LAURENS & LAURENS - [2015] FCCA 2754

FEDERAL CIRCUIT COURT OF AUSTRALIA

LAURENS & LAURENS

[2015] FCCA 2754

Catchwords:
FAMILY LAW – Property – value of business – controversy over whether or not business has been sold and if it has whether it has sold undervalue or sham sale – tax issues – matter to be referred to the Australian Taxation Office.

Legislation:

Family Law Act 1975, ss.75, 79

Stanford & Stanford (2012) 247 CLR 108, (2012) 293 ALR 70, (2012) 87 ALJR 74, (2012) 47 Fam LR 481, (2012) FLC ¶93-518, [2012] HCA 52
Hickey & Hickey & Attorney-General (Intervener) (2003) 30 Fam LR 355, [2003] FamCA 395, (2003) FLC ¶93-143
Bevan & Bevan (2013) 279 FLR 1, (2013) 49 Fam LR 387, [2013] FamCAFC 116

Applicant:

MS LAURENS

Respondent:

MR LAURENS

File Number:

MLC 8464 of 2014

Judgment of:

Judge Harland

Hearing date:

3 August 2015

Date of Last Submission:

3 August 2015

Delivered at:

Melbourne

Delivered on:

9 October 2015

REPRESENTATION

Counsel for the Applicant:

Mr Podmore

Solicitors for the Applicant:

Lanham Lawyers

Counsel for the Respondent:

Ms Marshall

Solicitors for the Respondent:

Anthonys Solicitors

ORDERS

The wife’s contravention application filed on 28 July 2015 is withdrawn and dismissed.
That within 42 days of the date of these orders, the parties do all acts and things to sell:
(a)Property G, being the whole of the land contained in the title reference volume [omitted]; and
(b)Property O being the whole of the land contained in the title reference volume [omitted].
That both parties take all necessary steps and execute all necessary documents to cause their property situated at Property G, and being the whole of the land comprised in title reference volume [omitted] be sold by private treaty at the earliest possible date at a price to be agreed on between the parties and failing such agreement to be determined by the proper officer of the Real Estate Institute of Victoria or his nominee.
That the proceeds of sale of the properties referred to in order 2 be disbursed as follows:
(a)the payment of agent’s commission, advertising costs and legal fees;
(b)in discharge of mortgage secured on the first property which sells;
(c)the balance of the proceeds of sale from the first property to sell is to be applied to discharge or reduce the business debts, being:
(i)[F] loan #6650 of $155,289.97;
(ii)[F] business one #2585 of $3,343.95;
(iii)[F] overdraft #6856 of $31,503.27;
(iv)[F] ATO debt of $32,429.60;
(d)the payment of agent’s commission, advertising costs and legal fees;
(e)in discharge of the mortgage secured on the second property to sell;
(f)in payment of any of the remaining business debts referred to in order 4(c) above; and
(g)the remaining balance be distributed as to 70% to the wife and 30% to the husband.
That in the event that Property G and being the whole of the land comprised in title reference volume [omitted] fails to be sold by private treaty within a period of three (3) months hereof, then each…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] FCCA 2754
Decision Date: 9 October 2015

CaseChat Overview and Summary

In the matter of LAURENS & LAURENS, heard before Judge Harland, the wife's application for contravention was withdrawn and dismissed. The court was required to make orders concerning the sale of two properties, Property G and Property O, and the disbursement of the proceeds. Additionally, the court addressed the transfer of a motor vehicle, a vacation club membership, and the division of a superannuation interest.

The court's reasoning focused on achieving a practical and equitable division of the parties' assets and liabilities. It directed the sale of both properties, specifying a preference for private treaty sale with a mechanism for price determination if agreement could not be reached. The proceeds were to be applied first to sale costs, then to discharge mortgages, followed by the settlement of specified business debts. Any remaining balance was to be distributed with a 70% share to the wife and 30% to the husband. The court also made provision for the sale of Property G by auction if it failed to sell within three months, with a similar distribution scheme for the proceeds.

Further orders included the wife's sole ownership of a motor vehicle, with her indemnifying the husband against all liabilities associated with it. The husband was to receive the parties' interest in a vacation club membership. The court also made orders pursuant to section 90MT(1)(a) of the *Family Law Act 1975* regarding the division of the husband's superannuation interest, specifying a base amount for the wife and a corresponding reduction for the husband. To ensure compliance, the court empowered the Registrar to execute documents on behalf of a party who failed to do so. Finally, the court ordered that a copy of the judgment and orders be forwarded to the Australian Taxation Office due to potential fraud concerns.

