SORRENSEN & SORRENSEN

[2015] FamCA 334

FAMILY COURT OF AUSTRALIA

SORRENSEN & SORRENSEN [2015] FamCA 334

FAMILY LAW – PROPERTY – Final – Where the parties agree that equal division of their property interests would be a just and equitable outcome – where the parties are unable to reach an agreement as to how their property interests should be adjusted to give effect to an equal division – where the wife does not wish to retain one of the properties in dispute – where the husband does not wish to retain that property unless it is retained equally by the husband and wife – where it is just and equitable to order that the property be held by the husband.

Family Law Act 1975 (Cth)
Family Law (Superannuation) Regulations 2001 (Cth)

Superannuation Industry (Supervision) Regulations 1994 (Cth)

Buckley & Buckley [2012] FamCAFC 220

APPLICANT: Ms Sorrensen

RESPONDENT: Mr Sorrensen

FILE NUMBER: BRC 8601 of 2012

DATE DELIVERED: 8 May 2015

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 27 April 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kirk QC

SOLICITOR FOR THE APPLICANT: MacDonnells Lawyers

COUNSEL FOR THE RESPONDENT: Mr Jordan

SOLICITOR FOR THE RESPONDENT: Woods Prince Lawyers

Orders

Definitions

1. That for the purpose of these Orders the following definitions shall apply:

   1.1‘the C Town Property’ means all of the rural property situated at B Street, C Town, Queensland, and more particularly described as Lot … on CP …, County of D, Parish of C Town, Title Reference ....

   1.2‘the F Town Property’ means all of the property situated at E Street, F Town, Queensland, and more particularly described as Lot 5 on CP …, County of G, Parish of H, Title Reference ...

   1.3‘the K Property’ means all of the property situated at I Street, Suburb J, Island K, Queensland, and more particularly described as Lot … on CP …, County of L, Parish of K, Title Reference ....

   1.4‘the Suburb N Property’ means the property situated at M Street, Suburb N, and more particularly described as Lot 7 on SP 200798 County of L, Parish of O, Title Reference 50678938.

   1.5‘the Sorrensen Property Fund’ means the Discretionary Trust established by Deed dated 29 June 1989 between Mr P as settler and Q Pty Ltd as Trustee, with the Trustee being subsequently varied to R Pty Ltd.

   1.6‘the Trustee’ means R Pty Ltd, the Directors of which are the Applicant Wife and the Respondent Husband.

   1.7‘the Sorrensen Superannuation Fund’ means the self-managed superannuation fund established by Deed dated 15 February 1999, and varied by Indenture dated 26 September 2005, with the  Trustee being Sorrensen Super Pty Ltd, and the members being the Applicant Wife and the Respondent Husband.

   1.8‘the Superannuation Trustee’ means Sorrensen Super Pty Ltd, the Directors of which are the Applicant Wife and the Respondent Husband.

   1.9‘S’ means the company S Pty Ltd, the Directors of which are the Applicant Wife and the Respondent Husband.

   1.10‘the Parties’ means the Applicant Wife and the Respondent Husband.

   1.11‘the Entities’ means all companies and trusts in which the Applicant Wife and Respondent Husband has an interest.

IT IS ORDERED

Transfer of F Town Property

1. That within 45 days of the date of these Orders the Respondent Husband (“the Transferor”) shall transfer to the Applicant Wife (“the Transferee”) all of his right, title and interest in and to the F Town Property and for that purpose the following shall apply:

   2.1The transfer documentation shall be prepared by the Transferee’s solicitor and delivered to the Transferor for signature;

   2.2The transfer documentation must be signed by the Transferor no later than 14 days prior to the settlement date;

   2.3If the Transferee requires the return of the transfer for stamping purposes then:

   2.3.1The Transferee’s solicitor will advise the Transferor of this requirement at the time the transfer documentation is delivered;

   2.3.2Subject to the Transferee’s solicitor giving an undertaking to use the transfer for stamping purposes only but to otherwise hold the transfer in escrow pending settlement, the Transferor must sign and deliver the transfer to the Transferee’s solicitor no later than 14 days prior to the settlement date.

   2.4On or before the settlement date, the Transferor must:

   2.4.1Hand to the Transferee’s solicitor all such documents as are necessary to transfer and assign all of the Transferor’s right, title and interest in the building insurance policy to the Transferee;

   2.4.2Hand to the Transferee’s solicitor all transfer documents duly signed;

   2.4.3Hand to the Transferee or the Transferee’s solicitor all keys, codes or devices in the possession or control of the transferor for all locks, gates, doors and security systems on the property;

   2.4.4Hand to the Transferee’s solicitor any pool safety certificate for the property and any costs associated with obtaining the pool certificate shall be paid for equally by the husband and wife;

   2.4.5Provide the Transferee with vacant possession;

   2.4.6Do all such acts and things and sign all documents necessary to give effect to the said transfer.

Interim use of the F Town Property

1. That pending the transfer of the F Town property pursuant to these Orders:

   3.1Both parties are restrained by injunction from encumbering the property without the prior written consent of the other;

   3.2Both parties are restrained by injunction from giving any notice or seeking or consenting to any order that affects the F Town property;

   3.3Both parties are restrained by injunction from making any agreement affecting the F Town property which binds the Transferee to perform;

   3.4Any notice, proceeding or other Order that affects the F Town Property or requires work on the F Town Property which is received by the Respondent Husband must be given to the other party within 7 days of receipt;

   3.5Each party will cause to be repaired, at their own expense, any damage to the F Town Property caused by them or persons attending or occupying the property with their knowledge, consent or invitation;

   3.6The Applicant Wife will maintain at her expense the building insurance for the F Town Property at a replacement value of no less than $600,000 and provide to the Respondent Husband a certificate of currency evidencing same within 48 hours of its receipt;

   3.7The Applicant Wife is responsible for the day to day maintenance and care of the F Town Property;

   3.8The Applicant Wife is solely liable for and indemnifies the Respondent Husband against all outgoings in and about the F Town Property.

Sole use and occupation of F Town Property

1. That pending the transfer of the F Town Property pursuant to these Orders:

   4.1The Applicant Wife has sole right to use and occupy the F Town Property to the exclusion of the Respondent Husband;

   4.2The Respondent Husband is not to enter or access the F Town Property;

   4.3The Applicant Wife is responsible for the day to day maintenance and care of the F Town Property.

