MARANI & MARANI
[2018] FCCA 2468
•26 September 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MARANI & MARANI | [2018] FCCA 2468 |
| Catchwords: FAMILY LAW – Property – alteration of property interests – assessment of contribution and future needs – capital gains tax. |
| Legislation: Family Law Act 1975 (Cth), ss.75, 79 |
| Cases cited: Bevan & Bevan [2013] FamCAFC 116 Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA395 Stanford & Stanford [2012] HCA 52 Rosati (1998) FLC 92‑804 Vass & Vass [2015] FamCAFC 51 |
| Applicant: | MS MARANI |
| Respondent: | MR MARANI |
| File Number: | BRC 1607 of 2016 |
| Judgment of: | Judge Altobelli |
| Hearing date: | 31 July 2018 |
| Date of Last Submission: | 31 July 2018 |
| Delivered at: | Wollongong |
| Delivered on: | 26 September 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Pope |
| Solicitors for the Applicant: | Derek Legal |
| Counsel for the Respondent: | Mr Jordan |
| Solicitors for the Respondent: | Rhonda Sheehy & Associates |
ORDERS
That within 21 days of the date of these Orders, both parties provide to my Associate in Chambers, a Minute of Order that jointly reflects the Court’s findings in these Reasons for Judgment.
In the event that a joint Minute cannot be submitted, then within 28 days of the date of these Orders, each party must provide to my Associate in Chambers a Minute of the Order that they contend for, and the matter will then be re‑listed for further submissions on a date to be fixed.
IT IS NOTED that publication of this judgment under the pseudonym Marani & Marani is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT WOLLONGONG |
BRC 1607 of 2016
| MS MARANI |
Applicant
And
| MR MARANI |
Respondent
REASONS FOR JUDGMENT
Introduction
These Reasons for Judgment explain the Orders that the Court has made in determining a contested Application for alteration of property interests between the Applicant Wife, and the Respondent Husband.
Background
The Applicant Wife is 58 years old, and the Respondent Husband 57 years old. They commenced cohabitation and married in 1993 and separated in either May or June 2015 (nothing turns on this). They cohabited for a period of just under 22 years. They have four adult children between the ages of 18 and 27. The Husband and Wife divorced in December 2016. The present proceedings were commenced in February 2016. The first Final Hearing in this matter was allocated for July 2017 but had to be adjourned due to valuation issues. A judicial mediation occurred on 10 May 2018 but did not result in a final settlement. The matter was heard over two days commencing on 30 July 2018. Mr Pope of Counsel appeared on behalf of the Wife, and Mr Jordan of Counsel for the Husband.
The matter was heard in the Brisbane Registry of the Court but listed before a visiting Judge. The impression formed is that the parties have spent a vast amount of emotional energy and financial cost in litigating what turned out to be quite narrow issues. The Affidavits relied on were of a volume quite disproportionate to the issues in dispute.
By the time of closing submissions, the parties had agreed that contributions at the date of the Hearing should be assessed as being equal. There remained some relatively small valuation issues, a capital gains tax issue, the characterisation of interim payments made during the course of the proceedings, and the assessment of the Wife’s claim under s.75(2) of the Family Law Act 1975 (Cth). In this regard, the Wife contended for an adjustment in her favour of 2.5 per cent. The Husband opposed this, on the basis that having regard to the size of the asset pool, the Wife would not be in need.
Alternatively, however, should the Court find that the Wife was in need, her post‑separation conduct was such as to, in effect, disentitle her to any adjustment under s.75(2) of the Family Law Act (supra). In the further alternative, however, the Husband’s Counsel conceded that if there was a s.75(2) adjustment in the Wife’s favour, it would be a very small one.
The Orders sought by the Wife are reproduced in the First Schedule to these Reasons. The Husband’s Orders are reproduced in the Second Schedule. Apart from the obvious difference that she sought 52.5 per cent, and he sought 50 per cent, they agreed that the Wife should retain the former matrimonial home at Property A which she presently occupies. They agreed that the Wife should resign as Director of Company A Pty Ltd, and transfer her shares to the Husband.
They agree that the Wife should resign as the Director of Marani Superannuation Pty Ltd, and transfer her share to the Husband in this regard. They agree that the Husband, in his capacity as Trustee of Marani Superannuation Pty Ltd, should cause the property known as Property B to be sold, with the consequential sale proceeds to be paid into the bank account of Marani Superannuation Pty Ltd.
Both the Husband and the Wife agreed that the Husband, in his capacity as director of Company B Pty Ltd is to make a number of payments from the sale proceeds of the Company C Ltd shares, including $230,000 being rent owed by Company A Pty Ltd, to be paid to Marani Superannuation Pty Ltd. The sum of $115,331 is to be paid towards outstanding tax. The sale proceeds of the Company C Limited shares are to be used to pay out the Motor Vehicle 1 lease which, thereafter, Company A Pty Ltd transfer to the Wife for her sole use and benefit.
