Randle and Randle
[2014] FamCA 248
•5 March 2014
FAMILY COURT OF AUSTRALIA
| RANDLE & RANDLE | [2014] FamCA 248 |
| FAMILY LAW – PROPERTY – application by wife for division of property - contributions – superannuation - |
FAMILY LAW – PROPERTY – Death of party to proceedings after reasons were given and orders were made – Leave granted for sons or punitive executors to apply as a legal personal executive
| Family Law Act 1975 (Cth) ss 75(2), 79 and 79(8) |
| APPLICANT: | Ms Randle |
| RESPONDENT: | Mr Randle |
| FILE NUMBER: | HBC | 668 | of | 2010 |
| DATE DELIVERED: | 19 February & 5 March 2014 |
| PLACE DELIVERED: | Hobart |
| PLACE HEARD: | Hobart |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 18 & 19 February 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Dixon SC and Ms Foale |
| SOLICITOR FOR THE APPLICANT: | Simmons Wolfhagen |
| COUNSEL FOR THE RESPONDENT: | Ms C. Gibson |
| SOLICITOR FOR THE RESPONDENT: | Charmaine Gibson |
Orders
These orders shall be binding upon the parties, their legal personal representatives; including any executor/s, administrator/s and/or assigns of one or other of the parties.
Within 120 days of the date of these orders the husband shall pay to the wife the sum of $328,740. Interest to accrue on that sum as and from 1 April 2014 at a rate of 6 per cent per annum until the date payable pursuant to these orders and thereafter interest to accrue as provided in the Family Law Rules 2004. Such payment to the wife may be made by way of a trust distribution from the Randle Family Trust, provided the husband pays and indemnifies the wife in respect of any tax liability arising from such payment.
Within 120 days from the date of these orders the wife shall transfer to the husband her interest in O Street, P Town (‘O Street’) and R Street, P Town (‘R Street’). The husband shall pay rates, taxes and insurance on these properties from the date of this order and shall indemnify the wife in that respect.
Within 120 days from the date of these orders the husband shall transfer to the wife his interest in S Street, P Town (‘S Street’). The wife shall pay rates, taxes and insurance on that property from the date of this order and shall indemnify the husband in that respect.
Within 120 days of the date of this Order, the husband shall cause the mortgage to E Bank over S Street (“the S Street mortgage”) to be discharged and the wife be released from her personal covenants in respect of that mortgage. Pending the discharge of the S Street mortgage the husband shall indemnity the wife in respect of the S Street mortgage and shall pay interest and normal loan repayments in respect of that mortgage as and when they fall due.
Within 120 days from the date of these orders the husband shall transfer to the wife his interest in T Street, P Town. Pending the transfer of T Street, the wife shall pay rates, taxes and insurance on that property from the date of this order and shall indemnify the husband in that respect and from the date of the order shall be entitled to all rents and profits on that property.
Within 120 days from the date of these orders the husband will do all things necessary to transfer to the wife bank accounts and investments in the sole name of the wife;
(i)E Bank Account number …;
(ii)E Bank Saver Account number …;
(iii)E Bank Account number …;
(iv)E Bank Saver Account number …; and
(v)X Trustees Select Mortgage Fund, member number ...
(vi)All shares currently held in the name of the wife, including but not limited to her Y Pty Ltd shares;
(vii)Any furniture, household effects or any items of personality currently in the possession of the wife, save and except for antique furniture; and
(viii)Loan repayable by Mr AA to the wife in the sum of $40,000.00.
Within 120 days from the date of these orders the husband will do all things necessary to transfer his interest in the joint Commonwealth Bank account for T Street (account with number …), along with the balance funds of $943.00 and will provide to the wife all records, as are reasonably available, relating to the current tenancy, purchase and improvements to T Street property since acquisition for the purpose of potential capital gains tax that may arise in the future.
Within 120 days from the date of these orders (or such earlier time as agreed by the parties) the husband (in his personal capacity and as in his capacity as Director of Randle Pty Ltd as trustee for the Randle Family Trust) and wife shall do all acts and things and execute all documents necessary to list unit B Street, Suburb C in Queensland, including the furniture and contents contained therein (‘B Street’), for sale by private treaty as set out in the following manner:
(a)the parties shall appoint a local real estate agent as agreed between them (“the agent”);
(b)the listing price for the sale shall be as agreed between the parties and failing agreement as recommended by the agent, who shall have regard to any valuations provided by the parties or either of them;
(c)neither party shall sign or enter into a contract for sale of B Street without the consent of the other party or that parties legal personal representative or in the absence of consent, an order of this Court.
