Pinney & Pinney (No 5)
[2023] FedCFamC1F 553
•30 June 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Pinney & Pinney (No 5) [2023] FedCFamC1F 553
File number(s): SYC 792 of 2022 Judgment of: MCCLELLAND DCJ Date of judgment: 30 June 2023 Catchwords: FAMILY LAW – PROPERTY – Application to vary orders pursuant to r 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) – Where the parties largely agree on the variations sought – Clarification of the intention of the Court – Orders varied pursuant to the slip rule. Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 10.13 Cases cited: Coghlan & Coghlan (2005) FLC 93-220; [2005] FamCA 429 Division: Division 1 First Instance Number of paragraphs: 14 Date of hearing: 30 June 2023 Place: Sydney Solicitor for the Applicant: Mr Gittoes-Caesar, Lander & Rogers Solicitor for the Respondent: Self-represented litigant ORDERS
SYC 792 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS PINNEY
Applicant
AND: MR PINNEY
Respondent
ORDER MADE BY:
MCCLELLAND DCJ
DATE OF ORDER:
30 JUNE 2023
THE COURT ORDERS THAT:
1.Pursuant to rr 10.13(1)(e) and (f) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), the orders made on 19 May 2023 are varied in accordance with Annexure ‘A’ attached hereunder.
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 the pseudonym Pinney & Pinney has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE
REASONS FOR JUDGMENTMCCLELLAND DCJ:
In this matter, by way of Initiating Application filed 15 June 2023, the wife has sought variation of orders that I made on 19 May 2023 pursuant to what is known as the ‘slip rule’ provisions, specifically r 10.13 of the Federal Circuit and Family Court of Australia Rules 2021 (Cth). Relevantly, that rule provides exceptions to what would otherwise be circumstances where the work of the Court is finalised and, in effect, the Court would be functus officio, that is, having no further role to play in respect to the proceedings.
Rule 10.13 enables the Court to vary or set aside an order in a number of circumstances including, relevantly for the purpose of this decision, where the order does not reflect the intention of the Court (r 10.13(1)(e)) or where a party in whose favour an order is made consents (r 10.13(1)(f)).
Dealing with those paragraphs in reverse, that is, first considering those variations to which the parties consent, I note that after the parties, to their credit, participated in a judicial settlement conference this morning, they have reached an agreed position and consent to the following amendments:
·as per proposed paragraph 4(a) of the annexure to the wife’s application;
·as per proposed paragraph 4(b) of the annexure to the wife’s application, save to the extent that during discussions it was agreed that the paragraph 4(b)(i) will now read “that the wife nominate three agents (“nominated list”) by close of business on 30 May 2023”. It was further agreed that there would be a notation that “the wife provided the nominated list to the husband in accordance with Order 4(b)(i) by close of business on 30 May 2023”;
·significantly, the parties also agreed to the proposed variations as set out by the wife in proposed paragraphs 4(e), (f) and (g); and
·as per proposed paragraphs 7 and 8 of the annexure to the wife’s application.
The above amendments will therefore be made to the orders of 19 May 2023 pursuant to the ‘slip rule’.
The parties remain in dispute, however, in respect to the wife’s application to vary what was Order 6 of the orders made on 19 May 2023, with such variation being set out in proposed paragraphs 5(f) and (g) of the annexure to the wife’s application, which would replace Order 6 that currently reads:
The balance then remaining is to be paid in the proportions of 62 per cent to the wife (“her share”) less the legal costs amount and 38 per cent to the husband (“his share”) plus the legal costs amount.
The application by the wife has been made in circumstances where the term “the balance”, I accept, could be constructed as referring to the balance of the sale price of the Suburb D property, as opposed to resulting in an outcome whereby the wife received 62 per cent of the total net assets of the parties’ property pool.
Accordingly, the wife proposes that, in place of Order 6, proposed paragraphs 5(f) and (g) be included to read:
(f)In payment to the Wife of an amount necessary to effect an overall division of the known assets (less liabilities) and superannuation interests of the parties as to 62% to the Wife; and
(g)The balance to the Husband.
I respectfully agree with the wife’s submission that Order 6 could be read in a manner that does not reflect the intention of the Court as set out in [177] and [244] of my reasons for judgment dated 19 May 2023. Such intention was that the wife would receive an amount from the proceeds of settlement of the sale of the property such that the amount represented 62 per cent of the parties’ net assets, including superannuation but less the joint liabilities of the parties as set out in Order 5(e).
