Nour & Ackford
[2023] FedCFamC1F 851
•13 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Nour & Ackford [2023] FedCFamC1F 851
File number: SYC 5516 of 2018 Judgment of: HENDERSON J Date of judgment: 13 October 2023 Catchwords: FAMILY LAW – PROPERTY – agreed balance sheet and the assets each party are to retain – hearing conducted on the papers and by submissions – husband seeks a 4 per cent adjustment for an initial superior contribution to the parties’ current assets and in respect of relevant 75(2) factors being a payment to him of $375,000 in an asset pool of 7.4 million – orders made as sought by the husband Legislation: Family Law Act 1975 (Cth) ss. 75(2), 79(1)(a), 79(4)(c), 106A Cases cited: Pierce & Pierce (1999) FLC 92-844 Division: Division 1 First Instance Number of paragraphs: 49 Date of hearing: 3 October 2023 Place: Sydney Counsel for the Applicant: Mr Dura Solicitor for the Applicant: Karras Partners Lawyers Counsel for the Respondent: Mr Harper Solicitor for the Respondent: Landerer and Company Solicitors ORDERS
SYC 5516 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR NOUR
Applicant
AND: MS ACKFORD
Respondent
ORDER MADE BY:
HENDERSON J
DATE OF ORDER:
13 OCTOBER 2023
THE COURT NOTES THAT:
A.The following definitions for the purpose of these Orders:
(a)“Superannuation Fund 1” means Superannuation Fund 1. …in the name of Mr Nour;
(b)“Superannuation Fund 2” means Superannuation Fund 2 member No.… in the name of Mr Nour;
(c)“Nour Family Trust” means the discretionary trust known as the B Pty Ltd Family Trust established by Deed dated March 2019 in respect of which B Pty Ltd is the corporate trustee and Mr Nour is the appointor of the Trust;
(d)“B Pty Ltd” means the company known as B Pty Ltd;
(e)“D Trust” means the discretionary trust known as the D Trust established by Deed dated May 2012 in respect of which D Pty Ltd is the corporate trustee and Ms Ackford, Ms E and Ms F are the joint appointors of the Trust;
(f)“D Pty Ltd” means the company known as D Pty Ltd;
(g)“G Bank Managed Funds” means G Bank Account No. …71, Bonds Account No. …70 and Structured Notes Account No. …70 in the name of Ms Ackford;
(h)“Suburb J Mortgage” means the mortgage over the property at H Street, Suburb J, Victoria in favour of the Commonwealth Bank of Australia registered no. …;
(i)“K Company Shares” means various shares in G Bank Portfolio Account No. …13 in the name of Mr Nour;
(j)“L Pty Ltd” means the company known as L Pty Ltd
(k)“L Trust” means the discretionary trust known as the L Trust established by Deed dated December 1999 and Deed of Variation dated December 2017 in respect of which L Pty Ltd is the corporate trustee and Mr Nour is the appointor of the Trust;
(l)“Ackford Family Trust” means the discretionary trust known as Ackford Family Trust established by Deed dated July 2006 in respect of which Ms Ackford is the trustee and appointor of the Trust;
(m)“M Limited Shares” means various shares in M Limited (individual Brokerage – …) in the name of Mr Nour;
(n)“N1 Pty Ltd” means the company known as N1 Pty Ltd;
(o)“N2 Pty Ltd” means the company known as N2 Pty Ltd;
(p)“O Pty Ltd” means the company known as O Pty Ltd;
(q)“P Financial Services” means P Financial Services Unit Trust Account No. …24 in the name of Ms Ackford;
(r)“Superannuation Fund 3” means P Financial Services Super Fundamentals Account No. …41 in the name of Ms Ackford;
(s)“Q Shares” means … ordinary shares in Q Pty Ltd in the name of Ms Ackford;
(t)“Related Party Loans" means the loans between the L Trust and Ms Ackford or the Ackford Family Trust referred to in paragraph 3(2) of the Advice prepared by Ms R of S Accounting Services dated 16 December 2022, in paragraph 2.9 of the Expert Valuation Reports of Ms T/U Accounting Services dated 1 August 2023 and 26 September 2023 and in Appendix G/2 to the Expert Valuation Report of Ms T/U Accounting Services dated 31 August 2023;
(u)“UPE” & “UPE Converted Loans” mean the loans payable by Ms Ackford and/or the Ackford Family Trust to N1 Pty Ltd referred to in paragraph 3(1) of the Advice prepared by Ms R of S Accounting Services dated 16 December 2022 and in Appendices E/2 (Ackford Family Trust) and H/2 (N1 Pty Ltd) to the Expert Valuation Reports of Ms T/U Accounting Services dated 1 August 2023 and 26 September 2023;
(v)“W Street, Suburb Z” means the property known as W Street, Suburb Z being the whole of the land in Certificate of Title …;
(w)“BB Street, Suburb Z” means the property known as BB Street, Suburb Z being the whole of the land in Certificate of Title …;
(x)“CC Street, Suburb DD” means the property known as CC Street, Suburb DD being the whole of the land in Certificate of Title …;
(y)“H Street, Suburb J” means the property known as H Street, Suburb J being the whole of the land in Certificate of Title Volume … Folio ….
THE COURT ORDERS THAT:
1.The Wife be declared to have the sole rights, title and interest, to the exclusion of the Husband, in the following:
(a)The property situated at and known as H Street, Suburb J;
(b)The property situated at and known as C Street, Suburb DD;
(c)The Wife’s interest in the Ackford Family Trust;
(d)N1 Pty Ltd;
(e)N2 Pty Ltd;
(f)The Wife’s interest in the D Trust;
(g)The Wife’s interest in D Pty Ltd;
(h)The Q Pty Ltd shares;
(i)The P Financial Services;
(j)The Wife’s member entitlement in the Superannuation Fund 3;
(k)All bank accounts standing in her sole name;
(l)All interests in life insurance policies standing in her sole name; and
(m)All personal property now in her possession or control.
2.The Husband be declared to have the sole rights, title and interest, to the exclusion of the Wife, in the following:
(a)The property situated at and known as BB Street, Suburb Z;
(b)The property situated at and known as W Street, Suburb Z;
(c)The balance of the L Trust (after the transfer of N1 Pty Ltd out of the L Trust);
(d)L Pty Ltd;
(e)The Husband’s interest in the Nour Family Trust;
(f)B Pty Ltd;
(g)O Pty Ltd;
(h)The M Limited shares;
(i)The K Company Shares;
(j)The Husband’s member entitlements in the Superannuation Fund 2;
(k)The Husband’s account in the Superannuation Fund 1;
(l)All bank accounts standing in his sole name;
(m)All interests in life insurance policies standing in his sole name; and
(n)All personal property now in his possession or control.
3.Within 30 days of the date of these Orders, the Husband do all things and sign all documents necessary to cause L Pty Ltd to transfer to the Wife or as she may direct all its right, title and interest in the twelve (12) ordinary shares owned or held by L Pty Ltd in N1 Pty Ltd.
4.Pending the transfer of shares referred to in Order 3 above, the parties do all things and sign all documents necessary to cause the UPE and UPE Converted Loans to be retained.
5.Within 30 days of the date of these Orders, the parties do all things and sign all documents necessary to cause the Related Party Loans to be forgiven.
6.Within 30 days of the date of these Orders, the Wife do all things and sign all documents necessary to cause to be paid to the Husband by way of electronic funds transfer or bank cheque the capital sum of $375,000.
7.The Husband indemnify and keep indemnified the Wife from any liability arising from the fact that N1 Pty Ltd was once a member of the L Trust and cause L Pty Ltd and/or the L Trust to release the Wife from any liabilities she may owe to the said company and/or the L Trust.
8.The Husband indemnify and keep indemnified the Wife from any loans between himself and the Wife and any Related Party Loans.
9.Within 30 days of the date of these Orders, the parties do all things and sign all documents necessary to cause all Related Party Loans to be forgiven.
10.Within 30 days of the date of these Orders, the parties do all things and sign all documents necessary to cause:
(a)The Husband to be released from his guarantee; and
(b)The property at W Street Suburb Z to be released as collateral security in respect of the Suburb J Mortgage.
11.The Husband indemnify and keep indemnified the Wife from any liability arising from the property retained by him and referred to in Order 2 above.
12.The Wife indemnify and keep indemnified the Husband from any liability arising from the property retained by her and referred to in Order 1 above.
13.Except as otherwise provided for in these Orders to the contrary, the Husband is declared the sole owner of, and the Wife has no interest in all other property and financial resources, of whatsoever nature and kind, in the name or possession of the Husband as at the date of the making of these Orders and in the future.
14.Except as otherwise provided for in these Orders to the contrary, the Wife is declared the sole owner of, and the Husband has no interest in all other property and financial resources, of whatsoever nature and kind, in the name or possession of the Wife as at the date of the making of these Orders and in the future.
15.In the event any party to these proceedings refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these Orders then the Registrar of this Court shall be appointed pursuant to section 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and to do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of Affidavit.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HENDERSON J:
The matter of Nour & Ackford was a determination of the parties’ entitlement to their property and whether there should be an adjustment in favour of the husband by way of superior initial contributions and future needs under section 75(2) of the Family Law Act 1975 (Cth) (“the Act”).
Mr Dura of counsel acted for the husband, Mr Nour born in 1965 (“the husband”), and Mr Harper of counsel for the wife, Ms Ackford born in 1969 (“the wife”).
The parties, to their credit, resolved multiple issues in dispute before the Court and agreed on the assets comprised in the pool including superannuation. Accordingly, the matter proceeded by way of submissions only and the parties were spared the indignity and destructive consequences of being cross-examined.
The evidence read was as follows.
(1)For the husband:
(a)Initiating Application filed 29 August 2018;
(b)Case Outline filed 29 September 2023, including the attached Minute of Order;
(c)Trial Affidavit filed 26 July 2023;
(d)Affidavit in Reply filed 28 August 2023;
(e)Affidavit of two witnesses – Ms EE and Mr FF;
(f)Updating Affidavit of Ms T filed 27 September 2023, the Expert valuating the interest of the husband and wife in the wife’s business D Pty Ltd inter alia; and
(g)Financial Statement filed 26 July 2023.
(2)For the wife
(a)Case Outline filed 29 September 2023, including the attached Minute of Order;
(b)Further Amended Response to an Initiating Application filed 11 August 2023;
(c)Trial Affidavit filed 11 August 2023;
(d)Four Affidavits of Ms T attaching her four Reports, sworn 24 November 2021, 1 August 2022, 31 August 2023, and 26 September 2023; and
(e)Financial Statement filed 11 August 2023.
(3)The agreed Joint Balance sheet as follows.
