Toffler and Eggers - [2014] FCCA 764

FEDERAL CIRCUIT COURT OF AUSTRALIA

TOFFLER & EGGERS

[2014] FCCA 764

Catchwords:
FAMILY LAW – De facto property settlement - where a constructive trust over a property is claimed by an Intervener - contributions of the parties; whether the de facto husband’s earning capacity has diminished - where the de facto husband ceased to participate in the proceedings while still under cross-examination - whether the amount owed by the de facto husband to his former lawyers ought to be paid directly to them as Second Interveners.

Legislation:
Family Law Act 1975, ss.90SF, 90SM, 117

Goldstraw v Goldstraw [2002] VSC 491
Baumgartner v Baumgartner [1987] HCA 59
Allen v Snyder (1977) 1 NSWLR 685
Stanford & Stanford (2012) FLC 93-495
Bevan &Bevan [2013]FAMCAFC 116

Applicant:

MS TOFFLER

Respondent:

MR EGGERS

First Intervener:

MS D
by her Case Guardian
MS CLIFF

Second Intervener

MILLS OAKLEY SOLICITORS

File Number:

MLC 5904 of 2011

Judgment of:

Judge Small

Hearing dates:

24 - 26 June 2013, 11 December 2013
& 28 March 2014

Date of Last Submission:

11 December 2013

Delivered at:

Melbourne

Delivered on:

11 April 2014

REPRESENTATION

Counsel for the Applicant:

Mr Brown SC

Solicitors for the Applicant:

Middlemiss & Co

Counsel for the Respondent:

Mr Williams (24-26 June 2013 only)

Solicitors for the Respondent:

Rodda Legal (24-26 June 2013 only)

Counsel for the First Intervener:

Mr Bornstein

Solicitors for the First Intervener:

Julian Teh, Barrister & Solicitor

Counsel for the Second Intervener:

Mr R Harrison (11 December 2013 only)

Solicitors for the Second Intervener:

Nicholes Family Lawyers

DECLARATIONS

The real property shown as Property W on the Plan of Subdivision (omitted) approved by the (omitted) Council on 18 January 2001 and referred to as Property W in the Updated Building Direction issued by the said Council on 15 January 2013 is held by the Applicant on trust for the Applicant and the First Intervener as tenants-in-common such that the Applicant holds a one-quarter share and the First Intervener holds a three-quarters share.
Following from Declaration 1, and for the reasons set out herein, the First Intervener is entitled to a consequential order that the property situated at and known as Property W in the State of Victoria and more properly described in Certificate of Title Volume (omitted) Folio (omitted) (“the real property”) be subdivided in accordance with the said Plan of Subdivision and that Property W on the said Plan of Subdivision be transferred to the Applicant and the First Intervener as tenants-in-common such that the Applicant holds a one-quarter share and the First Intervener holds a three-quarters share free of all encumbrances.
The shareholder loan accounts detailed in the (business omitted) Pty Ltd income tax returns for the year ended 30 June 2010 are shareholder loans to the Respondent alone.
The Applicant and the Respondent lived together in a de facto relationship between 1992 and 2011 and that relationship was conducted in the State of Victoria.

ORDERS

The real property shall be subdivided in accordance with the Plan of Subdivision…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Toffler and Eggers

Details

AGLC: Toffler and Eggers [2014] FCCA 764
Case: [2014] FCCA 764
Decision Date: 11 April 2014

CaseChat Overview and Summary

This matter concerned orders made by Judge Small in a dispute between the Applicant and the Respondent, with the First and Second Interveners also involved. The core of the dispute involved the division of real property, a company, and superannuation interests following the breakdown of a de facto relationship. The orders detailed a complex scheme for subdividing property, transferring ownership of specific lots, and allocating financial responsibilities, including mortgages and outgoings. Additionally, the orders addressed the division of proceeds from the sale of another property and the distribution of a significant portion of the Respondent's superannuation to the Applicant.

The court was required to determine the appropriate orders for the division of property and financial resources between the parties. This included establishing how the real property would be subdivided and titled, how a company and its assets would be allocated, and how the parties' respective superannuation interests would be treated. A key legal issue was the division of the Respondent's superannuation, specifically the application of section 90MT of the Family Law Act and the associated regulations concerning splittable payments. The court also had to consider the implications of these orders for the trustee of the superannuation fund and ensure procedural fairness was afforded.