(d)the parties shall co-operate in every way with the agent including (without limiting the generality of the foregoing):-
(i) making the key available to the agent;
(ii)signing all documents requested by the agent to sell B Street;
(iii)subject to agreement or determination as to terms, executing a contract for sale in the form prepared by solicitors or conveyancers having the conduct of the sale at the sale price;
(iv)allowing inspection of B Street all reasonable times as requested by the agent;
(v)doing all necessary repairs or improvements as recommended by the agent,
(vi)not doing or saying anything to hinder or prevent a sale being effected;
(e)On settlement of the sale of B Street the proceeds of sale shall be distributed in the following manner and priority:
(i)all costs and agreed expenses of the sale including legal costs and disbursements, agent’s commission, advertising expenses and auction expenses;
(ii)an amount necessary to discharge the mortgage encumbering B Street property;
(iii)An amount reasonably calculated by either or both parties to meet any capital gains tax payable on the sale of B Street; Such sum so calculated to be paid to the husband, and
a)the husband shall lodge tax returns and he shall pay or cause to be paid such actual capital gains tax or cause such tax to be paid as soon as is practicable and shall indemnify the wife in respect of such capital gains tax,
b)when the actual capital gains tax is assessed, based on the completed sale of B Street; the husband shall within 7 days inform the wife of the amount of such assessed capital gains tax; and
I.shall pay to the wife an amount equivalent to 45 per cent of the difference between the assessed capital gains tax and the amount calculated at the time of sale, if the amount calculated at the time of sale is greater than assessed capital gains tax. and
II.the wife shall pay the husband an amount equivalent to 55 per cent of the difference between the assessed capital gains tax and the amount calculated at the time of sale (if the amount calculated at the time of sale is less than the assessed capital gains tax).
(iv)to reimburse any party who paid for any necessary repairs/maintenance or improvements to prepare B Street for sale – provided that such costs were approved by the other party before the work was carried out.
(v)the balance remaining shall be paid to the wife.
(f)The parties may, on 14 days notice, seek to relist the matter if they seek further orders in respect of the sale of B Street.
(g)In addition to the payment of the balance of proceeds of sale as provided in this order the husband shall, within 14 days of the completion of the sale of B Street, pay to the wife an amount equivalent to 45 per cent of the net proceeds of sale of that property (the ‘net balance due’). The net balance due is to be calculated by deducting from the gross sale price of B Street; the costs and agreed expenses of the sale including legal costs and disbursements, agent’s commission, advertising expenses, repairs or maintenance costs carried out with the consent of the parties and any auction expenses; the amount reasonably calculated by either or both parties to meet any capital gains tax payable on the sale; and the amount otherwise paid to the wife pursuant to order 9(e)(v).
(h)Pending the sale of B Street, the husband shall pay or cause to be paid the mortgage, rates, land tax, insurance, Body Corporate fees and all outgoings of whatsoever nature or kind pertaining to that property as they fall due.
Within 120 days of the date of this order the husband shall transfer to the wife all of his personal shareholdings on the Australian Stock Exchange; namely 243 D Pty Ltd shares and 1028 E Bank shares to the value of about $87,588; save and except for the 50 E Bank shares of a value of about $5,000 which shares remain the property of the husband.
Pursuant to paragraph 90MT(1)(b) Family Law Act 1975 (Cth), whenever the Trustee of the Randle Superannuation Fund (“the Fund”) makes a splittable payment from the interest held by the husband, the Trustee shall pay to the Applicant wife, 100 per cent of the splittable payment, and there shall be a corresponding reduction in the entitlement the husband would have had in the Fund but for this order.
(a)The previous paragraph has effect from the operative time.
(b)The operative time is four (4) days from the date this order is served upon the Trustee of the Fund.
(c)Such splitting order shall include the shares and cash in the Fund of value of about $94,477.
(d)Each party and the Trustee of the Fund shall have liberty to apply in relation to this splitting order up and until 1 October 2014.
Within 120 days of the date of this order, the husband shall do all such things as are necessity to claim the funds receivable by the husband’s estate from the F Pty Ltd Insurance policy insuring the husband’s life held by the husband, identified as Contract number …, with commencement date 27 May 1996, including but not limited to the Death Benefit component of value $367,000 and pay same to the wife; and if necessary for the purpose of giving effect to this order, the husband shall make a binding nomination, nominating the wife as the beneficiary of the F Pty Ltd Insurance policy number … and provide evidence of that nomination to the wife and pay or cause to be paid the premiums on that policy as and when they fall due.
Within 120 days from the date of this order the wife will sign all documents to transfer to the husband all her interest, if any, in:
(a)G Pty Ltd;
(b)Randle Pty Ltd;
(c)Randle Family Trust
(d)H Pty Ltd;
(e)I Pty Ltd;
(f)Any furniture, household effects or any items of personality in the possession of the husband;
(g)E Bank shares; and
(h)All bank accounts held in the sole name of the husband, including the husband’s E Bank saver account ending.
(i)the motor vehicles in the possession of the husband, together valued at $6,000;
(j)any insurance policy insuring any property to be retained by the husband pursuant to these orders; and
(k)The antiques held at J Hall, valued at twelve hundred dollars ($1,200).
(l)The antique furniture, which items the wife will make available to the husband or his nominee for collection when reasonably requested within 120 days of the date of this order.
Any further monies, net of legal costs, received or receivable by the husband or his nominee pursuant to the recovery action commenced by K Lawyers be paid to the parties on the basis of 55 per cent to the husband and 45 per cent to the wife. To this end, the husband shall irrevocably authorise the wife to make enquires of the debt recovery agent at her own expense. The husband shall keep the wife reasonably informed as to the recovery of the debts.
Within 120 days of the date of this Order, the husband will sign all documents necessary to transfer to the wife the motor vehicle, registered number … and the motor vehicle, Queensland registered number ….
