Powell and Christensen

[2020] FamCA 203

FAMILY COURT OF AUSTRALIA

POWELL & CHRISTENSEN [2020] FamCA 203

FAMILY LAW – PRACTICE AND PROCEDURE – where the self-managed superannuation fund of the parties is non-compliant – where there is contravention of regulatory and statutory provisions.

Superannuation Industry (Supervision) Act 1993 (Cth)

APPLICANT: Ms Powell

RESPONDENT: Mr Christensen

FILE NUMBER: CAC 1032 of 2018

DATE DELIVERED: 30 March 2020

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Gill J

HEARING DATE: 30 March 2020

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Dobinson Davey Clifford Simpson

SOLICITOR FOR THE RESPONDENT: Self-representing

Orders

1. That for the purposes of these Orders:

   1.1 Reference to "the Fund" means the Christensen Super Fund ("the Fund");

   1.2 The trustee of the Fund is the Applicant and the Respondent jointly ("the Trustee"); and

   1.3 The Applicant and the Respondent are the members, and the only members, of the Fund.

2. Within 14 days the Respondent provide to the Applicant's solicitors a copy of the Trust Deed for the Fund.

3. Within 30 days of the date of these Orders the Applicant Wife will do all acts and things to provide all necessary instructions and information to J Accountants of Canberra to enable that firm to take all necessary steps to make the Fund compliant with the requirements of the Superannuation Industry (Supervision) Act 1993 and other superannuation regulations and relevant tax obligations, including but not limited to, preparation of annual Fund financial statements for the financial years ended 30 June 2017, 2018 and 2019 and the part financial year ended 31 March 2020, the preparation of Member statements and Trustee’s resolution and Minutes, preparation of an annual audit for each outstanding financial year and lodging annual tax returns for each outstanding financial year and to facilitate this order:

   3.1 The Applicant will do all things necessary to meet the fees payable to J Accountants from the funds held to the credit of the Fund bank accounts with ANZ bank.

   3.2 The Applicant be and is hereby authorised to instruct J Accountants to make any representations considered appropriate to the Australian Taxation Office to seek the waiver of any penalties for payment of tax and non-compliance.

   3.3 The Applicant will cause any tax payable to the Australian Taxation Office in respect of the Fund and any penalties and fees required to be paid by the Fund to be paid from the Fund bank accounts with ANZ.

   3.4 The Applicant and Respondent will, in their capacities as Trustees of the Fund, sign all documents required to be signed by them to enable J Accountants to complete the work to make the Fund compliant within 7 days of J Accountants informing the Applicant and the Respondent in writing that documents are ready to be signed by them.

   3.5 Within 14 days of the Applicant being notified by J Accountants that the Fund is compliant and having provided the Applicant and Respondent with a balance sheet and member benefit statements for the Fund members as at 31 March 2020, the Applicant will file an Affidavit with the Court attaching the Member benefit statements of the Applicant and Husband and a letter from J Accountants confirming the Fund has been made compliant.

   3.6 If either party disputes the valuation accorded for the self-managed superannuation fund by J Accountants then that party is to file and serve a notice of such dispute within 7 days of the filing of the affidavit by J Accountants as to the member balances.

IT IS NOTED THAT

1. In the absence of notice of such dispute being filed then the matter will proceed to final judgment without further submissions.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Powell & Christensen has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 1032 of 2018

Ms Powell

Applicant

And

Mr Christensen

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. The proceedings are awaiting a final judgment following the completion of the trial in these proceedings.  In the course of the preparation of that judgment, I identified that there was a gap in the evidence in relation to the parties’ self-managed superannuation fund. 

2. During the trial, the parties had identified that the fund, in which they are both trustees and both account holders, was non-compliant with its obligations.  The evidence did not permit me to identify what the member balances might be and that, as I indicated to the parties, was an impediment to my making of final orders as it was an impediment to my capacity to determine what may be just and equitable. 

3. In accordance with this issue, I relisted the matter and directed the parties to put, on the case of the Wife, an Application in a Case and on the case of the Husband, a Response to an Application in a Case, to deal with how it might be that this impasse could be resolved so that the matter could proceed to final judgment.

4. The Wife, during the proceedings, had indicated that she lacked various aspects of the information that would be required for her to remedy the defaults in respect of the self-managed superannuation fund. 

5. The Husband disputed that this was the case.  His position was that she had access to all the necessary information to enable her to remedy the position.  He accepts that he held or holds the relevant information that would enable it to take place, but he has explained in today’s proceedings that he declines to do so as that buys into the narrative proposed by the Wife that he is in some senses financially controlling. 

6. In her current proposal, the Wife now proposes that she would take responsibility for rendering the self-managed superannuation fund compliant.  She proposes that she would, for the purposes of obtaining appropriate advice, engage an accounting firm to assist in that process, that from this, she would liaise with the Australian Taxation Office (the “ATO”) which is an issue that has arisen because of the non-compliance of the fund and that she would provide Members’ statements and an affidavit from the accounting firm such as to identify the value of the parties’ superannuation interests to allow orders to be made.  She proposes that the funding for this be taken from an administrative account associated with the self-managed superannuation fund. 

