MAHOUB & MAHOUB - [2013] FamCA 848

FAMILY COURT OF AUSTRALIA

MAHOUB & MAHOUB

[2013] FamCA 848

FAMILY LAW – PROPERTY SETTLEMENT – Consideration of Bevan & Bevan [2013] FamCAFC 116 - Contributions - Determination of discreet issues as to contribution – Determination of appropriate section 75(2) adjustment – Consideration of prospective capital gains tax liabilities – Husband’s paid legal costs reflected in section 75(2)(o) adjustment.
Family Law Act 1975 (Cth) ss. 75, 79

Stanford v Stanford [2012] HCA 52
Bevan & Bevan [2013] FamCAFC 116
Russell and Russell (1999) FLC 92-877
Teal & Teal [2010] FamCAFC 120
Rosati and Rosati (1998) FLC 92-804
IABH & HRBH [2010] FamCA 110
Omacini and Omacini [2005] FamCA 195
Gollings v Scott [2007] FamCA 397

APPLICANT:

Mr Mahoub

RESPONDENT:

Ms Mahoub

FILE NUMBER:

PAC1721

Of 2012

DATE DELIVERED:

19 August 2013

PLACE DELIVERED:

Parramatta

PLACE HEARD:

Parramatta

JUDGMENT OF:

Foster J

HEARING DATE:

12, 13, 14 and 15 August 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms Christie

SOLICITOR FOR THE APPLICANT:

Watts McCray Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Lethbridge SC with Ms Barnett

SOLICITOR FOR THE RESPONDENT:

Lough & Wells Lawyers

Amended pursuant to rule 17.02 of the Family Law Rules 2004

Orders

That each party shall do all things necessary within 21 days of the date of these orders to cause the properties situated at and known as:
a)B Street, C Town in the State of New South Wales (“the C Town property”) being the whole of the land contained in folio identifier …;
b)Property D, E Street, Melbourne in the State of Victoria ("Property D") being the whole of the land contained in folio identifier …; and
c)F Street, Melbourne in the State of Victoria ("the F Street property") being the whole of the land contained in folio identifier …
(collectively referred to as "the properties") to be placed on the market for sale by private treaty.
That, for the purposes of Order 1 above, the Real Estate Agent to act in respect of the sale shall be as agreed by the parties and, failing agreement within seven (7) days of the date of these Orders, then shall be a Real Estate Agent appointed by the President of the Real Estate Institute of New South Wales or his/her nominee for the property situated in New South Wales and the President of the Real Estate Institute of Victoria or his/her nominee for the properties situated in Victoria.
That, for the purposes of Order 1 above, the sale price for the properties shall be as agreed between the parties and, failing agreement within seven (7) days of the date of these Orders, then shall be at a price determined by the President of the New South Wales Division of the Australian Property Institute or his/her nominee, for the property situated in New South Wales and by the President of the Victorian Division of the Australian Property Institute or his/her nominee for the properties situated in Victoria.
That the proceeds of sale of the C Town property to be disbursed…

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.

Continue reading MAHOUB & MAHOUB

Details

AGLC: MAHOUB & MAHOUB [2013] FamCA 848
Case: [2013] FamCA 848
Decision Date: 19 August 2013

CaseChat Overview and Summary

This matter concerned property settlement proceedings between a husband and wife, heard by Foster J in the Family Court of Australia. The dispute involved the division of various properties and assets, including consideration of prospective capital gains tax liabilities arising from the sale of certain real estate. The court was required to determine the contributions of each party and the appropriate adjustments under section 75(2) of the *Family Law Act 1975* (Cth), including the reflection of the husband's paid legal costs within such an adjustment.

The court's reasoning addressed the division of multiple properties, including the C Town property, Property D, and the F Street property. For these properties, the court ordered their sale by private treaty, with specific provisions for the appointment of real estate agents and the determination of sale prices in the event of party disagreement. The proceeds of sale were to be disbursed according to a detailed priority, including payment of sale expenses, discharge of mortgages, and the allocation of the net balance between the parties. Crucially, the court made specific provisions for anticipated capital gains tax liabilities, ordering sums to be held in controlled monies accounts to meet these future tax obligations, with mechanisms for their disbursement and the division of any shortfall. The court also declared the sole entitlement of each party to certain other properties, with provisions for indemnification regarding associated liabilities.