The wife provide to the husband, within 120 days of the date of this order, a Withdrawal of Caveat number …, together with a cheque made payable to the Recorder of Titles in the sum of $124.83.
As soon as is reasonably possible (and at least by 1 October 2014) each party shall forward or cause to be forwarded to the legal representative of the other party keys or security devices that the first party has to property transferred, or to be transferred, to the other party under these orders, including house and car keys.
The husband shall indemnify the wife from and against income tax liability on income received or deemed to have been received by the wife up to and including the date of these orders.
Subject to these orders and as between the parties:-
(a)each of the husband and wife is solely entitled (to the exclusion of the other) to property and chattels in the possession or control of such party as at the date of these orders; and
(b)that for this purpose Bank accounts are deemed to be in the possession of the person whose name appears on the Bank’s records thereof, insurance policies are deemed to be in the possession of the beneficiary thereof and superannuation entitlements are deemed to be in the possession of the person who is named as the Worker, whose age or working future provides the conditions for payment out of such entitlements;
Leave is given to each party and/or the legal personal representative of the husband to apply in relation to the arithmetic and/or mechanics of this order and/or the procedural orders sought pursuant to Rule 6.15 of the Family Law Rules 2004, such leave to be available up to 1 October 2014 or such other period as is otherwise ordered.
Following the expiration of the appeal period, all subpoenaed documents (except for the parties’ case summaries, minutes of orders and expert reports) shall be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.
All extant applications (except costs), including the husband’s divorce application and the wife’s spousal maintenance application, as are not dealt with in these orders are dismissed. Any costs application may be dealt with in accordance with the Family Law Rules 2004 (Cth).
IT IS CERTIFIED
Pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth), it was reasonable to engage Junior Counsel and Senior Counsel to attend.
THE COURT NOTES
The husband has requested return of his collection of military history books, 15 plates previously belonging to his mother, engraved silver teapot which was a gift to the husband from the army and silver salt and pepper shakers.
The motor vehicle in Queensland is owned by one or other of the husband’s business and has an agreed value of $3,000. As this vehicle is to be transferred to the wife, the value of G Pty Limited was reduced by $3,000 and the motor vehicle was treated as property with a value of $3,000 on the wife’s side of the ledger. If this approach is arithmetically incorrect, the parties (or either of them) have leave to apply to vary these orders pursuant to order 20 above; provided a legal personal representative has been appointed for the husband.
The wife made submissions as to the method of transferring the 45 per cent of the value of B Street to her. The approach adopted in these orders is to delay the payment to her of her share of the value of B Street until that property has been sold. It is not intended to double count to mortgage. If the approach is arithmetically incorrect, the parties (or either of them) have leave to apply to vary these orders, pursuant to order 20 above; provided a legal personal representative has been appointed for the husband.
The parties conceded, by way of agreed fact that the husband had died on Sunday 2 March 2014.
The husband’s counsel made further oral submissions to this Court on 5 March 2014 (when she appeared by genesis telephone link with the husband’s two sons present with her) and by way of letter lodged (pursuant to leave) dated 6 March 2014.
Senior counsel for the wife made oral submissions in court on 5 March 2014 (when he appeared by genesis telephone link with the wife and Ms Foale by telephone and Mr McKenna at the bar table) and the wife’s solicitor made written submission by document entitled ‘Submissions made on behalf of wife’ filed 7 March 2014 (pursuant to leave).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Randle v Randle has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT HOBART |
FILE NUMBER: HBC 668 of 2010
| Ms Randle |
Applicant
And
| Mr Randle |
Respondent
REASONS FOR JUDGMENT
EX TEMPORE
These proceedings were heard by me on 18 and 19 February 2014. At the conclusion of evidence and submission, reasons were delivered including findings of fact which are substantially as set out as follows. Those reasons included the division of property and which party would retain what property.
As the structure of the orders was, in the context of these parties, necessarily complex the proceedings were stood over to 5 March 2014 for formal orders to be made. In the meantime the parties were to make submissions as to how the orders ought to be structured in light of the determination on 19 February 2014.
On Sunday 2 March 2014 the respondent husband died. His legal representative had, prior to that time submitted a form of order. On 5 March 2014 the legal representatives for each party made submissions as to the orders and further written submissions were received the following day. Orders were perfected on 7 March 2014.
EX TEMPORE REASONS - 19 FEBRUARY 2014
INTRODUCTION
In these proceedings commenced in July 2010, Ms Randle, (“the wife”) sought property orders against Mr Randle (“the husband”).
This is the second relationship of both parties, and each of the parties has children from their first relationships. It is a particularly sad case, as it is not in issue that the husband has a terminal illness and is unlikely to survive very long into the future. These proceedings and this illness have caused enormous concern for the husband, his sons and the wife. This is also a difficult matter because the wife, the sons and the husband are distrusting of each other and observe the motives of the other in a dark and black light.
I have delivered ex tempore reasons (although they were tidied and put before the parties in clearer written form when the orders were made) as the husband ought to know the result of these proceedings before he passes.
THE ISSUES
There are a number of issues which this Court needs to determine, including the nature and length of the relationship of the parties and how to treat the valuation of G Pty Limited. There are serious issues of the nature and extent of the parties’ respective contributions, including initial contributions, contributions during the relationship, and contributions since the relationship came to an end. There is an issue regarding other factors, including those pursuant to s 75(2) of the Family Law Act1975 (‘the Act’).
