Menotti and Lamb and Ors - [2017] FamCA 918

FAMILY COURT OF AUSTRALIA

MENOTTI & LAMB AND ORS

[2017] FamCA 918

FAMILY LAW – PROPERTY – contentious issues about what happened to funds from sale of assets during marriage – arguments about whether discovery had been provided – where dispute is complicated by wife’s state of health which requires vigilance as to her knowledge of events – where wife issued proceedings in a State Court under the State Trust Act for control of trust but judge transfers to this court – husband then seeks costs – justice and equity requires orders but some adjustment in wife’s favour.

Family Law Act 1975 (Cth)
Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth)

Trustee Act 1936 (SA)

Kavan & Mallery and Anor (2015) FLC 93-651

APPLICANT:

Ms Menotti

RESPONDENT:

Mr Lamb

INTERVENOR:

B Pty Ltd, C Pty Ltd, D Pty Ltd

FILE NUMBER:

ADC

465

2008

DATE DELIVERED:

14 November 2017

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Adelaide

JUDGMENT OF:

Cronin J

HEARING DATE:

15, 16, 20, 21 June; 23, 24, 25 August 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Lindsay

SOLICITOR FOR THE APPLICANT:

Starke Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Jackson

SOLICITOR FOR THE RESPONDENT:

Jordan & Fowler

SOLICITOR FOR THE INTERVENOR:

Jordan & Fowler

Orders

The husband and the wife in their capacities as directors of B Pty Limited forthwith sell the B business and upon the sale, the proceeds be applied:
(a)first, to pay all commissions and expenses directly associated with the sale;
(b)secondly, to pay all legal expenses arising from the sale;
(c)thirdly, to pay all creditors of the business (other than the husband and the wife) but specifically the Australian Taxation Office obligations of the business;
(d)fourthly, to pay all staff obligations (other than the husband and the wife) of the business; and
(e)fifthly, to place the balance into a trust account operated by the solicitor for the husband, in the joint names of the parties, to be divided as set out in paragraph 12.
For the purposes of implementing the sale of the business, the husband forthwith nominate three business brokers and no later than 14 days after being so provided with those names, the wife choose one broker.
For the purposes of implementing all necessary conveyancing work required for the sale of the business, the husband nominate three solicitors and no later than 14 days after being so provided with those names, the wife choose one solicitor from those nominated.
Each of the husband and the wife do all things required to give proper instructions to those professionals engaged for the purposes of the conduct of the sale of the business.
For the purposes of assessing the price to be sought for the sale of the business, in default of agreement, the broker nominated by the wife as appointed by paragraph (2) of these orders, shall nominate the relevant price at or above which, the business shall be sold.
If the parties do not agree upon the relevant price determined by the nominated broker,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Menotti and Lamb and Ors

Details

AGLC: Menotti and Lamb and Ors [2017] FamCA 918
Case: [2017] FamCA 918
Decision Date: 14 November 2017

CaseChat Overview and Summary

In the matter of *Menotti and Lamb and Ors*, Cronin J made orders concerning the division of assets between a husband and wife. The dispute centred on the sale of a business operated by B Pty Limited and the disposition of a property known as E Street, Suburb E. The court was required to determine how the proceeds from the sale of the business and the property should be distributed, including the order of priority for payments and the ultimate division of the net balance between the parties.

The court's reasoning involved establishing a clear process for the sale of the business, including the nomination and selection of a business broker and solicitors, and setting a framework for determining the sale price. It also addressed the wife's option to retain the Suburb E property at a fixed value, outlining the conditions and financial adjustments required if she exercised this option. The orders specified the order in which various expenses and liabilities, including business creditors, staff obligations, and the wife's taxation liability, were to be paid from the sale proceeds.

The final orders dictated that the husband and wife, as directors of B Pty Limited, were to sell the business forthwith. The proceeds were to be applied first to sale commissions and expenses, then legal expenses, followed by business creditors (including the Australian Taxation Office) and staff obligations. Any remaining balance was to be placed in a trust account. The wife had a period to elect to retain the Suburb E property at a fixed value, with specific conditions regarding its mortgage. If she did not elect to retain the property, it was to be sold, with proceeds applied similarly to the business sale. After these steps, and the payment of the wife's taxation liability, the net balance of the trust account was to be divided, with 65 per cent allocated to the wife and 35 per cent to the husband, after accounting for certain costs. The wife was also ordered to pay the husband's costs of the proceedings.

