Suffolk and Suffolk

[2011] FamCA 1006

FAMILY COURT OF AUSTRALIA

SUFFOLK & SUFFOLK [2011] FamCA 1006

FAMILY LAW - Final property consent orders – S79(2) just and equitable

APPLICANT: Mr Suffolk

RESPONDENT: Ms Suffolk

FILE NUMBER: MLC 1817 of 2010

DATE DELIVERED: 15 December 2011

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Young J

HEARING DATE: 12, 13, 14 and 15 December 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr J. Williams

SOLICITOR FOR THE APPLICANT: Carew Counsel Pty Ltd

COUNSEL FOR THE RESPONDENT: Mr T. Puckey

SOLICITOR FOR THE RESPONDENT: Kennedy Partners

Orders

IT IS ORDERED BY CONSENT:

The Payment

1. THAT the Husband pay to the Wife:

   1.1the sum of $116,000 on or before 14 March 2012 ("the first payment"); and

   1.2the further sum of $116,000 on or before 14 July 2012 ("the second payment").

2. THAT in the event that the husband fails to pay all or any part of either the first payment or the second payment on or before the respective due dates the husband in his capacity as Director of B Pty Ltd (ACN …) (being the trustee of the Suffolk Super Fund) shall forthwith sign an authority and any other document required to enable the wife to withdraw the amount which remains unpaid (together with any interest on the unpaid amount as calculated under the Family Law Rules 2004, and calculated daily from the due date of payment) from the husband's entitlements within the said superannuation fund, provided that the sum withdrawn in any financial year does not exceed the maximum that the husband can withdraw under the transition to retirement rules relating to self-managed superannuation funds.

3. THAT pending the husband’s compliance with paragraph 1 hereof the husband be restrained from withdrawing any other funds from the Suffolk Super Fund.

4. THAT for a period of six (6) months commencing on 23 December 2011 and monthly thereafter the husband shall pay to the wife by way of spousal maintenance for the wife the sum of $3,000 per calendar month to be paid into a bank account nominated in writing by the wife to the husband, the first such payment to be made on or before 23 December 2011 and each succeeding payment on or before the 23^rd day of each succeeding calendar month.

Suburb C property

1. THAT forthwith and no later than 1 February 2012 the husband shall do all such acts and things and sign all such documents as may be necessary and required in order to transfer to the wife at the expense of the wife and free of all encumbrances all of the husband’s right title and interest in D Street, Suburb C in the State of Victoria, being the whole of the land more particularly described in Certificate of Title Volume … Folio … (“the Suburb C property”).

Suburb E property

1. THAT forthwith and no later than 1 February 2012 the wife do all such acts and things and sign all such documents as may be necessary and required in order to transfer to the husband at the expense of the husband all of the wife’s right title and interest in 1126 Suburb E Road, Suburb E described in Certificate of Title Volume … Folio … (“the Suburb E property”) and contemporaneously with the said transfer the husband cause the mortgage to the National Australia Bank, being mortgage registered number … and secured against the Suburb E property, to be either discharged or refinanced into his sole name.

2. THAT in the event that the husband elects to sell the Suburb E property or any part thereof within the next two (2) years the wife be given the first option to purchase it at a price to be agreed by the parties or in default of agreement by a valuer which the parties will request be appointed by the President of the Real Estate Institute of Victoria or his or her nominee and the Wife shall have liberty to lodge a caveat to secure her entitlement herein.

