FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Riain & Dohman [2024] FedCFamC1F 549
File number(s): SYC 2118 of 2021 Judgment of: CHRISTIE J Date of judgment: 22 August 2024 Catchwords: FAMILY LAW – PROPERTY – Alteration of property interests – Just and equitable – Where both parties wish to retain a property – Where remaining property is subject of dispute – Where existing legal and equitable interests considered – Whether advances from family members have the character of loans – Where husband and wife are both shareholders in companies – Where valuation evidence inadequate - Whether there should be adjustments based on s 75(2) factors – No matters of principle.
FAMILY LAW – INJUNCTIONS – Breach of orders – Where husband requested wife be injuncted from instructing her lawyers – Where wife sought litigation funding – Where husband asserted wife breached orders prohibiting encumbrance of assets by consenting to caveat over matrimonial home – Where husband failed to establish knowledge on behalf of wife’s lawyers – Where there was no aided breach of orders by wife’s lawyers – Application dismissed.
Legislation: Family Law Act 1975 (Cth) ss 75, 79, 81 Cases cited: Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
Dickons & Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
H Stanke & Sons Pty Ltd v O'Meara (2006) 95 SASR 425; [2006] SASC 308
In the Marriage of Pierce (1998) FLC 92-844; (1998) 24 Fam LR 377
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Kowaliw & Kowaliw 1981 FLC 91–092
Mallett v Mallett (1984) 156 CLR 605; [1984] HCA 21
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Norman v Norman [2010] FamCAFC 66
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Trevi& Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Wallis & Manning (2017) FLC 93-759; [2017] FamCAFC 14
Whent & Marbrand [2018] FamCAFC 95
Williams & Williams [2007] FamCA 313
Division: Division 1 First Instance Number of paragraphs: 109 Date of hearing: 5-7 August 2024 Place: Sydney For the Applicant: Litigant in person Counsel for the Respondent: Ms Spain Solicitor for the Respondent: Rockdene Lawyers Table of Corrections Paragraph 82 Insertion of item 10 W CBA & ANZ accounts secured over B Street, Town C; $271,631 Amendment to Total Replace $1,727,316 with 1,998,947 Amendment to NET TOTAL ASSETS Replace $4,861,606 with 4,589,975 Paragraph 107 Insertion of item (i) CBA & ANZ accounts secured over B Street, Town C($271,631) Amendment to subtotal Replace $2,139,798 with $1,868,167 Paragraph 108
Line 1 Replace $4,861,606 with $4,589,975
Line 3 Replace $2,552,249 with $2,409,737
Line 4 Replace $169,379 with $312,071
Line 6 Replace $158,122 with $300,814 ORDERS
SYC 2118 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR RIAIN
Applicant
AND: MS DOHMAN
Respondent
ORDER MADE BY:
CHRISTIE J
DATE OF ORDER:
22 AUGUST 2024
Amended pursuant to rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021…
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CaseChat Overview and Summary
The court meticulously examined the financial disclosures and the application of funds from family loans. It found that while the husband's financial disclosure was incomplete, it did not significantly impact the overall asset pool. The court also considered the valuation of shares and the transfer of shares to the minor children. Ultimately, the court emphasized the need for a just and equitable outcome, acknowledging the complexity of defining such an outcome but striving to balance the contributions and needs of both parties. The court ordered specific transfers of property interests, refinancing of debts, and payments between the parties to achieve an equitable distribution.
In dismissing the husband's injunction application, the court found that there was no evidence to support the husband's claims that the wife's lawyers had aided a breach of court orders or that the wife had knowledge of such a breach. The court held that the wife had not contravened the orders prohibiting encumbrance of assets by consenting to a caveat over the matrimonial home. The application for the injunction was thus dismissed.
Orders
Orders of the court
SYC 2118 of 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:
MR RIAIN
Applicant
AND:
MS DOHMAN
Respondent
ORDER MADE BY:
CHRISTIE J
DATE OF ORDER:
22 AUGUST 2024
Amended pursuant to rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) on 26 September 2024
THE COURT ORDERS THAT:
1. Within 30 days of the making of these Orders, the applicant husband do all acts and things and sign all documents necessary to transfer to the respondent wife all his rights, title and interest in the property situated at D Street, Suburb E (“the Suburb E property”).
2. Contemporaneously with Order 1 above, the parties do all acts and things and sign all documents necessary to discharge the mortgage secured against the Suburb E property and thereafter the wife refinance all existing liabilities secured against the Suburb E property into her name.
3. If the wife is unable to comply with the requirement for refinance in Order 2 then the parties are to do all acts and things and sign all documents necessary to sell the Suburb E property.
4. The parties do all things to apply the proceeds of sale of the Suburb E property as follows:
(a) Discharge of all encumbrances on title;
(b) Payment of all sums due on settlement;
(c) Payment of legal or conveyancing fees;
(d) Payment of an amount referrable to estimated Capital Gains Tax (“CGT”) (calculated in accordance with Order 5) into a controlled monies account; and
(e) Balance to the wife.