Each of the parties has filed a case outline and set out the orders that they seek. The wife’s case is that the property ought to be divided substantially equally, with her retaining certain assets and the husband retaining other assets. The husband’s position is that he set up G Pty Limited in 2002, that he had generally contributed more than the wife, and in particular he (with his son Mr N) contributed solely to the creation and continuation of the business. He says, on the basis of that asset being effectively excluded, there ought to be a division of property 75 per cent as to him and 25 per cent as to the wife.
The pool of assets is substantially agreed at just under $4.8 million.
The value of G Pty Limited was valued by the Single Expert, to be just under $2.4 million, so it represents effectively half of the total assets, hence the circumstances in which the parties find each other, that is, the wife seeking equality and the husband seeking 75 per cent for him and 25 per cent to the wife.
The husband is aged 67; he is in very poor health. It is not an issue that he is in the final stages of a terminal illness. Such was the state of the husband’s health; he was unable to give evidence at court. The Court took the step of convening at his bedside on two occasions. Each of these was for a relatively short period of time. The Court acknowledges the effort that his family went to, to make that comfortable for him, court staff, the wife, counsel and the Court.
The wife is aged 63, and she has the health difficulties set out in her trial affidavit, at paragraph 3.
The parties met in 1987. The wife asserts they commenced cohabitation in 1989. They married in 1993, and their marriage was the subject of a difficult time in 2002, and I will refer to that a little later in these reasons. The wife contends that the marriage ended in July 2010. She further contends that she made contributions from that time. On the evidence I generally accept those contentions.
The husband’s case is that the parties ended their relationship in 2002. The husband was not disingenuous in this evidence, as the parties sexual relationship ended at that time but on the evidence I am satisfied that their emotional relationship and married relationship continued until July 2010.
At the commencement of this hearing, I informed the parties of my concern that I would likely need to make adverse findings of credit in relation to one or both of the parties.
In this case, the wife relied upon her affidavit filed 28 January 2014 and her financial statement filed the same day. In addition she relied upon an affidavit and report of Mr L, a single expert. A number of documents were tendered, and I have had regard to all of those documents.
The husband relied upon his affidavits filed 24 December 2013 and 14 February 2014 and his financial statement of 14 February 2014.
Each of the parties was cross-examined. I have had regard to the husband’s ill health in relation to the cross-examination, in particular in the first 50 minutes of his evidence, where he clearly struggled with memory, but not with clarity of thinking.
Notwithstanding my early concerns, I am satisfied that both parties gave evidence as to the best of their recollection. Neither party endeavoured to deceive the Court. Each of them endeavoured to say what they thought had happened, but coloured from their own memories and subjectivity, memories are not perfect. People’s perceptions of themselves are often different from other people’s perceptions of them. Each of the parties tried and succeeded in dealing with this matter with dignity. It was to the credit of each of them. I will consider the probative force of any disputed issues, of which there are, fortunately, very few, and make findings about them, and I am not in any way critical of the evidence of either of the parties.
In these reasons, any statement of fact is to be regarded as a finding of fact.
The wife’s evidence was contained in her detailed trial affidavit, and she spent a significant period of time in preparing that affidavit and its annexures. She is careful and many assertions of fact were supported by documentation.
As I indicated earlier, on the evidence, I am satisfied that the parties started a relationship in 1987. I am satisfied that the wife was receiving a modest income and that each party commenced contributing towards a joint endeavour at that time. I am satisfied that they commenced cohabitation in about 1989, and contributions continued. The wife contributed as a homemaker, partner and financially.
In 1987 the husband left his then employment and started the business, M Pty Ltd. He had significant skills in that type of business. In addition he served in the part time military in which he had a long history. He excelled and took great delight in that service.
Over the following years, commencing in 1991 the parties bought real estate, at times sold real estate, and continued their joint contributions.
At the commencement of contributions, the wife had a near new car and about $3,000 savings in the bank together with some furniture. Those savings had increased to about $4,000 by the time they commenced cohabitation in 1989, although that increase must be seen in the context of joint contribution.
The husband had some money in the bank, although not a large sum, (I prefer the wife’s evidence in this regard, some furniture/furnishings, a car, and an interest in his then former matrimonial home. That interest was valued at about $100,000 in about 1990 or thereabouts. It was subject to a mortgage of about $30,000 which the husband used to pay for his first wife.
Each of these parties has a close relationship with their children and has contributed to them as best they can in different ways over the whole of the period of their relationship and contribution.
I accept that in about 1999, or thereabouts, the husband had a loan from his mother of $25,000 which was forgiven by her to him.
In about 2003, or thereabouts, the husband was left a one half interest in the home of his mother. At that time the home had a value of about $130,000, and the husband paid out $75,000 to his brother to acquire the whole of that home. It’s not clear what the status of that loan is or whether it has morphed at any particular time.
In 2002 a number of events occurred. The husband recognised that some industries were under stress in Tasmania and looked for a different way to make income. He decided to set up G Pty Limited. In doing so he excluded the wife from that business, about which she was upset and which put pressure on their relationship.
