RUSSELL & RUSSELL - [2016] FCCA 137

FEDERAL CIRCUIT COURT OF AUSTRALIA

RUSSELL & RUSSELL

[2016] FCCA 137

Catchwords:
FAMILY LAW – PROPERTY – Husband’s application for a property settlement.

ASSET POOL – Add backs – whether the parties’ legal costs should be notionally added back into the asset pool – financial resource – whether unvested shares stemming from the Husband’s employment are considered a financial resource – unvested share units held to be a financial resource – Section 75(2) factors – Husband’s superior earning capacity and younger age – Wife’s primary care of the child – CONTRIBUTIONS – Wife asserts greater initial contribution – Husband asserts greater contribution throughout the marriage – where both parties have made considerable contributions – contributions considered to be equal.

SPOUSAL MAINTENANCE – Where the Wife claims her chances of paid employment are hindered by her five year absence from the workforce – wife is entitled to spousal maintenance for a period of twelve months.

CHILD SUPPORT – Application by the Wife pursuant to s 123 and s 124 of the Child Support (Assessment) Act 1989 (Cth) – where the Wife is seeking the Husband pay educational expenses, costs of excursions, private health insurance above those covered by private health insurance and Medicare –Husband to make payment of compulsory tuition fees, charges and levies and private health insurance at the current level.

Legislation:

Family Law Act 1975 (Cth), ss.75(2), 79 (2), 79 (4), 75 (2)(o)
Child Support (Assessment) Act 1989 (Cth), ss.123, 124, 125

Hickey & Hickey & Attorney General for the Commonwealth of Australia (2003) FamCA 395

NHC & RCH (2004) FLC 93-204

Stanford & Stanford [2012] HCA 52
Bevan and Bevan [2013] FLC 93-545

Beklar and Beklar [2013] FamCA 327
Vass and Vass [2015] FamCAFC 51

Applicant:

MR RUSSELL

Respondent:

MS RUSSELL

File Number:

MLC 10163 of 2014

Judgment of:

Judge Bender

Hearing date:

18 November 2015

Date of Last Submission:

19 November 2015

Delivered at:

Melbourne

Delivered on:

28 January 2016

REPRESENTATION

Counsel for the Applicant:

Mr Sweeney of Counsel

Solicitors for the Applicant:

Farrell Family Lawyers

Counsel for the Respondent:

Ms Dellidis of Counsel

Solicitors for the Respondent:

Coote Family Law

ORDERS

Maintenance

The Husband shall pay to Wife the sum of $1,863 per month by way of spousal maintenance on the following conditions:
(a)The first payment shall occur within 7 days of the date of these Orders and thereafter on a monthly basis;
(b)The payments shall be made into a bank account nominated by the Wife; and
(c)The Husband's obligation pursuant to this paragraph shall terminate after the expiry of 12 monthly payments.

Payment

The Husband shall pay to the Wife the total sum of $331,200 ("the payment") as follows:
(a)The Wife acknowledges receipt of $105,715 from the Husband in December 2015 ("the first payment");
(b)Within 30 days of the date of these Orders, the Husband shall pay to the Wife the cash sum of $225,485 ("the second payment").
Pending the second payment and save for the purposes of effecting these Orders:
(a)The parties are restrained…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading RUSSELL & RUSSELL

Details

AGLC: RUSSELL & RUSSELL [2016] FCCA 137
Case: [2016] FCCA 137
Decision Date: 28 January 2016

CaseChat Overview and Summary

This case involved an application by the Husband for property settlement, with the Wife also seeking spousal maintenance and child support. The asset pool was a key point of contention, particularly regarding the notional add-back of legal costs and the classification of unvested employment shares as a financial resource. The court was also required to consider various Section 75(2) factors, including the Husband's superior earning capacity and younger age, the Wife's role as primary caregiver, and the parties' respective contributions to the marriage.

