Scrivener and Neill
[2016] FCCA 1758
•13 July 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SCRIVENER & NEILL | [2016] FCCA 1758 |
| Catchwords: FAMILY LAW – Final hearing parenting and property - parenting issues settled after evidence taken from the family report writer – property issues remain in dispute – initial contributions – business income. |
| Legislation: Family Law Act 1975, ss.4(1), 78, 79(2), 79(4), , 90MT, 90SF(3), 90SM(1), 90SM(3), 90SM(4), 106A |
| Cases cited: Pierce v Pierce (1998) FLC 92-844 Williams & Williams [2007] FamCA 313 Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 Stanford & Stanford [2012] HCA 52 |
| Applicant: | MR SCRIVENER |
| Respondent: | MS NEILL |
| File Number: | MLC 7589 of 2015 |
| Judgment of: | Judge Harland |
| Hearing dates: | 9, 10 and 11 May 2016 |
| Date of Last Submission: | 8 June 2016 |
| Delivered at: | Dandenong |
| Delivered on: | 13 July 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Hannan |
| Solicitors for the Applicant: | Pearsons Lawyers Pty Ltd |
| Counsel for the Respondent: | Mr Duckett |
| Solicitors for the Respondent: | Ccs Lawyers |
ORDERS
That there be a division of the net assets (excluding superannuation set out paragraph 9 of these reasons) of the parties as to 49% to the Respondent and 51% to the Applicant (“the settlement amount”).
That the parties forthwith do all things and sign all documents as are required to list the real property at Property P and being the whole of the land comprised of title reference Volume (omitted) (“the Property P property”) for auction at the earliest possible date at a reserve to be agreed between the parties and failing agreement at the reserve recommended by the Real Estate Agent.
Upon the sale of the Property P property the proceeds be applied as follows:
(a)Firstly, to pay all costs, commissions and expenses arising from the sale;
(b)Secondly, to pay all outstanding outgoings associated with the property;
(c)Thirdly, the sum required to discharge the mortgages encumbering the properties namely the (omitted) Bank mortgage (account number (omitted)) and the (omitted) Bank loan (account number (omitted));
(d)Fourthly, to pay $50,000 to the Applicant by way of part property settlement; and
(e)Fifthly, to pay the balance to the Respondent.
That within 60 days of the date of the signing of the contract of sale for Property P property (“the settlement date”):
(a)The Applicant do all things and sign all documents so as to discharge all remaining joint mortgages (including line of credit accounts); and
(b)The Applicant pay to the Respondent the balance of the settlement amount.
That contemporaneously with the discharge of all joint mortgages and payment of the settlement amount pursuant to these orders the Respondent do all such acts and things and sign all necessary documents to transfer to the Applicant all her right, title and interest in the properties situated at Property W and being the whole of the land comprised in title reference Volume (omitted) (“the Property W property”) and Property M and being the whole of the land comprised of title reference Volume (omitted) (“the (omitted) property”).
That in the event the Applicant is unable to obtain a discharge of all joint mortgages and pay the total of the settlement amount owing to the Respondent pursuant to these orders, the parties forthwith do all things and sign all documents as are required to list the Property W property and the Property M property for auction at the earliest possible date at a reserve to be agreed between the parties and failing agreement at the reserve recommended by the Real Estate Agent agreed to by the parties.
Upon the sale of the Property M property the proceeds be applied as follows:
(a)Firstly, to pay all costs, commissions and expenses arising from the sale;
(b)Secondly, to pay all outstanding outgoings associated with the property;
(c)Thirdly, the sum required to discharge all mortgages encumbering the property;
(d)Fourthly, to pay any capital gains tax;
(e)Fifthly, to pay the balance of any settlement amount owing to the respondent ;
(f)Any balance left to the Respondent.
That the parties hold their respective interests in the Property P property, the Property W property and the Property M property (“the properties”) on Trust pursuant to these orders.
That until transfer and/or sale of the properties the Applicant have sole use and occupation of the properties and during such right and occupation he pay all instalments pursuant to all mortgages and all rates and taxes and like apportionable outgoings on the properties as they fall due and indemnify the Respondent with respect to all and any of the amounts payable.
That until the transfer and/or sale of the properties neither party encumber the properties or redraw any available funds without the consent in writing of the other party or court order.
