Kallen and Alvin and Anor (No 2)

[2013] FamCA 648

FAMILY COURT OF AUSTRALIA

KALLEN & ALVIN AND ANOR (NO 2) [2013] FamCA 648

FAMILY LAW – PROPERTY PROCEEDINGS – Where reasons for judgment had been published – Where the parties were given an opportunity to make submissions about the form the orders will take given the findings in the reasons for judgment.

Family Law Act 1975 (Cth) s117B(1)

Rosati & Rosati (1998) 23 Fam LR 288

APPLICANT: Ms Kallen

RESPONDENT: Mr Alvin

INTERVENOR: Mr DD

FILE NUMBER: BRC 11120 of 2009

DATE DELIVERED: 30 August 2013

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 26 August 2012

REPRESENTATION  

COUNSEL FOR THE APPLICANT: Mr McGregor

SOLICITOR FOR THE APPLICANT: Charles Cooper Lawyers

COUNSEL FOR THE RESPONDENT: Mr Page QC

SOLICITOR FOR THE RESPONDENT: Michelle Porcheron Lawyers

SOLICITOR FOR THE INTERVENOR:

Mr DD

B Law Firm

Orders

1. Within sixty (60) days of the date of these Orders, the applicant shall pay or cause to be paid to the respondent the sum of $708,971.49 which sum shall be deemed to have been paid by the applicant upon the deposit of such sum to the trust account of the solicitors for the respondent.

2. The respondent shall forthwith provide to his solicitors an irrevocable authority and instructions requiring them to pay from the sum referred to in paragraph 1 hereof immediately upon its receipt by the solicitors for the respondent and upon the undertaking of Michelle Porcheron Solicitor that she will claim no lien over any part of the funds referred to below:

   (a)the sum of $14,000.00 to the trustees of the GN Super;

   (b)the sum of $55,380.55 together with interest thereon to the intervener, Mr DD, in full and final settlement of the indebtedness of the Respondent to that firm and in return for payment to the intervener, the intervener will provide to the respondent a Request to withdraw Writ in respect of the property at F Street, Suburb G.

3. Upon payment of the sum referred to in paragraph 1 hereof:

   (a)the respondent shall transfer to the applicant all his share and interest in and to the company known as N Pty Ltd ACN …;

   (b)the respondent shall resign as a director and secretary of the company, N Pty Ltd;

   (c)the applicant shall indemnify the respondent and hold him indemnified in relation to any liabilities of the company, N Pty Ltd or relating to such company including any personal liability of the parties under the commercial bill facilities to the CBA Hong Kong;

   (d)the applicant shall forthwith do all acts and things and sign all documents reasonably necessary to cause the respondent to be released from the personal guarantees given by him to the Westpac Bank and Commonwealth Bank of Australia for the loan facilities held in the name of N Pty Ltd;

   (e)the applicant shall forthwith do all such things and execute all such documents necessary to cause N Pty Ltd to transfer and assign to the respondent the benefit of the loan agreement executed by N Pty Ltd and R Pty Ltd in or about the month of  August 2006 relating to a sum of $165,681.00 together with interest;

   (f)the applicant shall forthwith do all such things and execute all such documents necessary to transfer and assign to the respondent the indebtedness of N Pty Ltd to R Pty Ltd in the sum of $20,000.00.

4. The respondent will forthwith do all such things and execute all such documents necessary to refinance the security registered over the property at F Street, Suburb G and necessary to release the applicant from the unlimited personal guarantee provided to secure the loan from CTB Australia Ltd and to release N Pty Ltd from any guarantee given by that company relating to that loan facility.

5. The respondent shall indemnify the applicant and N Pty Ltd and hold them indemnified in relation to any and all liabilities of R Pty Ltd including any personal liability of the applicant and N Pty Ltd to CTB Australia Ltd as well as any and all undertakings given by the applicant and N Pty Ltd to indemnify the other guarantor security providers in respect of R Pty Ltd’s loan facility with CTB Australia Ltd against any shortfall in repayment of the total loan facility to the Bank.

6. The applicant shall forthwith resign as a director and secretary of J Pty Ltd.

7. The respondent will indemnify the applicant and hold her indemnified in relation to any and all liabilities of J Pty Ltd including any personal liabilities of the applicant arising from her having held office as a director of that company.

8. The applicant will forthwith resign from any office held by her in Alvin Pty Ltd.

9. The applicant will transfer to the respondent all her share and interest in Alvin Pty Ltd.

10. The respondent shall forthwith cause Alvin Pty Ltd as trustee for the Alvin Family Trust to transfer to the applicant or to the nominee of the applicant the 100 shares in N Pty Ltd owned by the Trust.