The legal issues before the court included whether the parties' legal costs should be notionally added back into the asset pool for the purposes of property settlement, and whether unvested share units stemming from the Husband's employment constituted a financial resource. The court also had to determine the extent of each party's contributions to the marriage, assess the Wife's entitlement to spousal maintenance given her absence from the workforce, and consider the Husband's obligations regarding the child's educational expenses and private health insurance.

The court found that unvested share units were a financial resource. It determined that both parties had made considerable contributions throughout the marriage, and therefore, their contributions were to be considered equal. Regarding spousal maintenance, the Wife was found to be entitled to payments for a period of twelve months due to her hindered employment prospects. The Husband was ordered to pay the child's compulsory tuition fees, charges, and levies, as well as private health insurance premiums at the current level of cover.

The court ordered the Husband to pay the Wife a total sum of $331,200 as a property settlement, acknowledging a prior payment of $105,715. The Husband was also ordered to pay spousal maintenance of $1,863 per month for twelve months. The parties were restrained from dealing with certain properties pending the property settlement payment. The court also made detailed orders regarding the division of real estate, chattels, superannuation, and the management of the Russell Family Trust and Russell Superannuation Fund. The Husband was ordered to pay the child's educational expenses and private health insurance.

Orders

Orders of the court

Maintenance

The Husband shall pay to Wife the sum of $1,863 per month by way of spousal maintenance on the following conditions:

(a) The first payment shall occur within 7 days of the date of these Orders and thereafter on a monthly basis;

(b) The payments shall be made into a bank account nominated by the Wife; and

Payment

The Husband shall pay to the Wife the total sum of $331,200 ("the payment") as follows:

(a) The Wife acknowledges receipt of $105,715 from the Husband in December 2015 ("the first payment");

(b) Within 30 days of the date of these Orders, the Husband shall pay to the Wife the cash sum of $225,485 ("the second payment").

Pending the second payment and save for the purposes of effecting these Orders:

(a) The parties are restrained by injunction from further encumbering or using the Property S property, Property W1, Property W2 or Property R as security without the consent in writing of the other party; and

(b) The Husband is restrained by injunction from selling, assigning, transferring or otherwise disposing of his interest in Property W1, Property W2 or Property R.

In default of the second payment, the Husband shall do all necessary acts and things and sign all necessary documents to transfer Property W1, Property W2 and Property R to the Wife upon trust for immediate sale on such terms and conditions as are agreed between the Husband and the Wife and in default of agreement, to be determined by the President of the Real Estate Institute of Victoria from time to time or his nominee. At settlement of the sale/s the proceeds shall be disbursed as follows:

(a) In payment of all costs, commissions and expenses of the sale/s;

(b) In discharge of any registered mortgage encumbering the property/properties;

(c) To the Wife, any amount then owing by the Husband to the Wife pursuant to these Orders, together with interest thereon at the rate prescribed under the Family Law Rules 2004; and

(d) The balance (if any) to the Husband.

Real property at Property S

That the Wife shall retain, to the exclusion of the Husband, all of her right, title and interest in the real property situate and known as Property S, being the land more particularly described in Certificate of Title Volume (omitted), Folio (omitted) (“the Property S property”).

Contemporaneously with the second payment:

(a) The Husband, at his expense, shall do all acts and things necessary to discharge the mortgage registered (number (omitted)) to the (omitted) Bank with respect to the Property S property;

(b) The Husband, at his expense, shall provide to the Wife a Withdrawal of Caveat for the caveat lodged against the Property S property ((omitted)) together with a cheque for the requisite filing fee; and

(c) The Wife shall thereafter indemnify the Husband and keep him indemnified in relation to all liabilities arising from or related to the Property S property, including but not limited to any rates, taxes, insurances or any other outgoings of whatsoever nature or kind.

Pending the discharge of the mortgage referred to in paragraph 6(a) hereof:

(a) The Wife has the sole right to use and occupy the Property S property;

(b) The Wife is responsible for the day to day maintenance and care of the Property S property; and

(c) The Husband shall pay and indemnify the Wife in relation to all instalments due pursuant to the investment loan to (omitted) Bank secured by way of mortgage registered no. (omitted).