Both parties agree that the remaining shares in Company C Limited be transferred in specie to the Wife in order to effect the Final Order for alteration of property interests (with the Husband contending for 50 per cent, and the Wife 52.5 per cent). In the Wife’s Orders, however, she seeks that the value of the shares to be transferred to her shall be net of capital gains tax. The Husband contends, however, that there should be no adjustment in respect of capital gains tax as she led no evidence about the need to sell those shares.
Both parties seek an order that they engage Accountants to ascertain the capital gains tax on the sale of any shares in 2017/18 to date, and that the capital gains tax then be paid when it falls due.
Both parties seek a splitting order in relation to the Wife’s interest in the self-managed superannuation fund known as Marani Superannuation Pty Ltd fund. The Wife seeks an order that would give her 52.5 per cent of the same. The Husband seeks an order that the split be quantified at $330,000.
They both agree that the sum of $489,231.23 be deemed a partial property settlement payment to the Wife, and $446,685.23 be deemed a partial property settlement to the Husband.
They each seek a number of consequential and machinery type orders in declarations that seem not to be in dispute. What is clear, however, from these orders is that their intent on the Husband’s part is to achieve a 50 per cent settlement, and on the Wife’s part 52.5 per cent settlement.
The Husband seeks a further order that the Wife sign the taxation returns for the Wife personally, and the Marani Superannuation Fund, for the years 2015, 2016 and 2017. There appeared to be no dispute about this.
At the Wife’s proposed order 2(e), she seeks an order that the Husband transfer to the Wife’s Solicitor’s trust account the sum of $400,000 presently banked in the Company D bank account, as partial property settlement to the Wife. The precise meaning of this was unclear to the Court but, it will assume, this order was subsumed to the broader intent of the Wife to achieve a 52.5 per cent settlement in her favour.
The Evidence before the Court
In the Wife’s case, she relied on the following documents:
a)Amended Initiating Application of Ms Marani filed 29 June 2017;
b)Affidavit of Ms Marani filed 24 July 2018;
c)Affidavit of Ms Marani filed 13 July 2018;
d)Affidavit of Ms Marani filed 2 July 2018;
e)Affidavit of Ms Marani filed 26 September 2017;
f)Affidavit of Ms Marani filed 13 July 2017;
g)Affidavit of Ms Marani filed 26 June 2017;
h)Affidavit of Mr L filed 26 June 2017; and
i)Financial Statement of Ms Marani filed 13 July 2018.
In the Husband’s case, he relied on the following documents:
a)Amended Response to Initiating Application of Mr Marani filed 2 July 2018;
b)Affidavit of Mr Marani filed 16 July 2018;
c)Affidavit of Mr Marani filed 2 July 2018
d)Affidavit of Mr Marani filed 31 October 2017;
e)Affidavit of Mr Marani filed 2 September 2017;
f)Affidavit of Mr Marani filed 27 July 2017;
g)Affidavit of Mr Marani filed 11 July 2017;
h)Affidavit of Mr A filed 2 July 2018;
i)Affidavit of Mr A filed 25 September 2017;
j)Affidavit of Mr S filed 12 September 2017;
k)Affidavit of Mr D filed 12 September 2017;
l)Affidavit of Mr D filed 28 June 2017;
m)Affidavit of Ms A filed 6 September 2017;
n)Affidavit of Ms A filed 28 June 2017;
o)Affidavit of Mr K filed 28 July 2017; and
p)Financial Statement of Mr Marani filed 2 July 2018.
The following documents were tendered as evidence:
a)Updated valuation Report by Mr O dated 25 July 2018;
b)(Business type) licence renewal 2017/2018 documents;
c)(Business type) values in relation to Company A Pty Ltd;
d)‘All Asset Appraisals’ (Mr J) valuation dated 30 July 2018;
e)Documents produced in answer to subpoena on Company A Pty Ltd, namely stocktakes figures for 2018.
At the Hearing, the Wife was required for cross‑examination. The Husband was also required for cross‑examination. Mr L and Mr A were required for cross-examination. The Single Joint Expert, Mr O, was also required for cross‑examination.
