Vancovich and Dunfield

[2016] FamCA 393

FAMILY COURT OF AUSTRALIA

VANCOVICH & DUNFIELD [2016] FamCA 393

FAMILY LAW – PROPERTY SETTLEMENT – Review of a Registrar’s decision to refuse to make orders by consent on the basis that s 81 was not satisfied – where the parties intend to continue to operate a business jointly – where the parties have both received independent legal advice – final orders made as sought by the parties

Family Law Act 1975 (Cth), s 81

Jong & Yeng [2014] FamCAFC 156

APPLICANT: Mr Vancovich

RESPONDENT: Ms Dunfield

FILE NUMBER: MLC 9528 of 2014

DATE DELIVERED: 3 May 2016

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Johns J

HEARING DATE: 3 May 2016

REPRESENTATION

THE APPLICANT: In person

COUNSEL FOR THE RESPONDENT: Mr Hannan

SOLICITOR FOR THE RESPONDENT: Ryan Carlisle Thomas

Orders

1. On or before the expiration of 45 days after the date upon which Orders in the form of these Minutes are made (“the due date”) the husband pay to the wife the sum of One hundred and Twenty Five thousand dollars ($125,000) (“the lump sum”).

2. Contemporaneously with and conditional upon the payment by the husband to the wife of the lump sum:

   (a)       The wife transfer to the husband all of the wife’s right, title and interest, legal and equitable, in the property (“the former matrimonial home”) situated at and known as B Street, Suburb C, … and being the whole of the land more particularly described in Certificate of Title Volume … Folio …;

   (b)       The husband pay the costs of and incidental to the said transfer of the former matrimonial home;

   (c)       The wife pay out and do all other things necessary to discharge National Australia Bank limited personal loan BSB … Account No. …; and

   (d)       The husband pay out and do all other things necessary to discharge mortgage No. … in favour of the St. George Bank Ltd..

3. In the event that the husband defaults in his payment of the lump sum, the husband pay to the wife interest at a rate of 9.5 per cent per annum calculated daily from the due date until the whole of the lump sum and interest accrued thereon has been paid out in full. Any partial payments shall be applied firstly as against interest payments and secondly in reduction of the lump sum.

4. In the event that the husband defaults in his payment of the lump sum and in the event that such default continues for a period of ninety days from the due date, the former matrimonial home be sold.

5. In the event of a sale of the former matrimonial home, such sale be conducted by the husband and the wife acting in conjunction upon such terms and conditions and at such price as may be agreed between the parties and, in default of agreement, as may be determined by the President of the Real Estate Institute of Victoria or his nominee.

6. Until payment of the lump sum or, in the event of a sale of the former matrimonial home until settlement thereof shall take place, the husband shall:

   (a)       Be entitled to the sole use and occupancy of the former matrimonial home to the exclusion of the wife;

   (b)       Pay all amounts due and payable pursuant to the Mortgage in favour of the St. George bank Ltd., over the said property together with all rates, land tax and other rates, taxes, insurances and charges imposed in relation to the former matrimonial home and shall indemnify the wife in relation to any such payments that the wife might hereafter be called upon to make; and

   (c)       Maintain the former matrimonial home in a clean and tidy condition and keep it in good repair, fair wear and tear excepted.

7. In the event of a sale of the former matrimonial home, the proceeds of any such sale be applied as follows:

   (a)       In payment of Agent’s fees and commissions;

   (b)       In payment of reasonable Conveyancing costs of and incidental to any such sale;

   (c)       In discharge of the said Mortgage;

   (d)       In payment of the lump sum, including interest (if any), payable to the wife in accordance with these Orders; and

   (e)       In payment of the whole of the balance to the husband.

8. The husband pay all past, present and future rates, land tax and other rates, taxes, insurances and charges imposed in relation to the former matrimonial home and indemnify the wife in relation to any such payments that wife might be called upon to make after the due date.

9. The wife transfer and assign to the husband (at the husband’s expense) all of her right, title and interest (if any) in the other assets, chattels, jewellery and other personal adornments and effects presently in the husband’s possession (the chattels in the former matrimonial home being deemed to be in the possession of the husband).

10. The husband transfer and assign to the wife (at the wife’s expense) all of his right, title and interest (if any) in the other assets, chattels, jewellery and other personal adornments and effects presently in the wife’s possession.

11. The wife transfer and assign to the husband all of her right, title and interest (if any) to back pay, holiday pay, long service leave, termination of employment payments and other emoluments (if any) that belong to or that have been earned by the husband.

12. The husband transfer and assign to the husband all of her right, title and interest (if any) to back pay, holiday pay, long service leave, termination of employment payments and other emoluments (if any) that belong to or that have been earned by the wife.

13. The husband and the wife shall each retain the directorships, secretarial appointments and share holdings as presently held by them in:

    (a)       D Pty Ltd.; and

    (b)       E Pty Ltd.

14. The wife and the husband each sign and execute all such documents and deeds and do all such acts and things as shall be reasonable and necessary to completely effectuate these Orders.

15. Nothing in these Orders shall preclude the wife or the husband from applying to the Family Court for orders or directions in relation to the implementation of the provisions hereof or shall restrict the Court from making such orders or giving such directions as it shall consider appropriate and necessary in all of the circumstances to give effect to the intention of the parties.

