Kavner & Kavner
[2023] FedCFamC1F 794
•26 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kavner & Kavner [2023] FedCFamC1F 794
File number: SYC 1055 of 2021 Judgment of: CAMPTON J Date of judgment: 26 September 2023 Catchwords: FAMILY LAW – PROPERTY – Final orders made by consent – Where the court is satisfied the proposed orders are just and equitable Legislation: Family Law Act 1975 (Cth) ss 11, 71A, 79, 90C, 90E, 90K, 106A Division: Division 1 First Instance Number of paragraphs: 15 Date of hearing: 26-28 June 2023, 18-20 September 2023 Place: Sydney Counsel for the Applicant: Mr Gray with Mr Roberts of Counsel Solicitor for the Applicant: Farrar Gesini Dunn Sydney Counsel for the Respondent: Mr Loofs SC Solicitor for the Respondent: Gosford Family Law ORDERS
SYC 1055 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS KAVNER
Applicant
AND: MR KAVNER
Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
26 SEPTEMBER 2023
THE COURT ORDERS BY CONSENT AND ON A FINAL BASIS, THAT:
Setting aside the Binding Financial Agreement
1.That pursuant to s 90K(1)(c) of the Family Law Act 1975 (Cth) ("the Act") the Binding Financial Agreement entered into between the parties on 29 November 2005 be set aside.
2.That consequential upon the making of the setting aside of the Binding Financial Agreement, orders 3-32 inclusive are made pursuant to section 79 of the Act.
The Suburb D property
3.That the Husband in his capacity as director of B Pty Ltd ATF the Mr Kavner Family Trust No 2 do all acts and things necessary for the property situated at 1 C Street, Suburb D being the land more properly described as folio identifier … (“the Suburb D property”) to be listed for sale as follows:
(a)That the property be placed on the market not before 1 March 2025;
(b)That for the purpose of selecting the listing agent:
(i)The parties are to agree on the identity of the listing agent by 1 December 2024;
(ii)That in default of agreement by 15 December 2024, the wife is to nominate to the husband 3 proposed real estate agents by 22 December 2024;
(iii)The husband is to select one real estate agent from those nominated by 30 December 2024;
(iv)Should the wife fail to nominate pursuant to 3(b)(ii) the husband is to choose the real estate agent unilaterally; and
(v)Should the husband fail to select pursuant to 3(b)(iii), the wife is to choose the real estate agent unilaterally.
(c)That for the purpose of selecting the solicitor/conveyancer acting in respect to the sale of the Suburb D property:
(i)The parties are to agree on the identity of the solicitor/conveyancer by 1 December 2024;
(ii)That in default of agreement by 15 December 2024, the husband is to nominate to the wife 3 proposed solicitors/conveyancers by 22 December 2024;
(iii)The wife is to select one solicitor/conveyancer from those nominated by 30 December 2024 to act upon the sale;
(iv)Should the husband fail to nominate pursuant to 3(c)(ii), the wife is to select the solicitor/conveyancer unilaterally; and
(v)Should the wife fail to select pursuant to 3(c)(iii) the husband is to select the solicitor/conveyancer unilaterally.
(d)Unless otherwise agreed by the parties upon the recommendation of the listing agent, the sale is to be by way of public auction;
(e)That the parties are to attend to any agreed repairs, modifications or improvements of the property as recommended by the listing agent in writing and which are reasonably able to be attended to prior to 31 March 2025, with the cost of any agreed repairs, modifications or improvements to be paid by the parties as follows:
(i)55% by the husband;
(ii)45% by the wife;
(f)That the reserve price of the property is to be as agreed between the parties in consultation with the listing agent, and in the event no agreement as to the listing price is reached between the parties by 31 January 2025, then as determined by a joint valuation obtained by the parties pursuant to order 16 herein;
(g)That in the event the bidding at the auction does not reach the reserve price the parties may negotiate with the highest bidders or any other interested person and effect a sale of the real property at a price which is not more than 5% below the reserve price.
(h)That if the property remains unsold, the parties shall do all acts and things necessary to immediately re-list the property for sale by private treaty with the listing price to be as agreed between the parties in writing and if no agreement can be reached, the listing price shall be 5% less than the reserve price at the preceding auction.
(i)That in the event the property is not sold by private treaty within two months of it being listed for sale, the parties shall list the property for sale by auction and re-auction the property at intervals as recommended by the agent until the property is sold and the reserve price for each successive auction shall be 5% less than the reserve price at the previously held auction unless otherwise agreed between the parties in writing.
4.That both parties be permitted to attend the auction and bid or make an offer to purchase the Suburb D property in which case Order 6 applies.