F Pty Ltd

1. THAT subject to paragraphs 9 and 10 and on or before 14 July 2012 ("the date") the husband, both in his personal capacity, and as director of F Pty Ltd (ACN …) ("F") shall do all such acts and things and sign all such documents as may be necessary and required in order to transfer to the wife, at the expense of the wife, and free of all encumbrances, all units in the F Unit Trust and all of his right title and interest in F including right title and interest in the following real properties (“the Suburb G properties”):-

   8.1the real property situate at and known as the Apartment, H Street, Suburb G ("the Apartment"), being the whole of land more particularly described in Lot … in Plan of Subdivision … ("the Suburb G Plan of Subdivision") and forming part of the land currently within Certificate of Title Volume … Folio … ("the H Street property");

   8.2the real property situate at and known as the Ground Floor Shop, 197 H Street, Suburb G ("The Ground Floor Shop"), being the whole of land more particularly described in Lot 1 in Plan of Subdivision … ("the Suburb G Plan of Subdivision") and forming part of the land currently within Certificate of Title Volume … Folio … ("the H Street property"); and

   8.3the real property situated at and known as I Street, Suburb G in the state of Victoria being the whole of the land more particularly described in Certificate of Title Volume … Folio .. ("the I Street property").

2. THAT in order to give effect to sub paragraph 8.1 and 8.2  hereof, the parties shall each forthwith do all such acts and things and sign all such documents as may be necessary, at the equally shared expense of the husband and the wife, and for the Husband not exceeding $1,000 in legal costs and 50 per cent of the lodging fee, in order to:

   9.1lodge the Suburb G Plan of Subdivision with Land Victoria; and

   9.2do all such necessary other acts and things in order to have the Suburb G Plan of Subdivision approved and finalised, including having new titles issued for:

   9.2.1The Apartment; and

   9.2.2The Ground Floor Shop.

3. THAT contemporaneously with the transfers in paragraph 8 the husband do all things and pay all monies required to:

   10.1cause the two mortgage loans (“the F mortgages”) to the National Australia Bank presently encumbering the F properties and being secured by way of mortgage registered number …  to be discharged in full and for the wife to be released from any guarantee given in relation to the F mortgages;

   10.2cause all other debts of F and the F Unit Trust as at the date of the transfer, including the Husband's loan account in the F Unit Trust, to be discharged.

4. THAT pending the transfers in paragraph 8 and the discharge of the mortgages pursuant to paragraph 10 the parties shall each do all acts and things necessary to ensure the following:

   11.1the husband shall pay and indemnify the wife in relation to all payments required pursuant to either or both of the F mortgages and all other rates, taxes and outgoings of any nature or kind with respect to the Suburb G properties;

   11.2until the transfer referred to in paragraph 8, the husband shall be entitled to all rental and other income derived from any one of the Suburb G properties, but as and from 1 July 2012, the wife be entitled to all such income for her sole use and benefit;

   11.3each party holds his or her interest in the Suburb E property and J Town property referred to in paragraph 14 hereof upon trust pursuant to  this Order and be and is hereby restrained from encumbering or further encumbering the said properties save for the purpose of compliance with these Orders, and to secure such obligations each party shall be entitled to lodge a caveat against the title of either or both properties at his or her own expense, such caveat to be removed at the expense of the party lodging it at the time paragraphs 8 and 10 are given effect to, or else in order to give effect to the terms of these orders.

5. THAT in the event that the husband fails to comply with paragraph 8 then:

   12.1the real properties at J Town and Suburb E be forthwith sold upon such terms as agreed between the parties or in default as determined by the President of the REIV or his or her nominee.

   12.2the net proceeds of sale of the said properties be applied:

   12.2.1first to pay all costs of the sale;

   12.2.2second to discharge any registered encumbrance on the properties sold;

   12.2.3third to discharge the F mortgages;

   12.2.4the balance paid to the husband.

   12.3in the event that the sale proceeds of both J Town and Suburb E properties are, collectively, insufficient to pay the sum required to discharge the F mortgages, then the husband will, at the time of the settlement of the sale of whichever of these two properties occurs later in time, pay, at the time of such settlement, the additional sum required to ensure the discharge of the F mortgages.