Real properties at Property W1, Property W2 and Property R

That the Husband shall retain, to the exclusion of the Wife, all of his right, title and interest in the following real properties:

(a) The property situated at and known as Property W1, being the land more particularly described in Certificate of Title Volume (omitted) Folio (omitted) (“Property W1”);

(b) The property situated and known as Property W2 in the state of Victoria, being the land more particularly described in Certificate of Title Volume (omitted) Folio (omitted) (“Property W2”); and

(c) The property situated at and known as Property R in the State of Victoria, being the land more particularly described in Certificate of Title Volume (omitted) Folio (omitted) (“Property R”);

("the investment properties").

The Husband shall be solely responsible for and indemnify the Wife with respect to:

(a) The loans secured by mortgages registered any of the investments properties; and

(b) All liabilities arising from or related to the investment properties, including but not limited to any rates, taxes, insurances or any other outgoings of whatsoever nature or kind.

10.

The Husband:

(a) Has the sole right to use and occupy the investment properties;

(b) Is responsible for the day to day maintenance and care of the investment properties;

(c) Is responsible for payment of the instalments pursuant to the loans secured by way of mortgage/s on the investment properties;

(d) Is solely entitled to the rental monies from the tenants who occupy any of the investment properties.

Other property

11.

Save as otherwise provided, the Husband shall retain for his sole use and benefit absolutely:

(a) His chattels and personal possessions;

(b) The silver located at the Property S property, which the Wife shall make available to the Husband on 21 February 2016;

(d) His (omitted) Superannuation/(omitted) superannuation entitlements;

(e) His bank accounts; and

(f) His (omitted) restricted shares and share entitlements;

12.

That the Wife retain for her sole use and benefit absolutely:

(a) The furnishings and effects situated in the Property S property, save for the 17kg silver;

(b) Her chattels and personal possessions; and

13.

Within 21 days of the date of these Orders, the Husband transfer to the Wife, at the expense of the Wife, the Mercedes motor vehicle, registration number (omitted).

Russell Family Trust

14.

Within 21 days of the date of these Orders:

(a) The Wife transfer (“the transfer”) to the Husband, at the expense of the Husband, her shareholding in (omitted) Pty Ltd;

(b) The Wife resign as director of (omitted) Pty Ltd;

(d) Within a further 7 days the Husband register the transfer with Australian Securities Investment Commission and table a meeting of shareholders in respect of same.

(e) The Wife do all such acts and things and sign all necessary documents to transfer to the Husband or his nominee any interest of any nature whatsoever she may have in Russell Family Trust ("the Trust"), including her credit loan account in the Trust (if any) and from the date of compliance by the Wife with her obligations pursuant to this Order, the Husband shall indemnify the Wife in respect of all claims of whatsoever nature which may be made against her by reason of her interest in the Trust or (omitted) Pty Ltd, or in respect of any income tax or other liability which may accrue by virtue of payments distributed to or received by her from the Trust, save for the taxation liabilities accruing as a result of the distribution to the Wife from the trust in the 2015 financial year.

15.

That the Husband retain sole use and control of any and all income, investments, assets and tax credits (if any) therefrom, at his discretion and absolutely.

16.

That the Wife forthwith, at the expense of the Husband, do all acts and things and sign or cause to be signed any necessary documents to:

(a) Assign to the Husband any loan accounts standing to her credit and provide a full release and discharge from and against any claim, right, entitlement or interest in any such loan account in the Trust; and

(b) Renounce and forgo any power, right, interest or entitlement (legal and beneficial) in or to the Trust.

17.

That the Husband indemnify and keep indemnified the Wife as to any and all debts, liabilities and outgoings jointly incurred by the parties or on behalf of the Trust, including any assessment for taxation, primary or provisional (interest penalties and costs thereon) after the date of these Orders, save for the taxation liabilities accruing as a result of the distribution to the Wife from the trust in the 2015 financial year.

Russell Superannuation Fund

18.

Paragraphs 19 to 24 of these Orders are binding upon Russell Superannuation Fund Pty Ltd (“the Trustee”), being the trustee of the Russell Superannuation Fund (“the Fund”).