5.That for the purpose of the sale of the Suburb D property, the Husband in his capacity as director of B Pty Ltd ATF the Mr Kavner Family Trust No 2 shall provide all necessary authorities to the listing agent and the solicitor/conveyancer, to enable the wife to be provided with all information and documents regarding the sale and to allow the wife to speak with the listing agent and the solicitor/conveyancer and communicate to the wife the details of all offers made to purchase the property, copies of any contracts prepared relating to the sale, copies of any settlement sheets and copies of any other correspondence associated with the sale of the property.
6.That following the sale of the Suburb D property, the husband in his capacity as director of B Pty Ltd ATF both the Mr Kavner Family Trust, and ATF the Mr Kavner Family Trust No 2 shall cause the proceeds of sale to be distributed in the following order of priority:
(a)In payment of agents’ commission and advertising expenses and legal expenses of the sale;
(b)In payment of any outstanding water, rates or statutory charges with respect to the property noting the husband is responsible for paying such expenses pending sale and he shall reimburse the wife 45% of any monies due and payable from his share of the sale proceeds;
(c)In reimbursement of such sums expended by the parties or either of them pursuant to order 3(e) and 16(e); and
(d)That the balance is paid to the husband.
7.That simultaneous with the payment to the husband in Order 6(d), the husband shall pay to the wife, into an account as directed by her, a cash sum equivalent to 45% of the amount received by him at Order 6(d) and for the avoidance of doubt the wife is to receive this cash amount as a capital payment from the husband.
8.That pending the settlement of the Suburb D property:
(a)The wife to have sole use and occupation of the Suburb D property save and except that the husband may attend the property on two occasions per week (upon the provision of 1 hours' notice by text message to the wife) and at such further times as is agreed between the parties conditional upon the following:
(i)That the husband is to not enter the home or garage or come within 20 metres of the home or garage, or permit any other person to do so (excluding the children of the marriage) without being invited to do so by the wife;
(ii)That the husband have unfettered access to the shed and the plant and equipment contained therein; and
(iii)The husband is not to be accompanied by 3rd parties (save and except his grandchildren) without the prior written consent of the wife.
9.That pending sale of the Suburb D property (or retention by one of the parties pursuant to order 4), the husband personally and in his capacity as director of B Pty Ltd ATF the Mr Kavner Family Trust No 2, and save and except for implementation of these orders or by written agreement from the wife, be restrained from selling, disposing, transferring, gifting, encumbering or otherwise dealing with the property situation at and known as 1 C Street, Suburb D in the state of New South Wales being the whole of the land within folio identifier ....
10.That commencing from 31 March 2025 (or such earlier date that the parties may agree to commence the marketing of the Suburb D property), the wife to do all acts and things to ensure:
(a)That the listing agent and any perspective buyer(s) may attend the property for the purpose of inspection as may reasonably be requested of her;
(b)The residence and the exterior of the property is maintained in a clean and presentable manner.
The Suburb D blocks
11.That the husband in his capacity as director of B Pty Ltd ATF the Mr Kavner Family Trust No 2 shall do all acts and things necessary to cause the property situated at 2 C Street, Suburb D being the land more properly described as folio identifier … and … (“the Suburb D bush blocks”) to be forthwith listed for sale as follows:
(a)That for the purpose of selecting the listing agent:
(i)The parties are to agree on the identity of the listing agent within 28 days of the date of these orders;
(ii)That in default of agreement; the wife is to nominate to the husband 3 proposed real estate agents by 25 October 2023;
(iii)The husband is to select one real estate agent from those nominated by 1 November 2023;
(iv)Should the wife fail to nominate pursuant to 11(a)(ii) the husband is to choose the real estate agent unilaterally; and
(v)Should the husband fail to select pursuant to 11(a)(iii) the wife is to chose the real estate agent unilaterally.
(b)That for the purpose of selecting the solicitor/conveyancer acting in respect to the sale of Suburb D blocks:
(i)The parties are to agree on the identity of the solicitor/conveyancer within 28 days of the date of these Orders;
(ii)That in default of agreement, the husband is to nominate to the wife 3 proposed solicitors/conveyancers by 25 October 2023;
(iii)The wife is to select one solicitor/conveyancer from those nominated by 1 November 2023;
(iv)Should the husband fail to nominate pursuant to section 11(b)(ii), the wife is to chose the solicitor/conveyancer unilaterally; and
(v)Should the wife fail to select pursuant to 11(b)(iii) the husband is to select the solicitor/conveyancer unilaterally.
