SCHOREL & SCHOREL (No.3) - [2020] FCCA 922

FEDERAL CIRCUIT COURT OF AUSTRALIA

SCHOREL & SCHOREL (No.3)

[2020] FCCA 922

Catchwords:
FAMILY LAW – PROPERTY – Adjustment of property interests – loan by husband’s parents – whether contribution by husband or on behalf of parties – post separation assets and liabilities – assessment of contributions – disparity in income – justice and equity.

Legislation:

Family Law Act 1975 (Cth), ss.44, 75, 79

Cases cited:

Bevan & Bevan [2014] FamCAFC 19

Chapman & Chapman [2014] FamCAFC 91

Kessey & Kessey (1994) FLC 92-495

Mabb & Mab [2020] FamCAFC 18

Scott & Danton [2014] FamCAFC 203

Russell & Russell (1999) FLC 92-877

Stanford v Stanford [2012] HCA 52

Teal & Teal [2010] FamCAFC 120

Applicant:

MR SCHOREL

Respondent:

MS SCHOREL

File Number:

SYC 8325 of 2015

Judgment of:

Judge Obradovic

Hearing date:

4 March 2019

Date of Last Submission:

4 March 2019

Delivered at:

Parramatta

Delivered on:

29 April 2020

REPRESENTATION

Counsel for the Applicant:

Mr Cummings SC

Solicitors for the Applicant:

Walter & Elliott Family Lawyers

Counsel for the Respondent:

Mr Lethbridge SC

Solicitors for the Respondent:

Barkus Doolan

ORDERS

Leave is granted to the applicant (“husband”) pursuant to s.44(3) of the Family Law Act 1975 (Cth) (“the Act”) to make an application for alteration of property interests pursuant to s.79 of the Act out of time.
Within 28 days the parties shall do all acts and things and sign all documents necessary for the respondent (“wife”) to transfer to the husband all her right, title and interest in the property situate at and known as B Street, Suburb C in the State of New South Wales being the whole of the land comprised in (omitted) (“B Street Property”).
Simultaneously with the transfer of the wife’s interest in the B Street Property to the husband, the husband shall:
(a)cause to be paid to the wife, or as she may direct in writing, the sum of $392,048;
(b)indemnify the wife against any and all liability in relation to the loan from the husband’s parents (namely, Mr A Schorel and Ms B Schorel) to the husband and wife which is secured over the B Street Property by way of mortgage (registration number …94); and
(c)use his best endeavours to obtain a full release from the husband’s parents of any and all liabilities owed by the wife to the husband’s parents arising from the loan secured over the B Street Property by way of mortgage (registration number …94).
Upon noting that:
i.The A & B Schorel Family Trust was established under a Deed of Trust and the rules governing the operation of the said Trust are governed in the said Trust Deed.
ii.The husband is the Nominator of The A & B Schorel Family Trust.
iii.D Pty Ltd is the Trustee of The A & B Schorel Family Trust.
iv.D Pty Ltd holds 100 ordinary shares of 100 ordinary shares of A Pty Ltd.
v.The husband and the wife are both directors of D Pty Ltd and each hold 50 ordinary shares…

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 SCHOREL & SCHOREL (No.3)

Details

AGLC: SCHOREL & SCHOREL (No.3) [2020] FCCA 922
Case: [2020] FCCA 922
Decision Date: 29 April 2020

CaseChat Overview and Summary

In *Schorel & Schorel (No.3)*, Judge Obradovic of the Federal Circuit Court of Australia considered an application by the husband for an adjustment of property interests out of time, following the breakdown of the parties' marriage. The dispute involved the division of various assets and liabilities, including a jointly owned property, interests in family trusts and companies, and a loan from the husband's parents.

The court was required to determine whether to grant the husband leave to proceed with his application out of time, and thereafter, how to adjust the property interests of the parties justly and equitably. Key issues included the characterisation of a loan from the husband's parents as a contribution by the husband or on behalf of the parties, the assessment of contributions made by each party, and the division of post-separation assets and liabilities, particularly in light of a disparity in the parties' incomes.

The court granted the husband leave to make his application out of time. In its orders, the court directed the wife to transfer her interest in the B Street Property to the husband, who was to pay the wife a sum of $392,048 and indemnify her against the loan from his parents secured over that property. The wife was also ordered to address certain liabilities of a family trust and a company to the Australian Taxation Office and to assign her interests in a loan account with the trust, relinquish her interest in the trust, resign as a director of a company, and transfer her shares in that company to the husband. The remaining assets and liabilities were to be retained by each party respectively, with mutual indemnities for debts in their respective names.

