Merrill and Burt

Case [2018] FamCA 609

FAMILY COURT OF AUSTRALIA

MERRILL & BURT [2018] FamCA 609
PROPERTY SETTLEMENT – Just and equitable – Whether it is just and equitable to make orders altering the property rights and interests of the parties – De facto relationship – Consideration of factors under s 90SF(3) of the Family Law Act 1975 (Cth) – Whether to “add back” certain post separation expenditure into the pool or take into account the expenditure as a s 90SF(3)(r) factor – Consideration of the contributions of the parties.
Family Law Act 1975 (Cth) ss 79, 90SF, 90SF(3)(r), 90SM, 90SM(1), 90SM(3), 90SM(4)
Bevan & Bevan [2013] FamCAFC 116
Biltoft & Biltoft (1995) FLC 93-614
Browne & Green (1999) FLC 92-873
CPL & CPL [1998] FamCA 143
Chorn & Hopkins (2004) FLC 93-204
Clauson & Clauson (1995) FLC 92-595
Clifford & Lodge [2000] FamCA 1666
Cunningham & Cunningham (2005) FLC 92-212
Finlayson v Finlayson & Gillam (2002) FLC 93-121
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-145
Holland & Holland [2017] FamCAFC 166
In Re Sabri; ex parte Brien (1997) FLC 92-732
Kouper & Kouper (No 3) [2009] FamCA 1080
Kowaliw & Kowaliw (1981) FLC 91-092
Mayne & Mayne (2011) FLC 93-479
Pierce v Pierce (1999) FLC 92-844
Rosati v Rosati [1998] FamCA 38
Stanford & Stanford (2012) 247 CLR 108
Thurston & Loomis & Ors [2018] FamCA 26
Vass & Vass [2015] FamCAFC 51
Waters & Jurek (1995) FLC 92-635
Zaruba & Zaruba [2017] FamCAFC 91
APPLICANT: Ms Merrill
RESPONDENT: Mr Burt
FILE NUMBER: LM 9912 of 2013
DATE DELIVERED: 10 August 2018
PLACE DELIVERED: Adelaide
PLACE HEARD: Melbourne
JUDGMENT OF: Berman J
HEARING DATE: 3, 4, 5, 6, 10, 13 April 2017, 31 July 2017 and 16 October 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Bartfeld QC with Ms Fisken
SOLICITOR FOR THE APPLICANT: Farrar Gesini Dunn
COUNSEL FOR THE RESPONDENT: Mr Jones QC with Mr Hall
SOLICITOR FOR THE RESPONDENT: Efron & Associates

Orders

  1. That in full and final settlement of all claims that either party may have against the other for property settlement pursuant to the provisions of the Family Law Act 1975 (Cth) (as amended) (“the Act”):-

    (a)That on or before forty five (45) days from the date of this order the husband do pay to the wife the sum of SIX HUNDRED AND FOURTEEN THOUSAND ONE HUNDRED AND NINETY SEVEN DOLLARS ($614,197) (“the settlement sum”);

    (b)That contemporaneously with the payment of the settlement sum the wife shall transfer her estate and interest in the property situate at L Street, Suburb E described in Certificate of Title Volume … Folio … (“the L Street property”) to the husband;

    (c)That within fourteen (14) days of this order the wife do sign the settlement agreement with the Australian Taxation Office (“ATO”) with respect to the taxation liabilities in the total sum of TWO MILLION FIVE HUNDRED AND THIRTEEN THOUSAND SEVEN HUNDRED AND SEVENTY THREE DOLLARS ($2,513,773) for the following entities:-

    (i)CPL Pty Ltd;

    (ii)OPL Pty Ltd as…

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Merrill and Burt [2018] FamCA 609
Case
[2018] FamCA 609
Decision Date

CaseChat Overview and Summary

This matter came before Berman J concerning property settlement claims between a husband and wife under the *Family Law Act 1975* (Cth). The dispute involved the division of various assets and liabilities, including real estate, company shares, and significant taxation liabilities.

The court was required to determine the terms of a final settlement between the parties. Specifically, the court needed to address the payment of a substantial settlement sum by the husband to the wife, the transfer of a property known as the L Street property, the wife's responsibility for significant taxation liabilities owed to the Australian Taxation Office concerning several entities, and the transfer of shares in CPL Pty Ltd. The court also had to consider the wife's right to retain certain assets, including CPL Pty Ltd, and the husband's right of first refusal and option to purchase specific properties owned by CPL Pty Ltd.