In reaching its decision, the court applied principles of property adjustment under the Family Law Act, considering factors such as the duration of the de facto relationship, its impact on earning capacity, and the need to provide security for a parent caring for a young child. The court's reasoning led to detailed orders for the subdivision and transfer of real property, the retention of the company by the Respondent with an indemnity to the Applicant, and the distribution of sale proceeds from another property. Crucially, the court ordered a significant portion of the Respondent's superannuation to be split in favour of the Applicant, with specific provisions binding the superannuation trustee and restraining the Respondent from taking actions that would diminish the Applicant's entitlement.

The court made extensive orders detailing the subdivision of real property, the transfer of specific lots, and the allocation of financial liabilities. The Respondent was ordered to retain his company, with the Applicant to transfer her interest to him. Proceeds from the sale of another property were to be distributed in specified amounts and percentages. The court also ordered a significant portion of the Respondent's superannuation to be paid to the Applicant, with specific provisions for the trustee and restrictions on the Respondent's ability to alter death benefit nominations. Each party was to be solely liable for liabilities encumbering property they received, and joint tenancies were severed.

Orders

Orders of the court

The real property shall be subdivided in accordance with the Plan of Subdivision (omitted) approved by the (omitted) Council on 18 January 2001 (“the subdivision”) and the Applicant and the First Intervener shall do all such acts and things and sign all such documents as may be necessary to effect the subdivision, including instructing a surveyor, obtaining council approval and registering the proposed Plan of Subdivision so that separate titles issue for the two lots described thereon.

Within 90 days of the subdivision the Applicant and the First Intervener shall do all such acts and things and sign all such documents as may be necessary to transfer to the First Intervener and the Applicant as tenants-in-common in unequal shares the property marked as Property W on the said Plan of Subdivision.

Subject to Orders 1 and 2 hereof, the Applicant shall:

(a) retain all her right title and interest in the real property and indemnify and keep indemnified the Respondent against any liability for the mortgage encumbering the real property and all outgoings of the real property;

(b) Within 90 days cause the mortgage registered number (omitted) to (omitted) Bank currently registered over the real property to be discharged and refinanced so that the Applicant is responsible for the entirety of the balance due and payable under the mortgage and the First Intervener receives her interest in the property marked as Property W on the said Plan of Subdivision free of any mortgage.

The Respondent shall retain all his right title and interest in the company (business omitted) Pty Ltd (“(business omitted)”), including all assets owned by the company, and indemnify and keep indemnified the Applicant in relation to all loans, liabilities, interest, actions, suits, costs, claims, expenses or demands whatsoever whether past, present or future relating to (business omitted).

The Respondent shall forthwith sign all such documents as may be necessary to amend the records in the (business omitted) tax returns for the year ended 30 June 2010 to reflect Declaration 3 hereof.

Within 30 days the Applicant shall do all such acts and things and sign all such documents as may be necessary to transfer all her right title and interest in (business omitted) to the Respondent.

The proceeds from the sale of the property situated at and known as Property F in the State of Victoria are to be released forthwith as follows:

(a)First the sum of $52,263 to the Applicant;

(b) Second the sum of $23,877.23 to the Second Intervener;

(d) Fourth any remaining balance to be distributed 55 per cent to the Applicant and 45 per cent to the Respondent.

In accordance with section 90MT of the Family Law Act, whenever a splittable payment becomes payable in respect of the superannuation interest of the Respondent in the Eggers Superannuation Fund (“the Fund”), the Applicant will be entitled to be paid an amount calculated in accordance with Part VI of the Family Law (Superannuation) Regulations 2001 using the base amount of $67,885.95 (sixty seven thousand eight hundred and eighty five dollars and ninety five cents) and there will be a corresponding reduction in the entitlement of the Respondent.

The trustee of the Fund must comply with the obligations imposed upon trustees of eligible superannuation plans under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001.

10.

