Macrina & Macrina
[2021] FedCFamC2F 387
•17 November 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Macrina & Macrina [2021] FedCFamC2F 387
File number(s): ADC 862 of 2019 Judgment of: JUDGE DICKSON Date of judgment: 17 November 2021 Catchwords: FAMILY LAW – property – interim property settlement – interim spousal maintenance – where parties have been separated for four years – where wife has been residing in rental property since 2017 – where husband has been living in freehold property – where husband has had control of the bulk of the matrimonial assets – where husband has been paying spousal maintenance to the wife pursuant to orders of this Honourable Court – where wife brings application for interim release of funds to purchase a house for her to reside in – where it is just and equitable for the wife to receive an interim distribution – where no final hearing date is set. Legislation: Family Law Act 1975 (Cth) Part VIII ss 80(1)(h), 79 Cases cited: Amstel & Amstel [2015] FamCA 661
Felice & Felice [2011] FamCA 162
Gabel & Yardley [2008] FamCAFC 162
Marshall& Marshall [2015] FamCA 712
Sresbodan & Sresbodan & Ors [2013] FamCA 480
Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466
Division: Division 2 Family Law Number of paragraphs: 97 Date of hearing: 13 October 2021 Place: Adelaide Counsel for the Applicant: Ms Lewis Solicitor for the Applicant: Mellor Olsson Counsel for the Respondent: Mrs Read Solicitor for the Respondent: Scammell & Co ORDERS
ADC 862 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS MACRINA
Applicant
AND: MR MACRINA
Respondent
ORDER MADE BY:
JUDGE DICKSON
DATE OF ORDER:
17 NOVEMBER 2021
THE COURT ORDERS:
1.That no later than 22 December 2021 and by way of partial property settlement the Husband do pay to the Wife the sum of SEVEN HUNDRED THOUSAND DOLLARS AND ZERO CENTS ($700,000.00) (‘the said sum’).
2.That in the event that the Husband fails to comply with paragraph 1 herein:
(a)The parties shall forthwith do all such things and shall execute all documents necessary to:
(i)Apply funds currently held in the names of the parties in B Bank Account Number …74 towards the discharge of the B Bank Mortgage number …74 and/or the B Bank line of credit Account Number …59; and
(ii)Apply such funds that may be necessary (such funds currently held in the Scammell & Co Trust Account representing the proceeds of sale of the business known as ‘C’) towards the discharge of the B Bank mortgage number …50 and/or the B Bank line of credit Account Number …59; and
(iii)Place upon the market for sale by private treaty with such agent as agreed in writing and upon such terms as are agreed (and in default of agreement as to sale by private treaty within 14 days then by public auction) the property known as and situated at D Street, Suburb E in the State of South Australia being the whole of the land comprised and described in Certificate Register Book Volume … Folio … (‘the D Street, Suburb E property’);
3.The proceeds of sale of the said D Street, Suburb E property be dispersed as follows:
(a)To pay all land agent fees and charges;
(b)To pay all conveyancers fees and charges;
(c)The sum of $700,000 to the Wife; and
(d)The balance (if any) to be held in an interest being account in the joint names of the parties until further order.
4.The Husband as Trustee of the Macrina Trust be at liberty to allocate distributions of the Macrina Trust to the Wife.
5.The Husband do indemnify the Wife and keep her indemnified in relation to any distribution made to the Wife in accordance with paragraph 4 herein and the Husband do pay and further do indemnify and keep the Wife indemnified in respect of any tax liability incurred by the Wife arising from any such distributions.
6.That in the event that the parties fail to agree a sales agent for the sale of the said D Street, Suburb E property within forty-nine (49) days of the date hereof, then the Secretary of the Real Estate Institute shall appoint a sales agent upon the written request of either party via their solicitor.
7.That in the event of either party refusing, failing or neglecting to sign any document necessary to implement the terms of the orders made in paragraphs 2 and 3 herein, then pursuant to s 106A of the Family Law Act 1975 (Cth) (as amended), a Deputy Registrar or Judicial Registrar of this Honourable Court is appointed to sign all or any such documents necessary upon proof by affidavit of such refusal, failure or neglect.
8.All interim applications do otherwise stand dismissed.
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 a pseudonym Macrina & Macrina has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE DICKSON
INTRODUCTION
These are reasons for judgment in respect of interim property and spousal maintenance proceedings instituted by Ms Macrina (‘the Wife’) and opposed by Mr Macrina (‘the Husband’).
The interim applications of the parties have had a number of amendments since the Wife’s original Application in a Case filed on 2 June 2020.
The proceedings for final property settlement have not yet been listed for final hearing. The Wife’s Initiating Application for final orders for property settlement was filed on 5 March 2019. The Husband’s Response seeking final orders for property settlement was filed on 7 June 2019.
At the hearing on 13 October 2021 the parties were able to reach agreement in relation to an issue of contention regarding the Wife receiving copies of documents from the Husband’s accountants, F Accountants. An order was made by consent inter alia that:
The respondent shall provide, within 7 days, written confirmation to this accountants, namely F Accountants, that he authorises the release of copies to the applicant’s solicitor of the accountants trust account and copies of invoices and receipts concerning any transactions relating to the trust account every 3 months from 13 October 2021.
OVERVIEW
The parties
The Wife was born in 1970 and is currently 51 years of age. The Wife is employed as a hospitality worker. The Wife’s updated financial circumstances (Annexure -3 to her Affidavit filed on 25 May 2021) evidences a total salary or wage before tax of between $1,000.00 to $1,200.00 per week. In addition, the Wife receives the sum of $500.00 per week by way of spousal maintenance from the Husband pursuant to paragraph 10 of an order made by consent on 4 September 2020.
The Husband was born in 1968 and is 53 years of age. The Husband describes his occupation as a ‘business owner’.[1] The Husband deposes to receive an average weekly income of $2,345.00 gross. In addition to the spousal maintenance order, the Husband also pays $500 per week towards the B Bank Line of Credit in accordance with paragraph 11 of the order made on 4 September 2020.
[1] See Husband’s Financial Statement filed 6 June 2019 at paragraph 3.
The parties’ relationship
The parties’ cohabitated from 1991 until November 2017. It was a long relationship of nearly 26 years.
The parties have three children, Mr G born 1994, Mr H born 1996, and Ms J born in 1998. The children are all adults, but in differing ways have continued to receive ongoing financial support from each of their parents.
At separation, the Wife vacated the former matrimonial home situated at K Street, Suburb L in the State of South Australia (‘the former matrimonial home’). The Husband has continued to enjoy occupation of the said former matrimonial home since November 2017, nearly 4 years ago. The former matrimonial home is freehold.