The husband structured and operated the G Pty Ltd business without the wife because, on his perception, whilst she had helped him in the past, he believed that she was not effective in terms of managing a business or staff. He set that business up on the back of an existing strong business with an existing strong turnover, and with the skills he had developed through the relationship and prior to the relationship.
To describe the husband as a workaholic is an understatement. The husband devoted himself to whatever cause he was involved in, whether that was in the army or in business. From time to time his wife may have come a poor second to his desire and drive to build his business, and that is not in any way a criticism of him; that was the course he determined to adopt and the wife accepted.
In 2002 the husband commenced living next to or at his business. He continued to travel to his home with the wife and he spent evenings and had most evening meals with the wife.
In 2006 the husband was diagnosed with a serious illness. He has fought a long battle with that illness over the last eight years, with great assistance by the wife both before and after the July 2010 separation.
In terms of G Pty Limited the husband was assisted in the development of that business by his son, Mr N from 2002 to 2006. At this time he found at least one probably more significant clients for the business. In 2006 Mr N went overseas and later returned to the business in 2012.
As part of the husband’s estate planning he had meetings with his accountant and with his wife. Unsurprisingly, given the different perspectives of these parties, this led to conflict as to what he thought his wife was entitled to and what his wife considered she was entitled to. This led to a situation in July 2010 when the letter, which is annexure H to the wife’s affidavit, was sent and these proceedings were commenced. That letter confirmed the separation and reflected the close and loving relationship the parties had up to that time.
The parties ceased sexual intimacy in about 2002. I find, and accept, on the wife’s evidence that the parties continued an intimate and close married relationship in terms of their affection to each other from that time. I accept that in the period between 2002 and July 2010, the wife provided support to the husband in terms of meals, company and other household duties as deposed by the wife.
I do not accept that the parties separated in 2002, the period from that year until July 2010 the wife’s overall contributions were less than they had been in the previous thirteen years of their relationship. The parties structured their marriage differently from 2002, but continued to be a couple, they socialised and travelled together and supported each other emotionally and/or financially.
They were at odds, at times, over the wife’s spending of money. The parties decided to renovate the home in which the wife was living. I accept the evidence of the husband, that he was not happy with the overall result and cost, but on the evidence it was a joint endeavour.
In 2010, after separation, the wife continued to contribute in her own way, and the husband continued to contribute in significant financial ways to the wife. In 2013 the parties travelled overseas together as a couple, although it’s not suggested it was reconciliation.
In September 2013 the husband’s health failed further and the wife has provided significant support to him since that time. I have no doubt that that would be viewed in different ways by different people, bearing in mind the trauma which all of them are experiencing at the present time.
THE LAW REGARDING THE TREATMENT OF PROPERTY
The law regarding the treatment of property is under some level of refocus and review following the High Court decision in Stanford v Stanford in November 2012.[1] Prior to that decision, the preferred approach (although not entirely uncontroversial) was the four step approach reflected by the Full Court of this Court in cases such as Hickey & Hickey & Attorney-General for the Commonwealth of Australia.[2]
[1] Stanford v Stanford [2012] HCA 52.
[2] [2003] FamCA 395.
In determining the property applications I have had regard to the parties’ relationship, marriage and subsequent separation; together with their property transactions during and after the relationship. The parties have been separated since July 2010 and their respective contributions have continued since that date.
The approach of both parties is that this is a matter where there ought to be an adjustment of property between them. They have engaged in litigation for more than three and one half years. Having regard to the particular circumstances of these parties, I am satisfied that it is appropriate and just and equitable to consider an alteration of the parties’ rights and interests in their respective property.
My first task was to identify, according to ordinary legal principles, the existing legal and equitable interests the parties have in property.
Following that task, I considered that it was appropriate and just and equitable for any orders to be made having regard to s 79 of the Act. I then had regard to the relevant contributions and other matters to be taken into account under s 79(4) of the Act.
I considered, in light of the evidence, whether to make orders to adjust the parties’ property interests. As part of that task I had regard to the requirements of s 79(2) of the Act that it is just and equitable in all of the circumstances to make an order under the section. In the circumstances of these parties, I was satisfied that it is just and equitable that the Court exercises its powers to adjust property pursuant to s 79 of the Act.
THE PARTIES PROPERTY
In terms of the pool of assets, it totals some $4.78 million. The precise amount will be varied because of a number of concessions that were made at the commencement of the submissions, including the bad debts of K Lawyers, the value of the car in Queensland, which is agreed at $3,000, the increase of the value of the wife’s car from three thousand to four thousand dollars.
Another dispute was in relation to the property in Queensland, which the husband had said did not have a value of $500,000, as determined by a single expert. He said its value was $460,000. The parties agreed that the Queensland property had furniture with an agreed value of $3,000.
The effect of these orders that I am going to make will be to order the sale of that real property and furniture and the net proceeds are to be divided in accordance with the percentage that I have determined. So if it is sold for $460,000 or $500,000 the percentage will apply to that sum and not to some other sum which is not agreed. The difference will make no major difference to the overall pool of property.
The husband owns property, O Street, P Town and R Street, P Town, which has an agreed value of $500,000. It is to be retained by the husband. The wife owns S Street, P Town, which is to be retained by her; it has an agreed value of $490,000. The property T Street, P Town is owned by the parties jointly and has an agreed value of $194,000, and orders will need to be put in place to transfer that property to the wife’s sole name.
There are properties at U Street, V Street and, W Street, P Town, which are in various family trusts or other entities owned and controlled by the husband. Those properties will be retained by the husband at the agreed valuation, which are, in any event, included in the valuation of the first two, the valuation of the Family Trust. The third property is included in the valuation of G Pty Limited. The property at Queensland I have already dealt with; it is to be sold, and there is to be an appropriate adjustment in that regard.
There is furniture at S Street, P Town. There is an issue about antique furniture. The wife asserts that that was part of the division agreement between the parties. The husband asserts that it’s not and wanted those items returned. Having regard to the evidence of each party, and without challenging the veracity of such evidence of each party, I intend to make an order requiring the wife to have those items made available to the husband.
Otherwise, the furniture at S Street Street, P Town remains the property of the wife. The furniture at T Street, Launceston remains the property of the husband.
There is a piece of antique furniture at J Hall which has an agreed valuation of $1,200, which will be treated as the husband’s property.
The husband has shares with a current value of about $92,588, and those shares are to be transferred to the wife at today’s valuation, excluding the E Bank shares, which have a value of about $5,000, which are to remain the property of the husband.
The husband is to retain the moneys in the E Bank Saver account totalling $2,056. He is to transfer or pay to the wife the money held in the E Bank joint bank account, being the rental property for the T Street property, of about $943.
The bank accounts in the wife’s name, which are the E Bank acounts 1, 2, & 3, which is $34,836, 4 which is $4993, the term deposit with X Trustee at $33,932, are to remain the property of the wife at those valuations. The loan the wife made to her son of $40,000 is an asset of hers. The Y Pty Ltd shares to the value of $9,924 are hers, and they are to be taken on her side of the ledger.
There was some issue in the Court hearing as to the proceeds of sale of a property where the wife received about $123,000. I accept she received that sum, and I accept that that sum in many ways is reflected in the assets which she holds, that is, $60,000 in her superannuation, $40,000 in the sum loaned to her son and the balance elsewhere. So it has not been dissipated and is already included in the pool.
There is a business of G Pty Limited, which the single expert valued at some $2,398,329. The Single Expert gave evidence and was not in any way impeached in his evidence. I accept his valuation of that business, noting that it holds a property obtained by the husband since 2002, being the W Street property. There was an endeavour by the husband to adduce very late evidence as to the value of this business by way of affidavit of his son Mr N. I gave reasons and declined the husband permission to rely upon that evidence.
M Pty Ltd business has a valuation of $326,670. That valuation was not in dispute. There will need to be an adjustment to that price when the property in Queensland is sold (whether it is sold for $500,000 or otherwise)
H Pty Limited has a valuation of $42,739. Those companies and structures will be the property of the husband and will be assigned to him by whatever sensible orders the parties propose to me.
The two cars are to be retained by the husband, and there, I understand, needs to be no orders in relation to those vehicles.
The $4,500 motor vehicle and the $3,000 Queensland car will be assigned to the wife. If the values of those cars are included in the value of one or other of the corporations then the values of the corporations will be adjusted accordingly to give effect to the cars being transferred to the wife. The K Lawyers debt was agreed at $12,788.37. I will make a separate order in relation to that sum. If it’s an asset of one of the companies it will be taken out as an asset. I will make an order directing that any receipts from that will be divided in accordance with the percentage that I determine in respect of this matter.
SUPERANNUATION
In terms of the superannuation fund, there are four superannuation funds:-
(a)the F Pty Ltd Investment, $367,000;
(b)the Super Fund Shareholding and Cash, $94,477;
(c)the F Pty Ltd Investment Policy 1, $21,013; and
(d)the F Pty Ltd Investment Policy 2, $4,970.
As the latter of those investments policies, which is superannuation, is less than $5,000 I am not permitted to make a splitting order in relation to that fund. Unless it can be rolled out and put into one of the other funds it would have to remain the property of the husband for the purpose of these orders. The other policies are such that they ought to be transferred or rolled out to the wife at a time when it maximises their return.
There was some issue as to whether the F Pty Ltd policies were that of the husband or members of his family, but no evidence was given in that respect. The wife will retain her portfolio and the husband will be responsible for the $73,410 being the mortgage on the S Street property. The properties that are transferred to the wife will be transferred free of any encumbrances.
I note that the totality of that sum will come to somewhere between $4.7 million or $4.8 million dollars.
Having considered the legal and equitable interests of both parties to property I am satisfied that I ought to consider whether there should be an adjustment of property pursuant to s 79 of the Act.
CONRIBUTIONS
The quality and quantity of the parties’ respective contributions has been contested in this case. The husband’s initial contributions were greater than those of the wife, as I found earlier in these reasons and I have had regard to that initial contribution. I repeat the findings of contributions set out earlier in these reasons.
In summary the husband’s initial financial contributions were greater than that of the wife, given his interest in the home he owned with his former wife. The parties each made significant direct, indirect financial contributions over the years of 1987 to 2002. After that time the husband’s financial contributions were greater, albeit that the G Pty Ltd business was leveraged off the M Pty Ltd business.
I have had regard to the husband’s contribution in terms of the money from his mother (making and forgiving the $25,000 loan) and the bequest of a half-share of his mother’s home.
I have considered the wife’s contribution (both financial and non financial) made directly or indirectly by her in the acquisition, conservation or improvement of the real estate properties and the M Pty Ltd business. I have considered her ongoing contributions to the welfare of the parties, including the wife’s role as a home maker and carer for the husband, which continued up to the date of hearing. In doing so, I have also had regard to the wife working from 1987 through to 2000 or 2002. She from time to time, in that period of time ran the business whilst the husband was away. Over those years the parties both worked hard to create income and capital. I accept her descriptions of such contributions as set out in her trial affidavit.
The first of the parties’ companies was created by the drive of the husband working long hours and working long hours away from home. That imposes a greater task on the one left behind in terms of maintaining a home and, at times, running the business.
I accept that the wife, from time to time, looked after the husband’s mother and provided significant support to her.
I have noted and made no adjustment in relation to the moneys expended on the renovations of the home in which the wife lives. It was a joint endeavour.
The husband, with the help of his son, Mr N, commenced the G Pty Limited business and I have had regard to the husband’s greater contribution in relation to the development of that business and setting that business up. I do that also in noting his other financial contributions.
These are extempore reasons and I have generally accepted the detailed evidence of the wife, I do not intend to go through the contributions chapter and verse. On balance, having regard to the evidence and the findings of fact before me, I determine that, on a contribution basis the property should be divided on the basis of a contribution of 60 per cent by the husband and 40 per cent by the wife and that is on a global approach.
OTHER FACTORS
As to the question of the other factors including the factors under s 75(2) of the Act I of have had regard to the age and state of health of each of the parties, the respective financial resources of each of the parties and the needs of the wife to support herself, including that she was in receipt of support from the husband of between $80,000 and $100,000 per year over the last few years.
The limited earning capacity of the wife is a relevant factor.
The wife does not enjoy good health and her earning capacity is significantly reduced. Notwithstanding the university degree she received in the mid 2000s. The wife has depended upon the financial support of the husband over the period of their marriage, particularly since 2002. He pays her support of about $80,000. In addition he pays her car expenses, telephone, gardening and the like.
In the circumstances in this case, I have determined, given all of the circumstances that there should be a relatively modest adjustment in the wife’s favour. Unfortunately, as conceded by the husband, there is not to be any adjustment in his favour given the present state of his health.
Having regard to all of the facts and circumstances, I have determined that there ought to be an adjustment of five per cent in relation to the other factors. Thereby providing that the wife would receive 45 per cent of the property and the husband to receive 55 per cent of the property.
I do not intend to make orders today, as I had indicated to the parties earlier. There needs to be thought as to how the structures can be undone and transferred and how properties can be effectively transferred.
EX TEMPORE REASONS - 5 MARCH 2014
These proceedings were heard by me on 18 and 19 February 2014. At that time the total property was as follows:-
(a)O Street and R Street, Launceston, $500,000;
(b)S Street, Launceston, $490,000;
(c)T Street, Launceston, $194,000;
(d)shares held personally by the husband with ASX, being the E Bank shares, $5000 approximately;
(e)shares held by the husband with the Australian Stock Exchange, not E Bank shares, being valued at $87,588;
(f)Commonwealth Bank Net Saver ending 849, $2056;
(g)E Bank joint account, being the T Street rental property, $943;
(h)a number of accounts in the wife’s name, being $598, $376, $34,836 and $4993, a term deposit of $33,932.
There is a loan of $40,000 to the wife’s son; the Y Pty Ltd shares of $9,924; the valuation of G Pty Ltd, $2,398,329.
In respect of M Pty Ltd, I was concerned as to how I could deal with the property, and I raised this with the parties. That property, which is in Queensland, had a valuation on it of some $500,000 and the furniture in that property. What I have done is deducted from the value of M Pty Ltd, which appears to be the owner of that property, that $503,000, giving that sum a negative $176,330. I did not deduct the amount under the mortgage as that was, in effect, taken care of by giving the husband the full credit of $503,000.
Some submissions were made in relation to the structure of the orders regarding the Queensland property. The whole of the agreed value of the Queensland property and the furniture were deducted from the value of M Pty Ltd which had been agreed at $326,670. This included the Queensland property and the mortgage on that property.
The structure of the orders were those as sought by the husband. To give effect to those orders I had outlined in the reasons, I provided that the husband or his nominee would continue to pay the principle and interest on the mortgage.
As such, I structured the orders in this way. First of all I deducted the full value of the home unit and furniture from the value of M Pty Ltd changing it from $326,670 to negative $176,330. I directed that the husband pay to the wife, effectively, 45 per cent of the net proceeds of sale after deduction of the selling expenses and an amount set aside for capital gains tax.
I will explain what I will do later when I make the orders to give effect to the matters that I set out in the reasons. There is H Proprietary Limited, $42,739; the motor vehicles, $6,000; the Queensland car, $3000; the other car, $4,500; the piec of antique furniture, $1,200; the super fund; holdings and cash of $94,477; the F Pty Ltd investment of $367,000. The wife’s superannuation of $161,084 and the mortgage on S Street of $73,410.
