Marsden and Marsden - [2011] FMCAfam 924

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MARSDEN & MARSDEN

[2011] FMCAfam 924

FAMILY LAW – Property adjustment – consent orders – application to enforce – application to vary orders pursuant to s79A – non-disclosure of a change of position at the time of the making of the consent orders – delay in enforcing consent orders.

Family Law Act 1975, s.79A

In the Marriage of Suiker (1993) 17 Fam LR 236

Applicant:

MR MARSDEN

Respondent:

MS MARSDEN

File Number:

BRC 6118 of 2007

Judgment of:

Lapthorn FM

Hearing dates:

16 & 17 May 2011

Date of Last Submission:

17 May 2011

Delivered at:

Brisbane

Delivered on:

8 September 2011

REPRESENTATION

Counsel for the Applicant:

Mr Jordan

Solicitors for the Applicant:

McPhee Lawyers

Counsel for the Respondent:

Mr Baston

Solicitors for the Respondent:

Hopgood Ganim

ORDERS

That pursuant to s79A(1)(a) of the Family Law Act 1975 Order (30) of the Orders made 24 April 2007 be set aside and in lieu thereof:
(30) That the parties each be responsible for, and do all such acts and sign all such things as might be required to pay capital gains tax assessed as payable in respect of the real property situate at Property W consequent upon its sale in accordance with the following proportions between the parties:
(i)That the Wife’s liability be limited to and not exceed the sum of $11,488; and
(ii)That the Husband be liable for the balance in the sum of $39,466 to be paid to the Wife within 7 days of the date of this Order from the funds in trust in the joint names of the parties with McPhee Lawyers and the husband indemnify and keep indemnified the wife in respect of such liability.”
That upon compliance with order (1) herein any remaining funds in trust in the joint names of the parties with McPhee Lawyers be dispersed to the husband or at his direction.
That save as to the question of costs all outstanding applications be dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Marsden & Marsden is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE

BRC 6118 of 2007

MR MARSDEN

Applicant

And

MS MARSDEN

Respondent

REASONS FOR JUDGMENT

Introduction

I have been asked to determine a dispute in relation to orders made by consent in the Family Court of Australia on 24 April 2007. These orders provided for parenting and property settlement between the parties. On 23 June 2010 the husband brought proceedings in this court to enforce part of the property orders. In response to his application the wife sought to have the original property orders varied.
The dispute between the parties centres around the capital gains tax liability that has arisen as a result of the sale of a property pursuant to those orders. I will refer to that property as ‘the townhouse’ throughout this judgment.
As a consequence of orders made by Federal Magistrate Slack on

18 August 2010 the sum of $60,000 was deposited into a solicitor’s trust account. I am to determine how that sum is to be allocated between the parties.
At the hearing the husband sought the following enforcement order:[1]
(1)That by way of enforcement the Wife pay to the Husband upon him becoming liable to pay capital gains tax in accordance with paragraph 30 of the Order made on 24 April 2007 a sum calculated as follows:-
(a)amount payable by Husband pursuant to paragraph 30(a) less $11,450.00; plus
(b)amount payable by the Husband pursuant to paragraph 30(b) of the said Orders minus the amount that would have been payable if the Wife had only sold shares valued at no more than $11,450.00.
(c)amount paid by the Husband in relation to the costs of maintaining the property at Property W from 1 April 2010 until sale and the costs of obtaining and servicing the mortgage on Property P to Suncorp.
[1] Taken from Applicant’s Outline of Case filed 10 May 2011
He also sought a costs order against the wife.
Although the wife did not ultimately press the alternative order (4) I set out the orders she sought:[2]
[2] Taken from Respondent’s Outline of Case filed 12 May 2011
(1)That paragraphs 1 to 4 of the final orders sought in the Applicant’s amended application filed herein on 8 July 2010 be dismissed and further that paragraphs 1 to 3 of the orders sought as set out in annexure A to the affidavit of the husband filed herein on 18 April 2011 be dismissed.
(2)That under section 79A of the Family Law Act 1975 this Honourable Court vary paragraph 25 of the Orders made herein on 24 April 2007 (“Orders”) as follows:
(a)The following subparagraph be inserted between subparagraphs (b) and (c) of the Orders:
(i)“That within 7 days of the date of this Order the Wife shall be paid the sum of $53,650 from the funds in trust with McPhee Lawyers in the joint names of the parties”.
(3)In the alternative to paragraph 2,
(a)That under section 79A of the Family Law Act this Honourable Court vary paragraph 30 of the Orders as follows:
(i)The introduction of the paragraph be varied by deleting the words “to pay one half of the capital gains tax assessed as payable in respect of:”
(ii)By substituting the following paragraph for paragraph 30(a) as follows:
“to pay capital gains tax assessed as payable in respect of the real property at Property W consequent upon its sale in accordance with the following proportions between the parties:
1.   That the Wife’s liability will be limited to and not exceed the sum of $11,488; and
2.   That the Husband will be liable for the balance in the sum of $39,466 to be paid to the Wife within 7 days of the date of this Order from the funds in trust in the joint names of the parties with McPhee Lawyers and the husband will indemnify and keep indemnified the wife in respect of such liability.”
(4)In the alternative to paragraph 3,
(a)That under section 79A of the Family Law Act this Honourable Court vary paragraph 30 of the Orders as follows:
(i)The introduction of the paragraph be varied by deleting the words “to pay one half of the capital gains tax assessed as payable in respect of:”
(ii)By substituting the following paragraph for paragraph 30(a) as follows:
“to pay capital gains tax assesses as payable in respect of the real property at Property W consequent upon its sale in accordance with the following proportions between the parties:
1.   That the Wife’s liability will be limited to and not exceed the sum of $16,275; and
2.   That the Husband will be liable for the balance in the sum of $34,679 to be paid to the Wife within 7 days of the date of this Order from the funds in trust in the joint names of the parties with McPhee Lawyers and the husband will indemnify and keep indemnified the wife in respect of such liability.”
(5)Such further or other Orders as the Honourable Court deems meet.
(6)That the Applicant pay the Respondent’s costs of and incidental to the Final Application on an indemnity basis.

