ROBB & WILLIAMS

[2010] FamCA 342

FAMILY COURT OF AUSTRALIA

ROBB & WILLIAMS [2010] FamCA 342

FAMILY LAW – PROPERTY SETTLEMENT – interpretation of previous consent orders – determination of liability of various outstanding expenses 

Family Law Act 1975 (Cth)

APPLICANT: Ms Robb

RESPONDENT: Mr Williams

FILE NUMBER: ADC 835 of 2007

DATE DELIVERED: 3 MAY 2010

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: BURR J

HEARING DATE: 16 DECEMBER 2009 & 15 APRIL 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: MS PYKE QC

SOLICITOR FOR THE APPLICANT: ANGELA FERDINANDY

COUNSEL FOR THE RESPONDENT: NOT APPLICABLE

SOLICITOR FOR THE RESPONDENT: HUSBAND IN PERSON

Orders

1. That from the remaining funds of WR Consultants Pty Ltd (“the company”) the amount of FOUR THOUSAND NINE HUNDRED AND FIFTY DOLLARS [$4,950] (including GST) be paid to Mr N to complete the liquidation of the company SAVE AND EXCEPT that in the event that there are insufficient funds in the company to discharge Mr N’s fees then the parties pay one-half each of those fees or any remaining fees due and payable to him in the event of partial satisfaction of same from the company funds.

AND UPON THE COURT DECLARING that of the amended account of P Accountants being a total of $8,996.51, the sum of FOUR THOUSAND ONE HUNDRED AND SEVENTY SIX DOLLARS AND FIFTY ONE CENTS [$4,176.51] relates to the work of P Accountants in appointing and dealing with Mr O as liquidator of the company and the sum of FOUR THOUSAND EIGHT HUNDRED AND TWENTY DOLLARS [$4,820] relates to work otherwise for the company

IT IS ORDERED:-

1. That Mr N be authorised to apportion the aforesaid amended account of P Accountants as follows:-

   (a)as to the company, the sum of $4,820; and

   (b)as to the wife, the sum of $4,176.51

   and that the said liability be paid out of the assets of the company and apportioned between the parties accordingly.

2. That the wife pay to P Accountants the sum of FIVE HUNDRED AND THIRTY DOLLARS AND FIFTY NINE CENTS [$530.59] being the balance of the original account tendered by them.

3. That the husband do pay from his share of the company assets all debts and liabilities of the husband to the company in respect of all rental due and owing by the parties with respect to the V property and the Marina berth in the sum of FOUR THOUSAND DOLLARS [$4,000].

4. That the wife do pay from her share of the company assets all debts and liabilities of the wife to the company in respect of all rental due and owing by the parties with respect to the V property and the Marina berth in the sum of TWO THOUSAND FIVE HUNDRED DOLLARS [$2,500].

5. That the parties be at liberty to apply on seven [7] days notice to the other for any consequential, additional or addendum orders required by the liquidator of the company, Mr N, or otherwise in order to complete the liquidation of the company.

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

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADC 835 of 2007

MS ROBB

Applicant

And

MR WILLIAMS

Respondent

REASONS FOR JUDGMENT

1. The application before me for determination is an interesting one.  After lengthy trial proceedings the parties reached agreement on all issues of property settlement, which agreement was reflected in consent Orders made by me on 23 April 2009.  Having reached that agreement in circumstances where naturally I was not privy to the discussions or negotiations, the parties cannot now agree what they meant in a couple of areas and have asked me to endeavour to interpret for them what they meant.  I am not going to be able to determine what they meant.  The best I can do is interpret and determine what is meant on the face of the Orders.

2. The particular Orders in respect of which the parties are in dispute and about which there is no agreement between the parties as to their meaning and effect are contained in paragraphs 5(d)(i), 5(d)(ii) and 5(q) of those Orders. Those paragraphs read as follows:-

   “[WR] Consultants Pty Ltd

   5(d)That the following costs be paid from the funds in the company account:-

   (i)the Liquidator’s fees and disbursements;

   (ii)the cost of professional advice obtained on the joint instructions of the parties regarding the dissolution of the company and the taxation consequences of the dissolution;

   ……..

   Other assets and liabilities

   …….

   5(q)That the wife do pay the account of [P Accountants] in respect of any work done by [P Accountants] in appointing [Mr O] as Liquidator and any account rendered by [Mr O] in respect of such work and shall indemnify and keep the husband indemnified in respect thereof.”