7. The Husband says the Wife should be responsible for rendering the fund compliant and for obtaining Members’ statements.  He says that any outstanding payments that are required to be made, including to the ATO, should be drawn from the fund itself, although I have expressed some reservations as to whether that course is open.  He says that ultimately such outstanding payments should be held as against the Wife’s interest in the fund.

8. It may be observed that there is no communication between the parties.  The Husband complains that this lack of communication renders the resolution of outstanding issues in the proceedings incredibly difficult.  It may be observed that the lack of communication occurs in particular factual circumstances where the Husband accepts that he engaged in an act of extreme family violence upon the Wife.  It cannot be expected that there will be ready communication between the parties.

9. The context in respect of the self-managed superannuation fund is that the parties are joint trustees of the fund.  The Wife had responsibility for the lodgement of the various documents with the administration of that fund.  The Wife has not done so since the date of separation, nor has the Husband.  The Wife has complained that she lacked access to the relevant information.  The Husband has said that she had such access.  He accepts that he had access to the information required to lodge for the self-managed superannuation fund.

10. The Wife, in general terms, has now said that she has reviewed material, including old emails, and found access to a number of aspects of the information that would be required.  She has identified, however, that she does not hold a log-in access for the entity that is responsible at present for the administration of the fund.  That entity requires the information to be lodged via an online portal.  The Wife says that she does not hold access or a password. 

11. The Husband accepts that it may well be a fact that she does not hold a login for that entity.  He asserts that she probably has a password by virtue of some password keeping facility on a computer that she removed at the demise of the relationship.  He accepts that he has a password.  During oral submissions he posits that he may make or would be prepared to make that password available to the Wife. 

12. The Wife has conceded that she has now located access to a number of the entities including bank accounts which does not reflect the position that she advocated at the final trial of the matter where she said that she was unable to access the relevant information. 

13. At present, there is a lack of clarity as to the status of the previous administrators of the fund.  What is apparent is that the current administrators of the fund had previously indicated that unless the parties were to lodge the various documents, which have not been lodged, that they would withdraw from their role as the administrators of the fund.  They have not sent further correspondence to indicate that they have or have not taken that step, although it appears they have drawn some sort of fee in January 2020, although it has not been identified what that fee was for.  The Husband says that there should be no confidence that they have withdrawn their services under those circumstances; however, it must be said that there is grave uncertainty as to their current role in respect of the self-managed superannuation fund. 

14. It is under those circumstances that it remains necessary to render the superannuation fund compliant and to place values on each of the Members statements. 

15. The Husband and Wife were both obliged as trustees to maintain the returns for the fund.  They did not do so.  As I noted, it appears that this was a task undertaken by the Wife during the relationship.  The position seems to now be that the Wife has access to the various forms of information that would be required.  It was clear during the proceedings themselves, and has now been reiterated, that the Husband had access to that information and retains access to that information.  It appears that he is the only one with a log-on to the relevant portal.  He says, however, it is the Wife who should fix it and who should bear the expense. 

16. The Husband’s position leaves uncertainty as to whether or not the appropriate steps would be able to be undertaken.  The Wife’s position does not leave that same uncertainty.  She addresses appropriate steps including the seeking of professional advice to enable the fund to be made compliant.  While the Husband complains that this will constitute a duplication with the role of the current administrator, and in fact it may do so, it is unclear that that is the case.  It seems necessary, or at least reasonable, for the parties to have access to professional advice to assist in interactions with the ATO in relation to the defaults in the administration of the fund, not least in the hope of garnering reduction or removal of penalties which would otherwise draw upon the resources that the parties otherwise have available.

17. Although the current administrator has withdrawn some fees, it is not apparent why that has happened and it is not clear what their current role is and it is not clear that they will provide sufficient advice to undertake the tricky path of not only rendering the funds compliant, which may be straightforward, but the tricky path of dealing with the ATO. 

18. The Wife has taken the step of estimating the amount of costs such that they are not overly onerous.  She has also identified an appropriate source of funding for the meeting of those costs.  The taking of those steps would enable just and equitable orders to be made to deal with the pool and the orders as sought by the Wife, under those circumstances, should be made. 

19. I note one aspect in particular of those which relates to the provision of a copy of the Trust Deed.  The Husband has asserted that he has provided the Trust Deed on a number of occasions.  The Wife still seeks the Trust Deed.  At best as I can tell, during the trial, this dispute emanated over a fracas of the Husband providing documents directly to the Wife and the Wife refusing such provisions, saying it should occur via her solicitor.  What remains clear is that given the assertions made by the Husband that he has provided that Trust Deed in the past, he has access to such to provide it now.  It may well be that the Wife somewhere has that document.  That document is necessary to resolve the dispute, it is necessary to ensure that the Wife has it given the responsibility that she will take on with rendering the self-managed superannuation fund compliant and there appears to be little or no inconvenience in the direct provision of document.  That order will be made.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 30 March 2020.

Associate:

Date:  31 March 2020