19.

The base amount to be allocated to the Husband out of the interest of the Wife in the Fund is $X, to be calculated as follows ("the base amount"):

where:

F = The total value of the Fund as the date of the valuation

H = Total value of the Husband's existing member entitlements in the Fund

Y = The total value of the Husband's (omitted) shares/(omitted) Superannuation fund as at the date of the valuation.

20.

In accordance with s 90MT(1)(a) of the Family Law Act 1975:

(a) The Husband is entitled to be paid from the Wife's interest in the Fund, using the base amount, the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001;

(b) The Wife's entitlement in the Fund is correspondingly reduced.

21.

Paragraph 20 has effect from the operative time and the operative time is four business days from the date of service of a copy of these Orders on the Trustee.

22.

The Trustee shall do all such acts and things and sign all such documents as may be necessary to:

(a) Calculate, in accordance with the requirements of the Family Law Act 1975, the entitlement created in paragraph 20 of these Orders; and

(b) Pay the entitlements whenever a splittable payment becomes payable from the Wife's interest.

23.

After service of the payment split notice pursuant to r 7A.03 Superannuation Industry (Supervision) Regulations 1994 to create a new interest in her name in a fund to be nominated by her, the Wife be and is restrained from requesting the Trustee, in accordance with r 7A.06(2) Superannuation Industry (Supervision) Regulations 1994, to rollover or transfer the transferable benefits to another superannuation fund.

24.

Upon giving effect to the payment split in paragraph 20, the Trustee, as soon as practicable, shall thereafter do all acts and things and sign all documents to transfer its right, title and interest in Wife's post-split entitlements, as a cash amount, to an alternate complying fund nominated by the Wife.

25.

Subject to the Trustee giving effect to the request by the Wife in accordance with paragraph 24 of these Orders, the Wife shall, at the Husband's expense, within 14 days:

(a) Transfer to the Husband her shares in the Trustee;

(b) Resign as a member of the Fund; and

26.

Unless otherwise specified in these Orders:

(a) Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date;

(b) Monies standing to the credit of the parties in any bank account are to become the property of the owner of the bank account;

(c) Each party hereby forgoes any claim they may have to any superannuation benefits belonging to or earned by the other, save as is provided herein;

(d) Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders; and

(e) Any joint tenancy of the parties in any real or personal property be otherwise expressly severed.

27.

That the parties execute all deeds or instruments and do all acts and things necessary to give validity and operation to the deed or instrument to give effect to these Orders.

28.

That if either party shall refuse or neglect to sign any document or do such thing as may be reasonably required to give effect to these Orders within fourteen (14) days of the service of a demand upon him or her to execute such document or to do such thing, the Registrar of the Federal Circuit Court at Melbourne is empowered to sign such document and to direct such things as to be done in the name of the party in default.

Schooling and child support

29.

The parties shall do all acts and things and sign all necessary documents to arrange for the child of the marriage, X, born on (omitted) 2005 ("the child"), to attend (omitted) School (or such other school as is agreed) for her secondary schooling to commence in 2017.

30.

Pursuant to s.123 and s.124 of the Child Support (Assessment) Act 1989, the Husband shall pay for the child of the marriage:

(a) All compulsory tuition fees, charges and levies appearing on the school invoice for her primary schooling at (omitted) Primary School and for her secondary schooling at (omitted) School (or such other schools as are agreed); and

(b) All private health insurance premiums at the child's current level of cover.

31.

The Husband shall pay or cause to be paid the expenses set out in paragraph 30 directly to the relevant institution.

32.

The Husband shall forthwith the Wife with a duplicate health insurance card so that the Wife can claim the benefits of the policy when she takes X to relevant appointments.

33.

Pursuant to s.125 of the Child Support (Assessment) Act 1989, the Husband's payments in accordance with paragraph 30 hereof shall not reduce the annual rate of child support payable under any administrative assessment.

34.

The Wife shall forthwith sign all documents necessary to effect paragraph 1 of the Orders of 17 December 2015.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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