Thurston and Loomis and Ors (No 2)

[2018] FamCA 103

FAMILY COURT OF AUSTRALIA

THURSTON & LOOMIS AND ORS (NO. 2) [2018] FamCA 103

FAMILY LAW – PROPERTY – Where the matter was listed to hear final submissions that the Applicant, the Respondents and the Intervener sought to make in respect of the precise wording of the final orders to be made in the property settlement proceedings so that the Court can be satisfied they give effect to the findings and determinations in the final judgment in a just and equitable way – Where funds on trust shall be transferred between third parties and invested in an interest bearing account on trust for the parties’ superannuation fund pending further order of this Court – Where a lien could not be asserted over a party’s member interest in a superannuation fund – Where certain payments from the fund will need to be paid before the parties’ account balances can be determined – Where the Respondent should not be solely responsible for the payment to a third party of administering this matter to conclusion.

Family Law Act 1975 (Cth)

APPLICANT: Ms Thurston

FIRST RESPONDENT: Mr Loomis

SECOND RESPONDENT: L Ltd

THIRD RESPONDENT: C Pty Ltd

INTERVENER: ML Lawyers

FILE NUMBER: BRC 1010 of 2012

DATE DELIVERED: 27 February 2018

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 16 February 2018

REPRESENTATION

THE APPLICANT: In Person

THE RESPONDENTS: In Person

SOLICITOR FOR THE INTERVENOR:

Mr ML

ML Lawyers

Orders

IT IS ORDERED UNTIL FURTHER ORDER

1. That Mr RO, solicitor, do all things necessary to cause the transfer of all funds currently invested and held by him as trustee for the R Superannuation Fund as directed by Mr BG, of E Accountants.

2. That Mr BG shall cause those funds, upon receipt, to be invested in an “at call” business savings account earning interest for the R Superannuation Fund and he shall hold those funds on trust for the said R Superannuation Fund pending further order of this Court.

3. That Mr BG shall cause $1,500 to be withdrawn from the fund and paid to Ms Thurston as reimbursement for $1,500 she previously spent from her personal funds on behalf of the R Superannuation Fund as found by Justice Forrest in his reasons for judgment delivered on 25 January 2018.

4. That Mr BG shall cause $2,032.05 to be paid to Mr RO as payment for the administrative tasks he undertook in managing the funds whilst he has been holding them on trust.

5. That Mr BG shall determine any other liabilities of the R Superannuation Fund, including any outstanding and current tax liabilities and cause them to be paid or set aside so as to be paid as they fall due and owing and he shall then determine the members’ account balances in the fund as at the first available and practical date of his choosing and then cause the parties and the Court to be notified of those members’ account balances as soon as is practicable.

6. That Mr BG shall also calculate what he estimates will be his reasonable professional fees for undertaking the responsibilities cast upon him by these orders, including for undertaking responsibilities anticipated to be cast upon him by the final orders that are yet to be made, which orders are likely to include orders that Ms Thurston’s member interest is to be split 100 per cent in favour of Mr Loomis; that Mr Loomis elect to retire and take 100 per cent of his entitlement as a lump sum payment (including the interest of Ms Thurston split to him); that certain amounts of Mr Loomis’s lump sum entitlement be paid to the Child Support Agency in discharge of his liability to that Agency; that a further amount of Mr Loomis’s lump sum entitlement be paid to ML Lawyers to discharge his liability for costs to that firm; that a certain amount of Mr Loomis’s liability then be paid to Ms Thurston as part of her entitlement to property settlement; and the balance of his entitlement to be paid to Mr RO to hold on trust for Mr Loomis pending further order of the Court, and Mr BG shall inform the Court and the parties at the same time as he notifies the parties and the Court of the members’ account balances in the fund, such that the Court will understand, as far as is practicably possible, exactly how much money will be available in the members’ accounts on the finalisation of the matter and the closing down of the R Superannuation Fund as determined by final property settlement orders. 