Transfer of K Property

1. That within 45 days of the date of these Orders, the Applicant Wife (“the Transferor”) shall transfer to the Respondent Husband or his nominee (“the Transferee”) all of her right, title and interest in the K Property and for that purpose the following shall apply:

   5.1The transfer documentation shall be prepared by the Transferee’s solicitor and delivered to the Transferor’s solicitor for signature;

   5.2The transfer documentation must be signed by the Transferor no later than 14 days prior to the settlement date;

   5.3If the Transferee requires the return of the transfer for stamping purposes then:

   5.3.1The Transferee’s solicitor will advise the Transferor of this requirement at the time the transfer documentation is delivered;

   5.3.2Subject to the Transferee’s solicitor giving an undertaking to use the transfer for stamping purposes only but to otherwise hold the transfer in escrow pending settlement, the Transferor must sign and deliver the transfer to the Transferee’s solicitor no later than 14 days prior to the settlement date.

   5.4On or before the settlement date, the Transferor must:

   5.4.1Hand to the Transferee’s solicitor all such documents as are necessary to transfer and assign all of the Transferor’s right, title and interest in the building insurance policy to the Transferee;

   5.4.2Hand to the Transferee’s solicitor all transfer documents duly signed;

   5.4.3Hand to the Transferee’s solicitor all keys, codes or devices in the possession or control of the Transferor for all locks, gates, doors and security systems on the property;

   5.4.4Provide the Transferee with vacant possession;

   5.4.5Do all such acts and things and sign all documents necessary to give effect to the said transfer.

Interim use of the K Property

1. That pending the transfer of the K Property pursuant to these Orders:

   6.1Both parties are restrained by injunction from encumbering the K Property without the prior written consent of the other;

   6.2Both parties are restrained by injunction from giving any notice or seeking or consenting to any Order that affects the K Property;

   6.3Both parties are restrained by injunction from making any agreement affecting the K Property which binds the Transferee to perform;

   6.4Any notice, proceeding or other Order that affects the property or requires work on the property which is received by the Applicant Wife must be given to the other party within 7 days of receipt;

   6.5Each party will cause to be repaired, at their own expense, any damage to the K Property caused by them or persons attending or occupying the property with their knowledge, consent or invitation;

   6.6The Respondent Husband is directed to maintain, at his expense, building insurance for the K Property at a replacement value of no less than $500,000 and provide to the Applicant Wife a certificate of currency evidencing same within 48 hours of its receipt.

Sole use and occupation of K Property

1. That pending the transfer of the K Property pursuant to these Orders:

   7.1The Respondent Husband has the sole right to use and occupy the K Property to the exclusion of the Applicant Wife;

   7.2The Respondent Husband is responsible for the day to day maintenance and care of the K Property;

   7.3The Respondent Husband is solely liable for and indemnifies the Applicant Wife against all outgoings in and about the K Property.

The C Town Property and the Sorrensen Property Fund

1. That within 45 days of the date of these Orders, the Applicant Wife shall take all steps necessary, including by signing any documents required, to resign as a director of R Pty Ltd and to transfer her share/s in that company to the Respondent Husband or his nominee and for that purpose the following shall apply:

   8.1The resignation and transfer documentation shall be prepared by the Applicant     Wife’s solicitor after consultation with the Respondent Husband’s solicitor and provided, where necessary for signature, to the Respondent Husband’s solicitor who shall return completed documents to the Applicant Wife’s solicitor within 14 days of having received them;

   8.2All necessary steps required to formally notify the Australian Securities and Investments Commission of the resignation and transfer shall be attended to by the Applicant Wife’s solicitor who shall notify the Respondent Husband’s solicitor in writing when completed;

   8.3The Respondent Husband shall ensure that the Applicant Wife’s personal possessions located at the C Town property are delivered at the direction and expense of the Applicant Wife within 45 days of these Orders;

   8.4The Applicant Wife shall within 45 days of these Orders deliver to the Respondent Husband’s solicitors all such documents as are necessary to transfer and assign all of the Applicant Wife’s rights, title and interest in any relevant building insurance policy to the Respondent Husband or his nominee;

   8.5The Applicant Wife shall within 45 days of these Orders deliver to the Respondent Husband’s solicitor all keys, codes or devices in her possession or control for all locks, gates, doors and security systems on the C Town property;

   8.6The Applicant Wife will assign to the Respondent Husband any loan account standing to her credit and provide a full release and discharge from and against any claim, right, entitlement or interest in any such loan account in the Sorrensen Property Fund; and

   8.7The Applicant Wife will renounce and forego any power, right, interest or entitlement (legal and beneficial) in or to the Sorrensen Property Fund and do all other acts and things necessary to give effect to these Orders.

Sole use and occupation of the C Town Property

1. That pending the resignation of the Applicant Wife as a director of R Pty Ltd and the transfer of her share/s in that company to the Respondent Husband or his nominee pursuant to these Orders:

   9.1The Respondent Husband has the sole right to use and occupy the C Town Property to the exclusion of the Applicant Wife;

   9.2The Respondent Husband is responsible for the day to day maintenance and care of the C Town Property;

   9.3The Respondent Husband is solely liable for and indemnifies the Applicant Wife against all outgoings in and about the C Town Property.

Farm Equipment and Machinery on C Town Property

1. The Respondent Husband retains, and the Applicant Wife hereby relinquishes any claim to, the equipment and machinery currently on the C Town Property.

The Suburb N Property

1. The Respondent Husband retains, and the Applicant Wife hereby relinquishes any claim to, the Suburb N Property currently registered in the Respondent Husband’s sole name.

2. The Respondent Husband is solely responsible for, and indemnifies the Applicant Wife in relation to all outgoings and mortgage repayments with respect to the Suburb N Property.

Taxation and Capital Gains Taxation Liability

1. Each party is to bear any taxation liability in their sole name.

Shares in Public Companies

1. The Respondent Husband retains all of his shares held with T Limited in his sole name and the Applicant Wife relinquishes any claim to those shares.