In stating that as the intention of the Court, I have had regard to the submissions of the husband which, by way of summary, were that:
·in circumstances where I have identified in my judgment, by way of the findings in respect to the property pool, separate items in respect to superannuation; and
·in circumstances where I have made orders such that Orders 5 and 6 dealt with the sale of the property and Orders 10, 11 and 12 separately dealt with the apportionment of the parties’ superannuation;
It could reasonably be inferred that the intention of the orders were that, before the assessment of 62 per cent of the parties’ assets being paid to the wife, there would have been an apportionment of the parties’ superannuation interests according to that which they had as at the date of the hearing.
The difficulties with that argument are, in fact, several. Firstly, the case was never conducted on the basis of a two-pool approach. Both parties presented their case on the basis that the Court was to consider the assets and liabilities of the parties as one pool including superannuation, with the adjustment applying to the totality of that pool. This was as opposed to a two pool approach, which is not uncommonly taken by the Court, of regarding the parties’ assets as being made up of two pools, that is, non-superannuation and a superannuation pool. In that context, the arguments presented by the parties during the course of the proceedings focused on the parties’ contributions to the totality of the parties’ assets and did not present either separate evidence or separate arguments regarding a differential apportionment in respect to superannuation, nor did they address those matters that are commonly considered in separately apportioning superannuation as set out, for instance, in the well-known case of Coghlan & Coghlan (2005) FLC 93-220.
In summary, I am satisfied that [177] and [244] of the reasons, when read in the context of [176], confirm that the Court’s intention was, firstly, that the adjustment of the parties’ property was to be conducted on the basis of one pool, which included the totality of the parties’ assets including superannuation. Secondly, that the distribution was to occur after the making of certain payments, including discharge of the mortgage, payment of the joint liabilities identified in Order 5(e) and also after payment of the parties’ respective liabilities to litigation funders, which will be addressed in the agreed proposed paragraphs 7 and 8 in the wife’s annexure to her application.
I am therefore satisfied that there should be a variation of the orders made on 19 May 2023 as sought by the wife in proposed paragraphs 5(f) and (g), which properly reflect the intention of the Court. In that respect, I note that the sub-paragraphs within Order 5 of the orders made on 19 May 2023 are numbered using roman numerals, whereas the parties today proceeded on the basis of lettered sub-paragraphs. For completeness, I will vary the orders to accord with the manner in which the parties conducted today’s hearing, being lettered sub-paragraphs.
I will also, with the helpful consent of both parties, make the further variations sought by the wife adjusting the relevant numbering of the orders at paragraphs 11, 13 and 17 of the annexure to her application, insofar as references to other orders are made.
I further delete the notation that is set out in the orders of 19 May 2023, insofar as it is now superfluous.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Deputy Chief Justice McClelland. Associate:
Dated: 7 July 2023ANNEXURE ‘A’
ORDERS
SYC 792 of 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISON 1)
BETWEEN: MS PINNEY
Applicant
AND: MR PINNEY
Respondent
ORDER MADE BY: MCCLELLAND DCJ
DATE OF ORDER: 19 MAY 2023
THE COURT ORDERS THAT:
1.All previous orders are hereby discharged.
2.The wife shall pay the costs of the husband of and in connection with the proceedings heard on 27 March 2023 in the fixed sum of $20,590 (“the legal costs amount”), with such sum to be deducted from monies that would otherwise be payable to the wife from the net proceeds of the sale of the property known as and situated at C Street, Suburb D NSW, being the whole of the land comprised in Certificate of Title Folio Identifier … (“the property”).
3.Unless otherwise agreed between the parties in writing, within five (5) business days of the date of these orders, the parties shall direct all building work on the property to immediately cease as and from that date.
4.Unless otherwise agreed between the parties in writing within seven (7) business days of the date of these orders, each party will do all acts and things and sign all documents necessary to forthwith place the property on the market for sale and, in particular, will:
(a)remove any caveat(s) that may be on the property;(b)list the property for sale with an agent to be agreed and, failing agreement:
(i)The wife nominate three agents (“nominated list”) by close of business on 30 May 2023
within seven (7) days of receiving confirmation that the final occupancy certificate has been issued by Suburb H Council;(ii)The husband select one of the agents from the nominated list with seven (7) days of receiving the nominated list; and
(iii)Thereafter, the parties do all acts and things to engage the agent.