That within 14 days of the date of these orders the Respondent do all acts and things and sign all such documents as may be required to do the following at the expense of the Applicant:
(a)Resign as Director from (omitted) Pty Ltd ACN (omitted) (“(omitted) Pty Ltd”);
(b)Transfer her shareholding in (omitted) Pty Ltd to the Applicant;
(c)Remove herself as signatory to the (omitted business) business account;
(d)Relinquish all of her right and interest in (omitted) Pty Ltd;
(e)Assign to the Respondent all of her right, title and interest in her beneficiary loan account including unpaid present entitlements within the Scrivener Family Trust ABN (omitted) (“the Trust”);
(f)Relinquish all of her rights to capital and/or income in the Trust and otherwise assign to the Applicant any position she holds in the Trust including her rights as a beneficiary and/or appointer.
Contemporaneously with paragraph 5 herein:
(a)The Applicant indemnify the Respondent against all liabilities of whatsoever nature in relation to the Scrivener Family Trust (ABN (omitted)) arising whether by reason of the Respondent having been a beneficiary of the Trust or a director of the Trustee ((omitted) Pty Ltd) including but not limited to:
(i)Liabilities which the Trustee/s of the Trust and the Trust now has or may have against the Wife at any time/s up to and including the date of these orders; and
(ii)Any loan amount which may be outstanding (if any) by the Respondent to the Trust.
(b)The Applicant be and is hereby restrained from making any further distributions from the Trust to the Respondent.
That there be an equalisation of the parties' superannuation benefits and entitlements as follows:
(a)Within 30 days of settlement of the sale of the Property P property or the date of Final Orders being made by the Court, whichever is the latter, the Applicant pay into the (omitted) Superannuation Fund's ("the Fund") bank account sufficient monies to ensure the Fund can:
(i)Pay into the Respondent's nominated superannuation fund an amount of $96,000 (“the payment”);and
(ii)Meet the Fund's normal operating expenses.
(b)That contemporaneously with the payment:
(i)The Respondent relinquish all of her right, title and interest in the (omitted) Superannuation Fund (ABN (omitted)); and
(ii)The Respondent complete and furnish to the Trustee of the Fund a roll-over form nominating the Respondent's chosen registered superannuation fund; and
(iii)Within 24 hours of receiving the completed rollover form the Trustee of the Fund will transfer the sum of $96,000 to the Respondent's nominated fund.
That the Applicant shall retain for his sole and exclusive use, enjoyment and benefit all other items of property (both real and personal and including choses-in-action and financial resources) in his name possession and/or control including but not limited to:
(a)The business known as (omitted) Pty Ltd trading as (omitted business);
(b)The stock of (omitted) Pty Ltd;
(c)The Scrivener Family Trust;
(d)Mercedes van; and
(e)All chattels, cash and assets otherwise in his possession.
That the Respondent shall retain for her sole and exclusive use, enjoyment and benefit all other items of property (both real and personal and including choses-in-action and financial resources) in her name possession and/or control including but not limited to:
(a)Honda (omitted);
(b)All chattels, cash and assets otherwise in her possession.
That in the event that either party should fail, neglect or refuse to sign or execute any deed, document or instrument required by or to give effect to these Orders then pursuant to Section 106A Family Law Act that the Registrar of the Federal Circuit Court of Australia, Dandenong Registry shall be and is hereby authorised, empowered and directed to sign and execute such deed, document or instrument in the place and instead of such party and to thereafter do all things and acts as are necessary to give validity and operation to same.
IT IS NOTED that publication of this judgment under the pseudonym Scrivener & Neill is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT DANDENONG |
MLC 7589 of 2015
| MR SCRIVENER |
Applicant
And
| MS NEILL |
Respondent
REASONS FOR JUDGMENT
The parties agreed to final parenting consent orders after hearing the family report writer being cross-examined. The parties were in a de facto relationship. The parties were unable to resolve the property issues between them.
Both parties gave oral evidence. The Applicant is somewhat pedantic and this was evident in the way he answered questions but I am satisfied that both parties did their best to tell the truth.
The Applicant is 47 years old. He is an (occupation omitted) running his (omitted) business known as (omitted business).
The Respondent is 47 years old. She works part time as an (occupation omitted).