2. The Applicant Wife retains, and the Respondent Husband relinquishes any claim to, the following shares currently held by the Wife in her sole name:

   15.1    CBA Shares;

   15.2    Suncorp Group Limited Shares;

   15.3    Telstra Corporation Limited Shares;

   15.4    Woolworths Limited Shares; and

   15.5    Woolworths Limited (Notes II) Shares.

3. That within 30 days of the date of these Orders, the Respondent Husband will do all things and sign all necessary documents to cause the following shareholdings, currently held in the joint names of the parties, to be transferred into the Applicant Wife’s sole name:

   16.1    U Pty Ltd Shares;

   16.2    National Australia Bank Shares;

   16.3    ANZ Bank Shares;

   16.4    QBE Insurance Group Limited Shares;

   16.5    CBA Shares;

   16.6    T Limited Shares;

   16.7    Tabcorp Holdings Limited Shares; and

   16.8    Westpac Banking Corporation Shares.

   Thereafter the Respondent Husband shall relinquish any claim to the abovementioned shares.

4. That pending the transfers detailed in paragraphs 14, 15 and 16 hereof each of the Applicant Wife and Respondent Husband is hereby restrained from:

   17.1    Selling, transferring or realising any of the shares;

   17.2    Encumbering any of the shares;

   17.3Receiving any monies from the sale of, or borrowing against any of the shares.

Financial Institution Accounts

1. That the Respondent Husband, to the exclusion of the Applicant Wife, receive the funds in the following bank accounts:

   18.1    NAB Account …;

   18.2    NAB Account …;

   18.3    Funds held in any other bank account in his sole name.

2. The Applicant Wife is restrained from transacting on the accounts set out in paragraph 18 and the Applicant Wife and the Respondent Husband will do all things necessary to facilitate these Orders, including but not limited to, transferring the funds in the said accounts to the Respondent Husband and either closing the said account or removing the Applicant Wife’s access to the said account.

3. That the Applicant Wife, to the exclusion of the Respondent Husband, receive the funds in the following bank accounts:

   20.1    NAB ISaver Account …;

   20.2    NAB Term Deposit …;

   20.3    NAB Bank Account …;

   20.4    NAB Bank Account …;

   20.5    NAB Bank Account …; and

   20.6    Funds held in any other bank account in her sole name.

4. The Respondent Husband is restrained from transacting on the accounts set out in paragraph 20, and the Applicant Wife and the Respondent Husband will do all things necessary to facilitate these Orders, including but not limited to, transferring the funds in the said accounts to the Applicant Wife and either closing the said account or removing the Respondent Husband’s access to the said account.

Liability for debts

1. That otherwise as provided for in these Orders, the Applicant Wife and the Respondent Husband will each remain solely liable for and indemnify the other for any and all credit card debt or liability held in their own respective names.

Assets and Liabilities to be retained by the Applicant Wife

1. That the Applicant Wife retains as her absolute property and the Respondent Husband relinquishes all claim to the following:

   23.1Otherwise than provided for in these Orders, the furniture and contents in her possession;

   23.2 Her personal possessions from the C Town property to be delivered to her at     her direction by the Respondent Husband;

   23.3    The jewellery in her possession;

   23.4 The 4WD 1Registration number … registered in her sole name;

   23.5 All shares and investments held in her sole name save as otherwise provided in these Orders;

   23.6    Her entitlement in the Sorrensen Superannuation Fund;

   23.7 Otherwise than provided for in these Orders, all other proprietary interests in the Applicant Wife’s current possession or control.

2. That the Applicant Wife retains sole liability for, and indemnifies the Respondent Husband, with respect to:

   24.1    Any taxation liability for which she is assessed;

   24.2Otherwise than provided for in these Orders, any loan, lease or credit card liability held or registered in her sole name.

Assets and Liabilities to be retained by the Respondent Husband

1. That the Respondent Husband retains as his absolute property and the Applicant Wife relinquishes any claim to the following:

   25.1Otherwise than provided for in these Orders, the furniture and contents in his possession;

   25.2The 4WD 2 Registration No. … registered in his sole name;

   25.3The boat;

   25.4The 4WD 3 Registration …;

   25.5The 4WD 4 Registration …;

   25.6His right, title and interest in the property situated at M Street, Suburb N;

   25.7His right, title and interest in the V Trust (W Pty Ltd as Trustee);

   25.8All of his interest in and to his shareholdings in S Pty Ltd save as otherwise provided in these Orders;

   25.9All shares and investments held in his sole name save as otherwise provided in these Orders; and

   25.10Otherwise than provided in these Orders, all other proprietary interests in his current possession or control.

2. That the Respondent Husband retains sole liability for and indemnifies the Applicant Wife with respect to:

   26.1    Any loan held with respect to the Suburb N Property;

   26.2    Any and all outgoings in relation to the Suburb N Property;

   26.3    Any taxation liability for which he is assessed;

   26.4Any other loan, lease or credit card liability held or registered in his sole name.

S Pty Ltd

1. That S Pty Ltd retains, and the Applicant Wife relinquishes any claim to, all of the following shareholdings currently held by that company:

   27.1    AP Eagers Ltd shares;

   27.2    BHP Billiton Ltd shares;

   27.3    Coca Cola shares;

   27.4    Monadelphous Group Ltd shares;

   27.5    Newcrest Mining shares;

   27.6    Rio Tinto Ltd shares;

   27.7    Santos Limited shares;

   27.8    Wide Bay Building Society shares;

   27.9    Woodside Petroleum shares.

2. That within 30 days of the date of these Orders, the Applicant Wife shall do all such acts and things and sign all documents, as may be required to resign as secretary of S Pty Ltd and her solicitors shall take all necessary steps required to formally notify the Australian Securities and Investments Commission of the resignation and they shall notify the Respondent Husband’s solicitor in writing when that is completed.

Sorrensen Superannuation Fund

1. That in accordance with paragraph 90MT(1)(a) of the Family Law Act 1975 (Cth):

   29.1The Applicant Wife is entitled to be paid a base amount of $1,259,093.40, out of the Respondent Husband’s interest in the Sorrensen Superannuation Fund; and

   29.2The Respondent’s Husband’s entitlement (or the entitlement of such other person to whom a splittable payment may be made out of the Husband’s interest) in the Sorrensen Superannuation Fund is correspondingly reduced.

2. That the Respondent Husband and Applicant Wife in their capacity as Directors of the Trustee of the Sorrensen Superannuation Fund shall do all such acts and things and sign all such documents as may be necessary to:

   30.1Calculate, in accordance with the requirements of the Family Law Act 1975 (Cth) and the Family Law (Superannuation) Regulations 2001 (Cth) the entitlement created for the Applicant Wife by paragraph 29 of these Orders;

   30.2Pay the respective entitlements whenever the Trustee makes a splittable payment out of the Respondent Husband’s interest in the Sorrensen Superannuation Fund.

3. That paragraph 29 have effect from the operative time and the operative time is the date of transfer of the transferable benefits as defined in r 1.03(1) of the Superannuation Industry (Supervision) Regulations 1994 (Cth).

4. That, after service on the Trustee, Sorrensen Super Pty Ltd, of the payment split notice pursuant to r 7A.03 of the Superannuation Industry (Supervision) Regulations 1994 (Cth) the Applicant Wife shall do all such acts and things and sign all such documents as may be necessary, including but not limited to:

   32.1Making a request pursuant to r 7A.06 of the Superannuation Industry (Supervision) Regulations 1994 (Cth) for the transfer of the transferable benefits from the Sorrensen Superannuation Fund to a regulated fund of the Applicant Wife’s choosing (“the Wife’s New Super Fund”);

   32.2Making a request to transfer the whole of the remainder of the member benefit in accordance with the governing rules of the Sorrensen Superannuation fund.

5. That following the receipt by the superannuation Trustee, Sorrensen Super Pty Ltd, of the election made by the Applicant Wife as contemplated by paragraph 32 of these Orders, the Respondent Husband and Applicant Wife in their capacities as Directors of the superannuation Trustee, Sorrensen Super Pty Ltd, shall cause a meeting to be held in accordance with the Rules of the Sorrensen Superannuation Fund and in that meeting shall:

   33.1Authorise the transfer of the transferable benefits on behalf of the Applicant Wife to the Trustees of the Wife’s New Super Fund;

   33.2Authorise the transfer of the whole of the remainder of the Applicant Wife’s benefit to the Trustees of the Wife’s New Super Fund.

6. Before the close of the meeting of Trustees as contemplated by paragraph 33 of these Orders, the Applicant Wife shall do all such acts and things and sign all such documents as may be necessary to:

   34.1Resign as Director of the superannuation Trustee, Sorrensen Super Pty Ltd; and

   34.2Resign her membership in the Sorrensen Superannuation Fund.

7. Pending the transfer of the transferable benefits from the Respondent Husband to the Applicant Wife:

   35.1The Respondent Husband and the Applicant Wife are restrained from dealing with, charging, encumbering or disposing of any of the assets of the Sorrensen Superannuation Fund other than in accordance with the terms of these Orders or with the written consent of the other party; and

   35.2Each party shall immediately revoke any binding death benefit nomination already made and each party be and is hereby restrained from:

   35.2.1Making any other nomination where the effect of such nomination would be to render any splittable payment not splittable; and

   35.2.2Doing any such act or thing which would defeat, extinguish or reduce the entitlement of either party under this Order.

NOTATIONS:

A.The value of the transferable benefits to be transferred from the Respondent Husband’s interest in the Sorrensen Superannuation Fund to the Applicant Wife’s interest in the Applicant Wife’s new super fund are calculated in accordance with r 7A.12 of the Superannuation Industry (Supervision) Regulations 1994 (Cth).

B.Pursuant to r 14F of the Family Law (Superannuation) Regulations 2001 (Cth), any payments from the interest of either party in the Sorrensen Superannuation Fund made after the trustees have transferred the transferable benefits from the Respondent Husband to the Applicant Wife are not splittable payments.

IT IS FURTHER ORDERED

Personal Items

1. That within 45 days of the date of these Orders, the Applicant Wife shall deliver to the Respondent Husband at his direction and expense his personal possessions located at the F Town property.

2. That within 7 days of the date of his receipt of his items of personal property from the F Town property, the Respondent Husband shall return to the Applicant Wife, all photos, photo albums and the box of cards relating to the passing of the parties’ son X.

Indemnity

1. That the Respondent Husband indemnify the Applicant Wife and keep her indemnified in relation to any and all obligations or liabilities (including Taxation liability) arising out of the Wife’s interest or involvement in R Pty Ltd, the Sorrensen Property Fund, S Pty Ltd, the V Trust, or otherwise as a consequence of her obligations in these Orders, including, but not limited to, any capital gains tax liability incurred as a consequence of a transfer of the parties’ interests in the K Property to a third party.

Time frames generally

1. Unless otherwise stated, the time for all payments and transfers pursuant to these Orders is 45 days from the date thereof.

Registrar to sign in default

1. That the parties execute all deeds or instruments and do all acts and things necessary to give validity and operation to the deed or instrument as may be required to give effect to these Orders.

2. That if either party refuses, fails or neglects to execute any document necessary to put these Orders into effect 14 days after being requested to do so, and any such refusal, failure or neglect is proved by Affidavits filed and served by or on behalf of the party alleging this, the Registrar of the Family Court at Brisbane be and is hereby appointed pursuant to Section 106A of the Family Law Act 1975 (Cth) to execute such document in the name of such party.

Preparation of documents and duty

1. That save as otherwise provided herein the transferee spouse or the spouse receiving the benefit of any transaction pursuant to these Orders prepare the documentation necessary to give effect to the provision of these Orders at their cost and further be responsible for the payment of registration fees and any other fees in relation to the transfer of property into their name.

2. That any duty payable on any transaction arising out of these orders be paid by the transferee spouse or the spouse receiving the benefit of such transfer or transaction.

Costs

1. That all previous orders reserving determination of costs issues be discharged.

2. That each party bear their own costs of and incidental to these proceedings.

Undertakings

1. That the Applicant Wife is discharged from her undertaking given 24 January 2013.

2. That the Respondent Husband is discharged from his undertaking given 24 January 2013.

3. That the Respondent Husband is discharged from his undertaking given 6 March 2013.

4. That the Respondent Husband is discharged from his undertaking given 27 April 2015.

5. That paragraph 3 of the Orders made by Justice Forrest on 27 April 2015 is discharged. 

IT IS NOTED that publication of this judgment by this Court under the pseudonym Sorrensen & Sorrensen has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 8601 of 2012

Ms Sorrensen

Applicant

And

Mr Sorrensen

Respondent

REASONS FOR JUDGMENT

1. The parties in this matter each seek property adjustment orders from the Court. They were married in 1966 and, though still lawfully married, separated almost three years ago after forty six years of cohabitation.