Background

Mr Marsden and Ms Marsden were married [in] 1989. They separated on 12 March 2005 and were divorced on 1 July 2006. They have two children from their marriage.
Both parties are [occupations omitted].
The Husband commenced proceedings in the Family Court of Australia at Brisbane for parenting orders on 3 June 2005 and later filed an Amended Initiating Application on 29 August 2005 to include property settlement.
The matter came before Justice O’Reilly for final hearing on 23 April 2007 and with the assistance of Counsel, the parties reached agreement on both the parenting and property matters. Final orders were made by consent on 24 April 2007 that provided for: the parties to have equal shared parental responsibility for the children; the children to live with the mother; and the children to spend time with the father every Wednesday and each alternate weekend. The final consent orders also provided for property settlement with the Wife to receive 58% of the property pool and the Husband to receive 42% of the property pool. Of relevance to these proceedings, the final consent orders provide at Orders 23 and 30 as follows:
(23)That as soon as reasonably practicable after the date of these Orders, the Wife shall do all such things and sign all such documents so as to permit the Husband to sell the property (on such terms and conditions as he shall deem appropriate) situated at Property W, Queensland being more particularly described as Lot [omitted], including, but not limited to, transferring the said property to any bona fide purchaser of same.
(30)That the parties shall each be responsible for, and shall do all such acts and sign all such things as might be required to pay one half of the capital gains tax assessed as payable in respect of:
a)The real property at Property W consequent upon its sale; and
b)Such shares currently owned by the Wife or the Mr M Family Trust which shall be sold by the Wife in order to meet the liability for capital gains tax referred to in the previous sub-paragraph.
The parties purchased the townhouse in 1999 as an investment property. It was registered in the wife’s name only. After separation the husband moved into the townhouse and when he affirmed his affidavit in the substantive proceedings on 18 December 2006 he gave the following evidence at paragraph 161:
[161] I am happy for [Ms Marsden] to retain the former matrimonial home. I propose that there be and (sic) order that the town house be sold and that the nett proceeds of sale form part of my settlement. A period of 3 months would be necessary to enable me to find and purchase a suitable home after settlement of financial matters.
The property was not sold until 27 January 2011. As a consequence of orders made by FM Slack on 18 August 2010 $60,000 from the proceeds of sale of the townhouse was deposited into a solicitor’s trust account pending the outcome of this dispute.

Evidence

In support of his case the husband relied upon:
a)Amended Initiating Application filed 8 July 2010;
b)His affidavits filed:
i)23 June 2010; and
ii)18 April 2011;
c)The affidavit of Mr H filed by leave 16 May 2011.
The wife relied upon:
a)Amended response filed 11 May 2011;
b)Her affidavits filed:
i)17 August 2010; and
ii)11 May 2011;
c)The affidavit of Mr J filed 11 May 2011;
d)The husband’s affidavit of evidence in chief filed in the Family Court of Australia 19 December 2006;
e)
The affidavit of Mr W filed in the Family Court of Australia