Since separation the Wife has resided in rental accommodation. She is currently paying $300.00 per week in rent.[2] The primary focus of the Wife’s application is to receive funds such that she can now buy a property for herself and to cease living in rental accommodation pending final resolution of this litigation.
[2] See Annexure -3 of the Wife’s Affidavit filed on 25 May 2021.
DOCUMENTS RELIED UPON
The Wife relies on the following documents:
(a)Wife’s Initiating Application, filed on 5 March 2019;
(b)Third Further Amended Application in a Case, filed on 25 May 2021;
(c)Wife’s Affidavit in support, filed on 25 May 2021;
(d)Wife’s Financial Statement, filed on 6 June 2019; and
(e)The written submissions provided to the Court on the day of argument.
The Husband relies on the following documents:
(a)Husband’s Response to Initiating Application, filed on 7 June 2018;
(b)Amended Response to Application in a Case, filed on 8 July 2021;
(c)Husband’s Affidavit in support, filed on 8 July 2021;
(d)Husband’s Financial Statement, filed on 7 June 2019; and
(e)The written submissions of the respondent provided to the Court in advance of argument.
ORDERS SOUGHT
The Wife seeks orders as set out in her Third Further Amended Application in a Case and as identified on page 1 of the Outline of Submissions as follows:
(adopting the same numbering from her Third Further Amended Application)
Sale of D Street, Suburb E Property
16.The applicant and the respondent take all steps necessary to place upon the market for sale upon such terms as are agreed, provided that, if not otherwise agreed, this shall be by public auction scheduled to take place not later than 6 weeks of the date of this order, the investment property at D Street, Suburb E (the whole of the land comprised in Certificate of Title register book volume … Folio …), upon the basis that the funds paid by the purchaser thereof shall be dispersed by the conveyancer (who shall be a person nominated by the real estate agent if not otherwise agreed by the parties, as follows):
16.1To pay the land agent fees and charges,
16.2To pay the conveyancer’s costs and charges,
16.3To pay the balance to the applicant or her nominee, for her sole use and benefit and by way of partial property settlement.
17.That contemporaneously with the settlement of the sale referred to in the proceeding clause the respondent pay such sums and sign such documents, all at his sole cost, as will enable such sum as is necessary to be paid to discharge the B Bank line of credit account number … in the parties names and the discharge of memorandum of mortgage number … secured by the said D Street, Suburb E property to be effected, with the respondent to pay to the exoneration of the applicant and indemnify and keep her indemnified with respect to any sums to be paid pursuant to any refinance facility obtained in his name to enable payment of full of the said line of credit and discharge of the said mortgage.
18.That in the event the respondent is unable to refinance to discharge the said line of credit debt without using the K Street, Suburb L property (the whole of the land comprised in Certificate of Title register book volume 5263 Folio 925) as security therefore, the parties take all such steps and sign all such documents to arrange for the said K Street, Suburb L property to be security for the necessary borrowings in their joint names but on the basis that:
18.1The debt may not then be increased unless both parties sign to authorise the extension; and
18.2 The respondent will make all repayments required by the lender and will pay same to the exoneration of the applicant.
Spousal Maintenance
19.That until further order the respondent pay to the applicant by direct payment into a bank account nominated by her for that purpose (currently her B Bank account number …11) the sum of $500 per week by way of spousal maintenance.
Access to $250,000 held in Term Deposit
20.That the applicant and respondent take all steps necessary forthwith upon the making of an order in these terms to release to the applicant or her nominee the sum of $250,000 and interest accrued thereon held in the joint names of the parties with B Bank account number BSB… Account number …74 such payment to be for the applicant’s sole use and benefit by way of partial property settlement.
Use of Nett Proceeds of Sale of the Business “Business C”
21.That the order made at clause 12 of the order made on 7 May 2021 do continue or in the alternative that the proceeds of sale being the amount paid by the purchaser less any conveyancing costs and charges (but not less than any taxation liability of the respondent) be dispersed equally between the applicant and the respondent, by way of partial property settlement.
Taxation Matters/Trust Distributions
22.That the respondent be restrained from making any further or other distributions to the applicant during any financial year without also making payment in full to her of the amount of the distribution, and should any such distribution have been made before the making of this order the respondent shall ensure payment of any tax liability (as calculated by the applicant’s account on her behalf and then confirmed by the Australian Taxation Office) in the applicants name and do indemnify an keep her indemnified with respect to same.
Respondent to Disclose Account’s Trust Account Ledger
23.That the respondent take all steps necessary to ensure that, via solicitors, a document representing “summary of movement in trust account 31 May 2019 to 31 August 2021” be provided to the applicant, together with a copy of all invoices and receipts supporting the transactions referred to therein, and that the respondent arrange for such transactions to be prepared in further summaries and provided to the applicant at 3 monthly intervals thereafter until final order in this matter.
Other Orders
24.Such further or other order as this Honourable Court deems appropriate.
25.That the respondent pay the applicant’s costs of and associated with this application in a case, including each amendment thereof and affidavits.
The Husband seeks orders in his Amended Response to Application in a Case filed on 8 July 2021 and mirrored in his written submissions as follows:
(adopting the numbering as set out in the said Amended Response)
Access to $250,000 from the Macrina Group
2.The parties do all necessary steps and sign all necessary documents to pay this money (and any interest earned) into the respondent’s solicitors trust account by way of partial property settlement.
3.Secondary position (in the event that the Court does not exceed to order 2):
3.1This money (and any interest earned) be paid in the following order and priority:
3.1.1$117,500 to the respondent’s accountants trust account for anticipated tax associated with the said money;
3.1.2The balance be paid to the parties in equal shares via their solicitors trust account.
Sale of D Street, Suburb E
4.There be no orders for the sale of the D Street, Suburb E property.
5.Secondary position (in the event that the court orders the D Street, Suburb E property sale:
5.1All prior orders for the respondent to pay the applicant spousal maintenance be discharged forthwith,
5.2The net sale proceeds of the D Street, Suburb E property (after all usual payments and adjustments to agents/conveyancers and alike due at settlement) be paid in the following order and priority:
5.2.1Discharge in full the parties B Bank line of credit facility (account …59)
5.2.2Discharge in full all any and any capital gains tax payable by the Macrina Trust or the parties individually arising from the said sale
5.2.3Discharge in full the invoices in annexure 4 of the respondent’s affidavit filed contemporaneously with his response
5.2.4Discharge in full the respondents tax liability owed to the ATO
5.2.5The balance thereafter be paid in equal shares via their solicitors trust account.