2. They have had their share of good fortune in that they now ask the Court to make orders dividing up their property interests that are worth in excess of $10 million. They have also had their share of misfortune, having lost one of their adult sons who, sadly, passed away in his early adulthood.

3. The Respondent, Mr Sorrensen (who I shall call “the husband”), is 71 years of age and the Applicant, Mrs Sorrensen (who I shall call “the wife”) is 70 years of age.  They are both retired and live off the income generated by the capital they have accumulated to this point in their lives. They have one adult son who is 43 years of age and two grandchildren. Their son and grandchildren live with the wife in the home at F Town that was once the matrimonial home. The husband lives in a home at Suburb N in Brisbane that he has purchased since separation.

4. The wife commenced these proceedings in 2012. With the assistance of their legal representation and a mediator they were able to reach agreement many months ago that an equal division of their property interests would be a just and equitable outcome. That reflects their apparent agreement that a weighing up of the husband’s contributions principally made as an income earning accountant and the wife’s contributions principally made to the welfare of the family, including as a homemaker and parent, over forty six years of cohabitation and since separation appropriately resulted in an equal division of their property interests.

5. Despite having reached that agreement long ago, unfortunately, the former couple have not been able to reach agreement as to how to adjust their property interests to achieve that equal division. They disagree about some details as to the exact form and value of their property interests, and they disagree about exactly how all of their property interests are to be adjusted between them in a way that achieves the equality that they each consider just and equitable. 

6. Relevantly though, having regard to Stanford v Stanford (2012) 293 ALR 70 (“Stanford”), each party contends that adjustment of existing property interests is necessary to do justice and equity between them. I accept that.

What are the issues for the Court to determine?

1. At the commencement of the one day trial, the Court was told of matters that remained in dispute between the parties. At the end of the trial not all of those remained in dispute, some being conceded by senior counsel for the wife and counsel for the husband.

2. I understood the issues remaining in dispute at the end of the trial left for the Court to determine were as follows:

   (i)Whether the value of shares the husband is to keep in the private company S Pty Ltd is to include the sum of $6,600 representing the value of 2,000 Wotif Ltd shares it is agreed the company previously owned but no longer does;

   (ii)Whether the amount of $139,669 that was held by the husband in a bank term deposit some time ago that is now no longer there should be considered part of the property being divided by notionally being added back to the ‘pool’ of property interests being adjusted and treated as already retained by the husband;

   (iii)Whether there is to be an amount included in the property being adjusted representing a HSBC bank account in the husband’s name and, if so, what should that amount be;

   (iv)Whether there is to be an amount included in the property being adjusted representing a NAB bank account in the husband’s name and, if so, what should that amount be;

   (v)Whether a further amount of $85,000 is to be considered part of the property being adjusted by notionally being added back and treated as already retained by the husband;

   (vi)Whether any amounts should be notionally added back and treated as property already retained by each of the parties in respect of their expenditure on legal fees to date in this matter;

   (vii)Whether bank shares jointly owned by the parties should be actually divided between them equally or all retained by the wife;

   (viii)Whether the real property situated at B Street, C Town owned by a discretionary family trust ultimately solely controlled by the husband is to be sold or retained by the husband, and, if it is to be sold, then on what terms;

   (ix)The value to be ascribed to the plant and equipment on the C Town property and whether it is to be sold or retained by the husband;

   (x)Whether a motor car is to be transferred to the parties’ son or not;

   (xi)The exact terms of orders dividing the property and superannuation interests equally between the parties, including in respect of indemnities, delivery of personal property and even as to notations.

The principles to be applied in determining a property adjustment dispute

1. Of course, the property interests of parties to a marriage may be altered by the Court making such order as it considers appropriate.[1] The Court cannot make such an order though, unless it is satisfied, in all of the circumstances, that it is just and equitable to make the order.[2] The consideration of whether it is just and equitable to make a property settlement order must begin by identifying, “according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property”.[3] Legal principle is to be followed and applied when exercising the discretion conferred by s 79,[4] and care must be taken not to conflate the s 79(2) question of whether it is just and equitable to make property settlement orders at all with the separate s 79(4) question as to the particular orders to be made if any are to be made.[5] 

   [1]          Family Law Act 1975 (Cth) s 79(1)

   [2] Ibid s 79(2)

   [3]          Stanford v Stanford (2012) 293 ALR 70 at [37]

   [4] Ibid at [38]-[39]

   [5] Ibid at [40]

2. However, as in this case, where both parties ask for property adjustment orders, in my view, the Court can accept without further enquiry that it is just and equitable for some adjustment orders to be made. Also, as in this case, where the parties agree that an equal division by capital value of the totality of their property and superannuation interests, whatever that is found to be, is an appropriate basis from which to fashion property adjustment orders that are just and equitable, the Court’s task becomes much easier and all of the matters that would otherwise have to be determined and considered do not have to be.

3. The often used four step approach to determining the property adjustment orders to make involves firstly, making findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing; secondly, identifying and assessing the contributions of the parties within the meaning of subsections (a), (b) and (c) of s 79(4) and determining the contributions based entitlements of the parties expressed as a percentage of the net value of the property of the parties; thirdly, identifying and assessing the relevant matters referred to in subsections (d), (e), (f) and (g) of s 79(4) - including, because of s 79(4)(e), the matters that are relevant pursuant to s 75(2) - and determining the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step 2; and fourthly, considering the effect of those findings and determinations and resolving what order is just and equitable in all the circumstances.

4. As I have noted, many of these steps do not have to be taken in this case. The matters that remain in dispute can, in my view, conveniently be considered in two separate parts of the process. Firstly, determining whether or not amounts can be notionally added to the ‘pool’ of property interests to be distributed equally by adjustment orders between the parties and, if so, whether they can be treated as already received by the parties as part of the property interests they are to retain so as to determine what each otherwise retains of the existing property. Secondly, determining the precise adjustment orders to be made that satisfy the statutory requirement of the Court being satisfied that the orders are just and equitable.

