VAIL & SARGENT - [2013] FMCAfam 78

FEDERAL MAGISTRATES COURT OF AUSTRALIA

VAIL & SARGENT

[2013] FMCAfam 78

FAMILY LAW – Property – Husband’s application for summary dismissal of Wife’s application – Wife’s application for property settlement has no reasonable prospects of success and is summarily dismissed.

Family Law Act 1975, s.75(2)
Federal Magistrates Court Rules 2001, r.13.10

Lindon v Commonwealth (No 2) (1996) 136 ALR 251 at 256
McDonald & Sandler [2012] FamCAFC 191

Applicant:

MR VAIL

Respondent:

MS SARGENT

File Number:

BRC 9301 of 2010

Judgment of:

Baumann FM

Hearing date:

23 November 2012

Date of Last Submission:

23 November 2012

Delivered at:

Brisbane

Delivered on:

4 February 2013

REPRESENTATION

Counsel for the Applicant:

Ms Ogge

Solicitors for the Applicant:

Chan Legal

Solicitor for the Respondent:

Mr McCarthy

Solicitors for the Respondent:

K L Legal

ORDERS

The Husband’s application filed 22 October 2012 for summary dismissal of the Wife’s application for property filed 6 January 2012 is granted.
The Wife’s application filed 6 January 2012 is dismissed.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE

BRC 9301 of 2010

MR VAIL

Applicant

And

MS SARGENT

Respondent

REASONS FOR JUDGMENT

In January 2012, the Wife, Ms Sargent commenced proceedings for property settlement in this Court, seeking an order that she receive “65% of the net assets” of the parties. As early as 20 April 2012, the Husband, Mr Vail, by the Response then filed, claims the Wife should receive nothing.
The evidence is that the relationship was of short duration between these two mature aged parties – the Wife currently being 50 years of age and of Russian ethnicity, whilst the Husband is 55 years of age and born in Australia. It is accepted that the parties met on the internet whilst the Wife was living in Kazakhstan with the Wife arriving in Australia in June 2006 (with her 9 year old son [Y]), on a Prospective Wife Visa. The parties married on [date omitted] 2006.
In March 2009, the Wife’s eldest child [X], a former medical student, arrived in Australia and the Wife, [X] and [Y] were successful in obtaining Australian Residency, sponsored by the Husband. Within weeks thereafter, the relationship ended and the Wife and her children left the home then occupied with the Husband in August 2009. Both parties agree separation actually occurred on 26 June 2009, however the parties remained separated under the one roof until 14 August 2009.
The Wife asserted the Husband had been domestically violent towards her, and on 13 October 2009, the Wife obtained a Protection Order against the Husband. The Husband denies he committed family violence and says the order was made “without admissions”.
On 22 October 2012, the Husband filed an application seeking an order that the Wife’s application for property settlement be summarily dismissed. The Wife opposes the application, effectively seeking the right to continue to pursue…

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 VAIL & SARGENT

Details

AGLC: VAIL & SARGENT [2013] FMCAfam 78
Case: [2013] FMCAfam 78
Decision Date: 4 February 2013

CaseChat Overview and Summary

The case of Vail & Sargent involves a dispute between the parties over the valuation of a business for the purposes of property settlement. The matter was heard in the Family Court of Australia, where the Husband filed an application for summary dismissal of the Wife's property application, seeking a declaration of the value of the Husband's business interest. The Wife, in turn, sought an independent valuation of the business.

The primary legal issue the court had to decide was the appropriate method and figures to be used in valuing the Husband's interest in the business. The court considered whether the valuation method adopted by the Wife's expert, Mr C, was appropriate, particularly in relation to the fair wages for owners and the industry multiplier. The court also examined whether the Wife's figures, if accepted, would still justify the valuation of the Husband's interest at the asserted amount of $110,700.

The court found that the valuation method used by the Wife's expert was not sufficiently robust, as it did not adequately consider the fair wages for owners and the applicable industry multiplier. The court also determined that even if the Wife's figures were accepted, the Husband's interest in the business would not be valued at the asserted amount of $110,700. Given the uncertainties in the valuation, the court found that there was no basis for the Wife's claim and granted the Husband's application for summary dismissal of the Wife's property application.

The court dismissed the Wife's application filed on 6 January 2012 and granted the Husband's application filed on 22 October 2012 for summary dismissal of the Wife's property application.

Orders

Orders of the court

The Husband’s application filed 22 October 2012 for summary dismissal of the Wife’s application for property filed 6 January 2012 is granted.

The Wife’s application filed 6 January 2012 is dismissed.

Background

Background to the litigation

In this report, Mr C says, by way of business background that:-“Business backgroundAccording to information provided by the Husband Mr Vail (Ms Sargent’s former husband), Mr Vail has for many years conducted an insurance broking business in partnership with his partners Mr H and Ms H. Upon the death of Mr H in 2010, Mr Vail purchased the 67% share of the former partner Mr H and Ms H’s share in the business for the sum of $230,000.” Mr C does not indicate, in his report, whether he took into consideration the sale price of the two-thirds interest in the business, between these related parties, in determining his valuation. I find it troubling that Mr C has:-a)Adopted a fair wages for owners of $100,000 without any apparent analysis. The Trust Income Tax Return reveals, and the evidence before the Court confirms, that three people work in his business – the Husband, his former wife Ms J and his daughter Ms R. In the 2012 tax year distributions of income were made by the Trustee as follows:-· [H] Family Trust $50,000· Husband 47,796· Ms J 47,795· Ms R 47,795$193,386In the circumstances, the “wages” for the three persons working in the business, as paid by the business in the 2011/2012 year represented their distributions and totalled $143,386.The Court cannot determine whether the figure adopted of $100,000 or the figure paid of $143,386 is correct for a reasonable remuneration for the three persons working in the business.b)No explanation is offered as to in what circumstances the range of industry multiplier will apply. Not surprisingly, the Wife seems to adopt the higher figure (of 3.69%) to the best nme of $60,000 and then accepts the Husband’s interest to be 50% - getting a valuation of the Husband’s interest at $110,700. Clearly, however, even if the Court accepted that figure, the Husband would be entitled to deduct the sum he claims to owe to his former partner of $89,449 – leaving at the very best the Husband having a “net interest”, on the Wife’s own figures of approximately $20,000. Anything worse than the Wife’s best case scenario, significantly reduces the value of the Husband’s interest in the business at this time, for example:-a)If the net maintainable earnings were as low as $17,000; orb)The multiplier was the lower end of the range rather than the adopted higher end of the range. On the basis of the Wife’s produced report, it is hard for the Court to discern any value for the Husband’s interest in the business in the region of $110,700 as asserted by the Wife. The Wife, with the benefit of a pro bono lawyer in Ms Ogge (who I must say could have said nothing more than she has in this application on behalf of the Wife), has shown that the business could have a value to the Husband – but that its value is much less than $110,000. The Wife says the business should be independently valued, but does not have the funds to pay for or contribute to such exercise. The Husband says the Wife did not pay her share of the property valuation, however, the Wife has not answered that allegation.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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