The Applicable Law
This is an application under s.79 which relevantly provides:
79 Alteration of property interests
(1) In property settlement proceedings, the court may make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
(b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c) an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the marriage; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Section 79(4) incorporates the provisions contained in s.75(2) of the Family Law Act (supra), which states:
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party's role as a parent; and
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In Bevan & Bevan [2013] FamCAFC 116, the Full Court of the Family Court of Australia considered the High Court’s decision in Stanford & Stanford [2012] HCA 52, which provided guidance on how s.79 was to be interpreted and implemented. Bevan endorsed the continuing application of the four-step approach articulated by the Full Court in Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA395 (‘Hickey’), but on the basis that it is a shorthand distillation of the words of s.79, as opposed to being a statutory edict. The four steps articulated in Hickey at paragraph 39 are:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
The decisions in Stanford and Bevan also emphasise the importance of making findings that any order is just and equitable for the purposes of s.79(2), independent of the s.79(4) process. In most cases, such as the present one, it makes no difference to the outcome of the alteration of property interests exercise. Even if the just and equitable consideration were treated as a threshold issue in this case the parties have, by their actions (separation, and re-ordering of their financial lives since then), and claims (divergent claims about their property under s.79 of the Family Law Act (supra)), indicated that they themselves consider it just and equitable that some order be made under s.79 adjusting their property interests as presently held. It is clearly just and equitable in this case to make an order.
Both decisions also emphasise the importance of identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. This is not inconsistent with step one in Hickey.
A problem that commonly arises, and indeed does arise in this case, relates to property that once existed but no longer does. This disposed of property may still be significant, however. As the Full Court said in Bevan, such disposals must be dealt with carefully. In practical terms this means carefully assessing the evidence about the disposal, attempting to quantify it if this is at all possible, and then assessing its weight whilst neither placing too much, or too little, weight on it. It would seem that notionally adding back such property may still be appropriate in some cases. In Vass & Vass [2015] FamCAFC 51, the Full Court said at [138]:
There is no error committed per se in adjusting the parties’ actual property interests by a calculation involving notionally adding back into the pool sums which have been dissipated by the parties. We reject any suggestion that the decision of Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545 – or, more particularly, the decision of the High Court in Stanford & Stanford [2012] HCA 52; (2012) 247 CLR 108 – is authority for any necessary contrary solution.
The Balance Sheet
During submissions, Counsel for the Husband provided the following balance sheet which is reproduced below:-
| ASSETS | ESTIMATED VALUES |
| Former matrimonial home | $1,150,000.00 |
| Furniture and chattels (inc. paintings) | $15,000.00 |
| Applicant’s Jewellery | $15,000.00 |
| Property at Property C | $540,000.00 |
| Property at Property D | $1,456,000.00 |
| Company A Pty Ltd (property) | $2,173,000.00 |
| Company D Trust (616 630 Shares) as at 12.07.2018 (Company B Pty Ltd) | $1,731,971.00 |
| Company D Trust bank account (shares sold on the 28/29.06.2018) | $459,400.17 |
| Marani Superannuation Fund (Mr & Mrs Marani Superannuation Pty Ltd) | $1,463,500.00 |
| Applicant’s Superannuation | $57,000.00 |
| Motor Vehicle 2 | $35,000.00 |
| My Furniture and chattels | $5,000.00 |
| Cash received by Applicant to be determined at Trial | $489,231.23 |
| Cash received by myself | $146,685.23 |
| $9,736,787.50 |
LESS LIABILITIES
| Bank F loan | $1,245,000.00 | |
| Bank F loan over Property D | $1,150,000.00 | |
| Husband’s Bank F Credit cards | $41,000.00 | |
| Applicant’s Credit Cards | $76,258.49 | |
| Bank G loan over Motor Vehicle 2 | $35,000.00 | |
| Outstanding Tax | $115,331.00 | |
| Anticipated Tax on sale of shares | E$50,000.00 | $2,712,589.49 |
| NET ASSETS | $7,024,198.01 |
Counsel for the Wife indicated that there was only one issue in dispute, with the Wife contending that the value of the Marani Superannuation Fund was in fact $1,528,000. This matter may be dealt with quite economically.
The Husband’s contended valuation is reflected in the case outline document that he filed when this matter was first listed for Hearing before her Honour Judge Spelleken. The case outline document was filed 24 July 2017 and puts the value of Mr & Mrs Marani’s Super Pty Ltd as Trustee for the Marani Superannuation Fund to be $1,463,500.
The value contended on behalf of the Wife is found in the Single Joint Expert Report prepared by Mr O, attached to his Affidavit of 12 July 2018. At page 7 his Report, he summarises the results of the inquiries and investigations he conducted and expresses the professional opinion that the indicative value of the superannuation fund was $1,528,000. Mr O was cross‑examined by Counsel for the Husband, but not on this issue. The Court therefore finds that the value of the said superannuation fund to be, as contended on behalf of the wife, i.e., $1,528,000. There was initially an issue about valuation of wine, but that was considered in closing submissions.
As that was the only issue in dispute in the balance sheet, the Court finds the same to be as follows:-
| ASSETS | ESTIMATED VALUES |
| Former matrimonial home | $1,150,000.00 |
| Furniture and chattels (inc. paintings) | $15,000.00 |
| Applicant’s Jewellery | $15,000.00 |
| Property at Property C | $540,000.00 |
| Property at Property D | $1,456,000.00 |
| Company A Pty Ltd (property) | $2,173,000.00 |
| Company D Trust (616 630 Shares) as at 12.07.2018 (Company B Pty Ltd) | $1,731,971.00 |
| Company D Trust bank account (shares sold on the 28/29.06.2018) | $459,400.17 |
| Marani Superannuation Fund (Mr & Mrs Marani Superannuation Pty Ltd) | $1,528,000.00 |
| Applicant’s Superannuation | $57,000.00 |
| Motor Vehicle 2 | $35,000.00 |
| My Furniture and chattels | $5,000.00 |
| Cash received by Applicant to be determined at Trial | $489,231.23 |
| Cash received by myself | $146,685.23 |
| TOTAL ASSETS | $9,801,287.63 |
LESS LIABILITIES
| Bank F loan | $1,245,000.00 |
| Bank F loan over Property D property | $1,150,000.00 |
| Husband’s Bank F Credit cards | $41,000.00 |
| Applicant’s Credit Cards | $76,258.49 |
| Bank G loan over Motor Vehicle 2 | $35,000.00 |
| Outstanding Tax | $115,331.00 |
| Anticipated Tax on sale of shares | E$50,000.00 |
| TOTAL LIABILITIES | $2,712,589.49 |
| TOTAL NET ASSETS | $7,088,698.14 |
The Capital Gains Tax issue
As foreshadowed above, one difference in the orders sought between the Husband and the Wife in relation to the transfer to her of the remaining Company C Limited shares, is whether the value of the shares to be transferred to her should be net of capital gains tax, as she contends. The difficulty for the Wife is that when she was cross‑examined she gave no indication that she would need to sell these shares, in whole or in part, in order to implement the order for alteration of property interest that she sought.
Indeed, it was also not an issue that she raised in her case information document filed for the purposes of the judicial mediation. It was not an order sought in her Amended Application filed 29 June 2017. In cross‑examination she informed the Court that she did not plan to reside in the former matrimonial home if she did not get the Property B as part of her settlement (something she gave up by the time of closing submissions).
Indeed, her words in cross‑examination, in relation to the former matrimonial home, were to the effect that there was, “nothing to keep me there”, and the, “house was too big”. All that the Court can conclude in the circumstances is that she intends to sell the former matrimonial home at Property A which, prima facie, obviates the need for her to sell the shares in respect of which she seeks a capital gains tax adjustment.
Consistent with the decision of the Full Court in Rosati (1998) FLC 92‑804 at paragraph 6.36, this Court is unable to be satisfied that there is a significant risk that the asset will have to be sold in the short to midterm, and thus is not required to make allowance for any capital gains tax payable on such sale. It may, as this Court does, nonetheless, take into account the possibility, or risk of a sale, as a relevant s.75(2) consideration. The weight to be attributed to this factor, however, cannot be significant, given the evidence before the Court.
A final balance sheet issue needs to be recorded. The orders proposed by the Husband in closing submissions include a declaration that $446,685.23 be deemed a partial property settlement to the Husband. Notwithstanding this, in the balance sheets that he contends for, he does not make reference to this number but, instead, refers to a sum of $146,685.23 described as “Cash received by myself”. To the best of the Court’s knowledge, neither Counsel appeared to have observed this anomaly in closing submission.
Because of the complexity of the orders for alteration of property interests that each party contends for, having regard to the diverse, and somewhat complex, asset pool, the Court intends to publish its Reasons for Judgment, in which it will make clear what its intentions are as regards the contentious issues. The parties will then be given the opportunity to either submit an agreed Minute Of Order to reflect these Reasons, or, alternatively, to provide the Minute Of Order that they contend for, to be supported by further submissions at a future date.
The Wife’s future needs?
The first issue that the Court must consider is whether it is obliged to even consider making an adjustment under s.75(2) in the Wife’s favour. Indeed, Counsel for the Husband submitted that no such adjustment was either necessary or open on the evidence, in circumstances where the Wife would receive at least 50 per cent of the net asset pool valued at $7 million, and in a situation where she would be virtually free of debt.
Indeed, s.79(4)(e) requires the Court to take into account the matters referred to in s.75(2) “so far as they are relevant”. The Court has concluded, however, that the size of the pool of assets which will become available to the Wife is not so great that she will necessarily be free of need in the future. The safer approach, the Court believes, is to closely consider the evidence in this case about the relevant s.75(2) consideration and assess what, if any, adjustment should be made.
The Wife contends for an adjustment in her favour of 2.5 per cent which produces a differential of 5 per cent. A 5 per cent differential on a pool of $7 million is $350,000 dollars and provides to the Wife an extra $175,000.
It is necessary to consider the relevant considerations under s.75(2).
