SAMPER & SAMPER - [2020] FCCA 1675

FEDERAL CIRCUIT COURT OF AUSTRALIA

SAMPER & SAMPER

[2020] FCCA 1675

Catchwords:
FAMILY LAW – Property – final – long marriage 26 years – contributions to separation agreed to be equal – valuation of husband’s sole trader professional practice – valuation principles – likelihood of the possibility of the critical identified future events occurring – analysis of wife’s post separation unilateral distribution of revenues of parties business operated solely by her – analysis of wife’s entitlement to be allocated a notional salary from partnership profits to reflect her personal exertions – distinction between salary as return on personal exertion and profits as return on business enterprise - no net preliminary distribution by wife of funds not otherwise accounted for in joint balance sheet - assessment of post separation contributions – assessment of pre and post separation contributions – equal contributions overall to hearing – assessment of each parties future earning capacity – failure of husband to provide full and frank disclosure – no basis for finding different earning capacities sufficient to justify an adjustment pursuant to s75(2) – order adjustment of property interest so that each party retains 50% of the net property pool including superannuation – which party should have first right to purchase partnership business – wife as party who has operated partnership business day to day for 14 years to have first opportunity for 3 months – husband to have second opportunity for 3 months – if neither party can buy out the other then partnership business to be sold on the open market.

Legislation:

Family Law Act 1975 (Cth), ss.79, 75(2), 75(2)(o), 79

Evidence Act1995 (Cth), s.140(2)

Partnership Act1892 (NSW), s.32

Cases cited:

DJM & JLM (1998) FLC 92-816

Trevi v Trevi [2018] FamCAFC 173

Black and Kellner (1992) FLC 92-287

Weir & Weir (1993) FLC 92-338

Williams & Williams [2007] FamCA 313

Wallis & Manning [2017] FamCAFC 14

Jabour & Jabour (2019) FLC 93-898

Horrigan & Horrigan [2020] FamCAFC 25

Hurst & Hurst (2018) FAMCAFC 146

Malec v JC Hutton Pty Ltd [1990] HCA 20 169 CLR 638;

Burger King Corporation v Hungry Jack’s Pty Limited [2001] NSWCA 187

Applicant:

MS SAMPER

Respondent:

MR SAMPER

File Number:

SYC 2499 of 2015

Judgment of:

Judge B Smith

Hearing dates:

12 August 2019, 13 August 2019

Date of Last Submission:

13 August 2019

Delivered at:

Sydney

Delivered on:

6 July 2020

REPRESENTATION

Counsel for the Applicant:

Mr Kearney S.C.

Solicitors for the Applicant:

Pearson Emerson Meyer Family Lawyers

Counsel for the Respondent:

Mr Hodgson

Solicitors for the Respondent:

Malouf Solicitors

ORDERS

The Applicant Wife (“the wife”) shall, within 3 month of the date of these Orders by way of alteration of property interests, pay to the Respondent Husband (“the husband”) $1,553,005.50 being such sum as is necessary for the husband to retain an amount equal to 50% of the net value of the parties interests, where the wife retains the assets and liabilities of the Partnership and the B Street, Suburb C property:
(a)Simultaneously…

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 SAMPER & SAMPER

Details

AGLC: SAMPER & SAMPER [2020] FCCA 1675
Case: [2020] FCCA 1675
Decision Date: 6 July 2020

CaseChat Overview and Summary

In the matter of *Samper & Samper*, the Family Court of Australia considered a property settlement dispute between a husband and wife following a 26-year marriage. The central disagreement revolved around the valuation of the husband's sole trader professional practice and the wife's post-separation management of a joint business. The court also had to determine the appropriate distribution of assets and liabilities, including a partnership business and a jointly owned property.