5. In exercising its property adjustment powers the Court may, amongst many things, order payment of a lump sum, order that payment of any sum ordered to be paid be wholly or partly secured, appoint or remove trustees, order that payments be made directly to a party, make a permanent order or an order pending the disposal of proceedings, impose terms and conditions, make orders by consent or make any other order which it thinks it is necessary to make to do justice.[6]

   [6]           Family Law Act 1975 (Cth) s 80(1)

What are the parties’ interests in property?

1. Importantly, the parties agree in respect to the identification and valuation of virtually all of their property and superannuation interests. The Court was provided with a schedule of property and superannuation interests at the start of the trial and that was updated at the end of the trial by both sets of legal representatives. The parties agreed on the value of much of that property and the ultimate retention of much of it by one or the other. Those agreements are reflected in the following table:

Property	Current Ownership	Agreed value	Party retaining by adjustment orders
Real property at F Town	Husband and wife	$1,200,000	Wife
Furniture and contents at F Town property	Husband and wife	$20,000	Wife
Real property at K Island	Husband and wife	$550,000	Husband or other entity at his direction
Furniture and contents of K Island property	Husband and wife	Nominal only	Husband
Parcel of shares in listed public companies	Husband and wife	$116,283.96	Wife
4WD 3 motor car	Husband and wife	$67,000	Husband
Sailing boat	Husband and wife	Nominal only	Husband
NAB credit card	In wife’s name	Credit balance of $3,637.63	Wife
NAB term deposit	In wife’s name	$6,024.40	Wife
Parcel of shares in listed public companies owned by S P/L	Owned by husband through his ownership of shares in S P/L	$84,422	Husband
Jewellery	Wife	$40,000	Wife
Travellers Cheques	Wife	$1,912.82	Wife
Parcel of shares in listed public companies	Wife	$327,853.04	Wife
Shares in T Group Limited	Husband	$3,810.24	Husband
Money from super fund – withdrawn previously and used to buy Suburb N property	Husband	$140,000	Husband
Money from W ATF V Trust – used to buy Suburb N property	Husband and wife	$670,000	Husband
Proceeds of sale of T shares – used to buy Suburb N property	Husband	$653,000	Husband
Money from super fund	Husband	$100,000	Husband
Money from super fund	Wife	$100,000	Wife
Proceeds of sale of T shares	Wife	$65,069.41	Wife
Suncorp insurance payout	-	$31,000	Wife
Monies received in 2013	-	$100,000	Wife
Husband’s credit card liability	Husband	-$4,289	Husband
Husband’s other credit card liability	Husband	-$26,549.59	Husband
Net Total	$4,249,174.80

1. The parties also agreed that the following property interests existed as well as agreeing on the value to be ascribed to them. They could not agree on how these interests are to be adjusted between them.

Property	Current Ownership	Agreed value
Parcel of shares in listed banks	Husband and Wife	$534,025
Wife’s member entitlements in Sorrensen Super fund	Wife	$1,523,047.09
Husband’s member entitlements in Sorrensen Super fund	Husband	$3,069,977.91
Net Total	$5,127,049.90

1. The parties also agreed that the real property situated at B Street, C Town registered in the name of R Pty Ltd as trustee for the Sorrensen Property Fund is property of the parties for the purposes of determining property adjustment orders. Given that the Sorrensen Property Fund is a discretionary family trust and the husband is the Principal of that trust with power to remove and replace the trustee, thus having ultimate control over the distribution of the trust’s income and capital, and both parties are beneficiaries of the trust, that is undoubtedly appropriate.

2. The wife submits that the value that should be ascribed to that real property at C Town is $1,100,000. The husband in his oral evidence said that he does not accept that the property has that value. The wife also asserts that there is plant and equipment on that property that should have a value of $40,000 ascribed to it. The husband does not agree with that. I shall return to these issues.

Should any amounts be notionally added to the ‘pool’ of property interests and treated as already received by the parties as part of his and her equal share of the property?

1. As I have observed in previous judgments, although the Full Court observed in the post-Stanford[7] decision of Bevan & Bevan[8] that “notional property” that is “added back” to a list of assets to account for the unilateral disposal of assets “is unlikely to constitute “property of the parties to the marriage of either of them” and thus is not amenable to alteration under s 79”,  and also that “it is important to deal with such disposals carefully, recognising the assets no longer exist”, I do not consider that such observations altered the fact that the determination of the appropriate way to deal with unilateral pre-trial disposition of property is a matter within the discretion of the trial judge.

   [7] (2012) 293 ALR 70

   [8] [2013] FamCAFC 116 at paragraph [79]

2. I am of the view that it is still appropriate to have regard to the Full Court’s previous decisions of Chorn & Hopkins,[9] Omacini & Omacini[10] and Cerini & Cerini[11] when considering this aspect of the discretionary exercise. Of course, notionally adding an amount to a list of assets does not create property which is amenable to adjustment itself, but, in my view, amounts notionally added may certainly be considered along with actual property and superannuation interests that are amenable to adjustment by the Court’s orders when determining the orders that are appropriate and, ultimately, just and equitable.

   [9] (2004) FLC 93-204

   [10] (2005) FLC 93-218

   [11] [1998] FamCA 143

3. Of course, I acknowledge that those authorities just referred to establish that “notionally adding back” should be the exception rather than the rule, but they do also establish that it is not inappropriate to notionally add back where:

   (i)the parties have expended money or capital that existed at separation on legal fees;

   (ii)where there has been an unreasonable premature distribution or disposition of property of the parties or either of them;  or

   (iii)in the circumstances outlined by Baker J in his judgment in Kowaliw and Kowaliw.[12]

   They do also confirm that these are ultimately matters for the trial Judge’s discretion.