Nett Sale Proceeds of Business C
6.The respondent be at liberty to retain the net sale proceeds of Business C by way of partial property settlement.
Trust Distributions
7.The respondent be at liberty to allocate distributions of the Macrina Trust at his sole discretion but consistent with the trustees obligation under that trusts establishing deed.
8.Secondary position (in the event that the court does not exceed to order 7):
8.1 The respondent do all necessary things to use any money received from the group to first pay as a priority any and all tax liabilities of the Macrina Trust and any or all of the respondent’s tax liability.
Respondent’s Accountants trust account ledger
9.There be no orders for periodic updates to the applicant’s solicitor of the said trust account.
10.Secondary position (in the event that the court does not exceed to order 9)
10.2The applicant do pay any and all costs for the respondent to obtain copies of his accountants trust ledger at 3 monthly intervals.
Superannuation Splitting
11.The parties, as the sole directors of M Super Fund and sole members of the N Super Fund (the SMSF) do all necessary things and sign all necessary documents to, at the SMSF’s cost:
11.1pay all necessary tax due and payable by the SMSF;
11.2instruct the respondent’s account to:
11.2.1Prepare all necessary outstanding financials and tax returns for the SMSF;
11.2.2Roll out the residual balance of the SMSF to each of the parties such as to equalise all superannuation interests of the parties (including the applicant’s personally held superannuation interest (S)); and
11.2.3dissolve/wind up the SMSF thereafter.
11.3The parties thereafter each retain their respective superannuation interest as and by way of partial property settlement.
12.The applicant do pay the respondents costs associated with the responding to her application in a case filed 2 June 2020 and its subsequent amendments.
During her submissions, Mrs Read of Counsel, on behalf of the Husband, proposed an alternate position in relation to the D Street, Suburb E property.
That in the alternative and by way of oral application, the Husband proposed as alternate orders the following:
(a)That the property at D Street, Suburb E be sold;
(b)From the net proceeds of sale, the B Bank mortgage number …50 be discharged;
(c)That following discharge of the said B Bank mortgage, the Wife do retain the balance so as to purchase a home for herself;
(d)That the Husband do retain the sum of $250,000 currently held in a B Bank term deposit account and funds paid upon the sale of a business known as ‘Business C’; and
(e)The Husband proposes retaining the abovementioned sums for the purpose of paying outstanding taxation liabilities, legal fees and accounting costs.
THE ASSET POOL
The parties are in agreement in relation to the larger items of the property pool. The parties are in disagreement in relation to a number of items, particularly as they relate to what might be described as ‘add backs’.
A comparison of the parties’ Asset and Liabilities as set out in the Wife’s Written Submissions and in Exhibit ‘H2’ on behalf of the Husband, is as follows:
Item
Description
Owner
Wife’s value
Husband’s value
1.
K Street, Suburb L – former matrimonial home currently occupied by Husband – freehold
Joint
V$775,000 July 2020
(v = valuation)
V$675,000 March 2019
(v = valuation)
2.
B Bank mortgages …54 and …05
Joint
(see 4 below)
3.
D Street, Suburb E - rented to tenants
Husband via Family Trust
E$820,000
(e = estimate)
V$590,000 March 2019
4.
B Bank mortgage …50, connected with line of credit secured over D Street, Suburb E property
Husband
($287,000)
Agreed
5.
CBA farm management deposit funds withdrawn Dec 2018 and disbursed to Husband’s accountant, F Accountants
Husband
$332,000
Nil
6.
Sum of $85,000 received by Husband into his B Bank Account and disbursed to the Husband’s accountant, F Accountants. Husband asserts this sum is from the sale of Motor Vehicle 1
Husband
$85,000
Nil
7.
Business C receipts- Trust no 2 disputed by Husband as derived from income due to trading
Husband
$16,500
Part of farm management deposit money above at 5
8.
Private funds paid to F Accountants, source unknown to Wife. Husband asserts sum is not an asset but income from trading
Husband
$38,000
Part of farm management deposit money above at 5
9.
Motor Vehicle 2 sale proceeds $10,000
Husband
V$90,000 July 2020
E$10,000
10.
Race car sale proceeds $21,500
Husband
V$55,000 July 2020
E$21,500
11.
Motor Vehicle 3 sale proceeds $3,500
Husband
V$60,000 July 2020
E$3,500
12.
Motor Vehicle 1 vehicle sale proceeds
Husband
$85,000
Agreed $85,000
13.
Boat - 15 foot fibre glass cabin cruiser – sold for $12,000
Husband
V$15,000 July 2020
E$12,000
14.
Dune buggy -
Husband
V$20,000 July 2020
Included as part of Macrina Group value
15.
Red sports car purchased just prior to separation. Husband disputes he owns motor vehicle and maintains it is owned by his sister
E$30,000
Nil
16.
Motor Vehicle 4
Husband
V$30,000 July 2020
Agreed $30,000
17.
Motor Vehicle 5
Husband
V$55,000 July 2020
Included as part of Macrina Group valuation
18.
2004 enclosed car trailer for race car
Husband
V$35,000 July 2020
E$32,000
19.
Motor Vehicle 5 Husband disputes owned by him
Husband
E$22,000
Nil
20.
Motor Vehicle 6
Husband
E$6,000
Nil
21.
Golf cart
Husband
E$8,000
E$600
22.
Tractor
Husband
E$20,000
Included as part of Macrina Group valuation
23.
Trailer cool room
Husband
V$6,000 July 2020
Agreed $6,000
24.
Motor Vehicle 7
Husband
V$20,000 July 2020
E$18,000
25.
Motor Vehicle 8
Husband
V$1,500 July 2020
Included as part of Macrina Group valuation
26.
Motor Vehicle 9 purchased post separation
Husband
V$30,000 July 2020
E$6,000
28.
Tools and equipment and guns at K Street property
Husband
V$3,950 July 2020
Agreed $3,950
29.
B Bank term deposit #...88
Wife
Nominal
Not known
30.
B Bank #...21 nominal funds
Husband
Excluded
Not known
33.
Bank Account B Bank #...55
Husband
Excluded
$2,000
34.
B Bank Term Deposit funds paid by Mr O Macrina in December 2020
Joint
$250,000 plus interest
Agreed $250,000
35.
Proceeds of sale of parties interest in Town P land originally $144,796.90 but now disbursed
Joint
Excluded
$145,000 disclosed to Wife as partial property settlement pursuant to order made 2 Nov 2020
TOTAL ASSETS
E$2,621,950
E$1,603,550
Personal Debts
40.