(c)Unless otherwise agreed by the parties upon the recommendation of the listing agent, the sale is to be by way of public auction;
(d)That the parties are to have unfettered access to these blocks at all times for the purpose of having the properties sold including the facilitation of access to 3rd parties for the purpose of valuing, marketing inspecting, preparing the blocks for sale and/or complying with all regulatory requirements, including but not limited to any Environmental Impact Studies, necessary for the property to be listed for sale and/or sold;
(e)That the reserve price of the property is to be as agreed between the parties in consultation with the listing agent, and in the event no agreement as to the listing price is reached between the parties by 8 November 2023, then as determined by a joint valuation obtained by the parties pursuant to order 16 herein;
(f)That in the event the bidding at the auction does not reach the reserve price the parties may negotiate with the highest bidders or any other interested person and effect a sale of the real property at a price which is not more than 5% below the reserve price unless otherwise agreed by the parties in writing;
(g)That if the property remains unsold, the parties shall do all acts and things necessary to immediately re-list the property for sale by private treaty with the listing price to be as agreed between the parties in writing and if no agreement can be reached, the listing price shall be 5% less than the reserve price at the preceding auction;
(h)That in the event the property is not sold by private treaty within two months of it being listed for sale, the parties shall list the property for sale by auction and re-auction the property at intervals as recommended by the agent until the property is sold and the reserve price for each successive auction shall be 5% less than the reserve price at the previously held auction unless otherwise agreed between the parties in writing; and
(i)That the cost of any agreed expenses in respect to preparing the property for sale including but not limited to the cost of obtaining any necessary Environmental Impact Report shall be paid for by the parties as follows:
(i)55% by the husband;
(ii)45% of the wife.
12.That for the purpose of the sale of the Suburb D bush blocks, the husband in his capacity as director of B Pty Ltd ATF the Mr Kavner Family Trust No 2 shall provide all necessary authorities to the listing agent and the solicitor/conveyancer, to enable the wife to be provided with all information and documents regarding the sale and to allow the wife to speak with the listing agent and the solicitor/conveyancer and communicate to the wife the details of all offers made to purchase the property, copies of any contracts prepared relating to the sale, copies of any settlement sheets and copies of any other correspondence associated with the sale of the property.
13.That pending sale of the Suburb D bush blocks properties the husband personally and in his capacity as director of B Pty Ltd ATF the Mr Kavner Family Trust No 2, and save and except for implementation of these orders or by written agreement from the wife, be restrained from selling, disposing, transferring, gifting, encumbering or otherwise dealing with the properties situated at and known as 2 C Street, Suburb D being the land more properly described as folio identifier … and ….
14.That the husband in his capacity as director of B Pty Ltd ATF both the Mr Kavner Family Trust, and ATF the Mr Kavner Family Trust No 2 shall cause the proceeds of the Suburb D bush blocks to be distributed in the following order of priority:
(a)In payment of agents’ commission and advertising expenses and legal expenses of the sale;
(b)In payment of any outstanding water, rates or statutory charges with respect to the property noting the husband is responsible for paying such expenses pending sale and he shall reimburse the wife 45% of any monies due and payable at settlement from his share of the sale proceeds;
(c)In reimbursement of such sums expended by the parties or either of them pursuant to order 16(e); and
(d)That the balance is to be paid to the husband.
15.That simultaneous with the payment to the husband in Order 14(d), the husband shall pay to the wife, into an account directed by her, a cash sum equivalent to 45% of the amount received by him at Order 14(d) and for the avoidance of doubt the wife is to receive this cash amount as a capital payment from the husband.
16.That for the purpose of the joint valuation referred to above:
(a)That the husband is to provide the wife the names of 3 valuers:
(i)In the case of the Suburb D property, on or before 7 January 2025; and
(ii)In the case of the Suburb D bush blocks, within 8 weeks of these orders.
(b)That within 7 days of the wife receiving the husband’s nomination, she is to select the valuer;
(c)Should the husband fail to nominate pursuant to 16(a), the wife is to choose the valuer unilaterally and should the wife fail to select pursuant to 16(b) then the Husband is to select the valuer unilaterally;
(d)In the case of the Suburb D property, the wife to permit the valuer selected access to the property at such time(s) as is nominated by the valuer for the purpose of undertaking the valuation; and
(e)That cost of the valuation shall be paid by the parties as follows:
(i)55% by the husband;
(ii)45% by the wife.
Motor Vehicle 1
17.That within 28 days of these orders, the husband in his capacity as director of B Pty Ltd is to transfer to the wife Motor Vehicle 1 and pending transfer the wife shall have exclusive use of Motor Vehicle 1.
