Macvean & Manton (No 2)

Case [2022] FedCFamC1F 689

Federal Circuit and Family Court of Australia

(DIVISION 1)

Macvean & Manton (No 2) [2022] FedCFamC1F 689

File number(s): MLC 13788 of 2019
Judgment of: BERMAN J
Date of judgment: 14 September 2022  
Catchwords:

FAMILY LAW – PROPERTY SETTLEMENT – Where the wife seeks that the property proceedings be adjourned pursuant to s79(5) of the Family Law Act, to a date fixed no earlier than 1 September 2024 – Where the wife asserts that the husband’s business will increase in value – Where the wife seeks to rely on a shadow expert valuation report – Where no leave was given to the wife to rely upon the shadow expert valuation report – Consideration of whether it is likely that there will be a significant change in the financial circumstances of the husband’s business – Consideration of whether an adjournment would likely do justice between the parties – Where there is insufficient evidence to support a finding of a likely significant change in circumstances –Where there is no evidence or relevance to support the adjourned date proposed by the wife – Where the evidence presented would not enable the Court to exercise its discretion – Where the parties have spent in $3,000,000 in legal fees and disbursements – Whether the potential costs incurred if the proceedings were adjourned, would overwhelm the proceedings and diminish the asset pool – Application dismissed

FAMILY LAW – PROPERTY SETTLEMENT – Just and equitable – Contributions – Future needs – Addbacks – Where in the alternative to s 79(5) of the Family Law Act, the wife seeks orders for the division of property – Where the husband has made greater financial contributions – Where final orders were made by consent in relation to children’s matters – Where the wife is the primary carer – Where the husband earns significantly more income than the wife – Where the husband’s company is his alter ego –Where the husband asserts that he owes his mother a loan of $439,697 – Where the husband seeks to include his unpaid income tax accrued post separation –Where there is insufficient evidence presented and the loans are not brought to account – Where a significant part of each parties’ legal fees are added back – Consideration of s 75(2) factors – Orders.

FAMILY LAW – CHILD SUPPORT – Application for departure – Consideration of s 116(1)(b) and s 117 of the Child Support Assessment Act 1989 (Cth) – Where the Court is satisfied that leave should be given pursuant to s 116(1)(b) – Where the parties agree that there should be a departure – Where the parties do not agree as to the extent and the nature of the departure – Where the wife seeks that the husband pay periodic child support in addition to non‑periodic child support, being 100% of the children’s school fees and other expenses – Where the husband seeks that he pay non‑periodic child support, being 50% of the children’s school fees and other expenses – Consideration of the…

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AGLC
Macvean & Manton (No 2) [2022] FedCFamC1F 689
Case
[2022] FedCFamC1F 689
Decision Date

CaseChat Overview and Summary

The case of Macvean & Manton (No 2) involves a property settlement between a husband and wife following their divorce. Both parties have agreed that it is just and equitable to make an order of property settlement pursuant to section 79 of the relevant Act. The husband, who owns a business consisting of several entities and trusts, and the wife, a medical professional, have sought to adjust their legal and equitable interests in the property. The dispute primarily revolves around the valuation and distribution of assets accumulated during their cohabitation, including a property sale, personal assets, and business interests.

The court was required to determine the appropriate adjustment of property interests between the parties, considering their respective contributions to the accumulation of assets and the future implications of the settlement. This involved assessing the value of the husband's business interests and property, the wife's personal assets, and the superannuation entitlements of both parties. The court also needed to decide on the method of payment for the wife's settlement sum and the allocation of superannuation.

The court found that the husband should pay the equivalent of the current Child Support Assessment, along with the children's school fees and related expenses, subject to CPI indexation. A 10 per cent adjustment in favour of the wife was deemed appropriate. The net pool of assets was determined to be $6,141,103, from which the wife is entitled to receive $3,469,723. The court ordered that the wife receive a settlement sum of $1,264,666, payable in three separate instalments. Regarding superannuation, the court allocated a base amount of $87,500 from the husband's interest to the wife, considering the contributions and circumstances of each party.

The court's decision reflects a balanced approach to the property settlement, taking into account the contributions and future circumstances of both parties, as well as the specific needs and obligations of the husband towards the children.