ATO debt 2018 and 2019
Wife
E$9,000
Nil, already paid
41.
ATO debt
Husband
$125,590 - $134,320 not agreed by Wife
$125,590
42.
CGT on sale of D Street, Suburb E
Not known but will not be owing until 2023 if sold in 2022
E$61,200
43.
ATO debt due to release in 2018 of CBA Farm management deposit
Husband
Not known disputed by Wife as a joint liability
Part of net farm management deposit above
44.
CGT on sale of Town P interest
Joint
E$13,000
E$26,000
47.
Car loan for Motor Vehicle 9 purchased post separation
Husband
Not known
Part of net farm management deposit above
48.
Unpaid development costs
$106,612
49.
Unpaid to Company Q
E$200,000 to $300,000
TOTAL LIABILITIES
E$22,000
E$519,402
NET TOTAL
E$2,599,950
E$1,084,148
In addition to the abovementioned identified assets and liabilities, there is an additional item which has been excluded for these purposes from the Asset and Liabilities table. The parties are in agreement that there will be a future sum payable to the parties due to a commercial dispute currently before the Supreme Court of South Australia as between the Husband and his brother, Mr O.
At this stage of the proceedings it is unclear as to how much that litigation may realise. The Wife asserts that it could be a figure ranging from between $2,000,000 (‘the Wife’s realistic figure) and $4,600,000 (‘the figure that the Wife asserts the Husband is holding out to receive’). The Husband says his interest in the group is expected to be ‘between $2 million and $4.6 million’[3] and that ‘there has recently been interstate buyers interested in purchasing the Group’s land ‘for significantly more than prior land valuations’.[4] I have not inserted that figure into the abovementioned table because the amount is yet to be determined. Nor can the parties confirm with certainty what date any such funds might be received. The sum payable to the parties could be described at this stage of the proceedings as a ‘known unknown’.
[3] See Husband’s Affidavit filed 8 July 2021 at [36].
[4] Ibid.
However, given the apparent agreed position that the parties will receive at least $2 million from the Supreme Court litigation, the parties amended net totals of the Assets and Liabilities Schedule are:
(a)Wife E$4,599,950; and
(b)Husband E$3,084,148.
The Husband proposes as a final order that the Wife receive 45% of the net assets of the parties. The Wife has had the benefit of $145,000 by way of partial property settlement as ordered by consent on 2 November 2020 in paragraph 1.1.
On the Husband’s case, therefore the Wife would be entitled to a payment of approximately $1,242,867.
THE WIFE’S EVIDENCE & SUBMISSIONS
Sale of D Street, Suburb E
The Wife’s evidence as set out in her supporting Affidavit filed on 25 May 2021 is as follows:
(a)The Husband purchased the property at D Street, Suburb E (‘the D Street, Suburb E property’) during the relationship in June 2005;
(b)The D Street, Suburb E property has always been used as an investment property. The rent paid by tenants is directed towards mandatory payments to reduce a line of credit with the B Bank held in the parties’ joint names. The Husband is the registered owner of the D Street, Suburb E property as Trustee of the Macrina Property Trust. The beneficiaries of the said trust are the Wife, the Husband and their adult children, together with another entity known as the R Trust;
(c)In June 2018, following advice from their respective Accountant Mr S, the parties drew down substantial lump sums from the B Bank line of credit which were dispersed as follows:
(i)$64,385 to pay building debts;
(ii)$35,032.25 to the Wife (which she says was used to pay a taxation liability of $18,032.25, $7,000 in legal fees, and $10,000 for living expenses); and
(iii)$272,000 paid to the Husband to invest in a farm management deposit.
(d)In December 2018, the Wife alleges that the Husband paid a sum of $332,000 (the original $272,000 paid into the farm management deposit and a further sum of $60,000 from the CBA farm management deposit) to his accountant’s Trust Account;
(e)The Wife alleges that the Husband then withdrew these funds (together with other monies) to enable him to buy businesses known as ‘Business C’ and the ‘T Business and also to discharge legal and accounting fees;
(f)The Wife asserts that the Husband has therefore had the sole benefit of $332,000 of which $272,000 came from the parties’ line of credit secured over the D Street, Suburb E property;
(g)The Wife seeks that the D Street, Suburb E property be placed on the market for sale by such agent as agreed between the parties at public auction. The D Street, Suburb E property was valued in March 2019 at $590,000;
(h)It is the Wife’s contention that the property’s value would have increased and that a recent comparable sale saw a property sell for $820,000.[5] Neither party has obtained an updated valuation of the property;
(i)The Wife seeks that she be paid the full net proceeds of the D Street, Suburb E property. This would require the Husband to raise sufficient funds to discharge the B Bank line of credit in the sum of $287,000 such that the Wife receives the full net proceeds of the D Street, Suburb E property;
(j)In the alternative, if the Husband is unable to find finance to pay out the loan, the Wife proposes that he could place the former matrimonial home at K Street, Suburb L, as security for any new finance application;
(k)Further in the alternative, the Wife proposes that the Husband use funds available in the B Bank term deposit to pay down the B Bank line of credit and for the Wife to receive the net proceeds;
(l)The Wife deposes that she is now in a temporary contract position with her employer until 24 November 2021.[6] The Wife has expressed concern that she may have difficulties securing finance to obtain a home loan given her low income and a lack of permanency in relation to her employment;
(m)The Wife deposes to requiring “$685,000 approximately, or more” to purchase a home based on her recent enquiries;[7] and
(n)The Wife deposes to requiring approximately $750,000 if she was permitted a sum to purchase a home and to pay legal fees to date.[8] ‘Exhibit W1’ is the Wife’s Legal Costs Notice pursuant to r 12.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules2021.
(o)The D Street, Suburb E property is tenanted. The Wife asserts that she has called for a copy of the lease, but that the Husband has failed to provide it.
[5] See Wife’s Affidavit filed 25 May 2021 at [12].
[6] Ibid at [17].
[7] Ibid at [21].
[8] Ibid at [23].
Spousal Maintenance
As set out above, the Wife is currently paid the sum of $500 per week from the Husband by way of spousal maintenance pursuant to paragraph 10 of the order made on 4 September 2020. There is no complaint that the Husband has failed to meet his obligations in this regard.