Orders

Orders of the court

The wife’s contravention application filed on 28 July 2015 is withdrawn and dismissed.

That within 42 days of the date of these orders, the parties do all acts and things to sell:

(a) Property G, being the whole of the land contained in the title reference volume [omitted]; and

(b) Property O being the whole of the land contained in the title reference volume [omitted].

That both parties take all necessary steps and execute all necessary documents to cause their property situated at Property G, and being the whole of the land comprised in title reference volume [omitted] be sold by private treaty at the earliest possible date at a price to be agreed on between the parties and failing such agreement to be determined by the proper officer of the Real Estate Institute of Victoria or his nominee.

That the proceeds of sale of the properties referred to in order 2 be disbursed as follows:

(a) the payment of agent’s commission, advertising costs and legal fees;

(b) in discharge of mortgage secured on the first property which sells;

(c) the balance of the proceeds of sale from the first property to sell is to be applied to discharge or reduce the business debts, being:

(i) [F] loan #6650 of $155,289.97;

(ii) [F] business one #2585 of $3,343.95;

(iii) [F] overdraft #6856 of $31,503.27;

(iv) [F] ATO debt of $32,429.60;

(d) the payment of agent’s commission, advertising costs and legal fees;

(e) in discharge of the mortgage secured on the second property to sell;

(f) in payment of any of the remaining business debts referred to in order 4(c) above; and

(g) the remaining balance be distributed as to 70% to the wife and 30% to the husband.

That in the event that Property G and being the whole of the land comprised in title reference volume [omitted] fails to be sold by private treaty within a period of three (3) months hereof, then each party take all necessary steps and execute all necessary documents to cause the said property to be sold by auction at the earliest possible date at a reserve to be agreed upon between the parties and failing such agreement to be determined by the proper officer of the Real Estate Institute or his nominee and that the proceeds of the said sale be disbursed as follows:

(a) the payment of agent’s commission, advertising costs and legal fees;

(b) in discharge of mortgage secured on the first property which sells;

(c) the balance of the proceeds of sale from the first property to sell is to be applied to discharge or reduce the business debts, being:

(i) [F] loan #6650 of $155,289.97;

(ii) [F] business one #2585 of $3,343.95;

(iii) [F] overdraft #6856 of $31,503.27; and

(iv) [F] ATO debt of $32,429.60.

(d) he payment of agent’s commission, advertising costs and legal fees;

(e) in discharge of the mortgage secured on the second property to sell;

(f) in payment of any of the remaining business debts referred to in order 5(c) above; and

(g) the remaining balance be distributed as to 70% to the wife and 30% to the husband.

That the parties be responsible for 50% each of any capital gains tax incurred from the sale of Property G being the whole of the land contained in the title reference volume [omitted].

That within 28 days from the date of these orders each party shall do all things necessary to:

(a) Transfer to the sole name of the wife of the motor vehicle 2012 Ford Territory, registration number [omitted] the cost of the wife; and

(b) Simultaneously with the transfer, discharge of all liability of the in relation to this motor vehicle at the cost of the wife

And the wife hereby indemnifies and shall keep indemnified the husband in relation to all liabilities in respect of the motor vehicle whenever and however arising.

That the parties do all acts and things necessary documents to transfer their interest in the [omitted] Vacation club Membership to the husband.

That the orders below have effect form the operative time:

(a) that in accordance with paragraph 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the husband’s interest in Colonial First State, the wife is entitled to a base amount of $48,080.67 and there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for these orders;

(b) that, having been accorded procedural fairness in relation to the making of this order, this order binds the Trustee of the superannuation fund; and

(c) the operative time for this order is four (4) business days after the date of service of the orders on the trustee of the superannuation fund.

10.

That in the event that either party should fail, neglect or refuse to sign or execute any deed, document or instrument required by or to give effect to these Orders then pursuant to s.106A Family Law Act 1975 that the Registrar of the Federal Circuit Court of Australia, Melbourne Registry shall be and is hereby authorised, empowered and directed to sign and execute such deed, document or instrument in the place and instead of such party and to thereafter do all things and acts as are necessary to give validity and operation to same.

11.

The Principal Registrar of the Federal Circuit Court of Australia is to forward a copy of these orders and judgment and any other relevant material from the court record to the relevant officer of the Australian Taxation Office of possible fraud on the part of the husband and/or the wife.

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

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