6. THAT the husband indemnify the wife in relation to all liabilities arising out of F including without limiting the generality thereof all personal taxation liabilities and any or all liabilities resulting from any past present or future claim which may be made against the wife up to 14 July 2012 and the wife likewise indemnify the husband thereafter.

J Town property

1. THAT the wife forthwith and no later than 1 February 2012 do all necessary things and sign all documents to transfer to the Husband at his expense all her right title and interest in respect of the property known as K Street J Town more particularly described in Certificate of Title Volume 04803 Folio 537 (“the J Town property”)(“the sale”) and:

   14.1that in the event that the husband elects to sell the J Town property the proceeds be applied as set out herein;

   14.2upon completion of the sale, the proceeds of the sale be applied as follows;

   14.2.1first, to pay all costs, commissions and expenses of the sale;

   14.2.2second, to discharge the mortgage encumbering the real property;

   14.2.3third, to pay to the Australian Taxation Office any capital gains tax assessed in respect of either party on the said sale; and

   14.2.4Fourth, the balance to be paid in reduction of the F mortgages.

   14.3contemporaneously with the transfer of the J Town property from the wife to the husband pursuant to this paragraph the husband shall cause mortgage encumbering the J Town property to the National Australia Bank Limited being mortgage registered number AB365505A ("the J Town mortgage") to be either discharged or to be refinanced into the husband's name, and in the event that he fails to do so the property be sold and the proceeds applied in accordance with paragraph 14.2 hereof, and pending the transfer or sale of the J Town property the Husband pay the mortgage and rates as they fall due.

Bathing Box

1. THAT the husband forthwith and no later than 1 February 2012 do all such acts and things and sign all such documents as may be necessary to assign to the wife all of his right title and interest in the bathing box (“the bathing box”) being number .. on the J Town Foreshore and assign to the wife all of his right title and interest in the licence number … (“the licence”) between J Town Foreshore Committee Management Inc as licensor and the parties as licensee, in relation to the bathing box, and thereafter the wife will indemnify the husband against any expense or liability arising out of the ownership of the bathing box.

L Town property

1. THAT the husband retain for his sole use and benefit to the exclusion of the wife the real property situate at and known as M Street, L Town in the state of Victoria being the whole of the land more particularly described in Certificate of Title Volume 11199 Folio 070 (“the L Town property”), subject to its existing encumbrance for which the Husband is to remain solely liable.

N Pty Ltd and O Pty Ltd

1. THAT the wife forthwith and no later than 1 February 2012 transfer, at the Husband's expense, her right title and interest in N Pty Ltd (ACN …) (“N”) as trustee of the Suffolk Trust (“the trust”) to the husband so as to give him sole control of the assets and liabilities contained in the trust and upon such transfer and resignation as a director the husband indemnify the wife for any liability of whatsoever nature or kind from that date forward save that:

   17.1the husband and wife shall use their best endeavours to do all things necessary to procure the release of each of their children in respect of any debit or credit in the loan account standing in the name of each child in the trust and for each such child to forgive any current entitlement that child has to trust assets;

   17.2in the event that any one of the children of the marriage, make any claim for trust assets or entitlements which they may have at this time, the wife indemnify the husband as to 50 per cent of such claim; and

   17.3further the husband be restrained from making any claim on behalf of the trust against any of the children. 

2. THAT forthwith the wife do all such acts and things and sign all such documents, at the expense of the husband, as may be required to:

   18.1resign as a director of N Pty Ltd;

   18.2resign as director of O Pty Ltd (ACN …) (“O”);

   18.3resign as a secretary of O;

   18.4do all such acts and things as are within the power of the wife to facilitate the appointment of the husband or a person nominated in writing by the husband as director of O in the place of the wife; and

   18.5Transfer to the husband at the expense of the husband all shareholding of the wife held within both N and O.

3. THAT forthwith the husband do all such acts and things and sign all such documents as may be necessary to discharge any sum owed by the wife pursuant to a debit loan account in the name of the wife with respect to N Pty Ltd in its capacity as trustee of the trust and otherwise indemnify the wife in relation thereto.