The Wife deposes that she has since mid 2020 been able to earn more income than what is reflected in her Financial Statement.[9] The Wife now earns “at least $1,900 per fortnight net of tax”.[10] If the Wife does extra shifts or penalty rate shifts, the weekly sum increases.[11] The Wife deposes to paying regular amounts to the Australian Taxation Office to reduce a taxation debt currently standing to the sum of $9,949.39.[12]
[9] Ibid at [29].
[10] Ibid.
[11] Ibid.
[12] Ibid.
The Wife deposes to having had $33,000 in a B Bank term deposit.[13] The Wife intends to use some of those funds, together with monies advanced by her mother in the sum of $10,000, to purchase a new motor vehicle. The remaining balance of approximately $13,000 has been earmarked to assist the parties’ daughter Ms J with her wedding costs. The Wife proposes to sell her Motor Vehicle 10 and then repay the net proceeds to her mother in order to reduce the borrowings of $10,000.[14]
[13] Ibid at [30].
[14] Ibid.
The Wife further deposes to having received since separation the sum of $144,796.90 pursuant to a consent order made on 2 November 2020.[15] The Wife’s evidence is that she used those funds (apart from $20,000 now in her B Bank term deposit) to pay legal fees, accounting debts, and taxation liabilities.[16]
[15] Ibid at [32].
[16] Ibid.
The Wife’s counsel conceded that once the Wife obtains her own home, then the payment of rent currently in the sum of $300 per week would fall away as her weekly outgoings for accommodation would be nil.
Access to $250,000 from Macrina Group
The Wife deposes that in November 2020, the Husband’s brother paid the sum of $250,000 into a B Bank account being Account Number …74 in the joint names of the parties.[17] The parties are currently restrained from dealing with the funds by virtue of orders made on 7 May 2021 and as amended on 13 May 2021.
[17] Ibid at [34].
The Wife says that she is ‘uncertain about what the respondent can or will borrow by way of refinance in relation to the sale of the D Street, Suburb E property and refinance using the K Street, Suburb L property, and about what the D Street, Suburb E property will sell for’.[18]
[18] Ibid at [35].
The Wife therefore seeks an order that the $250,000 plus interest (about $95 only) be made available to her.[19]
[19] Ibid.
The Wife says that receipt of this sum will enable the Wife to pay outstanding legal fees, taxation liabilities, and accounting costs.[20] The Wife’s counsel submitted at the hearing on 13 October 2021 that for the purposes of this application, the Wife’s legal representatives do not press that funds be made available for payment of the Wife’s legal fees. In other words, there is a proposal that any funds made available be for the specific purpose of the Wife rehousing herself at first instance.
[20] Ibid at [36].
In the Wife’s written submissions on page 7, the Wife’s new position as described is:
The applicant now seeks to have the term deposit $250,000 and such of the Business C’s sale proceeds (the respondent estimates it to be in the order of $88,000) as are necessary to discharge the Line of Credit debt so that the full sale proceeds, other than land agents fees and conveying costs and charges, could be available to her.
And further on page 8:
Use of the term deposit funds and such of the Business C sale proceeds as are necessary to discharge the bank loan would enable the respondent to own the K Street, Suburb L, property without any bank debt associated with that property and the applicant would have the benefit of a similar amount of funds (as the K Street, Suburb L property and the D Street, Suburb E property are of similar value to each other) without the need to obtain any bank loan and mortgage debt.
Husband not to create any other tax liability for the Wife to pay/Trust distributions
The Husband is the Trustee of the Macrina Property Trust. The Wife is one of a class of nominated beneficiaries. Since separation, the Husband has continued to make ‘paper distributions’ to the Wife as a nominated beneficiary. This has resulted in the Wife being assessed to pay tax liabilities for income that she has not received nor had the benefit of and have a debt due to her.
By virtue of her Further Amended Application in a Case, the Wife no longer seeks a lump sum of $162,188 representing notional distributions made to her via the Trust. The Wife deposes that she will continue to pay off her tax liability in the sum of $9,949.39.[21] The Wife says that she seeks an order that the respondent not make any distributions to the Wife which will generate a tax liability unless, ‘I am actually paid the income distribution amount first’.[22]
[21] Ibid at [45].
[22] Ibid at [46].
Disclosure of Husband’s accountant Trust Account transactions
This aspect of the Wife’s application was resolved by consent at the hearing on 13 October 2021, when an order was made inter alia that:
The respondent shall provide, within 7 days, written confirmation to his Accountant’s, F Accountants, that he authorises the release of copies to the applicant’s solicitor of the accountant’s Trust Account and copies of invoices and receipts concerning any transactions relating to the Trust Account every 3 months from 13 October 2021.
I therefore do not need to determine this issue.
Certain orders to continue
The Wife seeks to have certain orders already made in these proceedings continue pending trial.[23] Those orders are said to be set out in paragraphs 4, 5, 6, 7, 8 and 10 of the order made 7 May 2021 and paragraph 4 of the order made 4 September 2021 and paragraphs 11 and 12 of the order made 7 May 2021. Other than as prescribed in these reasons, and to give effect these orders, I do not propose to interfere with any prior orders without proper application and as such those orders will continue by their terms.
[23] Ibid at [50]-[51].
THE HUSBAND’S EVIDENCE & SUBMISSIONS
The Husband’s evidence is as set out in his Affidavits filed on 28 October 2020 and 8 July 2021.
Sale of D Street, Suburb E & Spousal Maintenance
The Husband opposes any order for the sale of the D Street, Suburb E property.
In the alternative, the Husband seeks that:
(1)All prior orders for spousal maintenance payable by the Husband to the Wife be discharged.
(2)That if the D Street, Suburb E property is to be sold, that the proceeds be discharged by way of:
(i)The B Bank line of credit facility.
(ii)Capital Gains Tax payable by Macrina Trust, or the parties individually arising from the sale.
(iii)Discharge of invoices in Annexure -1 of the Husband’s Affidavit dated 8 July 2021.
(iv)Discharge of the Husband’s tax liability to the ATO.
(v)The balance thereafter to be paid in equal shares to the parties via their solicitor’s Trust Account.
In support of these orders, the Husband relies upon paragraphs 20 – 28 inclusive of his Affidavit filed 28 October 2020 and paragraphs 34 to 57 of his Affidavit filed on 8 July 2021.
The Husband deposes that:
(1)If the D Street, Suburb E property is sold, it will trigger payment of Capital Gains Tax. The Husband deposes that ‘I am unsure whether the subsequent distributions from the trust of the sale proceeds will attract further tax’.[24] There is no dispute that any tax arising from the sale of the D Street, Suburb E property will not be payable until 2023.