3. The relevant application requiring my determination is the wife’s amended Application in a Case filed on 30 November 2009 and in particular paragraphs 5, 6, 8 and 9 thereof.  Matters originally raised pursuant to the other clauses of that application have been resolved.

4. In summary, the issues which remain in dispute relate to fees owing to the appointed liquidator Mr N, an account owing to P Accountants and an issue in relation to trade debtors of $6,500 recorded in the books of the company WR Consultants Pty Ltd.  The wife has also sought her costs of bringing these proceedings.  Her Counsel agreed though that her application in that regard should abide my determination of the other issues.

5. The parties swore and filed numerous affidavits in support of their positions in the matter.  The wife also relies upon affidavits of Mr N and Mr C, the latter being the principal of P Accountnats. The husband also relies upon the affidavit of solicitor Ms Rosie Cardone.  Ms Cardone was not required for cross examination.  I have also had the benefit of receiving oral evidence from both parties and from Messrs N and C.

Liquidator’s fees

1. I will deal first with the issues raised by paragraph 9(b) of the wife’s amended Application in a Case.  She does not now pursue all of the matters adumbrated in that sub-paragraph but rather seeks:-

   “That each party do contribute equally towards Mr [N’s] fees and disbursements out of their share of company assets.”

2. Previously, the aforesaid consent Orders of 23 April 2009 directed the parties to appoint Mr N as liquidator in the winding up of the company (paragraph 5(a)).   Mr N’s fees and disbursements were to be paid from company funds (paragraph 5(d)(i)).  In the event that there were insufficient company funds, then the parties were to pay those costs equally (paragraph 5(e)).

3. In his affidavit Mr N has identified a host of fees which remain unpaid. There remained outstanding $3,472.95 of an account of $18,472.95 for work completed up to the 15 June 2009.  However, Mr N agreed to accept a payment of $15,000 for this account.  Further fees have been incurred since which total $3,820.72 for work to the end of November 2009.  Mr N also requested a further capped amount of $2,000 (excluding GST) for future expenses in relation to the finalisation of the liquidation.

4. It was the husband’s case that an estimate of $15,000 provided by Mr N for the liquidation work was in fact a quote for his services and that there was no obligation to pay any amount beyond that.  In his oral evidence, Mr N stated that the figure which he provided to the husband in December 2008 was a reasonable estimate of his fees.  It was produced at the request of the parties’ solicitors and was based on a list provided to him outlining the matters which required attention at the time.   

5. As indicated above, Mr N is no longer pursuing the balance of the account for fees up to the 15 June 2009.  He has written off that balance of $3,472.95.   Furthermore, he has offered to accept a reduced fee of $4,500 (excluding GST) for work completed up to November 2009 and any potential future work required in finalising the liquidation.   In other words Mr N has agreed to accept an amount of $2,500 in lieu of his fees incurred for work undertaken between 15 June 2009 and the end of November 2009 calculated at $3,820.72.  In addition, GST of $250 will be payable representing a total of $2,750.  For the work required to conclude the liquidation he has indicated his agreement to accept an amount of $2,000 plus GST of $200.  Thus the total that he now seeks in settlement of the fees already incurred by him and in settlement of the fees to be incurred by him in completing the liquidation exercise, including GST, is $4,950.

6. By the conclusion of the evidence before me, the husband indicated that he agreed to accept Mr N’s proposal in that regard and agreed the figure of $4,950.  It was a wise choice by the husband.  I was and am satisfied that Mr N never proffered a quote for his services.  He only ever provided an estimate.  The wife had already indicated her agreement to the payment from company funds of the larger amount in fees and hence was perfectly happy to accept the lower sum.

P Accountants’ fees

1. The next matter in contention is the account owing to P Accountants in the amount of $9,527.10 for work completed from 2006 to 2008.  This issue is raised in paragraphs 5, 6 and 9(c) of the wife’s amended Application in a Case.  It arises as a consequence of the consent Orders made by me on 23 April 2009 and as contained in paragraph 5(q) thereof.  The wording, on its face, appears clear.  The wife was to pay the component of the P Accountants’ account in relation to the work carried out by the liquidator Mr O.  The remainder of the fees were to be deducted from the company funds. In his affidavit, Mr C provided a helpful breakdown of the P Accountants account which attributes $5,350.59 to services performed for the company and $4,176.51 to costs in relation to Mr O.