In terms of the insurance policies the parties had agreed that there were two policies which were assets of the husband, the F Pty Ltd Investment Policy … inclusive of $16,709 death benefit and the F Pty Ltd Investment Policy … of $4,970.
In my reasons delivered at the conclusion of the hearing on the 19 of February 2014 I indicated that that later policy being under $5,000 ought to remain with the husband. The earlier policy, and it was an agreed position, ought to be paid to the wife. Submissions were made in relation to these policies however, there was no evidence adduced to me nor any concessions made.
It is open to the parties to make application in relation to the mechanics of the order or to seek to vary the order if the nature of that property has changed from the agreed position at the time that judgment was delivered and the decision made in relation to the distribution of property.
I had intended in the orders and indicated to the parties that the wife would have S Street, T Street, the balance of the shares in the ASX but not the E Bank shares, the joint account in T Street, her bank accounts (which I referred to earlier), the term deposit with X Trustees, the loan to her son, the Y Pty Ltd shares, the Queensland car, the other car, the super fund shares and cash, the F Pty Ltd Investment Policy for $21,013, although I note the comments that were made earlier, the portfolio, plus the money to be paid to her.
The husband would retain O Street, R Street, the shares held personally with the ASX in E Bank, the bank account with $2,056 in it, the G Pty Ltd of $2,398,329, M Pty Ltd, which I indicated was minus $176,330, the H Company, $42,739, the cars, the piece of antique furniture, the F Pty Ltd investment property, the mortgage which is negative $73,410. As I indicated earlier, the reasons for this matter were delivered at the conclusion of evidence and submissions. The husband’s health was poor and it was anticipated he would pass away in the very near future.
It is an agreed fact, apparently, that the husband passed away on 2 March 2014. In my February reasons I set out the orders I proposed to make dealing with the various items of property, the value of most which were agreed in dealing with this division. After an exchange between bench and bar, the precise form of the formal orders was to be made today. Each of the parties was to submit a form of order and it was anticipated they would take advice from their respective accountant or accountants. A form of order was provided by the wife on 4 March 2014, and on 4 March the solicitor for the husband forwarded me a copy of the orders, noting she did not currently hold instructions for the executors.
Section 79(8) of the Family Law Act 1975 (Cth) provides:-
Where, before property settlement proceedings are completed, a party to the marriage dies:
(a)the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings;
(b)if the court is of the opinion:
(i)that it would have made an order with respect to property if the deceased party had not died; and
(ii)that it is still appropriate to make an order with respect to property;
the court may make such order as it considers appropriate with respect to:
(iii)any of the property of the parties to the marriage or either of them; or
(iv)any of the vested bankruptcy property in relation to a bankrupt party to the marriage; and
(c)an order made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
It provides two parts, ss 79(8)(a), which provides a discretion to continue property proceedings in circumstances where a plaintiff dies and to appoint, in a discretionary way, a legal personal representative. That term is not defined under the Act. There is no overt interaction between ss (a) and ss (b) of s 79(8).
What I intend to do is to give leave for the sons and/or putative executors to apply if they wish to be appointed the legal personal representative of the husband. I am going to give the parties leave to make that application by 1 October 2014. Subsection (b) of s 79(8) is not a part of ss (a) and it is open for the Court to make property orders.
When reasons were delivered on 19 February 2014 it was clear that the husband’s life expectancy was severely curtailed. No application was made by his legal representatives for s 75(2) factors, and in fact, they positively eschewed such application. There was an application made by the wife pursuant to s 75(2) that the factors were to be considered on her side of the ledger on the basis that the husband was likely to pass away in the immediate future.
When giving reasons, it was clear as to the percentage division of the property each party would take. Each of the parties was given leave to provide a form of order which mechanically reflected the judgment. Such form of order was provided on behalf of both parties. Given those circumstances, I consider it is appropriate to make an order in the light of the structures provided by me prior to the death of the husband. I intend to make an order pursuant to s 79(8)(c). Proceedings being in personam, I have no alternative but to dismiss the divorce application and the application for spousal maintenance.
The husband sought orders that he could pay the amount due to the wife by instalments; that was not the subject of any submission at the conclusion of the hearing, nor was it considered by me when I outlined the orders. The husband also sought to make payments to the wife by way of distribution of the Family Trust. I am happy to accommodate that approach provided the husband meets any taxes arising from that course.
The husband sought orders for return of a number of items personal items. It was only the antique furniture that were the subject of submissions. I intend to make an order in relation to the latter two items and a notation in relation to the remainder. One of the orders sought by the husband was the transfer of Z Street, Q Town, but it didn’t specify to whom that property should be transferred.
I provide an extension of time to the husband or his executor or trustee to comply with these orders. In terms of interest, the husband has been paying to the wife the sum of $80,000 per year by way of voluntary spouse maintenance. That entitlement ceases upon the death of the husband. The wife should be entitled to receive funds from the husband reasonably promptly after making these orders, but payment may be delayed by reason of the husband’s passing. Accordingly, the moneys the husband is to pay to the wife will not be payable for 120 days; however, interest will accrue on that sum from 1 April until the 120 days have passed. After that time, the interest will accrue in accordance with the Family Law Rules 2004.
I certify that the preceding one hundred and five (105) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 19 February 2014 and 5 March 2014.
Associate:
Date: 19 February and 5 March 2014
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