FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Sarka & Sarka [2024] FedCFamC1F 804
File number: SYC 7105 of 2022 Judgment of: SCHONELL J Date of judgment: 27 November 2024 Catchwords: FAMILY LAW – PROPERTY – Final orders – Where the wife and husband both contend the contribution-based entitlement was equal – Where the wife contends there should be a 5 percent adjustment under s 75(2) because of the wife’s care of the parties’ youngest child, the husband’s greater earning capacity and the wife’s contention that the two older children will pay to the husband their unpaid present entitlements – Where the husband contends there should be no adjustment under s 75(2) – Where the wife’s position regarding property alteration pursuant to s 79 shifted from seeking a cash adjustment to seeking a transfer to her of a property, a company in which the husband was a director holding on trust for her 50 percent of the parties’ units in a unit trust, as well as a cash adjustment – Orders made as to the parties’ SMSF, payment of present unpaid entitlements, and a division of assets as to 52 percent to the wife and 48 percent to the husband in the form of a cash payment.
FAMILY LAW – PRACTICE AND PROCEDURE – Application to adduce adversarial evidence – Where the wife seeks to adduce adversarial evidence as to the value of a commercial property – Where the husband objected to the adducing of adversarial evidence – Discussion of ‘special reason’ for allowing adversarial evidence – Where there is a special reason for allowing adversarial evidence in addition to the evidence of the jointly appointed single expert – Application to adduce adversarial evidence as to the value of commercial property allowed.
Legislation: Family Law Act 1975 (Cth) Part VIII of the ss 75(2), 79(4)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 7.02, 7.08
Cases cited: ASIC v Hellicar (2012) 247 CLR 345; [2012] HCA 17
Cubillo v Commonwealth (No 2) (2000) 103 FCR 1; [2000] FCA 1084
Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Neales & Neales (2022) FLC 94-079; [2022] FedCFamC1A 41
Palumbo v Mandel (2019) FLC 93-929; [2019] FamCAFC 228
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Division: Division 1 First Instance Number of paragraphs: 111 Date of hearing: 11 November 2024 – 13 November 2024 Place: Sydney Counsel for the Applicant: Ms Coulton Solicitor for the Applicant: Stacks, Collins & Thompson Counsel for the Respondent: Ms Petrie Solicitor for the Respondent: Calvin Nelson & Co ORDERS
SYC 7105 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS SARKA
Applicant
AND: MR SARKA
Respondent
ORDER MADE BY:
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CaseChat Overview and Summary
The Court further addressed the wife's application to adduce adversarial evidence regarding the value of a commercial property. The wife sought to present evidence from another expert, Mr P, but the husband objected. The Court allowed the wife to adduce adversarial evidence, finding a special reason to permit it despite the husband's objection. The wife's application for leave to present Mr P's evidence was granted, as it was deemed necessary to ensure a fair assessment of the property's value.
The final orders mandated several actions, including a distribution of funds from a term deposit, transfer of property interests, payment of outstanding entitlements, and a division of assets. The Court also ordered the parties to handle their superannuation interests by making a splittable payment to an eligible superannuation fund, with the wife entitled to 50 percent of the combined interests. The orders detailed specific timelines for compliance and outlined the consequences for non-compliance, including the appointment of the Registrar to execute necessary documents.
Orders
Orders of the court
SYC 7105 of 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:
MS SARKA
Applicant
AND:
MR SARKA
Respondent
ORDER MADE BY:
SCHONELL J
DATE OF ORDER:
27 NOVEMBER 2024
THE COURT ORDERS THAT:
1. Within seven (7) days of the date of these Orders, the parties shall do all acts and things and sign all documents necessary to cause F Pty Ltd as trustee for the Sarka Family Trust (“F Pty Ltd atf SFT”) to distribute to the Wife the sum of $6,621,333 from funds held on term deposit with E Financial Services in account number …11 in the name of F Pty Ltd atf SFT.
2. From the date of these Orders the Husband shall have the sole use and occupation of the property situated at and known as G Street, Suburb H in the State of New South Wales being the whole of the land in Folio Identifier … (“Suburb H property”).
3. Simultaneously with the parties compliance with Order 1 herein:
(a) The Wife shall do all such acts and things and sign all such documents as may be required and prepared by the Husband to transfer to the Husband all of her right, title and interest in the Suburb H property;
(b) The Wife shall do all such acts and things and sign all such documents as may be required to withdraw the Caveat on the Suburb H property to K Pty Ltd.
