FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Stokerton & Stokerton (No 2) [2023] FedCFamC1F 695
File number(s): MLC 1922 of 2020 Judgment of: GILL J Date of judgment: 21 August 2023 Catchwords: FAMILY LAW – PROPERTY – distribution and vesting of trusts.
FAMILY LAW – PROCEDURE – where application for adjournment was refused – evidence regarding trust accounts adduced from an accountant who was not a single expert – questions regarding the wife’s capacity.
FAMILY LAW – THIRD PARTY INTERVENER – wife’s former legal representatives as third party intervener – orders to secure debt of unpaid legal fees and disbursements pursuant to costs agreement.Legislation: Family Law Act 1975 (Cth) - ss 75(2), 79, 92, 102NA, 172, 174, 180, 194, 198
Federal Circuit and Family Court of Australia Act 2021 - s 67
Legal Profession Uniform Law Application Act 2014 (Vic) - Part 4.3
Cases cited: Benson & Drury (2020) FLC 93-998
Bevan v Bevan (2013) 49 FamLR 387
Commissioner of Taxation v Worsnop (2009) 40 FamLR 552
Jabour & Jabour (2019) FLC 93-898
Keating & Keating (2019) FLC 93-894
Kennon & Kennon (1997) 22 Fam LR 1
Martin v Martin (2016) 54 Fam LR 548
Division: Division 1 First Instance Number of paragraphs: 170 Date of hearing: 17-19 July 2023 Place: Melbourne Counsel for the Applicant: Mr Crofts Solicitor for the Applicant: Hope Earle Lawyers Solicitor for the First Respondent: Litigant in Person Solicitor for the Second Respondent: Mr N, M Pty Ltd ORDERS
MLC 1922 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR STOKERTON
Applicant
AND: MS C STOKERTON
First Respondent
M PTY LTD
Second Respondent
ORDER MADE BY:
GILL J
DATE OF ORDER:
21 AUGUST 2023
THE COURT ORDERS THAT:
1.The wife shall forthwith resign as trustee of the Stokerton Trust .
2.In lieu of the wife taking such steps any document necessary to effect her resignation may be executed by a Registrar of the Court.
3.The husband shall then forthwith cause the Stokerton Trust to vest and in so doing shall:
(a)Cause all outstanding debts owed by the Stokerton Trust to be paid;
(b)By distribution cause the debts owed by the parties to the Stokerton Trust to be expunged;
(c)Realise the remaining assets of the trust;
(d)Cause all necessary taxation return for the trust to be lodged;
(e)Meet all taxation liabilities from the remaining trust assets;
(f)Subject to Order 10 below shall distribute any remaining property of the trust to the husband and wife in the ratio 55 per cent to the husband and 45 per cent to the wife.
4.The husband is appointed as trustee for the sale of O Street Suburb P, Victoria, and trustee for the proceeds of the sale of that property, and in aid of such is authorised to execute documents to effect the sale of the property in lieu of the wife.
5.Within thirty (30) days of the date of these Orders the wife is to…
Continue reading Stokerton & Stokerton (No 2)
Sign in free to access the full text
- AGLC
- Stokerton & Stokerton (No 2) [2023] FedCFamC1F 695
- Case
- [2023] FedCFamC1F 695
- Decision Date
CaseChat Overview and Summary
The court ruled that the Stokerton Trust should vest, with debts paid and remaining assets distributed in a 55-45 ratio in favor of the husband. The husband was appointed as the trustee for the sale of their family home, with orders made for the wife to vacate the property and for the husband to sell it. The net proceeds of the sale were to be divided in the same ratio, with an additional cash distribution to the wife to account for superannuation imbalances. The court also ordered that the wife's loan to the Q Trust vest in the husband, with payments made to the wife from the sale of another property. Regarding the third party's claim, the court found it just and equitable to pay the fees from the wife's share of the property distribution before she received her share, subject to potential adjustment for reasonableness and proportionality.
The court considered various factors in its reasoning, including the contributions of each party during their relationship, their future prospects, and the impact on third-party creditors. The court concluded that there was no significant difference in the non-financial contributions of the parties, although their roles varied over time. Both parties had limited future income prospects, with the husband's prospects slightly better due to his superannuation and the Q Trust. The court found it just and equitable to adjust the property interests to end their financial entanglements, considering the third party's claim and the overall fairness of the distribution.
Orders
Orders of the court
MLC 1922 of 2020
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:
MR STOKERTON
Applicant
AND:
MS C STOKERTON
First Respondent
M PTY LTD
Second Respondent
ORDER MADE BY:
GILL J
DATE OF ORDER:
21 AUGUST 2023
THE COURT ORDERS THAT:
1. The wife shall forthwith resign as trustee of the Stokerton Trust .
2. In lieu of the wife taking such steps any document necessary to effect her resignation may be executed by a Registrar of the Court.
3. The husband shall then forthwith cause the Stokerton Trust to vest and in so doing shall:
(a) Cause all outstanding debts owed by the Stokerton Trust to be paid;
(b) By distribution cause the debts owed by the parties to the Stokerton Trust to be expunged;
(c) Realise the remaining assets of the trust;
(d) Cause all necessary taxation return for the trust to be lodged;
(e) Meet all taxation liabilities from the remaining trust assets;
(f) Subject to Order 10 below shall distribute any remaining property of the trust to the husband and wife in the ratio 55 per cent to the husband and 45 per cent to the wife.
