Parmenter & Louwen (No 3)
[2023] FedCFamC1F 948
•8 November 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Parmenter & Louwen (No 3) [2023] FedCFamC1F 948
File number(s): CSC 452 of 2021 Judgment of: JARRETT J Date of judgment: 8 November 2023 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Application pursuant to r 10.13(1)(h) – Where the applicant contends error in the orders and reasons for judgment by way of accidental slip or omission – Where the reasons for judgment explain the matters raised by the applicant – Where there was no evidence of other matters raised by the applicant – Application dismissed Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 10.13(1)(h) Cases cited: Parmenter & Louwen [2023] FedCFamC1F 739
Pavlic & Pavlic [2023] FedCFamC1A 54
Division: Division 1 First Instance Number of paragraphs: 15 Date of hearing: 30 October 2023 Place: Brisbane Counsel for the Applicant: Mr Raeburn Solicitors for the Applicant: Preston Law Solicitors for the Respondent: WGC Lawyers ORDERS
CSC 452 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS PARMENTER
Applicant
AND: MR LOUWEN
Respondent
ORDER MADE BY:
JARRETT J
DATE OF ORDER:
8 NOVEMBER 2023
THE COURT ORDERS THAT:
1.The application for final orders filed on 26 September, 2023 and the application in a proceeding filed on 26 September, 2023 be dismissed.
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
JARRETT J:
Before me are three applications – two filed by the applicant Ms Parmenter and the other filed by the respondent, Mr Louwen. By the conclusion of the argument before me, the applicant had asked that one of her applications be dismissed with her consent – the application in a proceeding filed on 28 September, 2023 for a stay of the operation of a judgment I delivered on 31 August, 2023. The respondent too, sought the dismissal with his consent of his application in a proceeding filed on 27 October, 2023.
That leaves to be determined the applicant’s initiating application and application in a proceeding (which seeks identical relief to that sought in the initiating application) filed on 26 September, 2023 in which she seeks the following orders (as per the original):
1.That the Federal Circuit and Family Court of Australia Orders made on 31 August 2023 be varied pursuant to Rule 10.13(1)(h) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, or such other Rule as deemed appropriate by this Court, as follows:
(a)the amount payable by the Applicant to the Respondent at paragraph 13 of the Orders be amended to $949,754.20; and
(b)the formula at paragraph 15(c) of the Orders be amended to r=[(a+$1,530,776)x(45/100)]- $425,345.
2.That the Federal Circuit and Family Court of Australia Orders Reasons for Judgement dated 31 August 2023 be varied pursuant to Rule 10.14(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, or such other Rule as deemed appropriate by this Court, as follows:
(c)the value of the entity [C Pty Ltd] in the table at paragraph 76 of the Reasons for Judgement be amended to have a negative value, or total indebtedness of $1,804,705.00;
(d)the value of the entity [Louwen] Family Trust (including [E Pty Ltd]) in the table at paragraph 76 of the Reasons for Judgement be amended to $2,737,636.00;
(e)the value of the entity [Louwen Parmenter Superannuation Fund] in the table at paragraph 76 of the Reasons for Judgement be amended to $284,995.00;
(f)the subtotal in the table at paragraph 76 of the Reasons for Judgement be amended to $2,770,781.00;
(g)the total in the table at paragraph 76 of the Reasons for Judgement be amended to $3,055,776.00;
(h)the value of the parties net property at paragraph 145 of the Reasons for Judgement be amended to $3,055,776.00;
(i)he parties respective entitlement at paragraph 145 of the Reasons for Judgement be amended to $1,527,888.00;
(j)he value of 5 per cent of the net property pool at paragraph 154 of the Reasons for Judgement be amended to $152,788.80;
(k)at paragraph 155 of the Reasons for Judgement the net property to be retained by the Applicant be amended to $1,680,676.80;
(l)at paragraph 155 of the Reasons for Judgement the net property to be retained by the Respondent be amended to $1,375,099.20;
(m)the value of the entity [Louwen Family Trust] at paragraph 157 of the Reasons for Judgement be amended to $2,737,636.00;
(n)the value of the entity [C Pty Ltd] at paragraph 157 of the Reasons for Judgement be amended to a negative value or total indebtedness of $1,804,705.00;
(o)the value of assets retained by the Applicant at paragraph 159 of the Reasons for Judgement be amended to $2,630,431.00;
(p)the value of the assets retained by the husband at paragraph 158 of the Reasons for Judgement be amended to $425,345;
(q)the amount payable by the Applicant to the Respondent at paragraph 159 of the Reasons for Judgement be amended to $949,754.20; and
(r)paragraph 160 of the Reasons for Judgement be amended to reflect that the value of the [Suburb H] Property exceeds the amount payable by the Applicant to the Respondent.
The application is one for the amendment of the final orders I pronounced on 31 August, 2023 pursuant to the “slip rule”.