   [12] (1981) FLC 91-092

4. Furthermore, there is an obligation on the parties in property adjustment proceedings to fully and frankly disclose their financial circumstances to the other party and to the Court and to do so continuously to the point of trial. Indeed, I am of the view that this obligation to fully and frankly disclose encompasses the obligation to disclose the use of property or capital from the time of separation to the time of the trial. That disclosure should be to the other party and to the Court and should be timely. This obligation, in my view, is ordinarily met by parties deposing in trial affidavits to the detail and circumstances of the dissipation or use of property or capital and the timely disclosure of documents relevant to these issues. A party should not be left to merely speculate about whether property does or does not still exist or about how much was spent on legal fees by the other party or about the source of the funds for such payments until the morning of the trial, when failure to disclose at that point in time may present insurmountable difficulties in proving the reality of the issue.

The Wotif.com shares

1. For the wife, senior counsel submitted that an additional sum of $6,600 should be added to the value of the shares in S Pty Ltd that the husband is to keep to properly reflect the value of 2,000 shares in the public company, Wotif.com Holidays Ltd previously held by S Pty Ltd.

2. The evidence about the matter is extremely sparse. In the wife’s Balance Sheet filed 12 June 2014 read into evidence in her case by senior counsel, the wife listed in the share portfolio of S Pty Ltd the 2,000 Wotif shares. She ascribed “market value” to them but did not set out what that was at that time. There is no dispute that the husband agreed in 2014 that the Balance Sheet of the wife accurately reflected their property interests. Accordingly, I accept he agreed that there were 2,000 Wotif shares.

3. In the husband’s affidavit of evidence in chief filed 21 April 2015, the husband does not list any Wotif shares in the share portfolio of S Pty Ltd referred to in his schedule of property.

4. In the schedule prepared by senior counsel for the wife handed to the Court at the commencement of the trial, made exhibit 3, next to the entry of 2,000 Wotif shares is the remark “(shares have been acquired by Expedia and paid out – please confirm they still exist)” and a value of $6,600 is ascribed to them for the wife.

5. Apart from it apparently being accepted that Wotif was taken over by another company, there was no agreement or any other evidence as to whether or not S’s 2,000 Wotif shares were acquired by that company or sold prior to the takeover or as to the consideration that might have been paid for them. In addition, the husband was asked nothing of the matter in cross-examination. Counsel for the husband submitted that as there is no evidence or agreement about the matter that the shares cannot be included in the pool or given a value.

6. It is apparent that the husband, having accepted that the Wotif shares existed last year, failed for some reason to disclose what happened to them and, if the shares were sold, what happened to the sale proceeds. Senior counsel for the wife submitted that because of that failure the Court is entitled to take a robust approach to the matter in accordance with settled principle. That may very well be correct, but the difficulty for the Court in adopting a  robust approach is the lack of any evidence at all as to what the shares might have been worth, whether they were bought out by the takeover company, whether they were sold previously, what might have happened to any proceeds of sale and the like. The Court is clearly unable to go off and do any research itself and a capacity to act robustly cannot simply be fiat to pull a figure out of the air without any reasoned approach. Had the wife put evidence before the Court that established a price at which shares in Wotif.com were purchased by the takeover company it would have been far easier, adopting a robust approach, to simply fix the value for the shares by reference to that evidence and the husband’s failure to say anything about the matter.  However, in the absence of such evidence I decline to include the shares or any value for them in the property interests being adjusted.

The $139,669 term deposit

1. There was dispute about the balance of a Term deposit said to be held by the husband.   In the June 2014 Balance Sheet prepared by the wife, she listed an NAB term deposit account number 7086, but the balance of the account was said to be “Unknown”.  The husband did not include it at all in his schedule of property in his trial affidavit filed 21 April 2015. In the schedule of property handed up at the end of the trial by senior counsel for the wife, it was listed and ascribed a value of $139,669.54. Counsel for the husband opposed its inclusion.

2. The husband was asked questions about it in cross-examination. He conceded that he had held money in that term deposit account and that at one point, over two years ago, it did have a balance of $139,669 in it. He said that had gone down to $133,000 by 21 January, 2013. When he was asked what had happened to it, the husband said that most of it had been paid to his former solicitors in payment of legal fees he had incurred with them in these proceedings.  That being the case, and given that I am yet to deal with the issue of how to treat expenditure by the parties on their legal fees, I consider it appropriate to leave my determination about this matter to then.

The HSBC bank account

1. There was dispute about the manner in which money in a HSBC bank account in Asian City Y should be treated. In the schedule handed to the Court at the end of the trial by senior counsel for the wife, next to the entry for the HSBC account, the value of $74,851.04 was ascribed. I could find no evidence adduced by the wife to support that value. Senior counsel did not take me to any in his submissions.

2. In the Balance Sheet prepared by the wife filed on 12 June 2014, under an entry “[W Pty Ltd] as trustee for [V Trust]” is the further entry “Plus HSBC [Asian City Y] account”. The word “Unknown” is listed in the value column.

3. The husband did not include any reference to the HSBC account in his trial affidavit. He was cross-examined by senior counsel for the wife on the issue during the trial.  He said that the HSBC account in Asian City Y has no money in it but that he would have to get a statement from Asian City Y to verify that. A copy of a HSBC statement of account was shown to him and tendered into evidence. He agreed that it was a statement that he had given to the wife’s solicitors in 2013 by way of disclosure. He agreed that it showed that as at 30 May 2013 that account had US$6,370.69 in it. He agreed that the statement was addressed to W Limited and said that he believed W is the trustee of the V Trust. He asserted that the money in that account was all withdrawn shortly thereafter when he got the benefit of an interim order to be able to use all of the funds invested with W to put towards the purchase of the Suburb N property in which he now lives. It is agreed that he used $670,000 previously invested with W in this way.

4. There being no other evidence about the matter, I have no reason not to accept the husband’s evidence on the point and will not be including any amount in the totality of the property interests to be adjusted representing funds held in  the HSBC account.

Should a further amount of $85,000 be notionally considered part of the property interests to be adjusted, being money the husband spent on the purchase of the Suburb N property post-separation?

1. It is apparently agreed that the husband unilaterally purchased the Suburb N property in the first half of 2013, for a contract price of $1,900,000. The evidence was that he paid a $20,000 deposit and he said he paid that on a credit card. He also agreed that he had paid a further $65,000 deposit on the property before coming to this Court seeking orders that he be allowed to access other funds by way of partial property adjustment to complete the purchase. He could not recall, in cross-examination, where that $65,000 came from.

