FAMILY COURT OF AUSTRALIA
| MARCONE & MARCONE | [2020] FamCA 850 |
| FAMILY LAW – PROPERTY – Final Orders – where the parties separated approximately 10 years ago – where the parties agree that the division of the matrimonial assets should be equal – where the wife seeks an add-back in the sum of $19,000 – monies added back to the asset pool – where the wife’s principal residence will be subject to CGT if she sells the property – where the wife seeks that the husband indemnify her for 50% of any CGT liability she may incur from the sale of the property in the next 8 years – where the husband agrees to indemnify the wife for 2 years – where the parties seek a declaration of the existence of their Trust – declaration as to the existence of the Trust – order for a contingent liability that the husband be required to indemnify the wife in respect of one half of the CGT in the event of the sale of her principal residence for a period of 2 years – order for a 50/50 division of the net asset pool. |
| Evidence Act 1995 (Cth) s 140 Family Law Act 1975 (Cth) ss 75, 79 Family Law Rules 2004 (Cth) |
| Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116 Chapman & Chapman (2014) FLC 93-592; [2014] FamCAFC 91 Jarrott & Jarrott [2012] FamCAFC 29 |
| APPLICANT: | Mr Marcone |
| RESPONDENT: | Ms Marcone |
| FILE NUMBER: | MLC | 12470 | of | 2016 |
| DATE DELIVERED: | 9 October 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Johns J |
| HEARING DATE: | 21, 22 & 23 July 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Werner |
| SOLICITOR FOR THE APPLICANT: | Gigliotti Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Kiernan |
| SOLICITOR FOR THE RESPONDENT: | Ian Robertson Legal |
Orders
DECLARATION
Pursuant to section 78(1) of the Family Law Act 1975 (Cth), the Court declares that F Pty Ltd holds on Trust for the Marcone Family Trust all real property interests presently registered in its name.
BY CONSENT IT IS ORDERED
The Husband shall retain the following assets:-
(a)The real property at AA Street, Suburb P in the State of Victoria (“AA Street”);
(b)His 50% interest in BB Street, Suburb CC in the State of Victoria (held jointly with B Pty Ltd, A.C.N. …).
The Husband shall retain the proceeds of sale of his interest in C Pty Ltd (A.C.N. …) and D Pty Ltd (A.C.N. …).
The Wife shall retain the following real properties:-
(a)Her 30% interest in DD Building, 2…
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- MARCONE & MARCONE [2020] FamCA 850
- Case
- [2020] FamCA 850
- Decision Date
CaseChat Overview and Summary
The court was required to determine several legal issues. These included whether to declare the existence of the Marcone Family Trust and the beneficial ownership of certain real property interests held by F Pty Ltd. The court also needed to address the parties' competing claims regarding the indemnification for potential CGT liabilities arising from the sale of the wife's principal residence, specifically the duration and extent of such an indemnity. Finally, the court was asked to formalise the division of the parties' various assets and liabilities, including properties and company interests, in accordance with their agreed 50/50 split.
Johns J made a declaration that F Pty Ltd held certain real property interests on trust for the Marcone Family Trust. By consent, the court then made detailed orders for the division of assets. The husband was to retain specific properties and the proceeds of sale from his interests in certain companies. The wife was to retain other specified real properties and her shares in F Pty Ltd and interest in the Marcone Family Trust. Orders were made for the division of proceeds from the sale of a property held by the wife's solicitors and for the application of proceeds from the sale of the "G Street Properties". Crucially, the court ordered that the husband would indemnify the wife for 50% of any CGT payable on the sale of the X Street property, up to a maximum of $142,000, provided the sale was completed within two years of the orders. The husband was also required to charge his AA Street property with this indemnity. Upon the second anniversary of the orders, the husband's indemnity obligation would cease. The court also made orders regarding the transfer of shares in F Pty Ltd and interests in the Marcone Family Trust, and addressed the parties' respective liabilities for expenses and taxes. All extant applications were otherwise dismissed.