Orders

Orders of the court

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Background

Background to the litigation

The parties both consider that it is just and equitable for there to be an order of property settlement made pursuant to s 79 of the Act and that the legal and equitable interests in the property will need to be adjusted.background The husband was born in 1969 and is now aged 53 years. The wife was born in 1979 and is now aged 43 years. The husband is self-employed and owns a business, which is comprised of the following entities:-(a)P Pty Ltd;(b)P2 Pty Ltd;(c)P3 Pty Ltd;(d)P5 Pty Ltd;(e)P4 Pty Ltd;collectively as “the P Pty Ltd Group”; and(f)The T Trust and U Trust (“the trusts”). The wife is a medical professional and currently works two days per week (for up to 20 hours). The parties commenced cohabitation in 2007, were married in 2012 and separated in August 2019. A divorce order was effected in early 2021. X and Y are the children of the parties and as discussed, final parenting orders were made by consent on 16 December 2021. Following separation, the husband commenced a relationship with Ms GG (“Ms GG”). The husband and Ms GG commenced cohabitation in early 2020. A child of their relationship was born in 2021. At the commencement of cohabitation, the wife was the sole registered proprietor of a unit situate at TT Street (“the Suburb JJ property”). The Suburb JJ property was sold in early 2021, for $400,000. The wife received net proceeds in the sum of $157,085 from the sale however, there was an estimated capital gains tax payable by the wife consequent on the sale, in the sum of $37,853. The wife contends that at the commencement of cohabitation, she held approximately $160,000 of assets comprising of the following:-(1)Equity in the Suburb JJ property of $37,000;(2)A share portfolio valued at $16,479;(3)Cash savings of approximately $87,000;(4)Superannuation of $12,000;(5)A motor vehicle of approximately $2,000; and (6)Various household items and personal effects valued between $5,000 and $10,000. At the commencement of cohabitation, the husband held a one-third interest in P Pty Ltd (“P Pty Ltd”). Whilst there is some uncertainty as to the value of the husband’s interest, it is uncontroversial that in late 2008, the husband purchased his business partner’s one‑third interest in P Pty Ltd either for $430,000, as claimed by the wife, or for $146,000 to fund the purchase of shares and $293,647 for cash flow, as claimed by the husband. The husband also held an interest in the property at B Street, Suburb C (“the B Street property”) which he had purchased in early 2007 for $572,500 with a home loan secured by mortgage of $458,000. Whilst there is some contention between the parties as to both the status and the treatment, it appears that the husband had borrowed money from his mother in the sum of $185,000, to finance the balance of the purchase price of the B Street property. During the course of the relationship, each of the parties worked and were able to contribute to the best of their separate abilities, to the family expenses and the acquisition and maintenance of the property of the parties.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

BERMAN J
The husband will pay the equivalent of the current Child Support Assessment together with the children’s school fees and other related expenses as a periodic amount subject to CPI indexation. The matters considered and acknowledging that a percentage adjustment must be considered on the basis of its dollar worth rather than the application of a percentage based principle, there should be an adjustment in favour of the wife of 10 per cent.conclusion The net pool (inclusive of liabilities and addbacks) is $6,141,103. At 56.5 per cent the wife is entitled to receive $3,469,723. The wife is to retain the following:- The wife is entitled to the sum of $3,469,723 and accordingly she is to receive a settlement sum of $1,264,666. In the amended draft minute of order, the wife sought a settlement of $1,908,160. Presumably, the wife accepted, albeit with some reluctance, that the husband may struggle to find the proposed settlement sum readily and therefore, was prepared to accept a payment of the settlement sum by instalments. I propose to enable the settlement sum that is payable to the wife to be repaid by three separate instalments. superannuation Taking into account the ages of the parties, it is unlikely that they will satisfy a condition of release for a significant period. I have not been provided with a copy of the superannuation trust deed but I am satisfied that each of the parties hold an interest in an accumulation type fund and that the agreed superannuation entitlements of each of the parties is sufficient for me to be satisfied that the parties separate superannuation interests have been properly considered and identified. The total superannuation of the parties is $887,729. The wife holds $291,584. She seeks there be a base amount of $152,280 allocated to her pursuant to s 90XT(4) of the Act from the husband’s interest in Superannuation Fund 1 (“the fund”). Such an outcome would represent 50 per cent of the total superannuation of the parties. The husband concedes that there should be a base amount allocated to the wife, but limited to $87,500. This would represent 42.7 per cent of the superannuation interest of the parties. There is scant evidence as to the method and manner by which the separate superannuation interests of the parties accumulated. I note that at the commencement of cohabitation the husband held a superannuation entitlement of $78,955. I assume that but for the $10,000 sum that was withdrawn by the husband, his initial contribution is significantly reflected in the current superannuation balance. The wife held a modest superannuation entitlement at the commencement of cohabitation of about $12,000. I bring to account the contributions of the parties to their separate superannuation funds. Predominantly, the wife’s superannuation has accrued as a result of a superannuation contribution arising from her employment as a medical practitioner. Her ability to generate income and undertake employment was subservient to her commitment to the care of the children. The husband’s interest in P Pty Ltd enabled him to generate a significantly higher income stream and also the greater contribution to his superannuation. The husband’s interest in P Pty Ltd is property of the parties to which each of the parties have made a financial and non-financial contribution.

Ratio Decidendi

Legal Principle Established

Established by: BERMAN J

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