5. In relation to any CGT payable on the sale of the Suburb E property:
(a) Within 60 days of the date of these Orders, the wife will cause her accountant to provide an estimate of the capital gains tax payable on the sale of the Suburb E property;
(b) Within 3 months of the end of the financial year in which the Suburb E property is sold, the parties will do all things and sign all documents necessary to lodge their personal tax returns so that an assessment can issue;
(c) That simultaneously with lodging the tax return, the wife will direct her accountant to prepare a CGT calculation arising from the sale of the Suburb E property and will provide a copy of the calculation to the husband;
(d) Within 14 days of the wife providing the assessment to the husband, the husband and wife will do all acts and things and sign all documents necessary to pay to the ATO from the controlled monies account, the sum necessary to pay in full the CGT liability only as calculated by the wife’s accountant pursuant to Order 5(a) above; and
(e) Any funds remaining in the controlled monies account after the payment of the CGT will be distributed to the wife.
6. Within 30 days of the making of these Orders, the wife do all acts and things and sign all documents necessary to transfer to the husband all her rights, title and interest in the property situated at F Street, Suburb G (“the Suburb G property”).
7. Contemporaneously with Order 6 above the parties do all acts and things and sign all documents necessary to discharge the mortgage secured against the Suburb G property and thereafter the husband refinance all existing liabilities secured against the Suburb G property into his name.
8. If the husband is unable to comply with the requirement for refinance in Order 7 then the parties are to do all acts and things and sign all documents necessary to sell the Suburb G property.
9. The parties do all things to apply the proceeds of sale of the Suburb G property as follows:
(a) Discharge of all encumbrances on title;
(b) Payment of all sums due on settlement;
(c) Payment of legal or conveyancing fees; and
(d) Balance to the husband.
10. Within 30 days of the date of these Orders the wife in her capacity as Director of H Pty Ltd do all acts and things and sign all documents necessary to refinance the following loans and release the husband as a borrower and/or guarantor:
(a) CBA loan …18;
(b) CBA loan …02;
(c) CBA loan …09; and
(d) ANZ Overdraft …53.
11. If the wife is unable to comply with the requirement for refinance in Order 10 then the wife is to do all acts and things and sign all documents necessary to sell the property situated at B Street, Town C QLD (“the Town C property”).
12. The wife do all things to apply the proceeds of sale of the Town C property as follows:
(a) Discharge of all encumbrances on title and/or monies necessary to release the husband from any personal guarantee;
(b) Payment of all sums due on settlement;
(c) Payment of legal or conveyancing fees; and
(d) Balance to H Pty Ltd.
13. That the husband pay to the wife the sum of $300,814 $158,122 within 30 days.
14. The husband be declared solely entitled to all shares in his name, bank accounts in his name, superannuation entitlements, car and personal property in his possession or control.
15. The wife be declared solely entitled to all shares in her name, bank accounts in her name, superannuation entitlements, car and personal property in her possession or control.
16. Except as otherwise provided in these Orders each party shall indemnify the other party against any liability in his or her sole name.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
Background
Background to the litigation
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
As to the fourth step, namely considering justice and equity, what is a “just and equitable” outcome “does not admit of exhaustive definition” and “[i]t is not possible to chart its metes and bounds” (Stanford v Stanford (2012) 247 CLR 108 at [36]).CONSIDERATION The issues which fall to be determined in order to determine what property orders are just and equitable are:(a)Did the wife’s parents loan the parties funds?(b)How were the funds which came from the wife’s family applied?(c)Did the husband’s mother and father loan funds to the husband or an entity?(d)If so, how were those funds applied?(e)How should the shares in J Pty Ltd be valued?(f)What is the significance and consequence of the transfer of 40 shares in W Pty Ltd to the parties’ minor children?(g)In what manner should the parties’ respective contributions during the relationship be weighed?(h)How should the parties’ respective contributions after separation be weighed?(i)What is the income and earning capacity of each of the parties?(j)Have both parties made full and frank financial disclosure? If not, what is the consequence (if any) of that omission?Disclosure The correspondence in this case (in evidence before me) demonstrated a frustration on the part of the wife and the solicitors who represented her about the provision by the husband of financial documentation over a long period. In the period immediately preceding the trial it is plain that many of the documents which had been the subject of previous complaint were provided such that at the hearing the husband’s financial disclosure helped to resolve some of the issues which had hitherto remained unsolved, such as the fate of the proceeds of sale of the property owned by W Pty Ltd. While the disclosure by the husband was subpar, this did not ground a conclusion that the husband had undisclosed income or assets such as would impact on my assessment of the pool available for adjustment (except perhaps some publicly listed shares). The financial disclosure of the wife in respect of her income and access to the benefits of self‑employment was also less than ideal but similarly, I did not conclude that this failure ultimately affected the determination of the asset pool and was comfortably satisfied that the financial statements for the entity from which the wife derives income provided a tolerably clear impression of the value she is able to derive from her shareholding.Items of dispute on the balance sheetL Pty Ltd The company owns a property at M Street, Suburb N NSW. The parties agree that the value to be attributed to the Suburb N property is $3,350,000, being the figure in the single expert report dated July 2024. Further, the parties agreed that the Suburb N property is encumbered by way of a mortgage in the sum of $1,222,913. The husband also says that there are debts of the company to persons who have invested funds with the company (or loaned monies to the company). I examine each of these purported liabilities below.