The argument in support of the application refers to my reasons for judgment delivered on 31 August, 2023. The first point made is that at [15] of the reasons for judgment, I accepted that the total indebtedness of an entity operated by the parties, C Pty Ltd, was $1,804,705 as per the valuation of an expert witness, Mr L. The argument points out, however, that in the table at [76] of my reasons for judgment, the value of C Pty Ltd is listed as “$NIL”.
The explanation for that apparent inconsistency is to be found in the following paragraphs of my primary reasons:
82There is controversy about how to treat the value of [C Pty Ltd]. The applicant included this business on her balance sheet but the respondent did not factor it into the calculations in his evidence. The company itself is not an asset or liability of the parties save to the extent that its shares have value. Insofar as the respondent has, as sole shareholder, a right to distribution of assets upon winding up of the company, the value of that right can firmly be said to be nil where the company’s nett value is negative.
83Often, shareholders and directors of private companies such as [C Pty Ltd] are required to give personal guarantees to secure borrowings from bankers and the like. They often also give such guarantees to suppliers to the company’s business. On the evidence before me, however, the parties’ liability for the company’s debts is not apparent. I can make no finding that either has any potential liability contingent upon the non-payment of debts by [C Pty Ltd].
Tax liability owed by [C Pty Ltd]
84It became apparent in March, 2023 that [C Pty Ltd] owed significant tax liabilities to the Australian Taxation Office for both GST and PAYG withholding tax. These were in the order of $530,873.95. On the adjournment application in March, 2023 the respondent tendered two director’s penalty notices issued to him by the Australian Taxation Office (although they were not tendered in evidence on the trial). The applicant’s evidence is that she has caused the company to enter into an arrangement with the ATO to repay the unpaid amounts. Although there is no evidence about it, I assume that in the event that the amounts are repaid, the director’s penalties will be withdrawn or not pursued.
85The Full Court of the Federal Circuit and Family Court of Australia (Division 1) recently considered the inclusion of corporate tax liabilities in a balance sheet in Pavlic & Pavlic [2023] FedCFamC1A 54 at [17]-[19]. In that case, the majority warned against the inclusion of corporate tax debt in a table of the parties’ assets and liabilities where neither party bore any personal liability for it. Even in cases where there could be statutory penalisation of the director of the company for failure to pay tax, the majority differentiated that from a derivative liability for the corporate tax debt.
86Here, the corporate tax debt is included in the valuation of [C Pty Ltd] and is part of the reason that company has nil value. It is therefore not necessary to take it into further account. Because there is an arrangement with the ATO to pay the unpaid tax, I have not included the liability under the director’s penalty notices as a liability of the respondent. I have included in the orders I have determined to make, provision to take account of these penalties in the event that the company does not pay the outstanding tax and the notices are enforced. The respondent should not bear the penalties if the tax is not paid, the company, or those that control its day-to-day activities should.
I intended that C Pty Ltd should not be ascribed any value other than nil in the table at [76] of my reasons. C Pty Ltd’s debts far exceed its assets and according to the expert Mr L, it had no positive value and thus, its shares have no value. There was no evidence before me to the effect that the parties, or at least the applicant, had any liability, contingent or otherwise, for the company’s debt. Applying Pavlic & Pavlic [2023] FedCFamC1A 54 the entity was ascribed no value in the table and its debts were ignored. No occasion for the application of the slip rule is established in this respect.
Next, the applicant argues that at [17] of the reasons for judgment, I accept that the value of E Pty Ltd (another company associated with the parties) is $20. This is correct.
She then argues that in [20] of the reason for judgment I accept that the Louwen Family Trust has a value of $2,933,830 as per the valuation of Mr L. However, the value of these entities in the table at [76] of the reasons for judgment is $2,742,310.
Having reviewed my reasons, I am satisfied that the recitation of the evidence in [20] is correct. It refers to a value ascribed by Mr L to the entity as at 30 June, 2022 and 30 July, 2022. My reasons at [20] faithfully reproduces Mr L’s evidence at [3.44] of his report dated 31 August, 2022, which valued the interests as at 30 July, 2022.
Mr L compiled two reports for the parties to use in the proceedings. The second is dated 3 March, 2023 and valued the Louwen Family Trust as at 31 January, 2023. In the second report, Mr L revised his valuation and his conclusion appears at [3.46] which gives the nett value of the trust most proximate to the trial as the amount I have ascribed in [76] of my reasons – $2,409,184. It was my intention to use the most recent valuation figure in the table in [76] of my reasons. The use of that figure in [76] does not conflict with my findings in [20] of my reasons because they are valuations as at different dates. No occasion for the application of the slip rule is established in this respect.
The applicant further argues that at the trial “it was accepted by the parties, including the Respondent Husband … that the value of the self-managed superannuation fund per the applicant’s balance sheet was incorrect”. The applicant further argues that it was understood by the applicant that the respondent accepted “that the value of the self-managed superannuation fund is [a commodity] held in a [BB Finance] account in the United States and that the value at trial […] equates to USD$192,560. The exchange rate at the time of the trial was $1.48, making the value of the self-managed superannuation fund in AUD $284,988 plus the $7 in the bank account totalling $284,995”.