7. That any injunctions, restraints or orders imposing obligations on the parties that are current at the time of making this order continue until further order.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Thurston & Loomis & and Ors (No 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 1010 of 2012

Ms Thurston

Applicant

And

Mr Loomis

First Respondent

And

L Ltd

Second Respondent

And

C Pty Ltd

Third Respondent

And

ML Lawyers

Interveners

REASONS FOR JUDGMENT

1. On 25 January this year, I delivered my reasons for judgment in the substantive proceedings for property settlement and child support departure between the parties in this matter. I also made some orders pursuant to the Child Support (Assessment) Act 1989 departing from the administrative assessment of child support as between the applicant and the first respondent.

2. I did not make the final orders for property settlement at that time for the reasons set out in that judgment, but listed the matter before me again to give all of the parties and the intervenor the opportunity to make further submissions as to the final orders that should now be made in the matter having regard to my reasons for judgment. Those submissions were heard on Friday, 16 February 2018.

3. Between delivery of my reasons for judgment and the hearing of those submissions, the Court was informed by Mr RO, solicitor, who has, pursuant to the Court’s orders, held certain funds on trust for the parties and most particularly for their self-managed superannuation fund for the last few years, that he sought payment for the administrative work he has done in respect of holding those funds as trustee and managing them as directed by the Court and the Court appointed single expert, Mr BG of E Accountants.

4. The Court was also informed by Mr RO that he is owed around $200,000 by Mr Loomis who he previously represented in these proceedings and that he considered he had a lien over the fruits of any judgment in favour of Mr Loomis.

5. I caused Mr RO to be informed that he should appear before the Court on 16 February 2018 with details of his claim to be paid for the administration of the funds he held on trust for the parties’ self-managed superannuation fund to be filed and served on the other parties.

6. On that day, Ms Thurston appeared in person, Mr Loomis appeared in person and also representing the second and third respondent companies, Mr ML appeared for the Intervenors, ML Lawyers, and Mr RO appeared.

7. I heard submissions from all those parties.

8. Mr RO conceded that he could not assert a lien over a party’s member interest in a superannuation fund and did not oppose the proposition of all of the funds being transferred to a third party, such as Mr BG, to be held on trust pending final orders being made in this case. Mr RO simply pressed for payment of his reasonable administrative costs at this point, acknowledging that his claim of fees owed to him by Mr Loomis is disputed by Mr Loomis and still in the process of being resolved according to the correct processes. Mr RO accepted that once Mr Loomis’s entitlement to cash as property is ultimately determined, a new trustee could transfer that back to Mr RO to be held on trust pending finalisation of the dispute with Mr Loomis and further order of the Court.

9. By affidavit dated 13 February 2018, Mr RO detailed in a schedule his claim to be paid the sum of $2,032.05 for his administration of the funds he has held on trust. He said in his affidavit that all of the work has been charged as if all of it was done by a clerk, not a solicitor. My perusal of the schedule and the charges he claims causes me to consider that is correct and that the work he has done was necessary and that he has not unreasonably charged for it.

10. Mr Loomis informed the Court that he did not oppose Mr RO being paid that amount.

11. Ms Thurston opposed the claim and asserted Mr RO should not be paid. She gave a few reasons. First, she referred to the fact that her former solicitor, Mr ML, had not charged any fees for administering the funds when he held them on trust for the parties. Second, she submitted that as Mr RO had not invested the money into an interest bearing bank account quickly enough, when he was required to, he had cost the parties in lost interest and that he should not now be paid for administration of the funds when his omissions had caused the parties to lose money that they could otherwise have earned.

12. Ms Thurston had not filed any evidence that she could point to in support of those submissions. I decided to give Mr RO the right to file some evidence in answer to Ms Thurston’s bald assertions of fact from the bar table and gave him seven days to do so.

13. On Friday, 23 February 2018, I received an affidavit from Mr RO in which he deposed to the timeline of relevant factual circumstances surrounding the transfer of funds from ML Lawyers held on trust for the parties to him and the eventual deposit of those funds into interest bearing bank accounts.

14. He received the sum of $685,048.30 from ML Lawyers on 29 January 2015. He wrote letters to the parties seeking their authorities and Tax File Numbers to facilitate investment of the funds. He received a letter from Ms Thurston telling him that she did not agree that he control the investment and seeking information from him. Subsequently, that dispute was resolved and an authority was signed by Ms Thurston.