4. THAT the husband retain for his sole use and benefit any interest of N in the real property situate at and known as P Street, Suburb Q in the State of Victoria being the whole of land more particularly described in Certificate of Title Volume … Folio … (“the P Street property”), subject to its existing encumbrance and be at liberty to deal with the property as he sees fit.

Suffolk Family Trust

1. THAT forthwith the wife sign all documents and do all such acts and things as reasonably necessary at the expense of the husband to:

   21.1effect the removal of the wife as beneficiary of the trust;

   21.2relinquish any entitlement which the wife may have in any monies standing to the wife’s credit in the accounts of the trust;

   21.3encourage the children of the marriage to give effect to accounting advice to relinquish their debit and or credit interests in the trust.

R Pty Ltd

1. THAT forthwith and no later than 1 February 2012 the wife do all such acts and things necessary and sign all such documents as may be required to transfer to the husband at his expense all her right title and interest in the business known as R Pty Ltd (“R Pty Ltd”) and thereafter the husband indemnify the wife in relation to any future claim that may be made against the wife including the claims of any creditors arising out of her past interest in R Pty Ltd.

Other issues

1. THAT the husband forthwith shall:

   23.1indemnify the wife against all liabilities in relation to or arising out of the wife's involvement in N, O, R Pty Ltd and the trust ("the entities") including, without limiting the generality thereof, all personal taxation liabilities and any or all liabilities resulting from any past, present or future claim which may be made against the wife, the husband or against any one of the entities, including any claim by any creditor of any one of the entities; and

   23.2procure the release of the wife from any or all guarantees given by the wife in relation to the entities or any one of them.

2. THAT the wife will relinquish any entitlement which the wife may have in relation to any entities to be retained by the husband including any monies standing to the credit of the wife in the accounts of the entities to be retained by the husband.

3. THAT the wife otherwise retain for her sole use and benefit the following assets:

   25.1all public company shares in her name;

   25.2all funds standing to the credit of the wife in any bank account in her name;

   25.3all furniture and chattels in her name and including those stored within the Suburb C property;

   25.4all other assets, property or entitlements of the wife in the wife’s name or possession, including, without limiting the generality of the foregoing, the long service leave entitlements of the wife arising from her employment with the P Street Centre.

4. THAT the husband is entitled to sole use and occupation of the property at Suburb E from the date of these orders save that the wife be at liberty to attend the property for one weekend between 5.00 p.m. Friday 16 December 2011 and 5.00 p.m. Sunday 18 December 2011 for the purpose of collecting her personal clothing, quilts and Manchester and kitchen utensils and Ms S' personal belongings.

5. THAT the wife forthwith make available to the husband the Cutlery and Tablecloth from his mother by delivering same to the husband between the hours 9am and 5pm at the P Street Centre.

6. That save as otherwise provided for in these orders the husband retain for his sole use and benefit the following assets:

   28.1all other assets owned by N, including any interest held by N within O;

   28.2all other assets owned by the trust, including, without limiting the generality hereof, the interest of the trust in its partnership with the T Family Trust;

   28.3the 4WD motor vehicle registration number;

   28.4the husband’s European motor vehicle registration number …;

   28.5the husband’s European motor vehicle registration number …;

   28.6the SUV motor vehicle registration number …;

   28.7all public company shares in the husband’s name;

   28.8all interest of the husband in the P Street Centre operating from the P Street property;

   28.9all or any interest of the husband within O Pty Ltd;

   28.10all funds standing to the credit of the husband’s bank accounts in his name;

   28.11all furniture and chattels in the husband’s possession including all furniture and chattels currently stored in the L Town property;

   28.12all other assets in the husband’s personal name.