Orders
Orders of the court
DECLARATION
1.
Pursuant to section 78(1) of the Family Law Act 1975 (Cth), the Court declares that F Pty Ltd holds on Trust for the Marcone Family Trust all real property interests presently registered in its name.
BY CONSENT IT IS ORDERED
2.
The Husband shall retain the following assets:-
(a) The real property at AA Street, Suburb P in the State of Victoria (“AA Street”);
(b) His 50% interest in BB Street, Suburb CC in the State of Victoria (held jointly with B Pty Ltd, A.C.N. …).
3.
The Husband shall retain the proceeds of sale of his interest in C Pty Ltd (A.C.N. …) and D Pty Ltd (A.C.N. …).
4.
The Wife shall retain the following real properties:-
(a) Her 30% interest in DD Building, 2 Z Street, R Town in the State of New South Wales (held jointly with Ms FF);
(b) Her 50% interest in CC Building, 1 Z Street R Town in the State of New South Wales (held jointly with Ms T and F Pty Ltd);
5.
Within 7 days, the proceeds of sale of the property at M Street, Suburb N presently held on trust by the Wife’s solicitors (approximately $224,266) shall be divided between the parties as follows:-
(a) First, $69,925 to the Husband; and thereafter
(b) The balance to the wife.
6.
As soon as practicable, the parties shall do all things and sign all documents necessary to cause F Pty Ltd to pay the outstanding land tax payable in respect of the property at X Street, Suburb Y in the State of Victoria (“X Street”).
7.
The Wife shall retain her shares in F Pty Ltd and her interest in the Marcone Family Trust.
8.
Upon completion of proceeding …/2019 presently pending in the Victorian Civil and Administrative Tribunal (including any appeals) the husband and the wife do all such acts and things as may be required to effect a sale of the real properties at the Unit at G Street, Suburb P in the State of Victoria (Certificate of title Volume … Folio …) and the shop at G Street Suburb P (Certificate of title Volume … Folio …) (“G Street Properties”) and the proceeds of sale applied as follows:-
(a) First, to pay all costs and expenses of the sales;
(b) Second, to discharge any debt secured over either of the properties;
(c) Third, to pay any capital gains tax payable upon the sale of the properties; and thereafter
(d) The balance to F Pty Ltd, subject to these orders.
9.
Prior to the sales of either of the G Street Properties, the parties may by agreement undertake any rectification works as they may be advised.
10.
The parties have liberty to apply for further orders concerning the rectification and/or sale of the G Street Properties.
11.
Upon settlement of the sale of the G Street Properties, and subject to order 10 above, all funds held by F Pty Ltd shall be divided between the parties in equal shares subject to the following:-
(a) The Husband may take his share over a period of up to two financial years, as he may be advised.
(b) The Wife may take her share at such intervals as she may be advised.
(c) Each party will be separately liable for any tax payable upon his or her share.
BY THE COURT
12.
Until the settlement of the sale of the G Street Properties, any rental received in relation to the G Street properties or either of them be paid into the bank account maintained by F Pty Ltd, with any expenses relating to those properties to be paid from the said account.
BY CONSENT IT IS ORDERED
13.
By no later than 30 June in the tax year in which the Husband receives his final payment referred to in paragraph 11 above, the Husband shall transfer to the Wife, all of his shares in F Pty Ltd and sign all documents necessary to relinquish his interest in the Marcone Family Trust.
14.
Save as otherwise provided expressly in these orders, the parties shall each be responsible for half of all expenses relating to the G Street properties pending compliance by the Husband with paragraph 13 above.
15.
Save as expressly provided in these orders, each party shall hereafter be personally responsible for payment of all expenses relating to any real properties which he or she is to retain pursuant to these orders, and for the purposes of this order any real properties to be retained by F Pty Ltd are deemed to be properties to be retained by the Wife or her nominee.
16.