Motor Vehicle 2
18.That the husband via E Pty Ltd retain ownership of Motor Vehicle 2 to the exclusion of the wife.
Contents
19.That the wife be entitled to retain, to the exclusion of the husband, the contents contained within Suburb D property (excluding any property owned by the husband's companies contained with the sheds) including all furniture and outdoor furniture, artwork, personal effect or chattels of any kind.
Plant and equipment
20.That all plant and equipment retained on the Suburb D property owned by E Pty Ltd including but not limited to that retained within the shed(s) of the property is to remain the sole property of E Pty Ltd.
21.That all tools and tool boxes retained in the garage of the Suburb D property is to remain the property of the husband, and the husband may forthwith direct the property manger to remove such tools and tool boxes and place them in the shed.
22.That the wife be, and hereby is restrained by injunction, from removing any plant and equipment or other property owned by any entity owned or controlled by the husband, including but not limited to E Pty Ltd from the Suburb D property.
The husband’s entities
23.That within 28 days of the date of these orders, the wife to do all acts and things necessary to resign as a director of any entity in which the husband is director or shareholder, including but not limited to F Pty Ltd and to transfer any shareholding she may have in such entities to the husband or as otherwise directed by him.
24.That the husband to retain, to the exclusion of the wife, his interest in:
(a)G Pty Ltd;
(b)H Pty Ltd;
(c)J Pty Ltd;
(d)K Pty Ltd;
(e)L Pty Ltd;
(f)M Pty Ltd;
(g)N Pty Ltd;
(h)E Pty Ltd;
(i)F Pty Ltd;
(j)P Pty Ltd;
(k)Q Pty Ltd;
(l)R Pty Ltd; and
(m)B Pty Ltd.
25.That as and from the date of these orders, the husband to indemnify, and keep indemnified, the wife in relation to any indebtedness of the husband’s entities of whatever kind irrespective of when such indebtedness arose.
Mr Kavner Family Trusts
26.By these orders, that upon payment of the Suburb D property and Suburb D blocks proceeds to the wife pursuant to orders 7 or 15, the wife unconditionally declares a determination to no longer be included as a beneficiary, and relinquishes any right, title or interest she may have as a beneficiary of the Mr Kavner Family Trust No 2.
27.That the husband shall:
(a)Indemnify and keep indemnified, the wife in respect of any and all liabilities, loans accounts, loans, debts, suits, actions, claims or otherwise relating to B Pty Ltd, and/or the Mr Kavner Family Trust and/or the Mr Kavner Family Trust No 2 including any deferred tax liability, current or future tax liability.
(b)Indemnify, and keep indemnified, the wife against any tax liability arising from income or capital distributed or paid to her through or from the Mr Kavner Family Trust, the Mr Kavner Family Trust No 2 and/or as a result of the wife receiving sale proceeds from the Suburb D property and/or the Suburb D blocks.
Standard ownership clauses
28.That unless otherwise specified in these Orders and except for the purposes of enforcing the payment of any money due under these or any subsequent Orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date;
(b)Money standing to the credit of the parties in any joint bank account is to be divided equally between the parties and the parties are to do all acts and sign all documents necessary to forthwith close such accounts;
(c)Each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other;
(d)All insurance policies to become the sole property of the owner named therein;
(e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders; and
(f)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
Section 106A orders
29.That pursuant to section 106A of the Family Law Act, a Registrar of the Federal Circuit and Family Court of Australia be authorised to execute any deed or instrument to give effect to these orders in the event that either party refuses or fails to do so upon request from the other party’s solicitors.
30.That the party in default shall pay to the other party all costs of and incidental to the application under s 106A as ordered by the court.
Costs and Previous Orders
31.That all applications pending before this Court be dismissed with no order as to costs.
32.That all previous orders are hereby discharged.
AND THE COURT NOTES
A.The parties have agreed to enter into these orders in order to resolve all litigation between them, including the wife’s application to set aside the Financial Agreement entered into between the parties on 29 November 2005, any further litigation which may have been occasioned as a result of the determination of that dispute and any and all spousal maintenance claims by the wife.
B.The parties acknowledge that they each enter into these orders voluntarily and having had the benefit of legal advice including from counsel retained by each of them.
C.The parties enter into these orders with the intention of minimising any further legal fees, including those which may be occasioned by making further enquiry into the financial circumstances of the other party.
D.Contemporaneously with entering these orders, the parties have executed:
(i)A Binding Financial Agreement to oust the jurisdiction of this Court with respect to spousal maintenance; and
(ii)A Deed of Release under the Succession Act 2006 in which each party relinquishes any right that they may have to claim against the estate of the other.