24 November 2006; and
f)The transcript of the proceedings before the Honourable Justice O’Reilly on 24 April 2007.
Both parties were cross-examined. They each impressed as honest and forthright witnesses who gave their evidence to the best of their ability and recollection.
Throughout these reasons I will refer to a number of facts. Any such reference should be regarded as a finding of fact unless a contrary intention is clear from the context.
The wife gave evidence that she entered into the consent orders on the basis of her understanding that the husband intended to sell the property soon after the orders were made and acting on that belief she was prepared to pay half of the capital gains tax attributable to it. She formed this belief upon relying on the husband’s assertions at paragraph 161 of his affidavit of evidence in chief. I accept her evidence. The wife also gave evidence that she had wanted to transfer the property into the husband’s name as part of the settlement but ultimately agreed to the consent orders on the representation of the husband that he did not intend to remain living in the townhouse long term.
The husband gave evidence that when he affirmed his affidavit in December 2006 he intended to sell the property consistent with his evidence at paragraph 161 of that affidavit. His position changed however by the time he entered into the consent orders such that his primary motivation at that time was to provide a home for the children that they were happy, safe and secure in. He did not file any updating affidavit addressing this change of position nor did he disclose this to the parties or the court.
It was put to him that he understood at the time the consent orders were made that the parties had entered into the agreement on the basis that there would be an imminent sale of the townhouse. He did not accept that proposition. He took the view that there was nothing in the orders requiring a prompt sale of the property. A literal reading of the terms is consistent with this view. However, whilst I accept the husband’s evidence as to his recollection was honestly given, I am not persuaded that at the time of entering into the consent orders the parties agreed to orders (23) and (30) other than on the basis that the townhouse was to be sold in the foreseeable future after the husband had obtained other suitable accommodation.
I have come to this view on the basis that his evidence at paragraph 161 was the only evidence of his intentions on which the parties and the court could have relied, there being no other contrary advice or evidence given at the time. When that evidence is taken into account and read with order (30) that made provision for the sharing of the capital gains tax, it would be a long bow to draw to conclude that the timing of the sale was open ended and thereby exposing the wife to the risk of a greater capital tax liability if the property was not sold for a lengthy period of time. This outcome would be inconsistent with the overall intent of the orders for property adjustment which provided for the wife to receive a settlement equating to 58% of the pool of assets and liabilities. It would also be inconsistent with the decision not to transfer the townhouse into the husband’s name enabling him to sell the property at a later date suitable to him and take advantage of a primary residence concession on the capital gains tax liability.
Whilst I accept the husband’s position in relation to the timing of the sale of the townhouse had shifted from his stated position in December 2010, at the time of the hearing he had not informed the wife or the court of that shift and he proceeded to enter into terms of settlement on the basis of a sale of the townhouse in the not too distant future. The submissions of the wife in her outline document and made by her counsel referred to an understanding between the parties that there was to be an ‘immediate’ sale. I am not persuaded that was in the contemplation of the parties however on balance I am persuaded the agreement was reached on the understanding that the sale would be in the foreseeable future and within the vicinity of three months from the date of the orders.
In order to determine the issue of enforcement or variation of the original orders it is beneficial to consider the chronology of the attempts at resolving the issue of the sale of the townhouse.
Some 6 weeks after the making of the orders the wife wrote to the husband’s solicitor on 4 June 2007 as follows:
…As you would be aware, Mr Marsden stated that it was his intention to sell the [W] property as soon as possible. To date no contact has been made by Mr Marsden regarding this. I have now requested [omitted] Real Estate, who have achieved the most recent sale in the complex, to commence listing proceedings. In order for a formal listing a Disclosure Statement is required from the Body Corporate Services. Mr Marsden is in receipt of the Body Corporate Accounts and is responsible for payments regarding the property and all costs regarding marketing and sale. I am informed that the Body Corporate Services will supply Disclosure Information (for a fee of $110.00) to the Real Estate Agency for completion of the REIQ Disclosure Statement which is a requirement for the sale process. I am informed that such information can be supplied at Mr Marsden’s request following his payment. Please request Mr Marsden to contact the Body Corporate Services Administration Department to request Disclosure information be prepared and forwarded…
Although this action by the wife was not consistent with order (23) which provided for the property to be sold on the terms and conditions considered appropriate by the husband the promptness of her correspondence is corroborative of her evidence that she was of the understanding there was to be no delay in the sale.
On 7 June 2007 the husband wrote to the wife’s solicitor as follows:
I believe it is inappropriate for [Ms Marsden] to commence listing procedures re the sale of the townhouse. Court order 23 states…So as to permit the Husband to sell the property (on such terms and conditions as he shall deem appropriate)…I do not wish [Ms Marsden] to be involved in any way re the sale of the townhouse and will not be responsible for any costs she incurs.
The husband did not indicate at this stage that he had no intention of selling the property.
The wife’s solicitors wrote to the husband’s solicitor on 18 June 2007:
I confirm that my client is in the process of obtaining a Release of Mortgage over the former matrimonial home.
I have no knowledge of any Mortgage over the town house. The existence of any Mortgage would not prevent the husband from selling the property, as he is required to do under clause 23 of the Order. Please confirm your client is taking immediate steps to sell the property.
On 22 June 2007 the solicitors for the husband and wife had a telephone conversation in which the possibility of a transfer of the townhouse to the husband and payment of capital gains tax was discussed.
The wife’s solicitor wrote to the husband’s solicitor on 28 June 2007:
I am instructed that my client agreed to pay one-half of the Capital Gains Tax from the sale of the town house because

Mr Marsden intended to sell it immediately. As it appears that Mr Marsden is now in no hurry to sell the property, I am instructed to ask his agreement that my client’s liability for the CGT be limited up to her share of the maximum sale price of $370,000.00, being the value of the property at, or about, the date of the Order. Clearly, my client would be disadvantaged if her liability for CGT unfairly increases as a result of delays in selling the property.
The husband’s solicitor replied on 5 July 2007:
Please note that our client is not in a position to properly consider any proposal by your client in relation to the CGT issue until the former matrimonial home has been transferred to your client, he is paid the monies owing in accordance with the Order of 24 April 2007 and he is released from his obligations with respect to the current Suncorp mortgage registered over the former matrimonial home.
Apart from the issue of the sale of the townhouse all other provisions of the property orders were complied with by 7 August 2007.
The husband’s solicitor wrote to the wife’s solicitor on 4 September 2007:
We enclose the Form 1 and 24 Transfer documents for the transfer of the property at Property W from your client to our client at a consideration of $370,000. Please have your client sign the transfer documents and return them to our offices as soon as possible.
We acknowledge that pursuant to the Order made 24 April 2007 our client is responsible for payment of one half of the CGT assessed to be paid by your client on the sale of the property. We await your advice in relation to the CGT assessed.
This correspondence was responded to on 20 September 2007 by way of the following from the wife’s solicitor:
We are instructed by our client that she requires the transfer of the unit to occur by way of a Consent Order pursuant to section 79A of the Family Law Act 1975 varying the original Orders made between the parties and that her capital gains tax liability is limited to the sum of $11,450.00. This amount is one half of the capital gains tax calculated to be owing as at April 2007.
This would enable both parties to take the benefit of the capital gains tax roll-over relief and would benefit your client by relieving him from paying stamp duty on the transaction.
This is our client’s preferred option.
In the event that your client requires our client to transfer her interest without the benefit of an Order, our client will agree to the transfer on the following terms:
1. Our client’s capital gains tax liability is limited to the sum of $11,450.00 with your client to indemnify our client for the balance and ensure that upon transfer of the unit the balance is paid to our client or to the Australia Taxation Office, and
2. Your client pay 50% of the capital gains tax payable on the sale of the shares with this amount to be paid at the date of the transfer of the unit to our client or at her direction.

The wife’s solicitor wrote again to the husband’s solicitor on

3 December 2007:
We refer to the above matter and to our facsimile of 20 September 2007.
We note that we have not received a response in respect of same.
We ask that you obtain your client’s instructions in respect of this matter and inform us without further delay.
The reply to that and the earlier letter came by way of a letter from the husband’s solicitor to Wife’s solicitor on 7 April 2008:
We refer to previous correspondence in relation to the transfer of the townhouse.
We are instructed that our client is happy to proceed with the transfer of the townhouse to our client pursuant to a 79A Order varying the original order. Your client’s Capital Gains Tax liability will be limited in the sum of $11,450.00 being one half of the amount calculated to be owing at April 2007.
We look forward receiving to your draft 79A Order as soon as reasonably possible.
By early September 2007 the parties were of the same mind in relation to transferring the townhouse to the husband but it was not until

12 months after the making of the consent orders that the parties had reached an agreement to amend those orders pursuant to s.79A so that the property was transferred to the husband and the wife’s liability in relation to the capital gains tax was limited to $11,450. This agreement however was never acted upon.
The husband’s solicitors sent the wife a letter on 14 May 2008:
We refer to our correspondence sent to Hopgood Ganim on 7 April 2008. We contacted Hopgood Ganim yesterday who advised that they no longer hold instructions to act on your behalf. Andrew McCormick from Hopgood Ganim advised that he had forwarded a copy of our correspondence dated 7 April 2008 to you but we enclose a copy of that for your convenience nonetheless.
Could you please confirm whether you are happy to proceed with the transfer of the town house pursuant to section 79 of the Order with your Capital Gains Tax liability capped at $11,450.
Please also advise whether you will be attending to the preparation of the 79A Order.
The Wife was diagnosed with thyroid cancer in or around June 2008. She underwent surgery and radiotherapy throughout 2008 and is currently in remission.
It was not until January 2010 that the parties resumed communication in relation to resolving the issue. The reason for this hiatus in the communication was not explained.
On 22 January the wife wrote to the husband and to his solicitor:
In response to the issue re [Property W], communications, access etc, I would be grateful if you would instruct your solicitor to draw up a Consent Order for the Property W townhouse to be transferred to your ownership. This is what should, and would, have occurred at final Consent Orders had it not been stated that your intention was to have the property sold immediately after settlement. The issue of Body Corporate Service communications would then no longer be a problem and the property would be in your name for you to do with as, and when, you wish, without the need for any involvement from me. I have previously contacted and requested the Body Corporate Service direct all communication to you, but, with you not being the registered owner, this was to no avail.
The husband replied as follows on 1 February 2010:
You would be aware the girls and I have been looking at property since the time of settlement.
As the girls expressed a strong desire to remain at the [W] property my solicitor wrote to you in 2008 regarding the transfer of the property. I understand you did not reply.
I would be happy to arrange transfer of the townhouse once you agree to pay me half the capital gains tax (as per Consent orders). If you wish to proceed could you please have your accountant calculate the CGT which I will confirm independently. I have recently had the townhouse valued with a view to sale. The valuation by Ms F of [real estate agent omitted] is $475 000 (attached).
The matter is of some urgency as I am actively pursuing other properties. Please let me know as soon as possible in writing if you agree and I will proceed.
Please address all correspondence exclusively to myself (either by email, fax or post) and not my solicitor.
On 6 February 2010 the Husband entered into a contract for the purchase of an apartment at Property P.
On 23 February 2010 the parties exchanged a number of text messages as follows:
Husband: Dear [Ms Marsden], Listing [W] property 4 sale thru Ms F [real estate agent omitted]. Thk u Mr Marsden
Wife: Hi [Mr Marsden] pls have your solicitor draw up a consent order 4 transfer of then property to you as previously requested. Thks
Husband: The property is being sold as per the consent orders
Ms F will be in contact with u re signing documents for listing as per consent orders. Her contacts are……. Could you pls forward me ur email address so I may give 2 her.
Wife: I tried to list the property 4 sale as per consent order three and half years ago. You might recall that you objected. I have the documents re this. Pls ask your solicitor to arrange consent order 4 transfer to you as previously requested.
Husband: Consent orders state that I sell property on such terms and conditions as I shall deem appropriate and you shall do all such things and sign all such documents so as to permit me to do so. Pls do so. Tk u
The consent orders are very clear. You are required to do all things and sign all documents so as to permit me to sell the property. There is no time line stated in the consent orders. At no time in the last 2 years have you raised any concerns with regard to the timing of the property being sold. You ignored correspondence from my solicitor. Ms F informed me this afternoon there is huge demand for townhouses in [W] and only one other property on the market. I wish to sell asap to pay off the loan I have taken out to purchase another property. If you do not comply with the orders I will seek all costs of litigation as well as the interest and repayments on the loan. Tk u [Mr Marsden].
Wife: Three and half years on from when it should have been sold & when I tried to sell has significant tax implications which I should not be responsible for & which would be reduced under new consent order ie CGT & roll over relief. The spirit of the first order was that it was to be sold immediately. I would be happy to sign new consent order asap.
Husband: I wish property 2 be sold asap as per the existing consent orders. Your replies this afternoon acknowledge this. Tk u [Mr Marsden]
The following day further text messages were exchanged:
Husband: I have just been called by Ms F. She has told me you are refusing to sign the documents in order for the property to be sold. This is in breach of the existing consent orders. I have no intention of the property being transferred to my name prior to sale. Please comply with the consent orders. Mr Marsden
Wife: Due to significant 3yr+ delay & subsequent disadvantaged position for me I will not be signing real estate forms. T/f by varied consent order is best for you as well. Plse arrange for this asap
On 3 March 2010 the husband’s solicitor wrote to the wife:
We refer to the Orders made by Consent on 24 April 2007 in the Family Court of Australia at Brisbane.
We are instructed that you have refused to sign the Agency agreement to enable our client to list the property at Property W for sale. We draw to your attention to paragraph 23 of the Consent Order, which requires that you do all such acts and things to sign all documents so as to permit our client to sell the property on such terms and conditions as he deems appropriate.
We enclose for execution by you the Agency Agreement.
Please return the executed document to our office by close of business on Wednesday 24 March 2010, failing which our client will be forced to commence enforcement proceedings. In the event that our client is required to take that action, he will seek an Order that you pay costs of and incidental to such proceedings.
In reply the wife’s solicitor wrote to the husband’s solicitor on

12 March 2010:
We refer you to order 23 of the orders made by consent and in particular, to the opening phrase “that as soon as reasonably practical after the date of these orders”. Our records confirm that correspondence passed between our client and your office in June 2007 in which our client confirmed that she was ready, willing and able to do all such acts as was required to place the property on the market. In addition, our client confirmed that she had, in the absence of any actions being taken by Mr Marsden in that regard, contacted a local agent to commence the listing process.
Correspondence in September 2007 confirms that our client confirmed with you, by way of formal offer, that she required the transfer of the unit to occur by way of consent order pursuant to section 79 of the Family Law Act (1975) varying the original orders made between the parties and that her capital gains tax liability be limited to $11,450.00, being one half of the capital gains tax calculated to be owing as at April 2007. We note that despite an indication received in December 2007 that your client was agreeable to that course, no formal response was received to that proposal, nor any action taken by your client to place the property on the market.
In addition, our client wrote to Mr Marsden in January 2010 again requesting that the property be transferred by consent. We are instructed that a copy of that correspondence was sent to your office.
We note that it is now some 35 months since the consent orders were made and your client now seeks to enforce an order requiring the sale of the property. It is our client’s position that the consent orders have been varied by acquiescence or substantive delay on Mr Marsden’s part with consequential damage to our client if the orders are not varied by consent.
Given the history of communication between the parties, in our view, it is unlikely that your client would successfully satisfy the Court that our client’s actions have resulted in the delayed or her compliance with the order.
Our client will not agree to the sale of the property occurring in circumstances where she incurs greater capital gains tax liabilities or costs, than she would have if the property was sold within a reasonable period following the making of the orders.
As such, our client will be proposes that your client agree to signing an application for consent whereby the orders made on 24 April 2007 are varied such that:
1.   either the property is transferred to Mr Marsden or sold by the parties;
2.   that in either case, the wife’s liability for capital gains tax as was determined by order 30(a), be limited to an amount equal to the capital gains tax which she would have been responsible for had the property been sold shortly after the making of consent orders in April 2007 at an agreed value of $370,000.00;
3.   that Mr Marsden be responsible for any costs incurred as a result of transfer of the property;
4.   that if the property is sold without being transferred to Mr Marsden, then the conveyancing be handled by HopgoodGanim Lawyers;
5.   that Mr Marsden pay one half of capital gains tax incurred as a result of the sale of shares required by order 30(b).
6.   That all outstanding costs and liabilities necessary to resolve these matters, including, but not limited to the full capital gains tax estimate on the sale of the property, Mr Marsden’s 50% capital gains estimate from the sale of shares, legal fees and accountancy costs (re tax estimates, duties etc), be paid from the proceeds of sale with Mr Marsden to receive the net balance proceeds.
If your client is not agreeable to the proposed course, then we confirm that we have instructions to accept service of proceedings on behalf of Ms Marsden and advise that our client will, as part of her response, seek an order for costs against your client incurred as a result of his failure to comply with the orders made in April 2007.
The Husband moved into his new residence in March 2010. He filed the current proceedings on 23 June 2010.
On 18 August 2010 Federal Magistrate Slack made orders by consent that provided:
(1)For the purpose of sale of the townhouse in accordance with Order 23 of the Order made 24 April 2007: -
(a)The Wife forthwith deliver up to the Husband’s Solicitors the original stamped release of mortgage from Suncorp-Metway Limited ABN 66010831722 dated 13 June 2007;
(b)The Wife shall do all acts and sign all documents reasonably necessary to transfer to the Husband upon trust pursuant to the Orders made on 24 April 2007 the real property situated at Property W, QLD more particularly described as Lot [omitted] (“the townhouse”).
(c)The Husband: -
(i)Within 7 days of the transfer referred to above at paragraph 1.2 list the town for sale by a private treaty;
(ii)In the event that the townhouse has not been sold by or before a date three (3) months from the date of listing the townhouse be auctioned with the Husband to pay the costs of auction with the reserve price as agreed between the parties and failing agreement as set by the chief executive officer of the real estate institute of Queensland.
(iii)In the event that the property is not sold by auction or private negotiation in 14 days after the said auction, then the Husband do all acts to re-list the townhouse for sale by private treaty at the reserve price or such other price as agreed between the parties for a further period of 2 months;
(iv)At the expiration of the said 2 month period the townhouse property be auctioned without reserve.
(d)Upon completion of sale the Husband set aside from the net sale proceeds the sum of $60,000 to be placed in the trust account of McPhee Lawyers on behalf of the parties pending determination of these proceedings or written agreement between the parties.
(2)Each party have liberty to apply in relation to the sale of the townhouse upon the giving of 48 hours notice.
(3)The costs of this application be reserved to the trial judge
The townhouse was sold for $462,000 with settlement occurring on

27 January 2011. The sale price was some $98,000 greater than the value attributed to the property at the time the consent orders were made giving rise to a greater capital gains tax liability to the wife.

Application of Legal Principles

There was no dispute that this court has the power to enforce the orders made in 2007. It is prudent however to firstly consider the wife’s application to vary the consent orders as the outcome of that application may affect any orders in relation to enforcement.
Any application to vary property orders must be considered under section 79A(1) of the Family Law Act1975. In determining such an application the court must consider firstly whether at least one of the factors set out in that section has been established. If so satisfied the court must then consider whether to exercise its discretion to vary or set aside the order.
The section reads:
Setting aside of orders altering property interests
(1)     Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
(a)     there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or
(b)     in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or
(c)     a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or
(d)     in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order; or
(e)     a proceeds of crime order has been made covering property of the parties to the marriage or either of them, or a proceeds of crime order has been made against a party to the marriage;
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
The wife submitted that the court should be satisfied that there has been a miscarriage of justice as a result of the husband failing to disclose the fact that his position in relation to the sale of the townhouse had changed between the time he affirmed his affidavit in December 2006 and when the consent orders were made. The miscarriage of justice being the wife’s exposure to the increased liability for capital gains tax.
Mr Jordan on behalf of the husband argued that the wife had attempted to make out the husband had committed a fraud. I was invited to reject any such accusation. I am not persuaded the wife sought such a finding. If she did I would reject it.
I am however satisfied that the husband had an obligation to inform the wife and the court of his changed position as the timing of the sale was clearly relevant to the question of any capital gains tax liability. I find that he failed to do so. The Full Court of the Family Court considered the issue of non-disclosure of a change of intention during negotiations in the matter of Suiker.[3] In that case the parties entered into consent orders for property adjustment. During the course of their negotiations the husband did not disclose he had applied to take a redundancy and was considering changing his superannuation fund to a more advantageous one. After the orders were made he was offered and took redundancy ultimately receiving benefits to the value of $135,455 greater than that which was contemplated by the parties at the time of entering into the consent orders. The Full Court accepted the wife’s submission that the husband had a duty to disclose to her before entering into the consent orders that he was contemplating taking a redundancy and upheld the trial judge’s finding that there had been a consequential miscarriage of justice.
[3] (1993) 17 Fam LR 236
Having made the finding that the husband had failed to disclose his changed position and being satisfied that the consent orders were made on the basis of an intention to sell the property in the foreseeable future I am then required to determine if a miscarriage of justice has arisen as a result of that non-disclosure.
The Full Court in Suiker had this to say:
Under the Family Law Act 1975 the need for a resolution of disputes by negotiation and the consequent making of consent orders or the approval of maintenance agreements is an essential part of the legislation and the rules. Relevant provisions in force at the time included s 79(9) and s 87 of the Family Law Act 1975 and O 24 and O 31 r 8 of the Family Law Rules. In our opinion, the necessity for full and frank disclosure of financial matters to the Court and to the other party are basic to the process of the Court and the fundamental aims of the financial legislation contained in s 79 of the Family Law Act 1975. As Dawson J said in Harris v Caladine (1991) 14 Fam LR 593; FLC 92-217 at 78,485-6:
``In considering what order, if any, should be made under s 79, a court is required under subs (4) of that section to take a number of matters into account, including the various financial contributions made by the parties to the marriage. And subs (2) provides that a court shall not make an order under the section unless it is satisfied that, in all the circumstances, it is just and equitable to do so. The fact that an order is sought by consent does not relieve a court, or a Registrar, from compliance with the requirements of the section, but it may render compliance much less demanding. Provided that a court, or a Registrar, is adequately informed, where the parties are at arm's length and are properly represented little more than consent may be needed to establish that the requirements of the section have been met: see Jenkins v Livesey [1985] AC 424 at 437, 444.
Even if the consent pursuant to which an order is made under s 79 amounts to a contract between the parties, it is the order itself which is of legal significance. As Lord Diplock observed in de Lasala v de Lasala [1980] AC 546, at 560, in related circumstances:
'Financial arrangements that are agreed upon between the parties for the purpose of receiving the approval and being made the subject of a consent order by the court, once they have been made the subject of the court order no longer depend upon the agreement of the parties as the source from which their legal effect is derived. Their legal effect is derived from the court order.'
And in the case of an application under s 79, even if there is consent amounting to a contract, that is not enough of itself to entitle the parties to an order. The requirements of the section must be satisfied.''
It is implicit in these passages that the consent to an order must be informed consent. The consent to the order is itself part of the judicial process on which the Court places reliance. If that consent is based on misleading or inadequate information, then there may be, in our opinion, a miscarriage of justice either by reason of the ''suppression of evidence'' or by reason of ''any other circumstance'' .
We would point out that cases dealing with the expression ''miscarriage of justice'' decided under s 75 of the Matrimonial Causes Act 1959 relate to a very different topic from cases which arise under s 79A of the Family Law Act 1975. Section 75 of the Matrimonial Causes Act 1959 dealt with the rescission of a decree nisi for dissolution of marriage, if the Court was satisfied that there had been a miscarriage of justice by reason of fraud, perjury, suppression of evidence or any other circumstance. Condonation, connivance, and collusion were bars to relief. Section 79A relates to the setting aside of property orders. The policy of the law is, and has been, to encourage the parties to compromise their differences and to make consensual arrangements. In Wilson v Wilson (1967) 10 FLR 203-204 Wallace P. said that the phrase ''miscarriage of justice'' does not appear to have a fixed meaning. In our view, in appropriate cases, the order itself in the light of the true facts may bear upon the question whether there has been a miscarriage of justice. In the Marriage of Holland (1982) 8 Fam LR 233; [1982] FLC 91-243 at 77,341:
``To succeed in an application under s 79A, the wife must show some circumstance leading to a miscarriage of justice. Agreement to a consent order which may not adequately reflect a party's entitlements under s 79 does not, of itself, show that there has been a miscarriage of justice. There may be cases where the order consented to is so far outside the ambit of what is just and equitable that the Court may infer that a party has acted under duress, in ignorance or as a result of incompetent advice.''
See also Gebert, supra, at Fam LR 66; FLC 77,935.
As regards the view expressed in Clifton and Stuart that the expression ''miscarriage of justice'' ''relates to the integrity of the judicial process'' we are of the opinion that this passage was not intended to refer only to the hearing in the Family Court, but that the expression ''judicial process'' can refer to a variety of matters and circumstances which had an influence on the outcome of the litigation. It is neither necessary nor desirable to attempt to define the matters which may amount to a miscarriage of justice by reason of any other circumstance in the relevant sense.

In Suiker the non-disclosure led the parties to use figures for the ascertainment of the pool of assets and liabilities that were substantially different to what ultimately transpired but could have been ascertained if the disclosure was made. In this case I accept the wife’s submission that if the orders are allowed to stand in their current form she would be required to bear a higher burden of capital gains tax liability than originally contemplated and the husband would receive the benefit of the capital gain although he too would have to pay his share of the capital gains tax. I am satisfied the non-disclosure has led to a miscarriage of justice by reason of ‘any other circumstance’ and therefore the factor contemplated by s.79A(1)(a) has been established.
There was nothing in the evidence to suggest that compliance with the orders had become impracticable and therefore I am not satisfied that s.79A(1)(b) has been established.
Although the evidence suggests order (23) was not complied with, this in itself would not lead me to find that there has been a default in an obligation such that it had become just and equitable to vary the order. Accordingly I am not satisfied that s.79A(1)(c) applies. Nor was there any evidence that would attract a consideration of s.79A(1)(d).
Having found that s.79A(1)(a) has been established I must turn my mind to whether it is appropriate to exercise my discretion and vary the orders. The husband invited me when exercising that discretion to decline to make such an order. In support of that submission he argued that the wife had sat on her hands for a significant period of time. The agreement reached by the parties in September 2007 and again in April 2008 was an appropriate one given the husband’s changed intention in relation to the sale of the townhouse and the wife’s desire not to be burdened with a greater capital gains tax liability. However nothing was done to put that agreement into place.
Although the wife was diagnosed with a form of cancer in 2008 there was no evidence that her treatment and recuperation was such that she was precluded from attending to this issue for a period of nearly two years.
The husband submitted that it would be unfair to hold him to the agreement and limit the wife’s responsibility for capital gains tax because she did nothing to put that agreement into place. In my view neither did the husband. Both parties are responsible for the situation in which they have found themselves as they each failed to follow through with the agreement or seek enforcement until the husband did so in 2010.
Although the husband sought orders limiting his liability for the capital gains tax to $11,450 his counsel argued that it was open to me to not make any orders other than to release the funds held in trust because the parties are each responsible for the position they are in. There is merit in that argument. However when I weigh that outcome up with the intent of the original orders and the fact that the husband will obtain the benefit of the increase in value of the townhouse I am persuaded that the wife would be significantly disadvantaged if I did not make orders reflective of the agreement reached in 2008. To have her carry the burden of the greater capital gains tax liability or even share it equally with the husband would see an outcome inconsistent with the intent of the original orders that provided for the wife to receive 58% of the property pool. Whilst I accept the argument that the wife is at least partly to blame for the position the parties are in it would be unfair to her if she was to pay more by way of capital gains tax than was contemplated at the time of the consent orders.
I accept that if I make an order accordingly the husband would the one to bear a greater responsibility for the capital gains tax but I am not persuaded this would be unfair as he altered his position in relation to the sale without informing the wife prior to the consent orders being made; he has had the benefit of living in the property longer than was originally contemplated; and has also received the benefit of the capital gain.
When I weigh up the competing arguments I am persuaded that I should exercise my discretion and vary the orders.
Having said that I am not persuaded that the wife’s proposed order (2) is appropriate. It appears that by that proposal she sought to gain the benefit of 58% of the capital gain on the townhouse and then for the parties to share the burden of the capital gains tax liability. I accept the husband’s submission that to make such an order would be unfair on him and lead to an outcome inconsistent with the original orders.

I would dismiss that part of her application.
Her proposed order (3) however reflects the position of limiting her liability to what was contemplated in the 2008 agreement and is reflective of the original consent orders which I have already found were made on the basis of a sale of the townhouse in a foreseeable time period. For the reasons I have outlined above I am of the view that that is the appropriate outcome and will make the order accordingly.
Having made that finding and for the reasons I have set out above I would dismiss the husband’s application to limit his liability to pay capital gains tax to that which was agreed in 2008 or make an order the parties share the current liability equally.
I accept the husband’s submission, which was not challenged, that there was no evidence that the wife has or will need to sell shares to pay her capital gains tax liability. It is appropriate therefore when varying order 30(a) that order 30(b) be discharged. For that reason I will set aside the whole of the current order 30 and replace it with a new order reflective of my decision.
The husband also sought an order for the wife to contribute to the costs he has incurred in purchasing a new property prior to the sale of the townhouse. He argued that he was out of pocket to the sum of $21,239 as a result of the wife’s refusal to attend to the signing of the listing agreement. I am not persuaded the wife should bear these costs. The husband went ahead with the purchase of a new property before he had sought to list the townhouse for sale. There was no evidence of any pressing need to do so. Given the history of inability of the parties to follow through with agreements and put the original orders in place, it was either overly optimistic or foolish on his part to adopt that course and not expect some problems along the way. He should bear the costs associated with the purchase of his new property.
For the above reasons I will make the orders set out in the beginning of this judgment.

I certify that the preceding seventy-two (72) paragraphs are a true copy of the reasons for judgment of Lapthorn FM

Date: 8 September 2011