FEDERAL CIRCUIT COURT OF AUSTRALIA
| SARAF & SARAF | [2020] FCCA 442 |
| Catchwords: FAMILY LAW – Property – Consideration of Notional Add Backs – Consideration of Loans. |
| Legislation: Family Law Act 1975 (Cth), ss.75, 79 |
| Cases cited: Stanford [2012] HCA 52 Hickey & Hickey & Commonwealth (2003) FLC 93-143, 30 FamLR 355 AJO & GRO (2005) 33 Fam LR 134, (2005) FLC 93-218 |
| Applicant: | MR SARAF |
| Respondent: | MS SARAF |
| File Number: | BRC 12926 of 2017 |
| Judgment of: | Judge Lapthorn |
| Hearing dates: | 3 and 4 December 2019 |
| Date of Last Submission: | 4 December 2019 |
| Delivered at: | Brisbane |
| Delivered on: | 3 March 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr McGregor |
| Solicitors for the Applicant: | Cornerstone Law Offices |
| Counsel for the Respondent: | Ms Wilson |
| Solicitors for the Respondent: | Stephens & Tozer Solicitors |
ORDERS
That the net assets, liabilities, superannuation, and financial resources of the parties be divided 45% to the Applicant husband ("the husband") and 55% to the Respondent wife ("the wife").
The Saraf Family Business, B Street, Suburb C "the business"
That within 14 days each party do all acts and things necessary to cause the business to transfer the Motor Vehicle 1 to the wife and the Motor Vehicle 2 to the husband.
That the husband be appointed sole trustee for the sale of the business.
That as the sole trustee appointed to sell the business, the husband shall:
(a)Notify the wife in writing of any offers received for the sale of the business;
(b)Provide the wife with the signed contract for sale of the business; and
(c)Not sell the business for less than $663,934.
That within seven (7) days from when the Business Sale Contract becomes unconditional, the wife shall do all such acts and things and sign all necessary documents so as to:
(a)resign as director of D Pty Ltd at the husband's cost;
(b)be removed as beneficiary of the Saraf Trust at the husband's cost.
That the proceeds of sale of the business shall be applied pursuant to Order 4 of the Orders made on 30 May 2018, and in addition, the proceeds of sale shall be applied to pay for:
(a)Payment to Cornerstone Law Offices legal fees $20,319;
(b)Payment to Mr H $202,639;
(c)The cost of the Accountant's work for the next round of tax after sale of business and bills relating to BAS until sale of business;
(d)Capital gains tax in accordance with the orders below; and
(e)The balance of the net proceeds of sale shall be divided between the husband and the wife so that the husband receives 45% and the wife receives 55% of the overall net asset pool including superannuation and taking into consideration the value of what each of them is otherwise retaining as determined by judgment delivered this day.
That…
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- AGLC
- SARAF & SARAF [2020] FCCA 442
- Case
- [2020] FCCA 442
- Decision Date
CaseChat Overview and Summary
The court was required to determine the appropriate division of the parties' net asset pool, including superannuation and financial resources. Key issues included the valuation and sale of the Saraf Family Business, the allocation of specific motor vehicles, the treatment of capital gains tax arising from the business sale, and the disposition of the former matrimonial home. The court also needed to address the refinancing of a mortgage and the potential sale of the real property if insufficient funds were available to meet the husband's entitlement.
The court ordered a division of the net assets, liabilities, superannuation, and financial resources of the parties, allocating 45% to the husband and 55% to the wife. The Saraf Family Business was to be sold, with the husband appointed as the sole trustee for the sale, subject to specific notification and minimum sale price requirements. Proceeds from the sale were to be applied to legal fees, a payment to Mr H, accounting costs, capital gains tax, and the remaining balance was to be distributed according to the ordered percentages. The court also made detailed provisions for the appointment of an accountant to estimate capital gains tax and for the handling of those funds. Further orders addressed the transfer of the former matrimonial home to the wife, contingent on sufficient funds from the business sale, or its sale by private treaty or auction if necessary. Each party was to retain their respective personal assets and superannuation, and to indemnify each other in relation to their own liabilities, with provisions for a Registrar to execute documents if a party failed to comply with the orders.