Orders

Orders of the court

The husband and the wife in their capacities as directors of B Pty Limited forthwith sell the B business and upon the sale, the proceeds be applied:

(a) first, to pay all commissions and expenses directly associated with the sale;

(b) secondly, to pay all legal expenses arising from the sale;

(c) thirdly, to pay all creditors of the business (other than the husband and the wife) but specifically the Australian Taxation Office obligations of the business;

(d) fourthly, to pay all staff obligations (other than the husband and the wife) of the business; and

(e) fifthly, to place the balance into a trust account operated by the solicitor for the husband, in the joint names of the parties, to be divided as set out in paragraph 12.

For the purposes of implementing the sale of the business, the husband forthwith nominate three business brokers and no later than 14 days after being so provided with those names, the wife choose one broker.

For the purposes of implementing all necessary conveyancing work required for the sale of the business, the husband nominate three solicitors and no later than 14 days after being so provided with those names, the wife choose one solicitor from those nominated.

Each of the husband and the wife do all things required to give proper instructions to those professionals engaged for the purposes of the conduct of the sale of the business.

For the purposes of assessing the price to be sought for the sale of the business, in default of agreement, the broker nominated by the wife as appointed by paragraph (2) of these orders, shall nominate the relevant price at or above which, the business shall be sold.

If the parties do not agree upon the relevant price determined by the nominated broker, provisions of paragraph (7) shall apply.

Liberty is granted to both parties to apply for orders arising from any disagreement as to:

(a) the terms and conditions of the sale of the business referred to in paragraph (1) including any dispute as to the determination of the sale price;

(b) the correctness or otherwise of the creditors in paragraph (1)(c); and

That until 4.00pm on 16 December 2017, the wife may elect by writing to the solicitor for the husband, to retain E Street, Suburb E at a fixed value of $1.4 million, but with an encumbering mortgage of $513,842. If she so elects, the husband forthwith transfer to her any interest he has in Suburb E within 30 days thereafter but simultaneously with such transfer, the wife provide to the husband evidence of the mortgagee’s discharge of the husband’s obligations under any mortgage encumbering Suburb E. Thereafter, the sum of $886,158 shall be notionally added to the amount held in trust under paragraph 1(e) of these orders.

That upon the settlement of the sale of the business and the completion of the requirements of paragraph (1), the wife’s taxation liability fixed at a maximum of $216,915 be paid from the joint trust funds.

10.

Upon the payment of the wife’s taxation liability referred to in paragraph (9), the balance of the trust account, to which shall be notionally added the sum referred to in paragraph (8) if the wife has so elected, and completed the requirements of paragraph (8), be distributed in accordance with paragraph (12).

11.

If the wife has not completed the requirements of paragraph (8) by the date there set out, or by such extended time as the parties agree, the husband and the wife forthwith place E Street, Suburb E on the market for sale, and upon the sale, the proceeds be applied:

(a) first, to pay all commissions and expenses directly associated with the sale;

(b) secondly, to pay all legal expenses arising from the sale;

(c) thirdly, to discharge the mortgage encumbering the Suburb E property to a maximum sum of $513,842 (with the wife being responsible for any sum greater than that amount); and

(d) fourthly, to place the balance thereafter into the trust account referred to in paragraph (1)(d) hereof.

12.

After the settlement of the sale of the Suburb E property and the business, and the completion of the requirements of paragraph (9), the net balance shall be divided as to:

(a) 65 per cent to the wife, less the costs referred to in paragraph (13); and

(b) 35 per cent to the husband, plus the costs referred to in paragraph (13).

13.

The wife pay the husband’s costs of the … Court proceedings in an amount to be agreed, and failing agreement, as assessed by a registrar of this court.

14.

Save as to costs, all applications are otherwise dismissed.

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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