(c)execute all documents requested by the agent for the sale of the property and, in the event that the husband and the wife cannot agree on the terms of the agent’s contract, within seven (7) days of the agent being selected, the contract is to be in the agent’s standard terms with the agent’s standard fees;
(d)give such instructions as are necessary to a legal practitioner or conveyancer, agreed upon by the husband and the wife within seven (7) days of the date of this Order and, failing agreement, the husband shall forthwith in writing nominate two solicitors/conveyancers from which the wife shall, within a further seven (7) days, select one and failing which the husband will select one who shall be the legal practitioner appointed (“the legal practitioner”).
(e)market the property for sale by public auction on a date within six weeks of the date of the selection of the agent at a reserve price agreed between the husband and the wife and, failing agreement the reserve price be set at $12.2 million (“the First Auction”)
and/or the agreed reserve price not being obtained, at the price of the maximum bid obtained at the auction;(f)in the event the property is not sold at the First Auction, market the property for sale by public auction with the Agent on a date within six weeks of the First Auction date (“the Second Auction”) at a reserve price agreed between the husband and the wife and failing agreement 3% below the reserve price at the First Auction;
(g)each party attend the Section Auction pursuant to these Orders and in the event that the reserve price set for that auction is not reached, the parties will negotiate with the highest bidder and the second highest bidder and will accept the highest offer to purchase made within 2.5% of the reserve price set for that auction unless the husband and wife otherwise agree;
(h)execute the contract for sale and, in the event that the husband and the wife fail to agree on the terms of the contract for sale, the terms recommended by the legal practitioner will be adopted;
(i)co-operate in every way with the agent in relation to the sale of the property at all times requested by the agent and ensure that the property is in a neat and clean condition;
(j)do all things and execute all other documents necessary to complete the sale within the time required by the contract for sale to ensure that the purchasers do not have a right to terminate or rescind due to failure to do so.
5.On settlement of the sale of the property, the husband and the wife shall do all acts and things necessary to distribute the proceeds of sale in the following manner and priority:
(a)payment of the agent’s commission, auctioneer’s commission and any other expense properly incurred in respect of the sale of the property;
(b)payment of the legal costs of the sale;
(c)payment of any amount outstanding to any water authority or local council in respect of the property not otherwise taken up as a credit in favour of the vendor;
(d)payment of the amount required to effect a discharge of the L Bank registered mortgage (Loan account Number: …25) secured on the title to the property;
(e)In payment of the parties’ joint liabilities as agreed by the parties during the proceedings, being:
A.Money owed in respect to air-conditioning – $1,800;
B.Money owed in respect to joinery – $4,327;
C.Money owed to an engineering company – $3,100.
(f)In payment to the wife of an amount necessary to effect an overall division of the known assets (less liabilities) and superannuation interest of the parties as to 62% to the wife; and
(g)The balance to the husband.
6.The balance then remaining is to be paid in the proportions of 62 per cent to the wife (“her share”) less the legal costs amount and 38 per cent to the husband (“his share”) plus the legal costs amount.6.From the wife’s share of the net sale proceeds pursuant to Order 5(f) and at the settlement of the Suburb D property, the following amounts be distributed:
(a)The wife repay in full the TT Finance loan for litigation funding in her sole name, and at her expense remove any caveat or other encumbrances securing repayment of such facility; and
(b)The wife pay the husband the legal costs in the sum of $20,590.
7.From the husband’s share of the net sale proceeds pursuant to Order 5(g), and at settlement of the Suburb D property, the following amounts be distributed;
(a)The husband repay in full the RR Finance loan for litigation funding in his sole name, and at his expense remove any caveats or other encumbrances securing repayment of such facility.
8.Within seven (7) days of the settlement of the sale of the property, the parties shall do all acts and things necessary to cause the funds (if any) standing to the credit of the parties in any joint accounts to be divided equally between the parties, and the parties shall forthwith thereafter do all such things as required to close those accounts.
9.Within 14 days of the date of these orders:
(a)The parties obtain an updated member benefit balance for the wife in the Pinney Super Pty Ltd ATF Pinney Super Fund (“the Fund”) from the Fund's accountants; and
(b)The wife thereafter shall make an application to roll out her member benefit entitlement by way of cleared funds to a complying superannuation fund nominated by the wife, and the parties in their capacity as directors of the trustee company shall forthwith do all acts and things necessary to approve and give effect to that request.