2. In the course of his oral evidence it emerged that the husband’s position was that in agreeing to the consent orders, he was of the belief that the entirety of the P Accountants account represented the costs associated with Mr O and therefore the wife should be liable to pay it in full.  In support of his position, the husband claims that repeated requests for the break down of the account prior to settlement were ignored by Mr C. In his oral evidence Mr C did concede that this was the case.

3. Since being provided in late 2009 with the break down of the account, the husband’s position is that P Accountants undertook unauthorised work for the company in relation to the liquidation and thereby accrued fees for work about which the husband was neither aware nor to which he consented.

4. In determining this dispute, I am assisted by the evidence of the husband and the principal of P Accountants, Mr C, who appeared by telephone.  Mr C gave extensive evidence regarding the component of the account relating to the work completed for the company.  I accept the evidence of Mr C that the liquidation of the company was inevitable and that this was first brought to the husband’s attention in late 2005.  This coincided with the husband’s appointment of Mr L as his personal accountant upon recommendations from Mr C in order to avoid any conflict of interest.  Mr C also stated that the costs in relation to the liquidation of the company were incurred solely in 2006. Mr C’s position was that he had numerous discussions with both the husband and Mr L throughout 2006 in relation to the forthcoming liquidation of the company.  Mr C gave evidence in particular of a three way telephone conversation he had with the husband and Mr L on 3 February 2006.  I accept that it was Mr L, during a telephone conversation in October 2006, who recommended that his former colleague Mr O be appointed the liquidator.  Mr C adamantly denied the proposition that work was performed for the company without the husband’s knowledge or consent.  I accept his evidence in that regard.

5. Under cross examination by the husband, Mr C conceded that approximately 10% of the account related to expenses incurred for work performed purely for the benefit of the wife.  He also acknowledged that a tax barrister was consulted on the instructions of the wife but for acquiring tax advice in relation to the company.  He said that he viewed this advice to be a shared cost as it was related to the company.   I agree with him.

6. As stated, the total costs being sought by P Accountants total $9,527.10 of which $4,176.51 is attributable to their work in relation to the appointment of, and the dealing with, Mr O.  That amount is clearly payable by the wife.

7. Of the balance of $5,350.59, given Mr C’s acknowledgment that some 10% of same was accrued in relation to giving advice to the wife and not for the benefit of the company, the balance of the debt due and owing by the company to P Accountants is $4,820.  The 10% balance of the original account, namely $530.59, is clearly payable by the wife.

Trade debtors

1. The final matter before me for determination relates to trade debtors of $6,500 that were recorded in the company’s financial statements as at the end of June 2008.  The issue between the parties is as to whether or not that amount is owed by the parties to the company for the rental of certain properties or only by the husband.  The properties are V property and a Marina berth (“Marina berth”).  In his affidavit, Mr N has apportioned the rental as $5,000 to the V property for the 2007 and 2008 financial years and $1,500 to the Marina berth for the 2008 financial year.

2. For the duration of their marriage, the parties paid nominal rent for these properties to minimise fringe benefits tax.  The parties have given evidence by way of filed material and oral evidence regarding their usage of these properties between separation and settlement.  

3. In both her filed material and oral evidence the wife maintained that between separation and property settlement the husband had sole access to and use of both assets and therefore should be liable to pay the outstanding rent.  I accept the wife’s evidence that she only attended upon two occasions at the V property after separation.  She also added that she previously did have a key to the property but gave it to the parties’ son to return to the husband in December 2005. The husband denies ever having received such a key.

4. Counsel for the wife cross examined the husband at some length about his usage of the properties. However, I accept that the husband attended infrequently upon the V property and mainly to carry out maintenance work after separation.  The husband also denied that he restricted the wife’s use of V property during this time.  I accept his evidence in that regard too.  Thus I am satisfied that the parties are equally liable in respect of the trade debt accrued in relation to the V property being a total of $5,000.

5. In relation to the Marina berth, the husband conceded that the wife had never used or had access to it. Between separation and settlement the husband had sole access to the berth apart from the one occasion when it was rented out for a period during 2006.  The husband admits that the berth has remained vacant since then. I am satisfied on the evidence that the husband has had sole access to and use of the Marina berth and enjoyed its benefits to the exclusion of the wife.  I am satisfied that the husband should bear sole responsibility for the trade debt of $1,500 in respect of the Marina berth. 

I certify that the preceding  twenty three (23) paragraphs are a true copy of the reasons for Judgment of the Honourable Justice Burr

Associate: 

Date: