FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Sorensen & Vester [2024] FedCFamC2F 1835
File number(s): HBC 171 of 2023 Judgment of: JUDGE TURNBULL Date of judgment: 18 December 2024 Catchwords: FAMILY LAW – PROPERTY – Short relationship – Valuation of assets of a dairy company – Whether certain assets are owned by the company or by the Husband – Whether the Husband’s father holds milk income of the company that should be included in the company assets – Whether all the purported expenses of producing the milk should be accepted – Whether the milk income should be ‘added back’ to increase the value of the company’s assets – Whether the company had a lease agreement with the Husband justifying the withdrawal of monies from the company for ‘lease payments’ or should those monies also be added back to form part of the company’s assets – the quantum of the company’s directors loans – Whether the Husband has a personal loan to his father – Whether the Court should take a one, two or three pool approach – Whether it is just and equitable for an order to be made – EVIDENCE – The impact of the failure of the Husband to call his father as a witness – Whether the Wife’s ‘estimated’ value of chattel items is admissible evidence – Whether her estimate was an ‘admission’ and thereby an exception to the hearsay and opinion rules - Whether there has been full and frank disclosure. Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021
Evidence Act 1995 (Cth)
Income Tax Assessment Act 1936 (Cth)
Cases cited: Australian Securities & Investments Commission v Fortescue Metals Group Ltd [No 5] [2009] FCA 1586
Australian Securities and Investments Commission v Rich [2009] NSWSC 1229
Bagshaw & See [2019] FamCA 482
Beck & Beck (No 2) (1983) FLC 91-318
Berghan v Berghan [2017] QCA 236; (2017) 57 Fam LR 104
Bevan & Bevan [2013] FamCAFC 116
Biltoft and Biltoft [1995] FamCAFC 45
Blatch & Archer [1774] 98 ER 969
Boege and Boege [2001] FamCA 1167
Briginshaw v Briginshaw (1938) 60 CLR 336
C & C [1998] FamCA 143
Campbell v Kuskey (1998) FLC 92-795
Clauson & Clauson (1995) FLC 92-595
Coghlan v Coghlan (2005) 33 Fam LR 414
Coshott v Prentice [2014] FCAFC 88
Dawes & Dawes [1989] FamCA 71
Dickons & Dickons [2012] FamCAFC 154
Dovgan & Dovgan [2021] FamCA 306
Ermogenous v Greek Orthodox Community of SA Inc [2002] 209 LCR 95
Federal Commissioner of Taxation v Bosanac (no 7) [2021] FCA 249
Gadhavi & Gadhavi [2023] FedCFamC1A 117
Gould & Gould [2007] FamCA 609
Grier & Malphas [2016] FamCAFC 84
Grunseth & Wighton [2022] FedCFamC1A 132
Heydon v The Perpetual Executors Trustees and Agency Co WA Limited [1930] HCA 26 113
Hicks & Trustee of the Bankrupt Estate of Hicks [2021] FamCAFC 19
Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395
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- AGLC
- Sorensen & Vester [2024] FedCFamC2F 1835
- Case
- [2024] FedCFamC2F 1835
- Decision Date
CaseChat Overview and Summary
The court considered the evidence presented by both parties and found that the husband had not called his father as a witness, which had an impact on the case. The court also found that the wife’s estimate of the value of chattel items was admissible evidence and that her estimate was not an ‘admission’ and therefore not an exception to the hearsay and opinion rules. The court found that there had not been full and frank disclosure by the husband. The court then considered the valuation of the company’s assets, including the value of the company’s directors’ loans, and determined that the value of the company was $1,503,410.22. The court found that the husband’s father held milk income of the company that should be included in the company assets and that all the purported expenses of producing the milk should be accepted. The court also found that the milk income should be ‘added back’ to increase the value of the company’s assets. The court found that the company had a lease agreement with the husband justifying the withdrawal of monies from the company for ‘lease payments’ and that those monies should also be added back to form part of the company’s assets. The court found that the husband had a personal loan to his father and that a three pool approach should be taken. The court found that it was just and equitable to make an order.
The court ordered that all extant property orders be discharged. The applicant was required to transfer all her share, right, title, and interest in the company to the respondent and resign as an office holder of the company, including as a director. The respondent was required to pay the applicant the amount of $315,793.24. The respondent was required to release the applicant from all liabilities of and in relation to the company and indemnify and keep indemnified the applicant to the maximum extent permitted by law. The applicant was required to release the company from any liabilities in relation to any director’s loans and/or any other monies that may be owed to the applicant. Each party was required to be solely entitled to the exclusion of the other to all other property in their legal or beneficial ownership or possession. Each party was required to forego any claims they may have to any superannuation long service leave, redundancy, retirement, retrenchment, inheritance, and like benefits belonging to, earned, or received by the other. Life insurance policies were required to remain the sole property of the owner named thereon. Any joint tenancy of the parties in any real or personal estate was required to be severed. Each party was required to be solely liable for and indemnify and keep indemnified the other against all costs and expenses in relation to any items of property to which that party was entitled pursuant to the order and be solely liable for and indemnify the other against any liability encumbering any items of property to which that party was entitled pursuant to the order and in that party’s sole name, including but not limited to credit cards, loans, lease agreements, and charitable commitments. Each party was required to do or cause to be done all things necessary or reasonably desirable to give full effect to the order and the matters contemplated by it, including but not limited to the execution of documents. In the event that either party failed to execute any documents required to be signed for the purpose of the order within three business days of any such document being provided to either party, and upon the Registrar of the Federal Circuit and Family Court of Australia being satisfied by way of affidavit evidence only of such failure or neglect or default by either party, then the Registrar was required to be appointed to execute any such documents in the name of either of the parties in order to give full force and effect to the order. All extant proceedings were required to be dismissed.
Orders
Orders of the court
1. All extant property orders are discharged.
2. Within 28 days the Applicant do all things and sign all documents necessary to transfer all her share, right, title and interest, in C Pty Ltd (‘C Pty Ltd’) to the Respondent (‘Transfer’), and to take all necessary steps to resign as an office holder of C Pty Ltd, including as a director.
3. Contemporaneously with the Transfer, the Respondent pay to the Applicant the amount of $315,793.24. (‘Payment’).
4. As from the date of the Transfer and Payment (‘the date of the Transfer and Payment’), the Respondent release the Applicant, and indemnify and keep indemnified the Applicant, to the maximum extent permitted by law, from all liabilities of and in relation to:
(a) C Pty Ltd that exists at the date of the Transfer and Payment or that may exist in the future, including any taxation liabilities; and
(b) Any current and/or future assets of C Pty Ltd.
5. As from the date of the Transfer and Payment, the Applicant release C Pty Ltd from any liabilities in relation to any director’s loans and/or any other monies that may be owed to the Applicant, to the maximum extent permitted by law (it being noted that the Applicant's director's loan of $29,719.76 has been repaid to her).
6. Unless otherwise specified in this order and save for the purpose of enforcing this order:
(a) Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the legal or beneficial ownership or possession of that party as at the date of this order;
(b) Each party forego any claims they may have to any superannuation long service leave, redundancy, retirement, retrenchment, inheritance, and like benefits belonging to, earned or received by, the other;
(c) Life insurance policies remain the sole property of the owner named thereon;
(d) Any joint tenancy of the parties in any real or personal estate is expressly severed;
(e) Each party be solely liable for and indemnify and keep indemnified the other against all costs and expenses in relation to any items of property to which that party is entitled pursuant to these orders, and be solely liable for and indemnify the other against any liability:
(i) Encumbering any items of property to which that party is entitled pursuant to this order; and
(ii) in that party’s sole name, including, but not limited to, credit cards, loans, lease agreements and charitable commitments.
7. Each party must do or cause to be done all things necessary or reasonably desirable to give full effect to this order and the matters contemplated by it, including, but not limited to, the execution of documents.
8. In the event that either party fail to execute any documents required to be signed for the purpose of this order within 3 business days of any such document being provided to either party, and upon the Registrar of the Federal Circuit and Family Court of Australia (Division 2) being satisfied by way of Affidavit evidence only of such failure or neglect or default by either party, then the Registrar be appointed pursuant to section 106A of the Family Law Act 1975 (Cth) (Family Law Act) to execute any such documents in the name of either of the parties in order to give full force and effect to this order.
9. All extant proceedings are dismissed.
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
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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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