The Wife may, at her election, require F Pty Ltd to sell the property at X Street anytime up to two years from the date of these orders, subject to the following:-
(a) The election shall be made by notice in writing to the Husband.
(b) The Husband and the Wife shall have the joint conduct of the sale.
(c) The property shall be sold by an agent agreed between the parties and, in default of agreement, by an agent appointed by the President of the Real Estate Institute of Victoria.
(d) The terms of sale shall require a deposit of not less than 10% with the balance payable by the purchaser within not more than 120 days, unless otherwise agreed.
(e) Subject to the parties having liberty to apply, the reserve price, advertising and mode of sale shall be in the discretion of the agent.
(f) The proceeds of sale shall be applied as follows:
(i) First, all costs and expenses of the sale, including estate agents costs and disbursements;
(ii) Second, all capital gains tax payable;
(iii) Third, the balance to F Pty Ltd; and
(iv) The balance to be distributed by F Pty Ltd to the Wife in such manner as the Wife may elect.
(g) The parties have liberty to apply for further orders concerning any aspect of the sale.
BY THE COURT
17.
In the event that X Street is sold strictly in accordance with paragraph 16 of these orders and the transfer is completed within two years of the date of these orders the Husband shall indemnify the Wife for 50% of the capital gains tax payable upon the sale up to a maximum amount of $142,000 (“the Indemnity”).
18.
As soon as practicable, the Husband shall by deed in writing charge the AA Street property with payment of the Indemnity in accordance with these orders and the Wife may register a caveat over that property in support.
19.
Upon the second anniversary of these orders, the Husband is released from the Indemnity and the Wife must withdraw any caveat she has lodged in respect of it.
BY CONSENT IT IS ORDERED
20.
The Wife may, at her election, require F Pty Ltd to transfer to her its 25% interest in the property at CC Building, 1 Z Street R Town, with the Wife to be responsible for all associated costs and any taxes arising as a consequence.
21.
In the event that any party fails to sign any document reasonably required to give effect to these orders then, pursuant to section 106A, the document may be signed by a Registrar on behalf of any party.
22.
Unless otherwise agreed, the parties shall instruct the Practice of V Street, Suburb W, Victoria to prepare and lodge any income tax returns, company financial statements or other such documents as may be necessary to effect the orderly payment of any taxes for which the parties are presently liable, or become liable to pay as a consequence of these orders.
23.
That unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money due under these or any subsequent orders:-
(a) each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at the date of these orders;
(b) all insurance policies to become the sole property of the owner named;
(c) each party to be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders (F Pty Ltd being taken, for the purposes of this order, to be an item of property retained by the Wife);
(d) any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
24.
That all extant applications be otherwise dismissed.
AND THE COURT NOTES:
A. The Wife holds her half share of the property at CC Building, R Town (Lot … in Strata Plan …) as tenant in common with F Pty Ltd and Ms T (each of whom hold a one quarter share).
B. The Wife holds her 30% share of the property at DD Building, 2 Z Street, R Town (Lot … in Strata Plan …) as tenant in common with Ms FF (who holds a 70% share).
C. Since the proceeding commenced the parties have sold the following real properties, the proceeds of which now form part of F Pty Ltd’s cash reserves:-
(a) M Street, Suburb N;
(b) K Street, Suburb P; and
(c) L Street, Suburb Q.
D. The effect of these orders is that the Wife shall become the sole shareholder in F Pty Ltd, which entity will remain the registered proprietor of the following real properties:-
(a) The X Street property (such property being the principal place of residence of the Wife) ; and
(b) CC Building, 1 Z Street R Town (F Pty Ltd’s 25% interest being held jointly with the Wife and Ms T).
E. Since the proceeding commenced the Applicant Husband sold his (25% share the C Pty Ltd), the proceeds in the sum of $95,000 now form part of the Applicant Husband’s Westpac Bank Account.
Note: The form of the order is subject to the entry of the order in the Court’s records.
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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