Orders

Orders of the court

Leave is granted to the applicant (“husband”) pursuant to s.44(3) of the Family Law Act 1975 (Cth) (“the Act”) to make an application for alteration of property interests pursuant to s.79 of the Act out of time.

Within 28 days the parties shall do all acts and things and sign all documents necessary for the respondent (“wife”) to transfer to the husband all her right, title and interest in the property situate at and known as B Street, Suburb C in the State of New South Wales being the whole of the land comprised in (omitted) (“B Street Property”).

Simultaneously with the transfer of the wife’s interest in the B Street Property to the husband, the husband shall:

(a) cause to be paid to the wife, or as she may direct in writing, the sum of $392,048;

(b) indemnify the wife against any and all liability in relation to the loan from the husband’s parents (namely, Mr A Schorel and Ms B Schorel) to the husband and wife which is secured over the B Street Property by way of mortgage (registration number …94); and

(c) use his best endeavours to obtain a full release from the husband’s parents of any and all liabilities owed by the wife to the husband’s parents arising from the loan secured over the B Street Property by way of mortgage (registration number …94).

Upon noting that:

i. The A & B Schorel Family Trust was established under a Deed of Trust and the rules governing the operation of the said Trust are governed in the said Trust Deed.

ii. The husband is the Nominator of The A & B Schorel Family Trust.

iii. D Pty Ltd is the Trustee of The A & B Schorel Family Trust.

iv. D Pty Ltd holds 100 ordinary shares of 100 ordinary shares of A Pty Ltd.

v. The husband and the wife are both directors of D Pty Ltd and each hold 50 ordinary shares of 100 ordinary shares in that company.

Within 28 days the wife shall:

(a) pay any liabilities owed by The A & B Schorel Family Trust to the Australian Taxation Office in respect of any income directed by the wife to be paid through The A & B Schorel Family Trust for the period 27 October 2014 to 4 March 2019; and

(b) pay any liabilities owed by A Pty Ltd to the Australian Taxation Office in respect of any income directed by the wife to be paid through A Pty Ltd for the period 27 October 2014 to 4 March 2019;

(i) assign to the husband the whole of her right, title and interest or liability (if any) in any loan account the wife has with The A & B Schorel Family Trust and thereafter the husband shall, subject to the wife making the payments referred to in (a) and (b) above, indemnify and keep indemnified the wife against all actions, claims, suits and demands both at law and in equity, which the said Trust now has or may have at any time or times in the future against the wife;

(ii) relinquish all of her right, title and interest in respect of The A & B Schorel Family Trust, whether such interest may be actual, contingent or otherwise;

(iii) resign as a director of D Pty Ltd; and

(iv) transfer her 50 ordinary shares in D Pty Ltd to the husband.

Subject to these Orders, the husband is solely entitled to the exclusion of the wife to all other property both real and personal in his ownership, possession and/or control, including but not limited to:

(a) all monies in financial institutions in his name whether in Australia or overseas;

(b) his 50 ordinary shares in D Pty Ltd;

(d) his motor vehicle E;

(e) his superannuation entitlements whether in Australia or overseas; and

(f) his furniture, household effects, jewellery and personalty.

Subject to these Orders, the wife is solely entitled to the exclusion of the husband to all other property both real and personal in her ownership, possession and/or control, including but not limited to:

(a) her interest in the property at F StreetF Street, Suburb C in the State of New South Wales being the whole of the land comprised in (omitted) (“F Street Property”);

(b) all monies in financial institutions in her name whether in Australia or overseas;

(d) her interest, if any, in the Schorel Family Trust;

(e) her motor vehicle H;

(f) her superannuation entitlements whether in Australia or overseas;

(g) her interest [with] Employer I including any retirement benefit; and

(h) her furniture, household effects, jewellery and personalty.

The husband indemnify and keep indemnified the wife in relation to all liabilities and debts in his name, including but not limited to the liability in respect of his car lease, any credit card liabilities and income tax liabilities.

The wife indemnify and keep indemnified the husband in relation to all liabilities and debts in her name, including but not limited to her home loan in respect of the F Street Property, her loan from Ms J, her K Bank car loan, her National Australia Bank personal loan, any credit card liabilities and personal income tax liabilities.

In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Federal Circuit Court of Australia be appointed pursuant to s106A of the Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.

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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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