Phillips and Phillips (No 3)

[2010] FamCA 1124

FAMILY COURT OF AUSTRALIA

PHILLIPS & PHILLIPS (NO. 3) [2010] FamCA 1124

FAMILY LAW – PROPERTY – Application by the husband to review an order by the Registrar that he file and serve an updated financial statement – Where the husband initially sought to have the wife file and serve an updated financial statement – Review allowed – Husband ordered to file an affidavit detailing his dealings with his shares in company

APPLICANT: Ms Phillips

RESPONDENT: Mr Phillips

FILE NUMBER: BRC 10818 of 2007

DATE DELIVERED: 29 November 2010

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Barry J

HEARING DATE: 29 November 2010

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Wiltshire, Solicitor of Wiltshire Lawyers, appearing for the Applicant Wife

SOLICITOR FOR THE RESPONDENT: Mr Hirst, Solicitor of Hirst & Co, appearing for the Respondent Husband

Orders

IT IS ORDERED UNTIL FURTHER ORDER THAT:

1. Paragraph (4) of the Orders made by Registrar Kane dated 21 September 2010 be reviewed and the words “and the Husband file and serve a Financial Statement” be deleted.

2. The Husband to file an affidavit within twenty-one (21) days of the date hereof particularising the following:

   a.   his dealings with his shares in VW Company from 30 January 2002 including the sale or acquisition of any shares in the company with full particulars relating to same;

   b.   the number of EC Limited shares he received in the merger transaction together with the value of the EC shares;

   c.   whether any value was placed on the VW shares for the purposes of the merger and if so, full particulars of same;

   d.   what dividends the Husband received from his holding of VW shares up to the date of the merger; and

   e.   what dividends the Husband has received from the EC shares since the date of the merger.

3. Costs reserved.

IT IS NOTED that publication of this judgment under the pseudonym Phillips & Phillips is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 108 of 2007

MS PHILLIPS

Applicant

And

MR PHILLIPS

Respondent

REASONS FOR JUDGMENT

1. On 8 September this year the husband filed an application seeking an order that the wife file an amended financial statement.  The wife had filed a financial statement in 2007 at the time she instituted these proceedings.  There has been no updating document since that time and the husband has reason to believe that the wife’s financial position had significantly altered in the intervening period. He sets out his understanding of the applicant’s financial affairs in an affidavit filed accompanying the application of 8 September 2010.

2. On 21 September 2010 the matter came before Registrar Kane and the registrar by paragraph (4) of her Order ordered each party file and serve an updated financial statement.

3. The husband brings this application to review the order of the registrar by deletion of the words, “and the husband file and serve a financial statement.”  The husband’s legal representative has produced written submissions.  Attention is drawn to the fact that by paragraph 4 of my order of 5 March 2008 I relieved the husband of the requirement to file a financial statement.  He had filed a response to the wife’s application.  Clearly, the focus at that point in time is entirely on the wife’s financial position.

4. For the purposes of the determination, in February next year it is argued that the husband’s financial position is irrelevant.  I am inclined to accept the validity of the submission in these terms. 

5. The husband, at all times, has maintained that the values ascribed to the various assets, for the purposes of consent orders made back in January 2002, were accurate estimates of value as at that relevant time.  I have dealt with this matter on many occasions since the matter first came before me in 2008.  I have formed the view that the only valuation which was open to challenge was the value placed on the large holding of VW shares.  The parties had relied on a letter from a stockbroker who traded VW shares and who gave an estimate of their value.  That was premised on the basis that the shares would be sold on the market, in effect, flooding the market and depressing the price.  It is common ground, the shares were trading at a higher figure around the relevant time.

6. Mr B, an accountant, says that this was a misunderstanding of the true forensic process in that the focus should have been on whether there could be a takeover of the company or a merger exchanged.

7. I am informed at today’s hearing, that in about 2007 – I am not sure whether it was prior to the institution of these proceedings – the VW shares were exchanged for shares in a publicly listed company, EC Limited.  VW shares were publicly listed shares at the relevant time.

8. It seems to me, although there is considerable time gap between 2002 and 2005 the husband should give full disclosure of his dealings in the VW shares because it is the value of those shares that is the issue to be determined.  I note there is evidence back in 2002 VW liabilities, I think, substantially exceeded the assets.  There were concerns about various aspects on that of whether VW was in a position to acquire the husband’s shares.  However, events which transpired after that may be relevant.  I do not say they necessarily will be relevant.  I propose to make an order allowing the review, insofar as it requires the husband to file a statement of financial circumstances.  I do not believe I would be assisted in a determination in February next year by such a document.

9. For the reasons given I will allow the review but order the husband to file an affidavit detailing his dealings in the VW shares.

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Barry.  

Associate: 

Date:  29 November 2010