E.That the husband agrees to forthwith do all acts and things necessary to have the final ADVO currently in place for his protection from the wife discharged noting that such ADVO was obtained by Police.
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 Kavner & Kavner has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
CAMPTON J:
These are proceedings in the Major Complex Property List commenced by Ms Kavner (“the wife”) on her filing an Initiating Application on 18 February 2021 seeking orders as to property adjustment pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) and spouse maintenance. Mr Kavner (“the husband”) filed a Response to the Initiating Application on 18 March 2021. The husband sought to enforce a s 90C financial agreement entered by the parties on 29 November 2005. He contends that the financial agreement operated as a Binding Financial Agreement for the purposes of s 71A of the Act, and hence a prohibition exists against a court making an order adjusting property inconsistent with the terms of that agreement.
On 26 August 2022, the parties agreed that the financial agreement did not comply with the provisions of s 90E of the Act and hence was void as to any purported ouster of any Part VIII jurisdiction as to spouse maintenance. On the same day they agreed to list the wife’s challenges to the financial agreement as a preliminary or separate issues trial.
One challenge is to the integrity of the certification of her solicitor attached to the s 90C agreement. If she was unsuccessful in that challenge, it was her contention that a delay of about six months, from the time she executed and returned the agreement to the husband until his entry into it concluded that the parties did not enter a binding agreement. By additional alternatives, if she was unsuccessful in those challenges, she sought that the agreement be set aside on multiple grounds pursuant to s 90K of the Act including as to fraud (both as to a representation that the agreement would not be relied upon, and by way of a non-disclosure of a material matter) by way of undue influence, unconscionable conduct and impracticality of enforcement of the agreement together with revocation of it.
The husband opposed the challenges made by the wife to the integrity and effect of the financial agreement.
If the wife’s challenge to the financial agreement by way of the separate issues hearing was successful, the parties would thereafter be engaged in lengthy proceedings as to the adjustment of property settlement pursuant to s 79 of the Act.
The trial separate issues trial was conducted with intensity over a period of six days. Each of the parties had the benefit of expert highly skilled legal practitioners appearing on their behalf over the course of that trial.
During submissions the parties advised the Court that they had reached an agreement compromising all outstanding aspects of the litigation.
I have received and marked into evidence today as Exhibit 17 proposed consent orders executed by the parties on 22 September 2023. By way of those consent orders, the parties agree that the wife’s challenge to the agreement, by way of impracticality pursuant to s 90K(1)(c) of the Act achieves currency. In that circumstance they consent to an order setting aside the financial agreement.
Consequential upon the setting aside of the agreement, the parties ask the court to make a series of consent orders providing for a trust controlled by the husband to sell real properties, and for the wife to receive:
(a)The proceeds of sale portions of that real property in the range of $9 million;
(b)A property in Queensland;
(c)$3 million in cash; and
(d)A motor vehicle, contents, jewellery, livestock and livestock equipment and some shares.
In addition, the wife will retain funds in the range of $4.465 million received subsequent to the separation of the parties from either the proceeds of sale of a property they owned at Suburb S, or by way of payment of additional lump sums by the husband. She also will retain other funds repaid to her from the husband’s trust.
In the circumstances, having regard to the history of the litigation and the calibre of the legal representation of each party over the course of this dispute, little more needs to be advised to the court other than that each of those legal representatives, on behalf of their clients, confirm the consent of each of the husband and the wife to the making of the consent orders, and assure the court as to the justice and equity of the proposed property adjustment.
Each of the parties highlight to the court, and it is accepted, that they have had the benefit of legal and accounting advice for the purposes of the consent orders and have entered into a commercial decision to finalise this litigation.
As is self-evident from these reasons, in the event the wife was unsuccessful in her challenges to the agreement, the litigation would not conclude as the spouse maintenance dispute would remain on foot. In the event the wife was successful, the litigation would proceed in relation to the financial and spouse maintenance dispute. It is submitted on behalf of the husband, and I accept, that the conclusion of the litigation allows the parties to get on with their lives and to avoid incurring future uncertainty and costs, such that this alone is a powerful discretionary factor to make orders in accordance with Exhibit 17.
In all of the circumstances, I am satisfied that it is just and equitable to make the orders as sought in accordance with Exhibit 17, and those orders will be made with the consent of the parties.
I otherwise confirm, as indicated to the parties on the last day of the trial, my congratulations in being able to achieve a conclusion of a difficult piece of litigation. I congratulate their legal representatives for the role they played in both the conduct of the litigation and in achieving a compromise on behalf of their clients.
I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 26 September 2023
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