The Respondent is hereby restrained by himself his servants and agents from making any binding death benefit nomination to the trustee of the Eggers Superannuation Fund in favour of any person who is an eligible beneficiary within the meaning of Regulation 13 of the Family Law (Superannuation) Regulations 2001 which would have the effect of diminishing the value to the Applicant of the splitting order made in paragraph 8 hereof.

11.

Paragraphs 8 and 9 of these Orders bind the trustee of the Fund when these paragraphs take effect from the operative time, being the fourth business day after the date these Orders are served upon the trustee.

12.

The Respondent and the Applicant shall do all such things and execute all such documents as are necessary to facilitate the rollover by the trustee of the Fund of the Applicant’s entitlements pursuant to paragraph 8 of these Orders to another regulated superannuation fund, an approved deposit fund, or a retirement savings account or other such applicable fund or account at the sole nomination of the Applicant as soon as that is practicably possible after the operative time.

13.

The Respondent trustee by himself, his servants or agents shall not do any act or thing that would prevent the Applicant from receiving the benefits and the fund to which she is entitled pursuant to paragraph 8 of these Orders.

14.

Within 60 days the Respondent shall pay to the Australian Taxation Office the balance of the Applicant’s taxation debt owed for the year ending 30 June 2010 including any interest and/or penalties accrued.

15.

Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these any subsequent orders:

(a) each party shall be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders. The chattels in the real property known as Property W are deemed to be in the possession of the Applicant and the chattels in the real property known as Property W are deemed to be in the possession of the First Intervener;

(b) monies standing to the credit of the parties in any joint personal bank account are to be divided 55% to the Applicant and 45% to the Respondent;

(d) insurance policies remain the sole property of the life insured named therein;

(e) each party shall be solely liable for and indemnify the others against any liability encumbering any item of property to which that party is entitled pursuant to these orders;

(f) any joint tenancy of the parties in any real or personal estate is hereby expressly severed; and

(g) each party forgoes any claim they may have to any inheritances to which the other party is entitled to either presently or in the future.

AND THE COURT NOTES

A. That procedural fairness has been afforded to the trustee of the Eggers Superannuation Fund.

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

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Both parties have contributed over the years to the other’s income, earning capacity, property and financial resources as set out elsewhere in these reasons.Section 90SF(3)(k) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; The relationship lasted about 19 years with a separation of six months in the middle. There is no evidence before me that the length of the relationship has in any way affected either party’s earning capacity.Section 90SF(3)(l) the need to protect a party who wishes to continue that party's role as a parent; X’s young age means that she will need substantial care for many years to come. The orders I propose to make will provide her mother with some security of accommodation which will allow her to continue to be X’s primary carer. Section 90SF(3)(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation. There is no evidence before me that the Applicant is cohabiting with another person. There is a clear inference to be taken from the evidence that Mr Eggers may be cohabiting with Ms H, but he denies that, and I can make no finding about it. Even if I were satisfied that he and Ms H are living together, there is no evidence before the court about Ms H’s financial position, other than that she has assisted the respondent several times over the years and that his company has paid her company significant amounts of money.Section 90SF(3)(n) the terms of any order made or proposed to be made under section 90SM in relation to:(i) the property of the parties; or(ii) vested bankruptcy property in relation to a bankrupt party. I propose to make an order that the Applicant retain the family home subject to its mortgage, her superannuation and some of the monies held in trust, and that the Respondent retain his companies, and most of his superannuation.Section 90SF(3)(o) Not relevant.Section 90SF(3) (p) Not relevant.Section 90SF(3)(q) any child support under the Child Support (Assessment) Act 1989that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; The Applicant’s evidence is that there is a Child Support Assessment in the sum of $220 per week. She says that the Respondent has paid the assessed amount for some periods but not others. Her Financial Statement sworn on 6 December 2013 states that she currently receives no child support from the Respondent. However there is evidence that the Respondent has contributed to X’s school fees from time to time. He conceded in oral evidence that he had ceased paying regular child support in February 2012, although the Applicant’s evidence was that at the time of trial in June 2013, she was receiving $1,000 per month for X’s support. It would seem that Mr Eggers sometimes pays what he is assessed to pay and sometimes does not.