7. THAT unless otherwise specified in these Orders and except for the purposes of enforcing the payment of any moneys under these or any subsequent Orders:

   29.1each party hereby foregoes any claim they may have to any superannuation benefit that is belonging to or earned by the other save as provided for in these Orders;

   29.2all insurance policies are to become the sole property of the owner named thereon;

   29.3each 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;

   29.4any joint tenancy of the husband and wife in any real or personal estate is hereby expressly severed; and

   29.5each party do all acts and things and sign all documents as may be reasonably requested by the other party for the purposes of giving effect to these orders. 

8. THAT all previous Interim Orders be discharged.

9. THAT all extant Applications be dismissed, and the proceedings be removed from the docket of Young J.

10. THAT all exhibits tendered in the proceedings be returned to the party who tendered them.

11. THAT all subpoenaed documents be forthwith returned by the Subpoenas Clerk of the Melbourne Registry of the Family Court to the person or organisation from whom they were subpoenaed.

12. THAT each party pay his or her own legal costs and disbursements in these proceedings.

IT IS CERTIFIED

1. THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Counsel for each of the husband and wife.

IT IS NOTED:

A.THAT pursuant to s81 of the Family Law Act the parties intend these orders shall as far as practicable finally determine the financial (and other) relationship between them and avoid further proceedings between them.

B.THAT the Husband intends to continue to support the child Ms U in the manner he has done so to date, whilst she completes her current course of tertiary education.

IT IS NOTED that publication of this judgment under the pseudonym Suffolk & Suffolk is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 1817 of 2010

Mr Suffolk

Applicant

And

Ms Suffolk

Respondent

REASONS FOR JUDGMENT

1. The matter of Suffolk was before me for a defended hearing on property and financial matters and the associated questions of spousal maintenance and adult child maintenance.  Mr Puckey of Counsel appeared for the wife.  Mr Williams of Counsel for the husband.  Both clients had engaged experienced solicitors and they were present in Court throughout the proceedings.  The matter resolved in the course of the hearing.  I have now been presented with minutes of consent orders and I am asked by Counsel for both parties and their clients to finalise all proceedings in this Court in accordance with those orders. 

2. I have read all of the affidavits before the Court.  I have heard evidence from the parties, although the proceedings were continuing.  The matter resolved before evidence of valuation and subdivision of a country property was led before the Court.  Both parties in this case filed substantial affidavits.  Perhaps lengthy, they nevertheless incorporated all of the relevant facts and circumstances of the marriage and of the financial history and transactions of the parties.  Otherwise, I was assisted with a comprehensive chronology and some carefully drawn submissions in support of the detailed orders sought by each of the parties. 

3. At the time of evaluating these final consent orders I have a particular knowledge of the current financial circumstances of the parties, the income-earning capacity of the husband, subject to health and other lifestyle issues, and on the other hand, the circumstances of the wife and her need to secure an ongoing income basis from the property determination.  A central theme in this case has been the ownership of the country property identified in the orders as Suburb E.  There were various options before the Court, including that each party individually acquire the property or, otherwise, the property was subdivided.  It has not been necessary for me to determine those matters.

4. The matter has resolved upon the basis of the husband retaining his 75 per cent interest on title and, otherwise, the wife transferring to him the remaining interest therein, subject to the particular qualifications that have been carefully set out in paragraph 7 of the orders.  The other investment assets of the properties are held within a corporate and trust structure known as F Pty Ltd.  The effect of the orders is that the wife will retain the corporate structure but more particularly the three assets, being an apartment, a shop and premises at I Street, Suburb G.  They produce an income, and when properly managed and tenanted, that will be very much the foundation of the wife’s future income subject to whatever other personal endeavours she may otherwise undertake, ongoing spousal maintenance for six months only and the other division of assets incorporated within these orders. 

