McDonald and McDonald

[2008] FamCA 122

FAMILY COURT OF AUSTRALIA

MCDONALD & MCDONALD [2008] FamCA 122

FAMILY LAW – PROPERTY ORDERS – s 79(2) – Just and equitable

Family Law Act 1975 (Cth)

APPLICANT: MRS MCDONALD

RESPONDENT: MR MCDONALD

FILE NUMBER: DGF 413 of 2006

DATE DELIVERED: 26 FEBRUARY 2008

PLACE DELIVERED: MELBOURNE

PLACE HEARD: MELBOURNE

JUDGMENT OF: YOUNG J

HEARING DATE: 26 FEBRUARY 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR HUTCHINS

SOLICITOR FOR THE APPLICANT: McCARTHY HOEY

COUNSEL FOR THE RESPONDENT: MR ARNOLD

SOLICITOR FOR THE RESPONDENT: BAILEY TIMMS HANSEN & ROSSIS

ORDERS

IT IS ORDERED BY CONSENT :

1. THAT within thirty (30) days from these Orders ("the date"):

   A.the parties do all things and sign all documents necessary to transfer to the wife, and if applicable vacate the following assets at the transferee's cost:

   (a)        A Street, D, Volume …  Folio …;
   (b)        R1 and R2, D;
   (c)        Boat Shed 37, S;
   (d)        Ford Fairlane motor vehicle Registration No. …;

   and the wife retain for her sole use and entitlement:

   (e)A Services Pty Ltd, O Company and M Company.

   B.the wife indemnify the husband as to all rates, taxes and charges associated with the assets which are transferred to her or retained by her pursuant to 1(A) of these Orders and for liability in respect of the mortgage to the Commonwealth Bank secured over A Street, D ("the mortgage").

   C.the parties do all things and sign all documents necessary to transfer to the husband and if applicable vacate the following assets:

   (a)K Street, D, Volume … Folio …;

   (b)the business and trust assets being The McDonald Family Trust, A2 Pty Ltd and M Pty Ltd including any loan accounts;

   (c)the Bank of Melbourne term deposit formerly (allegedly) held upon trust for D McDonald.

   D.the husband indemnify the wife as to all rates, taxes and charges associated with the assets which are transferred to him.

2. THAT pending the transfers set out herein:

   (a)the wife have the right to occupy the real property at K Street, D and during such right of occupation the wife pay all instalments pursuant to the mortgage and all rates and taxes and like apportionable outgoings and household accounts of the properties listed in 1(A) (a), (b) and (c);

   (b)the husband have the sole right to occupy the real property at R1, D and pay all instalments pursuant to the rates, taxes and like apportionable outgoings of the said property;

   (c)the parties shall maintain the properties in their current condition;

   (d)the wife shall continue to manage the R2 and A Street, D properties and retain any profits from such rental for her sole use.

   (e)the parties hold their respective interest in all the real properties upon trust pursuant to these Orders; and

   (f)neither party encumber the real properties without the consent in writing of the other;

   (g)no statement of adjustments of Council and water rates be done upon the transfers.

3. THAT in default of these Orders either party may apply for an enforcement order.

4. THAT the husband pay and indemnify the wife as to all liabilities including taxation liabilities and loan accounts in respect of each of The McDonald Family Trust, M Pty Ltd and A2 Pty Ltd.

5. THAT the husband and wife forthwith sign all documents and do all things necessary to transfer ownership and registration of:

   (a)         T to the husband;
   (b)        P and S to the wife.

6. THAT unless otherwise specified in these orders and save for the purposes of enforcing any monies 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 (the furniture, personal possessions, and like chattels in the real property situate at K Street, D, being deemed to be in the possession of the wife and in R1, D, being deemed to be in the possession of the husband;

   (b)each party retain their own superannuation benefits;

   (c)insurance policies remain the sole property of the owner named thereon;

   (d)each party 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;

   (e)the joint tenancy of the parties in R1 and R2, D and any other real or personal estate is hereby expressly severed.

7. THAT the extant applications of the husband wife respectively, including the Form 2 Application of the wife filed 12 February 2008 and the Form 1 Application of the wife filed 12 May 2006 and all Responses filed thereto be otherwise dismissed.

   IT IS CERTIFIED

8. THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Counsel for each of the husband and the wife.

   IT IS NOTED

A.THAT the parties intend these orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: DGF 413 of 2006

MRS MCDONALD

Applicant

And

MR MCDONALD

Respondent

REASONS FOR JUDGMENT

1. The matter of McDonald, DGF 413 of 2006, is before me as a defended property and financial matter.  This case is part of my allotted docket of cases and it was listed for a defended hearing today.  Mr Hutchins of counsel appears for the wife, Mr Arnold of counsel appears for the husband.  Instructing solicitors for both parties are in court as are their clients.

2. In the lead up to the hearing this day, the wife filed a Form 2 application in a case seeing various interim procedural, valuation and other appointment of expert orders.  That was opposed by the husband in his response, which is document 20 in the court index of cases.  Both parties had filed affidavits in support of their interim orders sought.  The earlier Form 1 application was that filed by the wife on 12 May 2006, and the matter has now been in this court and awaiting a final hearing for almost two years.

3. The preliminary issue in dispute between the parties this morning was both the method of valuation and the actual valuation of the business conducted through the marriage under the umbrella of the McDonald Family Trust.  There were earlier filed two valuations but the further issue that had arisen, following upon a change of solicitors by the wife, was as to the accuracy and completeness of the current valuation or whether an additional expert should be appointed on behalf of the wife to have further input and to produce a valuation.  The good news in this case is that commonsense has applied.  The parties, out of court and with their experienced legal advisers, have resolved those issues in a pragmatic way so as to enable discussions to proceed on an overall settlement of all property and financial issues.  I am otherwise aware that the wife sought an update in valuations on the real property, including the beach box at S, and they have also been the subject of out of court, pragmatic discussions. 

4. The background of this marriage is set out in the affidavit material.  Given that I have consent orders before me I will not highlight in any detail the facts of the marriage that are relevant to a proper consideration under section 79 of the Act of a just and equitable order.  The parties commenced living together in or about 1980, married some six years thereafter and finally separated whilst living under the one roof in September of 2004.  They are now divorced.  The husband is 57 years of age, the wife 45 years of age.  There are two adult children of the marriage.  I have taken the time to read those affidavits and I am aware of some of the allegations contained therein.  I do not need to traverse some of the unfortunate alleged issues that occurred within the marriage.

5. In terms of the assets, counsel have indicated to me that their discussions, and on the specific instructions of their client, proceeded on the basis of a pool of assets of approximately $1,800,000.  Included within that net asset pool is the business at an agreed valuation of $200,000.  I reflect on the most recent valuation where the range was between $180,000 and $220,000 applying a capitalisation rate of 27.5 per cent.  The court is comforted by that valuation following upon the earlier initial valuation of Mr J.

6. Included within the asset pool is the parties' superannuation entitlements; the husband's in the sum of approximately $239,000 and the wife of $134,000.  Given that the husband is closer to retirement age than the wife, he can more readily access his superannuation upon retirement from employment.  The date of any such retirement is exclusively a decision of the husband but I understand he is carrying a deferred and restricted superannuation benefit for so long as he may work but, in the practical circumstances of this case, it is very appropriate not to split superannuation and to have the parties retain their own entitlements.

7. I have perused the Form 13 financial statements and have an understanding of the income and liability circumstances of the parties. There is no doubt that each of them made a significant contribution. Throughout this relationship and marriage there was clearly considerable hard work and effort, not just with family but with acquisition of assets. It is for that reason that they find themselves in a relatively fortunate position being able to fund two households. I am advised by counsel that the division of assets inclusive of superannuation has been concluded upon a 55 per cent distribution to the wife, 45 per cent distribution to the husband, the balance effectively having regard to section 75(2) factors. I have a very clear view that that settlement is within the proper ambit and accordingly I will declare that it is just and equitable within the provisions of section 79(2) of the Family Law Act 1975.

8. What occurred after the matter was stood down is minutes have been drafted and counsel have explained the orders to the court.  The orders are to be engrossed by the solicitor for the wife.  There are to be some refinements blended into the orders and a more concise and considered draft of orders are to be prepared.  I decline to allow any general liberty provision to the parties to apply.  The matter will only come back to court if there is a clear default in one of the terms of settlement and only then for the purposes of rectification of such default.  I am satisfied that with the various transfers of real property the parties know and understand that which they are to receive.

9. The wife will have the ongoing management right and retention of income from R1 and R2 in D.  The husband will retain the business, all of its assets, tools, equipment, and the wife will have no claim to its structure or its assets.  Likewise, the husband will pay and provide an indemnity to the wife in respect of the business and he will stand by any good profits or difficult times the business confronts hereafter.  Simply, if it is in his hands and he is responsible therefor.  Parties have sensibly agreed to where their pets will live and to an appropriate division of furniture, chattels and contents.

10. For those very brief extempore reasons I am satisfied that the orders reflect a just and equitable settlement of property and I will so order.  There will be certification for counsel in the usual terms.  There is to be a section 81 notation accompanying the order.  I emphasise to the parties who are in court and listening intently that these orders are final and they have no other right of audience or address before this court on property or financial matters, save for enforcing a real default in these orders.  I will have those reasons transcribed, placed upon the court file and made available to all parties.  

I certify that the preceding paragraphs are
a true copy of the reasons for judgment herein
of The Honourable Justice Young

………………………………………………………..
Associate:          
Date: 4 March 2008