15. Mr RO then entered into correspondence with the bank with a view to establishing the accounts. He had to follow some of that up with the bank to actually get the desired response. Eventually, by late June 2015, after a lot of correspondence between Mr RO and the bank, the money was invested as expected.

16. Ms Thurston is clearly disappointed that some interest was lost to the parties between February and June 2105. However, I do not accept her submission that it was all Mr RO’s fault and that therefore he should not be paid for the administrative work that he has done. The evidence does not satisfy me that Mr RO was careless or inactive or principally responsible for the money not being invested earlier than it was. In fact, the evidence shows that Ms Thurston’ own actions also slowed the process down at the start.

17. Further, the fact that Mr ML did not charge for work done holding the funds as trustee is not a reason why Mr RO, who stepped up to take on the responsibility of holding the parties’ funds in trust after Mr ML said he did not want the responsibility any longer, should not be entitled to be paid for the administrative work that he did.

18. I will be making an order that Mr RO be paid the sum he claims.

19. On 20 February 2018, I caused a letter to be sent by email to Mr BG to ask him if he would take on the role and responsibility of holding the parties’ funds on trust for them so that the final orders can be made in this case in the way that I have determined to make them. That email letter was copied to the parties as well as Mr ML and Mr RO.

20. By email response received from Mr BG on Tuesday, 20 February 2018, copied to all of the parties, Mr BG expressed his agreement to take on the responsibility to hold the funds on trust for the parties’ self-managed superannuation fund and to take the steps that are necessary for the final orders to be made in this matter.

21. I will, accordingly, be ordering that Mr RO take all steps to cause the balance funds held on trust for the parties’ self-managed superannuation fund to be transferred to Mr BG who shall hold those funds on trust for the parties’ self-managed superannuation fund.

22. I will order that Mr BG cause the sum of $2,032.05 to be paid from those funds to Mr RO in payment of his fees for administering those funds to date. I will also order that Mr BG cause Ms Thurston to be paid the sum of $1,500 as discussed in my reasons for judgment being reimbursement of her for funds she paid out for an expense that was an expense of the parties’ self-managed superannuation fund.

23. I will then order that Mr BG take such steps as are necessary to cause any further liabilities of the parties’ self-managed superannuation fund including any tax liabilities to be paid and for the parties’ member interests in the self-managed superannuation fund then to be calculated and for the parties and the Court to be notified as soon as possible as to the member balances that remain in the parties’ self-managed superannuation fund, as well as the anticipated fees that Mr BG will be charging that would be paid out of the funds in the self-managed superannuation fund account for all of the work that he does from this day on to give effect to these orders and the orders that are yet to be made finalising this matter.

24. When the Court has that information, I will proceed to make the final orders in the substantive proceedings that will include Mr BG taking the necessary steps to finalise the matter and close down the parties’ self-managed superannuation fund.

25. Mr Thurston submitted that Mr Loomis should be solely responsible for any fees Mr BG charges for administering the parties’ self-managed superannuation fund’s funds from now until this matter finalises. She submitted that he is only being utilised because of Mr Loomis’s actions and that such expense would not have to be incurred if it was not for Mr Loomis’s own actions. I do not accept Ms Thurston’s submissions in this respect.

26. Mr BG was appointed by the Court as a single, court appointed expert to help ensure that the parties brought their self-managed superannuation fund into complying status in circumstances where both were found by me to have been directly and deliberately responsible for the self-managed superannuation fund to be non-complying with superannuation law and regulations. I am satisfied that he discharged the responsibility placed upon him diligently and well. There are a number of difficulties to be faced and overcome in having this matter finalised in a manner that I am satisfied will result in orders that are just and equitable. The difficulties that have arisen, the matters that have influenced me to give responsibility for bringing the matter to finality in respect of the final orders I intend to make in the substantive property settlement proceeding, including dealing appropriately with the parties’ interests in their self-managed superannuation fund, are not solely matters for which Mr Loomis is responsible. I am not persuaded that Mr Loomis alone should be solely responsible for payment of Mr BG’ reasonable charges in administering this matter to conclusion. I will not be making that order.

27. I make the orders set out at the commencement of these reasons.

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 27 February 2018.

Associate:

Date:  27 February 2018