The legal issues before the court included the valuation principles applicable to the husband's professional practice, specifically how to assess the likelihood of future events impacting its value. The court was also required to analyse the wife's unilateral distribution of revenues from a business she operated post-separation, and to distinguish between salary as a return on personal exertion and profits as a return on the business enterprise. Furthermore, the court needed to assess both pre- and post-separation contributions of each party, considering their respective future earning capacities and the husband's failure to provide full and frank disclosure.

The court reasoned that contributions to the separation were agreed to be equal, and ultimately determined that each party should retain 50% of the net property pool, including superannuation. The court addressed the valuation of the husband's practice by considering the likelihood of critical future events. It also analysed the wife's post-separation actions regarding the business, distinguishing her personal exertions from the business's profits. The court found no basis for an adjustment under s75(2) of the Family Law Act 1975 (Cth) due to a lack of evidence supporting different earning capacities.

The court ordered that the wife would have the first opportunity to purchase the partnership business and the jointly owned property within three months. If she failed to do so, the husband would have a second opportunity for a further three months. Should neither party be able to buy out the other, the partnership business and property were to be sold on the open market, with the net proceeds divided equally between the parties. The orders also detailed the discharge of specific loans and the indemnification of each party for certain liabilities.

Orders

Orders of the court

The Applicant Wife (“the wife”) shall, within 3 month of the date of these Orders by way of alteration of property interests, pay to the Respondent Husband (“the husband”) $1,553,005.50 being such sum as is necessary for the husband to retain an amount equal to 50% of the net value of the parties interests, where the wife retains the assets and liabilities of the Partnership and the B Street, Suburb C property:

(a) Simultaneously with the parties' compliance with Order 1, the husband and wife shall do all acts and things and sign all documents as are necessary, at the wife's expense, to discharge the D Company loan or discharge the husband’s liability for that loan, and thereafter the wife shall be solely responsible for all monies owing in respect of the D Company loan.

(b) The husband shall do all acts and things and sign all documents as are necessary to transfer to the wife his interest in the B Street, Suburb C property, at the wife's expense;

(i) The wife is confirmed in her ownership of her pre-existing interest in the B Street, Suburb C property and the business and assets of the Partnership.

(c) Simultaneously with the parties' compliance with Order 1 the wife is to serve on the husband, through his solicitors, notice of the dissolution of the Partnership pursuant to section 32 of the Partnership Act 1892 (NSW), such dissolution to be stated in the notice to have taken effect on the date of the payment in Order 1.

(d) Upon the dissolution of the Partnership:

(i) The parties shall do all acts and things and sign all documents as are necessary so as to close the joint bank accounts and in doing so disburse any remaining balances to the wife;

(ii) Other than as provided in these Orders, the husband will have no claim on the property, assets or profit of the Partnership;

(iii) The Partnership business and assets, including the goodwill of D Company, will vest in the wife, and she will be entitled to continue to operate the business of the D Company;

(iv) The husband and wife are to do all acts and things and sign all documents as are necessary so as to close all bank accounts of the Partnership and in doing so are to disburse any remaining balances to the wife;

(v) The husband and wife are to do all acts and things and sign all documents as are necessary to give effect to these Orders as they relate to the Partnership, and the business and assets of the Partnership; and

(vi) Other than as provided in these Orders, each of the husband and the wife releases the other from all claims arising from, or in any way related to, the Partnership and the business conducted by it.

If the Applicant wife does not comply with Order 1 within the specified 3 month period, then within a further period of 3 months of the date of these Orders, by way of alteration of property interests, the husband shall pay to the wife $1,991,659.50 being such sum as is necessary for the wife to retain an amount equal to 50% of the net value of the parties interests, where the husband retains the assets and liabilities of the Partnership and the B Street, Suburb C property:

(a) Simultaneously with the parties' compliance with Order 1, the wife and husband shall do all acts and things and sign all documents as are necessary, at the husband’s expense, to discharge the D Company loan or discharge the wife’s liability for that loan, and thereafter the husband shall be solely responsible for all monies owing in respect of the D Company loan.