Ownership Description Applicants (H) value Respondents (W) value ASSETS 1 H W Street, Suburb Z 2,650,000 2,650,000 2 H BB Street, Suburb Z 5,000,000 5,000,000 3 W CC Street, Suburb DD 3,300,000 3,300,000 4 W H Street, Suburb J 1,150,000 1,150,000 5 6 H L Trust 0 0 7 H Nour Family Trust 500 500 8 W Ackford Family Trust 1,363,000 1,363,000 9 H Loan a/c – L Trust 0 0 10 H Loan a/c – Nour Family Trust 3,870 3,870 11 H Loan a/c – O Pty Ltd 50,078 50,078 12 W Loan a/c – N2 Pty Ltd 538 538 13 W N1 Pty Ltd 1,390,000 1,390,000 14 H O Pty Ltd 0 0 15 16 17 H CBA a/c …57 18 H CBA a/c …75 19 H CBA a/c …67 20 H CBA a/c …42 21 H CBA a/c …16 22 H CBA a/c …89 240,684 240,684 23 H V Company a/c …91 24 25 W CBA a/c …24 0 0 26 W CBA a/c …83 88,344 88,344 27 W CBA a/c …31 28 W CBA a/c …85 29 W ING a/c …00 30 W ING a/c …58 31 W C Bank a/c …06 32 W G Bank a/c …71 41,728 41,728 33 W G Bank a/c …65 34 W G Bank 35 W G Bank Coupon Auto Ownership Description Applicants (H) value Respondents (W) value ASSETS 36 37 38 J Sundry joint accounts 39 40 H M Limited 73,517 73,517 41 H C Shares Portfolio a/c …13 42 W Q Pty Ltd shares 43 W Contents 44 H Contents 45 Total $ 15,352,259 $ 15,352,259
ADDBACKS 46 H Paid legal costs - $421,069 0 47 W Paid legal costs - $625,000 0 48 49 Total $ 0 $ 0
LIABILITIES 50 H CBA mortgage a/c …41 1,400,000 1,400,000 51 H CBA mortgage a/c …56 3,290,000 3,290,000 52 W CBA mortgage – Suburb DD 2,556,078 2,556,078 53 J NAB mortgage – Suburb J 618,223 618,223 54 55 56 H CBA Mastercard a/c …82 57 W CBA Mastercard a/c # 58 59 H L Trust 43,000 43,000 60 61 W Loan a/c – N1 Pty Ltd 751,090 751,090 62 W Loan a/c – Ackford Family Trust 170,058 170,058 63 64 H Ms GG 120,000 120,000 65 W Mr HH 160,000 160,000 66 W Tax FY2023 67 W Tax FY2023 (N2 Pty Ltd) 68 W PAYG – June 2023 69 H USA tax liability 70 Total $ 9,108,449 $ 9,108,449
SUPERANNUATION Member Name of Fund Type of Interest Applicants value Respondents value 71 H Superannuation Fund 2 Accum / growth 470,773 470,773 72 H Superannuation Fund 1 Accum / growth 398 398 73 W Superannuation Fund 3 Accum / growth 709,358 709,358 74 Total $ 1,180,529 $ 1,180,529
FINANCIAL RESOURCES Ownership Description Applicants value Respondents value 75 H CBA a/c …18 for X - $7,158 0 76 H CBA a/c …36 for Y - $7,533 0 77 W Personal goodwill - $618,908 0 78 Total $ 0 $ 0
NETT TOTAL ASSETS (including Superannuation) $ 7,424,339 $ 7,424,339 SHORT RELEVANT CHRONOLOGY
In 2006, the parties commence cohabitation.
In 2007, the parties marry in Melbourne, Victoria.
In 2010, the parties’ twins, Y and X, are born.
In October 2017, the parties separate on a final basis.
The wife’s work history and the Company structure
The wife co-founds the company D Pty Ltd in equal shares with two other Directors in 2005.
Each Director held one-third interest in the company via their respective Family Trusts
In 2006 the wife establishes the Ackford Family Trust, of which she is the appointor. This is some 8 months prior to cohabitation.
The parties then incorporate a company known as N1 Pty Ltd.
The wife was full-time parent to the parties’ twins from their birth until commencing part-time work, two days a week, in 2011.
The business conducted by D Pty Ltd was transferred into the newly established discretionary trust, D Trust.
In 2012, the wife increases to working three days per week, then increases to four days per week in 2015, and resumes full-time work in 2017.
The husband’s work history
At the time of cohabitation, the husband was working as a manager at JJ Company.
He then moved to KK Company where he held at least three significant positions until 2017 when he left and received an Eligible Termination Payment.
For the following two years he was employed by LL Company as a manager.
In 2019, the husband joined MM Company until his unexplained leaving in early 2023.
He is currently working under contract two days per week and asserts he has been unable to find secure full-time employment.
From the husband’s case outline the orders he sought were that he receive some $468,668, otherwise the parties retain the current assets in their name, being real estate, businesses, moneys in bank accounts, and superannuation. Effectively, he sought an order that he receive 54 per cent of the assets. His initiating application was that he receive some 60 per cent of the assets of the parties. At the hearing the monetary figure to be paid to him was reduced to $375,000 representing 54 per cent of the agreed assets.