2. On 20 June 2013, Bell J ordered, by consent, that the husband receive $1,500,000 by way of partial property settlement to be used towards the purchase. It is agreed that he then sold shares, drew on superannuation entitlements and drew on investments with W, all totalling $1,463,000. In addition, he borrowed $500,000 from a bank to complete the purchase. Accordingly, he had access to $1,963,000 to complete the purchase when it had cost him $1,900,000 (presumably plus stamp duty and other costs of purchase).  As the evidence is that he had already spent $85,000 by way of deposit, he had $1,963,000 to cover $1,815,000 plus stamp duty and expenses. Without, any further evidence of any sort about this, or any submissions on the point, I cannot be satisfied that the $85,000 deposit was not simply repaid by him from the funds he subsequently received that are being treated as partial property settlement. I cannot be satisfied that he used capital that is not actually already being taken into account in the adjustment process. I will not notionally add $85,000 to the ‘pool’ of property interests and treat it as property retained by the husband. In fairness to the wife and senior counsel who appeared for her, I am not sure that they actually were arguing for this at the end of the trial in any event. As I have said, no submissions were made about the matter at the end of the trial, but out of caution, having regard to the remarks made at the outset of the trial by senior counsel for the wife as to what remained in dispute, I have determined this matter.

What amount should be included in the ‘pool’ of property for the husband’s NAB bank account?

1. In the schedule handed to the Court by senior counsel for the wife at the end of the trial was an entry for an NAB bank account no … in the husband’s name with a figure ascribed to it of $1,649.56. That was described as the value attributed by the wife. A figure of $505.90 was also entered and described as the value attributed by the husband.

2. The wife did not include any reference to the account at all in her Balance Sheet filed 12 June 2014.

3. The husband did include it in the schedule contained in his trial affidavit filed 21 April 2015. It is there that he ascribed the value of $505.90 as its value. Tendered into evidence during the trial, though, was a document described as an account summary from the NAB internet banking site dated 27 April 2015. It was the husband’s document and had, apparently, been downloaded and printed by him that morning. It showed the balance of this particular NAB account as only $0.15.

4. The husband was not cross-examined about the account and its balances at any particular time. He was not asked how he might have spent the money. Accordingly, I am not in a position to ascribe a value for the account at the time of the trial other than the nominal sum of $0.15, which is so little that I will not even include it. I am not persuaded that I should notionally add any amount into the ‘pool’ of property in respect of money spent from this account. I will not do so.

Should any money be notionally included in the ‘pool’ of property interests that are to be adjusted, and treated as property already retained by the parties having regard to the money spent on legal fees by the parties in the matter?

1. In the wife’s affidavit filed 24 April 2015, she deposed to having received a total of $296,069 in partial property settlement payments from four different sources during the course of these proceedings. She also deposed to having spent $257,952.09 on her legal fees to date. That figure correlates with the figure disclosed by her solicitors in their costs letter sent to the husband’s solicitors on 24 April 2015 and handed to the Court at the start of the trial pursuant to the Rules.

2. The wife deposed to having sourced the money that she paid her legal fees with from the partial property settlement funds she received, credit card payments and the monthly income she receives by way of pension payments from her superannuation interests.

3. I accept the wife’s evidence. Notionally adding the wife’s legal fees to the ‘pool’ of property interests being subject to adjustment would not be just and equitable treatment of the wife. It would amount to double counting. I will not do it.

4. She also said that the balance of the money she obtained by way of partial property settlement payments is held in her bank accounts which she asserts should, therefore, be excluded from the ‘pool’ of property interests being adjusted. It was argued that including them, when the partial property settlement amounts are included, would be an unfair double counting of the amounts. The wife has $16,173.26 in two bank accounts. I accept the merit of her argument. I will not include the money in those bank accounts in the pool.

5. The situation for the husband is different though. As I have already observed, he gave oral evidence that he had spent the amount of $139,669 that he had in a term deposit in 2013 on paying his former solicitors for legal fees. The costs letter written by the husband’s current solicitors to the wife’s solicitors dated 27 April 2015 that was handed to the Court at the trial pursuant to the Rules states that the husband spent $168,388 on his former lawyers and had spent a further $15,264 on his current lawyers. The husband gave evidence that he had deposited another $6,000 into his current lawyers trust account on account of anticipated fees. He gave evidence that the money paid to his current lawyers was sourced from funds received by way of partial property settlement late last year. I accept that. Including any of that amount notionally in the ‘pool’ would be double counting as the $100,000 sum received as partial property settlement is already included.

6. However, I consider it is clearly appropriate to include the sum of $139,669 that he said he drew from a term deposit and paid to his former lawyers as a notional amount in the ‘pool’ of property interests being subjected to adjustment and to treat that amount as retained by the husband.

7. Interestingly, in the costs letter from the husband’s solicitors, the solicitors said:

   We are instructed that the source of these payments are a combination of monies released as partial property settlement payments, credit card payments and monies from the pension sum received.

   That was exactly the same as had been said by the wife in her affidavit in respect of the source of the funds she paid her lawyers with, evidence I accepted. However, the husband’s own evidence given under cross-examination contradicted that. As I have just observed, he told the Court that he had drawn on the term deposit of $139,000 to pay his former lawyers. That was not money sourced from partial property settlement payments, credit card payments or pension income.

8. In the end, there was no cross-examination of the husband as to where he sourced the difference between what he paid his former solicitors and the amount drawn from the term deposit, which is just under $29,000. He could very well have sourced that from the sources referred to. On the evidence, I cannot find that he did not. Accordingly, I will not add that amount into the ‘pool’ of property being considered when making adjustment orders.

The ‘Pool’ so far

1. The property with respect to which the parties agree both as to value and how to be adjusted between them is valued at $4,249,174.80. The property upon which they agree as to value but not as to how to divide it is valued at $5,127,049.90. It includes the wife’s interest in their self-managed superannuation fund at $1,523,047.09 and the husband’s interest in that fund at $3,069,977.91. It also includes their jointly owned bank shares valued at $534,025. Notionally adding to those amounts the further sum of $139,669 for the parties’ capital the husband spent on his former lawyers that is not otherwise in the ‘pool’, the total is now $9,515,893.70.

Associate:

Date:  8 May 2015