There are some obvious significant differences between the Husband and the Wife. She earns no, or negligible income. In his Financial Statement filed 2 July 2018, he deposes to a total average weekly income of $10,811. The Husband has been in the workforce all of his life and has demonstrated entrepreneurial skill. In making this comment, the Court means in no way to demean the contribution that the Wife made as homemaker and parent throughout the marriage. The reality is, however, that she has not been in paid employment for over 20 years. Their capacity to earn income is, therefore, significantly disparate.
The Husband deposes to no ill‑health issues. The Wife asserts that she suffers from anxiety, depression, and deteriorating knee, back and hip problems, and that she has been diagnosed with ADHD. The evidence about the Wife’s health issues needs to be considered. At paragraph 17 of her Affidavit filed 2 July 2018 she deposes as follows:
I suffer from a disc prolapse which causes me ongoing pain, such that I find it difficult to bend or get up with ease. I also have a loss of thickness of cartilage in both knees and this causes ongoing pain with continuous arthritis. I have been told by my doctors – and Mr Marani is aware, having read many MRIs in relation to my knee problems – that I require a total knee replacement in both knees. I take the drug Celebrex, which is an anti-inflammatory drug, to relieve the pain of both my back and knee problems.
Annexed to the Wife’s Affidavit filed 13 July 2018 are a number of medical reports. Curiously, the two reports dated 7 April 2004 and 28 November 2014 are signed by (doctor). The reports are broadly consistent with the Wife’s own evidence. In cross‑examination, the Husband sought to distance himself from (medical) reports, suggesting, for example, that the issues with the Wife were degenerative and that, in fact, her health was excellent for someone her age, and would not impact significantly on her capacity for work.
The Court does not accept the Husband’s evidence in this regard. His impression of the Wife’s health, after separation, and purportedly as a (occupation omitted) are self-serving, and carry no weight with this Court.
The Court finds that the Wife does have physical problems in her back and knee and, indeed, that her prognosis is not positive.
The Wife gave evidence about being unable to return to (occupation omitted) work because of changes in (occupation omitted) requirements. The Court accepts this, as a general proposition. The Court takes notice of the notorious difficulty that women experience in returning to the workforce after lengthy absences.
The matters referred to above warrant a s.75(2) adjustment in the Wife’s favour. The quantification of this, however, must take into account the submissions made on behalf of the Husband about the Wife’s post‑separation conduct in interfering with the operation of their businesses.
Both Counsel framed their submissions in terms of this being a s.75(2)(o) issue. Counsel for the Husband submitted that once the evidence was examined, the Court would conclude that any adjustment in the Wife’s favour under s.75(2) would otherwise be extinguished or reduced.
The evidence about this alleged misconduct is extensive. By way of summary, the Husband asserts that the Wife caused the closure of what was known as the Business P at the beginning of August 2017, resulting in its closure for almost a year. He contends that this cost their business a substantial sum of money, including lost profit. In addition, he contends that the Wife caused physical damage to the premises, as well as removing (business products).
There is clearly substance in some of the Husband’s allegations. Perhaps the best evidence of this are the Orders made by her Honour Judge Spelleken on 18 October 2017 in which Her Honour basically restrained the Wife from attending any of their properties, with the exception of the former matrimonial home, and including specifically the businesses.
Moreover, she was ordered to provide written accounting to the Husband of (business products) and provide various bank statements. The Wife was also ordered to return to the businesses the (business products) that she caused to be removed. It is clear that Her Honour made these Orders having accepted the evidence, by way of Affidavits, that the Husband filed in support of his Application in a Case at the time.
The Wife was cross‑examined about the events in question. By way of preface, it is necessary to record that the Court did not find the Wife’s evidence about financial matters convincing. She was unresponsive at times, evasive at other times. Regrettably, she presented as a bitter, angry woman. She significantly exaggerated her involvement in the (business type) businesses.
The Court finds that the Wife deliberately interfered in the operation of the business. She made it as difficult as possible for the Husband to operate the business without her interference. She was clearly aware of the Orders made against her on 18 October 2017 but did not abide by the injunctions contained therein. In May 2018, for example, she attended the (business) and removed (business products). She did this without notice, or consent.
It is highly likely that the Business P did close as a result of her actions. There were (business) issues which the Wife sought to magnify, in order to justify her action, but which, the Court finds, could have been overcome with some goodwill, and communication between the parties. That was clearly non-existent.
The Court does not accept, however, the Husband’s contention that the Business P could not have been re-opened sooner than it has. The Wife’s arrogance as regards the parties’ businesses, during the period in question, was startling. Company A had already been valued by Mr O, in July 2016, as having a value in excess of $2 million. It is hard to understand the Wife’s motivation in the actions that she undertook. The inference of spite is hard to resist.
There is substance in the Husband’s contention that the Wife’s post‑separation conduct in interfering with the operation of their business should be taken into account under s.75(2)(o).
The Wife sought an adjustment in her favour of 2.5 per cent. But for her conduct in the post‑separation period, the Court would have made an assessment in that amount. In the circumstances, and having regard to all of the evidence, the Court finds that an adjustment should nonetheless be made in her favour but calculated at 1.5 per cent.
Just and equitable
The Court believes that an adjustment in the Wife’s favour of 51.5 per cent is as just and equitable as the circumstances allow. Fortunately, for both parties, there is enough available to them to get on with their lives, hopefully in relative comfort.
As foreshadowed earlier in these Reasons, because of complexity with the asset pool, and some uncertainty about the orders proposed, the Court’s preference is to Order that both parties forward to my Associate in Chambers, within 21 days, a Minute of Order that jointly reflects the Court’s findings in these Reasons for Judgment. If a joint Minute cannot be submitted, then within 28 days each party must provide to my Associate a Minute of the order that they contend for, and the matter will then be re‑listed for further submissions.
I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of Judge Altobelli
Date: 26 September 2018
Schedule One
MARANI AND MARANI BRC1607/16
ORDERS
SOUGHT BY APPLICANT WIFE
That as and by way of property settlement:-
The Husband receive a property settlement which is equivalent to 47.5% of the net property pool and the Wife is to receive a property settlement which is equivalent to 52.5% of the net property pool.
Within seven (7) days of the date of receipt of these Orders duly sealed from this Honourable Court:-
(a) The Husband shall transfer all his right, title and interest in and to the former matrimonial home situated at Property A and more particularly described as to the Wife for her sole use and benefit absolutely; and the Wife shall prepare and forward to the Husband’s solicitors all necessary documents relevant to that transfer.
(b) The Wife shall resign as director of Company A Pty Ltd and shall transfer her share in Company A Pty Ltd to the Husband for his sole use and benefit absolutely and the Husband prepare and forward to the Wife’s solicitors all necessary documents relevant to that transfer
(c) The Wife shall resign as Director of Marani Superannuation Pty Ltd and shall transfer her share in Mr Marani & Ms Marani Superannuation Pty Ltd to the Husband for his sole use and benefit absolutely; and the Husband shall prepare and forward to the Wife’s solicitors all necessary documents relevant to that transfer.
(d) The Husband in his capacity as Trustee of the Marani Superannuation Pty Ltd shall list property situated at Property B and more particularly described as for sale with a reputable Real Estate Agent in the area on an exclusive agency at a price recommended by the listing agent from time to time until sold and on settlement of the sale shall pay the full net proceeds of sale into the bank account of Marani Superannuation Pty Ltd;
(e) The Husband shall transfer to the Wife’s solicitor’s Trust Account, the sum of $400,000.00 presently banked in the Company D Bank Account, as partial property settlement to the Wife.
The Husband, in his capacity of Director of Company B Pty Ltd, shall from the sale proceeds of the Company C Limited shares:-
A. Pay TWO HUNDRED AND THIRTY THOUSAND DOLLARS ($230,000.00) for rent owed by Company A Pty Ltd to Marani Superannuation Pty Ltd;
B. Pay ONE HUNDRED AND FIFTEEN THOUSAND THREE HUNDRED AND THIRTY-ONE DOLLARS ($115,331.00) for outstanding Tax;
C. Pay the payout of the Motor Vehicle 1 lease so that the Motor Vehicle 1 will be unencumbered and thereafter Company A Pty Ltd shall transfer the Motor Vehicle 1 to the Wife for her sole use and benefit absolutely and the Husband, as Director of Company A Pty Ltd shall prepare and forward, to the Wife’s solicitors, all relevant documents necessary effect that transfer.
D. Transfer the remaining shares after final settlement to the Wife, for her sole use and benefit absolutely, to effect a 52.5%/47.5% distribution of property, as provided in Order 1 hereof and the Husband shall take all steps necessary to ensure the removal of the escrow provisions on the shares. The value of the shares to be transferred to the Wife shall be net of Capital Gains Tax (CGT). The amount paid shall take into account the payment to the Wife pursuant to Order 4 hereof.
E. Engage accountants, on behalf of the parties, to ascertain the CGT on the sale of any shares in 2017/18 to date and thereafter the Husband shall direct, on behalf of the parties, that monies held by the solicitors for the Husband, shall be used for payment of any outstanding CGT, when that CGT falls due, which shall be deemed a joint matrimonial liability.