11. The respondent will indemnify the applicant and hold her indemnified in relation to any and all liabilities of Alvin Pty Ltd including any personal liabilities o he applicant arising from her having held office as a director of that company.

12. The respondent will upon payment to him of the sum referred to in paragraph 1 hereof pay to the Trustee of the GN Super the sum of $14,000.00.

13. The respondent will forthwith resign as a trustee of the GN Super.

14. The GN Super will pay to the respondent or rollover into a fund nominated by him a sum calculated by way of the ratio of his member entitlement compared to the value of the Superannuation Fund after the accountant for the Superannuation Fund has completed and lodged all outstanding taxation returns for the Fund in order to bring it up to date and after any taxation liabilities and expenses associated with the lodging of the returns are paid.

15. The applicant shall within thirty (30) days of the date of these orders transfer to the respondent all of her right, title and interest in and to the property situated at F Street, Suburb G, more particularly described as Lot … on … County of EE, Parish of FF and upon such transfer the applicant will provide to the respondent a withdrawal of caveat to remove caveat … from the title to the said property.

16. The respondent will indemnify the applicant and hold her indemnified in relation to any liabilities of the applicant relating to the property at F Street, Suburb G.

17. The respondent shall transfer to the applicant:

    (a)50 woods lots in AB Timber Plantation;

    (b)30 droves of cattle in CD Beef Cattle Project.

18. Each of the parties shall forthwith do all such things and execute all such documents to cause the closure of the jointly owned bank accounts with Westpac Bank and St George Bank following the removal of any funds remaining on those bank accounts by the applicant.

19. The parties shall do all acts and things and sign all documents reasonably necessary to forgive the following loans:

    (a)Loans owing to N Pty Ltd by the parties;

    (b)Loan owing by Alvin Pty Ltd as trustee for the Alvin Family Trust to N Pty Ltd;

    (c)Loan owed by J Pty Ltd as trustee for the J Family Trust to N Pty Ltd.

20. The respondent shall retain in his possession and ownership and the applicant shall relinquish any claim in respect thereto and shall do all acts and things and sign all necessary documents to transfer to the respondent all the applicant’s right title and interest in and to the respondent’s bank accounts and the property chattels and personal possessions of the respondent held by him at the date of these orders.

21. The applicant shall retain in her possession and ownership and the respondent shall relinquish any claim in respect thereto and shall do all acts and things and sign all necessary documents to transfer to the applicant all the respondent’s right title and interest in and to the applicant’s bank accounts and the property chattels and personal possessions of the applicant held by her at the date of these orders.

22. In the event that either party defaults in the doing of any act and/or signing of any documents necessary to give effect to these orders then a Registrar or a Deputy Registrar of this Court is hereby appointed to do all acts and execute all necessary documents in the name of either party to give validity and operation to the terms of these orders.

23. Liberty to the parties is reserved to apply in relation to the enforcement of these orders.

24. All previous orders are discharged.

25. All other outstanding applications are dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Kallen & Alvin and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 11120 of 2009

Ms Kallen

Applicant

And

Mr Alvin

Respondent

REASONS FOR JUDGMENT

1. On 26 July 2013 I published my findings and reasons for judgment in the substantive property adjustment proceedings between the Applicant and the Respondent in this matter.  I did not pronounce final Orders though, preferring to give the parties the opportunity to bring in an agreed draft of the terms of the Orders to be made in accordance with my findings and reasons for judgment.

1. On Friday 16 August 2013, by consent, the parties were given until Monday 26 August 2013, to provide the Court with an agreed draft of the Orders to be made. On that day, a draft minute of proposed Orders was handed to the Court by the parties. The Court was told that all of the terms of that draft had been agreed between the parties as Orders reflecting my findings and reasons for judgment save for one part of it that I was to hear argument on before having to determine it. The Court was also informed by counsel for the Applicant wife that he was instructed to raise one other matter on behalf of the wife.

1. In my reasons for judgment, I determined that it would be appropriate and just and equitable for the wife to pay to the husband a cash amount of $870,352.70 to finalise property adjustment between them, subject to each of them retaining certain other interests in property and superannuation and liabilities.

1. The Orders that I will now make will require the wife to pay the husband only $708,971.49. The difference between the figure in my reasons and the figure in the Orders I will make represents, I was informed by the legal representatives of the parties, certain debts owed to the company to be wholly retained by the wife now being assigned to the husband.  That is entirely appropriate and, I am satisfied, just and equitable in all the circumstances of this case.

How long should the wife have to pay the husband the cash sum?

1. For the husband, it was submitted that the Orders should oblige the wife to pay the husband the sum of $708,971.49 within 60 days. For the wife, it was submitted that the Orders should give the wife 4 months to pay the husband that sum.