The final orders dictated the sale of the C Town property, Property D, and the F Street property, with specific percentages of the net proceeds allocated to the wife (55%) and the husband (45%), adjusted by specific monetary amounts in the case of the C Town property. Provisions were made for the management and disbursement of funds to cover capital gains tax liabilities arising from the sale of Property D and the F Street property, including the establishment of controlled monies accounts and the allocation of any shortfall. The wife was declared solely entitled to certain overseas properties and a 'summerhouse' held on trust for the child, while the husband was declared solely entitled to the M Street property. The orders also provided for the transfer of various bank accounts and interests in properties, with the wife assuming responsibility for refinancing mortgages and indemnifying the husband from liabilities associated with certain properties. Each party was to retain their respective personal property, shares, and financial accounts not specifically dealt with in the orders. Leave was granted to re-list the matter for implementation or enforcement issues.

Orders

Orders of the court

That each party shall do all things necessary within 21 days of the date of these orders to cause the properties situated at and known as:

a) B Street, C Town in the State of New South Wales (“the C Town property”) being the whole of the land contained in folio identifier …;

b) Property D, E Street, Melbourne in the State of Victoria ("Property D") being the whole of the land contained in folio identifier …; and

c) F Street, Melbourne in the State of Victoria ("the F Street property") being the whole of the land contained in folio identifier …

(collectively referred to as "the properties") to be placed on the market for sale by private treaty.

That, for the purposes of Order 1 above, the Real Estate Agent to act in respect of the sale shall be as agreed by the parties and, failing agreement within seven (7) days of the date of these Orders, then shall be a Real Estate Agent appointed by the President of the Real Estate Institute of New South Wales or his/her nominee for the property situated in New South Wales and the President of the Real Estate Institute of Victoria or his/her nominee for the properties situated in Victoria.

That, for the purposes of Order 1 above, the sale price for the properties shall be as agreed between the parties and, failing agreement within seven (7) days of the date of these Orders, then shall be at a price determined by the President of the New South Wales Division of the Australian Property Institute or his/her nominee, for the property situated in New South Wales and by the President of the Victorian Division of the Australian Property Institute or his/her nominee for the properties situated in Victoria.

That the proceeds of sale of the C Town property to be disbursed as follows and in that priority:

a) In payment of agents commission and advertising expenses and legal expenses of the sale;

b) In payment of costs incurred in relation to the nomination of a real estate agent (if any), in payment of costs incurred in relation to the nomination of a solicitor (if any) and in payment of costs in relation to determination of value or selling price by the President of the New South Wales Division of the Australian Property Institute or his/her nominee (if any);

c) Discharge of all mortgages secured on title of the property; and

d) In payment of the balance as to 55 per cent less $71,227 to the Wife, and 45 per cent plus $71,227 to the Husband.

That the proceeds of sale of Property D property to be disbursed as follows and in that priority:

a) In payment of agents commission and advertising expenses and legal expenses of the sale;

b) In payment of costs incurred in relation to the nomination of a real estate agent (if any), in payment of costs incurred in relation to the nomination of a solicitor (if any) and in payment of costs in relation to determination of value or selling price by the President of the Victorian Division of the Australian Property Institute or his/her nominee (if any);

c) Discharge of all mortgages secured on title of the property;

d) In payment of the sum of $85,000 into an interest bearing Controlled Monies Account in the name of the Husband and the Wife administered by the parties’ lawyers and the said sum be held in the Controlled Monies Account to be used for the purpose of meeting the Husband’s anticipated additional tax liability arising from the capital gain realised on the sale of the said property; and

e) The net balance of proceeds on sale then to be paid as to 55 per cent to the Wife and 45 per cent to the Husband;

f) That for the purposes of this order the Husband shall do all acts and things and sign all documents necessary to lodge his tax return for the financial year in which the sale of the said property occurs, by no later than 30 September after the end of the financial year in which the sale of the said property occurs;

g) That for the purpose of this order each party shall do all things necessary forthwith including but not limited to signing all documents requested of them and giving all consents to cause the monies including interest contained in the Controlled Monies Account to be paid out within 14 days of the Husband receiving his Notice of Assessment from the Australian Taxation Office in payment of the Husband’s additional tax liability arising from the capital gain realised on the sale of the said property and the balance then divided between the parties as to 55 per cent to the Wife and 45 per cent to the Husband;

h) If there is a shortfall from the sum of $85,000 and interest invested in the Controlled Monies Account to pay the Husband’s additional tax liability arising from the capital gain realised on the sale of the said property then from their own resources the parties shall each pay such shortfall as to 55 per cent by the Husband and 45 per cent by the Wife.