The parties started living together in 1992. They never married. They separated under the one roof in December 2012. The Respondent moved out of the home in March 2013.
The issues in dispute primarily centred on the following issues:
a)The weight that should be given to the Applicant’s initial contributions;
b)The extent to which there is an income earning disparity between the parties and whether or not there should be an adjustment for that; and
c)What adjustment should be made, if any, for the parties’ respective care of the children.
The treatment of the following items are in dispute:
a)The treatment of loan accounts at separation; and
b)The amount and treatment of funds the parties have received.
The parties’ legal and equitable interests
The parties agree that they have the following assets and liabilities available for division between them:
assets ownership $ Property P Joint 1,650,000 Property M Joint 650,000 Property W - 82% Joint 820,000 (omitted business) Scrivener Family Trust (Stock) Joint 71,500 Honda (omitted) Respondent 9,100 Mercedes Applicant 35,000 Partial property distribution Respondent 22,000 Funds drawn down by Applicant (less 22,000 paid to Respondent) Applicant 28,500 Total Assets 3,290,150
Liabilities Mortgage on Property P Joint 109,000 Line of credit on Property P Joint 680,000 Mortgage on Property M Joint 354,000 Lease on Applicant’s Mercedes Applicant 35,000 Total Liabilities 1,178,000 Net assets 2,112,150 Superannuation Self-managed Super Fund - cash 12,018.53 18% Ownership of Property W 180,000 Total Superannuation 192,018.53 Total (net assets + superannuation) 2,304,168.53
I accept that the business has a working account which fluctuates hovering around $20,000. I am satisfied this should not be included in the property available for division as the business needs a working account to maintain business’s cash flow. The parties have chosen not to have the business valued. They have agreed on the value of the stock and that it should be included in the property pool. Given that post separation the Applicant has been operating the business on his own, the parties’ approach to this is reasonable.
The weight that should be given to the Applicant’s initial contributions
The Applicant bought the property at Property N in 1991 for $81,000. He had mortgage of $68,000. The Applicant gave evidence about the various improvements he made to the property including fencing, putting in heating, painting and creating a driveway. He attributed monetary values to his expenditure. He says a good rule of thumb was that if you spent $2,500 then you increase the value by $5,000. That reasoning is flawed. Improvements made to a property do not necessarily increase its value. In order to establish the value of the works the Applicant would have had to have produced the expert evidence. He has not done so. Whilst I accept that he has made initial contribution, which must be recognised, I do not accept the value he has attributed to it.
The parties were friends at high school and started living together in 1992. They lived in the Property N property. The business operated out of the property and paid the rent. The Applicant was about 18 when they started living together. He had already started the business initially out of his parents’ backyard.
The Applicant says he also had $25,000 in savings. He said he tried to obtain bank statements but they did not go back that far and he also had a new van and redundancy from an apprenticeship.
The Respondent accepted that the Applicant received about $10,000 redundancy before they lived together. She said he had some savings but did not know how much. Given the Applicant had recently bought a property with a sizeable mortgage does not make sense that he would have a savings as high as $25,000 though I accept he had some savings.
The Respondent argues that he Applicant’s initial contributions are not as high as he has claimed and that over a 21 year relationship there have been a significant erosion of those contributions.
In Pierce v Pierce (1998) FLC 92-844 at paragraph 28 the Full Court said:
In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.
In Williams & Williams [2007] FamCA 313 the Full Court states at the paragraph 26:
We think there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution between the parties. Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing of the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in doing so it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.
The Applicant also relies on the decisions of Manolis & Manolis (No. 2) [2011] FamCAFC 105 and Agius & Agius [2010] FamCAFC 143. The decisions make it clear that the Court must consider not just the value of the initial contributions at the start of the relationship but how those initial contributions were utilised. In this case the parties retained the Property N property until 1996 when they sold it.
The Applicant says he should receive a 7.5% adjustment in his favour for his initial contributions and his separation contributions. The Respondent says if there is to be an adjustment at all it should be no more than 2.5%.
Other contributions
The Applicant says that he made equal parenting contributions. I do not accept this given his work hours and the renovations and improvements that the Applicant made equal contributions to the parenting of the children. He certainly made parenting contributions but the Respondent was more available working part time at a school. She also contributed to the business by doing the book work.
The Applicant carried out improvements to the parties’ properties. The Respondent provided some assistance and cared for both of the children.
The Applicant has continued to make financial contributions post separation. He has provided financial support for the children and paid the school fees. The Respondent did not pay child support when both children were living with him. The Applicant provided the Respondent with some financial assistance when she was setting up her household in rental accommodation.
The business
The Applicant was taken through the business accounts and the gross profits from trading from 2009 to 2015 and the first half of the 2016 financial year. They show a steady increase in gross profit.
In 2010 the parties together with their superannuation fund purchased the Property W property. The Applicant says he has been advised that there are moving forward there is no advantage to this structure because they cannot split their income.
The Applicant says that the business had steadily increasing expenses and that the business does not have the cash flow for paying wages superannuation and he therefore relies on drawing from previous profits. This is consistent with the evidence of his accountant. However that is not the whole picture.
It was clear that there were some questions particularly around depreciation and business losses that he could not answer as he relied on his accountant, Mr G.
Mr G also gave evidence. He prepared an affidavit and was cross-examined. The Respondent’s case is that the Applicant’s income is greater than that which is shown in his tax returns. It is not unusual for someone in the Applicant’s position, essentially a sole trader, being able to legitimately claim various expenses through the business which has the effect of lowering his taxable income. In those circumstances it is necessary to look not just the taxable income but also the benefits received from the business.
Mr G has looked at the Applicant’s income and provided an average for the past six years of $62,000. The difficulty with this approach is that the purchase of the Property W property distorts these figures as there was a one-off cost to the business of fit out which resulted in a $90,000 loss.
The balances in the self-managed superannuation fund are strictly in accordance with the parties respective contributions. Mr G gave evidence that he cannot change those as they are externally audited and that is the convention that is applied with respect allocation of earnings the superannuation funds. He confirmed that the trust must distribute all profits and has distributed those profits to the Applicant.
The business is structured through the (omitted business) As the Trustee of the Scrivener Family Trust. The financial records for business showed that its profits have been fairly steady and have largely increased from 2010 to 2015. The only distorting factor is the purchase of the Property W property in 2010. That property was purchased so that the business could move into a bigger premises. The business has had accumulated losses in the years 2011 to 2013 totalling approximately $90,000. This is largely due to the additional expenses associated with the Property W property being at the cost of the fit out and also increased rent. It must be noted that whilst the business is paying increased rent it is the party’s superannuation fund that receives the rent to the parties still benefit.
The trust has to divest itself of the accumulated losses except for about $6,000. The trust must get rid of the losses before it can distribute the profits. The trust must distribute the whole of the profits each year.
There was an advantage to the parties in operating the business through a trust when they were together because the income could be split. That advantage has now disappeared. The trust has beneficiary loan accounts. The trust has already paid tax on those amounts. The trust is obliged to do so even when it does not have enough cash to distribute which is how the loan accounts have arisen. It is important to note that tax has already been paid on those amounts so that when the trust has sufficient cash to pay the beneficiaries their loan accounts, they do not need to declare that cash on their income tax returns because to do so would mean paying tax twice on the same money.
The extent to which there is an income earning disparity between the parties and whether or not there should be an adjustment for that
The Respondent seeks an adjustment of 10% in her favour for the income disparity between the parties. It is clear that when looking at the income of the business the Applicant seeks to look backward and factor in the income with the losses associated with the purchase of Property W and the fit out costs and the Respondent wishes to look forward. When one looks at the figures of the past three years it is clear that the profits of the business are steadily growing. The picture is somewhat distorted as if the losses are factors in so many evidence of Mr G that harm most of those losses were attributed to the acquisition of Property W property. The increased rent still benefits the parties via their superannuation funds.
The Applicant argued that if the Respondent retrained she could earn up to $85,000 a year. This is fanciful. There was no evidence about this. The Respondent does not seek to retrain and if she did she may well have a significant decrease in income. This is all speculation. The Respondent is currently working 9 days per fortnight. Her evidence is that if she was working full-time she would earn about $50,000 to $55,000. The Respondent is not working full-time. There is no evidence to suggest that she can increase her hours with her current employer.
