Pascall and Pascall - [2016] FamCA 985

FAMILY COURT OF AUSTRALIA

PASCALL & PASCALL

[2016] FamCA 985

FAMILY LAW – PROPERTY SETTLEMENT – long marriage – where the parties were married for twenty-six years – where each party was a health professional – where the wife was made bankrupt by sequestration order after judgment was reserved – where the property pool is modest.

Bankruptcy Act 1966 (Cth)
Family Law Act 1975 (Cth)

Baglio & Baglio [2013] FamCA 105
Bevan & Bevan (2013) FLC 93-545

Brandt and Brandt (1997) FLC 92-758

C and C [1998] FamCA 143

Clauson and Clauson (1995) FLC 92-595

Dougherty v Dougherty (1987) 163 CLR 278

Ferraro & Ferraro (1993) FLC 92-335

Gollings & Scott (2007) FLC 93-319

Harper & Harper [2013] FamCA 528

Hickey & Hickey (2003) FLC 93-143

In the Marriage of Weir (1992) 16 Fam LR 154 at 58

Jones & Jones (1990) FLC 92-143

Kowaliw and Kowaliw (1981) FLC 91-092

Lee Steere & Lee Steere (1985) FLC 91-626

Lovine & Connor and Anor (2012) FLC 93-515

Mallet and Mallet (1984) 156 CLR 605
Norbis v Norbis (1986) 161 CLR 513 at 522

Pastrikos & Pastrikos (1980) FLC 90-897

Stanford v Stanford (2012) 247 CLR 108

Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234] per Coleman J

Townsend and Townsend (1995) FLC 92-569

Waters & Jurek (1995) FLC 92-635

Watson & Ling (2013) FLC 93-527

APPLICANT:

Ms Pascall

RESPONDENT:

Mr Pascall

FILE NUMBER:

BRC

6696

2010

DATE DELIVERED:

18 November 2016

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Hogan J

HEARING DATES:

2 September 2013,

30 & 31 October 2013,
15 November 2013,
16 December 2013,
21 May 2015;
3 June 2015;
12 June 2015;
18 December 2015;
11 March 2016;
21 March 2016; and
24 March 2016

REPRESENTATION

APPLICANT:

In person on 2 September 2013,

30 & 31 October 2013,
15 November 2013,
16 December 2013,
18 December 2015 and

COUNSEL FOR THE APPLICANT:

Ms Carmody on 21 May 2015 and 3 June 2015

SOLICITOR FOR THE APPLICANT:

Craig Ray & Associates on 21 May 2015, 3 & 12 June 2015 and 11 March 2016, 21 March 2016 and 24 March 2016

COUNSEL FOR THE RESPONDENT:

Mr Looney QC on 2 September 2013, 30 & 31 October 2013,

15 November 2013,

16 December 2013

SOLICITOR FOR THE RESPONDENT:

Hopgood Ganim on 2 September 2013,

30 & 31 October 2013,
15 November 2013,

16 December 2013

RESPONDENT:

No appearance on 21 May 2015;
In person on 3 & 12 June 2015, 18 December 2015 and 11 March 2016, 21 March 2016 and 24 March 2016

Orders

IT IS ORDERED BY WAY OF FINAL PROPERTY SETTLEMENT ORDER THAT

Save as is provided for in this Order, all previous orders are discharged.
Except as otherwise provided for in this Order, the wife receive and/or retain the following:
(a)       her professional practice and all associated entities; and
(b)any furniture, furnishings, chattels and personal effects in her possession; and
(c)       jewellery in her possession; and
(d)       any motor vehicle currently in her possession;…

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 Pascall and Pascall

Details

AGLC: Pascall and Pascall [2016] FamCA 985
Case: [2016] FamCA 985
Decision Date: 18 November 2016

CaseChat Overview and Summary

The case of *Pascall and Pascall* involved a property settlement dispute between a husband and wife, heard by Hogan J in the Family Court of Australia. The core of the disagreement concerned the division of assets and liabilities, particularly the husband's decision to divest himself of a significant portion of his interest in a company, F Pty Ltd, during the course of the proceedings.

The primary legal issue before the court was whether the husband's disposition of 55 per cent of his interest in F Pty Ltd was undertaken with the intention of reducing the pool of assets available for distribution between the parties. The wife contended that this action was designed to diminish the property available for settlement.

Hogan J accepted the husband's evidence regarding the disposition of his interest in F Pty Ltd. The court found that a key reason for the sale was to enhance the likelihood of key personnel, Mr WT and Ms SS, remaining with the business. Furthermore, the funds generated from the sale were used to meet existing matrimonial liabilities, specifically the shortfall from the sale of the former matrimonial home. The sale price was also found to be consistent with the company accountant's indicative valuation, and importantly, the husband had disclosed the proposed sale to the wife prior to its occurrence, with the wife acknowledging receipt of a discussion paper detailing the proposed sale of 55 per cent for $460,000. While the wife expressed reservations about the sale of a portion to Ms SS, the court determined that differences in opinion regarding the desirability of involving the practice manager did not render the husband's decision unreasonable, inappropriate, or indicative of an intention to diminish the divisible property.

The court made final property settlement orders, discharging previous orders and detailing the specific assets and liabilities to be retained by each party. These orders included provisions for the husband to pay capital gains tax liabilities arising from the sale of certain properties and to wind up specific companies at his expense. The orders also included mutual indemnities for liabilities arising from involvement with entities retained by the other party. Crucially, the court appointed a Registrar to execute documents and perform necessary acts in the event of a party's refusal or neglect to comply with the orders, pursuant to s 106A of the *Family Law Act 1975* (Cth). All outstanding applications were dismissed.