(c) The Husband shall indemnify the Wife against all payments and liabilities pursuant to the rates and outgoings of or with respect to the Suburb H property of whatever nature and kind.
(d) That the Husband and Wife do all such acts and things and sign all such documents as may be required to allow the transactions in Order 3(a) and (b) herein to take place electronically within PEXA and, for the purpose of the performance of the foregoing, that each party shall have a Solicitor or a Licenced Conveyancer act on their behalf for the purpose of the said transactions taking place on PEXA and each party shall bear their own costs associated with the transactions occurring on PEXA.
4. In relation to the proceedings in the Technology and Construction List currently before the Supreme Court of New South concerning the strata title scheme at L Street, Suburb J in the State of New South Wales (“Suburb J claim”) the Husband and/or Wife shall:
(i) Equally contribute from time to time such moneys as are required in accordance with the terms of Share Transfer Agreement dated April 2019 between M Pty Ltd , F Pty Ltd atf SFT and Mr Sarka (“Share Transfer Agreement”), until a mediated resolution or adjudicated determination (including any appellate determination) of the Suburb J claim;
(ii) Cause F Pty Ltd atf SFT to refund in the proportions of 50% to the Husband and 50% to the Wife any amount remaining in the said Term Deposit Account after payment of all amounts for which F Pty Ltd atf SFT and/or the Husband are liable to contribute from time to time pursuant to the Share Transfer Agreement upon a mediated resolution or adjudicated determination (including any appellate determination) of the Suburb J claim.
(iii) In the event that any amount for which F Pty Ltd atf SFT and/or the Husband are liable to contribute from time to time pursuant to the Share Transfer Agreement exceeds the amount in the Term Deposit Account then the parties shall personally pay any excess amount in the proportion of 50% by the Husband and 50% by the Wife.
5. The Husband do all acts and things and sign all documents necessary to cause F Pty Ltd atf SFT to make a payment from funds held on term deposit in the name of F Pty Ltd atf SFT with E Financial Services in account number …11 upon the expiration of 60 days after the making of these orders, with such funds to be distributed in the sum of $862,482 to Ms B or as otherwise directed.
6. The Husband shall do all acts and things and sign all documents necessary to cause F Pty Ltd atf SFT to within six (6) months of the date of these orders, pay:
(a) Ms C the sum of $854,449; and
(b) Ms D the sum of $827,727.
7. Within 28 days of the date of these Orders, the Wife shall do all acts and things and sign all documents, instruments and writings, including but not limited to moving and passing of all necessary resolutions, signing of trustee minutes and related documents, that may be necessary to:
(a) complete any outstanding accounts and thereafter resign as a Director of F Pty Ltd atf SFT;
(b) assign to the Husband the whole of the Wife’s right, title and interest and liability (if any) in any loan account (credit or debit) and/or unpaid distributions she may have in F Pty Ltd atf SFT;
8. Upon the Wife’s compliance with Order 7 herein, the Husband shall indemnify the Wife and keep her so indemnified in relation to all actions, suits and demands as may from the date of these orders be made against the Wife in respect of any debt or other amount of money due by her to F Pty Ltd atf SFT; to the Fund or in respect of any other matter whatsoever arising out of the management, business affairs and operation of these said entities.
9. The parties shall do all acts and things and sign all documents necessary to cause F Pty Ltd atf SFT to transfer to the Wife the whole of the aforementioned company’s right, title and interest in Motor Vehicle 1 Registration Number: … within seven (7) days of the making of these orders.
10. The Wife, in her capacity as director of F Pty Ltd atf SFT, be responsible for the preparation of the necessary documents, including the transfer of any insurance policies relating to the said motor vehicle, to give effect to this order and that the Husband, in his capacity as director/secretary of F Pty Ltd atf SFT, execute and return such documents to the solicitor for the Wife within seven (7) days of the documents being sent to the Husband or his solicitor.
11. The Wife be responsible for the payment of any necessary transfer costs, stamp duty and other expenses occasioned by the transfer to the Wife of said motor vehicle.
12. Within seven (7) days of the date of the making of these orders, the parties shall do all acts and things and sign all documents necessary to close the National Australia Bank BSB … and account Number …14 currently held in the parties’ joint names, and that any credit balance standing in any such joint bank account at the time of closure shall be retained by the Husband, and that a sealed copy of these Orders shall be sufficient authority for the Husband in that regard.