(2)He wants to retain this property as part of the final settlement. The Husband proposes to pay the Wife her property settlement from his interest in the Macrina Group which the Husband says is expected to be ‘between $2 million and $4.6 million based on previous land and chattel valuations’.[25]
(3)That whilst ‘unlikely’, any concern by the Wife that the Husband’s interest in the Macrina Group would be insufficient to meet her settlement payment, can be dealt with ‘via standard default interest and default sale orders’.[26]
[24] See Husband’s Affidavit filed 8 July 2021 at [35].
[25] Ibid at [36].
[26] Ibid at [40].
The Husband proposes that in the event that the D Street, Suburb E property is sold, then and in that event:
(1)All orders for spousal maintenance be discharged.
(2)The net sale proceeds be first used to discharge the line of credit, pay applicable tax by the Trust and the parties, pay in full the works already carried out and shown in the annexed invoices marked -4, and the balance thereafter in equal shares to the parties via their solicitor’s Trust Account.[27]
[27] Ibid at [41].
The Husband argues that the Wife is not disadvantaged by having to pay rent as she is receiving spousal maintenance which he describes as ‘effectively’ free accommodation and receiving ‘spending money’.[28] The Husband deposes that he is additionally paying $500 per week towards the reduction of the Bank B line of credit on top of rental income received.[29] I note correspondingly, that if the line of credit is discharged at sale, then the Husband will be relieved from paying the extra $500 towards the line of credit.
[28] Ibid at [42.1].
[29] Ibid at [42.2].
The Husband sets out his opposition to the Wife seeking an order that the Husband obtain personal finance in which to discharge the liability to the B Bank for the line of credit secured over the D Street, Suburb E Drive property.[30]
[30] Ibid at [48]-[57].
As the Wife no longer presses this aspect of her Application, and now seeks that the funds held in the B Bank Term Deposit be utilised to discharge the line of credit, I do not intend to address this issue.
Access to $250,000 from the Macrina Group
The Husband seeks an order that he be paid the sum of $250,000 currently sitting in the B Bank Term Deposit in the joint names of the parties. The Husband submits that having this money would enable him to ‘pay taxes, his accruing professional fees, particularly in respect of the Supreme Court, and of course the Family Court matter, and this is the basis upon which the applicant applied the Town P money that was agreed to be paid to her’.[31]
[31] See Husband’s Written Submissions at [6].
The Husband observes that he is the party ‘footing the bill for the commercial proceedings but at present the accountant and lawyers are all unpaid’.[32]
[32] Ibid.
In summary, the Husband seeks the funds to pay his legal fees both in these proceedings and in the Supreme Court. The Husband’s legal fees are set out in Exhibit H-2 of his rule 12.06 Notice. The quantum of costs for the Supreme Court action have not been specified and nor is there evidence before me about this issue.
Husband not to create any other tax liability for the Wife to pay/Trust distributions
The Husband seeks an order in paragraph 7 of his Amended Response to Application in a Case that he be ‘at liberty to allocate distributions of the Macrina Trust at his sole discretion but ‘consistent with the trustee’s obligation under that Trust’s establishing Deed’.
In the alternative, the Husband seeks orders that he do all necessary things to ‘use any money received from the group to first pay as a priority, any and all tax liabilities of the Macrina Trust, and any and all of the respondent’s tax liabilities.’
The Husband’s position is that as Trustee of the Trust, he should be permitted to distribute income in a manner to minimize tax payable by the Trust.
Net proceeds of Business C
The Husband seeks an order that he be at liberty to retain the net sale proceeds of Business C by way of partial property settlement. His evidence in support of this order are at paragraphs 58 to 64 of the Husband’s Affidavit filed 8 July 2021.
The Husband deposes that he utilised monies from the Farm Management Deposit to purchase this business which has been operated by the parties’ son, Mr H.[33] The Husband deposes to rewarding Mr H for his hard work by deciding to ‘sell the business to him and his new partner’.[34] The Husband explains that the sale ‘has languished because the purchasers are yet to pay the shopping centre management their bond and security’.[35] At the time of swearing his Affidavit on 8 July 2021, no contract had yet been executed. The Husband deposes to there being an agreed purchase price of $125,000, but that this figure will be reduced as a consequence of expenses at settlement.[36] The Husband’s seeks to retain the net proceeds from this sale as the ‘genesis of this business was my FMD money and I have already incurred the tax debt for same’.[37]
[33] See Husband’s Affidavit filed 8 July 2021 at [58].
[34] Ibid at [59].
[35] Ibid at [61].
[36] Ibid at [63].
[37] Ibid at [64].
There is no evidence of the sum to be received by the Husband from the Business C business other than the sum referred to in the handwritten amendments to the Husband’s Schedule of Assets and Liabilities set out in Exhibit H2. I infer that the Husband is to receive the sum of $88,000 net from the sale of the Business C business.
Paragraph 11 of the order made on 7 May 2021 (and amended on 13 May 2021) directs the Husband to deposit the sale proceeds of the business ‘Business C’ into the Scammell & Co Trust Account.
Respondent’s accountant’s Trust Account ledger
This aspect of the Husband’s application was dealt with by way of a consent order made by the parties on 13 October 2021 as set out above.
I therefore propose to make no further order.
Superannuation splitting
The Husband seeks an order that the parties, as sole Directors of the N Pty Ltd and sole members of the N Superannuation Fund (‘the SMSF’) do all things and sign all necessary documents to, at the SMSF’s costs:
(1)Pay all necessary tax due and payable by SMSF.
(2)Instruct the respondent’s accountant to:
(a)Prepare all necessary outstanding financials and tax returns for the SMSF; and
(b)Roll out the residual balance of the SMSF to each of the parties such as to equalise all superannuation interests of the parties (including the applicant’s personally held superannuation interest(s).
(c)Dissolve, windup the SMSF thereafter.
(3)The parties thereafter each retain their respective superannuation interests, as and by way of partial property settlement.
Paragraphs 65 to 68 of the Husband’s Affidavit filed on 8 July 2021 are understood to support the basis of the orders sought by the Husband.
The Husband deposes that the main asset of that Trust (sic) was U Street, Suburb V, which is ‘now subject to a sale contract at a price agreed by the applicant and I’.[38]
[38] Ibid at [65].
The Husband deposes that ‘based on the 2018 financials of that SMSF, my member interest was $222,526 and the applicant’s was $180,343’.[39]
[39] Ibid at [66].
The Husband further deposes to having not received any update of the Wife’s current superannuation interest(s) since July 2020.[40] After setting out the orders sought by him, the Husband then deposes to seeking an order that ‘I further seek that thereafter, each party retain their respective superannuation interest(s), as and by way of partial property settlement’.[41]
[40] Ibid at [67].