Orders

Orders of the court

IT IS ORDERED BY WAY OF FINAL PROPERTY SETTLEMENT ORDER THAT

Save as is provided for in this Order, all previous orders are discharged.

Except as otherwise provided for in this Order, the wife receive and/or retain the following:

(a) her professional practice and all associated entities; and

(b) any furniture, furnishings, chattels and personal effects in her possession; and

(d) any motor vehicle currently in her possession; and

(e) all funds in all bank accounts held in her name; and

(f) her entitlement to super.

Except as otherwise provided for in this Order, the husband receive and/or retain the following:

(a) all furniture, furnishings, chattels and personal effects in his possession; and

(b) any motor vehicle or motorbike currently in his possession; and

(d) any balance in the parties’ joint St George Savings Account number …116; and

(e) AXA life insurance policies numbered …686, …103 and …679 and Tower Australia Limited policy numbered …; and

(f) the loan owing to him by F Pty Ltd; and

(g) his interest in E Pty Ltd; and

(h) his interest in F Pty Ltd as trustee for the F Trust trading as F Practice; and

(i) the P Family Trust; and

(j) his interest in V Holdings as trustee for the V Trust; and

(k) the loan owing to him by V Holdings as trustee for the V Trust; and

(l) his member entitlement with the P Super Fund.

Unless otherwise agreed between the parties in writing, the husband shall, within six months of the date of this order, do all things necessary to cause any capital gains tax liability incurred by either party as a consequence of the sale of real property at G Street, Suburb X and R Street, Suburb Y to be paid from the monies received from the sale of those properties and held on trust pursuant to the Order made on 12 June 2015, which order shall remain in force until the payment/s referred to in this Clause are made or caused to be made by the husband.

Unless otherwise provided for in this Order, the wife shall indemnify the husband and keep him indemnified in relation to any liabilities of whatsoever nature incurred by him as a consequence of his involvement in or association with any entities to be retained by her pursuant to this Order.

Unless otherwise provided for in this Order, the husband shall indemnify the wife and keep her indemnified in relation to any liabilities of whatsoever nature incurred by her as a consequence of her involvement in or association with any entities to be retained by him pursuant to this Order.

Unless otherwise agreed between the parties in writing, the husband shall, within six months of the date of this order, at his expense, do all things necessary to cause the winding up of V Holdings Pty Ltd and O Pty Ltd.

The wife shall, within seven days (7) of a written request by the husband to do so, provide any relevant information or documents and sign all relevant documents necessary to facilitate the winding up of the entities as referred to above.

The wife shall, within seven days (7) of a written request by the husband to do so, sign all relevant documents necessary to facilitate the closure of the parties’ joint St George Savings Account number …116.

10.

In the event that either party refuses or neglects to do any act or sign any document required to be done or executed in compliance with the provisions of this Order, then, pursuant to s106A of the Family Law Act 1975 (Cth), a Registrar of the Family Court of Australia at Brisbane is hereby appointed to execute all deeds and documents in the name of the defaulting party and do all acts and things necessary to give validity and operation to the said order and the affidavit by the non-defaulting party shall be sufficient evidence of such non-compliance.

11.

All outstanding applications are 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

Even if the amount was quantified, in circumstances where the litigation occurred as it did and the costs were paid as they were, I am not persuaded that it is appropriate to notionally add back funds spent in defending it.Alleged diminution of the value of the property as a consequence of the husband’s decision to divest himself of 55 per cent of his interest in F Pty Ltd In contending that the Court should be persuaded that the husband’s decision to divest himself of 55 per cent of his interest in F Pty Ltd was designed to reduce the property available for distribution between the parties, the wife appeared to place particular significance upon Mr QQ’s emphasis that this disposal occurred whilst these proceedings were on foot. It is certainly true that Mr QQ emphasised this fact in his report. However, it seems to me that it is highly likely he did so for the purpose of identifying this as a potential issue – understandably and quite properly, he certainly did not express an opinion about any conclusions which should be drawn from the fact of the husband’s disposition of his interest. Additionally, Mr QQ accepted that a decision by a person, such as the husband, to dispose of part of his interest in F Pty Ltd had both positive and negative consequences including, as positives, stability of key employees, maintenance of the reputation of the business and a reduced risk to its operation if one professional left the practice. I accept the husband’s evidence in relation to the disposition of 55 per cent of his interest in F Pty Ltd. In particular I accept that:a)one of the reasons for this decision was to increase the prospects of Mr WT and Ms SS (who the husband regarded as key personnel) continuing their association with the business; andb)funds received from the sale of his interest were used to meet existing matrimonial liabilities (namely, the shortfall associated with the sale of the former matrimonial home); andc)the price was equal to that which was suggested by the accountant of the company as representing an indicative value of the business; andd)the husband disclosed the fact of the proposed sale to the wife before it occurred. I record that the wife conceded during cross-examination that, in September 2009 she was aware of the husband’s proposal to dispose of some of his interest in F Pty Ltd. Whilst she denied that her knowledge extended to the form the ultimate disposition took,[40] she conceded she had received a copy of the “Discussion paper” (which contained the information that what was proposed was the sale of 55 per cent for $460,000.00) no later than 10 September 2009. [40] Exhibit 12. In addition, the wife appeared to accept the merits of the proposition that the husband (as a sole trader) may benefit from the sale of an interest in the business to Mr WT, a person with whom he shared his profession. Her real difficulty appeared to be with the sale of 10 per cent to Ms SS. Whilst she certainly did not accept that this was reasonable - and was emphatic in stating that it was not a decision she would have made - the mere fact of differences in opinion about the desirability or otherwise of enjoining Ms SS, the practice manager, into the practice does not mean that a decision to do so was unreasonable or inappropriate or wanton, reckless or made with the intention of diminishing the property available for distribution between the parties.

Ratio Decidendi

Legal Principle Established

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