Pursuant to Section 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the Wife’s interest in the self managed Marani Superannuation Pty Ltd Fund, the Wife shall be entitled to be paid an amount to her nominated Superannuation Fund calculated in accordance with the regulations, at the operative time in the amount of 52.5% of the value of the Marani Superannuation Pty Ltd Fund, after the payment of the sum referred to in Paragraph 3A hereof and that there be a corresponding reduction to this entitlement the Wife would have had in the self-managed Marani Superannuation Pty Ltd Fund but for this Order;
The operative time of the aforesaid Order be seven (7) business days after the service of these Orders on the Trustee of the Marani Superannuation Pty Ltd Fund and the orders shall not be served on the Trustee until 7 days after the settlement of the sale of ‘Property B;
The Husband be solely responsible for all liabilities, costs, fees and other payments associated to the splitting of the self managed Marani Superannuation Pty Ltd Fund AND the Husband and Wife shall do all acts and things necessary and shall sign all documents to put the splitting of the Marani Superannuation Pty Ltd Fund into effect with the Accountants of the Marani Superannuation Fund including but not limited to the signing of any resignation form documents, minutes of meetings, company documents, Share Transfer forms and the like for that purpose’
A Declaration that the sum of FOUR HUNDRED AND EIGHTY-NINE THOUSAND TWO HUNDRED AND THIRTY-ONE DOLLARS AND TWENTY-THREE CENTS ($489,231.23) be deemed a partial property settlement payment to the Wife;
A Declaration that the sum of FOUR HUNDRED AND FORTY-SIX THOUSAND SIX HUNDRED AND EIGHT-FIVE DOLLARS AND TWENTY THREE CENTS ($446,685.23) be deemed a partial property settlement to the Husband;
The Wife shall otherwise retain for her sole use and benefit absolutely, the furniture and chattels in her possession, her jewellery, her Superannuation entitlements and she shall be solely responsible for all payments as they fall due on her credit card and shall indemnify the Husband from any liability therefor;
10.Should the above transfers/payments/distributed property to be retained by the Wife, not equate to a 52.5% division to her, the Husband shall pay the balance to that division to Wife in cash.
11.The Husband shall otherwise retain for his sole use and benefit absolutely, the property at Property C, his property at Property D, his Motor Vehicle 2, the furniture and chattels in his possession and he shall be solely responsible for all payments as they fall due on his Bank F credit card and his Bank G payments over his Motor Vehicle 2 motor vehicle and shall indemnify the Wife from any liability therefor; and
12.Unless otherwise specified in these Orders, each party shall be solely entitled to the exclusion of the other, to all other property and resources in the possession of such party, including any liabilities/taxation attached thereto or any liabilities/taxation in his/her name, as at the date hereof and shall indemnify the other party against any responsibility therefor.
13.For the purposes of effecting these Orders, each party shall sign as required all necessary documents and, in particular:-
(a) Sale Authority/ies;
(b) Contracts of Sale;
(c) Release Authority/s to any mortgagee;
(d) Transfer documents;
(e) Settlement Authority/ies;
(f) Any other document pertaining to the sale of real property;
(g) Share transfer forms;
(h) Resignation of Director forms;
(i) Transfer of motor vehicle registration forms; and
(j) Any documents required by the Accountant to implement these Orders.
14.That in the event that either party refuses or neglects to sign (within forty-eight (48) hours of a written request to do so any documents or do any act necessary to effect the terms of these Orders, the Registrar of this Honourable Court is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act, to execute such documents on behalf of the defaulting party.
15.That within 7 days of the date of these orders the Wife shall sign the taxation returns for the Wife personally and the Marani Superannuation Fund for years ended 2015, 2016 and 2017 as prepared by Accountants.
NOTATION:
It is noted the Husband has been informed that the escrow provisions on the shares referred to in Order 3d hereof can be lifted.
Dated this 1st August 2018
Solicitors for the Applicant Wife
Schedule Two
MARANI ORDERS
SOUGHT BY HUSBAND
That as and by way of property settlement:-
16.The Husband receive a property settlement which is equivalent to 50% of the net property pool and the Wife is to receive a property settlement which is equivalent to 50% of the net property pool.
17.Within thirty (30) days of the date of receipt of these Orders duly sealed from this Honourable Court:-
(a) The Husband transfer all his right, title and interest in and to the former matrimonial home situated at Property A and more particularly described as to the Wife for her sole use and benefit absolutely;
(b) The Wife resign as director of Company A Pty Ltd and transfer her share in Company A Pty Ltd to the Husband for his sole use and benefit absolutely;
(c) The Wife resign as Director of Marani Superannuation Pty Ltd and transfer her share in Marani Superannuation Pty Ltd to the Husband for his sole use and benefit absolutely;
(d) The Husband in his capacity as Trustee of the Mr & Mrs Marani Superannuation Pty Ltd list property situated at Property B and more particularly described as for sale with a reputable Real Estate Agent in the area on an exclusive agency at a price recommended by the listing agent from time to time until sold and on settlement of the sale pay the full net proceeds of sale into the bank account of Mr & Ms Marani Superannuation Pty Ltd;
18.The Husband in his capacity of Director of Company B Pty Ltd from the sale proceeds of the Company C Limited shares:-
A. Pay TWO HUNDRED AND THIRTY THOUSAND DOLLARS ($230,000.00) for rent owed by Company A Pty Ltd to Marani Superannuation Pty Ltd;
B. Pay ONE HUNDRED AND FIFTEEN THOUSAND THREE HUNDRED AND THIRTY-ONE DOLLARS ($115,331.00) for outstanding Tax;
C. Pay the payout of the Motor Vehicle 1 lease so that the Motor Vehicle 1 will be unencumbered and thereafter Company A Pty Ltd shall transfer the Motor Vehicle 1 to the Wife for her sole use and benefit absolutely; and
D. Transfer the remaining shares after final settlement to the Wife for her sole use and benefit absolutely to effect on equal distribution of property as provided in Order 1 hereof and the Husband take all steps necessary to ensure the removal of the escrow provisions on the shares;
E. Engage accountants on behalf of the parties to ascertain the CGT on the sale of any shares in 2017/18 to date and thereafter the Husband shall direct, on behalf of the parties, monies to be held by the solicitors for the Husband for payment of the outstanding CGT when it falls due which shall be deemed a matrimonial liability.