(b) The wife shall do all acts and things and sign all documents as are necessary to transfer to the husband her interest in the B Street, Suburb C property at the husband’s expense;

(i) The husband is confirmed in his ownership of his pre-existing interest in the B Street, Suburb C property and the business and assets of the Partnership.

(c) Simultaneously with the parties' compliance with Order 1 the husband is to serve on the wife, through her solicitors, notice of the dissolution of the Partnership pursuant to section 32 of the Partnership Act 1892 (NSW), such dissolution to be stated in the notice to have taken effect on the date of the payment in Order 1.

(d) Upon the dissolution of the Partnership:

(i) The parties shall do all acts and things and sign all documents as are necessary so as to close the joint bank accounts and in doing so disburse any remaining balances to the wife;

(ii) Other than as provided in these Orders, the wife will have no claim on the property, assets or profit of the Partnership;

(iii) The Partnership business and assets, including the goodwill of D Company, will vest in the husband, and he will be entitled to continue to operate the business of the D Company;

If neither Order 1 nor Order 2 are given effect within the specified 6 month period, then within a further period of 3 months of the date of these Orders the parties are to jointly arrange for the sale of the business known as D Company in a package including the B Street, Suburb C property, and for the dissolution of the Partnership, and the net proceeds after all the discharge of the mortgage over the B Street, Suburb C property and payment of all sales costs are to be distributed between the parties so that each party receives such sum as is necessary for them to retain an amount equal to 50% of the net value of the parties interests.

(a) If the parties are unable to agree on a mechanism for any aspect of this Order they have leave to approach the Court for the making of machinery provision Orders.

Upon dissolution of the Partnership, pursuant to Order 1, 2 or 3 above, the wife shall indemnify and keep indemnified the husband in respect of the husband’s liability to pay income tax on any income derived by him from the Partnership in the financial years ended 30 June 2018, 30 June 2019 or 30 June 2020.

Within 28 days of date of these Orders, each party shall pay 50% of Mr E's money to Mr E.

Save as otherwise provided for in these Orders, the wife be and hereby is declared to be solely entitled to all property and financial resources in her name, possession or control or to which she is or may become entitled including but not limited to the following:

(a) The wife's car;

(b) The wife's superannuation;

(d) The wife's jewellery and household contents;

(e) The wife's Westpac Foundation Plan;

(f) The wife's ATO Credit; and

(g) All furniture, furnishings, household contents and personal effects in the possession of the wife.

Save as otherwise provided for in these Orders, the husband be and hereby is declared to be solely entitled to all property and financial resources in his name, possession or control or to which he is or may become entitled including but not limited to the following:

(a) F Company;

(b) The husband's bank accounts;

(d) The husband's household contents;

(e) The husband's Inheritance;

(f) The husband's Shares;

(g) The G Street, Suburb H property; and

(h) All furniture, furnishings, household contents and personal effects in the possession of the husband.

Save as otherwise provided herein:

(a) the wife indemnify the husband from and in respect of all actions, claims, suits and demands as may be made against the husband in relation to all liabilities in the name of the wife including but not limited to the wife's credit cards;

(b) the husband indemnify the wife from and in respect of all actions, claims, suits and demands as may be made against the wife in relation to all liabilities in the name of the husband including but not limited to the G Street, Suburb H loan and the husband's credit cards;

(c) except as specifically provided for by any paragraph comprising these Orders to the contrary, each of the wife and the husband release the other from all debts owing from one to the other; and

(d) unless otherwise specified in these Orders, and other than in respect of the Partnership and the business carried on by it, 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.

Both parties shall do all acts and things and execute all documents, authorities and writings as are necessary to give effect to any of these Orders.

10.

In default of either or both the husband and wife doing all such things and executing all such documents as may be needed to comply with these Orders within the timeframe provided:

(a) a Registrar of a Court exercising competent jurisdiction or such other person appointed by the Court be authorised to do all such act and things and execute all such documents on behalf of either or both parties; and

(b) if either party procures compliance with this Order by obtaining execution of documents pursuant to this Order, then the party procuring such execution of documents will be indemnified by the party for his or her costs and expenses incurred in obtaining such compliance.