Orders
Orders of the court
1.
That the net assets, liabilities, superannuation, and financial resources of the parties be divided 45% to the Applicant husband ("the husband") and 55% to the Respondent wife ("the wife").
The Saraf Family Business, B Street, Suburb C "the business"
2.
That within 14 days each party do all acts and things necessary to cause the business to transfer the Motor Vehicle 1 to the wife and the Motor Vehicle 2 to the husband.
3.
That the husband be appointed sole trustee for the sale of the business.
4.
That as the sole trustee appointed to sell the business, the husband shall:
(a) Notify the wife in writing of any offers received for the sale of the business;
(b) Provide the wife with the signed contract for sale of the business; and
(c) Not sell the business for less than $663,934.
5.
That within seven (7) days from when the Business Sale Contract becomes unconditional, the wife shall do all such acts and things and sign all necessary documents so as to:
(a) resign as director of D Pty Ltd at the husband's cost;
(b) be removed as beneficiary of the Saraf Trust at the husband's cost.
6.
That the proceeds of sale of the business shall be applied pursuant to Order 4 of the Orders made on 30 May 2018, and in addition, the proceeds of sale shall be applied to pay for:
(a) Payment to Cornerstone Law Offices legal fees $20,319;
(b) Payment to Mr H $202,639;
(c) The cost of the Accountant's work for the next round of tax after sale of business and bills relating to BAS until sale of business;
(d) Capital gains tax in accordance with the orders below; and
(e) The balance of the net proceeds of sale shall be divided between the husband and the wife so that the husband receives 45% and the wife receives 55% of the overall net asset pool including superannuation and taking into consideration the value of what each of them is otherwise retaining as determined by judgment delivered this day.
7.
That any payment to be made to the wife shall be paid as directed by the wife and any payment to be made to the husband shall be paid as directed by the husband.
Capital Gains Tax
8.
That upon the business sale contract becoming unconditional, the parties jointly appoint an Accountant to estimate the Capital Gains Tax payable, with the husband to provide a panel of three (3) accountants to the wife and the wife to nominate one (1) from the panel within seven (7) days of receiving the list.
9.
That the parties shall comply with any reasonable written request from the accountant to provide information and documents necessary to complete the assessment.
10.
The costs of the work completed by the accountant are to be shared equally between the parties.
11.
The amount of capital gains tax estimated by the accountant shall be set aside and held in the Trust Account of Cornerstone Law Offices on behalf of the parties until final lodgement and payment to the Australian Taxation Office.
12.
The funds held on behalf of the parties by Cornerstone Law Offices are not to be released without the joint written consent of both parties.
13.
If the Australian Taxation Office deems no tax or less tax is payable, then the funds held in trust or any surplus are to be released to the parties as follows:
(a) 45% to the husband as directed in writing by him; and
(b) 55% to the wife as directed in writing by her.
14.
If the Australian Taxation Office deems more tax is payable, then the parties shall contribute equally to such shortfall.
Refinance of mortgage and transfer of title to wife in respect of F Street, Suburb G, Qld
15.
That once the business is sold, and provided that there are sufficient funds to pay the husband 45% of the overall net asset pool including superannuation and taking into consideration the value of what he otherwise retains as determined by judgment delivered this day:
(a) the parties do all such acts and things and sign all necessary documents so as to transfer to the wife all of the husband's right, title and interest in the former matrimonial home situated at F Street, Suburb G, Queensland, more properly described as Lot … on title reference … ("the real property");
(b) That contemporaneously with the transfer set out above, the parties do all such acts and things and sign all necessary documents so as to discharge the jointly held mortgage secured over the real property being mortgage number …07 and the wife do all things necessary to obtain finance to secure the mortgage into her sole name.
Sale of F Street, Suburb G, Qld
16.
