment of 4 per cent in favour of the wife.CONCLUSION Having regard to my findings, both as to contributions and in relation to matters under s 75(2) of the Act, I am satisfied that a just and equitable result sees that the parties’ interests be divided in the proportions of 56 percent to the wife and 44 percent to the husband. An adjustment in those terms results in the wife retaining assets valued at $3,907,221 and the husband retaining assets valued at $3,069,959. Hence, the wife will receive an adjustment in her favour of approximately $837,262. Whilst the husband sought an equalisation of the parties’ superannuation interests, in circumstances where those interests are modest relative to the other interests held by the parties and there is a difference of less than $24,000 between the parties’ respective interests, in my view there is little utility or benefit to either party in making a superannuation splitting order; a division of the pool, including superannuation, will provide a just and equitable outcome, as between the parties. The wife will retain assets valued at $3,542,612, comprising of:-·G Street, Suburb H $1,890,000·The Business $1,091,000·Add-backs $ 159,564·Part-property settlement $ 308,800·Superannuation $ 93,248 The wife will also be responsible for meeting her income-tax liability ($182,509) and her share of the capital gains tax payable on Suburb F ($146,000), leaving her with property valued at approximately $3,214,103. From the proceeds of sale of Suburb F, the wife will be paid the sum of $693,118. The husband will retain assets valued at approximately $3,123,974 comprising of:-·J Street, Suburb K $1,890,000·Country D commercial property $ 212,034·Proceeds of sale of Suburb BB property $ 126,920·Bank accounts in Country D $ 417,500·Proceeds of LL Shares $ 172,845·Part-property settlement $ 234,236·Superannuation $ 70,439 In addition, the husband will be responsible for his taxation liabilities, being income-tax payable ($175,895) and capital gains tax in respect of Suburb F ($146,000), leaving him with property valued at $2,802,079. Accordingly, he will be paid the sum of $267,880 from the proceeds of sale of Suburb F. Having regard to the circumstances of the case, I consider that orders giving effect to that adjustment provides for a just and equitable outcome as between the husband and the wife. It was common ground between the parties that the Court should make injunctive orders regulating the husband’s conduct so as not to disrupt the operation of the Business. Whilst most orders were agreed, the husband did not concede that an order be made restraining his use of the email address used by him when working in the Business. Given my findings that the husband has made threats to commence a new business in competition with that to be retained by the wife, I am satisfied that the restraint sought by the wife is appropriate and I will make an order in those terms. The husband also sought restraints against the wife disrupting his business. In circumstances where that business has not yet commenced operation and there is no evidence of any conduct by the wife to interrupt the operation of such business, I am not satisfied that such orders as sought by the husband are appropriate.

Ratio Decidendi

Legal Principle Established

In circumstances where each of the husband and the wife have derived an income from the Business since their separation and further, where the wife admitted that she did draw additional sums from the Business from time-to-time to meet family expenses, I do not propose to include her personal credit card liability in the parties’ balance sheet. That view is bolstered having regard to the fact that the balance sought to be included as at August 2023 relates to a liability that has accrued some six years post-separation. Item 19 – Legal fees relating to the alleged tenancy dispute and estate administration The husband claims the sum of $62,092 as a liability related to the administration of his father’s estate. The wife rejects that claim in circumstances where the husband has adduced no evidence in support of his claim. The husband has not produced his father’s Will, or any documents relating to the administration of his estate or invoices from lawyers in relation the alleged tenancy dispute. Accordingly, I accept the wife’s position; the alleged liability will not be included in the parties’ balance sheet.THE ASSET POOL Based on my findings, the parties’ legal and equitable interests for the purposes of the orders I am asked to make are as follows:- Both parties seek orders for the adjustment of their property pursuant to s 79 of the Act. There was no challenge to the proposition that it is just and equitable to make orders for the property settlement. Accordingly, in circumstances where the parties have shared a long marriage and it is agreed by them that they will no longer have the joint use and enjoyment of their interests, I am satisfied that it is just and equitable to make orders for adjustment of their interests. CONTRIBUTIONS It was common ground between the parties, and I accept, that neither the husband nor the wife had any assets of significance at the commencement of their long relationship. It was also common ground that the parties’ contributions during their long marriage were equal. Both parties worked hard and contributed to the best of their abilities in their respective roles within the marriage. For example, both parties worked to the best of their abilities in the establishment, growth and operation of the Business. Similarly, the marriage produced three children, and it is conceded that both parties contributed to the welfare of the family, albeit in different ways. It is agreed that during the marriage, each party contributed to the acquisition, conservation and improvement of their interests and to the welfare of their family. Having regard to the concessions made by the parties in respect of their contributions during the marriage, I am satisfied that the parties’ contributions during the marriage ought be regarded as equal. As to the contributions made by each following their separation, the wife contends that she has made significant post-separation contributions due to her ongoing support and care for the parties’ three children. She contends that the husband provided little assistance or support in the care of the children during the post-separation period. Further, the wife contends that she has been solely responsible for the conduct of the Business since 2021, which has benefited both parties.