[41] Ibid at [69].
The Husband’s application for orders to be made in relation to the parties’ self-managed superannuation fund is opposed by the Wife. In submissions, Ms Lewis stated that it was ‘inequitable’ for the Husband to seek those orders on an interim basis.
INTERIM PROPERTY SETTLEMENT – PRINCIPLES
The law in relation to interim property settlements in this jurisdiction is well established.
If an interim property order is to be made, the order must be granted under a power to make such orders and the issues attaching to the exercise of such power must be taken into account.
Section 79 of the Family Law Act 1975 (Cth) (‘the Act’) confers on the Court a power to make orders for property settlement. While there is only a single exercise of power under section 79, the Court may exercise the power through “a succession of orders until the power ... is exhausted” or until a final order dealing with all the known property of the parties is made.[42]
[42] Gabel & Yardley [2008] FamCAFC 162.
Section 80(1)(h) of the Act confers on the Court a power to “make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order”. Together, sections 79 and 80(1)(h) confer on the Court a power to make orders for interim property settlement.
The Full Court decision of Strahan & Strahan (Interim Property Orders)[43] is the leading authority on the test to be applied when considering an interim property settlement application. The Full Court stated that there are two stages to consider when hearing an application for interim property settlement.
[43] Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 (Boland, Thackray & O’Ryan JJ).
The first stage is what was said to be ‘the procedural step’. Their Honours Justice Boland and Justice O’Ryan held:
“In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.”[44]
[44] Ibid [132].
The second stage of the process for considering interim property applications is the ‘substantive step’. With respect to the second stage of the process, their Honours said:
“In relation to the second matter, as the jurisdiction under s 79 of the Act is being exercised the provision of that section must be considered and applied but with limitations given that it is not the final hearing. There is also no requirement of compelling circumstances in relation to the substantive step.”[45]
[45] Ibid [135].
Given that a party is effectively seeking access to their own funds, it is unnecessary for there to be ‘any detailed inquiry as to the purpose for which funds are to be used’.[46]
[46] Felice & Felice (2011) FamCA 162 at [12] (Loughnam J).
Following on from discussion about the two-stage approach, the plurality of the Full Court considered ‘the adjustment issue’ or ‘claw back issue’, which is whether:
“it seems likely to the Court that…the applicant…will be likely to receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made.”[47]
[47] Ibid [137] per Boland & O’Ryan JJ.
In exercising the power under section 79 of the Act, it is important for the Court to ensure that it is just and equitable to make the order sought in circumstances where the power will not be exhausted by an interim order.[48]
[48] Ibid [136] per Boland & O’Ryan JJ.
The Full Court decision Gabel v Yardley,[49] confirmed that:
“the interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal”.[50]
[49] Gabel & Yardley [2008] FamCAFC 162.
[50] Ibid [72] (Bryant CJ and Coleman J).
Importantly, more is required than the mere fact that upon a final hearing the applicant would receive the property being sought (or an amount in excess of funds being sought) from the other party.[51]
[51] Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 [139].
In summary, the tests to be applied are:
·Whether the power under section 79 and 80(1)(h) of the Act should be exercised.
·If so, then an assessment of the factors contained in section 79 of the Act is to occur.
·An assessment as to whether any interim amount provided to the Wife in this matter is able to be ‘clawed back’ at a final hearing stage.
Relevantly to this matter, there are authorities in relation to receiving a partial property settlement where a party is seeking interim funds to purchase property to live in.
In the matter of Amstel,[52] the Wife made an application for partial property distribution for the purpose of re-housing herself. The Wife was living with friends, which she contended was a short-term measure until she was able to obtain suitable accommodation for herself.[53] She deposed that she had the care of the family dog, which restricted the scope of her leasing arrangements and in any event, she wanted to buy and not take on any long-term leasing. The Husband had obtained alternate suitable accommodation for himself.[54]
[52] Amstel & Amstel [2015] FamCA 661 (Johns J)
[53] Ibid [22].
[54] Ibid [30].
The Wife sought an interim distribution of $2,000,000, out of an approximate $5,784,000 pool (on her figures). The Husband’s position as to the net asset pool did not differ significantly from the Wife’s, and he conceded at the final hearing that there should be an equal division of the parties’ interests.[55]
[55] Ibid [25].
Ultimately, the Court held that it was just and equitable for the Wife to receive the sum she sought, having regard to her living circumstances and the concessions made by the Husband as to the value of the parties’ interests and the amount he said the Wife would be entitled to by way of final property settlement.[56]
[56] Ibid [35].
The matter of Marshall[57] is yet another case where a Wife sought an interim property settlement in order to rehouse herself. In this case, Justice McClelland (as he then was) sets out an overview of the law as it relates to interim property settlements from paragraph 33 onward in the judgment. His Honour observed that the case law in respect of interim property settlements had been summarised by Justice Fowler in the case of Sresbodan & Stresbodan & Ors[58] at [35]-[43] inclusive. The following principles were said to be relevant to the Court’s consideration:
[57] Marshall & Marshall [2015] FamCA 712.
[58] Sresbodan & Stresbodan & Ors [2013] FamCA 480.
(i)Together, s 79 and s 80(1)(h) of the Family Law Act confer a power on the Court to make orders for interim property settlement.
(ii)Section 79 confers a discrete power to make orders for property settlement and the Court may exercise the power conferred by s 79 through ‘a succession of orders until the power … is exhausted’ or a final order dealing with all the known property of the parties is made.
(iii)Section 80 is not in itself a source of jurisdiction for such an order to be made. Rather, the section is an ‘enabling provision’ that provides various ways in which the general power in s 79 may be exercised in individual cases. This includes, by s 80(1)(h) making ‘a permanent order, an order pending the disposal of proceedings, or an order for a fixed term, or for a life or during joint lives, or until further order.’
(iv)There are two stages to the hearing of an application for property orders.
(v)There is no barrier or threshold requiring an applicant to establish ‘compelling circumstances’ at either the first or second stages of the Court’s consideration.
(vi)Given that the parties are effectively seeking access to their own funds, it is unnecessary for there to be ‘any detailed enquiry as to the purpose for which funds are to be used’.
(vii)Sufficient particulars must nonetheless be provided to enable the Court to determine;
(i)That the application is ‘genuine’.
(ii)To identify ‘the circumstances that make it appropriate to give consideration to exercising its power’.
(iii)To sufficiently weigh the identified need ‘against the benefit of having only one exercise of a s 79A power’.