However, at the trial, the following cross-examination occurred in relation to the value of the parties’ superannuation fund:
MR RAEBURN: [Mr Louwen], just so that – we’re trying to ascribe a value to the fund, do you agree that the only asset of the fund is [the commodity]?---That I paid - - -
And I think a $7 bank account?---I paid [an amount] for, yes.
HIS HONOUR: You weren’t asked what you were paid for - - - ?---Yes.
- - - you were asked whether that’s the only - - - ?---Yes.
- - - asset of the fund.
MR RAEBURN: As at today, [Mr Louwen], would you agree that [the commodity changes] – the spot value of [the commodity] goes up, goes down?---I would. Yes. I would agree with that.
In preparation for the trial, you would have had a look at the [commodity], did you? The spot value of [the commodity]?---I’m not going to agree with the price of [the commodity]. It’s only worth what you sell it for.
Okay?---If tomorrow it’s worth $12, it’s worth $12.
This court has to make a determination as to its value as at the date of this trial, [Mr Louwen]?---Yes. It’s $[…] an ounce right now.
Well, I suggest to you that as at today the spot value of [the commodity] is $[…] an ounce; would you agree with that?---I saw it – I saw it last night it was [lower] so it might have fluctuated 20 cents. That’s possible, yes.
Okay. If that’s possible, would you agree with this calculation, sir, at $[…] an ounce times the […] ounces, that’s at a US price – a USD spot price – that’s USD$192,560.
HIS HONOUR: Do you want a calculator?
MR RAEBURN: Would you like a calculator, [Mr Louwen]?---No, I want - - -
HIS HONOUR: It’s just a matter of arithmetic. Why are you - - -?---to see the price of [the commodity].
- - - asking him to agree with arithmetic?
MR RAEBURN: Well, I’m just - - -
THE WITNESS: Yes.
MR RAEBURN: Your Honour - - -
THE WITNESS: I don’t know what the - - -
HIS HONOUR: I can work arithmetic out for myself.
MR RAEBURN: Thank you.
THE WITNESS: Yes. What’s more relevant is the price of [the commodity].
MR RAEBURN: [Mr Louwen], what I’m going to suggest to you is that the spot price for [the commodity], […], with the US currency exchange to Australia being $1.48 as at today; would you agree with that?---Not at all. $1.48?
As in $1.48 – a dollar American gets $1.48 Australian?---The Aussie dollar is worth 67 cents right now.
Okay. What I’m going to suggest to you, [Mr Louwen], is that the spot price for [the commodity] as at today, the date that the court can make the determination as to the value of the - - - ?---I don’t agree with you because it was – I looked at it, it was $[...].
Okay?---That’s what I looked at, so, that’s what I’m going to stick with.
I’m giving you a chance, [Mr Louwen]?---Yes.
If you’ve got the ability to do calculations, I’m – your Honour, I’m content for the witness to do the calculations and say what he - - -
HIS HONOUR: I don’t want him to do any calculations.
MR RAEBURN: No. Thank you, your Honour.
THE WITNESS: But I’m not going to agree the price of [the commodity].
MR RAEBURN: Well, okay. I’m – you agree that there’s […] ounces?---Yes.
HIS HONOUR: Is there any evidence before me about the price of [the commodity]?
MR RAEBURN: No, there’s not, your Honour. But, your Honour, there was a - - -
HIS HONOUR: It’s a commodity the value of which fluctuates.
MR RAEBURN: Yes, your Honour.
THE WITNESS: Thank you, your Honour.
MR RAEBURN: There was a call for the [BB Finance] account which gives the daily balance but it hasn’t been answered.
HIS HONOUR: So what does that mean?
MR RAEBURN: Well
HIS HONOUR: All it means is you’re bereft of evidence.
MR RAEBURN: Yes, your Honour. Anyway, your Honour, one last question on this point is, [Mr Louwen], I’m suggesting to you is that the [commodity] is worth 284,000 and change - - -?---Absolutely not.
- - - not the 225? It’s only worth what you sell it for.
The assumption underlying the applicant’s argument is not borne out in the transcript. Whilst the respondent accepted that an asset of the parties’ superannuation fund was the commodity, he did not accept either the spot price of the commodity put to him or the exchange rate between United States dollars and Australian dollars. No occasion for the application of the slip rule is established in this respect.
Finally, the applicant argues that certain assets held by E Pty Ltd and the Louwen Family Trust were transferred to the parties and so should be accounted for separately. However, even if that were so and the evidence supported findings in that respect, there is no evidence from which a value could be ascribed to those chattels allowing them to be accounted for separately.
CONCLUSION
The applicant does not establish that it is appropriate to amend the orders made on 31 August, 2023 pursuant to Rule 10.13(1)(h) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. The initiating application and the application in a proceeding both filed on 26 September, 2023 are dismissed.
I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jarrett. Associate:
Dated: 8 November 2023
0