19.Pursuant to Section 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the Wife’s interest in the self managed Marani Superannuation Pty Ltd Fund, the Wife shall be entitled to be paid an amount to her nominated Superannuation Fund calculated in accordance with the regulations, at the operative time in the sum of THREE HUNDRED AND THIRTY THOUSAND DOLLARS ($330,000.00) thereof and that there be a corresponding reduction to this entitlement the Wife would have had in the self-managed Marani Superannuation Pty Ltd Fund but for this Order;
20.The operative time of the aforesaid Order be seven (7) business days after the service of these Orders on the Trustee of the Marani Superannuation Pty Ltd Fund and the orders shall not be served on the Trustee until 7 days after the settlement of the sale of ‘Property B’;
21.The Husband be solely responsible for all liabilities, costs, fees and other payments associated to the splitting of the self managed Marani Superannuation Pty Ltd Fund AND the Husband and Wife do all acts and things necessary and sign all documents to put the splitting of the Marani Superannuation Pty Ltd Fund into effect with the Accountants of the Marani Superannuation Fund including but not limited to the signing of any resignation form documents, minutes of meetings, company documents, Share Transfer forms and the like for that purpose’
22.A Declaration that the sum of FOUR HUNDRED AND EIGHTY-NINE THOUSAND TWO HUNDRED AND THIRTY-ONE DOLLARS AND TWENTY-THREE CENTS ($489,231.23) be deemed a partial property settlement payment to the Wife;
23.A Declaration that the sum of FOUR HUNDRED AND FORTY-SIX THOUSAND SIX HUNDRED AND EIGHT-FIVE DOLLARS AND TWENTY THREE CENTS ($446,685.23) be deemed a partial property settlement to the Husband;
24.The Wife otherwise retain for her sole use and benefit absolutely, the furniture and chattels in her possession, her jewellery, her Superannuation entitlements and she be solely responsible for all payments as they fall due on her credit card and indemnifies the Husband from any liability therefor;
25.Should the above transfers/payments/property to be retained by the Wife not equate to a 50% division to her, the Husband pay the balance to the Wife in cash.
26.The Husband otherwise retain for his sole use and benefit absolutely, the property at Property C, his property at Property D, his Motor Vehicle 2, the furniture and chattels in his possession and he be solely responsible for all payments as they fall due on his Bank F credit card and his Bank G payments over his Motor Vehicle 2 and indemnifies the Wife from any liability therefor; and
27.Unless otherwise specified in these Orders, each party be solely entitled to the exclusion of the other, to all other property and resources in the possession of such party, including any liabilities/taxation attached thereto or any liabilities/taxation in his/her name, as at the date hereof and indemnifies the other party against any responsibility therefor.
28.For the purposes of effecting these Orders, each party sign as required all necessary documents and, in particular:-
(a) Sale Authority/ies;
(b) Contracts of Sale;
(c) Release Authority/s to any mortgagee;
(d) Transfer documents;
(e) Settlement Authority/ies;
(f) Any other document pertaining to the sale of real property;
(g) Share transfer forms;
(h) Resignation of Director forms;
(i) Transfer of motor vehicle registration forms; and
(j) Any documents required by the Accountant to implement these Orders.
29.That in the event that either party refuses or neglects to sign (within forty-eight (48) hours of a written request to do so any documents or do any act necessary to effect the terms of these Orders, the Registrar of this Honourable Court is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act, to execute such documents on behalf of the defaulting party.
30.That within 7 days of the date of these orders the Wife shall sign the taxation returns for the Wife personally and the Marani Superannuation Fund for years ended 2015, 2016 and 2017 as prepared by Accountants.
It is noted the Husband has been informed the escrow provisions on the shares referred to in Order 3d hereof can be lifted.
Key Legal Topics
Areas of Law
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Family Law
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Tax Law
Legal Concepts
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Remedies
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Costs
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Statutory Construction
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