(viii)While the usual s 79 considerations apply to the second stage of the process, a detailed analysis of those considerations is not required in any interim hearing.
(ix)Nevertheless, because the very nature of an interim hearing is such that the Court is not in a position to properly evaluation the evidence, the Court should take a conservative approach including in respect of determining whether there are likely to be sufficient resources of the parties available at final hearing to accommodate any ‘adjustment issue’.
(x)After completion of the first two stages, it is then necessary to focus on that ‘adjustment issue’. In terms of quantum, it is necessary to consider whether an interim property order would give a party so much that it could not be adjusted on the final hearing.
(xi)In terms of form, such an order must be of a nature that it is ‘capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power.
(xii)In that respect, the interim order ‘must be capable of variation or reversal without resort to s 79A of the Act or appeal’.
(xiii)An applicant is required to show more ‘than the mere fact that upon final hearing the applicant would receive the property being sought’ or an amount in excess of the funds being sort’ from the other party.
(xiv)The exercise of the jurisdiction should be conducted in the context of and with an appreciation that ‘as a generality, the interests of the parties and the Court are better served by there being one final hearing of s 79 proceedings.
(xv)The overriding consideration at all stages of the process is that the Court is satisfied that it is ‘just and equitable’ to make the order in circumstances before the Court.
(xvi)In evaluating the competing contentions, it is necessary to have some regard to the fact that, in family law proceedings, one party may have the predominance of resources.
(xvii)Perhaps the most common situation in which the Court would be prepared to entertain an application for interim property orders, is when the party with access to the least resources requires funds to conduct their own litigation, that is, to effectively even out the legal playing field.
(xviii)While the majority of cases in which interim property orders have been made relate to applications to obtain funds to conduct litigation, that is by no means the only instance where such orders have been made. Other instances include;
(i)Situations where parties may need access to resources ‘to meet debts which may result in the party being pursued by creditors’.
(ii)The need for a party to make payments to the benefit of the children.
(iii)To take advantage of other financial opportunities.
(iv)Where the parties consent.
(v)Where there are urgent situations such as:
(i)Where it is necessary to exercise this power if injustice is to be avoided. Examples include cases where it is necessary to do so to avoid an asset being eroded or lost in the intervening period.
(ii)Cases (beyond the maintenance power) where an order in favour of one party is necessary to preserve or obtain a home for or is otherwise necessary for the welfare of the children.
CONCLUSION
Sale of D Street, Suburb E & Spousal Maintenance
In circumstances where:
(a)The parties separated 4 years ago;
(b)The Wife has been residing in rental accommodation since 2017;
(c)The Husband has been living in the freehold matrimonial home since separation;
(d)The Husband has had control of the bulk of the matrimonial assets; and
(e)The matter has not yet been listed for trial and any conclusion of these proceedings could be some time away,
I am satisfied that it is in the interests of justice to make an order for partial property settlement in favour of the Wife. The sum of $700,000 is slightly more than the $685,000 sought by the Wife for a home and less than the sum of $750,000 sought to include legal fees. Having regard to the final orders sought by the Husband and approaching the asset pool as conservatively as I can, I am satisfied that it is possible to make any necessary adjustment to take into account the payment to the Wife at trial.
The Husband seeks to retain the D Street, Suburb E property at trial. I will therefore give him time to raise the sum ordered to the Wife. If he cannot do so, then the D Street, Suburb E property will be sold in order to do so.
I decline to discharge the order for spousal maintenance as sought by the Husband. I am not satisfied that the criteria set out in section 83(2) of the Act have been met in order to do so. Furthermore, once the Bank B line of credit has been discharged, the husband will no longer by paying $500 per week towards repayments of this liability.
Access to $250,000 from Macrina Group
It is unclear as to what sum the D Street, Suburb E property will sell for. The parties have not put evidence before the Court as to what (if any) secured liabilities need to be discharged at settlement of the D Street, Suburb E property. Out of an abundance of caution therefore, I intend to discharge the loans as a matter or priority.
I do not propose to make any orders for further funds to be made available to either the Husband or the Wife for the payment of outstanding legal fees or accounting fees or taxation liabilities at this stage. The state of the evidence with respect to these outstanding liabilities means that if further applications are made by the parties to pay outstanding liabilities of such a nature, then further applications, together with meaningful evidence, will need to be filed prior to trial.
I decline to make any further orders for partial property in favour of either party until the composition of the asset pool and what funds are left over become clearer after the Wife receives her sum as ordered.
Net proceeds of Business C
I decline to make an order in favour of the Husband for him to receive these funds at this stage. It is likely that a portion of these funds will be required to discharge the B Bank loans. At this stage of the proceedings, I consider it just and equitable to prioritise the Wife’s housing. Consideration can be given to further distributions when the asset pool is settled and after the D Street, Suburb E property is sold.
Husband not to create any other tax liability for the Wife to pay/Trust distributions
I propose to make an order enabling the Husband to make trust distributions to the Wife as a class of beneficiaries under the Trust Deed. However, it will be a condition of those distributions and subject to order, that the Husband will indemnify the Wife in relation to any tax arising from the distributions given the disparity in income between them. The Wife complains that whilst the distributions have been made to her ‘on paper’, it is in fact the Husband who has received the monetary benefit of such distributions and accordingly the Husband should pay any tax arising.
I propose to make the order as sought by the Wife in this regard.
Superannuation splitting
I decline to make orders for superannuation splitting as sought by the Husband in his Amended Response to Application in a Case filed 8 July 2021. No evidence is provided by the Husband as to the necessity for this order to be made on an interim basis. It is submitted in the Husband’s ‘Submissions of the Respondent’ that ‘an equalisation of the parties’ total superannuation is just and equitable and it will reduce the issues in dispute for that to occur as a partial property settlement’. The Court is not assisted as to how an order for superannuation splitting on an interim basis will ‘reduce the issues in dispute’ at trial. It is possible, for example, for either one of the parties to amend their final orders at trial to seek a greater adjustment of the parties’ superannuation interests. The Wife has also accumulated superannuation outside of the SMSF. It is unclear from the orders proposed by the Husband how that superannuation interest of the Wife is to be dealt with by way of adjustment.
Accordingly, I decline to make the orders as sought by the Husband.
Having regard to the facts and circumstances which are outlined in the parties’ affidavits and addressed by counsel in submissions, the Court is satisfied that it is just and equitable to make the orders set out at the commencement of these reasons.
I certify that the preceding ninety-seven (97) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Dickson. Associate:
Dated: 17 November 2021
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