16. The wife indemnify the husband against all debts incurred by her after the date of separation (if any) and against all liability whatsoever in respect of her obligations to third parties (if any) and not hereafter pledge the husband’s credit.

17. The husband indemnify the wife against all debts incurred by him after the date of separation (if any) and against all liability whatsoever in respect of his obligations to third parties (if any) and not hereafter pledge the wife’s credit.

18. Unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent Orders:

    (a)       Each party 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;

    (b)       Each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;

    (c)       Monies standing to the credit of the husband and the wife in any joint bank account are to become the property of the husband and the wife as tenants in common in equal shares;

    (d)       Insurance policies remain the sole property of the beneficiary named therein; and

    (e)       The husband and the wife each 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.

19. Any joint tenancy of the husband and the wife in any real or personal estate is hereby expressly severed and, pending the making of formal Orders in the court:

    (a)       The husband and the wife hold their respective interests in any jointly owned property upon trust pursuant to these Orders; and

    (b)       Neither party encumber any real or personal property in the possession of either party as at the date of these Orders without the consent in writing of the other.

IT IS DIRECTED:

1. The Minutes of Consent Orders remain on the Court file.

THE COURT NOTES:

1. The husband and the wife intend that these Orders shall as far as practicable finally determine the financial relationships between them and avoid further proceedings between them.

2. The husband and the wife agree that neither of them has a need for spousal maintenance from the other of them and these Orders have been entered into on that basis.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Vancovich & Dunfield has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 9528 of 2014

Mr Vancovich

Applicant

And

Ms Dunfield

Respondent

REASONS FOR JUDGMENT

1. The matter of Vancovich & Dunfield comes before me today upon an Application in a Case filed on behalf of the husband on 4 March 2016.  That application seeks a review of a decision made by Registrar Moser, refusing to make orders in the terms of a minute of consent order filed on behalf of the parties in conjunction with an application for consent orders filed on 25 January 2016. 

2. The application of the husband is supported by the wife; that is, both parties come before me today seeking final orders with respect to their financial interests, to be made by consent. 

3. The background to the matter is as follows.  The wife is aged 43 years.  She is engaged in part time employment in the public service and is otherwise engaged as a company director in charge of operations of three entities owned by the parties’ corporate entities. 

4. The husband is aged almost 40 years.  He is a company director and he also is engaged in the operation of the entities, his principal role being in charge of the accounting operations of those entities. 

5. The parties married in 2006 and separated on a final basis in January 2013.  They were divorced on 9 February 2015. 

6. There are two children of the marriage:  F, who is aged six years, and G, who is aged four and a half years.  Both children live with the wife, and they spend significant and substantial periods of time with the husband.  I am told that, indeed, the children are spending five or six nights with the husband on a fortnightly basis. 

7. The principal asset of the parties is the business.  That business is conducted through two companies, D Pty Ltd and F Pty Ltd.  I am told that the husband and the wife are the directors of those companies and are equal shareholders in those entities.

8. Those entities operate facilities which have been valued by Bankwest recently, and the valuation of those entities is in the order of $5.3 million.  In addition to that interest, the parties own a property at Suburb C which is valued at approximately $800,000 and is subject to a mortgage of approximately $530,000.  Pursuant to the proposed orders, it is anticipated that that property be transferred to the husband and that there be a payment to the wife.  The parties come to Court today seeking orders that will effectively transfer the Suburb C property to the husband but will see them continue to own and operate the child care centres jointly. 

9. Ordinarily, upon the making of final orders it is anticipated and expected that there be a separation of the parties’ financial interests. Indeed, s81 of the Family Law Act1975 (Cth) provides as follows:

   In proceedings under this Part, other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage, the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.

10. The Full Court considered the operation of s 81 in the decision of Jong & Yeng [2014] FamCAFC 156. The Full Court there confirmed at paragraph 37 that section 81 “is not a separate head of power but an exhortation to the court.” Relevantly, the Full Court there determined that whilst s 81 is a provision that must be taken into account, it is not a provision that is a head of power to be applied in every case. There are cases, exceptional, where there is not a final separation or division of the parties’ financial interests. The Full Court there upheld the decision of the primary judge which provided for final orders which saw the continuation of parties’ joint ownership in property.

11. Similar orders are sought by the parties the subject of this application.  The parties have each had the benefit of independent legal advice.  The husband, until recently, was represented.  The application for consent orders includes a signed statement by the parties’ lawyers that the parties have been provided with independent legal advice.  It was conceded on behalf of the wife today that in the event of any future breakdown in the relationship between the parties with respect to the operation of the child care centres, the remedy to such dispute would lie in the Corporations Act2001 (Cth), and the parties would need to look to other forums to resolve any dispute between them as to the operation of the business.

12. The orders, I am told, reflect a division of assets on the basis of approximately 52 and a half per cent to the wife and 47 and a half per cent to the husband.  There are no other particular contribution aspects to which I have been referred.  The parties, as I have already noted, share the care of the children.  It is submitted on behalf of the parties that the proposed orders are just and equitable, that the proposed division is well within the range of likely outcomes had the parties pursued their applications before the Court.  I accept those submissions.  I am satisfied, having considered the application for consent orders and listened carefully to the submissions made by the parties, that the proposed orders are just and equitable. 

13. I will make orders in the terms of the minute of orders which is signed by the parties. 

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johns delivered on 3 May 2016.

Associate: 

Date:  3 May 2016