If upon the sale of the business, there are insufficient funds to pay the husband 45% of the overall net pool of assets and liabilities including superannuation and taking into consideration the value of what he otherwise retains as determined by judgment delivered this day, or if the wife is unable to refinance the mortgage into her sole name in accordance with these orders, then the property at F Street, Suburb G shall be listed for sale forthwith.
17.
The parties do all such acts and things and sign all necessary documents and pay all such monies (including upfront marketing costs) equally so as to effect the sale of the real property.
18.
The real property shall be immediately listed for sale by private treaty with a real estate agent as agreed in writing between the parties, with the husband to provide a panel of three (3) agents to the wife, and the wife to nominate one (1) agent from the panel within 48 hours of receiving the panel.
19.
If the wife fails to nominate an agent within 48 hours, the husband is at liberty to nominate an agent so that the property can be listed on the market for sale forthwith.
20.
The listing price shall be as agreed in writing between the parties and failing agreement as nominated by the listing agent but at a price not less than $410,000.
21.
The parties are to cooperate in every way with the listing agent in relation to the marketing of the real property for sale, including making the key readily available, allowing inspection of the property at all times reasonably requested by the agent and ensuring that the real property is clean, neat and in good order at the time of inspection by any prospective buyer.
22.
In the event of a contract for the sale of the real property not having been entered into within thirty (30) days from the date of the listing for sale then the parties do all things and sign all necessary documents to procure a sale of the real property by way of public auction.
23.
The listing agent shall nominate the auctioneer with the costs of the auctioneer to be shared equally between the parties.
24.
The reserve price shall be as agreed to in writing by the parties at least seven (7) days prior to the date of auction, failing which the reserve price shall be as recommended by the listing agent.
25.
Upon the sale of the real property, the proceeds of the sale shall be disbursed as follows:
(a) In payment of the mortgage secured over the real property;
(b) In payment of real estate agent's commission, auction and advertising costs (if any);
(c) the legal costs of sale;
(d) The balance shall be divided between the husband and wife so that the husband receives 45% and the wife receives 55% of the overall net pool of assets and liabilities including superannuation and taking into consideration the value of what each of them is otherwise retaining as determined by judgment delivered this day.
26.
That any payment to be made to the wife shall be paid as directed by the wife and any payment to be made to the husband shall be paid as directed by the husband.
The Husband to retain
27.
Except as otherwise provided for in these Orders, the husband shall retain as his absolutely property, with the wife to relinquish and where necessary release, transfer and/or assign to the husband all right, title and claim, if any, to and in:
(a) All funds held in bank accounts in the husband's name;
(b) Any motor vehicle in his possession;
(c) Chattels in his possession;
(d) Personal possessions in his possession; and
(e) Interest in superannuation funds in his name.
The Wife to retain
28.
Except as otherwise provided for in these Orders, the wife shall forthwith retain as her absolute property, with the husband to relinquish and where necessary release, transfer and/or assign to the wife all right, title and claim, if any, to and in:
(a) All funds held in bank accounts in the wife's name;
(b) Any motor vehicle in her possession;
(c) Chattels in her possession;
(d) Personal possessions;
(e) Interest in superannuation funds in her name.
Other Orders
29.
Except as otherwise provided for in these Orders, the husband shall indemnify the wife and hold her indemnified in relation to any and all liabilities of the husband.
30.
Except as otherwise provided for in these Orders, the wife shall indemnify the husband and hold him indemnified in relation to any and all liabilities of the wife.
31.
Each party shall sign all necessary documents and do all necessary things in order to give effect to the terms of these Orders.
32.
If either party refuses or neglects to comply with a provision of these Orders within seven days of a written request to do so by the other party, then a Registrar of the Federal Circuit Court of Australia be hereby appointed, pursuant to Section 106A of the Family Law Act 1975 (Cth), to execute all documents in the name of that party and do all acts and things necessary to give validity and operation to these Orders.
33.
That the parties have liberty to apply in relation to the implementation of these Orders.
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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