Berman J ordered that the husband pay the wife a settlement sum of $614,197 within 45 days, contemporaneously with which the wife would transfer her interest in the L Street property to the husband. The wife was also ordered to sign a settlement agreement with the Australian Taxation Office for liabilities totalling $2,513,773 across various entities and to indemnify the husband against any taxation liabilities arising from these entities. The husband was directed to withdraw caveats lodged against the wife's or CPL's real property, and certain individuals were ordered to transfer shares in CPL Pty Ltd to the wife. The wife was to retain CPL Pty Ltd, subject to the husband's first right of refusal and option to purchase specific properties at pre-determined values, which were to be discharged within 18 months. The wife was to retain other specified assets, including the balance of proceeds from the sale of 5 M Street, her German motor vehicle, and personal belongings. The husband was to retain the L Street property (subject to the settlement payment), his 4WD vehicle, and personal belongings. The wife was to retain funds from VCAT proceedings, and the husband was restrained from making any claims in relation to them. In the event of default in the settlement sum payment, the L Street property was to be sold, with proceeds applied first to sale costs, then encumbrances, and finally to the outstanding settlement sum and default interest, with any balance paid to the husband's solicitors. The husband was also ordered to transfer his shares in OPL Pty Ltd and units in the 6 M Street Unit Trust to the wife. Finally, a Registrar of the Court was authorised to execute any necessary documents on behalf of either party if they failed to do so, pursuant to s 106A of the Act. All other extant applications were dismissed.

Orders

Orders of the court

1.

That in full and final settlement of all claims that either party may have against the other for property settlement pursuant to the provisions of the Family Law Act 1975 (Cth) (as amended) (“the Act”):-

(a) That on or before forty five (45) days from the date of this order the husband do pay to the wife the sum of SIX HUNDRED AND FOURTEEN THOUSAND ONE HUNDRED AND NINETY SEVEN DOLLARS ($614,197) (“the settlement sum”);

(b) That contemporaneously with the payment of the settlement sum the wife shall transfer her estate and interest in the property situate at L Street, Suburb E described in Certificate of Title Volume … Folio … (“the L Street property”) to the husband;

(c) That within fourteen (14) days of this order the wife do sign the settlement agreement with the Australian Taxation Office (“ATO”) with respect to the taxation liabilities in the total sum of TWO MILLION FIVE HUNDRED AND THIRTEEN THOUSAND SEVEN HUNDRED AND SEVENTY THREE DOLLARS ($2,513,773) for the following entities:-

(i) CPL Pty Ltd;

(ii) OPL Pty Ltd as trustee for the 6 M Street Unit Trust;

(iii) S Pty Ltd as trustee for the S Street Trust;

(iv) U Pty Ltd;

(v) The wife as assessed on distributions from OPL Pty Ltd;

(vi) Shortfall interest charge (SIC) and general interest charge (GIC);

AND that the wife indemnify the husband in respect of any taxation liability that arises in respect of the named entities.

(d) That within thirty (30) days of this order the husband do all acts and things as may be necessary to withdraw caveats currently lodged by him and/or on his behalf against any and all real property owned by the wife or CPL;

(e) That SS and/or TT do all such acts and execute all such documents as are required to transfer within fourteen (14) days of orders being made the shares in CPL Pty Ltd (ACN …) held in their names to the wife;

(f) That if in the discharge of the wife’s liability to the ATO or in respect of her other liabilities she proposes to sell any or all of the real property held by CPL Pty Ltd THEN the wife shall give the husband thirty (30) days’ notice of any intention to sell and the husband will have the first right of refusal and a first option to purchase the nominated property or properties at the following value:-

(i) 2 and 3, M Street, Suburb D $1.9 million;

(ii) 1 M Street, Suburb D $630,000;

(iii) N Street, Suburb D $750,000;

(iv) 5, 6 and 7 at N Street, Suburb D $65,000;

PROVIDED that the husband’s right of refusal and first option to purchase shall be discharged within eighteen (18) months of the date of this order;

(g) That the wife retain to the exclusion of the husband the following:-

(i) CPL Pty Ltd subject to the husband’s first right of refusal and option to purchase;

(ii) The balance of proceeds of sale of 5 M Street;

(iii) Her German motor vehicle;

(iv) Her personal belongings and effects.

(h) That the husband retain to the exclusion of the wife the following:-

(i) Subject to the payment of the settlement sum the L Street property;

(ii) His 4WD motor vehicle;

(iii) His personal belonging and effects;

(i) That the wife retain and the husband be restrained by injunction from making any claim with respect to any funds received by her arising from the VCAT proceedings number …;

(j) That in default of the payment of the settlement sum and should the default continue longer than fourteen (14) days, the parties will cause the property situate at L Street, Suburb E to be placed on the market for sale by public auction or private treaty with the net proceeds of sale to be applied in the following manner:-

(i) To pay all costs, commissions and expenses of sale in respect of the said property;

(ii) To discharge any mortgage or any other encumbrance affecting the said property;

(iii) Such sum as shall then be required to pay such of the settlement sum either in whole or in part as shall remain outstanding together with default interest calculated from the date of default pursuant to the Family Law Rules 2004 (Cth) and Family Law Regulations 1984 (Cth) with the balance remaining to be paid to the Trust Account of Efron and Associates for and on behalf of the husband;

(k) That the husband do all such acts and things and sign all such documents as may be required to transfer to the wife:-

(i) All shares held by him in OPL Pty Ltd; and

(ii) All shares and/or units held by him in the 6 M Street Unit Trust;

(l) That in the event that either of the parties do not execute and/or deliver to each other any instrument or deed required to be executed by him or her pursuant to these orders THEN a Registrar of this Court is authorised pursuant to s 106A of the Act to execute any necessary documents on behalf of either of the parties as may be required to give effect to these orders.

2.

That all extant applications be 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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