I do not accept the Applicant’s submissions that the parties’ income are similar. I am satisfied that the Applicant has a higher income earning capacity than the Respondent. $62,000 per annum is not an accurate reflection of his income as it ignores the fact that the losses are not ongoing, the gross profits of the business have been steadily increasing and the Applicant will be receiving the whole of the rental income.
In the Respondent’s affidavit filed on 21 April 2016 she says she has taken the opportunity of doing temporary (omitted) work with her employer working full-time. Her salary for the 2015 year was approximately $54,000 which included approximately $7,000 in rent which she will no longer receive.
What adjustment should be made, if any, for the parties’ respective care of the children
The parties have two children X born (omitted) 2001, aged 14 and Y born (omitted) 2004, aged 11. The parenting orders consented to by the parties provide for X to live primarily with the mother and Y live primarily with the father. The orders provide for the boys to spend time with each other and the parent they are not living with the daytime periods on alternate Sundays and Thursdays.
There is some uncertainty as to what the parenting arrangements will be in the future. The Applicant seeks an adjustment in his favour by reason of the fact that Y is in his primary care and is three years younger than X. I must deal with the situation as I find it rather than speculate on what might happen in future.
The Applicant says he should receive a 2.5% for the care of Y.
The Respondent says that any adjustment for the care of Y should be minimal and not greater than 1.5%. The Respondent says they will be sharing expenses and apart from anxiety, Y does not have special needs. The only adjustment would be for the 3 year age difference.
The treatment of loan accounts at separation
In re-examination the Applicant said he paid to the Respondent three amounts of $5,000 on 1 June 2013, 9 February 2014 and 10 February 2014. He says that the balance after those withdrawals was $17,999.25 and that he left his $5,000 in that account at that time. The evidence suggests that the parties had access to similar sums at this time. If this is incorrect then I would still decline to add back the $15,000 the Respondent received. The Applicant was and continues to be in a stronger position to her. There is nothing to suggest that she did anything other than use these funds for her own support.
The amount and treatment of funds the parties have received
The parties cannot agree on the treatment and the amount of funds each have received since separation.
The Applicant was taken through various figures which totalled $51,500 plus a further such of $3,050 being amounts he has drawn down in 2015 and 2016. The Applicant paid to the Respondent from this sum the $22,000 in partial property settlement pursuant to interim consent orders made on 5 November 2015.
I am satisfied that the Applicant has received $32,550 more than the Respondent. As the $22,000 sum is being included in the property pool, this amount will also be included. It would be double counting to include the $10,815 in the Respondent’s bank account and the $28,000 currently in the Applicant’s bank account as the parties’ evidence is that these sums represent the partial property settlement and the drawn downs respectively.
Section 90SF(3) adjustments
The parties’ ages are similar. Neither raise any health issues. Both will have the primary care of one of the children. The relationship lasted 21 years. Neither party has re-partnered.
The Applicant will retain the business and the Property W property.
I have addressed the issue of the parties’ respective incomes and the issue of an adjustment for care of the children separately.
Legal Principles with respect to property
There is no dispute between the parties that they were in a de facto relationship of more than two years duration. Section 90SB(a) of the Family Law Act 1975 (Cth) (“Family Law Act”) is satisfied. Section 90SD being the geographical requirement is also satisfied.
Part VIIIA of the Family Law Act is the part of the Act dealing with property, spousal maintenance and maintenance agreement. The major provisions relating to marital property division are contained in sections 90SM(1); 90SM(3), 90SM(4); and 90SF(3) of the Family Law Act.
Pursuant to section 90SM(1) the Court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a marriage in relevant property.
The expression “property” is defined in section 4(1) in relation to the parties to a marriage or either of them as meaning “…property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.”
Pursuant to section 90SM(3) the Court is actively prevented from making such an order unless it is satisfied that it is just and equitable to do so in all of the circumstances prevailing. This follows from the use of the prohibitory words “shall not” in the relevant section.
Section 90SM(4) provides the mechanics of how a Court is to make an order altering marital property interests.
Paragraphs (a), (b) and (c) categorise contributions made by marital partners, which are relevant. Paragraph (d) directs the Court to take into account any order regarding the earning capacity of either party to the marriage concerned.
Paragraph (e) directs the Court to consider a list of matters contained in section 90SF(3), which are germane to spousal maintenance or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs. Finally, paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.
Until the decision of Stanford& Stanford [2012] HCA 52 (“Stanford & Stanford”), the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled with a preferred approach as set out by the Full Court in Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39].
The High Court of Australia (“High Court”) considered the operation of section 79 (which is almost identical terms to s.90SM) in the matter of Stanford & Stanford.In the case, the majority stated at [35]-[36] that:
It will be recalled that s 79(2) provides that "[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order". Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [Footnotes omitted]
The High Court found three fundamental propositions with respect to the application of section 79, which can be summarised as follows:
a)Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court emphasised the word existing;
b)Secondly, although section 79 gives the Court a broad power to make property settlement orders it may not be exercised in an unprincipled fashion. There must be no assumption that the parties’ interests are or should be different to their existing interests; and
c)Thirdly, when considering whether making a property settlement order is just and equitable the Court must not assume that one or the other party has the right to a property adjustment order. The Court must give separate consideration to section 79(2) in addition the matters referred to section 79(4).
In Stanford & Stanford the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of section 79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation. I am satisfied that it is just and equitable to make orders adjusting the parties property interests in this case
The High Court also pointed out that what is just and equitable is different in every case.
The principles referred to in Stanford & Stanford are equally applicable to de facto property matters: see Watson & Ling (2013) 49 Fam LR 303.
Conclusion
At the conclusion of the hearing the parties entered into consent minutes providing for the sale of the Property P property, for the mortgage and bank loan to be paid out on a partial property distribution to each of the parties of $50,000. At the time of delivering this judgment I do not know if the property has sold.
In addition parties were to file an amended minute of orders sought and be at liberty to file any letter with respect to the amended minute from Mr G accountant or other relevant party. I require parties to file amended minutes because of the issues raised during the course of evidence with respect to the most effective way of dealing with the Respondent’s superannuation entitlements in the self-managed fund and the beneficiary loan accounts. The applicant also provided a letter from Mr G indicating that he saw no difficulty in implementing the orders with respect to the trust and the superannuation fund.
Both sets of minutes provide for the parties superannuation interests to be divided equally. Both minutes provide for the Respondent to assign her interest in her beneficiary loan account and her interest in the trust.
Both seek percentage split of the non-superannuation assets. The Property P property is already on the market. The Applicant wants the opportunity to keep the Property M property and the Property W property. He proposes paying the Respondent a specific sum rather than a percentage. The difficulty with that approach is that the figures are not fixed. The Property P property is on the market but the exact price is unknown. It is not certain that the Applicant will be able to retain both the Property M property and the Property W property considering the asset pool he will be able to retain the Property W property which is the business premises. The Full Court in Jarrott and Jarrott [2012] FamCAFC 29 succinctly explain why this is correct approach at [21]:
As is not in doubt, and the authorities to which Senior Counsel for the husband referred confirm, the Court has consistently held that orders involving the realisation of assets for their implementation should be expressed in percentage terms so that the outcome of the realisation of such assets does not alter the overall percentage entitlements of the parties in the event of the asset, or assets, being realised for significantly more or less than the values relied upon at trial (see Waters & Waters (1981) FLC 91-019, Smith & Smith (1991) FLC 92-261 at page 78,759 and Docters Van Leeuwen & Docters Van Leeuwen (1990) FLC 92-148 at page 78,024).
I find that the Applicant should receive a loading of 6% for his initial and post separation contributions.
The s.90SF(3) factors favour the Respondent. Allowing for a small adjustment for the Applicant’s care of Y and given the income disparity between the parties there should be a loading in the Respondent’s favour of 5%. The outcome is that the Applicant will receive 51% and the Respondent will receive 49% of the net property pool. The settlement figure referred to in the orders is the non-superannuation pool set out in paragraph 9.
The Respondent already has the part property settlement of $22,000 and her Honda (omitted) worth $9,100. These are part of the 49% the Respondent is to receive with respect to the non-superannuation assets.
The Applicant will have the opportunity to retain the Property M and the Property W properties. I am satisfied that the orders are just and equitable.
I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of Judge Harland
Date: 13 July 2016
Key Legal Topics
Areas of Law
-
Family Law
-
Equity & Trusts
Legal Concepts
-
Remedies
-
Constructive Trust
-
Costs
-
Injunction
-
Fiduciary Duty
-
Procedural Fairness
0
5
2