That the proceeds of sale of the F Street property to be disbursed as follows and in that priority:

a) In payment of agents commission and advertising expenses and legal expenses of the sale;

b) In payment of costs incurred in relation to the nomination of a real estate agent (if any), in payment of costs incurred in relation to the nomination of a solicitor (if any) and in payment of costs in relation to determination of value or selling price by the President of the Victorian Division of the Australian Property Institute or his/her nominee (if any);

c) Discharge of all mortgages secured on title of the property;

d) In payment of the sum of $50,000 into an interest bearing Controlled Monies Account in the name of the Husband and the Wife administered by the parties lawyers and the said sum held in the Controlled Monies Account and interest to be used for the purpose of meeting the Husband and Wife's additional tax liability arising from the capital gain realised on the sale of the said property; and

e) The net balance then to be paid as to 55 per cent to the Wife and 45 per cent to the Husband;

f) That for the purposes of this order the Husband and the Wife shall do all acts and things and sign all documents necessary to lodge their tax returns for the financial year in which the sale of the F Street property occurs, by no later than 30 September after the end of such financial year in which the sale of the F Street property occurs;

g) That for the purpose of Order 6(d) herein, each party shall do all things necessary forthwith including but not limited to signing all documents requested of them and giving all consents to cause the monies including interest contained in the Controlled Monies Account to be used to pay the Husband and Wife's additional tax liability arising from the capital gain realised on the sale of the said property.

That for the purposes of these orders the Husband and Wife shall cooperate with one another and provide sufficient information to the other for the proper completion of their respective taxation returns regarding all matters relevant to the calculation of capital gains tax properly payable by the parties after all relevant deductions, including copies of one another's draft taxation returns for the relevant year or years.

That, as between the parties, the Wife is hereby declared solely entitled to the following properties:

a) The unit at City I being G Street, Suburb H, Country J;

b) The ‘summerhouse’ in Country J, City I region, K district, house number .., Country J ("K Property") and the Wife is hereby declared to hold the said property on trust for the child of the parties L

and the Wife shall indemnify and shall keep indemnified the Husband in relation to all mortgage payments, statutory rates and charges, other expenses and liabilities in relation to the said properties whenever and however arising.

That, as between the parties, the Husband is hereby declared solely entitled to the property situated at and known as M Street, N Town being the whole of the land contained in folio identifier … (“the M Street property”) and the Husband shall indemnify and shall keep indemnified the Wife in relation to all mortgage payments, statutory rates and charges, other expenses and liabilities in relation to the said property whenever and however arising.

10.

That within seven (7) days from the date of these Orders, the Wife do all things necessary and sign all necessary documents to transfer to the Husband her interest in the St George Bank offset account number …, Citibank account number …, and the St George Bank offset account for the M Street property and all monies contained in those accounts to the Husband and the Husband shall be at liberty should he wish to forthwith withdraw all funds from those accounts.

11.

That within two (2) months from the date of these Orders the Husband and Wife will do all acts and things and sign all documents necessary to transfer, at the expense of the Wife, the following properties into the Wife’s sole name:

a) O Street, Sydney “Property O” being the whole of the land contained in folio identifier … (“Property O property”);

b) P Street, Suburb Q, being the whole of the land contained in folio identifier … (“the Suburb Q property”); and

c) R Street, Suburb S being the whole of the land contained in folio identifier … (“the Suburb S property”).

and simultaneously with the transfer of each of the properties the Husband and Wife do all acts and things and sign all documents so as to facilitate the Wife refinancing the present mortgages secured over the said properties into her name and the Wife shall as and from the date of these orders indemnify the Husband from all or any liability arising from the mortgages presently secured over the said properties and all and any outgoings in regard to same and for the purposes of this order the Husband and Wife shall do all necessary things and sign all necessary documents within seven (7) days from this date so as to authorise and direct that rental payments in respect of the said properties be paid to such account as is nominated by the Wife and further do all necessary things and sign all necessary documents so as to authorise and direct the mortgagee banks to deduct mortgage payments in relation to the said properties from such account as is nominated by the Wife within seven (7) days from this date.

12.

That, as between the parties, and subject to the above Orders each party shall respectively retain all interest in and entitlement to all personal property now in his/her respective possession or control, all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively, all interests in life insurance policies and superannuation funds standing in his or her sole name respectively.

13.

That the parties are granted leave on seven (7) days notice to the Court and to the other party to re-list the matter as to implementation or enforcement of these Orders.

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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