10.Following the roll out of the wife's entitlement pursuant to Order 9, the parties in their capacities as directors of the trustee company shall cause a meeting of the Fund to be held in accordance with the governing rules of the Fund, the purpose of the meeting being for the wife to do all acts and things and sign all documents as may be necessary to:
(a)resign her membership from the Fund;
(b)resign as a director of the trustee company;
(c)transfer to the husband or his nominee 100 per cent of her shareholding in the trustee company; and
(d)vote in favour of any resolution that the husband may propose prior to her resignation which may have the effect of appointing an additional or new director of the trustee company, and vote to appoint another trustee if the husband may so direct.
11.In the event there is any net tax payable by the Fund arising as a consequence of the rolling over of the wife's entitlement by the trustee company to the wife's new superannuation fund, the Fund shall pay 100 per cent of such liability upon receipt of any Notice of Assessment issued by the Australian Taxation Office.
12.Upon compliance with Order 10, the husband indemnify and keep indemnified the wife in respect of her previous involvement with Fund in any capacity, whether as a member of said Fund and/or in respect of the trustee of said Fund.
13.Pending the transfer of the wife's member benefit entitlement to the wife's new superannuation fund, each party is restrained from dealing with or disposing of any of the assets of the Fund other than in accordance with the terms of these reasons or with the joint written consent of the parties as directors of the trustee company (which consent will not be unreasonably withheld), and each party shall immediately revoke any binding death benefit nomination already made and each party be and is hereby restrained from:
(a)making any binding death benefit nomination in favour of a child described in reg 13 of the Family Law (Superannuation) Regulations 2001 (Cth);
(b)making any other nomination where the effect of such nomination would be to render any splittable payment not splittable; and
(c)doing any such act or thing which would defeat, extinguish or reduce the entitlement of either party under this agreement.
14.Pending settlement of the sale of the property or for 6 months following the date of these orders (whichever occurs first), the husband shall pay, or cause to be paid to the wife as she may direct, the sum of $1,000 per week by way of cleared funds, directly into a bank account nominated by the Wife.
15.Pursuant to ss 123(1)(a) and 124 of the Child Support (Assessment) Act 1989 (Cth), there be a departure from the administrative assessment of child support payable by the husband to the wife, such that the husband shall pay:
(a)100 per cent of the tuition fees at such independent school as the children are agreed between the parties in writing to attend commencing Term 1 2024;
(b)100 per cent of all costs of extracurricular activities for the children that have been agreed to in writing between the parties in advance of enrolment;
(c)Private health insurance premiums for the children at the current level of cover; and
(d)100 per cent of the gap medical costs not able to be recovered (or the portion not able to be recovered) from the private health insurance for each child, excluding elective procedures or treatments unless they are agreed in writing by the parties prior to incurring the expenses, and subject to any insurance refund being paid to the husband.
16.The payments referred to in Order 15 are not to be credited against any administrative assessment for child support for which the husband is responsible for payment and, for the purposes of s 125 of the Child Support (Assessment) Act 1989 (Cth), such payments will not reduce the administrative assessment for child support.
17.The wife shall retain all interest in and entitlement to:
(a)her shares in M Pty Ltd;
(b)all personal and real property now in her possession;
(c)Motor Vehicle 1;
(d)all superannuation interests in her possession or control; and
(e)all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in her sole name respectively and all interests in life insurance policies and superannuation funds standing in her sole name respectively.
18.The husband shall retain all interest in and entitlement to:
(a)all personal and real property now in his possession or control;
(b)all superannuation interests in his possession or control; and
(c)all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his sole name respectively and all interests in life insurance policies and superannuation funds standing in his sole name respectively.
19.Each party is hereby declared solely liable for all liabilities in his/her sole name respectively and shall indemnify and keep indemnified the other party in respect of same.
20.Both the husband and the wife hereby release the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
21.Pursuant to s 81 of the Family Law Act 1975 (Cth), the parties intend these orders to finally determine all financial relations and issues between them and to avoid further proceedings between them.
22.Each party shall do all things necessary, including providing all consents, to give effect to these orders in the time periods prescribed in these orders.
23.In the event either party 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 the Court shall be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and 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.
THE COURT NOTES THAT:
A.Pursuant to orders made on 3 May 2023, the matter remains listed on 23 May 2023 to consider whether orders should be made requiring the wife to vacate the property pending sale and/or settlement.A.The wife provided the nominated list to the husband in accordance with Order 4(b)(i) by close of business on 30 May 2023.
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