From the wife’s case outline the orders she sought was a 55 per cent division of the parties’ assets to her which included a payment of $550,000 to her by the husband. At the hearing the wife sought an equal division of assets which equalled a payment of $75,000 by her to the husband.
The husband agreed with the assets each were to retain as set out in the wife’s minute of order together with a monetary adjustment in his favour.
The wife’s further amended response filed 11 August 2023 was that she receive 55 per cent of the net pool of assets. This position only changed at the hearing. Her initial response filed shortly after the husband filed his initiating application sought 60 per cent of the assets in her favour. As the facts of this matter were revealed, the wife’s responses filed as late as August 2023 seeking she receive 55 per cent of the assets was, in many respects, misconceived.
Ultimately, the difference between the parties in an asset pool approaching 7.4 million was a payment to the husband of some $300,000, given he was seeking $375,000 and the wife supporting a payment to him of $75,000. This is in circumstances where the parties have spent in the vicinity of $1,000,000 in legal fees with the wife’s share being $625,000 yet disputed paying the husband $375,000 to enable a resolution of the matter.
The husband’s application he receive 54 per cent of the assets results in the wife receiving 46 per cent of the assets. This is a difference of eight per cent. Eight per cent of a property pool approaching 7.4 million is some $600,000 with the actual cash adjustment to him being $375,000. It is surprising that commercial reality did not hold sway in this matter given the success the parties enjoyed in their working lives. It is extraordinary that parties will expend such substantial sums in legal fees, when the difference between them is a modest sum and the assets they will receive are substantial.
The wife sought an equal division of the assets, despite the husband’s initial superior financial contribution to the parties’ current assets as agreed and despite her superior income earning capacity to that of the husband pre and post separation, and into the future and where she will retain her income earning asset in D Pty Ltd.
When the parties commenced cohabitation, they were each seized of substantial assets. The husband had some $834,174 and the wife some $549,938.
Thus, there are two relevant considerations in this determination. The husband’s initial superior financial contribution in a 16 year marriage and the wife’s superior financial resources including superannuation, income and earning capacity into the future to that of the husband. The wife’s income in 2022 was $556,793 and $790,000 in 2023.
In 2022 the husband earned $291,079 being for six months at MM Company and if he continues working on contract 2 days a week will earn some $150,000 per annum.
The parties income and financial resources
The wife has some $709,000 in superannuation and the husband $471,000. From her own affidavit her income in the financial year ending 30 June 2023 is $790,000. Ms T, in her latest report, estimated the wife’s income to be closer to $750,000, per annum.
The husband’s income is likely to be around will be $150,000 in the next financial year and he is without secure employment. He works under contract two days a week with NN Company as a freelance consultant where he is paid $1,500 daily.
The gravamen of the wife’s argument, that there should be an equal division of the property in these circumstances, was that the husband did not explain why he gave up his position with MM Company in early 2023.
The husband has been a high-income earner during the marriage as has the wife, however, his income has not been consistently at the level of the wife’s. They each earned a similar income end year 2022, for the husband $535,000 and the wife $556,000, but prior to this and post this date did not. I accept the husband failed to tell the Court why he left his employment. I accept his evidence that he now is struggling to obtain full-time employment at 57 years of age. I accept his evidence that he has approached no less than eight recruitment firms to make himself available for interviews in any career opportunities. I accept that despite his experience and capacity he has been unsuccessful in obtaining the work he wishes to do and can do.
I accept that the husband has been unable to obtain secure full-time employment despite seeking to do so.
After these proceedings the wife will continue with her employment and own her share of the business outright as against the husband. This was a business built up substantially during the marriage. The wife will continue in her employment and receive her high income to which she is entitled. Although the husband is being paid out his share of the value of the business the wife is retaining it and he will no longer have any interest in it financially or otherwise into the future. The wife’s business is a valuable resource, and it will be hers absolutely.
The husband did not reach the income level the wife did during the marriage save for one year; does not have the superannuation the wife has; nor will he be able to continue to increase that asset at anywhere near the rate the wife will from working; does not have access to a secure income, or a business to generate a secure and high income; nor enjoy the emollients and benefits when one is self-employed.
The husband says he made a superior initial financial contribution to the wife, and he has relevant 75(2) factors. These factors should be met by a modest adjustment of some four per cent. That in so submitting says he has taken into account the reality that, with an asset pool approaching 7.5 million, each party will receive sufficient assets to provide for their accommodation and some future needs.
There is no other finding than that during the marriage, the parties made an equal contribution, both financially and as parent and homemaker. It is uncontroverted that the husband had a superior initial financial contribution to the wife, some two to three hundred thousand dollars in assets greater than hers and consistent with decisions such as Pierce & Pierce[1], I find the use the parties made of their assets was wise as to property acquisition and the wife’s business as well as other prudent investments. The wife set up her now extremely successful business with two other partners, some eight months or so before the marriage, and it has flourished during the marriage. The husband has made a contribution towards that flourishing, a matter the wife does not dispute. Although I accept in a marriage over 16 years, that the husband’s initial contribution would now no longer be as stark as it was then given the disparity in their contributions initially I am satisfied, pursuant to section 79(1)(a) of the Act that there should be a property adjustment to the husband and asses that adjustment at one per cent.
[1] (1999) FLC 92-844 (Ellis, Baker and O’Ryan JJ).
The only issue before me now is whether there should be a further adjustment in the husband’s favour of three percent for his relevant 75(2) factors being a total of four per cent, given the disparity between the parties’ income and earning capacity and access to secure employment, and the benefits that this provides.
SECTION 75(2) OF THE ACT.
It is correct, as the wife asserts, that the husband does not give any reason why he left MM Company, and only says, at paragraph 55 of his trial affidavit:
I have worked almost continuously during the course of the marriage and it was only after separation that I ceased work, in [early] 2023 when I ceased working at [MM Company].
This is not a spouse maintenance claim where the reasons for leaving secure employment would be highly relevant. This is a property division matter where the Act compels me to assess the future needs of parties under section 75(2) of the Act as part of the obligation on me under section 79(4)(c) of the Act.
I accept the submission of the wife I am not tasked to make an order equalising parties financial positions and there must be a basis for making the adjustment sought.
I am satisfied, pursuant to section 75(2) of the Act that there should be a further adjustment to the husband and that the basis for this is the disparity in their current income and earning capacity now, in the past and likely into the future; the disparity in their financial resources being superannuation and the wife’s business; the standard of living that is reasonable in all the circumstances and enjoyed by both during the marriage; the age of the husband; and the duration of the marriage all of which favour the wife over the husband .
The facts are that the parties are each in good health. They will receive a 50 per cent division of their assets and sufficient funds to house themselves. The wife has a far greater capacity to support herself into the future than does the husband given she retains, unencumbered, her interest in her company, D Pty Ltd.
That places the wife in a far superior financial position to the husband going forward after the results of the division of their assets. The husband is unlikely to acquire the superannuation or the income the wife will continue to enjoy even if he obtains full time employment.
I do not see the fact that, at age 57, and resigning from a high-powered job instantly disentitles him to an adjustment in his favour in a property division matter on these facts. This is not a spouse maintenance claim; it is a property claim into the future. Had it been a spouse maintenance claim, different considerations may have arisen. It was an untenable argument the wife sought to maintain that the husband should not have an adjustment in his favour such as he sought of a modest sum of four per cent, representing $375,000.
The adjustment sought by the husband is an exercise of discretion by a Judge having regard to the wife’s far superior capacity to support herself into the future than he currently has. In all the circumstances and on the found facts, I find the husband has made out his case that there be an adjustment of three percent in his favour for 75(2) factors being a four per cent overall adjustment and I will so order. The sum of $375,000 is to be paid to the husband by the wife within 60 days.
As they were agreed, I will make the orders as set out in the wife’s minute of order as to who is retaining what asset or resource.
I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Henderson. Associate:
Dated: 13 October 2023
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