1. The draft minute includes no provisions as to what is to happen in default of payment. If there is default, further enforcement proceedings might be necessitated. Of course, pursuant to s 117B (1) of the Act, interest will be accruing on the amount outstanding from the date by which the Orders provide the wife is to have paid the husband, unless the Court orders otherwise.

1. For the husband, it was submitted that the husband is entitled to the fruits of the judgment within a reasonable period of time and that 60 days, having regard to the many months that have passed since the trial, should be considered reasonable. It was also submitted that as interest continues to accrue on the money that the Orders require the husband to pay to the Intervener, it is inappropriate to hold the husband out of the funds from which he will discharge that liability for longer than another 60 days.

1. For the wife, it was submitted that 4 months would be more appropriate. Counsel for the wife submitted that this was so because the wife would have to sell real properties to meet the obligation to pay the husband pursuant to the Orders that will be made and that 4 months is a reasonable time within which to do so.

2. With respect to counsel for the wife, there was no evidence before me at the trial that the wife would have to sell any real property to meet any Order by the Court to pay the husband a cash amount. In fact, the wife said at paragraph 544 of her affidavit of evidence in chief filed 13 October, 2011 that the orders she was seeking would see her retaining all of the real properties of the parties and the interests they had in companies and trusts and have her paying the husband a cash sum to be determined by the Court. Of course, her case was always that the cash amount to be paid to the husband in return for her retention of all of their interests in all of the real properties and the companies should be much less than was ultimately determined by the Court as appropriate and just and equitable. However, never was there any evidence adduced that the wife might have to sell property or properties if the cash amount ordered to be paid by her to the husband was greater than what she was making application for.

3. Clearly, the wife and her legal representatives prudently would have anticipated the prospect that the Court might order a larger cash figure to be paid to the husband, particularly having regard to the husband’s case. I can only conclude that they must have considered whether evidence should be adduced about how the wife might meet any such obligation in that circumstance. As I have observed, no such evidence was before the Court.

1. I cannot, in my view, now make a decision about what is a reasonable amount of time within which to require the wife to pay the husband the cash amount determined appropriate based on statements made by counsel for the wife from the bar table that are not supported by the evidence adduced by the wife at trial.

1. In the circumstances, I consider the 60 day period which the husband is clearly prepared to give the wife to pay him the cash amount of $708,971.49 to be a reasonable time frame within which the wife should be required to pay the husband pursuant to the Orders. After that period, interest will accrue, pursuant to the Act and Rules, on any part of the amount still outstanding.

Should regard now be had to the wife’s potential Capital Gains Tax liability?

1. Counsel for the wife also told the Court that he had instructions to submit to the Court that, as the wife would now be required to sell real properties to pay the cash amount determined to be appropriate and just and equitable to be paid by her to the husband, and that the sale of those real properties would give rise to liability for capital gains tax that she would now have to bear solely, it is appropriate just and equitable to now take that liability into account in the framing of the Orders that the Court will make.

1. With respect to counsel for the wife who, I observe, did not appear for the wife at the trial of the matter, I refer back to paragraph 22 of my reasons for judgment published on 26 July 2013 and repeat that the wife’s solicitor who appeared for her at the trial conceded that there was absolutely no evidence before the Court as to the calculation of potential capital gains tax liability from a person properly qualified to give it. Accordingly, even if I had determined that potential capital gains tax liability should somehow be taken into account in the determination of the appropriate, just and equitable property adjustment orders, having regard to the general principles set out by the Full Court in Rosati (1998) 23 Fam LR 288, I could not have included any certain amount in my determination of the value of the relevant real property.

1. Again, as I have already observed in these reasons, there was absolutely no evidence adduced at trial for the wife of any imperative or any intention or desire on her part to sell any of the real properties, all of which she sought to retain at the trial. As already noted, the absence of such evidence must be viewed in the context of the wife and her legal representatives facing the husband’s case that sought orders for the wife to pay him a far greater cash sum than that which she sought to pay him. In these circumstances, having already delivered my reasons for judgment which include my findings as to the value of the parties’ interests in property, I do not consider that I can now somehow determine that an unknown potential capital gains tax liability be taken into account.

1. Whilst it is for each and every litigant before this Court, in conjunction with any legal representatives they may have, to determine how they run their case, the outcome in this case, as it is now presented by counsel for the wife, clearly shows there is much to be said for adducing at trial admissible evidence as to potential capital gains tax liability, where such potential liability exists, irrespective of the position the particular litigant seeks to maintain at the end of the proceedings.

1. Accepting, as I do, that the terms of the draft Orders handed to the Court by the parties, with the inclusion of a 60 day time frame for payment by the wife to the husband of the amount that is included in the draft, reflect the determinations made by me in the reasons for judgment already published, I will make the Orders set out at the commencement of these supplementary reasons.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 30 August 2013.

Associate:

Date:  30 August 2013