13. Both parties shall prepare personal tax returns disclosing all interest received from F Pty Ltd atf SFT and rental income from the Suburb H property during the financial year ending 30 June 2025 pursuant to Orders 2 to 4 dated 17 September 2024 and shall be personally liable for such payments individually received.
14. Should the Husband at any time so request, the Wife shall sign all documents, instruments and writings that may be necessary:
(a) pursuant to clause 21 of the Deed of Trust dated June 1985 establishing the Sarka Family Trust, and as amended from time to time, to vary, alter or add to any of the trusts contained in the said Deed, including the removal of the Wife as an eligible beneficiary and primary beneficiary, as determined by the Husband; and
(b) pursuant to clause 15 of the said Deed to effect appointment of a new or additional trustee as directed by the Husband; and
(c) such other documents as may reasonably be required, including a Deed of Renunciation in relation to the Sarka Family Trust, to give effect to these orders.
15. Pending compliance with these Orders, the Wife shall not make any claim, demand, take any action or commence any proceedings with respect to any unpaid present entitlement, unpaid distribution or loan owing to the Wife by F Pty Ltd atf SFT.
16. Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a) Each party be solely entitled to the exclusion of the other to all other property resources and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s record thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements, and the chattels in the Suburb H property are deemed to be in the possession of the Husband.
(b) 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.
(c) With respect to debts and liabilities, whether past, present or future, as are in the sole name of the Wife or Husband neither the Wife nor the Husband will seek contribution from, or indemnity by the other, with respect to such debts and liabilities.
(d) Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
17. The Husband and the Wife, as directors of the Fund acknowledge that they have been afforded procedural fairness and that this order binds the trustee of the Fund.
18. Pursuant to section 90XT(1)(b) of the Family Law Act 1975, the Husband and Wife shall do all acts and things and execute all deeds, documents, instruments and writings in their capacities as directors of F Pty Ltd atf Superannuation Fund 1 (“the Fund”) to make a splittable payment to an eligible superannuation fund nominated by the Wife in respect of the parties’ combined interests in the Fund and for that purpose the Wife is declared to be entitled to an amount representing 50 percent of the parties’ combined superannuation interests in the Fund and there be a corresponding reduction in the entitlement that the Husband would have had in the Fund but for these orders herein.
19. Order 18 have effect from the operative time.
20. The operative time for these Orders is a date 4 days after completion of a final distribution or winding up of the N Property Trust of which the Fund is currently a unitholder.
21. Within 42 days after completion of a final distribution or winding up of the N Property Trust, the parties, in their capacities as directors of the Fund, shall do all acts and things necessary in the following sequence:
(a) to enable the accountant for the Fund to complete and lodge all outstanding tax returns and financial statements for the Fund;
(b) to cause the payment of any outstanding taxes or other charges owing by the Fund to the Australian Taxation Office;
(c) to enable the accountant for the Fund to calculate the parties’ combined superannuation interests in the Fund taking into account the distribution, if any, from the N Property Trust, and any other assets held by the Fund;
(d) to make a splittable payment to an eligible superannuation fund nominated by the Wife of an amount representing 50 percent of the parties’ combined superannuation interests in the Fund.
22. Contemporaneously with the making of the splittable payment referred to in Order 18 herein, the parties, in their capacities as directors of the Fund, forthwith do all acts and things and execute all deeds, documents, instruments and writings, including but not limited to signing of trustee minutes, rollover requests and related documents that may be necessary:
(a) to give effect to the splittable payment referred to in Order 18 herein;
(b) to close the Wife’s member account in the Fund;
(c) for the Wife to resign as co-trustee of the Fund; and
(d) for the Wife to resign as a director of the Fund.
Section 106A
23. In the event of the Wife or Husband refusing or neglecting to sign the necessary documents to effect such sale, transfer or assignment within seven days of being requested by a party, then the Registrar of the Federal Circuit and Family Court of Australia is hereby appointed and empowered pursuant to the provisions of Section 106A of the Family Law Act 1975, to execute such documents in the name of the defaulting party and to do all acts and things necessary to give validity and operation to such document and further, that the defaulting party pay the costs on an indemnity basis in relation to the obtaining of the Registrar’s signature.
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
Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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