NOTES

(A) The Court notes the following definitions for the purposes of these Orders:

(a) "F Company" means Mr Samper trading as F Company being the practice conducted by the husband from rental premises situate at J Street, Suburb K.

(b) "Mr E's money" means the sum of $21,714 which the parties owe their son, Mr E.

(i) Commonwealth Bank Business Online Saver account #...99;

(ii) Commonwealth Bank Premium Cheque account #...06;

(iii) Commonwealth Bank account #...26;

(iv) Commonwealth Bank account #...51;

(v) Westpac Bank Choice account #...60; and

(vi) Westpac Bank eSaver account #...13.

(d) “Husband's credit cards” means and any credit cards in the husband's name including but not limited to the husband's Commonwealth Bank Amex/Visa #...28.

(e) “Husband's household contents” means household contents in the husband's possession and control.

(f) “Husband's Inheritance” means the funds inherited by the husband from the Estate of the late Ms L.

(g) “Husband's shares” means the husband's:

(i) 2,800 ordinary shares held with M Shares;

(ii) 2,355 ordinary shares held with N Shares;

(iii) 360 ordinary shares held with O Shares;

(iv) 2,125 ordinary shares held with P Shares;

(v) 10,000 ordinary shares held with Q Shares; and

(vi) CommSec Account #...33.

(h) “Husband's superannuation” means the husband's superannuation interest held with Super Fund R #...89.

(i) “Joint bank accounts” means any accounts held in the joint names of the parties including but not limited to the following accounts held jointly in the names of the husband and the wife:

(i) Westpac Bank Business One account #...12;

(ii) Westpac Bank Choice account #...12; and

(iii) Westpac Bank Business Cash Reserve account #...89.

(j) “G Street, Suburb H loan” means the means the loan owing to Commonwealth Bank account #...05 registered on the title over the land at G Street, Suburb H which secures the G Street, Suburb H loan.

(k) “G Street, Suburb H property” means the property situate at and known as G Street, Suburb H registered in the sole name of the husband being more particularly described as Lot ...6

(l) “Partnership” means the Mr & Mrs Samper Partnership (ABN ...) between the husband and the wife by which the parties carry on the business known as D Company from the B Street, Suburb C Property.

(m) “D Company loan” means the loan owing to Bank S account #...01 secured by mortgage registered on the title over the land at B Street, Suburb C, which secures the D Company loan.

(n) “B Street, Suburb C property” means the property situate and known as B Street, Suburb C, being the whole of the land contained in Folio Identifier ...27 registered in the names of the husband and wife as tenants in common in equal shares.

(o) “Wife's bank accounts” means the following accounts held in the name of the wife:

(i) Westpac Business Cash Reserve #...22;

(ii) Westpac Business One #...14

(iii) Westpac One account #...38,

(iv) Bank T account #...39;

(v) Bank U #...00; and

(vi) interest in Bank V account, Country W held in the name of Ms X.

(p) “Wife's cars” means the Motor Vehicle 1 registered in the name of the wife registration ... and the Motor Vehicle 2 registered in the name of the wife registration ....

(q) “Wife's credit cards” means the wife's following credit cards & or credit facilities:

(i) Bank Y account #...30;

(ii) Westpac MasterCard account #...39.

(r) “Wife's jewellery and household contents” means the jewellery and household contents in the wife's possession and control.

(s) “Wife's superannuation” means the wife’s superannuation interests held with Super Fund Z account #..., Super Fund AA #...05 and Super Fund BB #...05.

(t) “Wife's Westpac Foundation Plan” means the wife's investment interest in Policy Number: ...17.

(u) “Wife's ATO Credit” means the wife's credit with the ATO.

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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