4. The husband is appointed as trustee for the sale of O Street Suburb P, Victoria, and trustee for the proceeds of the sale of that property, and in aid of such is authorised to execute documents to effect the sale of the property in lieu of the wife.
5. Within thirty (30) days of the date of these Orders the wife is to vacate the property situate at O Street, Suburb P (“the Suburb P property”).
6. The wife is restrained by injunction from interfering in any way with the sale of the Suburb P property including but not limited to:
(a) Returning to the Suburb P property after the expiration of the 30 days in Order 5 above; and
(b) Being within 200m of the Suburb P property on the day of the auction or the day of any inspection of which she is notified in writing at least twenty-four (24) hours prior.
7. The husband is then forthwith to prepare the Suburb P property for sale following taking advice from a selling agent as to appropriate steps to prepare the property for sale.
8. The husband shall then forthwith place the Suburb P property on the market for sale on such terms and conditions as nominated by the husband.
9. Upon settlement of the Suburb P property, the proceeds of sale are to be applied, subject to Order 10:
(a) First, to pay the costs, commissions and expenses of sale, including the expenses associated with the preparation of the property for sale;
(b) The balance remaining thereafter to achieve a division of the net assets:
(i) 55 per cent to the husband;
(ii) 45 per cent to the wife; and
(iii) Then a further sum of $85,000 to the wife from the share of the husband.
10. Prior to making payment to the wife in accordance with Orders 3 and 9 the husband shall cause to be paid to M Pty Ltd from the proceeds to which the wife is otherwise entitled pursuant to these orders, in accordance with its written direction, the sum of $238,093.86.
11. The wife retain for her sole use and benefit and to the exclusion of the husband:
(a) All her bank accounts;
(b) Her Motor Vehicle 1;
(c) Her partial property settlements;
(d) Her chattels and personal effects; and
(e) Her superannuation.
12. The father retain for his sole use and benefit and to the exclusion of the wife:
(a) All his bank accounts;
(b) His interest in the Q Trust;
(c) His motor vehicle;
(d) His chattels and personal effects; and
(e) His superannuation.
13. The loan from the wife to the Q Trust shall vest in the husband, and the wife shall not be entitled to claim such against the Q Trust.
14. Unless otherwise specified in these Orders and save for the purposes of enforcing any obligations arising under these Orders or any subsequent Orders:
(a) In relation to items contained in the storage shed the parties shall divide such by taking turns to pick items from the shed until all items are selected, with the wife to take the first pick;
(b) Otherwise each party is solely entitled to the exclusion of the other all property (including choses in action) in the possession of such party as at the date of these Orders;
(c) Insurance policies, including the parties’ respective entitlements to any U Insurance payments, remain the sole property of the owner named therein;
(d) Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
No significant differential is apparent in respect of non-financial contributions engaged in by the parties through their long relationship, although after the end of their relationship their contributions, particularly in respect of the children favoured each at different times. Section 75(2) considerations Little attention was focussed on this aspect of the case. Neither party impresses as having robust prospects in securing future income. The father has predominantly engaged in outdoor work and caring for others. The prospect of future care work may be anticipated to be foreclosed by reason of his criminal conduct. He is now aged almost 56 years old. He contends, with little supporting evidence, that he suffers from PTSD. It may be accepted that at least in the recent past he has struggled with significant mental health challenges. At present he describes himself as self employed and working on an as needs basis, estimating his income at approximately $639 per week. He accepts that the wife, who was not employed during the relationship, and is not currently employed, functioned as a stay at home mother. The wife’s future prospects appear even more parlous than the husband’s future prospects. His capacity to derive an income appears more robust than hers. Whilst he has limited work prospects, it appears that the wife will have to start from scratch, which it can be expected will be no easy task given her age. Neither party has the care of any of the children, nor is it suggested that either has formed a new relationship or cohabits with another. On the evidence, each has, until separation lived a frugal life, which appears to be what they will each be consigned to in the future. The husband is able to, at present, receive support from a government benefit. As far as the evidence reveals, he has a more significant accumulation of superannuation than does the wife. Further, the husband will still have a limited financial resource in terms of the Q Trust. This should be considered as limited as, although the trust appears to consistently derive and distribute income, the debt it owes to Ms R almost entirely encompasses the assets of the trust. The wife has a significant creditor, in the form of her former lawyers.DISCUSSION AS TO PROPERTY ADJUSTMENT It is just and equitable to adjust the parties’ property interests following the ending of their cooperative financial arrangements that have enmeshed their efforts in supporting the family, financially and otherwise. In doing so it is also necessary to bring their financial interaction to an end, in a manner that does not require the cooperation of the wife, given her apparent opposition to the ending of financial relations. Through the parties’ lengthy relationship, although they each had different roles, they have each applied considerable efforts to contribute to the family. At later times, toward and following the end of the relationship, the non-financial contributions, and contributions to the welfare of the family of each of the parties has outstripped the other’s, for example when the husband was in gaol, when the wife had the sole care of the children, and when the husband had the sole care of the children. These may be taken to be balanced out.