5. Each of them have their home, the wife’s being unencumbered, and she retains the Bathing Box at J Town.  The other adjustment of real property, being the vacant land at J Town, is dealt with in these orders.  As in many other cases before the Court of recent years, the issue of the addback of moneys or assets to the pool was alive in this case, particularly, in relation to the proceeds of the sale of a nursery and the sale by the husband of two tranches of listed shares in March and November of last year.  Those matters have been resolved between the parties and are no longer live issues.

6. Whilst the parties own, themselves or through their corporate structure, substantial assets, there are also considerable liabilities, and the apportionment of these liabilities are dealt with in the minutes of orders, and predominantly, they are to remain with or be transferred to the husband.  The parties will retain their superannuation, subject to the eventuality contemplated in paragraph 2 of the orders.  Adult child maintenance was sought but is not the subject of any consent order and that outcome likely reflects my preliminary view on the reading of all of the material and the hearing of the evidence to date.

7. I have been assisted by Counsel in this matter, and along the way, I have had various financial aide-memoires on a developing basis and highlighting the valuation disputes and also the compromised position where that was the case from time to time.  The final of those aide-memoires and a follow up from the earlier documents has been provided by the wife’s Counsel as part of his submissions on the approval of these consent orders.  What the wife receives will, of course, ultimately, be directly related to the values adopted for the various assets.  On the one hand, she may receive, on these consent orders, 55 per cent of the pool of assets and superannuation.  On another view, closer to 50 per cent thereof.

8. I have asked Counsel and each of them have assured me that they have explained to their clients the final nature of these orders, the particular terms thereof, and I have an assurance that each party wholly understands the orders. In particular, it is acknowledged that they are final orders, subject to their performance. There is a section 81 notation attached to the orders. I am comfortable that the orders do address the issue of the continuing income of the wife. There are substantial liabilities, and I have a reasonable understanding of the income required to service those debts on an ongoing basis. I balance those two observations against the reasonably substantial income of the husband, subject to his health, age and related matters.

9. The obligation of the Court, when presented with final consent orders, is to determine that they are just and equitable, and on that basis, the Court may then pronounce the final orders.  On the basis of the evidence I have heard, the documents I have read, I am satisfied that, in the particular circumstances of this case and within the constraints of property ownership and various liabilities and the contributions made and the section 75(2) factors, that these orders are a very good compromise.  I certainly conclude they are a just and equitable outcome.  The orders are concluded on the basis that the parties each pay their own legal costs and disbursements of the proceedings and have no recourse to the other in that regard.

10. Any relevant previous order of this Court including any reserved costs orders is intended to be dismissed.  The parties have requested that exhibits be returned and, likewise, subpoenaed documents be returned to the person or organisation who produced same to the Court, and those matters will be dealt within the final form of orders when they are submitted to me in the next few days.  Overall, the parties can feel very comfortable that their affidavits were thorough, that I understood much of their financial life and, where relevant, their family life.  Each of them made a very substantial contribution.  It would have been unlikely that I differentiated between the hard working role of the breadwinner in this case contrasted to the wholly dedicated mother with three children, who worked as a bookkeeper.  It did seem to me to be a very balanced position in that regard. 

11. Otherwise, I do not find it necessary to further develop my thoughts on the matter, which remain preliminary and subject to the conclusion of the case.  I congratulate the parties on settlement.  I did not expect it, I must say.  I thought this matter was entrenched forever in terms of the attitude of one to the other vis-à-vis property and, particularly, Suburb E.  I congratulate Counsel and solicitors for the preparation of the matter.  It was well prepared and well conducted.

12. For those reasons, which I will have typed and placed upon the Court file, I intend to make these final orders on the basis that they are just and equitable.  I will, for completeness, have marked as aide-memoire “W4”, the document that Mr Puckey just handed me, and I think that document only, perhaps, should be retained on the file as it was the concluded position between the parties along, of course, with the executed minutes of orders.  The other documents can be returned or, if there’s an agreement, the various aide-memoires can remain on the file. 

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young delivered on 15 December 2011.

Associate:

Date: